1959-07-14

INDIAN AFFAIRS

[Stage Direction]
Second report of joint committee on Indian Affairs.-Mr. Dorion.


Hon. G. R. Pearkes (Minister of National Defence):: Mr. Speaker, I desire to table in English and in French copies of the exchange of notes between the government of Canada and the government of the United States of America governing the establishment of the integrated communications system to support the ballistic missile early warning system.
The house will recall that I referred to this system in the report on defence issued last April. I made further reference to it on July 2 when introducing the estimates of my department, and again on July 4 in answer to a question from the Leader of the Opposition. As I explained then, to enable the detection and early warning of intercontinental ballistic missiles the United States is establishing detection units in northern regions external to Canada. These units will report directly to NORAD headquarters in order to allow defence measures to be initiated as quickly as possible.
The most direct and economic routes for the communication links between these detection units and NORAD headquarters traverse Canada. In keeping with our joint efforts with the United States for the air defence of the North American continent, the Canadian government is co-operating in facilitating the establishment of the necessary communication links across Canadian territory.
In the main the facilities will be provided by existing Canadian commercial companies and leased to the United States. In those areas where facilities do not now exist they will be constructed, with the work being done by Canadian companies. On completion they will be leased to the United States authorities. This work will be undertaken under mutually agreed arrangements between the United States and Canadian authorities.


Mr. Speaker:: Has the minister leave to table the documents in question?


Some hon. Members:: Agreed.



URANIUM


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of the Opposition):: I should like to address a question to the Minister of Trade and Commerce arising out of a press report of this morning. It deals with a matter of great importance and one which I have more than once brought to the attention of the minister. The report is from Washington, and is to the effect that the United States is about to make a big slash in imports of uranium, especially from Canada, after 1962. It is attributed to officials of the atomic energy commission and state department sources. Will the minister comment on this matter, especially in view of the anxiety that reports of this kind must arouse?


Hon. Gordon Churchill (Minister of Trade and Commerce):: This matter has been up for discussion previously in the house. It hinges on the world supply of uranium. Naturally it is a matter of anxiety to Canadians, certainly in so far as uranium supplies may be concerned after 1962. The matter is under consideration, and we have had discussions with the authorities in the United States, but they have indicated that there is some uncertainty with regard to their requirements after 1962. They have much more abundant supplies of uranium now than was the case just a few years ago.
However, I do not think there is cause for alarm over this matter at the present time. This is the type of press report which will certainly arouse interest in areas where uranium is being produced, but we have time to work out a plan between Canada and the United States which may result in a satisfactory solution to what is a very difficult problem. However, basically we have to recognize that whereas a few years ago uranium was in short supply throughout the world, it is now not in short supply; hence the type of article to which my hon. friend refers.


Lester Bowles Pearson: Mr. Speaker, may I ask a supplementary question. Does the minister
5958	HOUSE OF
Inquiries of the Ministry not agree that while uranium may not be in short supply now, it is likely to be so in years to come, and therefore it is important to maintain this industry at its present level until that time arrives?


Gordon Minto Churchill: Quite right, Mr. Speaker. The forecasts I have been reading, produced by very competent scientists, indicate that the long term view shows that there will be a reasonably good demand for uranium. In fact some of those people estimate that by 1966, certainly by 1970, world demand will certainly equate with world supply. The difficult period lies between about 1962 and 1966. However, we are making a study of the situation. I have had reports from various sources with regard to this matter. Some are optimistic, one or two are a bit pessimistic, but generally the feeling is that as the peaceful uses of atomic energy are developed-and they are being developed rather widely now throughout the world- the demand for uranium will be sufficiently strong in the latter part of the 1960's that our uranium industry may be sustained.



NORTHLAND NAVIGATION COMPANY


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, might I be permitted to direct a question to the Minister of Labour. I would like to ask the minister what report he can give the house about the progress, or lack of it, that Mr. Currie has made in his attempts to mediate in the dispute between Northland Navigation and the unions in Vancouver, in order to get services restored.


Hon. Michael Starr (Minister of Labour):: Mr. Speaker, my report is that a meeting of the interested parties was called by the labour representative yesterday. That meeting was held, some progress was made, and other meetings are being held today and on ensuing days.



SHIPPING


[Stage Direction]
On the orders of the day:
Hon. Paul Martin (Essex East):: May I ask a
supplementary question of the Minister of Transport on this same matter. Is he in a position to give us a report as to arrangements for the provision of supplies?


Hon. George H. Hees (Minister of Transport):: Yes, Mr. Speaker, considerable progress has been made. I discussed this matter in detail yesterday with the chairman of the


maritime commission and the two members of parliament for the areas concerned. They have been kept advised as to what is being done, and everything possible is being done to make vital supplies available to these isolated communities. That matter is being looked after, and I feel that satisfactory progress is being made.


Paul Joseph James Martin: The minister has said that progress is being made, and I am sure the house will be very pleased to know that. But what progress is being made? Are supplies now being made available to these people?


George Harris Hees: Arrangements have been made with one shipping company to supply one area, and negotiations are going on for the supplying of another area. As I say, I have kept the members of parliament for the two areas concerned advised of exactly what is going on, and I am interested to note the great interest taken by the hon. member for Essex East in this matter.


Paul Joseph James Martin: I do not think I would have had a further supplementary question but for the last observation of the hon. gentleman. He says he has kept the two members of parliament advised, and I think that is quite right; but would he mind, from now on, keeping all members of parliament advised on a matter so vitally important to the people of that area?



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: I wish to direct a question to the Minister of Labour. Can the minister say whether the government has yet decided to continue the winter works program for this coming winter? When will the minister be able to make an announcement in this regard?


Michael Starr: Because of the fact that unemployment figures are still decreasing appreciably, it is impossible to assess now what the situation may be this coming winter. We hope the situation will be such that it will not be necessary to have this program repeated. However, I want to assure the house that we are watching the situation very closely, and if it should be necessary, consideration will be given to putting a plan into effect.


Hazen Robert Argue: Does the minister not feel that such a program is necessary in order to take care of ordinary seasonal unemployment and should not be hinged on widespread or extraordinary unemployment such as we have experienced recently?


Michael Starr: This plan was inaugurated by the government for the first time in the history of this country, in participation with the provincial and municipal governments, in order to alleviate an abnormal situation. It was instituted for that purpose only. Whenever further consideration has to be given to this problem because of circumstances which may arise, this government will always look sympathetically on the matter.


Hazen Robert Argue: I wonder if the Minister of Labour could tell the house whether any studies are going on as to what action might be taken to alleviate ordinary winter or seasonal unemployment.


Michael Starr: That aspect is being studied continuously in the Department of Labour and by various committees connected with the department.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, I wish to address a question to the minister responsible for the Canadian Broadcasting Corporation. Has his attention been drawn to a news story in the morning press that a chairman of the board of directors, who would not be president of the corporation, is to be appointed? Has the government given consideration to this matter, as well as to the legality of such an appointment?


Hon. George C. Nowlan (Minister of National Revenue):: My attention has been drawn to the article in question. Somebody spoke to me about it, but I have not had a chance to read the article. I am not in a position to comment on it, and the government has taken no action in that regard.



DURELLE-MOORE FIGHT    NEGOTIATIONS FOR TELECAST

[Stage Direction]
On the orders of the day:
Mr. W. L. M. Creaghan (Westmorland):: I wish to direct a question to the Minister of National Revenue. Would the minister advise the house if the C.B.C. will be carrying a live telecast of the Yvon Durelle-Archie Moore light heavyweight title fight on July 29? If not, are the responsible parties still negotiating?


George Clyde Nowlan: The hon. member was good enough to send me notice of his question this morning, and I have received some information from the C.B.C. which I will give to the house.
Inquiries of the Ministry
The original fight between Archie Moore and Yvon Durelle, fought in Montreal on December 10, was covered by the C.B.C., and the corporation paid $20,000 for the rights to that fight in Canada. Negotiations opened for the July 15 fight, later postponed to July 29, with Mr. Quinn, the promoter, asking $50,000 with a blackout of the telecast in Quebec city, Sherbrooke, Montreal, Cornwall, Kingston and Ottawa. This was the same blackout requirement as for the first fight. Early in April the Canadian Broadcasting Corporation made an offer to Mr. Quinn of $40,000 for the full rights but with a proposal to blackout only Montreal and Sherbrooke. Mr. Quinn has countered with a proposal of $50,000 with no blackout restrictions but with a guarantee by the corporation to pay for all empty seats in the Montreal Forum on the night of the fight. The corporation has rejected this offer.
The corporation has now made a final offer of $50,000 for full Canadian rights without any blackout restrictions. It was noted in the press that Mr. Quinn will reject this offer. The corporation has received no official answer.


Lester Bowles Pearson: Mr. Speaker, does the minister consider that the statement he has just given is clandestine political interference in the affairs of the C.B.C.?


George Clyde Nowlan: Mr. Speaker, I am sure that if the blackout applied to Ottawa some would think there had been clandestine interference.



CANADIAN NATIONAL STEAMSHIPS


[Stage Direction]
On the orders of the day:
George Harris Hees: Mr. Speaker, yesterday the hon. member for Kootenay West asked if I could give information as to payments received to date in respect of the sale of the Canadian National (West Indies) steamship fleet.
The amount received to date by the vendor is $560,000, which represents the payment under the terms of the sale agreement of 20 per cent of the purchase price of $2,800,000. The remainder is payable in five equal yearly payments with interest at 5 per cent per annum. The sale having taken place in August, 1958, there will be an instalment due next month. As the hon. member is aware, the payments are secured by letter of credit issued by the Banco Cubano del Comercio Exterior, and confirmed by the Bank of America International.
5960	HOUSE OF
Inquiries of the Ministry (Translation):



ST. LAWRENCE SEAWAY CONTRIBUTIONS TO DEVELOPMENT MADE BY MESSRS. BENNETT AND HOOVER

[Stage Direction]
On the orders of the day:
Mr. Azellus Denis (Si. Denis):: Mr. Speaker, may I direct a question to the Minister of Transport?
At the opening of the St. Lawrence seaway, the names of one Mr. Bennett and one Mr. Hoover were mentioned as having contributed to the materialization of that project. Is the minister able to tell us in what respect those two men participated in the project, unless it was as a Conservative and as a Republican?
(Text):


Mr. Speaker:: Order. I suggest that this question, relating to events of the past, might very well be put on the order paper.



OLD WELLAND CANAL


[Stage Direction]
On the orders of the day:
Mr. W. H. McMillan (Welland):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Would the minister keep the local members concerned advised on the progress in the clean-up of the old Welland ship canal? Conditions are particularly bad in that area, and there is certainly no evidence of any activity whatever.


George Harris Hees: Yes, Mr. Speaker. I am not aware of the exact condition of that clean-up operation at the moment, but I shall be very glad to inquire and report to the hon. member within the next day or so.



THE CANADIAN ECONOMY


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I wish to direct a question to the Prime Minister. Could the Prime Minister tell us whether or not the government has received the final report of the Borden commission on the marketing of oil; and if not, when that report is likely to be received?


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, the answer to the first question is no. With respect to the second question, the commission is operating in the usual way and when the report is ready it will be presented to the house.


Hazen Robert Argue: I wonder if the Prime Minister might make further inquiries in the light of a statement made by him in the house on 

May 5, to the effect that the report would be made available a few weeks after the end of that month.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, I wish to direct a question to the Secretary of State. Inasmuch as we are approaching the end of the session, can he undertake to provide answers to a number of questions of mine which have appeared on the order paper since April 28?


Hon. Henri Courtemanche (Secretary of State):: Mr. Speaker, as soon as I receive answers I will be glad to give them to the hon. member.



INDIAN AFFAIRS


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration) moved: the second reading of Bill No. S-6, to confirm an agreement between the government of Canada and the government of the province of New Brunswick respecting Indian reserves.
She said: Mr. Speaker, His Excellency the Governor General, having been made acquainted with the purpose of this bill, has given consent so far as Her Majesty's property rights are concerned, that the house may do therein as it shall think fit.
The purpose of this legislation is to ratify and confirm an agreement made on March 25, 1958 between the government of Canada and the government of the province of New Brunswick in relation to lands forming part of Indian reserves in the province of New Brunswick. The necessity for such an agreement arose from decisions of the judicial committee of the privy council of Great Britain in two cases involving the sale of portions of Indian reserves in Ontario and Quebec, by the federal government, following surrenders for sale given by the Indian bands for whom the reserves had been set apart.


Mr. Speaker:: Order. I wonder whether the hon. member would allow me to interrupt to ask for better attention so the house may hear the statement being made.


Ellen Louks Fairclough: In both cases it was held that notwithstanding that Canada had exclusive jurisdiction over lands reserved for Indians, the radical title to the reserves was

in the province and therefore a valid agreement, after a surrender for sale by an Indian band, could only be made by the province.
The effect of these decisions was far reaching. In the first place, they rendered void the various grants of surrendered reserve lands which Canada had purportedly made between confederation and the date of the court decisions, the last of which was in 1921. They also placed a serious restriction on the Indians' right to use their reserve lands to the best possible advantage, for in effect they stated that a surrender of Indian reserve lands, even when surrendered in trust for sale, operated to free the land from the burden of the Indian title for the benefit of the province without affording the Indians any right of compensation for the loss of their lands. Finally, they established in the province the right to recover from Canada all moneys which Canada had received from the sale of surrendered reserve land, despite the fact that such moneys may have been expended on behalf of the Indians.
The agreement in question is intended to settle the problems arising out of the court decisions. The effect of this ratification and confirmation by parliament and the legislature of the province of New Brunswick will be to validate the effective land grants made by Canada, permit Canada to retain for the benefit of the Indians all moneys received from former sales of surrendered reserve lands, and enable Canada, which is responsible for the administration of Indian affairs, to effectively deal with reserve lands in the province of New Brunswick which may be surrendered for sale in the future.
The agreement was ratified by the legislature of the province of New Brunswick by an act which received royal assent on April 18, 1958. This act is chapter 4 of the statutes of New Brunswick, 1958.


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


Mr. G. R. McWilliam (Norlhumberland-Miramichi):: Mr. Speaker, I wish to thank the minister for her statement. In view of the concentrated effort to wind up the session and also the fact that the minister is scheduled to leave very shortly I shall make only a few remarks. I may first state that the official opposition supports the passage of this bill. This is Bill No. S-6, to confirm an agreement between the government of Canada and the government of the province of New Brunswick. The purpose of this bill is, as the minister said, to ratify and confirm this agreement which was made on March 25, 1958. This agreement was ratified by New Brunswick on April 18, 1958. This bill was introduced in the other place and given first
New Brunswick Reserves Agreement reading on January 29. It received second reading on February 5 and third reading on February 12.
It is not my intention to go into the background of the events leading up to this agreement. From time to time lands were surrendered, and the position taken down through the years was that the surrendered lands belonged to the crown in the right of the Dominion of Canada. Certain cases were appealed to the privy council, and it was held that these lands were the property of the crown in the right of the province. This means that it was necessary to take action to validate the defective grants, and negotiations between the two levels of government have been going on for some 10 years and have now ended in mutual agreement. The agreement covered by this bill will enable the dominion government, which is responsible for the administration of Indian affairs, to deal in future in a proper and legal way with surrendered lands offered for sale.
The constituency of Northumberland-Mira-michi is involved in that eight parcels of Indian lands are involved, namely Indian Point, Eel Ground, Red Bank, two parcels of the Big Hole tract, Tabusintac, Renous and Burnt Church, out of a total of 18 in the province which are covered in this bill. As the federal member for Northumberland-Miramichi I have had representations made to me from time to time by Indians and others in connection with claims to ownership of surrendered lands. Doubts have been expressed as to legal ownership, and dissatisfaction arose in a number of cases which were, in the main, resolved and titles accepted, even if not legal in the strictest interpretation.
The official opposition supports the passage of this agreement and the bill based thereon, because it will clear up the matter of jurisdiction in the sale of surrendered lands, which I think will be a good thing to accomplish and will eliminate a lot of this friction which has existed down through the years.
In the schedule to the bill which spells out the memorandum of agreement between the government of Canada and the government of New Brunswick I read these words, in the fourth paragraph:
-in order to settle all outstanding problems relating to Indian reserves in the province of New Brunswick,-
This, Mr. Speaker, in my opinion is away beyond the scope of this agreement. There are other outstanding problems in connection with Indian reserves in the province of New Brunswick in which the federal and provincial governments have a joint interest, which I will not enumerate at this time.
5962	HOUSE OF
New Brunswick Reserves Agreement The main clause in the agreement states that it will settle all outstanding problems. Perhaps the minister can explain the purpose of these words. It may be that the province of New Brunswick should be asked to amend the wording of this clause, which can only apply to the problems concerning the lands forming part of the Indian reserves in the province, because certainly this bill will not settle all outstanding problems on Indian reserves by any means.
In conclusion, Mr. Speaker, I repeat that we support the passage of this bill which will eliminate the confusion about which I spoke, and will subsequently bring about better business relationships between parties interested in surrendered lands.


Frank Howard: On behalf of the C.C.F. I want to make a few comments in support of the bill before us and to express appreciation to the minister and the government that the federal government and New Brunswick have been able to reach a satisfactory conclusion to this matter. We are particularly pleased with the reference in the bill to minerals, and to the fact that a band does not become extinct by reason of its enfranchisement. If a band should become enfranchised, they would still retain the land which has been set aside for them.
I should like to say to the minister that any time she and the province of British Columbia, and particularly the Indian bands in British Columbia, could reach some sort of agreement which will satisfy the claims of the Indians in British Columbia in so far as the British Columbia land question is concerned, we would be pleased to support that also.


Hon. J. W. Pickersgill (Bonavisla-Twillin-gate):: Just before the minister replies, I may say that I have nothing to add to what the hon. member for Northumberland-Mira-michi (Mr. McWilliam) said about the bill in general. However, there is a special situation in connection with one of the reserves at Big Cove in the county of Kent about which the hon. member for Kent (Mr. Michaud) asked me to say a word. It is a legal question, and is the result of litigation between someone who the court decided really owned the land and whose land was trespassed upon by the Indians on the reserve. This person got a judgment in 1958 against the Indians, but of course the judgment is really worthless because there can be no execution against the Indians. It did seem to me the minister might look into it and see whether, in real equity, the crown ought not to do something about it.


Ellen Louks Fairclough: Mr. Speaker-


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


Ellen Louks Fairclough: I do not think there is much comment called for at this time. I should like to assure the hon. member for Bonavista-Twillingate that I shall be glad to look into the particular case he has cited.
With reference to the words which were protested by the hon. member for Northum-berland-Miramichi, if I may use so strong a word, I think it must be considered that this agreement was drawn and passed first by the legislature of New Brunswick. I agree that probably the words he quoted, that is "to settle all outstanding problems", are a little broad. Nevertheless it was the true intention of the bill, as understood by both New Brunswick and Canada, that the agreement was to cover the outstanding problems in this particular field which were the main ones interesting the two governments at that time. These same words, I think, were copied from former agreements that were entered into between the provinces and the federal government, and have been used on several occasions, notably in 1912 and again in 1924. I am sure there is no real objection to their appearance in this bill.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. McGee in the chair.
Clause 1 agreed to.
On the schedule.
Frank Howard: In so far as the schedule is concerned, I pose a question to the minister which arises from clause 6, subclause 4, paragraphs (a), (b) and (c), with respect to the appointment of an arbitration board to deal with differences which may arise. Paragraph (a) reads:
Canada and New Brunswick shall each appoint one arbitrator, and the two arbitrators so appointed shall appoint a third arbitrator-
I wonder what would take place if the two arbitrators so appointed were not able to agree on the third arbitrator. What steps would be taken to select him? I do not know whether this would ever be a possibility, but I know that in arbitration cases in other instances, dealing with other matters, it arises. There is usually provision for the selection of the third arbitrator when the two participating parties are not able to agree.


Ellen Louks Fairclough: I think that is such a hypothetical question that it raises the problem of giving an answer which might be taken as a ruling, but I would think the usual law would take over. Personally I am not concerned about this section. I do not think we will run into any difficulty.


Frank Howard: I do not imagine you would either, but the question could be dealt with through the process used in establishing arbitration boards in settling disputes, in expropriation questions and things of that nature. If that is the process to be used, it provides a solution.


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


Ellen Louks Fairclough: the second reading of Bill No. S-25, to confirm an agreement between the government of Canada and the government of the province of Nova Scotia respecting Indian reserves.
She said: His Excellency the Governor General, having been made acquainted with the purpose of this bill, has given his consent as far as Her Majesty's property rights are affected that the house may do therein at it thinks fit. I could make similar remarks on this bill to those I made on the bill which has just been adopted by the house. The situation is exactly the same. If hon. members agree, I think I might just ask if there are any comments.


George Roy McWilliam: The minister has just said that this bill is similar to Bill No. S-6 which just passed second and third reading, and that she did not think it was necessary to make any statement on the bill. I quite agree with that sentence. For the same reason I feel that there is not much more that can be added by me on this bill in addition to what I said on Bill No. S-6. However, I wish to say that the official opposition supports the passage of this bill. I note that once again the same phraseology is used with regard to the settling of outstanding problems. However, as the minister said previously-and as I agree-this is not a very serious thing, and we have no objection.


Frank Howard: Mr. Speaker, this affords me the opportunity to make probably the shortest speech I have made yet. We support this bill.


[Stage Direction]
Motion agreed to, bill read the second time, considered in committee, reported, read the third time and passed.
14. 1959
Nationality of Married Women CITIZENSHIP AND IMMIGRATION

Ellen Louks Fairclough: That it is expedient that the Houses of Parliament approve the convention on the nationality of married women done at New York on February 20, 1957, and that this house do approve the same.
She said: Mr. Speaker, I need not say more than a few words in support of this resolution. As hon. members will appreciate immediately, the convention on the nationality of married women is an especially forthright, commendable and timely document that should win the spontaneous approval of the progressive countries of the world. The convention contains only three substantive articles which are, however, of considerable significance in their recognition of the autonomy of married women with regard to citizenship. I think, Mr. Speaker, I might read them into the record:
Article 1
Each contracting state agrees that neither the celebration nor the dissolution of a marriage between one of its nationals and an alien, nor the change of nationality by the husband during marriage, shall automatically affect the nationality of the wife.
Article 2
Each contracting state agrees that neither the voluntary acquisition of the nationality of another state nor the renunciation of its nationality by one of its nationals shall prevent the retention of its nationality by the wife of such national.
Article 3
1.	Each contracting state agrees that the alien wife of one of its nationals may, at her request, acquire the nationality of her husband through specially privileged naturalization procedures; the grant of such nationality may be subject to such limitations as may be imposed in the interests of national security or public policy.
2.	Each contracting state agrees that the present convention shall not be construed as affecting any legislation or judicial practice by which the alien wife of one of its nationals may, at her request, acquire her husband's nationality as a matter of right.
As will be apparent, the general purpose of the convention is to ensure that the nationality of a married woman will not be affected automatically by her marriage to a national of another country, by the dissolution of such a marriage or by a change in the nationality of her husband. If she wishes to retain her nationality she will be free to do so. On the other hand, if she chooses to acquire the nationality of her husband the naturalization procedures will be eased in her favour. Yet the contracting states are free to determine how this easing of procedures is to be done, within the limits of national security and public policy.

Nationality of Married Women
As every hon. member knows, up to a few decades ago it was the universal rule that a woman who was of a different nationality than her husband acquired his nationality automatically upon marriage, and lost the nationality which she had possessed until then. In the process of time a number of countries, notably the United States, France and the U.S.S.R., enacted legislation providing that no such change in a wife's nationality would be automatic. However, the fact that this progressive action was not concerted among the nations brought domestic laws into conflict. The consequence at first was that while women no longer always acquired the nationality of their husbands, they still lost their own, and some were accordingly left stateless. It was imperative therefore that legislative action be made universal. Otherwise the attempt to resolve one hardship would have simply resulted in the creation of another.
Without waiting for the establishment of an international convention on the subject, Canada took the necessary steps in 1931 to maintain the national status of Canadian women who married nationals of countries that no longer granted automatic naturalization upon marriage. Moreover, with the adoption of the Canadian Citizenship Act in 1946, Canada became the first country of the commonwealth to provide that a woman has a fully autonomous citizenship status. Unless she herself wishes it and takes special steps in this direction, a Canadian woman will not lose her nationality, nor will an alien woman gain Canadian nationality upon marriage. On the other hand, there exists a simplified naturalization procedure for the alien wife who wishes to acquire the nationality of her Canadian husband.
The international agreement that is before this house for approval is therefore in full conformity with the citizenship policy followed by Canada at least over the past 12 years. It was prepared on the recommendation of the economic and social council of the United Nations, and opened for signature and ratification by a resolution of the general assembly adopted two years ago. Canada signed it on February 20, 1957, and on April 9 of that year the convention was tabled in the House of Commons. Twenty-two countries, including the United Kingdom and the U.S.S.R., have now signed the convention, which came into force last August. The number of ratifications has now reached 12.
Canada has taken a very active interest in this question at the United Nations, and is one of the states which sought to promote the drafting of the convention. Women's organizations in this country have expressed their satisfaction at Canada's signature, and

have displayed considerable interest in Canadian ratification. I am confident that every hon. member of this house will agree that it is desirable for Canada to approve the convention, both so as to reaffirm the equality of citizenship status as between men and women in Canada, and so as to give encouragement to a highly desirable development in modern society.
(Translation):


Mr. Gabriel Roberge (Megantic):: Mr. Speaker, I listened with great interest to the remarks of the Minister of Citizenship and Immigration (Mrs. Fairclough). I agree with her that this convention conforms in a general way with the terms of the Canadian Citizenship Act.
Mr. Speaker, I should like to read into Hansard part of the preamble of the convention on the nationality of married women, which was signed in New York on February 20, 1957, and has been tabled in this house and in the other place on April 9, 1957, as the minister pointed out. The part of the preamble I mean reads as follows:
(Text):
"Everyone has the right to a nationality" and that "no one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality".
(Translation):
Mr. Speaker, I have a feeling I have already heard some discussion in this house with regard to a bill asking that no distinction be made between native born Canadians and naturalized Canadians. As a matter of fact, this discrimination still exists in our citizenship act, and I hope that, as a result of the ratification by the house of the convention on the nationality of married women, the minister will consider introducing the required amendment to our citizenship act so that, at last, any discrimination between naturalized citizens and native Canadians be eliminated from our statutes.
Mr. Speaker, we on this side of the house are happy to support the convention which has already been approved by the United Nations and quite a number of countries.
(Text):


Frank Howard: Mr. Speaker, one of the pleasant duties which falls on members, particularly those who belong to the male sex, is to rise and indicate support for any measure such as this which will be beneficial to the most fascinating, delightful and romantic section of our society, especially when the hon. member who is introducing the motion is herself a woman. It is just in these short words that I wish to indicate our unqualified support for this motion before us and for the convention itself.


Mr. Caron:: Would the minister have this convention printed in French?


Ellen Louks Fairclough: In answer to hon. members who have spoken previously, I would say that the convention was tabled, as I said, on April 9, 1957. There are 100 or so copies available, and the ones I saw were all in English. I daresay it would not be difficult to translate it, but I am not sure whether we have any translated copies.


Alexis Pierre Caron: May we have it translated and given to us in French?


Ellen Louks Fairclough: I would be very happy to arrange that.


[Stage Direction]
Motion agreed to.

Gordon Minto Churchill: That it is expedient that the Houses of Parliament do approve the international wheat agreement opened for signature at Washington, D.C., on April 6, 1959, and that this house do approve the same.
He said: Mr. Speaker, on March 10 I announced to the house the successful conclusion of negotiations for a new international wheat agreement at the United Nations wheat conference in Geneva. The new agreement was open for signature in Washington from April 6 to April 24, and on April 22 the Canadian ambassador to the United States, Mr. Heeney, signed the agreement on behalf of Canada, subject to ratification by parliament.
As at May 31 the governments of 26 importing countries and of all nine exporting countries had signed the agreement. The house will note that the United Kingdom is a signatory to the new agreement. Four of the smaller importing countries listed in the agreement have not yet signed, but their accession to the agreement, as well as that of several other importing countries which are members of the current international wheat agreement but did not participate in the conference, is expected to take place before December 1, 1959, which is the final date stipulated in the agreement.
The exporting countries now include Italy, Mexico and Spain-previously importing countries-in addition to Argentina, Australia, Canada, France, Sweden and the United States. Instruments of acceptance following ratification must be deposited before July 16, in order that the new agreement enters fully into force on August 1, on the expiry of the current agreement.
International Wheat Agreement
This new agreement has the full support of the principal producer organizations in western Canada. The leaders of these organizations, who are members of the advisory committee of the Canadian wheat board, formed part of the Canadian delegation to the United Nations wheat conference. I should like to add in this connection that, as in previous negotiations, the counsel and judgment of these men, reflecting their mature experience in wheat affairs, gave valued support to the contribution made by the Canadian delegation to the conference.
The house will expect me at this time to give a broad outline of the new agreement and its main features. The 1959 agreement is new not only in the sense that it will succeed and replace the 1956 agreement on its expiry on July 31; it is also new in that it is different and broader in concept, scope and content than any of the three previous agreements concluded since 1949. In this sense it will mark a new era for the international wheat council, which should now provide an enlarged framework with realistic terms of reference directed to the practical and urgent needs of the world wheat situation as it is and as it has been developing.
The principal objectives of the new international wheat agreement remain the same, namely the assurance of supplies to importing countries and of markets to exporting countries at equitable and stable prices, and the overcoming of the serious hardship caused to producers and consumers by burdensome surpluses and critical shortages of wheat. However, these objectives have now been significantly broadened to include the expansion and freest possible flow of the international trade in wheat and flour in the interests of both exporting and importing countries; the encouragement of increased consumption of wheat and wheat flour generally, particularly as a means of improving health and nutrition, and the furtherance of international co-operation in connection with world wheat problems.
In order to appreciate fully the significance of these broader objectives, perhaps it may be useful to refer briefly to some of the background to the new agreement, and this may also help to give point to the changes in its operational clauses. Hon. members will recall that the three previous agreements of 1949, 1953 and 1956 were based essentially on reciprocal undertakings by exporting and importing countries. At the maximum price, exporting countries were committed to supply guaranteed quantities to importing countries: and at the minimum price, the importing countries were committed to purchase guaranteed quantities from the exporting

International Wheat Agreement countries. Within the price range there was no commitment, either to sell or to purchase under the agreement.
In a period of strong demand and rising prices, stimulated by the post-war shortage of grains and later by the Korean crisis, the first wheat agreement did stabilize prices for almost two-thirds of the world wheat trade throughout its four-year period, 194950 to 1952-53. In 1956, under the burdensome weight of accumulating wheat surpluses almost everywhere in the world, the quantities committed under the I.W.A. fell to almost a quarter of the international trade in wheat. Purchases transacted under the agreement since then have declined to about a third of the total movement of wheat between those countries which are members of the agreement. In such circumstances, when the quantity of wheat moving outside the agreement was twice as large as that transacted under it, and when the problems of surplus accumulation and disposal were beyond the scope of the agreement, it was clear that the former type of agreement was no longer adequate to cope with issues in the current wheat situation which require a solution, either by grappling with root causes or by the formulation of remedial measures to mitigate their adverse international effects.
The 1959 agreement reaffirms the belief of its members in intergovernmental cooperation on world wheat problems. It also represents an attempt on the part of its members to devise a new framework to meet changed conditions. Under the new agreement the international wheat council has wider powers and functions. It is authorized to hold an annual review of the world wheat situation covering developments in national production, stocks, prices and trade, including surplus disposal and special transactions, details of which must be supplied regularly to the council.
Instead of expressing rights and obligations in terms of guaranteed quantities applicable only at the maximum or at the minimum price, in the new agreement individual importing countries are under a continuing obligation to purchase, when prices are within the price range but below the maximum, not a guaranteed quantity but a specified minimum percentage of their total commercial imports. When prices reach the maximum the exporting countries undertake, if requested, to supply importing countries, at prices no higher than the maximum, with quantities of wheat equal to the average of their total commercial purchases from them over a representative base period.
In this connection it should be pointed out that as the obligations of exporting countries


at the maximum price are related to the average level of past purchases on commercial terms, there is an inducement to importing countries to buy more than their percentage commitment when prices are below the maximum in order to build up a larger entitlement. At the same time, while prices are at the maximum importing countries are released from their obligations to purchase under the agreement, and if they so wish may obtain their commercial needs from any other source. Thus mutual obligations are balanced in a way that is conclusive to a freer and larger movement of trade under the agreement.
From Canada's standpoint this aspect of the agreement represents a great improvement. In the previous agreement, guaranteed quantities were of the order of 295 million bushels, against which only 195 million bushels were transacted in 1957-58, the last year for which final figures are available. Under the new agreement, to the extent that the importing countries will purchase their requirements commercially, and in bushel terms, these may increase as well as decrease; a specific minimum percentage will have to be transacted under the agreement each year so long as prices are below the maximum. If the minimum percentages of the 30 importing countries specified in the agreement are expressed in terms of commercial purchases over a representative period, 1954-55 to 195758, the commercial movement within the agreement will amount to about 420 million bushels. If allowance is also made for the former United Kingdom dependent overseas territories, such as Ghana, Malaya and the West Indies Federation, and for members of the current agreement and other countries/ that did not participate in the conference but which are expected to accede to the new agreement, it is expected that annual commercial trade under the agreement will rise to about 450 million bushels or more.
Under earlier agreements the total of the importing countries' guaranteed quantities was divided among the exporting countries, each exporting country's share representing its individual guaranteed quantity. Importing countries could theoretically be required to take this guaranteed quantity if prices reached the minimum. In practice this right was never used, since prices did not fall to the floor. Moreover, there was considerable doubt whether the provisions safeguarding the exporters' position at the minimum would have proven effective had they been put to the test. In the new agreement the market represented by the total of the importing countries' commitment to purchase a specified percentage of their commercial imports will

be open to competition among the exporting countries. There is every prospect that on grounds of quality and price Canadian wheat will be able to compete successfully, and that this pressure will prove advantageous to our trade.
The price range in the new agreement is $1.50 to $1.90 per bushel for No. 1 Manitoba northern wheat, basis in store Fort William/ Port Arthur. The minimum remains unchanged and the maximum price has dropped 10 cents per bushel. In the face of the persisting accumulation of supply in excess of foreign commercial demand there was heavy pressure from the importers for a downward adjustment of the floor as well as the ceiling price. The exporters were successful in holding the minimum price and were able to agree to a reduction in the ceiling in the light of considerable advantages offered elsewhere in the new agreement, particularly the importers undertaking to purchase throughout the price range. Some decrease in the price range was inevitable in prevailing circumstances, and the reduction made can be regarded as the minimum necessary to secure acceptance of a more effective agreement. Whether the maximum price provisions will become operative during the three year currency of the new agreement cannot now be foreseen.
While the rights and obligations of exporting and importing countries are confined to sales and purchases transacted on commercial terms only, all transactions, commercial and special, entered into by member countries are to be recorded by the secretariat of the international wheat council for the purposes of the agreement. A "special" transaction is defined as "one which, whether or not within the price range, includes features introduced by the government of the country concerned which do not conform with usual commercial practices". The chief purpose of bringing special or non-commercial transactions within the effective scope of the agreement is to enable the council in its annual review to have a complete and comprehensive picture of the international trade in wheat. A complete record of non-commercial transactions will, of course, facilitate the task of safeguarding normal commercial markets.
To sum up, the new agreement is a flexible international instrument devised to deal with trade in wheat and the most pressing problems of the world wheat situation. With its wider responsibilities and functions the new council will provide an effective forum for intergovernmental consultations and co-operation in wheat, and as such will be better equipped to tackle world wheat problems and to promote corrective measures. In this way it is hoped that it will be able 66968-9-378
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International Wheat Agreement to exert a beneficial and stabilizing influence on the world wheat economy. In the present world wheat situation the new agreement affords increased assurance of markets for our wheat at a fair return to our wheat producers. For these reasons I commend to the house the new international wheat agreement for approval.


Paul Joseph James Martin: Mr. Speaker, the resolution the hon. gentleman has moved in connection with the fourth international wheat agreement is of importance, of course, to all sections of the Canadian people. The minister in noting some of the advantages of the fourth treaty called our attention to the statement of objectives which will be found in part I, article 1. In referring to these objectives the minister said there is an improvement over the purposes and objectives envisaged in the last international wheat agreement.
That is true, but one should not confuse the statement of intention with reality, particularly when in the treaty as presently drawn up there is no commitment to make effective the promotion of the expansion of international trade in wheat and wheat flour as stated in clause (b) of the objectives, nor is there any provision that would make it obligatory on any signatory to live up to the implications involved in clause (e), where it is proposed as the final objective to further international co-operation in connection with world wheat problems, recognizing the relationship of the trade in wheat to the economic stability of markets for other agricultural products.
I do agree with the minister, however, that as a statement of objectives in a collective effort such as this under the auspices of the United Nations there can be no quarrel with the broad concepts which are envisaged. I think at the outset it should be stated that in practical terms it is doubtful that this new international wheat agreement will be a guarantee of permanent stability in wheat prices.
The new agreement becomes effective on August 1 and will run until July 31, 1962. The minister has referred to the fact that unlike the preceding wheat agreement, and its predecessor Britain has become an adherent to the treaty. However, while that is welcome certainly on sentimental grounds, the economic implications ought not to be overstated. The participation by Britain will not bring about any major increase in the demand for Canadian wheat under the international wheat agreement, in my view. It is significant that the price for British participation-and the minister will correct me if I am wrong in this-is that, the ceiling price has been

International Wheat Agreement reduced from $2 to $1.90. The cut, therefore, is 10 cents, from $2 a bushel to $1.90 a bushel. As the minister has pointed out, the floor remains at $1.50. I believe the current price for No. 1 northern is below the present $2 ceiling, and is around $1.69.
The overriding consideration in this agreement, of course, is that we are faced again with a very serious world surplus, and that is a very important conditioning factor in this particular treaty. As a matter of fact my slight research indicates that most authorities in this matter feel that in the next three years the continuing world surplus situation will prevent the price of wheat reaching the maximum level. Crop failure, of course, could alter this situation, and in that event there is one safeguarding feature in the treaty that the minister has not mentioned, and that is that in the event of crop failures the exporting countries are not obliged to sell any more than their normal amounts to purchaser countries that are signatories to this treaty. The latter would therefore, I take it, be precluded under the treaty from stockpiling at the $1.90 level, a situation that price-wise could not attend any serious reduction in the world surplus situation and which might in itself be a cause for an improvement in the price situation but for the stockpiling control provisions contained in the treaty.
I suppose it will be argued that the participation by Britain in this treaty will give some steadiness and some orderliness to the marketing of wheat, but it will remain to be seen in the light of experience whether this will really be the case; for, as the minister has pointed out, there is no obligation as in this treaty to buy on the basis of fixed quotas. There is merely the requirement that countries give an indication of their intended purchases. In the case of Britain this will mean 80 per cent of their requirements.
It is very interesting to examine the annex to this treaty and see the various percentage requirements to which the purchasing countries commit themselves. Without belittling the principle behind this treaty, I do not think Canadian farmers and wheat producers should be taken in by these figures. I notice, for instance, that Vatican City is given at 100 per cent. Some new countries are given at fairly high figures. I am sure the minister will agree that it will be interesting to see whether many of these countries are really potential purchasers, particularly of Canadian wheat in these amounts. I think the percentage commitments of some purchasing countries should not be exaggerated.


There is, however, a new feature in this treaty which the minister has mentioned. It is that while the old treaty covered 25 per cent of the world's commerce in wheat, the new agreement will cover 75 per cent. And that, of course, does represent an improvement. However, the elimination of the fixed quota purchase has another implication, and that is the effect of this on the Soviet union. The Soviet union has not become one of the signatories to the treaty. The minister did not explain why. I suppose there were reasons in the minds of some of the exporting countries as well as considerations arising out of the position of the Soviet union itself, but perhaps the overriding reason was the fear of a flooding of the world market, such as the Soviet union was able to effect in the matter of tin. In that connection, it is noteworthy that in the annex West Germany undertakes to buy 70 per cent of her total requirements, leaving 30 per cent to be purchased from other than countries supplying wheat under this international agreement. Germany, of course, is not precluded from purchasing some of that 30 per cent, or all of it, from the Soviet union.
The minister did point out that the treaty takes into account give-aways-I do not think the minister did mention this-but the treaty takes into account the give-aways to underdeveloped and starving countries. The advantage of this, of course, is that it would be done on a collective basis and not, as it is being done now by some countries, on a unilateral basis with very disturbing effects to other countries. This is the principle behind some of the criticism which the present and the preceding Canadian government have levelled against the surplus disposal policy of the United States.
The treaty, notwithstanding some comments which I have seen in the press, does not provide for any controls in world wheat production. Without in any way saying whether or not I think it would be a good thing in itself, the fact is regardless of some of the advantages which this fourth international wheat agreement is supposed to give, the basis certainly does not include any step by which the gap between world production and world consumption can be improved. All that is indicated is that it should be regarded as the common concern of all countries to see to it that the gap between production and consumption was such as not to add to the burden which arises out of the serious surplus situation that now prevails.
In the statement of objectives, as I mentioned at the outset, there is an expression of support for the promotion of the expansion of world trade and the freest practical flow

of trade among the signatory countries. That is a very desirable thing, but this is nothing more than a mere pious expression of intention. The only effective way by which this could be given effect to would be for the signatories themselves to take steps in their own domestic policies toward a freer world trade and the expansion of world trade itself. The mere statement of these objectives should not be misconstrued.
In many respects this particular treaty is a victory for a buyer's market because of the cut-back of 10 cents. I know the minister would join with me and with any who speak on this measure in indicating that while there is a cut-back of 10 cents, it should be the policy and the aim of the government, having in mind the interests of the wheat producer, to keep the price at the ceiling. I emphasize this because of a press report which I saw in the Ottawa Journal of March 11 of this year under the heading:
U.K. Minister Sees Cheaper Wheat From I.W.A. Pact.
The article goes on:
British agriculture minister John Hare said last night the international wheat agreement reached yesterday in Geneva should pave the way to cheaper wheat.
A little further on it says:
Britain, by far the largest wheat importing country, has said the revisions in the new agreement meet all her objections to the agreement of 1953 and 1956.
Well, what may be Britain's objective and Britain's interest may not necessarily meet the objectives and the interests of the Canadian wheat producer. In any event, I suppose because of the world surplus situation, the present ceiling may be the price level most easily attainable; but I think it is important for us to bear in mind that for the admission of Britain, desirable as that is, we have had to pay some price.
It is argued by some that as a result of this cut-back the Canadian wheat producers may have lost some prospective buyers. If he replies possibly the minister will be able to comment on that point.
I notice that the number of participating countries has dropped from 42 to 36. I do not think the minister gave any explanation of that, and perhaps he would be good enough to do so when he replies.
This treaty, of course, recognizes the value of the principle of multilateralism in world trade as opposed to the operations of a free market. There will continue to be the usual arguments by those who feel that the latter would bring about a better price for the producer; but speaking for myself, certainly I believe this multilateral approach 66968-9-378J
14, 1959
International Wheat Agreement is more orderly and more inclined to bring about in the long run the kind of satisfaction of interests we desire, not only for the peoples of the world but for the Canadian wheat producers themselves.


Hazen Robert Argue: May I ask the hon. gentleman a question? Does he not think the multilateral arrangement to which he refers would also bring about a better price than a free market in certain circumstances?


Paul Joseph James Martin: Personally I am inclined to think that is the case, and that is what I meant when I said I think an orderly arrangement as the result of such a collective effort would likely have greater consequences for the wheat producers as well as for the other countries of the world involved in the two considerations, which I think go hand in hand.
I wonder whether the minister can indicate whether we are simply going to get 80 per cent of Britain's requirements, because my examination of this situation indicates that in recent years 97 per cent of Britain's wheat purchases were made from the major wheat exporting countries who continue as signatories to this treaty, notwithstanding the fact that Britain herself was not obligated to any of the requirements of the last two international wheat agreements.
I think the minister ought to indicate to us what will be the effect of the new European common market on exports by major wheat-producing countries. Moreover, it seems to me that the minister has not fully satisfied the committee when he speaks of the new powers given to the council with respect to the supervision of surplus disposal programs. It is true that we argued that under GATT there was a violation, at least in spirit, in the surplus disposal programs, particularly of the United States. But I am not convinced that this new treaty will or does provide for a greater measure of public scrutiny, that it really does go further than the situation that prevails under the existing treaty. I note that, while in part VI, article 21, there is provision for an annual review of the practices in connection with wheat disposal, in the final subsection of article 21 the following appears:
Nothing in this article shall prejudice the complete liberty of action of any exporting or importing country in the determination and administration of its internal agricultural and price policies.
It should not be forgotten likewise that in the agreement that comes to an end on July 31 there is provision for a periodic review of surplus disposal operations, just as there is, in effect though different in form, in the new agreement.
I think all these questions of the supervision of surplus disposal products are very
5970	HOUSE OF
International Wheat Agreement important. I know the minister would not want to leave the country with an exaggerated impression of the extent of the agreement which was arrived at in Geneva. It is true the international wheat council will make a yearly review of annual production and marketing measures affecting trade in wheat, and sales by member countries. This will, admittedly, include not only commercial sales, as the minister observed, but special transactions. Article 3 of the treaty defines what are special transactions. Commercial purchases are the percentages of purchases which importing countries agree to make of their total requirements of commercial wheat. Special transactions are defined as:
(a)	sales on long term credit resulting from government intervention;
(b)	sales under tied government loans;
(c)	sales for inconvertible currency;
(d)	barter transactions;
(e)	bilateral trading agreements;
(f)	gifts or grants.
It may be very well in principle to say the wheat council now, under this treaty, is going to have a review power that was not as clearly stated under the old treaty. However, this is to be observed. When the United States gave away wheat for foreign currency, and gave it away on tied government loans as it did to certain South American countries, we argued that the United States violated the spirit of the international wheat agreement, if it did not violate the letter of the agreement itself. I do not believe it can be argued that this limitation is removed under the present treaty. Under this treaty the United States now, without violating even the spirit or the letter of the agreement, may sell on long term credit to any country. It can continue to sell on tied government loans. It can say to a country, "We will make you loans for industrial purposes if you will take a certain amount of wheat from us."
As I understand it, there is nothing to prevent that under this treaty. It can continue to sell for inconvertible currencies, for instance to India for rupees. It can make barter transactions, which are the worst of all. It can make bilateral trading arrangements and agreements. It may dispose of wheat by gifts or grants.
We have been objecting to all this. We have been arguing that this was contrary to GATT at least in spirit. But now, under the new agreement, the United States will be able to take the position that while there is an obligation to have an annual review of all transactions of this kind, there is no possible argument that these various kinds of transactions, other than commercial ones are even contrary to the spirit of the


international wheat agreement. Under this new agreement therefore, as I see it, these practices really received the approval of the signatory countries to the international wheat agreement.
There is no need for any further extended comment on this treaty which, in principle, represents a sound approach. I do not believe, in fairness, it could be argued that it is a great improvement or, on balance, an improvement at all over the existing agreement. One appreciates all the difficulties in arriving at an agreement involving a matter of this sort. One recognizes the advantage of British participation, notwithstanding the fact that this means a cut-back from $2 to $1.90. While this treaty is perhaps the best that could have been obtained under all the circumstances-I want to be fair in my comments -I do believe its value should not be exaggerated. We should not think that by this agreement, involving the participation now of Britain, involving the greater publicity for certain transactions which we felt were inimical to our trading interests as a great wheat producing country, the argument we made against the surplus disposal policies of the United States has been destroyed.
However, with these observations I want the minister to know, as one who believes in the collective way of approaching these matters, that I do not overlook the fact that in principle this treaty does perpetuate some of the principles of the three preceding agreements. But it is certainly, I think, a great overstatement to argue that this treaty represents a fundamental change or an improvement over its predecessors.


Hazen Robert Argue: Mr. Speaker, the international wheat situation is a difficult one, and any consultation or any arrangement for consultation by most of the wheat exporting and wheat importing countries is something that should be supported. Agricultural producers have long been of the opinion that, in producing wheat and other grains and in the storage and sale of those grains, a proper central agency acting on behalf of producers is necessary, and have also believed that in the sale of wheat and in international deals in wheat this same principle of collective agreement should be continued.
We have had a number of wheat agreements in the past, and with the exception of the initial wheat agreement when there was a very definite price advantage under the agreement, those agreements have been standby rules for the sale of wheat. In general the buying and selling of wheat has taken place without the wheat agreements having any particular effect.

This agreement is perhaps the best effort that could be made by all of the nations collectively in the light of the current wheat situation. The Canadian government has had the support of farm organizations in its effort to bring about such an agreement. In fact it had some of the leading members of the agricultural organizations of this country actively participate in bringing about the formulation of this agreement.


Paul Joseph James Martin: Mr. Warren was
one of them, was he not, or Mr. Wesson?


Hazen Robert Argue: Is he from your part of the country?


Mr. Marlin (Essex Easl):: No, he is a westerner.


Hazen Robert Argue: Mr. J. H. Wesson, president of the Saskatchewan wheat pool, was one of the leading members on the Canadian side. Mr. Alf. Gleave, president of the Saskatchewan farmers' union, was also in attendance. There were undoubtedly others equally eminent whose names escape me for the moment.


Mr. Benidickson:: I thought a list of them should be put on the record later.


Hazen Robert Argue: Having said that this is probably the best arrangement that could be made under existing circumstances, one should recognize the fact that this agreement in no way assures the solution of this extremely difficult problem. I have listened in this house over the years to many speeches by ministers of trade and commerce, in which the minister of the day has presented the argument of the government in favour of the particular policy that was being followed at that time. The optimism for which Right Hon. C. D. Howe was so well known in the house has been carried into the speeches of the present Minister of Trade and Commerce.
We have had from the minister this morning a survey of this agreement. While one can discover from the statement he has made that he realizes that this agreement is not likely to meet the total situation as it exists, nevertheless the language the minister used emphasizes, this agreement, I believe, beyond its likely real value. By that I mean that the present minister is taking this same optimistic approach. I am wondering whether the present Minister of Trade and Commerce, when it comes to a discussion of the grain situation, has not perhaps the same ghost writer or ghost writers who used to prepare the extremely optimistic statements that were once prepared for his predecessor.


Gordon Minto Churchill: No; they are new ones.
International Wheat Agreement


Hazen Robert Argue: The minister says they are new ghost writers, but one undoubtedly is following in the footsteps of the other. He probably has been checking the files and has put into the hands of the minister, by the minister's own admission, the statement which was made this morning and which I think is so optimistic as in fact to give rise to a misleading conclusion, and which in fact would mislead people who do not understand this situation.
The minister has spoken of this agreements as being broader in concept, scope and content, and as an enlarged framework, and has said many optimistic things about the agreement. Mr. Speaker, I should like to hear from the minister at some time a frank statement on the extremely difficult situation in wheat that today faces Canada and the world. That is not in this statement made this morning. In this agreement there is not an adequate guarantee that these difficulties will in fact be met.
This agreement continues the trend of lower wheat prices. There is a reduction in the ceiling price from $2 a bushel to $1.90 a bushel. That is not likely to be a real factor within the life of this agreement, as I see it.


Paul Joseph James Martin: Unless there were big failures.


Hazen Robert Argue: The hon. member for Essex East says "unless there were big failures".


Murdo William Martin: I mean crop failures.


Hazen Robert Argue: Crop failures, of course. I do not think in the major wheat producing countries of the world you are likely to get a series of crop failures that would so affect the world situation as to bring about a shortage of wheat.


Paul Joseph James Martin: That is right.


Hazen Robert Argue: Another factor of this agreement is the continuation of the floor price at $1.50 a bushel, basis No. 1 northern, Fort William. We would have been happier if, along with a reduction in the ceiling price, there had been some increase in the floor price that would have brought that price to $1.60 a bushel. The selling price at Fort William today is $1.67 a bushel, which means that the price in recent years has been above $1.60. But any reduction in present wheat prices to the floor price set out in this international wheat agreement that we are approving this morning would spell disaster to the wheat producers of this country.
That would mean a net reduction in the present price of wheat of about 17 cents a bushel. In general that would wipe out the interim and final payments to wheat producers

International Wheat Agreement as we have known them. So if the price should go to rthe floor contained in the agreement, of $1.50 a bushel, the agreement would spell disaster to the wheat producers of this country.
Another factor in this agreement which reduces its value is the fact that there are no fixed quantities that countries agree to purchase; there are merely percentages. It is valuable that countries agree to do even that, but it would have been a much more adequate guarantee if the percentages could have been related to actual quantities of wheat so the producing countries in the world and the grain producers would have some idea of just what is involved.
Then there are important importing countries which are allowed by this agreement to purchase large quantities outside of the agreement itself. The Federal Republic of Germany, which has become Canada's second best customer for wheat in recent years, agrees to purchase 70 per cent of its requirements. In other words 30 per cent of the purchases of the Federal Republic of Germany can be made, under this agreement, outside of the agreement. That is what is set forth here. Another country, Japan, which has been an exceedingly important customer of Canada

a customer that recently, at any rate, has been growing in importance-is allowed under this agreement to purchase 50 per cent of its wheat from countries other than the exporting countries listed in this agreement. That is therefore another feature which shows that there are large quantities which can be purchased and sold outside of the agreement.
Then, of course, another thing that bears on the wheat situation as it now exists is the larger number of exporting countries that are brought under this agreement. It used to be considered that there were four exporting countries, the Argentine, Australia, Canada and the United States. To those countries from time to time have been added other countries. France is now a large exporter of wheat. We have had such other countries added to this agreement as Italy, Mexico and Spain. Countries which have not been large importers of wheat in the past but who still have imported wheat from time to time are now becoming exporting nations. This is another indication that the wheat situation is rather disturbing from the standpoint of the agricultural producers of this country.


Paul Joseph James Martin: Has my hon. friend the figures for world surplus?


Hazen Robert Argue: Our minds must think alike; I have them in my hand and it was the next thing I was coming to. These figures are

contained in the most recent issue of The Wheat Review for May, 1959, and here is the paragraph dealing with world surplus:
Latest available estimates indicate that supplies of wheat remaining on or about May 1, 1959 in the four major exporting countries for export and for carryover at the end of their respective crop years amounted to 2,207.7 million bushels, representing an increase of 22 per cent over the 1,815.5 million available a year ago. Supplies at May 1, 1959 in millions of bushels were held as follows: . . . United States, 1,373.7; Canada, 609.2; Argentina, 99.4; Australia, 125.4.
These are large and growing surpluses. There is an indication also that the U.S.S.R. is becoming a very important factor in the wheat situation. I have in my hand the Alberta Wheat Pool Budget of June 26, and it has this to say about the wheat production in Russia:
Reports from Russia indicate that country may harvest another tremendous wheat crop this year. Last year Russia produced a wheat crop claimed to be in excess of 2,300 million bushels, compared to the United States' all time record harvest of 1,450 million bushels. Another 2 billion bushel Russian crop could result in a substantial wheat surplus for export and create further wheat trading problems for Canada.
And, I might add, for the world.
The possibility of Russia entering the world wheat market on a large scale was a matter of some considerable concern at the international wheat agreement negotiations at Geneva last winter where the fear was expressed that Russia might decide to use wheat as an economic weapon in the world cold war. With the United States already distributing wheat in every manner possible, Canada s trading position would be greatly aggravated should Russia take such action.
This spring a total of 112.5 million acres were reported to have been sown to spring wheat in Russia. This compares with a total U.S. winter and spring wheat acreage of about 55 million and the Canadian acreage of only 22 million. About two-thirds of the Russian wheat crop is sown in the spring.
When the Canadian wheat board officials were before the agriculture committee they recognized that the Soviet union today stands as a very important potential competitor in the wheat markets of the world, and a country that in recent months has played a more active part in wheat exports.
For Canada there are indications that the grain situation is becoming more difficult. The Minister of Trade and Commerce seems to disagree with me every time I point out the difficulties that Canada is facing in the export field, and the difficulty Canada is facing in obtaining markets. The minister takes the same generally optimistic view which was taken by his predecessor, but I say to him that the wheat situation in Canada is not only serious at the present time but that the outlook for wheat sales in the days ahead is difficult.
This agreement provides for an annual review of the surplus disposal policies which

are being followed by other countries in the world. It would have been much better, I suggest, Mr. Speaker, if under this agreement there had been provision for an immediate survey of any transactions concerning the disposal of world surpluses in an extraordinary manner which interfered with normal sales. This is a case of closing the barn door after the horse is missing. After this situation has gone on for a year, then a review is made of the difficulties that have obtained. I suggest, Mr. Speaker, that this part of the agreement is so worded as to allow-I would not say condone but certainly to allow-these extraordinary features of the United States disposal program, for example, to be continued.
Paragraph (c) of article 21 reads as follows:
To assist in its review of surplus disposal, exporting and importing countries shall inform the council of the measures taken by them to secure compliance with the following principles: that the solution to the problems involved in the disposal of surpluses of wheat should be sought-
Here are the important words:
-wherever possible through efforts: to increase consumption.
"Wherever possible" means that if it happens to increase consumption-


Mr. Deputy Speaker:: Order. It being one o'clock I do now leave the chair.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Hazen Robert Argue: Before one o'clock I had been pointing out that welcome as the international wheat agreement is to this house and to the country, it does not guarantee that producers will have either adequate wheat markets or adequate prices. Undoubtedly it is a factor which tends to stabilize a state of affairs which is causing wheat producers great concern, but there is another body engaged in the wheat business which I think is probably a greater stabilizing factor than even this international agreement which we have under consideration.
1 think beyond question the Canadian wheat board in recent years has demonstrated that it is a major stabilizing influence in the world situation. Not only is Canada a major exporting country-indeed, the second most important exporting country in the world, giving way only to the United States in first place-but we have exerted and we are exerting through the Canadian wheat board an important stabilizing influence on world wheat prices. I am certain that if
International Wheat Agreement it were not for the Canadian wheat board, wheat prices in Canada and in the world would collapse immediately to the floor under the wheat agreement and then, without the wheat agreement, would fall even lower. The Canadian wheat board has followed sound pricing practices in the light of all the factors in world trade, and the United States, Australia, and even the U.S.S.R. have to a very large extent followed the lead given by the Canadian wheat board in its pricing policy. The wheat board has been a major asset to the wheat producers of this country in very difficult circumstances, and continues to be so.
There are those who say, when we have a wheat problem-and I read an editorial to this effect in the Globe and Mail the other day-why do the producers of wheat not diversify their efforts? The fact is that with the possible exception of beef production, the wheat producers have diversified in every possible way, even to the extent of endangering other markets and the prices of other commodities. When there has been a surplus of wheat farmers have gone into the production of barley, feed barley and malting barley, until they are told by the Canadian wheat board that it is difficult to sell Canadian barley.
To show what a loose interpretation the United States gives to its marketing policy, I remind the committee that they say they are prepared under public law 480 to promote the sales of their commodities as long as they do not interfere with normal sales. But though the sale of Canadian barley to the United Kingdom has been going on for a long time, and though this is an important Canadian market, the Americans are pushing into that market because they say that Canadian sales to the United Kingdom today are running as high as they were a year ago. In other words the United States feels free to get into our market in the United Kingdom.
Farmers have diversified their crops and produced barley as far as possible. They have developed the production of flax until flax prices are relatively poor at about $2.80 a bushel. Producers of bread grains have developed the production of Durum wheat, and everybody in the trade today urges the farmers not to produce more Durum wheat because there is greater danger of a declining market at present for that product than there is for normal grain.
I hope the Minister of Trade and Commerce and the government will give consideration to adopting more aggressive policies for the sale of wheat than those which have been followed heretofore. Canada itself will be obliged to enter the field of

International Wheat Agreement specialized sales if the export market is to be maintained, and I suggest to the government that they should be prepared to accept the local currency of nations which need our wheat but are unable to buy it because of shortage of dollars. In addition, we should be prepared to enter into barter deals for the exchange of wheat for the goods which other countries may have and which we could use.
I know the minister is going to hold up his hands in horror, but the United States is following these policies with great success and to our detriment, and unless Canada follows similar policies we shall be pushed even further out of international markets.
A third suggestion I wish to make is that in addition to being prepared to sell Canadian wheat on the basis of long term contracts, Canada should be prepared to purchase goods for import on similar long term contracts; there should be reciprocal long term contracts for the sale of goods. When there are discussions on the continuation or enlargement of the Polish market for Canadian wheat or of the U.S.S.R. market which we have developed in recent years, the answer always comes back that they would buy more Canadian wheat if Canadians would import from them and buy more of the goods they have to sell.
We feel that as time goes by these further policies must be developed. There is an obvious trend in policies with regard to the sale of wheat. As time goes on wheat is being more and more removed from the private trader, taken out of the hands of the speculators and being sold through government boards and agencies and under collective international agreements. We welcome this trend and hope the government will pursue these policies that time will show are essential if Canada is to maintain wheat exports.
I want to end on a note of caution. Unless these things are done the Canadian export market for wheat will be in danger. After hearing the evidence of the Canadian wheat board there is no question in my mind but that the board is very much concerned with growing competition from additional countries entering the export markets, and with the potential danger of widespread competition from the Soviet union. It remains for the Canadian government to do everything possible to restore and improve Canadian export markets for wheat.
We welcome this agreement. We know it is not flawless, but we feel it is better than no agreement at all.


William Moore Benidickson: Mr. Speaker, at this stage in the session I know that no one desires any repetition, and it is not my intention to indulge in that at all. The position of this party was extremely well stated this morning by the hon. member for Essex East. The hon. member for Assiniboia made some reference to the former minister of trade and commerce, and described him as an exceedingly optimistic man. I am not going to assume the right to make any definition of his characteristics. I think most of us know that he was a great realist and a great developer, and that this country would be much poorer if he had not been the courageous realist and developer he was. When the hon. member for Assiniboia described him as an optimist-which I think a good Canadian should be-I felt he did it in the context of an international wheat agreement. The hon. member indicated that even the present minister was practically repeating the type of explanation of advantages that might be obtained from an international wheat agreement that would have been given in former days by the minister's predecessor, Right Hon. C. D. Howe.
The hon. member for Assiniboia was in the house when the resolution ratifying the previous agreement came before parliament. Either he has forgotten the circumstances or he chose to be unfair to the then minister of trade and commerce, because certainly Mr. Howe was a realist with respect to the possibilities of the international wheat agreement. Without repetition I simply want in the context of this debate to place on record the views expressed by the minister of trade and commerce of 1956, Mr. Howe, when he introduced a resolution such as the present minister introduced today. At page 7067 of Hansard of August 6, 1956, Mr. Howe is reported to have said:
We must remember that no one is obliged to purchase wheat under the international wheat agreement unless we offer wheat at the minimum, which last year would have meant offering No. 1 northern wheat at $1.55 per bushel and this year would mean offering No. 1 northern wheat at $1.50 per bushel. Well, I would not like to be pressed into the necessity of offering wheat at those prices with any belief that the member countries of the wheat agreement would take up the wheat. There are physical difficulties of storage in the way, among others: and therefore I have never been prepared to suggest that the wheat agreement is a guarantee of a minimum price. Perhaps it contributes to that end, but the guarantee simply is not there.
And again at page 7068 he is reported as having said:
X wish we could dispose of the idea that the printing on a piece of paper determines whether Canada can or cannot sell wheat.

I think the hon. member for Assiniboia will remember that debate and realize that when he refers to Mr. Howe as an optimist-which most of us now recognize he is-his remarks would probably not be understood in the context of the debate on the international wheat agreement which we are having today.


Hazen Robert Argue: May I briefly interrupt my hon. friend to say that I was referring to statements the former minister made in this house in answer to questions of mine, and to statements he made in other debates many times -almost every week-in which he was overly optimistic.


William Moore Benidickson: May I suggest to my hon. friend that my memory is as good as his, and I fail to remember many occasions when what my hon. friend calls the optimism of Mr. Howe was not recognized by all as being the realism which so characterized his conduct and attitudes.
The merits of the international wheat agreement are generally agreed upon by all parties of the house. When this matter was presented in 1956 by the then government and the resolution was introduced by Mr. Howe, the present Prime Minister, who was then the chief agricultural critic of the Conservative party, indicated that he had views not very different from those of the mover of the resolution. At page 7055 of Hansard of August 6, 1956 the present Prime Minister said:
It is of interest to note that in effect what has been done in respect of the amounts purchaseable under this agreement is the establishment of a floor price for wheat. That is an important matter and achieves in part, although to a limited extent as compared to previous agreements, something that the farmer in this country and I think generally throughout the world does desire, a stabilizing security and a floor price.


Gordon Minto Churchill: Mr. Speaker-


Mr. Deputy Speaker:: I must advise the house that by speaking now the minister will close the debate.


Gordon Minto Churchill: Mr. Speaker, I thought I might say a word or two in answer to the hon. members who have spoken, the hon. member for Essex East and the hon. member for Assiniboia. I welcomed the explanation given by the hon. member for Kenora-Rainy River. There is obviously general agreement with regard to the international wheat agreement. The comments made by my hon. friends have been objective and indicate a knowledge of the subject.
Their criticisms of the wheat agreement were valid in part. I have made no claim that this agreement is perfect, and I doubt that a claim of that nature has been made by any other participant in the agreement.
66968-9-379
International Wheat Agreement 1 have never suggested that it would solve all our difficulties. My hon. friends have pointed out some of the things which perhaps are not settled by this present agreement.
The hon. member for Essex East raised several problems. He pointed out that this does not necesarily guarantee stability in wheat prices, but it goes quite a long distance toward so doing, just as any international commodity agreement does. He suggested that there would be no major increase through the participation of the United Kingdom in terms of purchases of Canadian wheat. That may be so. Britain is perhaps our most stable market for Canadian wheat, however, and I see no reason to worry about it.
The hon. gentleman drew attention to the increasing surpluses in world wheat supplies, with which subject I shall deal in just a moment. He noted that the Soviet union was not a signatory to the treaty, nor has it been to the others. He raised a question with regard to the European common market. I might say on this point that the countries of Europe which are in the common market, and also are members of the international wheat agreement, will not find that their arrangements under the common market will interfere with the arrangements they have made under the international wheat agreement. Therefore I do not think there is anything to worry about concerning the development of the common market in so far as the international trade in wheat is concerned. Those countries which have been international traders and international purchasers will continue to be so whether or not they are members of the common market.
Then my hon. friend had something to say with regard to the United States and suggested that article 21, subsection 4, went almost as far as to give approval to what might be called bad practices in world trading in wheat. The hon. member for Assiniboia, however, drew our attention to an earlier section of article 21, and I should like to read paragraph (c) of subsection 1 which he touched upon. It reads:
To assist it-
That is the council.
-in its review of surplus disposals, exporting and importing countries shall inform the council of the measures taken by them to secure compliance with the following principles: that the solutions to the problems involved in the disposal of surpluses of wheat should be sought, wherever possible, through efforts to increase consumption; that disposals should take place in an orderly manner; and that, where surpluses are disposed of under special terms, exporting and importing countries concerned should undertake that such arrangements will be made without harmful interference with normal patterns of production and international commercial trade.
5976	HOUSE OF
International Wheat Agreement
He also stated that we should not exaggerate the value of this international wheat agreement. I hope I did not do that in the course of my remarks, but this is a continuation of three earlier agreements which have proved their usefulness in the trade in wheat. It is obvious, because of the number of countries which are participating in this agreement, that it has been of assistance in world trade. The experience of the past has been drawn upon, and this new international wheat agreement has gone a bit further than earlier ones. I do not wish to exaggerate its value, but it is very useful. As the hon. member for Assiniboia pointed out-and I think his phrase was rather good-this agreement gives us stand-by rules for the buying and selling of wheat.
I noted the remark of the hon. member for Assiniboia about my rigid optimism. I do not know whether or not I class myself as an optimist, but I think it is rather well to have what might be termed an optimistic approach to some of our Canadian problems rather than the opposite word, pessimistic. This was the only time in the course of my hon. friend's remarks when he deviated from what was a statesmanlike utterance, but he dealt for a little bit with this optimistic approach. My hon. friend is constantly warning us about disaster: he is sounding alarm; he is pointing out difficulties; he is purveying gloom; he uses adjectives like alarming, disturbing and drastic. I think he must be a very depressing type of person to live with.


Hazen Robert Argue: I was just talking about you.


Gordon Minto Churchill: I think it is wise now and again to look at the brighter side of life without becoming extravagant or careless in our use of words and phrases. I take an optimistic view, if you like to put it that way, with regard to conditions in Canada, and I am not depressed over the wheat situation. In fact it would be rather disturbing, I think, to our farm population if we here in the House of Commons were continually pointing out the grave difficulties that face us in the future, when we know from actual experience that some of the difficulties will be dissipated as time goes on.
Let me give you an example of that. Two years ago we had hanging over our heads here in Canada a surplus of wheat amounting to 730 million bushels. I well recall how pessimistic the outlook was two years ago on the part of some people in this country, but that surplus has now been whittled down to about 500 million bushels, which is quite an improvement. Two years ago perhaps we could not have foreseen that, but it was better to take the optimistic view than to be crying blue ruin.


William Moore Benidickson: Will the minister not agree that we must again, as I said earlier in my remarks, be realists? The over-all surplus of the exporting countries named in this agreement is perhaps larger than it was before.


Gordon Minto Churchill: I quite agree that we have to be realistic in these things, and I hope I am being realistic. I shall speak in a moment about the world wheat surplus. I would just interpolate another word based on the remark of my hon. friend from Assiniboia about ghost writers. These are distinguished civil servants who prepare quite a bit of useful material. The only material they can be sure I will use without alteration are statements they prepare such as those for use in the House of Commons.
If the house will permit me, I should like to make mention of the fact that about a year ago I spoke to a group in New York and a distinguished member of the press gallery, Mr. Arthur Blakely, wrote a column along the line of what my hon. friend was saying; that this was a repetition of what had been said in the past and obviously I must be employing the same ghost writer who had written articles for Messrs. St. Laurent, C. D. Howe and Lester Pearson. Well, I wrote a note to Mr. Blakely and asked him to please not blame the officials of my department, because I had written every word of my speech myself and I regretted if I had simply been following along the lines that had been spoken by my predecessors. Well, so much for ghost writers.
May I say this with regard to the world surplus of wheat. We have to recognize the fact that wheat is grown in practically every country of the world. There is an increasing surplus of wheat being built up. Fortunately it is not of the same standard as the wheat grown in western Canada. A great part of it is softer wheat, which does not compete actively with the hard wheat which comes from our country; but there is an increased amount of wheat available throughout the world, and that creates problems with regard to international trade and brings up this problem of surplus disposal.
To deal with the subject of surplus disposal, this government actually, I think, made adequate protests to the United States with regard to this matter. At the same time we must recognize that they have taken cognizance of our protests and have modified their surplus disposal program of two or three years ago, and they are now operating under a method whereby consultation is carried on with our country on all occasions when the

surplus disposal of wheat is being considered. This to our mind is a great gain, and we are thankful to the United States authorities for the attitude they are taking. Consequently I think we should modify our criticism of United States surplus disposal programs.
The surplus disposal programs of the United States, in many instances, have been directed to very worthy causes. Some of these disposal programs are aimed at the increased use of wheat flour by peoples in the world who have not heretofore been consumers of that type of food. As that program advances the prospects, then, for exporting nations such as the United States and ourselves are increased. We must also recognize the fact that we ourselves are engaged in the surplus disposal of wheat, and have been playing our part in providing wheat on long term loans or on a gift basis to India, Pakistan, Ceylon and the Palestinian refugees, and we intend to continue that program.
In so far as the surplus disposal program does not interfere with normal commercial marketings of wheat, we cannot have much objection. The United States, all credit to them, have not been interfering recently with our normal, commercial sales of wheat to the United Kingdom, countries of Europe, and Japan. With assurance along that line, we cannot object to their providing wheat flour to countries that are really in need of food.
The hon. member for Assiniboia quite properly paid tribute to the stabilizing influence of the Canadian wheat board. He mentioned the fact that Canada was now the second greatest exporter of wheat. We actually are first in the field when it comes to commercial sales of wheat abroad. The United States has emerged as the largest exporter of wheat, but is still second to us on commercial sales. Our commercial sales abroad run to an average of 262 million bushels a year to their 160 million bushels a year. The excess which they export over our export figure of about 300 million bushels is made up by these programs for surplus disposal and gifts to needy countries. The activity of the Canadian wheat board in stabilizing the price of wheat throughout the world is recognized, and I am glad the hon. member for Assiniboia drew attention to that fact.
He made suggestions with regard to the barter of our wheat for goods from other countries. We recognize that this has been done by some countries, but we are not a state trader and it is difficult to barter products of this country for products from some other country unless we enter the field of state trading. This would apply also to his suggestion about long term contracts to purchase goods from Poland or from the U.S.S.R. in exchange for purchases 66968-9-379i
Income Tax Act
they make from us. There again state trading would have to be entered into if that were to be done.
May I conclude, Mr. Speaker, with this. As I have said on occasions, Canada's position in the international wheat field would not be as important as it is today, and cannot be maintained in the future, unless the quality and standard of Canadian wheat is maintained. Fortunately for us our country produces a hard, good grade milling wheat of high protein value which is a premium wheat in the world market and is desired by millers in countries abroad. My consultations with the importers of wheat in the United Kingdom and Europe, and my talks with Japanese millers who have visited this country, confirm our conclusion that Canadian wheat is a premium wheat, superior in quality to the soft wheats which are grown in most other countries of the world. A market for Canadian wheat should be maintained without any diminution of our sales abroad if that quality is maintained.
The emphasis, then, in Canada should be on maintaining quality. It is because of this that a person can take a reasonably optimistic view of the future, and can assure the Canadian farmer that there is a market abroad for Canadian wheat. That market abroad is being maintained by close personal relations between the Canadian wheat board and the countries abroad; by government activity and consultation with the governments of other countries who are importers of our wheat, and by our participation in the international wheat agreement and various international conferences where these matters are discussed. The outlook for the future is not too gloomy, not too difficult. We have to maintain a realistic approach; and a little trace of optimism in that, I think, is all to the good.


[Stage Direction]
Motion agreed to.


Hon. Donald M. Fleming (Minister of Finance) moved: the second reading of and concurrence in amendments made by the Senate to Bill No. C-48, to amend the Income Tax Act.
He said: As recorded in the Votes and Proceedings of the house for June 18, at page 579, a message was received that day from the Senate informing this house that the Senate had passed Bill No. C-48, an act to amend the Income Tax Act, with the following amendments:
1.	Page 11, line 16:-After "or" insert "charter-party".
2.	Page 11:-Strike out clause 19.

Income Tax Act
There are these two amendments which have been made by the Senate. As to the first, Mr. Speaker, may I comment that it is simply a drafting change and I believe alters, in no way at all the sense of the clause in question.
As to the second amendment, may I point out to the house that it has the effect of striking out clause 19 of the bill. Clause 19 amended section 71 of the Income Tax Act, which is the section of the act concerning foreign business corporations. There was some debate in this house on this clause of the bill, but I am sure I do not need to review now the questions that were raised at that time. The effect of the amendment by the Senate has been to strike this clause out of the bill. I regret that it has done so, for I think there was merit in clause 19 of the bill. However, it must be conceded at once that clause 19 was not a provision of leading importance in the bill; it certainly was not a clause particularly directed to affecting the revenues of the treasury.


William Moore Benidickson: Did my hon. friend say "particularly affecting the revenues"?


Donald Methuen Fleming: Yes. It would have had some effect, but probably a very slight effect indeed, upon the revenues. Had it been otherwise the government could not have accepted this amendment by the Senate, having regard to the provisions of the standing orders of this house, particularly Nos. 63 and 64, and the long cherished rights and privileges of this house.
I wish to emphasize, Mr. Speaker, that the government does not concede any right or power on the part of the Senate to amend money bills. Had this been a more serious matter, or had this amendment related to something affecting the revenues, I would have considered it my duty to challenge any infraction of the privileges and rights of this house thereby created.
In a word, Mr. Speaker, the position is the same as that which confronted this house on September 15, 1917 on a Senate amendment to the income war tax act at that time, and again on June 11, 1941 on a Senate amendment to a bill to amend the special war revenue act. I propose to follow the same course that was pursued by my predecessor, Sir Thomas White, with the concurrence of Sir Wilfrid Jliaurier on the first occasion I have mentioned, and by my predecessor Mr. Ilsley on the second occasion. Having regard to the circumstances I have already mentioned and to the advanced stage of the present session, now in its final week, I move:
That the said amendments be now read the second time and concurred in; but that this house, while disapproving of any infraction of its privileges
[Mr. Fleming (Eglinton).l
or rights by the other house, in this case waives its claims to insist upon such rights and privileges, but the waiver of said rights and privileges is not to be drawn into a precedent.
And that a message be sent to the Senate to acquaint their Honours therewith.


The Acting Speaker (Mr. McGee):: Is it the
pleasure of the house to adopt the motion?


William Moore Benidickson: The house will recall, Mr. Speaker, that this slight controversy with the other place with respect to the important section amended relates to a matter that we on this side of the house drew to the attention of the Minister of Finance when his resolutions were advanced. I was one of those who on May 4, when the resolutions were before the house, indicated that I was in good company in that I found taxation experts across the country described the proposed amendment as an enigma. They, like myself, from their experience could find no real, concrete example to justify the amendment. Like myself, they thought the law existing at this time had, throughout its history in broad and important lines, been to the advantage of the economy of this country.
At that time I gave some illustrations. We were, of course, aware of the most prominent foreign business corporation, namely Brazilian Traction Company. In the debate it was indicated that we well knew that this company had a fairly substantial number of head office people in the city of Toronto. The company had been organized in Canada. It had respect and regard for Canadian interests as a result of their background. I indicated that I remembered that this corporation, for instance, had been an applicant for export credit insurance with respect to substantial purchases that were made from Canadian manufacturers for use in the foreign country in which the actual operation took place.


Donald Methuen Fleming: Will my hon. friend not agree that that company would not have been affected at all by this measure?


William Moore Benidickson: Oh, quite so. But the point we were trying to make at that time was to obtain from the minister concrete examples of deleterious effects to Canada as a whole that were resulting from the existing law. The minister did give a couple of examples. Again, out of consideration for the house, I am not going to repeat them; I am simply going to give the reference. The minister gave two references after a great deal of pressure from our side. He was prepared to keep them a secret and just indicate that in his opinion and that of the officials, this was a desirable amendment, and that we should simply take his word for it. But at page 3305 of Hansard of May 4 the minister did give

some illustrations of possible tax evasion or the possible setting up of a tax haven that would result under existing section 7 (1) of the Income Tax Act.
Again it is a matter of public record-and I am not going to take the time of the house to repeat some of the evidence-that in the other place they did have a discussion of this matter in the Senate banking and commerce committee. That is a procedure that was not followed here. I admitted that it is not too usual on budget bills to examine the tax officials in a Commons committee. However, in the other place they did have a thorough examination of the resolutions, and they examined officials of the national revenue department and officials of the minister's Department of Finance. Then by quite a substantial vote they decided that in their opinion they had not been presented with evidence indicating that the proposal was likely to be advantageous to Canada but that, on the contrary, it would be better for Canada to have the present law continued.
The minister, of course, told this house in May that in the meantime he was proposing to examine carefully into all the ramifications of this particular law. I want to indicate that as I read the evidence in the Senate committee, the discussions, the debates and so on in the other place, it would appear to me that the examples given by the minister at page 3305 of our Hansard, to which I referred, did not stand up as examples that should worry us unduly with regard to any tax loss for Canada.
The minister referred to the question of whether or not the Senate should, under our rules, have authority to amend what is called in common language a money bill. The minister also made reference to the precedent of 1917, but his conclusion is rather different from mine. I understand that in 1917 the then leader of the opposition, Sir Wilfrid Laurier, did not, as the minister has indicated, concur in the proposal. My information is-and I have had a very brief opportunity to look at the precedents-that Sir Wilfrid Laurier, then leader of the opposition, resisted the motion. I have here a quotation from his remarks at that time, to this effect:
-this house alone has the privilege of dealing with money bills. The only right the Senate has is that of rejecting or assenting to such money bills.
The minister has indicated to us that the effect on the revenues by this amendment is inconsequential. He has decided in view of that fact not to regard this as a precedent, but on the contrary simply to accept it reluctantly without it being binding in future.
Income Tax Act


Donald Methuen Fleming: If my hon. friend will permit me to say so, I think he will find that while Sir Wilfrid took that firm position, as did the minister of finance and the Speaker at that time, in the final analysis it was thought that having regard to the advanced stage of the session, the house would not press the matter to a conclusion but would accept the amendments, and stated its waiver in terms similar to those of my motion today. But Sir Wilfrid did concur at the final stage.


William Moore Benidickson: Mr. Speaker, we are in rather an amusing position in that in both the resolution of 1917 and that of 1921 the words of the motion of the House of Commons were in these terms:
The waiver of the said rights and privileges is not to be drawn into a precedent.
My hon. friend today, of course, sort of adds precedent to precedent, and I hope he will have some further explanation to make.


Donald Methuen Fleming: Mr. Ilsley did the same thing.


William Moore Benidickson: That was the second precedent, but precedents build on each other and get increased strength from repetition. The important thing I would like to bring to the minister's attention is this. I would like to hear his reply to the evidence of public availability, the evidence before the banking and commerce committee of the Senate, and the debate after that committee reported to the Senate on June 16 and 17, I think it was, in which I felt that the other place had completely destroyed the examples which were given to this house by the Minister of Finance on May 4 as possibilities of tax avoidance deleterious to the interests of Canada. I would hope that the minister would give some reply to the evidence, which I have no doubt he has read, given in the other place.


Hazen Robert Argue: Mr. Speaker, I am not-


Mr. Speaker:: May I say, before the hon. member begins, that I would like to deal with a question of order which arises on this motion, and I think it might be more convenient to deal with it before the minister replies.


Hazen Robert Argue: Mr. Speaker, I do not intend to deal in any way with the merits of the action that has been taken by the Senate. The responsible minister, the Minister of Finance, acting for the government is prepared this time to accept these amendments but to declare that by our acceptance the House of Commons in no way waives its rights and privileges.

Income Tax Act
1 do not think we can emphasize too strongly that with regard to money bills it should be the sole right of the House of Commons not only to originate them but in fact to have them passed in their original form. It is impossible under the British North America Act for the Senate to initiate money bills. If it is assumed that the Senate has the right to amend money bills, then they can use the right to amend money bills to Circumvent the rule that they cannot initiate money bills. Such a bill as this could be amended in so many ways and to such major extent as to make the new bill beyond recognition, and in fact then give to the Senate a power that it does not have.
I wish the hon. member for Kenora-Rainy River had made a forthright statement as far as the rights of parliament and the rights of the House of Commons are concerned, rather than going into substantial detail on the merits of what the Senate is doing. I would think if the Senate continues in future this very regrettable practice, we in the House of Commons should consider how the Canadian constitution can be appropriately amended to make certain that money bills are not only the prerogative of the House of Commons to introduce, but that this right shall not be usurped by the Senate through major amendments.
I think, particularly in the context of the political make-up of the Senate at this time, a forthright statement by the hon. member for Kenora-Rainy River would have been even more significant. It is regrettable to me that the great Liberal party, once a party of reform, once a party of small "1" liberalism, has now become a party of the right, a party that defends the status quo, a party that has failed in this instance to assert beyond question the rights of the Canadian House of Commons with regard to money matters. I say that such a statement should be made by the Leader of the Opposition, particularly when one considers the division of party affiliation in the other place.


John George Diefenbaker: Mr. Speaker-


Mr. Speaker:: Is the Prime Minister going to speak to the point of order which arises or on the substance of the motion?


John George Diefenbaker: On the substance of the motion.


Mr. Speaker:: Then perhaps it would be more convenient if he proceeded now. I thought I should indicate the point of order which seems to me to arise on this amendment, at some stage before the matter is dealt with.


John George Diefenbaker: Then may I defer my remarks.


Mr. Speaker:: Briefly it is this. Although the point is broadly, I suppose, a constitutional issue and it is not my function to decide constitutional issues, we do have a standing order of the house which creates a problem to which 1 would like to draw the attention of hon. members at this time. The standing order in question is No. 63. The house has declared its position with respect to the alteration of money bills by the other place in standing order 63, and I consider that I am bound by that standing order and that the house is bound by it unless it is prepared to suspend the rule. Standing order 63 says:
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-
These are the significant words.
-which are not alterable by the Senate.
So as the House of Commons we have adopted standing order 63 in which we declare that bills to grant aids and supplies, in other words money bills of this kind, not only must originate in this house but are not alterable by the Senate.
We have before us now an alteration of such a bill which the Senate has made and sent back to us for consideration. I intervene in this way because of citation 104 in Beau-chesne's fourth edition in which it is stated:
It is the function of the Speaker to direct the attention of the house when an occasion arises to a breach of its privileges in bills or amendments brought from the Senate, and to direct the special entries to be made in the Journals by which the house, in respect of particular amendments, signifies its willingness to waive its privileges without thereby establishing a general precedent.
The matter has been raised by both of the hon. members who have spoken, but it seems to me to involve more than a question of agreement. It involves a question of the privileges of the house which have been enshrined in a rule-standing order 63-and if the house in its wisdom feels that the circumstances are such that it should waive its asserted privileges in this particular case, by doing so it in effect suspends rule 63. Therefore the view which I take is that unless the amendment properly suspends rule 63 it would require the unanimous consent of the house at this time to pass the amendment which is proposed.
In other words, the amendment would not only do what it purports to do, that is, to accept the alterations by the Senate, but it

would also, in effect, suspend rule 63 for the purpose of doing so. That is the problem that I wish to present to the minister for consideration.


John George Diefenbaker: I do not wish to reiterate what has already been said by the Minister of Finance (Mr. Fleming), except to say it has always been very clear as a matter of constitutional practice that the other place shall not interfere with supply, that money bills shall not originate in that body or be amended by that body. That principle is asserted in the motion made by the Minister of Finance today, and the waiver is apparent in the words which are used in the motion:
That the said amendments be now read the second time and concurred in; but that this house, while disapproving of any infraction of its privileges or rights by the other house, in this case waives its claims to insist upon such rights and privileges, but the waiver of said rights and privileges is not to be drawn into a precedent.
I think the wording of the motion actually has the effect which Your Honour had in mind when you pointed out the situation resulting from the effect of section 63 of the rules. Throughout the years this has been the means whereby this particular rule or section has been waived on the part of the House of Commons.
There are a number of examples-not very many-in which a similar course has been followed. Mention was made a moment ago of the case in 1917, the ruling of the Speaker, resuming an adjourned debate on the proposed motion of Sir Thomas White for the concurrence in amendments made by the Senate to Bill No. 117, an act to authorize the levying of a war tax upon certain incomes as reported on September 15 of that year. It was resumed from Friday, September 7, on which date Sir Wilfrid Laurier in the clearest and most unequivocal language pointed out that this right of the House of Commons should not be in any way circumvented by the other place. The Speaker then made a ruling which, with the leave of the house, I am going to read:
On a previous occasion when this motion was under consideration, two points of order were taken by the hon. the leader of the opposition, (1) that the Senate has no power to amend a money bill, and, (2) if the Senate makes such an amendment, in view of rule 78, the house is bound to insist on its privileges and reject the amendment.
As to the first point, it is beyond question that, in view of section 53 of the British North America Act, bills appropriating any part of the public revenue or for imposing any tax or impost must originate in the House of Commons; and there is no doubt that the Senate has neither power to increase the tax or impost nor to change the incidence of the burden of any such tax or impost in any such bill originating in this house; but the question whether the Senate can make such amendments as have been made in the bill now under
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consideration is a point of constitutional law in respect to which it would I think be improper for me to undertake to give an official decision. Matters of such high constitutional import are for the house and not for your speaker to determine.
In that connection, may I say that the declaration there represents the constitutional position. I will continue to read from this ruling:
With respect to the second point, viz., that rule 78 prevents the house from entertaining the present motion, while this rule is an affirmation of what this house considers its powers and prerogatives, there is nothing contained in it or any of our rules which prevents this house from adopting as its own, amendments such as this now under consideration.
I point that out to you, sir, because I think it answers the point of order which you have drawn to the attention of the house. Continuing the quotation:
In the year 1874, amendments of the Senate to a bill originating in this house were concurred in with the reservation that such action was not to be construed as a waiver of its rules and privileges. While the action of this house in the year 1874 was with respect to a bill dealing with dominion lands, and the present bill deals with taxation, in my judgment the principle involved as to the authority of this house to waive under stated conditions its rights and privileges is the same.
I think, sir, with great respect, that this covers the particular matter that you directed to the attention of the house.


William Moore Benidickson: Could I ask the Prime Minister a question? He did not argue specifically on the point that perhaps, as suggested by the Speaker, this would require unanimous consent.


John George Diefenbaker: I am not going into that at the moment. The question of unanimous consent was another portion of the suggested argument advanced by the Speaker. I was dealing, first, with the question as to whether or not there could now be a waiver by the means adopted in the motion put forward by the Minister of Finance. And then the Speaker, in 1917, went on to say:
After careful consideration, I am of the opinion that the motion of the Minister of Finance is in order, but should it be accepted by this house I shall give directions to the clerk to make a special entry in the Journals of the house to the effect that this house, while disapproving of any infraction of its privileges or rights by the other house, in this case waives its claims to insist upon such rights and privileges, but that the waiver of the said rights and privileges in this case is not to be drawn into a precedent.
I point out, sir, that the wording is much the same in the motion put forward by my hon. friend the Minister of Finance. At this point, Sir Wilfrid Laurier said:
I have nothing to say as to your ruling, sir, but I would suggest that, instead of the caveat proceeding from the Chair, it should be part of the motion itself.

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Mr. Speaker:: With the respect to the point raised by the right hon. member, there is no objection, so far as I am concerned. I may say that I am guided in taking the action I have taken by similar action on the part of the Speaker of the British House of Commons in respect to an analogous case some ten years ago.


Mr. Murphy:: Does the precedent to which Your Honour has just referred also extend to the entry which you purpose to have made in the Journals of the house, as emanating from the Speaker rather than from the house?


Mr. Speaker:: I have used the exact language of the Speaker of the British House of Commons, except that I have added a line taken from the entry made in the Journals of this house in 1874.
Generally, as to the right of the house to waive its unchallengeable right on the part of the House of Commons not to have its money bills or legislation changed or altered in the other place, it is very clear that that right exists and that it can in particular cases be waived.
I believe the latest example can be found in 1947 and I particularly recall an example that occurred on June 11, 1941. On that occasion there had been a similar action taken by the other place in respect of a money bill. This is reported in the Journals of the house for 1941 at page 491 in these words:
Mr. Ilsley then moved,-That the said amendment be now read the second time and concurred in; but that this house, while disapproving ol any infraction of its privileges or rights by the other house, in this case waives its claims to insist upon such rights and privileges but the waiver of said rights and privileges is not to be drawn into a precedent; and, further, that this house agrees to the incorporation in this bill of Bill No. 101, an act to amend the Special War Revenue Act.
The question was asked by the hon. member for Kenora-Rainy River (Mr. Beni-dickson) as to whether or not it would require unanimous consent on the part of the house. Without going into that question directly, I think perhaps that as a whole, while strongly asserting the right of this house to be the sole emanation for legislation connected with finance, taxation and the like- and I hope that will be the view of this house-in view of the motion of the Minister of Finance the house will give unanimous consent to that motion. The house will thereby assert in the clearest and most unequivocal language the undoubted constitutional right of this house, so that there can be no doubt that in allowing an amendment in this particular case there shall be no suggestion of precedent established and no future basis for the assertion in the other place of its right to continue this course.


Lester Bowles Pearson: Mr. Speaker, it seems to me that a very important constitutional principle is involved in this matter. I am sure we all feel that we have a duty to ensure that the rights and privileges of this house are not

violated, circumscribed or abridged by any action which we might be taking arising out of action taken in the other place. The rights and privileges of the House of Commons are well known in this matter and the limitations on the action of the other house in respect of those rights and privileges are also well known.
The Prime Minister (Mr. Diefenbaker) has just said that we must make perfectly certain that our rights are clearly expressed in any action we may take and that nothing that could constitute a precedent should be established, but in order to justify the action we might desire to take this afternoon reference has been made to action taken previously which was taken at that time on the understanding that it would not be a precedent. So action does become a precedent when you refer to it to justify action which you may take but which you do not wish to be taken as a precedent. That is the difficulty we are in, as I see it.
The Minister of Finance (Mr. Fleming) said a few moments ago, I believe, that the government accepted this course reluctantly. If the government's reluctance was due to the substance of the amendment in question, it seems to me all the more surprising that the government would take this particular course. If the government's reluctance is due to misunderstandings which may be created in the future because of the procedure we are following and because of the possible effect of that procedure on the rights and privileges of this house, then it seems surprising to me that having this reluctance the government would pursue this particular course.
Why should we run the risk-even if it is only a risk-of waiving our rights in this matter as a House of Commons if some other course could be followed which would accomplish the same purpose, if it is the intention of the government to make this change in the legislation? Could the government not take its responsibility in this matter, if it so desires, and introduce an amendment to its own Bill in its own right without referring to any amendment from any other place? Would that not be a possible course of action? Would that not be the best course to be followed? If that course could be taken, I can assure the government that we would certainly do everything we could to expedite the procedure.


John George Diefenbaker: Mr. Speaker, I should
like to ask my hon. friend this question. Is not the course that has been suggested by the Minister of Finance that which has been followed by successive governments since 1874 in particular cases?


Lester Bowles Pearson: Mr. Speaker, the Prime Minister and the Minister of Finance made it quite clear that this course has been followed twice previously. Perhaps that itself illustrates the danger into which we may be leading ourselves because on both those occasions it was understood that the course that was followed was not to be taken as a precedent. It is now being taken as a precedent and used to justify this course. On at least one of the occasions to which reference has been made -the amendment to the Special War Revenue Act of 1941-Mr. Ilsley, in part at least, justified the course he was taking, which was not to be taken as precedent, by saying that the amendment in question was scarcely a revenue amendment at all.
I take it from what the minister has said that there is no doubt on this score in the present instance. This is a revenue amendment and so the position is not even in substance exactly the same as in 1941 which has been advanced as a precedent.
Again I ask the Prime Minister and the Minister of Finance what objection could be taken to the course I have suggested, that the government itself introduce on its own initiative and on its own responsibility an amendment for the purpose the government has in mind?


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I am speaking on the entire issue now before us. I believe this places a great responsibility on your shoulders. I rise to ask that the rights of parliament and the traditions of centuries be maintained through your voice and on your advice.
If what the Prime Minister (Mr. Diefenbaker) said is correct, this House of Commons can make changes by unanimous vote or agreement. But, Mr. Speaker, I want to say as emphatically as 1 can that although the house has the right by vote to make changes, you are as Speaker the embodiment of the rights of parliament and of the traditions of centuries.
There are two main traditions of centuries. One is that the monarch cannot enter the House of Commons; only the monarch's representative can do that by knocking on the door. But the second is that what is known in Great Britain as the House of Lords and as the other place in our country cannot interfere with the right of the House of Commons on taxation and on expenditures. Because this right has been broken in the past we are now asked once again to break it.
Mr. Speaker, the Leader of the Opposition (Mr. Pearson) was quite correct a few moments ago when he said that what was established once would not be a precedent,
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but again we are asked to do what, to break, not the precedent of 600 years that a monarch cannot enter here but that what is the other place, the House of Lords in the mother of parliaments, the United Kingdom, be given the right to break the precedent of the control of the House of Commons over taxation. I say to you, sir, with all sincerity as a traditionalist, as one who believes so much in democracy and in those who fought and died to lay down those principles, that if this is done you should make it obvious in this House of Commons that we shall not again break what has been established in the past and allowed to be broken in the past. If parliament and democracy mean anything, let us maintain the tradition and the power of this house. I am most amazed that the Prime Minister would be the one to suggest that we now do it again.


Mr. Speaker:: I accept as obvious a good deal of what has been said in the course of the discussion of this rather serious matter involving the relationships of the houses of parliament and the privileges of this house. It is undoubtedly true that the house has done what is proposed now to do again and can do it again, provided it takes the proper course to do so. The precedents are, like this one, those which have arisen at the end of sessions when a money bill has been rejected by the other place and when perhaps the house was not disposed to enter too deeply into constitutional arguments; but if this motion is properly before the house it is for the house to decide whether it wishes to do again what it has done before and what it can do again.
This is the point that troubles me, and I have come to the conclusion that the motion which has been proposed by the Minister of Finance (Mr. Fleming), if it in effect amounts to a waiver of standing order 63, would require notice. That was why I said that because standing orders can be suspended only by an order of the house made on proper notice or by unanimous consent, that is why I suggested because no notice had been given that unanimous consent would be necessary before we could enter on a discussion of this motion and before this motion could be voted upon.
It may be that the house is prepared to have the matter dealt with in that way and I would say that perhaps that would be the way for the house to decide whether it wishes to follow this precedent again or whether it does not wish to follow it. It can decide that by voting. If the house allows this motion to come before it today by unanimous consent. If it will not allow this motion to come before it by unanimous consent today, then the government of course is free to give notice

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of this motion and bring it on in the usual way at a later time. I suggest then, with the permission of the house, that I ask now whether unanimous consent be given for the minister to introduce this motion today? I have in mind that it has the effect of suspending standing order 63. The house could then proceed with a discussion of the motion and to a vote on the motion when that discussion is concluded. Is the house prepared to give the minister unanimous consent to introduce this motion?


Lester Bowles Pearson: No.


Harold Edward Winch: Are you, Mr. Speaker, prepared to advise the house on the powers of this house and whether or not you think this is proper?


Mr. Speaker:: I have indicated that it is for parliament to decide what will be the disposition of this motion. My concern is rather a procedural one, the matter of bringing this motion before the house so that it can deal with it. If the government cannot do it today, it can do it again; therefore, it seemed to me that it might be the course of wisdom and economy of time to give the minister unanimous consent to have this motion brought before the house. Is the house prepared to give unanimous consent at this time to this motion being brought before the house for debate and to be voted on?


Lester Bowles Pearson: In view of the constitutional implications of this matter and its importance, I think the government should take its responsibility and put a notice on the order paper and discuss it in due course. I am sure if the matter comes up for discussion there will not be any delay as far as we are concerned. Our views have already been made known in regard to the proposition itself.


Mr. Speaker:: In the absence of that unanimous consent I have come to the conclusion-and I may say I appreciate that it may not be in accordance with the views of all members of the house-that this motion is not properly before the house now. Notice must be given on the order paper. I say that because of the practices which we have followed and which are set out in Beau-chesne's fourth edition, citation 10, and because of the view that I take that in effect this motion is a suspension of standing order 63. The citation reads:
Standing orders may be suspended for a particular case without prejudice to their continued validity, for the house possesses the inherent power to destroy the self-imposed barriers and fetters of its own regulations. It may even pass an order prescribing a course of procedure inconsistent with the standing order. A motion for such temporary

suspension requires notice under standing order 41. but in urgent cases the notice can be waived under standing order 42.
It seems to me that that is the thing to do; in the absence of waiver by the house the motion is not to be proceeded with.


Donald Methuen Fleming: Before you leave that matter, Mr. Speaker, may I point out that on previous occasions where this course was followed the point was not raised that unanimous consent was required. The same standing order, of course, has been in effect in this house for many years. But rather more specifically on the point than the citation which you read, if I may say so, is citation 281, the concluding portion of which reads:
The question whether the Senate has power to amend a bill to impose taxation is a point of constitutional law in respect of which the Speaker must not give an official decision; but the house may adopt as its own the amendments made by the Senate and order that a protest be entered in the Journals.
Therefore, what the government has done is simply and completely in keeping with the course that has been followed on previous occasions where the issue was precisely the same. The point is that unanimous consent was not involved. The standing order to which reference has been made was in effect on those occasions, Mr. Speaker.


Mr. Speaker:: May I say that the minister has introduced a further consideration. I am not, in my view, making any constitutional decision. I am dealing simply with an order of the house, standing order 63, which it is my duty to enforce. The purport of that order is that a money bill is unalterable by the Senate and unless that order is suspended I do not see how I can permit alterations of a money bill by the Senate to be brought before the house for approval.
I take the view that if the rule is to be suspended, it must be suspended in accordance with our practice. It is purely a procedural matter, so far as I am concerned, and therefore if the house would give unanimous consent the matter could be dealt with, without notice, under standing order 42. However, in view of standing order 42, we cannot proceed with it without proper notice. Standing order 42 says:
A motion may, in case of urgent and pressing necessity previously explained by the mover, be made by unanimous consent of the house without notice having been given under standing order 41.
However, it still requires unanimity, and that apparently we do not have.


Harold Edward Winch: May I ask a question of the Minister of Finance?


Mr. Speaker:: Order; I think the matter is disposed of, unless some hon. member wishes to protest the ruling of the Chair. This concludes the matter for the time being.



FINANCE


[Stage Direction]
Hon.	Donald	M.	Fleming	(Minister	of
Finance) moved the second reading of Bill No. C-72, to provide for the payment of additional grants to the province of Newfoundland.
Lester Bowles Pearson: Is the minister going to say anything about this bill?
Hon.	Donald	M.	Fleming	(Minister	of
Finance): I think there is no occasion for me to make any statement on this motion for second reading. Yesterday I reviewed at some length the history of this matter in the debate on the resolution preceding the bill. I think that I cannot, at this point, usefully add anything to what I said yesterday. The bill, as I indicated in my remarks at the resolution stage, is brief in its operative clauses but contains important recitals.
The first recital refers to the terms of article 29 of the terms of union. The second recital refers to the appointment of the royal commission in accordance with the terms of article 29. The third refers to the report of the royal commission and its recommendations, and the fourth contains a statement of undoubted fact, namely that both the government of the province of Newfoundland and the government of Canada have recognized the great difficulties inherent in determining future payments on an equitable basis from the experience of one selected year. This is the great difficulty that confronted the royal commission and virtually defied its efforts to find a suitable basis of recommendation, in the light of the very difficult, vague and nebulous terms of article 29.
The next recital refers to the fact that since the report of the royal commission was made the government of Canada has proposed a comprehensive study of dominion-provincial fiscal relations in co-operation with the provinces and all-I underline that word "all"-of the provinces have agreed to participate therein.
Then, the next paragraph contains a recital which is of some considerable importance in the light of the requests made repeatedly by those who spoke for Newfoundland for a review, some future review, of the fiscal relations between Canada and Newfoundland in relation to this matter of grants. It reads-
Grants to Newfoundland


John Whitney Pickersgill: Would the minister permit a question? Will the minister not concede that on several occasions the review that was asked for by Newfoundland was asked for on the basis of term 29 and no other basis?


Donald Methuen Fleming: No, I will not concede that for one minute, Mr. Speaker. I read extracts yesterday from the language used by Mr. Goldenberg, the counsel who represented Newfoundland before the royal commission, in which he stressed more than once the fact that Newfoundland was not asking the royal commission to recommend any payment for an indefinite period. He stressed repeatedly he was asking for a review. In discussion yesterday I referred also to the fact that Mr. Smallwood and those associated with him, asked last January, for future reviews. As I pointed out, in asking for successive reviews at periods-a period of eight years was mentioned-what was involved, in effect, was moving the yardsticks forward each time which could not, by any stretch of the imagination, be said to be a review in pursuance of the terms of article 29.
I think it is quite clear, Mr. Speaker, that if there had been any doubt in the minds of hon. members it must have been removed yesterday by the quotation from the language used by Mr. St. Laurent in this house in February, 1949 when he drew attention to the fact that all term 29 says is that eight years after union comes into effect the federal government shall appoint a royal commission to review and to recommend.


John Whitney Pickersgill: A travesty.


Donald Methuen Fleming: As Mr. St. Laurent pointed out, that was all it did; it created no continuing obligation. It was left then for decision on the part of parliament as to what steps, if any, should be taken in the light of the recommendation which such a royal commission might choose to make.
Coming back now to this matter of the review, what is proposed by this government is that as from April 1, 1952 the comprehensive review of federal-provincial relations which has been agreed upon by all the provinces should embrace the fiscal relations between Canada and all the provinces, and that means between Canada and Newfoundland. Having regard to the history of this matter, to what has happened since union with Newfoundland in 1949, any special circumstances affecting Newfoundland in this matter of fiscal relations between the federal government and that province should be taken into account in the course of that comprehensive review. It is within that comprehensive review that the fiscal relations

Grants to Newfoundland between Canada, on the one hand, and the province on the other, are going to be governed in the period following April 1, 1962.
I am not going to delay the house by repeating the point which I made yesterday. It seems to me to be one of fundamental importance in this matter that outside the constitutional subsidies which are payable to the provinces, including the province of Newfoundland, there is nothing contained in any binding statute-I put it yesterday, nothing in black and white-that governs the fiscal relations between the dominion, on the one hand, and the provinces or any of them on the other, after March 31, 1962. Therefore, in proposing a review which will take account of any special circumstances of Newfoundland in her financial position after March 31, 1962 we are, in my respectful submission, giving what was sought by Newfoundland on the occasions which I have mentioned.
It is indeed going beyond the terms of the article of union and it is in my submission to this house proceeding in a way that is an expression of the desire of all Canadians and of this Canadian parliament to be just and fair in its treatment of Newfoundlanders having regard to the warmth of welcome that Canada extended to Newfoundland when it became the tenth province in 1949. Therefore this present recital puts the parliament of Canada on record in a manner which is perhaps without direct precedent but it is put forward in this form to give assurance to all reasonable persons in Newfoundland that any special circumstances affecting the province of Newfoundland will be taken into account in determining the fiscal relations between Canada and Newfoundland after March 31, 1962.
The bill proposes that the treasury of this country be bound to pay to Newfoundland every cent that was recommended by the royal commission up to the 31st day of March, 1962.


John Whitney Pickersgill: And then the constitution goes out the window.


Donald Methuen Fleming: That is to be read along with this accompanying assurance to be found in this recital:
Whereas in the course of such review any special circumstances relating to the financial position of the province of Newfoundland after the 31st day of March, 1962, would be taken into consideration;
Therefore if this house chooses to adopt this bill the house will be putting itself on record on those terms; and in my respectful submission, Mr. Speaker, nobody who approaches this matter in a reasonable light


could expect the parliament of Canada to go further under the circumstances. The next recital proceeds as follows:
Whereas pursuant to the recommendations made by the royal commission established in fulfilment of the obligation of the government of Canada under the said term 29, it is now desirable to enact a measure to provide for additional grants to the province of Newfoundland.
Then follow the operative provisions of the bill and provision is there made for payment to Newfoundland of all of the sums which were recommended by the royal commission up to the 31st day of March, 1962.
Mr. Speaker, yesterday something was made or, as perhaps I should more accurately say, something was attempted to be made in argument that the word "thereafter" appearing in the final paragraph of the report of the royal commission means forever and forever thereafter. In my respectful submission, Mr. Speaker, that is an interpretation which that language will not bear, even in the most strained interpretation. The fact is that the royal commission, faced with the strong argument from counsel for the province of Newfoundland urging review, would have proposed a review at a named date if they had felt that they had the power to do so. But unfortunately for that purpose, the terms in article 29, as drafted, whether those who were in the federal government in those days and the government of Newfoundland in those days were responsible for it, do not take into account all the difficulties or burdens that were cast upon the shoulders of a royal commission in asking that royal commission to project into the future, however far they might attempt to do so, recommendations of a financial nature based upon evidence of what had occurred up to that time.
I am perfectly satisfied that if those who drew article 29 had had the foresight to enlarge that term to include within the ambit of the reference to the royal commission the power to make a recommendation with regard to a future review, this royal commission would have followed that course. They would have named some particular period and said, "That is as far as we can see ahead and at that date we wish that there should be some further review". But article 29 did not make any such provision. The royal commission therefore felt itself circumscribed and therefore it used this word "thereafter" knowing perfectly well that the competent counsel for the province of Newfoundland had said to it in his submission, "These payments are not being asked for indefinitely" because they were dealing with a period which was expected to be of limited duration.


Lester Bowles Pearson: May I ask the minister whether he ever discussed this interpretation of their responsibilities with any members of this royal commission?


Donald Methuen Fleming: I have refrained from doing so because I would not have considered it proper to do so.


Lester Bowles Pearson: Why interpret then?


Donald Methuen Fleming: I think it is perfectly obvious to anyone who approaches this question with an open mind and with a desire to arrive at reasonable readings, reasonable interpretations and reasonable conclusions, instead of indulging in the kind of sophistry that was resorted to by some hon. members yesterday that they cannot make the word "thereafter"-


Lester Bowles Pearson: What does it mean?


Donald Methuen Fleming: -by their contention, stretched and strained, to mean forever and forever.


Lester Bowles Pearson: What does it mean?


Donald Methuen Fleming: It means for such a period as was within the contemplation of those who drew this reference and those who were speaking for Newfoundland when they said this was not for an indefinite period.


Lester Bowles Pearson: What period was it? One year?


Donald Methuen Fleming: That would be something having regard to the financial situation which is precisely the matter which the undertaking given yesterday and now inscribed in the recitals in this bill makes clear provision for. This is a sensible way of dealing with this matter; and having regard to the desire on the part of this government for good relations between Newfoundland and all parts of this country, what we are doing here is not only sensible and reasonable but it is also the way which, in the long run, will most effectively contribute to establishing a sense of fairness in the dealings between Canada and the province of Newfoundland.
This is not a matter that should be prejudged now in the way in which some hon. members for Newfoundland constituencies sought to judge it yesterday.
I remind them that this article 29 has been quite obviously oversold. It has been subjected to interpretations which that term never could have borne in the minds of those who are prepared to read it carefully and interpret it properly. If those words used by Mr. St. Laurent-


John Whitney Pickersgill: May I ask a question?
Grants to Newfoundland


Donald Methuen Fleming: May I just finish? If those words used by Mr. St. Laurent in this house in February, 1949 had been carried with this article to the minds of those who have sought to place upon that article an impossible interpretation, then I am quite satisfied that this clause would not have been subjected to all the strains, to the overselling and to the misunderstanding to which it has obviously been subjected since.
I therefore think the house is justified in receiving this bill as a constructive proposal for dealing with this problem in a manner that assures to Newfoundlanders that when this period of fixed, determined payments expires they have the assurance that in the review, which has already been initiated, of fiscal relations between the dominion and the provinces the special circumstances relating to the financial position of the province of Newfoundland after March 31, 1962, would in the language of this bill, be taken into consideration.


John Whitney Pickersgill: The minister indicated that he would permit a question. The question that I should like to put to the minister is this. By whom does he consider that article 29 was oversold? Was it by the author?


Donald Methuen Fleming: I think it is quite apparent, from statements which the hon. member himself has made, that he is one of those who have oversold or been oversold in the interpretation of this article. For correction of his misinterpretation I direct him to the language that Mr. St. Laurent used in this house in February, 1949, language which I quoted yesterday.
We accept the interpretation that Mr. St. Laurent put upon this article at that time. It is crystal clear. It is not to be perverted and it is not to be watered down in the manner in which evidently some hon. members would like to see it watered down. Here I place the essential part of it, not the total portion which I read yesterday but the essential part, once more on record, and I would like to say to the hon. Leader of the Opposition (Mr. Pearson) that I do not think he was forthright yesterday in dealing with it. If the Leader of the Opposition accepts the interpretation which was placed on this article by Mr. St. Laurent speaking in this house on February 7, 1949, then I say to him that he cannot reassert some of the propositions which he put before the house yesterday. Here is Mr. St. Laurent's interpretation which he put on this article, one which in my respectful submission is completely correct, not only correct in terms of law but in the spirit of it. It is the type of expression which would be re-echoed in
5988	HOUSE OF
Grants to Newfoundland this house and is certainly re-echoed by this government. Mr. St. Laurent said, when speaking on article 29:
There is no undertaking to implement any terms of recommendation that may he made at that time by a royal commission. It was felt by the Newfoundland delegation, and by the representatives of the Canadian government, that this was something that was being entered into in a spirit of fairness on both sides, and that it was not necessary to make binding stipulations about what would happen with respect to the report of a royal commission.
Note, that he is saying there is no binding stipulation about what is to happen to the report of a royal commission or its recommendations. Those who framed this article decided it was better not to make any attempt at setting forth any stipulations as to what was to be done with the recommendations of the royal commission. Then he concluded with these words:
It was felt that if there was an investigation and a report by a commission, in which the public at that time would have confidence, the legislators of that day could well be trusted to do what would prove to be right in order to make this enlarged nation a united nation continuing on its path of progress toward its great destiny.
Mr. Speaker, we are the legislators to whom Mr. St. Laurent referred in the closing passage, and I believe that in this measure we are fully maintaining the view that was expressed by Mr. St. Laurent at that time as to the course that the legislators could well be trusted to take today, having regard to the desire that this enlarged nation be a united nation continuing on its path of progress toward its great destiny.


Lester Bowles Pearson: Mr. Speaker, the minister in introducing this bill expressed the hope that its main effect would be to strengthen the friendly feeling between Newfoundland and the rest of Canada, and to strengthen the unity inside our country. If that is his hope the reports that have already been received from Newfoundland of the action announced yesterday to be taken by the government indicate that that hope may not be realized.
This is a small bill but it is an important bill and it embodies a constitutional principle which is perhaps quite as important as the one we were discussing a few moments ago. That constitutional principle is simply whether the solemn obligation of Canada in respect of a pact between two countries will be carried out. This bill is a rejection of the recommendations of a report of a royal commission set up under term 29 of the act of union with Newfoundland. It is a rejection of the recommendations of that report, yet there is a preamble in this bill which reads:
Whereas pursuant to the recommendations made by the royal commission established in fulfilment 

of the obligation of the government of Canada under the said term 29, it is now desirable-
And so on. This bill is not in pursuance of all the recommendations of that royal commission, and because it rejects a very important part of those recommendations it is a rejection of that report. Indeed, this very short bill is a final and irrevocable settlement, to use the Prime Minister's (Mr. Diefenbaker's) words, of the contractual obligations, to use his words again, of term 29 of the act of union. This is a settlement imposed by one party to the act of union on the other party. It is a settlement brought about in this House of Commons by the government without consultation or agreement with the government of the other party, the government of Newfoundland.


Donald Methuen Fleming: There was consultation.


Lester Bowles Pearson: There was consultation before this announcement was made. When the government decided to take this course it had not at any time consulted with the government of Newfoundland in the terms of this resolution and the terms of this bill and tried to work out a course of action which would be acceptable to both parties to this act of union. Because the government did not do that, or make any attempt to do that, and because of the nature of this bill, I claim that this bill represents a repudiation of the act of union between two countries, and it weakens, and will weaken until it is rescinded, that union. It is unfair for that reason and it is a breach of faith with the people of Newfoundland. That is undoubtedly how it is being interpreted by the people of Newfoundland. It will cause disappointment. It has caused disappointment already and justified resentment in Newfoundland, and for that the government in introducing this bill is responsible.
This bill embodies exactly what the Prime Minister said on March 25 he would do. It embodies his interpretation of the nature of the recommendation of the royal commission, and I ask the hon. members on the other side of this house from Newfoundland whether they accept that interpretation, an interpretation repeated this afernoon, of the obligations imposed on a government under the recommendations of that royal commission. Certainly that was not the interpretation given to the recommendations of a royal commission by the hon. member for St. John's West (Mr. Browne), the Minister without Portfolio, some years ago in this house.
This bill ignores a word which is of no importance to the minister, but a very significant word in these recommendations. It ignores the word "thereafter", as having no

meaning or a meaning so limited as to be ridiculous. Indeed, according to the Prime Minister, the word "thereafter" has no existence at all. As he wrongly stated in Saskatoon on March 28, the royal commission intended in its recommendations to end all payments in 1962, that that was the meaning of the recommendations, and therefore the word "thereafter" not only had no meaning but no existence. Mr. Speaker, no doubt when we point that out we will be accused of quibbling with words. This bill is a decision of the government in respect of term 29 and of the recommendations of the royal commission appointed under term 29.
What happens now to term 29 of the act of union, a part of the act of union which was so important, and remained so important that if it had not been agreed on ten years ago there would not have been any act of union with Newfoundland?
What happens to the pledged word of the government of Canada under term 29 to take certain action? What happens to term 29 now? The minister has repeated his assurance to review the matter. One party to the contract will review the matter before 1962 as part of a general review of dominion-provincial financial relations where no such commitment as this is involved. The minister says: We will drop this special obligation, this solemn promise, into our seminar, into our study group, a study group which is, itself, an evasion of a promise.


Donald Methuen Fleming: Does the Leader of the Opposition contend that the recommendations of the royal commission are binding on the federal government?


Lester Bowles Pearson: Of course not. I said yesterday that no recommendation of a royal commission is legally binding on any government. But there is something which is more important than legality, and that is the moral and constitutional responsibility of this government to take no action which would interfere with the implementation of term 29 as long as that term is part of the act of union unless the changes made to term 29 are made by agreement between the two parties to the contract.
The minister said this afternoon that in this review which will be made by one party to the contract would take into consideration, before taking any decision as to the entitlement of Newfoundland under term 29, any special circumstances relating to the financial position of that province. He was saying: Though we do not mention term 29 in that connection in the preamble, we shall take into consideration any special circumstances. If that is the case, why not mention specifically term 29 as one factor to be taken into
Grants to Newfoundland consideration? Again, I ask hon. members from Newfoundland who sit on the other side of this house whether they are satisfied with that commitment on the part of the government, namely that in this review the government will take into consideration all factors and then make up its own mind in the light of those factors regarding what should be done to carry out contractual obligations of this kind. This makes Newfoundland, the other party to the contract, entirely dependent upon the decision of the federal government in respect to the implementation of term 29.


Donald Methuen Fleming: I do not want to interrupt the hon. gentleman if he would rather these questions be left-


Lester Bowles Pearson: No.


Donald Methuen Fleming: -but I am trying to follow this argument. How does he square what he is saying now with article 29? He is talking about promises, commitments and obligations. Where is the obligation created by term 29 except to appoint a royal commission, as Mr. St. Laurent pointed out?


Lester Bowles Pearson: Mr. Speaker, the obligation under term 29 is for the federal government to give assistance to Newfoundland to ensure that the level of services, and so on-I need not quote the term because the minister knows what it is. The specific obligation was to set up a royal commission to see how that undertaking could best be implemented. The royal commission has made its report. This government has not accepted that report and does not provide any alternative to that report, nor does it even consult with the government of Newfoundland as to how term 29 can best be carried out.


Donald Methuen Fleming: It is hard to recognize term 29 there.


Lester Bowles Pearson: I suggest this is an exceptional example of centralization in our federal structure.


An hon. Member:: No.


Lester Bowles Pearson: It certainly is centralization. Here is a pact between two countries in consequence of which the federal government- the Canadian government-undertook to do certain things. It undertook to set up a royal commission which would make recommendations as to how term 29 could be implemented in the way laid down in the pact. Then, without, consultation of any kind with the government of Newfoundland with respect to this matter and without an effort being made to see whether this problem could be worked out by agreement, this government, representing one side of the union, brings in a bill which rejects a fundamental feature of
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Grants to Newfoundland the recommendations of the royal commission, without I repeat, any consultation with the other party to the agreement.


Donald Methuen Fleming: There was consultation.


Lester Bowles Pearson: The fundamental feature of the recommendation which is rejected is that which reads: thereafter $8 million per annum until both parties agree to a change as a result of a review. The word "thereafter" does have a meaning. The minister says the government will make a review and perhaps make a change without any reference to the rights of Newfoundland to be consulted on the decision to be made after the review has taken place. Moreover, this promise, this commitment if you like, to review the situation is not even in the operative part of this bill, but is placed in the preamble to the bill. That, of course, is merely adding insult to injury.
So, we on this side will oppose this bill. Our party intends to stand firm on the commitments made and the obligations undertaken in the pact of union and at the time of union. We stand for carrying out that pact both in letter and in spirit. When the commitments of that pact are to be changed, that should be done not by arrogant imposition of federal decisions on a province but by consultation and agreement with Newfoundland. That, Mr. Speaker, is how we interpret what the Prime Minister calls a contractual obligation.
Finally, Mr. Speaker, when the responsibility is ours again we shall remove this injustice. We shall correct this violation of a contract and we shall make sure once again that the act of union is honoured in all its parts and is carried out as it must be carried out in letter and in spirit. When the people of Newfoundland joined their destiny and linked their history and added their glorious and honoured traditions to ours, they did not dream that ten years later the government of the other party to the contract would impose on them a decision, a settlement, without consultation with them; one, moreover, which does not carry out the recommendations of the royal commission set up under term 29 of the act of union and one which does not ensure that the obligations of that term will be carried out in the future through consultation and agreement between the two parties to the contract. For that reason I repeat that we shall oppose this bill as strongly as we can.


John George Diefenbaker: Mr. Speaker, I am not going to speak at any great length. However, certain statements which have been made by the


Leader of the Opposition (Mr. Pearson) deserve to be answered immediately.
Let me at once underline the fact that in so far as the Conservative party is concerned and in so far as this government is concerned we intend at all times to live up to the spirit of confederation and to carry out those terms which will assure a reasonable equality of opportunity everywhere in this land.
I am not going back to the beginning to the speeches that were made at the time of union but I want to underline once more a point that cannot be too strongly emphasized, that Mr. St. Laurent, the then prime minister, made it perfectly clear that the responsibility of the federal government under the act of union was the appointment of a royal commission. Although this has been placed on the record before, I intend to do so once again because the words that Mr. St. Laurent used are the words which are accepted by this government as representative of the proper interpretation to be placed upon article 29. At the expense of reiteration I shall read once more the words Mr. St. Laurent used as reported at page 289 of Hansard of February 7, 1949:
It was also provided that within eight years from the coming into force of the terms of union a commission would be set up to examine the situation anew, and to report as to whether or not the terms provided are working satisfactorily and are sufficient to bring about the object of equalizing the lot of the people of the new province with that of the people of the older provinces.
I emphasize these words that have been referred to previously. There is no undertaking to implement any terms of recommendation that may be made at that time by a royal commission. Those words are clear, unchallengeable and unequivocal. It is all very well in the light of subsequent events to apply principles to the interpretation given by the then prime minister. In the light of subsequent events those in the opposition endeavour to leave the impression that what they meant by article 29 was not the actual reading and the proper interpretation on the basis of the words used, but the interpretation which they today place upon the words of the undertaking entered into at that time when Newfoundland entered confederation. One would almost think there was something sacrosanct about the findings of the royal commission and that Newfoundland was in agreement therewith.
I am not here for the purpose of indulging in any way in recriminations with the premier of that province, but I want to say this. His views of that royal commission and its findings were certainly not in keeping with the grand and eloquent phrases used today by the Leader of the Opposition.


Lester Bowles Pearson: He thought it was ungenerous and wanted more. You are giving him less.


John George Diefenbaker: The premier did not think very much of the findings of that royal commission. This is what he said, as reported in the St. John's daily News of September 6, 1958:
The work of the McNair royal commission was a dead loss and the commissioners were a dead loss.
Those are the words of the premier of Newfoundland.


Lester Bowles Pearson: He wanted more money.


John George Diefenbaker: With respect to the
commissioners he went on to say:
I recommended the appointment of some of them, God forgive me.
Those, too, are the words of the premier of Newfoundland regarding the royal commission which has been spoken of in such eulogies by the Leader of the Opposition-


Lester Bowles Pearson: And by the Minister of Finance (Mr. Fleming) yesterday.


John George Diefenbaker: Those are the words of the premier of Newfoundland. Those are not my words or the interpretation of the Minister of Finance. Those are the words of the premier regarding a royal commission about which at the time it was set up the premier said the choice of personnel could not have been better. As a matter of fact he spoke of that royal commission in the most touching manner. He referred to the high qualifications and the great capacity of the membership. Let me refer to his words as reported on February 25,	1957 in the Charlottetown Guardian:
A beaming premier Smallwood groped for superlatives Friday to express his delight at the choice of members for the royal commission to review Newfoundland's financial terms of union with Canada.
Work of the commission, whose appointment was announced in the commons Friday by Prime Minister St. Laurent, would be "of absolutely terrific importance to Newfoundland," Mr. Smallwood told a press conference.
The future of Newfoundland's "standards and levels of services will be determined by the recommendations of the commission," he said. It would recommend "the form and scale" of additional financial assistance.
He then went on to say:
Commission chairman John McNair, Chief Justice and former premier of New Brunswick, was "long a personal friend of mine," Mr. Smallwood said. Mr. McNair was "a famous fighter for maritime rights and after we went in for Atlantic provinces rights."
John James Deutsch was "probably the most knowledgeable man in all Canada of federal-provincial affairs." He was "a great friend of Newfoundland-a man of great sympathy for Newfoundland."
Grants to Newfoundland
Of Newfoundland Chief Justice Sir Albert Walsh, third of the three commission members, Mr. Smallwood said "Newfoundland could be searched from end to end and we would not find a better man to represent Newfoundland on this royal commission. He is thoroughly informed."
Those were his words at the time of the appointment. Let us go on and see what else was said regarding the McNair report. The premier went on to say, on September 6, 1958, after the findings were made by the royal commission, as reported in the Ottawa Journal of that date:
I'm glad that there was a change of government in Ottawa following the last federal election.
Simply because these findings have been thrown into such a favourable light by the Leader of the Opposition today does not mean that they were acceptable then to the premier of Newfoundland. As reported in the same press article, the premier referring to the commissioner, said:
You couldn't budge them. They practically mutinied when we tried to show them pictures of our institutions.
In other words the attitude on September 6, 1958, was an attitude of disappointment. The amount asked for, as I recall it, by the Lewis commission was $15 million. The Lewis royal commission was set up by the province of Newfoundland to determine the whole question. The findings of the Lewis provincial royal commission as summarized at page 207 of the report are as follows:
1.	That the government of Newfoundland is entitled to claim from the government of Canada an annual grant of $17 million over and above all other federal grants as the additional financial assistance required under the explicit provisions of term 29;
2.	That the said grant should be paid annually to the province of Newfoundland commencing in the fiscal year 1957-58; and
3.	That the amount of the said annual grant should thereafter be subject to periodic review.


John Whitney Pickersgill: Could the Prime Minister say what he is reading from?


John George Diefenbaker: I am reading from page 287 of the Lewis provincial royal commission report. What did Mr. Smallwood say? I will have a few references to make about some of the things he said about those who today pretend in opposition that they are the friends of Newfoundland. I am going to refer to some of the statements he made respecting the type of treatment given to Newfoundland even during the days of the government of which the self-adopted son of Newfoundland the hon. member for Bonavista-Twillingate (Mr. Pickersgill) was a member.


John Whitney Pickersgill: Could I ask the Prime Minister a question?


John George Diefenbaker: I will be giving the hon. gentleman further attention in a minute.

Grants to Newfoundland


John Whitney Pickersgill: The Prime Minister has been waiting a long time for this day.


John George Diefenbaker: I am quoting from the St. John's Telegram of July 28, 1958 a statement concerning the McNair commission report attributed to the premier of Newfoundland:
I hope that the Diefenbaker parliament will study the recommendations and see fit to make the grant larger and provide for a future re-examination into Newfoundland's requirements.
Then, he went on to say this:
I believe our own royal commission is right, and that the McNair royal commission wrong. We can make the $8 million a year do for the next few years but the royal commission set up to make recommendations under term 29 were not expected to look forward to a mere four or five years. They were expected to complete and finalize the financial terms. I hope that the government of Canada will not refuse, in the future, to re-examine the position in the light of further experience and its desire to live up to the true spirit in which confederation was bom.
We have made provision for that in the bill which is now before the house in these words, something which the royal commission did not ask for, did not direct and did not recommend, something which the government of Newfoundland wanted, namely a review as to the circumstances. I am going to read those portions of the preamble set out in the bill which deal with our intention with regard to the future. When the Leader of the Opposition speaks of a breach of faith, let me quote him the words of Premier Smallwood regarding the findings of the royal commission. I shall also quote him in a moment some of the references to the former government and to the degree to which the former government had failed to discharge its responsibility to this new and great province of Newfoundland. Before I do so-


John Whitney Pickersgill: Is that an excuse for you?


John George Diefenbaker: If the hon. member for Bonavista-Twillingate continues I will deal with the time he became a member over there and some of the promises made at that time and some of the eulogistic references he made to the premier of Newfoundland.


John Whitney Pickersgill: I am rising on a question of privilege. If the Prime Minister can cite any promises of mines that I have not kept I should be very glad to have him do so.


John George Diefenbaker: Apparently I have already pointed out one.


John Whitney Pickersgill: Go ahead and cite it.


John George Diefenbaker: If the hon. gentleman denies this I will accept his denial immediately. During the campaigns of 1953

and 1957 did the hon. gentleman not say that there would be a review of Newfoundland's position?


John Whitney Pickersgill: I will answer that question. To the best of my knowledge I never said any such thing.


John George Diefenbaker: I think that sentence could well end on nothing. Let me read on.


John Whitney Pickersgill: What difference would it make, anyway?


John George Diefenbaker: I shall be referring to the hon. gentleman in a moment, if he persists, because the record is replete-


John Whitney Pickersgill: I will persist.


Lester Bowles Pearson: You had better find it.


John George Diefenbaker: -with observations that I think might find their place on the record if I were not dealing with this in an objective manner. Mr. Speaker, we say this:
Whereas both the government of the province of Newfoundland and the government of Canada have recognized the great difficulties inherent In determining future payments on an equitable basis from the experience of one selected year; and
Whereas since the report of the royal commission was made, the government of Canada has proposed a comprehensive study of dominion-provincial financial relations in co-operation with the provinces, and all the provinces have agreed to participate therein;-
And this is the important section:
Whereas in the course of such a review any special circumstances relating to the financial position of the province of Newfoundland after the 31st day of March, 1962, would be taken into consideration;-
Let me make this clear. In that review regard, and full regard, will be had to assuring those conditions inherent in section 29 being upheld to the end that Newfoundland shall enjoy a reasonable degree of equality of opportunity along with the other provinces in this country.


Lester Bowles Pearson: That is not the terms of the bill.


John George Diefenbaker: That is the essence of confederation, and that is the essence of the principles upon which we believe that the spirit of confederation shall be maintained.
Mention was made by the Leader of the Opposition that in the last couple of days there have been some observations made in the province of Newfoundland respecting this legislation. I realize that there have been statements made. I am not going to enter into any competition in the matter of recriminations. I am simply going to say that there have been exaggerated statements, statements which are not in keeping with a sense of full responsibility of the great issues that are inherent in this matter. Let my hon.

friends look back to those days when they believed that they would be in the seats of office forever. Their treatment of Newfoundland at that time is a far cry from the verbal protestations of today. Certainly, the premier has been outspoken, but what did he say regarding the government of the day of which the hon. member for Bonavista-Twillingate was so distinguished a representative? This was the kind of system used in his appointment. Mr. Smallwood recommended the member for Bonavista-Twillingate and Mr. St. Laurent said he accepted that recommendation. What did Mr. Smallwood say of those who today say that they are the friends of Newfoundland; that they intend to do those things that they did not do when they were in office, namely to raise living standards in Newfoundland. What did Mr. Smallwood say on June 25, 1955, when speaking at St. Andrews-by-the-Sea? This is what he said:
Premier Joseph Smallwood threatened last night to lead Newfoundland out of confederation with Canada unless the federal government stopped discriminating against the four Atlantic provinces, including his own.
Mr. Speaker, that was in 1955, and he went on to say-


Mr. Speaker:: Order. I wonder whether I might interrupt the Prime Minister. It being five o'clock, the house will now proceed to the consideration of public bills, pursuant to section 3 of standing order 15.


Mr. Hamilton (York West):: Mr. Speaker,
I wonder whether we could have unanimous consent of the house to carry on?


John Whitney Pickersgill: As far as we are concerned, yes.


Mr. Speaker:: Is it the unanimous consent
of the house to waive the hour for private and public bills under section 3, standing order 15?


Some hon. Members:: Agreed.


Mr. Speaker:: Agreed.


John George Diefenbaker: I continue:
It is not good for Canada to leave these Atlantic provinces to their own resources.
Then, he went on to use these words:
Before we become second-class citizens of Canada, we will show the other maritime provinces how to get out of confederation.
That was in 1955, Mr. Speaker, after they had been in confederation for six years. He went on-and the hon. member for Bonavista-Twillingate may take whatever joy he can out of this:
The federal government has made miserable proposals of sharing the cost in surveys of the wealth of timber, hydro power and minerals. We
Grants to Newfoundland
have gone ahead on our own and since confederation have spent $23 million to help build new industries.
If confederation was not to recognize the right of all Canadians to some equality in living standards and opportunity, Newfoundland and the maritimes might as well be declared game preserves for the holidays of Canadians from more prosperous provinces.
Where was this triumvirate sitting opposite me at that time? The ministers of the crown making of Newfoundland a game preserve, a place for holidays-


Lester Bowles Pearson: What is wrong with that?


John George Diefenbaker: -and making the people of Newfoundland second class citizens. Where was the Leader of the Opposition then, except in a position of power? Where was the hon. member for Bonavista-Twillingate (Mr. Pickersgill)?
Those are the things that I thought might be of interest when my hon. friends opposite reiterate the shortcomings of this government which in the period since June 21, 1957 has made available over and above everything for which Canada was responsible under the extant agreement, $7.5 million a year to Newfoundland which, had the former government remained in power, would never have been paid to Newfoundland.
After all, the record speaks. Now, we come to the Toronto Daily Star of July 9, 1955 when the premier wrote an article which is headed:
Premier "Joey" Smallwood, who almost single-handedly led Newfoundland into confederation with Canada, threatened the other day to lead her out again unless the federal government acted to make the four Atlantic provinces "economically strong."
Mr. Speaker, what did they do, those who sit today in the seats of the opposition? In those days from 1949 to 1955 what did they do? Newfoundland asked for action from 1953 onward, and Newfoundland had the representative for Bonavista - Twillingate. What did they do in those years? I give you the answer from the premier himself. He said this:
I am ashamed and angry to say it, but the altogether stupid, bungling, inadequate effort of great Canada to assist the Atlantic fishing industry (which is potentially almost as valuable in dollars and cents and much more valuable in numbers of families that can be supported than the oil industry of Alberta) is a reproach to a great and progressive country.
Who was in power when he said that? The question answers itself. Where was the self-appointed custodian of the rights of Newfoundland, the hon. member for Bonavista-Twillingate, then? Where was the Department of Fisheries? The hon. member for Bonavista-Twillingate has shown a tremendous interest in the last two years in

Grants to Newfoundland fisheries. What did he do when he was a member of the government? What did Mr. Smallwood say? He said:
The whole policy of the Department of Fisheries of Canada, in so far as there appears to be a policy for Newfoundland, is to drive the fishermen away from fishing.
This is an article contributed by the premier of the province, speaking of those halcyon days when these two members of the opposition who speak so loudly and protest so vehemently, were in power. Then, Mr. Smallwood went on to say:
The present Minister of Fisheries told one very prominent Newfoundlander that it wouldn't matter if the Newfoundland fishermen had to leave the fisheries, because they could always find work in some other part of Canada.
There is the record of those who today criticize this government for bringing about, first, the payment of the amount recommended by the royal commission and, in addition to that, provided for a review in order to assure that the principles of confederation, of which the Conservative party has a real knowledge and a tradition, shall be carried into effect in so far as the last province to join confederation is concerned.
Then, I should point out also the payments that have been made under the Atlantic provinces grants and the tremendous effect that the $7.5 million must have had on the economy of the province of Newfoundland and the other two provinces in the Atlantic area, and the $2.5 million to Prince Edward Island. This is what the St. John's evening Telegram said on January 24, 1958:
The Conservative administration is supported by two representatives from Newfoundland. The other five are in opposition. But we are getting far more sympathetic attention now than we got from the Liberals. Not that the government at Ottawa is favouring us because we voted so overwhelmingly for the opposition, but because it has been the declared Conservative policy to devote a greater proportion of the revenue to provincial needs, and especially to the needs of the Atlantic provinces. All this is quite contrary to Liberal policy.
I might refer for a moment to something to which I alluded on another occasion, the attitude that has been taken by this government to the various provinces. I point out that since we came into power we have endeavoured to bring about an equalization of opportunity amongst the provinces. We have been endeavouring to do that in order to bring about and achieve that degree of equality without which confederation would be meaningless. I should like to deal, in so far as conditional grants and unconditional grants are concerned, with the province of Newfoundland. I point out that from 1949 on, and prior to 1957, unconditional grants payments to the province of Newfoundland,

in the highest amount in any one year, were $20,106,000 in 1952-53. You talk about discrimination against Newfoundland. Let me point out this, that in 1957-58 the payment was $19,244,000, and for 1958-59 it will be in the neighbourhood of approximately twice that amount.
Then so far as conditional grants are concerned, from the time Newfoundland came into confederation, the highest payment that was made was in 1956-57 and it amounted to $6,573,000. For the first full year after this government came into office, the amount was $14,576,000, and it will be approximately the same amount in 1958-59, counting in, as my hon. friends says, the payments to which I have already made reference.
Talk about discrimination and unfairness; let me point out this fact. In addition to that, there were developments in Terra Nova national park; the tremendous development in St. John's harbour; joint housing developments; winter works program and the contribution to the construction of highways, 269 miles in Newfoundland. Those things were not peculiar to Newfoundland but they did bring, not only for Newfoundland but throughout Canada, new opportunities for the provinces to discharge their responsibilities and thereby assure individuals within each of the provinces a new vista in the future.
In so far as provincial governments are concerned, the direct federal contribution to Newfoundland has increased approximately twice in amount since this government came into power. All these things are indicative of the attitude that we adopt, which is not one of discrimination, as was suggested against the province of Newfoundland but rather the realization that whatever the political complexion of any province may be, that province shall not-as was sometimes the case in the past-be unfairly treated in any way.
A moment ago I mentioned some of the developments in that province. I neglected to mention as well the Gander development that has taken place and has been completed under this government.


Lionel Chevrier: It was started by us.


John George Diefenbaker: They started some things, Mr. Speaker; but we completed this and many other things.
I come to the general question of our attitude toward Newfoundland. Our attitude is this. We believe that province is entitled to fair and reasonable consideration. We believe that by 1962-and we have incorporated our belief in the statute-there should be that review which, ever since the findings of the royal commission, has been demanded by the government of Newfoundland. When that

review takes place, consideration will be .given to the matter. On the basis of the experience of the past of the degree to which we have increased the amount of contribution to the province, what do we find? In the period since 1956-57 to date the amount of contributions and payments to all provinces of Canada has risen from $689 million in 1956-57 to an estimated $1,212 million this year.


John Whitney Pickersgill: May I ask the Prime Minister a question?


John George Diefenbaker: Yes.


John Whitney Pickersgill: Why does not the Prime Minister give the figure for 1957-58?


John George Diefenbaker: I beg the hon. member's pardon?


John Whitney Pickersgill: Why does not the Prime Minister use 1957-58 for purposes of comparison? All the payments for 1957-58 were provided by the previous government.


John George Diefenbaker: I took the last year in which the former government was in power.


John Whitney Pickersgill: The Prime Minister does not do so for the obvious reason.


John George Diefenbaker: I took 1956-57 up to March 31. It was three months thereafter before we came into power. For that reason I gave the figures in question. As a matter of fact, if the hon. gentleman wants to continue until March 31, 1958, for the first year that we were in power, 1957-58, the amount was $853,700,000. In the ensuing two years that amount has been increased by $300 million, from $853,700,000 to $1,212,500,000 which in no way spoils the record.


Lester Bowles Pearson: What is a hundred million?


John George Diefenbaker: My hon. friend says "What is a hundred million?" He used to have a mentor who said, "What is a million anyhow?" The Leader of the Opposition increased that amount by $99 million.


Murdo William Martin: What about the $617 million deficit?


John George Diefenbaker: My hon. friend says, "What is $17 million?" Apparently these gentlemen are complaining about the millions we are providing.


Murdo William Martin: No. I said what about the deficit of $617 million.


John George Diefenbaker: Oh, Mr. Speaker, these hon. gentlemen-


Murdo William Martin: I know what the Prime Minister will say.
Grants to Newfoundland


John George Diefenbaker: We dealt with that matter over and over again.


Murdo William Martin: You always have an insult.


John George Diefenbaker: The hon. gentleman mentioned "insult" Mr. Speaker. Where is the insult in stating facts? Ever since this session began-and I say this in view of the fact that they speak of insults-there has been an apparent effort on the part of my hon. friends opposite at all times to use that method against me personally, but you never hear any objection. Yet when you tell them the truth, it is an insult in their vocabulary.
I am now going to refer to the statement which I made in the course of a television speech which sets out the viewpoint of this government as to Newfoundland. I said:
In the case of Newfoundland there has, I am sorry to say, been some misunderstanding-but differences arise even in the best of families.
My friend the Leader of the Opposition laughs. He will remember what Mr. Smallwood said.


Lester Bowles Pearson: What did he say yesterday?


John George Diefenbaker: I continue:
Let me say at once that I believe that we can and will resolve these differences in that spirit of understanding, common sense and compromise which has been so characteristic of the Canadian confederation from its very beginning.
Then I went on to point out that the equality of each province exists as a right. I said:
That equality exists as a right of our newest province's membership in the Canadian confederation. It is the earnest hope of my government that the differences may be settled as quickly as possible so that we may get together, and achieve together the raising of the general standard of living of the province and its people to that which we covet for all Canadians.
That is the attitude in which we have placed this legislation before the house. We start with the foundation of the words of Mr. St. Laurent. Mr. Smallwood naturally contends that the amount should be $15 or $17 million, in spite of the fact that he has obtained $7.5 million more than he would have obtained if the former government had remained in power for the three years. He also contended that there should be a review. We have provided in the meantime for the $8 million recommended. We have also made provision for a review to the end that, in the light of the circumstances then existing, we may be able to achieve by such further action and subsidy as is necessary the attainment of that equality to which I have referred.
I would point out that in all the other provinces there have been changes. The

Grants to Newfoundland original of section 118 of the British North America Act stated that Ontario would be adequately compensated by $68,000 a year, Quebec by $70,000, Nova Scotia by $60,000 and New Brunswick by $50,000. But in the intervening years there have been many changes in this regard. Those payments, at the time they entered into the pact of confederation were believed to be in existence in perpetuity. But in the light of events and in the light of economic development changes became necessary. We look forward to a period from the beginning of the term provided by this bill, namely five years, in which we allow for the amount which we believe will attain the objective of article 29; and then assure, at the end of that period, a review in the light of the economic development and the social changes which may take place in the interval, and which I am sure will take place in the interval because of the resource development which is taking place in Newfoundland and elsewhere in this country.
All I want to say is this in conclusion. No matter what is the amount that is fixed, it is natural that more will be asked for. After the report came out that $8 million was recommended, the premier of Newfoundland called on me and said that he wanted an additional $15 million a year in treasury grants instead of the $8 million recommended by the royal commission.
I simply say this, Mr. Speaker. I know it will arouse feelings, because after all when the act of union was entered into, the words of Mr. St. Laurent apparently were not distributed in the new province of Newfoundland in an underlined or emphasized manner. An interpretation was given, a political interpretation if I may say so, holding out hopes which those who uttered them knew could not be fulfilled. I say to the hon. member for Bonavista-Twillingate that I am sure that at no time did he make clear to the people of Newfoundland the meaning of the agreement that was entered into under the act of union. I am sure he did not make clear to the people of Newfoundland the interpretation placed thereon by Mr. St. Laurent. I am sure, in that expansive way, which is not peculiar to him, he led the people there to believe that something would be obtained which the agreement entered into did not contain.
There has been a wonderful spirit of Damon and Pythias between the hon. member for Bonavista-Twillingate and the premier of Newfoundland. I do not want to put them on the record, but even one as modest as the hon. gentleman would feel just a slight feeling of emotion, or even bashfulness, were I to read some of the views expressed by the 
premier of Newfoundland during successive campaigns, and also some of the words of the hon. gentleman spoken of the premier of Newfoundland. However, there is one expression I cannot refrain from referring to. On April 1, 1959, I think it was-


John Whitney Pickersgill: It was March 31.


John George Diefenbaker: I am sorry, I am a day
out. On March 31, 1959 the hon. gentleman stated of the premier of Newfoundland that he had served under two prime ministers of Canada, but he said, "I can tell you this; nobody has ever equalled the premier of Newfoundland."


John Whitney Pickersgill: No, that is not what I said.


Lester Bowles Pearson: Of course that is not true.


John Whitney Pickersgill: I am sure the Prime Minister (Mr. Diefenbaker) would not want to misquote what I said. What I said was that I had served under two very distinguished prime ministers and I had known a lot of other very distinguished politicians, but I had only known one political genius, and I do not take that back.


John George Diefenbaker: The actual words were better than my interpretation, Mr. Speaker. The hon. gentleman's memory is perfect. "I have served under two Canadian prime ministers, but I have known in my life time only one political genius." I can hardly understand the next reference with Mr. St. Laurent still with us, and he will be, I hope, for many years to come, when the hon. gentleman finally ended up his speech of adulation by saying that the premier of Newfoundland was the greatest Canadian of all time.


John Whitney Pickersgill: Now the Prime Minister knows that is not true.


John George Diefenbaker: I am quoting from the press report.


John Whitney Pickersgill: The Prime Minister is not quoting, he is reading from a document. I wrote a letter to the Ottawa Journal about this very report, and I also wrote one to the Toronto Telegram; as far as I know they are the only two papers where this story appeared. What I said was that he was one of the greatest Canadians of our time, and I added that in my opinion Louis St. Laurent was the greatest Canadian of our time.


John George Diefenbaker: Mr. Speaker, I was not quoting from the Ottawa Journal. I am quoting from a report by one who was there at the meeting, I understand, Miss Judith Robinson, in which she has, in quotation marks:
-Mr. Pickersgill said . . . "the greatest Canadian of our time."

The hon. gentleman said he did not say that, however, and it is accepted.


Lester Bowles Pearson: The Prime Minister knows he did not.


John Whitney Pickersgill: Mr. Speaker-


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: Mr. Speaker, I rise on a question of privilege, and it is a rather serious matter, I think. I know these are the ways one persuades some audiences, but we are trying to get at the truth here. A tape recording of my speech was made and before I made that correction I took the trouble of having it verified to be sure of precisely what I had said. I then wrote to the only two newspapers in which this erroneous statement occurred and made the correction. I never saw whether the Telegram carried it, but the Ottawa Journal did, and I am sure, knowing the Prime Minister's clipping service at least as well as he does, that he would have found the clipping there if he had looked for it.


John George Diefenbaker: I do not know what the complaint is. I accepted the correction because it is obvious the hon. gentleman did not think that.


Lester Bowles Pearson: Then stop repeating untruths.


John George Diefenbaker: May I therefore conclude by referring to the remarks of the Leader of the Opposition and say that we do want to strengthen the bonds between Canada and Newfoundland, as we do with all the provinces of Canada. That has been the reason for the policies adopted by this government which render available several hundred million dollars more to the provinces than was the case under the previous government. So far as the Atlantic provinces are concerned, we saw there the results of 22 years of rule on the part of those hon. gentlemen opposite. We brought into effect grants each year to assist those provinces to make provision economically for their development, and we will follow and continue to follow those policies to the end. There will not be in the years ahead, as we expect, the inequality which existed for so many years between the economic earnings of people in all parts of our country. We also want to see the building of that spirit of Canadianism. In that regard Newfoundland has shown its spirit and its attitude, and it is welcomed.
My hon. friend says that there has been a breach of faith, but I say to him, with all the power at my command, that statement is unwarranted, unfair and unjust. Those things were said, those exaggerated phrases were uttered, in the course of debate; but
Grants to Newfoundland as the years go by and the people of Newfoundland see the application of these principles which we have adopted, the criticisms of 1955 made against the former government will evaporate in the light of a progressive policy to ensure that Newfoundland shall attain its proper position along with the other provinces in the confederation.


John Whitney Pickersgill: As you know, Mr. Speaker, all of us in this house are equal, but some are more equal than others and as I have not got the unlimited time which the Prime Minister (Mr. Diefenbaker) has I cannot enter into all the aspects of the 100 per cent diversion from the subject to which the house listened this afternoon. It is very characteristic of the Prime Minister that when there is no answer to an argument he should change the scene, shift the scenery with great skill and produce effects which sometimes take people in until the third or fourth performance. But we in this house are getting well past the third or fourth performance.
I do not intend to pursue some of the things he said about statements made by Mr. Smallwood in 1954 or 1955-statements which perhaps I might not agree with-any more than I could remind the Prime Minister of some of the things said by Mr. Duff Roblin in the past few weeks of which, perhaps, the Prime Minister would not like to be reminded, to say nothing of the statements which have been made by Mr. Frost.
The Prime Minister said something about what had been done by the previous government for the fishery. I should like to tell the Prime Minister what was done by the previous government about the fishery, but I think the best evidence that the people of Newfoundland were satisfied with what was done in at least one constituency was the fact that I did not need to be self appointed in 1958, despite the Prime Minister's best efforts to see that I did not get back to this house; in fact, I was elected in 1958 with a majority considerably larger than in 1957. I say this for one reason only, because this suggestion that in some way or another the people of Newfoundland do not vote for their representatives like other people of Canada is, I think, an unreasonable one.


John George Diefenbaker: Who suggested that?


Donald Methuen Fleming: What is the next diversion?


John Whitney Pickersgill: I am merely following the Prime Minister's diversions, and I am not going to follow many of them.


An hon. Member:: Would the hon. gentleman permit a question?

Grants to Newfoundland


John Whitney Pickersgill: No, I think I would prefer to continue, for the reason that I should prefer to have my own 40 minutes. If I am allowed a little extension of time I shall be glad to answer the hon. gentleman.
The Prime Minister quoted something from the St. John's Telegram of 1958, but if he would read the St. John's Telegram since March, 1959 he would find it impossible to discover any similar articles anywhere; I do not think he would find many of them agreeable any more than, I am sure, he found agreeable reading what the premier of Newfoundland had to say about what some articles in the press today described as the peace move which was made yesterday. "Peace move" is a very curious way to describe it.
The Prime Minister indulged in his usual rhetoric about the Tory party living up to the spirit of confederation-the usual words, idle words, with which these things begin- and then he went on to pervert, and that is the only term I can apply to it, the words of Mr. St. Laurent about term 29. I should like to read some of page 289 of Hansard for February 7, 1949 which was carefully left out by the Prime Minister and by the Minister of Finance (Mr. Fleming).


John George Diefenbaker: It was quoted yesterday, twice.


John Whitney Pickersgill: Not this part:
This section of the Canadian economy generally described as the maritimes was felt to be the one which would be most nearly comparable to the situation which would be apt to develop in Newfoundland. It was felt that for a transitional term the government of Newfoundland had to be provided with sufficient funds to establish and develop services comparable to those available to the people of the maritime region, and that it had to be able to do so without imposing upon the people of Newfoundland a burden of taxation heavier than that prevailing in the maritime Tegion.
Then he went on-
After long negotiations it proved possible, I think, to arrive at the scheme which is set out in the terms of union, and which is apt to achieve that result.
In other words, what Mr. St. Laurent said about this was that it could be expected that these transitional grants would enable Newfoundland to bring her situation up to the maritime level, which she has not, in fact, done. And then he went on to say:
Human foresight, however, is never as good as hindsight.
The Prime Minister did not quote that, for obvious reasons.
It was also provided that within eight years from the coming into force of the terms of union a commission would be set up to examine the situation anew, and to report as to whether or not the terms provided are working satisfactorily and are


sufficient to bring about the object of equalizing the lot of the people of the new province with that of the people of the older provinces.
Anyone who reads this report will see that that has certainly not been achieved, and the commissioners did not suggest or hint that it would be achieved soon. In fact, they made it perfectly clear that it would not be achieved by 1962, the cut-off date. But what is going to be much harder for people to take than anything else, and for Mr. St. Laurent, himself, is the perversion of these words:
There is no undertaking to implement any terms of recommendation that may be made at that time by a royal commission.
By itself, taken out of its context, this has one significance, but read with the following words, what does it mean?
It was felt by the Newfoundland delegation, and by the representatives of the Canadian government, that this was something that was being entered into in a spirit of fairness on both sides, and that it was not necessary to make binding stipulations about what would happen with respect to the report of a royal commission.
Why? Because it was expected that men of honour would be dealing with the question on both sides, and that the terms of union, like those of the British North America Act, would not be interpreted by police court quibbling.
When the Prime Minister was serving under another leader his party took a very different view of this matter, and I should just like to remind hon. members of the view taken by Mr. Drew when he was leader of the party. I have here an extract from the St. John's Telegram of January 15, 1953 which is headed: "Drew-Deserve Better Terms" which reads as follows:
The first national party leader to react to E. J. Russell's proposal that Newfoundland "give all seven federal seats to the party which will commit itself most deeply to a revision and a betterment of the financial terms of union", was Hon. George Drew.
He wired Gordon Higgins, Q.C., M.P. for St. John's East, last night that he believes Newfoundland is entitled to much better terms than those now existing.
I should just like to read the telegram, the text of which was given in full. It was addressed to Mr. Gordon Higgins, St. John's, Newfoundland.
Replying your question regarding 1949 statement revision financial terms with Newfoundland you may confirm this without hesitation. I believe Newfoundland is entitled to much better terms than those now existing. As .you are also aware I believe the rights of the province should be much more firmly established than they are now.
That was the pledge on which the hon. gentleman who is now a member of the government sought the suffrages of the electors unsuccessfully in that election. That was

the position that was taken by the Conservative party. It was also taken by the hon. gentleman in 1957.
What do we have now? We have a repudiation of the existing terms; not better terms and not an improvement in the terms but a repudiation of the existing terms.


Donald Methuen Fleming: Nonsense.


John Whitney Pickersgill: The Minister of Finance whose favourite word is "nonsense"-


Donald Methuen Fleming: Just as your
favourite stock in trade is nonsense.


John Whitney Pickersgill: -talked about the overselling of term 29. I take it that although the minister was not prepared to say so, he was referring primarily to the premier of Newfoundland in talking about this overselling, and if he was not he can correct me. In any case, to show how very precise the premier of Newfoundland was in his interpretation of term 29, let me say this. I have heard him interpret it on many occasions on public platforms. I have never heard him deviate from the terms at all. He has always explained very precisely what they were as he did at the dominion-provincial conference in November of 1957 as will be found at page 99 of the report of the proceedings where he said:
Under the terms of reference,-
That is, of the royal commission. I continue:
-under the terms of section 29, the royal commission will not be allowed to recommend that the parliament of Canada on your recommendation-	[DOT]
He was speaking to the Prime Minister at the time. I continue:
-vote us more than enough to continue at the levels which we now have. In other words, the most we can hope for from the royal commission is enough to keep us 25 years behind Nova Scotia as she is today.
That was the interpretation and that was always the interpretation that was put upon it, as the plain terms show, that after eight years the purpose of this grant-if any was needed-was to continue the level of services then reached, not to improve the services and not to equalize at all. As Mr. St. Laurent said, it was to try to bring them up during the transitional period and after that to continue them.
The Minister of Finance, the Prime Minister and the Minister of Justice (Mr. Fulton) do not seem to be able to understand that that is why the people of Newfoundland resent so bitterly all these reminders of the other things they are getting, in common with other Canadians, because they consider 66968-9-380
Grants to Newfoundland that they are entitled to their rights and that they are also entitled to be treated like other Canadians.
Term 29 to a Newfoundlander is almost the equivalent to a French-speaking citizen of Canada of the language term of the British North America Act. It is a sheet anchor. It is the right of Newfoundlanders to be assured that whatever comes they will have enough, without having to have punitive taxation higher than the rest of the provinces.


John George Diefenbaker: Mr. Speaker, would the hon. gentleman permit a question arising out of the comparison he makes. Does he remember that Mr. St. Laurent said that the language rights of French Canada could be changed without consultation by a majority of parliament?


John Whitney Pickersgill: Yes, I remember that very well but I also remember what else he said. He went on to state that no man of honour would ever do it. And that is precisely why, under the terms of union with Newfoundland, no one ever believed that this would happen.


Lester Bowles Pearson: No person of honour would have made that change.


John Whitney Pickersgill: It must be remembered that we had had no previous experience. No one would have believed that any Canadian government would have come into this house and proposed legislation to repudiate the terms of the British North America Act. That is what we have before the house today.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: Rot.


John Whitney Pickersgill: That is why every Newfoundlander, except one or two, resents bitterly the action being taken by this government. It does not matter how many millions any minister says have been spent on family allowances or unemployment insurance in Newfoundland or how many millions have been spent on Atlantic provinces grants or on anything else which goes equally to other people. I admit that the Atlantic provinces grants do not go equally to other people but they go to four provinces and are given for one purpose-at least that is what we are told-and that purpose is to enable these four provinces to improve their situation, not to continue what they have but to improve their situation.
The Minister of Finance stood here on September 4 last year and said that because these Atlantic provinces grants were given to Newfoundland they could wait for another year for the disposition of this matter. That

Grants to Newfoundland has not been forgotten either, in Newfoundland, and it is not going to be forgotten for a very long time to come.
The Prime Minister made a great deal of the dissatisfaction of the government of Newfoundland with the report of the royal commission and, of course, it is quite true that they were dissatisfied. It is not at all surprising to me that they should have been dissatisfied because they had appointed a royal commission consisting of very respected and eminent citizens of that province to prepare a case to be presented to the federal royal commission. They believed in that case and believed they had a good case. They suffered the natural disappointment that perhaps the Prime Minister himself has had at times when he believed that he had a good case and was not able to convince the judge.
The recommendations of the royal commission were objected to on one count and on one count only by the government of Newfoundland and that is that its recommendation -its award-was inadequate.


John George Diefenbaker: And there was no review. I believe the hon. gentleman will agree that this was another ground on which objection was taken to the report.


John Whitney Pickersgill: No, I do not think the Prime Minister will find that to be the case- well, it may be that the Prime Minister is right. The reason why there was no review, of course, the Minister of Finance told us today, was that the commission did not have the power to recommend a review under term 29. I was rather surprised that the minister said that. I know that Mr. Ritchie said that to the commissioners and that presumably is what impressed the commissioners. That may very well be the reason why they did not provide for a review. I should be rather surprised if the premier of Newfoundland would have been very insistent about this question of a review if the commission had in fact recommended what was asked for, but that again is another matter.
At any rate, there were these two difficulties. The Prime Minister will also recall that as early as August 11 last year the premier of Newfoundland made an appeal to the Prime Minister-to which, incidentally, he received no reply-by telegram, asking that provision should be made on an interim basis for these payments because of the urgent need of the money to provide employment during the winter.


John George Diefenbaker: I know the hon. gentleman does not want to leave the wrong impression. A communication was made with me and then the premier and I had a discussion about this whole question.


John Whitney Pickersgill: I remember the events very well. If the Prime Minister will look it up I believe he will find that between August 11 when the telegram was received and September, any discussions that occurred must have been conducted by telephone. I recollect very clearly what took place and I put the telegrams on Hansard on either September 4 or September 6 of last year. There were three telegrams. The first telegram on August 11 asked for interim payments. Some days later there was a second telegram which asked for the review. Then there was a third telegram consequent upon the unanimous resolution of the legislature which came in on September 3. That was the occasion of this matter being raised in this house on September 4.
I say that this whole matter, which could have been disposed of on the basis on which we are now being asked to dispose of it just as well last September or last August as now, was postponed and the excuse that was given to this house by the Minister of Finance was that, well, they are getting $7,500,000 anyway that they would not have got if the Liberals were in office and therefore they can be denied their constitutional rights because they got some honey.


Donald Methuen Fleming: On a question of privilege, if the hon. member is going to quote me I suggest that he quote me accurately and refer to Hansard and not use this mumbo-jumbo that he is now inflicting on the house. It bears little or no resemblance to what I said.


John Whitney Pickersgill: The minister is pretty good at mumbo-jumbo. I was not purporting to quote him; I was purporting to paraphrase him.


Donald Methuen Fleming: A pretty bad perversion of what I said and he knows it pretty well.


Paul Joseph James Martin: You are not in
this debate at all.


John Whitney Pickersgill: I would like to say it seems to me that this government has never understood at all, never appreciated at all, what term 29 meant and what it was about. The Prime Minister, having delved into my past, I will recall one incident in his. It so happened that he and I arrived in Newfoundland on the same day in the same airplane in the year 1957, on the same general mission. The Prime Minister was on television that evening and I had the pleasure of watching him. He was asked by Mr. Don Jamieson of CJON about the royal commission provided under the constitution, and his answer was that he did not think this royal commission should be appointed; there were too many royal commissions anyway.


John George Diefenbaker: As I recall it, there was no reference provided under the constitution.


John Whitney Pickersgill: I do not think Mr. Jamieson mentioned the constitution. Everybody in Newfoundland and everybody who had anything to do with public affairs in Newfoundland knew perfectly well what the royal commission was that was provided for under the constitution. The Prime Minister was a member of this parliament; he took a large part in the debates at the time of union. He was the leader of the opposition. He was going to Newfoundland in that capacity for the first time to ask for the suffrage of the people; and on the most important question, the question that they attached more importance to in that province than any other, the Prime Minister did not know or had forgotten that under the constitution there was an obligation to appoint this royal commission. It seems to me that from the beginning to end of this matter that has been the attitude of this government; that there is no real obligation of any kind under term 29, no obligation at all; that what they have here is another of those fiscal arrangements on which they can make a dictate as they did, of course, at the beginning of the year 1958.
Now, we are asked in this bill, and the people of Newfoundland are asked, to be satisfied with this clause in the preamble:
Whereas in the course of such a review any special circumstances relating to the financial position of the province of Newfoundland after the 31st day of March, 1962, would be taken into consideration.
Now we are asked to do this by this government that failed to keep the promise to all the provinces that the Prime Minister had made in November, 1957 that he would reconvene the conference in January, 1958. Therefore, the government is saying to the people of Newfoundland: Now, sell your birthright, give up your birthright, give up your rights under the constitution and accept instead our word that when our seminar is over, when our study group has completed its work and when 1962 comes along we will do right by you.


Donald Methuen Fleming: How can any man
in this chamber talk such nonsense?


Lester Bowles Pearson: It is absolutely true, every word of it.


John Whitney Pickersgill: Everybody who has had any experience-and I have had a good deal -with federal-provincial fiscal arrangements knows that one of the basic principles of all the agreements right from the start has been that whatever is offered to one province is equally available to all others. That has always been the principle, and the only deviation there has been from that principle- 66968-9-380J
Grants to Newfoundland and I do not criticize it on that account-is in the case of the Atlantic provinces grants. Now here the people of Newfoundland are being told we are going to extinguish by this bill the rights you have under the constitution, the rights you have under term 29. They go out the window. You have no rights.
No longer after 1962 can you point to the charter, point to the British North America Act and say, "We are assured, as long as it is needed, that we will have enough money to provide the services"-not the services that they have in Ontario or Saskatchewan-"at the level they were in Newfoundland in 1957". That is all it is. It is not very much oversold, sir. That is what it is, and that is what is being taken away from the people of Newfoundland; this right that was written into the constitution is being taken away from them if this legislation is enacted.


Donald Methuen Fleming: May I ask the
hon. member a question? Will he point to any words in this bill that are going to take anything away from Newfoundland?


John Whitney Pickersgill: Yes, certainly.


Donald Methuen Fleming: The words there provide for payments to Newfoundland.


John Whitney Pickersgill: The words that take it away are these:
Whereas pursuant to the recommendations made by the royal commission established in fulfilment of the obligation-
There is no fulfilment of the obligation here; there is a "ratting" on the obligation. That is what there is and the hon. gentleman has a very uneasy conscience about it. What has happened here is that the government is trying to take away the rights under the constitution and substitute in their place the words of a preamble which hon. gentlemen know have no legal effect. How in the name of heaven do these gentlemen expect when they do not respect the constitution, when they disregard the constitution, to have anyone pay the slightest attention to a few words printed in the preamble of a bill which is itself a repudiation of an obligation?
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
Hon. W. J. Browne (Minister without Portfolio):: Mr. Speaker, the bill which we are now examining is more illuminating than the resolution which we had before us yesterday. Yesterday, when the Minister of Finance (Mr. Fleming) was explaining the resolution he did not stress some of the

Grants to Newfoundland clauses in the preamble which I feel deserve very great consideration. The hon. member for Bonavista-Twillingate, who is a law student, said this afternoon that the preamble has no legal effect. I think the lawyers in this house will disagree with him because, especially in a bill such as this, the preamble is of the utmost importance. It has legal effect, and will be so recognized in a court of law. The preamble deserves to be read, at least the two principal sections. It says:
Whereas since the report of the royal commission was made, the government of Canada has proposed a comprehensive study of dominion-provincial financial relations in co-operation with the provinces, and all the provinces have agreed to participate therein;
That is all the provinces including Newfoundland.
Whereas in the course of such a review any special circumstances relating to the financial position of the province of Newfoundland after the 31st day of March, 1962, would be taken into consideration;
It seems to me, Mr. Speaker, that this is much more definite than term 29 which contained the obligation of establishing a royal commission to make an investigation. Here the government pledges itself to take into consideration the special circumstances that would exist in Newfoundland after March 31, 1962. Opposition speakers do not seem to be able to get away from the provisions of term 29, and yet it was admitted here by several of them that the legal obligations established by the term had been fulfilled. We have now moved to another stage of the fiscal relationship between the dominion of Canada and the province of Newfoundland. It is admitted also that the federal government is doing its duty in fulfilling this recommendation up to March 31, 1962. We are making the payments which the royal commission recommended should be paid up until that time.
Opposition speakers, however, had little or no faith in the provisions for review to which I have referred. This is a review in which Newfoundland is able to bring forward any special circumstances, and I propose to elaborate on those as I go along. I listened to the hon. members on the other side of the house yesterday and today and, with the exception of the hon. member for Assini-boia (Mr. Argue), most of them were full of dire forebodings about what was going to happen in Newfoundland after March 31, 1962. The hon. member for Bonavista-Twillingate (Mr. Pickersgill) went further than his colleagues and he almost said, he certainly insinuated, that he did not trust the government. He said the same thing today,

that he did not think the government should be trusted in connection with the provision that is contained in the preamble.
I was a member of the house of assembly of Newfoundland between 1954 and 1957, and I had a good many opportunities of hearing at first hand some of the views which the premier of Newfoundland held in regard to the terms of union, and indeed to some members of the federal Liberal government as well. But I resigned my seat and came up here because I thought that I could assist my colleagues when we were in opposition in demanding better terms from the government and if, as was likely going to happen, we were returned then our government would give better terms to the people of Newfoundland. I feel we have done so, and I think I can show that. I believe it can be easily shown that the government can be trusted to do what is right in the future and that already the government has done far more for Newfoundland during the two years it has been in office than was done during any similar period when the previous government was in office.
It is inevitable, I suppose, that we should have this discussion on term 29. It is a pity it did not take place before the terms of union were signed. But, Mr. Speaker, I have here all the debates that took place in the House of Commons, in the committees, in the Senate, and its committee, in the House of Lords in England and in the House of Commons in England, but I could not find a reference to term 29. It was not until it was drawn to my attention that the prime minister of the day, Mr. St. Laurent, had made a reference to it in the course of a long speech that I came across his statement.
This statement, of course, has been quoted here several times and is very illuminating on the attitude which the government must have taken at that time in regard to term 29. Why did this term 29 to which so much importance is now being attached escape the notice of the members of the House of Commons, the members of the Senate and other places when the matter was being discussed? Was it because they all took for granted the interpretation which the prime minister of the day, Mr. St. Laurent, had placed upon it?
In order to give some hon. members who were not here a proper perspective of the subject we are discussing, I should like to be permitted, for a few moments, to sketch in some of the background of this whole business. There have been some references, one by the Leader of the Opposition (Mr. Pearson), to an agreement between two sovereign nations, and many hon. members may not appreciate what really happened in 1949.

The government of Newfoundland was entitled to become a full-fledged dominion under the statute of Westminster in 1931, but the government of Newfoundland never took the step that was necessary to proclaim its intention to become a full-fledged dominion. They passed the legislation, but there was one part that did not become operative which would have made us a dominion. That year 1931 was a critical year in the history of Newfoundland. I remember it so well because I predicted what was likely to happen; I remember doing that. The government had been borrowing so much that it was not likely to be able to borrow the $8 million for which they were looking.
As a result we had quite a financial crisis, and we had to get the assistance of Canadian banks, the assistance of the Canadian government and the assistance of the United Kingdom government. There was an election in 1932, and a new government was elected. The new government was compelled to agree to the appointment of a royal commission appointed by the United Kingdom government, the Amulree commission, which investigated the financial situation in Newfoundland. They recommended that there should be a commission of government consisting of three members from Newfoundland, three members from the United Kingdom, with the governor presiding who would be the seventh member. This was done. They carried on the government of Newfoundland between 1934 and 1949 for a period of 15 years.
When they started they received financial assistance from the United Kingdom. But as fishing markets improved and world conditions improved after the crisis of the thirties, especially when the United States forces came in 1941 under the bases agreement, things began to pick up financially in Newfoundland. As a result, the commission of government was able to pay off a great proportion of Newfoundland's indebtedness and also have a surplus of nearly $50 million by the time the terms of union were signed in 1949.
In 1946 the United Kingdom government said:	"Well, now, Newfoundland is selfsupporting again and it should decide what its future is going to be". They decided to set up a national convention consisting of 45 members who would be elected from all over Newfoundland. These members would sit down and decide what the future of the government of Newfoundland would be. They did this. The 45 members were elected, one of whom was the present premier of Newfoundland and another was a gentleman who is in the other place, Senator Bradley, the former secretary of state. They sat down and
Grants to Newfoundland discussed whether we should have a continuation of commission government or whether we should revert to responsible government, and the premier of Newfoundland advocated from the beginning that we should come into confederation with Canada. He tried to get people to support his view, but he could not get support for a long time. Eventually, he did.
The governor of Newfoundland wrote to Mr. Mackenzie King, the prime minister of Canada at the time in 1947 and said: "will you accept a delegation from the national convention of Newfoundland to see whether there is a basis existing for Newfoundland to become a province of the dominion of Canada." Mr. King wrote back and said yes, that he would be pleased to receive a delegation. The delegation was appointed and it came up here and they sat down together and they discussed the terms under which Newfoundland should come into confederation, to see whether there was a basis for Newfoundland coming into confederation. Most people overlook it, but that was another set of terms. There was no term 29 in that set but there was a term 14 which was a very much shorter one but similar one, a predecessor of term 29.
I should like to draw attention here to the fact that the original financial terms were very much less than the terms finally decided upon. They provided for transitional grants. The transitional grants afterwards were $6.5 million for the first three years, but the original terms on which the people voted in the summer of 1948 provided for only $3.5 million for the first three years and after that diminished by a sum of $350,000 a year until they disappeared in the twelfth year. Then term 14 as it was at that time, went on to say this:
14. In view of the difficulty of predicting with sufficient accuracy the financial consequences to Newfoundland of adjustment to provincial status the government of Canada will appoint a royal commission within eight years of union to review the financial position of Newfoundland and to recommend the form and scale of additional financial assistance, if any, which may be required by the government of Newfoundland to enable it to continue public services at then prevailing levels-
I quote this especially in reference to transitional grants, which, Mr. Speaker, you will notice were only $3.5 million and that was the maximum the government of that day thought that Newfoundland could get along on. And that is not so very long ago; that was in 1947-with $3.5 million.
That was sent to the national convention and they discussed it. They decided not to accept it by a vote of 29 to 16 and they

Grants to Newfoundland decided to submit to the people of Newfoundland two alternatives only, whether the people wanted the return of responsible government as it was in 1933 or whether they wanted the continuation of the commission of government. But no alternative of confederation was on the ballot paper. They would not have that. The United Kingdom came into the picture then.
In the meantime Mr. Smallwood had presented a petition which he said had been signed by fifty thousand people demanding that it should be put on the ballot paper. The United Kingdom said, "this matter has been thoroughly discussed; the people are aware of the issues and we will put it on the ballot paper". I am quoting this to show the Leader of the Opposition that that would not happen to a sovereign nation. It happened because Newfoundland was not a sovereign nation at the time. Confederation was put on the ballot paper. In the first referendum responsible government came first, confederation second and commission government third. In the second referendum confederation was approved with a majority of 2 or 3 per cent.
When the prime minister of Canada of the day, namely Mr. Mackenzie King, wrote to the governor and sent the terms he had this to say:
I feel I must emphasize that as far as the financial aspects of the proposed arrangements for union are concerned, the government of Canada believes that the arrangements go as far as the government can go under the circumstances. The government could not readily contemplate any change in these arrangements which would impose larger financial burdens on Canada.
Hence you see, Mr. Speaker, that in 1947 the government thought that $3.5 million a year was the utmost that the Canadian government could pay to the province of Newfoundland if it came into confederation.
After the referendum favoured confederation a new delegation was picked by the governor and was sent up here to negotiate the final terms. They came to Ottawa on October 5 and on December 11, 1948 the measure was signed embodying these final terms, including terms 28 and 29. Term 28 was the new transitional grant in which, as I pointed out, the original payments to Newfoundland were increased from $3.5 million a year was the utmost that the Canadian gov-ing by $800,000 a year until the eighth year when they diminished by $350,000 a year. The late Sir Albert Walsh-may the Lord have mercy on him-told me that it was largely due to his efforts that the $16.5 million extra was gained for Newfoundland. I think the Leader of the Opposition who was, I believe, a member of the committee that negotiated


with him will agree that his prestige and influence stood high with the government of the day, and the $16.5 million increase was gained on the offer which had come from Mr. Mackenzie King.
It must be remembered that these transitional grants were on a declining scale. Nobody on the other side of the chamber has yet asked this question: why is it that those transitional grants were on a declining scale? If now they think that Newfoundland's needs are getting greater and greater every year and ought to be provided for every year and spelled out in the bill why did they provide grants on a downward sliding scale? How much do you think these grants had declined up to 1956-57? Does the Leader of the Opposition, the hon. member for Bonavista-Twillingate or any hon. member from Newfoundland know how much that grant had declined? I refer to the grant of $6.5 million of 1949-50. Do they know how much that grant had declined by 1956-57? Can they tell me? Let me tell them that it had declined to $2,250,000. That is all that Newfoundland was receiving in 1956-57, namely $2.25 million. I should like everyone to remember how little Newfoundland was receiving from the dominion government in the eighth year of union. They show such a great interest in Newfoundland now. No wonder.
I have here the Auditor General's report for 1958. In that is given the revenue and expenditure for 1957-58 and for 1956-57. Despite that low transitional grant of $2.25 million in 1956-57, the Newfoundland government balanced its budget that year. It is not necessary to refer to all of the terms of union. There are a great many of them. However, I want to point out that when Newfoundland went into confederation Newfoundland had a cash surplus of $45 million. The federal government took over $46 million of debt, leaving Newfoundland with a debt of only $6 million. Was there ever a country in the world that started off with greater advantages than did Newfoundland owing only $6 million and with $45 million cash to start with? I hate to tell you what the public debt is now, Mr. Speaker. The debt of Newfoundland, I am sure must be up to nearly $100 million, direct and indirect. Where is the $45 million surplus? I know where $28 million of it went. It went into the great industries, the great socialist enterprises which the socialist premier of Newfoundland started. When I was on the political platform it was $25 million. I used to say "Do you know how much money the government got back out of that?" I looked in my pocket for a coin and I did not have a cent, so I had to show them whatever I had say, a ten cent piece. But the government

did not get 10 cents back out of the principal and interest and all the money which went into the socialized industries, and it is my "dear friend", the premier of Newfoundland who sets himself up as a judge of royal commissions and a judge of the prime ministers of governments. He is the one who knows how everything should be done. I used to say that you could start at the end of Water street in St. John's, walk two miles along, and you would pass private enterprises all the way along the road. You can start off at Duckworth street and go another two miles up as far as Mrs. Power's shop, which has been in existence for 75 years, and every one was operated with private capital and every one was making a living for the people who operated them, and the government was giving out $25 million to Germans, Latvians and anyone who cared to take it and they never returned one cent of interest or capital on the capital invested in them.


Mr. Carter:: Would the hon. minister say what this has to do with term 29?


William Joseph Browne: The hon. member can speak afterwards, I have not much time.


Lester Bowles Pearson: He will.


William Joseph Browne: As I said, the public debt of Newfoundland was only $6 million in 1949, $20 per head. The per capita debt in Canada was $875, and I said that Newfoundland should have received payment on the same principles adopted in 1867 and when the other provinces came in after that date. They should have been given credit for the difference in the per capita debt. If that had been done with regard to Newfoundland, Newfoundland would have received something like $13 million a year. I am happy to say that since this government came into office Newfoundland is receiving more than it would have received if that principle had been carried out.
I may say that in 1895 that principle was used to prevent Newfoundland's entry into confederation. Our public debt was greater per capita than Canada's was, and amounted to a difference of $5 million which the Canadian government would not accept. The hon. member for Burin-Burgeo (Mr. Carter) wants the Canadian government-I looked up his speech-to pay to Newfoundland financial assistance necessary to continue public services at the levels and standards reached by 1956-57. The brilliant hon. member for Bonavista-Twillingate today said the same thing. He said, "It is a very simple matter; all you do is to keep it at the 1956-57 level." Remember that, that is what they want; they want to keep it at the 1956-57 level. I have
Grants to Newfoundland here a report of the royal commission. Let us see what their recommendations are about the levels and standards of services in Newfoundland. At page 21 the royal commission said:
It should be made clear, at this point, that we have decided to proceed upon the assumption that the levels and standards of public service are indicated by their cost.
I repeat, "are indicated by their cost".
For example, if $100,000 is spent on the salaries of doctors and nurses to provide a health service, we assume for the purpose of our study that $100,000 is the measure of the flow of service which results from that expenditure.
Now let us see what the cost of the services was in 1956-57 and in the years since we assumed office. I have here the Auditor General's report for Newfoundland for the year ending March 31, 1958. This gives the actual expenditure for 1956-57 at $43,892,000, and for 1957-58 at $51,509,000. I also have here the budget of the Hon. Mr. Spencer for this year in which he sets out the estimated expenditures for last year and the expenditures for this year. The current account expenditure for 1958-59, estimated originally in the amount of $59 million, resulted in an expenditure of $63,887,600. For 1959-60 the estimated total current expenditure is $67,545,000.


John Whitney Pickersgill: It was $67 million, I think the hon. member will find.


William Joseph Browne: There is an increase of current account expenditure. In 1956-57, $43,892,000; in 1959-60, $67.5 million; that is an increase of over 50 per cent. Do the hon. members for Burin-Burgeo and Bonavista-Twillingate want to go back to those standards of 1956-57? That is what they were advocating here this afternoon.


Chesley William Carter: Does the hon. member want an answer?


Lester Bowles Pearson: He asked a question.


William Joseph Browne: These expenditures, Mr. Speaker, were made possible by the recommendations of the McNair report which we are implementing and by the Atlantic provinces grants, and by a special addition to the standard tax and by other new and increased grants to Newfoundland under various other departments.
Let us take the unconditional grants for Newfoundland which were put on the record yesterday by the Minister of Finance (Mr. Fleming) at page 5901 of Hansard. Just compare these. The unconditional grants are as follows. Some hon. members may not be familiar with this thing. I have been going over and over this, I suppose, more than any other person in Canada, except perhaps the



Grants to Newfoundland editor of the St. John's daily News who has been writing a series of articles on it. But I have lived with this for the last two years. The unconditional grants in 1956 and 1957 included the transitional grant and the tax rental agreement; it included the equalization grant, the stabilization grant and so forth. In 1956-57 the figure was $17,838,000; in 1957-58, $19,244,000; in 1958-59-prepare for a shock now, hon. member for Bonavista-Twillingate -$40,847,000; in 1959-60, $36,587,000. These grants have been increased over 110 per cent in three years taking into account 1959-60. Does the hon. member want to insist that we set the standards in Newfoundland at the 1956-57 level?


Some hon. Members:: Shame.


Mr. Browne (Si. John's West):: Mr. Speaker, let us come back to the transitional grants and those special grants that carry no return at all because the tax rental agreement brings a return into Canada. The transitional grant for 1956-57 was $2,250,000. Remember I told you that the only free payment made by the Canadian government in 1956-57 to Newfoundland was $2,250,000. For 1957-58 Newfoundland will get $8 million, because it gets $6,600,000 under the McNair report; in 1958-59, $15,500,000; in 1959-60, $15,500,000 plus the 3 per cent increase in the standard tax. So you see an increase from $2,250,000 in 1956-57 to $15,500,000 in 1959-60. Do you still want to go back to the standards of 1956-57?
The Leader of the Opposition criticized the Minister of Finance and said it was most unfair to justify a change in the recommendations by the argument that since union Newfoundland had also received a good deal of financial help from Ottawa along with the other Atlantic provinces. The Minister of Finance was not justifying anything; he was just stating facts, and he put all those facts on record in Hansard where they are mute but eloquent testimony of the assistance which Newfoundland has received from our government in the past two years, assistance far and away beyond anything which had been received from the previous government.
I think the Leader of the Opposition does not want to hear about all the things that this government has done for Newfoundland since it came to office. He does not like to hear what increased financial assistance has been provided.


Lester Bowles Pearson: I want to hear about this bill.


William Joseph Browne: That's right. You want to get back to the 1956-57 standards of $2,250,000. As far as Newfoundland is concerned, as far as Newfoundlanders are concerned and as far as constituents of Bonavista-Twillingate, of Burin-Burgeo and

any other part of Newfoundland are concerned, it does not make any difference whether the money comes in under term 29 or whether it comes in under the Atlantic provinces adjustment act or whether it comes in in any of the different ways in which money has been flowing into the treasury of Newfoundland since we came to office. It makes no difference. My hon. friend the minister of health (Mr. Monteith) could say something about this. How much was the Newfoundland government getting from the federal government in respect of hospital insurance in 1956-57? Nothing. How much were they getting from the federal government in 1959-60 for hospital insurance; how much was any province getting before we came into office? Not a cent. How much is Newfoundland getting now? More than $4 million, $4.6 million, to be exact. Perhaps hon. members opposite do not like hearing about the increase in hospital insurance payments, the increases under the health grants, the increase in unemployment assistance, the increase in university grants-


Lester Bowles Pearson: With 30 per cent unemployment, you needed an increase in unemployment assistance.


William Joseph Browne: -the increase in grants for picnic sites and access roads and so on-all money contributed by the federal government to the government of Newfoundland resulting in an improvement of services, and levels and standards of services in that province. All that money from whatever source it comes and into whatever department of government in Newfoundland it goes is used equally for the benefit of Newfoundland. Surely a contribution of over $4 million to the department of health on account of the hospital insurance scheme constituting as it does, I believe, 71 per cent of the total cost of the insurance scheme in Newfoundland is something that should be known to the Leader of the Opposition and to all other members in this house as well as to people all over N ewf oundland.


Lester Bowles Pearson: We know all about it. It was Liberal legislation.


William Joseph Browne: It does not make any difference either if grants of a similar kind are made to other provinces as long as Newfoundland is getting its share. As I say, the Minister of Finance was not attempting to justify any change in the recommendations; he was just citing the facts.
Let us look at the total revenue which Newfoundland is receiving today. You will

find these figures listed in the public accounts of Newfoundland and in the estimates for various years.
They are:
1956-57	1957-58	1958-59Total revenue	..	$44,095,000	$49,200,000	$74,140,000Federal grants	..	22,100,000	24,000,000	49,726,000
The federal grants are 66 per cent of the total revenue of Newfoundland in 1958-59 as compared to 50 per cent in 1956-57.


John Whitney Pickersgill: Would the hon. gentleman permit a question?


An hon. Member:: Sit down.


John Whitney Pickersgill: That includes the money which has not yet been paid.


William Joseph Browne: I know exactly what the hon. member is going to say. He is going to say that that includes the amount for 1957-58.


John Whitney Pickersgill: Yes, it does.


William Joseph Browne: And in
1959-60 the total revenue will amount to no less than $71,587,000.
Now, I have here the revenue of the province of New Brunswick, a province which is 50 per cent larger than the province of Newfoundland, yet the revenue is not 50 per cent greater. Indeed, it is very little larger than the revenue of the province of Newfoundland. I suppose I may as well give it to the house. I have it here. The revenue of the province of New Brunswick for 1959-60 is $74,888,000 and the revenue of Newfoundland which is only two-thirds the size is $72 million dollars. And of that sum the federal grant amounts to $46,800,000, or no less than 65 per cent.
Now let us compare the increase in the provincial revenue-the real provincial revenue-with the increase in the federal grants:
1956-57 1957-58 1958-59 1959-60 (millions of dollars)
Provincial Revenue .	22.0	25.2	24.4	24.0Federal Grants ....	22.1	24.0	49.7	46.8
There is an increase of about 12 per cent in provincial revenue between 1956-57 and 1959-60. Whereas the federal grants show an increase of over 110 per cent in the same period.
Thus it can be seen that the revenues of Newfoundland have suddenly increased since we took office and the standards and levels of public services have increased accordingly. The credit is due entirely to us, and these patriots, these men who love Newfoundland- there are no traitors among them-all want to go back to the 1956-57 standard.
The levels and standards have increased to a degree that no one, not even the premier of Newfoundland himself, had ever imagined was possible. The Newfoundland minister of finance himself said he never dreamed he 66968-9-381
Grants to Newfoundland would be bringing in a budget of $74 million dollars, and nobody else did either. This is not accidental. This is the result of the policy of our government. Newfoundland has never been so well treated as it has during the past two years under the able leadership of our Prime Minister (Mr. Diefenbaker), and no one knows this better than the premier of Newfoundland and my good friend-I wish I could say my learned friend -the hon. member for Bonavista-Twil-lingate.	1	1
What is the policy of the government? Yesterday the hon. member for Bonavista-Twillingate read from the report of the federal-provincial proceedings for November, 1957. I do not think I have time to read from it-


John Whitney Pickersgill: Oh, go ahead.


Lester Bowles Pearson: I think the minister ought to be given time to get to the bill.


William Joseph Browne: I thank
the hon. member for that suggestion because I know he does not want to get away from it.


Lionel Chevrier: I think the minister ought to say a few words in French, too.
(Translation):


William Joseph Browne: Perhaps I will say a few words in French-
(Text) :
The hon. member for Bonavista-Twillingate (Mr. Pickersgill) read from the federal-provincial conference proceedings of 1957. This is another book I keep very close to me and read from time to time because I find it most inspiring.


John Whitney Pickersgill: Almost archeological.


William Joseph Browne: I would like to read particularly the opening speech of the' Prime Minister in which he said:
We desire to achieve harmony in the operation of our governmental institutions in Canada.
Again he said:
The purpose of each of us here today, as premier Smallwood said in effect, is to come together in a spirit of amity, to endeavour while maintaining the spirit and intent of the British North America Act to assure the ability and capacity of the federal and provincial governments to discharge their respective constitutional functions.
He then went on:
We believe that this federation cannot thrive in a climate of glaring disparities in levels and standards of service and development-
Does that not have a familiar ring: "levels and standards of service"? Those words came from term 29. I continue:
-as between the several provinces from Newfoundland to British Columbia. It is our opinion that positive government is necesary both at the dominion and provincial levels in assuring national

Grants to Newfoundland development and we are prepared to assist provinces in carrying out their functions where we agree that is necessary and when parliament approves. We are prepared to consider on their merits major projects which will contribute to national development and which are beyond the capacities of any of the provinces.
Has that not been carried out in New Brunswick and in Saskatchewan? It will be carried out in other provinces as well.


Mr. Speaker:: Does the house agree to give the hon. member additional time?


Some hon. Members:: Agreed.


William Joseph Browne: Thank you, Mr. Speaker, and thank you, my hon. friends.
The Prime Minister went on to say:
Now may I turn for a moment to the subject of fiscal relations in particular. As I view the situation, the first problem we have to consider is the need for some special recognition of the situation of the Atlantic provinces. There is, of course, a royal commission considering the particular problem of Newfoundland in accordance with the undertaking in the terms of union, so I shall not endeavour to express opinions upon Newfoundland's position pending receipt of the recommendations of the commission.
My hon. friend quoted this. I continue:
I believe that we all recognize, however, that the Atlantic provinces as a group are confronted with greater difficulties in public finance than the rest of the nation, if they are to maintain the sort of provincial and municipal services that Canadians generally expect.
Are these the words of a man who is unfair or untrue to the interests of Newfoundland or of any province in Canada? I say no. Those are words expressing the thoughts of a man who is really ambitious to see that all parts of Canada shall have equal opportunities to progress. The Prime Minister went on to say:
My colleagues and I are prepared to recommend to parliament some form of special assistance to the governments of the Atlantic provinces. X ask you to consider-
I repeat, "I ask you to consider"-you, meaning the group of premiers. I continue:
I ask you to consider what the total amount should be and how best it can be divided, for it must not be forgotten that this assistance will be provided by all the people of Canada.
We know what happened. They recommended $100 million for the Atlantic provinces and Newfoundland was to receive $30 million of that. My friend the hon. member for Bonavista-Twillingate knows that that sum will go into every harbour, cove, town and settlement in his dear district of Bonavista-Twillingate as much as it will go into mine.
Not only Atlantic grants totalling $30 million in four years are to be considered, but there is also the Atlantic power act. I should like to ask what happened to the

request of the premier of Newfoundland concerning the building of a transmission line from Bay d'Espoir? We agreed to do that at a cost of $10 million. What happened? We have not heard about it since we told the premier about it.
When that $30 million was voted for Newfoundland we received letters of thanks from the parliaments of New Brunswick and Nova Scotia but no one heard a sound from Newfoundland. Did anyone hear what the premier had to say about it? No, he just tucked it in his pocket and never said a word of thanks. The first sign of any gratitude came from the hon. member for Bonavista-Twillingate yesterday when he said he approved of it.


John Whitney Pickersgill: I said so on the bill, too.


William Joseph Browne: That was the first indication we had of any gratitude. This money was really a godsend to Newfoundland. 1 do not know how the province would have got along without it.


John Whitney Pickersgill: I agree.


William Joseph Browne: In 1958-59 Newfoundland is to have a surplus of $12 million and in 1959-60 a surplus of $4 million, as a result of what is being paid. I am sure the present Minister of Finance of the federal government would like to have even that small surplus.
The Leader of the Opposition said that the problem was complicated. If the problem is complicated the report of the commission is extremely complicated. I do not know how many hon. members have read this report but it certainly is a difficult report. I found it exceedingly difficult to understand. If they read it thoroughly they will recognize that what the government is doing represents a very much better means of solving the financial problems of Newfoundland than was provided for under term 29.
The hon. member for Burin-Burgeo said that this bill postpones a final settlement indefinitely and he is right. There can never be any final settlement to the relationship between the federal government and the provinces. The original subsidies were given to the provinces in 1867 and thereafter have been changed ten times. It is reasonable to conclude that this parliament is not attempting to write finis to financial aid to Newfoundland. I should like to compliment the hon. member for Assiniboia for his very reasonable speech. I really expected he would support this measure from the way he spoke.
The bill provides for a review of fiscal relations between Newfoundland and Canada before March 31, 1962. The special circumstances of Newfoundland will be considered.

If the present premier of Newfoundland is in office then-which I hope he will not be, for the good of Newfoundland-he will be able to put forward in his own inimitable way, probably assisted by the hon. member for Bonavista-Twillingate who is so close to him, very good arguments as to why Newfoundland should continue to receive financial aid.
The action of this government in providing special Atlantic grants was a guarantee of the goodwill of this government toward Newfoundland and of its future attitude toward that province. Those grants amount to $7,500,000 a year.
We heard the hon. member for Assiniboia speak of the poor housing and bad roads in Newfoundland. He said it was appalling to see the roads there. In contrast let me read one or two extracts from the budget speech of the minister of finance of Newfoundland. He said:
I think it will be universally agreed that the union of Newfoundland and Canada has been a very happy one, and a very successful one. You could almost count on the fingers of your two hands the number of persons in this province today who do not share the universal view.
In the final paragraph he made another interesting statement. Before I read this part I want to remind the house that an hon. gentleman yesterday read extracts from the report of the royal commission to the effect that the commission found that there had been very little improvement in public services in the first eight years following confederation. Now listen to the final paragraph of the speech of the provincial finance minister:
And so, Mr. Speaker, we have seen ten years of confederation. We have seen ten years of steady and in some respects spectacular success. Newfoundland is beyond all comparison healthier, richer and happier than she ever was before. We are better fed, better clothed, better housed than we ever were. We have more roads, more cars, more electric light, more of almost everything than we had ten years ago.
Those are the words of Mr. Spencer, the minister of finance of Newfoundland. If the commission found that very little change had taken place in the province in the first eight years, then our government must get the credit for all of the progress made. I am sure, Mr. Speaker, that every member of this house rejoices in the progress that has been related by the Newfoundland minister of finance, and I am quite sure that everyone, even the members of the opposition, recognize in their hearts that we have contributed most substantially and made the greatest contribution to that progress and to that happy state described by the minister of finance.
In Labrador, the government of Newfoundland still has rights left, rights to royalties, 66968-9-381J
Grants to Newfoundland not rights to timber, water power or minerals, but rights to royalties from those companies which are exploiting the minerals there. In the very near future Newfoundland expects large revenues from those royalties. We hope that soon materializes; we hope the progress described will continue and we believe that with the help of our government Newfoundland will have a greater and a happier future than any of the members of the opposition ever dreamed of.


Chesley William Carter: Mr. Speaker, I cannot conscientiously support the principle of this bill because if I did I believe I would be acting as a traitor not only to the people of Newfoundland but to the people of mainland Canada as well since today, in so far as this question is concerned, their integrity and their honour rest in our hands. My reasons for saying this are as follows: In the first place, this bill is a part of the Canadian constitution but its principle is to destroy one of the constitutional rights of Newfoundland, a right which was the determining factor that caused Newfoundland to agree to become a part of Canada. It removes the substance from our constitution and substitutes a shadow in its place.
I was not only surprised, I was shocked, to hear the Minister without Portfolio, the hon. member for St. John's West (Mr. Browne), say that the legal obligations of our constitution have been fulfilled in this bill. How can a legal obligation be fulfilled by a bill which destroys one of our rights under the constitution of Canada? And if there is no legal obligation, what about the moral obligation? Is that not important, to the hon. member for St. John's West? Term 29 no longer exists when this bill is passed and in its place we shall have a vague promise of a review that will take place some time after March 31, 1962 and which will take into consideration the special circumstances of Newfoundland.
One may well ask, if the guarantees contained in the constitution of Canada itself have no value, what worth can be placed on any assurance given in this bill? In this respect the principle of the bill is contrary to the principle of the constitution itself- the British North America Act, of which this bill is a part, since it finalizes the union of Newfoundland with Canada. Not only is the principle of this bill contrary to that of the constitution but it violates the spirit of the constitution in that it terminates by unilateral action a solemn agreement between two sovereign parties. The sins of the former Liberal government, recounted by the Prime Minister (Mr. Diefenbaker) this afternoon, are no justification for that. Two wrongs can

Grants to Newfoundland never make a right and the Minister without Portfolio, the hon. member for St. John's West, can quote figures until he is black in the face, and still these facts remain. They cannot be obliterated and they cannot be justified.
The action contemplated by this bill and the attitude which it indicates are prejudicial to national unity. Ten years ago of their own free will Newfoundland took an irrevocable step, placing their faith solely in the honour and in the integrity of the Canadian people. Now at a time when national unity is so important and should be our main objective, the bitterness and the resentment of a half million Newfoundlanders who are stung by a sense of betrayal-


Mr. Graffley:: Who provoked it?


Chesley William Carter: -are something terrible to contemplate.
The constitutional aspects of this bill were fully discussed yesterday and again today and I do not propose to go any further into that question except to reply to one point made by the Minister of Finance. Yesterday the minister said, and I am quoting from page 5898 of yesterday's Hansard:
The second question which arises is as to what the commission meant by the word "thereafter" in the final line of the final recommendation. This naturally presents a question, and in endeavouring to determine the meaning to be given to this expression in the report one must of course have regard to the fact that these commissioners are not men who are given to expressing themselves in words of imprecise meaning.
This is what the minister said yesterday but what did he say last September? I am quoting now from Hansard of September 4 at page 4624. This is what the minister said then:
I have indicated that this is not a matter for one year but one that is going to be of continuing effect in the years to come. The royal commission has not set any particular period on the time within which the proposed annual payments of $8 million less transitional grants are to run. Accordingly, Mr. Chairman, we are dealing with a very large matter.


Lester Bowles Pearson: When did he change his mind on that?


Chesley William Carter: This, of course, was before the minister had time to think up a change of position. I am not going to take the time to elaborate on these two statements because they speak for themselves.


Some hon. Members:: Carried.


Lester Bowles Pearson: It will take all the longer if you start that.


Chesley William Carter: I am going to take my time. The adequacy or otherwise of these payments included in this bill will be dealth with by my colleague from Newfoundland. Money is always important, particularly to a have-not province, but whatever payments are made under this bill or any other measure will depend largely upon the spirit and attitudes we develop toward each other as separate parts of a great nation which has been so appropriately designated a dominion. This, in turn, will depend upon our ideas, our concepts and comprehension of what confederation was meant to be and what it actually has become. An act of parliament can join two countries together, but it cannot achieve unity and a nation without unity is like an empty shell without the all important kernel; it looks all right on the outside but the vital seed, life powers so essential to future growth and development, is missing.
The act of union of 1840 is a fine example of this. It joined together Upper and Lower Canada into a union which Sir John A. Macdonald himself referred to in a speech at Halifax as nominal only. When we Canadians discuss national unity we are prone to think mostly in terms of French speaking and English speaking Canadians. This is certainly a very important aspect of the problem as the hon. member for Montmagny-L'Islet (Mr. Fortin) pointed out in his excellent address at the opening of this session. But equally important, and equally difficult to solve, is the problem of unity between English speaking Canadians in general and between the nine English speaking provinces in particular. It is right and proper that we should work to achieve unity with our French speaking compatriots. But should we overlook the necessity of putting forth any effort to achieve unity amongst ourselves? In the absence of a language barrier, for some unaccountable reason we assume that unity follows automatically. Nothing could be further from the truth.
The whole course of our history since confederation proves the fallacy of that assumption. If we need any further proof we need only go back to the dominion-provincial fiscal conference in 1957. Anyone who analyses the speeches made by the 10 provincial premiers on that occasion could only conclude that far from having a national concept, we think and act as if Canada were merely a group of separate states joined together by the Canadian National Railways and the C.B.C. Perhaps we should not be surprised at this because if we look back through the corridors of our history we find that it was ever thus.

The dominion-provincial conference to which I referred a minute ago only confirmed that we have made very little real progress toward genuine national unity. Such unity as we appear to have is more glitter than gold, more shadow than substance. It may appear genuine on the surface, but if we are honest we must admit it does not run very deep; our divisions are still very real. They arise primarily out of mutual suspicion and mistrust.


An hon. Member:: Caused by the Liberals.


Chesley William Carter: There was distrust of the motives of the two Canadas when they approached the maritime provinces and held out to them this vision of a Canadian nation. This distrust, unhappily, has been confirmed over and over again by the actions and attitudes of the central provinces during the past 80 years. Hon. members who have been indoctrinated with the myth that the poor down and out Atlantic provinces sought union with Canada for their own benefit may be surprised to learn that it was Canada, and not the maritimes, who made the first approach. These are historical facts. The reasons are quite clear. The maritimes could get along without Canada, but for central Canada confederation was an absolute necessity.
To refresh our minds let us go back in history to the period in which confederation first took place. At that time the British North American colonies were divided into two isolated groups separated by hundreds of miles of uninhabited wilderness from Upper and Lower Canada in central Canada to the maritime provinces on the eastern seaboard. The minister yesterday made this statement, and I am reading now from page 5903 of Hansard:
-does anyone doubt that honourable solutions of fiscal problems between the provinces and the dominion after that date will be earnestly sought? This is the way the Canadian confederation has worked, and in the view of the government this is the way the Canadian confederation will work in 1962 and in the years to come.
This, sir, is precisely the point. We do not want confederation to work-at least I do not want confederation to work-in the years to come as it has worked in the years gone by. We want to learn from our mistakes, not repeat them. As I said, the Canadas were separated from the maritimes and to their south was a new, vigorous and prosperous nation, the United States, which had come into being 100 years before. This nation had broken away from the mother country and the crown to which the British North American colonies owed allegiance and appeared to take it for granted that sooner or later the British North American colonies would seek union with them. The hostility
Grants to Newfoundland between the United States and Great Britain engendered by the American revolution was renewed by the American civil war which was going on at that time and in which Great Britain sympathized openly and assisted the cause of the southern states.
It was natural that this hostility should overflow toward the British colonies. The British government had learned from bitter experience in the American revolution how difficult it was for their regular armies to wage war in the North American wilderness-


Mr. McGrath:: Will the hon. member permit a question?


Chesley William Carter: -and was deeply conscious
of their inability to defend their North American colonies from a concentrated attack by the United States. They were anxious, therefore-


James Aloysius McGrath: Will the hon. member permit a question?


Chesley William Carter: I will permit any questions
you want to ask after I am finished.


James Aloysius McGrath: I want to know what relationship this has to the bill?


Chesley William Carter: You wait a minute, and you
will find out. The British government was very anxious that the North American colonies should take some responsibility for their own defence, and to do this some form of union between them was necessary. It was in this setting that the British North American colonies found themselves in the year 1864, and for the benefit of my hon. friend if he cannot contain his patience, I refer to this because it affords an interesting parallel between the experience of Newfoundland and the experience of the other maritime provinces since confederation.
In 1864 the maritime provinces began taking steps to form a confederation of their own. It was a propitious time. The maritime provinces were enjoying unprecedented prosperity based on their shipbuilding industry, their shipping industry and a lucrative foreign trade.
They had developed sound economies with both Nova Scotia and New Brunswick budgeting for surpluses of nearly half a million dollars. That is not exactly hay even in these days, but in those days it was something relatively huge. With their public debt of about $13 per head, their financial position generally was sound and capital was flowing in to develop their natural resources. Mines were being opened up, manufacturing industries were being established and prosperity was growing. Recognizing the threat to their security and bearing in mind that union had brought prosperity to the colonies in the

Grants to Newfoundland south, in 1864 they took the first steps towards bringing about a maritime confederation.
It was then that Sir John A. Macdonald and Hon. George Etienne Cartier arrived on the scene with their vision of a British North American nation and their proposal that the maritime provinces should unite with them to bring it about. As a further inducement they held out the prospects of the maritime provinces becoming the Massachusetts of British North America. The manufacturing industries of the maritimes would supply the agricultural economy of central Canada. The intercolonial railway which the maritime provinces had planned to build for themselves would be extended to Montreal and Toronto, with central Canada bearing the largest cost. Thus maritime coal would have a market in central Canada and the maritime provinces would provide a market for central Canada beef and farm produce. In addition to this domestic trade, all the foreign trade of the confederated provinces was going to flow through maritime ports; and Halifax and Saint John, New Brunswick were destined to take their place among the great emporiums of the world. These promises were all outlined in speeches by Sir John A. Macdonald and Hon. George Etienne Cartier as they toured the maritime capitals, and they are a matter of record.
This idea of a British North American nation appealed to the patriotic instincts of the maritime people but they were frankly sceptical of the purity of the motives that prompted it. They had heard of the old saying "Beware of the Greeks, especially when they come bringing gifts". They knew that Upper and Lower Canada were enjoying a measure of prosperity but they knew also that it was based largely on trade with the United States which would diminish, if not disappear, when the civil war ended. They knew that the population of Upper Canada, like their own, had been greatly increased by the influx of Loyalists from the United States. They were aware that while the population of the two Canadas was over three times as great as theirs combined, yet the per capita public debt was $65 as compared with theirs of $13.
They were aware that the two Canadas themselves were joined together in a union which was so imcompatible that it could not possibly work and would have to be dissolved. They were conscious of the fact that the St. Lawrence seaway, frozen up five months or six months out of the year, made the two Canadas dependent on the United States for an outlet to the sea. This made them particularly vulnerable to pressure from the United States which could force them into political union simply by denying them access to the

sea. The maritime leaders knew that without access to the sea the economic life of the two Canadas would be severely restricted, if not completely strangled and that unless the maritimes confederated with them the two Canadas could never of themselves become a nation and would eventually be absorbed into the United States economy.
They saw that Upper and Lower Canada had nothing to lose and everything to gain from their proposals while the maritimes had much to lose, including their industries and their prosperity, because they would become a captive market, and whatever benefits they received would depend entirely on the good faith of the people and the government of central Canada. Consequently they had misgivings; and so for them confederation would be an act of faith.
But the maritime provinces, like Newfoundland, had one vulnerable spot. Their Achilles heel was an overwhelming patriotism and loyalty to the British crown and British traditions. For the sake of ensuring that North America would remain within the British commonwealth, in 1867 they finally entered into union. They knew it would involve some sacrifice and they were prepared to make it out of loyalty and patriotism in order to preserve British influence in North America.
But they saw too that the vision of a British nation in North America could become a reality and that their prosperity need not be impaired-and could even be improved- provided that the central provinces were sincere and would live up to their side of the bargain. So they came into confederation fully realizing, that like Newfoundland they were putting themselves completely at the mercy of central Canada whose larger representation would control the federal government and their only protection was sincerity, good will and good faith on the part of those whose proposals they had accepted.
Ninety years have now passed and to what extent has that faith been justified? What is the verdict of history? I am not going to take the time of the house to deal with that matter because we know what has happened. We know what world emporiums are on the Atlantic seaboard. We know what has happened to the shipping industry, the shipbuilding industry and to the prosperity of the maritimes. The answers to all these questions are recorded in history and they prove that the scepticism and fears of the people of the maritimes were well founded when the Upper Canada "Greeks" appeared with their gifts and promises.
Once their dependence on the United States had been removed; once their means of defence had been organized and a line of

defence communications set up to make possible supplies and reinforcements from the mother country; and once the outlets on the Atlantic seaboard had been secured to permit expansion of their trade and commerce, central Canada had little further use for the maritimes, and the great national vision became concentrated within the confines of Upper and Lower Canada.
No blame is to be attached to the ordinary people of those days because they were uninformed. Mass communications were few and far between and were poor in quality. But the federal government of the day certainly knew what was going on and it is on them that the blame must be placed. The big business interests of central Canada had no intention whatever of permitting strong competitive economies to develop on the eastern seabord and they succeeded in bringing to bear on the federal government sufficient pressure to ensure the success of their plans.
It was not long before the maritime provinces-deprived of their trading advantages, forced to buy in a captive market, victims of preferential tariffs designed to protect the industries and economy of central Canada to which their own economies had been made prisoner-began to assume the status of poor relations dependent upon the bounty and generosity of their sister provinces. That is the way that confederation has worked in the past. I ask the Minister of Finance whether that is the way in which he wants it to work in the years to come.
Newfoundland did not have any part in this great North American drama but she was a very interested spectator. She did not send delegates to the Charlottetown conference when the maritime confederation was being discussed, but she did send two delegates- Hon. F. B. T. Carter and Hon. Ambrose Shea- to the Quebec conference where the resolutions embodying the terms of the larger union were drawn up.
These terms were so unacceptable that Newfoundland rejected them outright, as indeed did Prince Edward Island and the other maritime provinces. In New Brunswick the proponents of confederation were so roundly defeated in a provincial election that Dr. Tupper, the Conservative leader, dared not risk an election in Nova Scotia on the same issue and the people of Nova Scotia to this day have never had a chance to vote on that issue.
Thirty years later, as the Minister without Portfolio pointed out, in 1894 Newfoundland, after experiencing a series of disasters-
Grants to Newfoundland


Mr. McPhillips:: Mr. Speaker, I rise on a point of order. I am following the text and I find that the hon. member has made a mistake in his speech.


Lester Bowles Pearson: That is very clever.


Mr. Speaker:: This has been a very general debate, but the hon. member, as I followed him, spent about 15 minutes on confederation without seeming to relate it to the bill. I hope he will do so in the time which remains.


Chesley William Carter: Mr. Speaker, I was endeavouring to draw a parallel between the experience of Newfoundland over the last ten years and the experience of the maritime provinces over the last 80 years, and I was replying to a statement of the Minister of Finance (Mr. Fleming), who said he wanted confederation to work in the years to come in the same way as it had worked in years past. If that is what the Minister of Finance wants, that is something which I do not want.
As I said, in 1894 Newfoundland, after experiencing a series of disasters, made overtures to the government of Canada concerning confederation. The terms offered on that occasion were so harsh that even in the dire extremity in which she found herself Newfoundland had no choice but to reject them again. But by 1949 circumstances had changed. Due to the establishment of United States bases, good fisheries, a flourishing paper industry and successful mining developments, Newfoundland was prosperous as never before in her history. She had accumulated a surplus of $40 million and her public debt had almost vanished. Her population was over 350,000. She owned 100,000 square miles of territory of vast potential wealth in Labrador and two great international airports at Gander and Goose Bay. Moreover, two wars had demonstrated her strategic importance as the sentinel of the Atlantic guarding the eastern gateway to Canada. Now she could enter confederation without coming empty-handed to the wedding, and so the marriage took place on March 31, 1949. Today that marriage is being consummated. It should be a day of rejoicing. In Newfoundland it is a day of sorrow, because if the entry of the maritimes into confederation was an act of faith, the entry of Newfoundland was doubly so. We had no elected government of our own to negotiate on even terms with the government of Canada or even to represent the will of the people during those negotiations.
The hon. member for St. John's West tried to make much of the point that Newfoundland did not have her sovereignty. The hon. member knows very well why Newfoundland did not have her sovereignty. At the time

Grants to Newfoundland Newfoundland was governed by a dictatorship appointed by the British crown and not elected by the Newfoundland people, which did not represent the wishes of the Newfoundland people but represented only the will of the British government in London, and the will of the British government was to force Newfoundland into confederation come what may.


James Aloysius McGrath: What did you do to try to restore sovereignty in 1949?


Chesley William Carter: What was that?


James Aloysius McGrath: I said, what did you do to try to restore sovereignty in 1949? Let the hon. member answer that question.


Chesley William Carter: Does the hon. gentleman know what any person can do under a dictatorship? I think I should remind the hon. gentleman and the other hon. members of the house that it was the very hon. gentleman from St. John's West, the Minister without Portfolio, who was one of the gentlemen who gave away Newfoundland's sovereignty.


William Joseph Browne: Mr. Speaker, I think I should not let that stand uncontradicted on the record and I rise on a question of privilege. I cannot be said to be the one who gave away Newfoundland's sovereignty, because we did not have true sovereignty. That is, Newfoundland was not a dominion under the statute of Westminster.


Chesley William Carter: There will be lots of time to reply to the hon. gentlemen. The referendum which took place in Newfoundland concerning confederation showed only a majority of some 7,000 votes out of 150,000 votes cast, and that only on the second ballot. We had no battery of economic experts to prepare our case or to examine and analyse our estimated revenues and financial requirements as worked out by the federal experts, calculations which the hon. gentleman from St. John's West has admitted contained tremendous errors of 100 per cent and over. But we did have term 29 which made it possible for all errors to be corrected after a trial period of eight years and we, like the people of the maritimes, were willing to trust the people of Canada that they would do right by us when the time arrived. Term 29 was to be our lifesaver, our sheet anchor, our only protection against all eventualities that might arise in the future.
The Minister without Portfolio asked, did we want to go back to the levels of 1957? Who said anything about going back to the levels of 1957?


William Joseph Browne: You did.


Chesley William Carter: Nobody on this side made any such assertion. What we said was that term 29 was our guarantee that Newfoundland, come what may, no matter what misfortune might befall her, would never have her public services reduced below the level of 1957.


Mr. Henderson:: Hurrah!


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order. The hon. member has only two minutes more.


Chesley William Carter: Hon. gentlemen opposite
laugh. Mr. Speaker, I do not know what the hon. gentlemen on the other side find so funny. Unless it is, Mr. Speaker, that they have a perverted sense of humour, which appears likely when we take a look at this bill, because the bill certainly is an expression of perverted humour. But what is funny about insisting on a guarantee that her level of public services would never fall below the level obtaining in 1957? What is funny about that?


An hon. Member:: You.


Chesley William Carter: Mr. Speaker, if we look back over the last ten years, it is evident that history has repeated itself. It is true that Newfoundland was given a warm welcome, and there was much evidence of good will in the first two or three years of the union. But very little interest has been shown in our difficulties, and very little effort has been made to understand the nature or the magnitude of the problems which would have to be overcome in order to close the gap between our levels of public services and those of the mainland, or between the fundamental differences in our concepts and outlook. It was not long before we were told that we must expect to receive exactly the same treatment as every other province. On the surface that appears logical and quite fair enough, but when you consider the extra handicaps that Newfoundland must overcome due to that 80-years gap to give Newfoundland equal treatment, it actually amounts to discrimination. I know that sounds like a paradox but it is the truth, because the effect of equal treatment is to perpetuate that 80-year gap and prevent Newfoundland from catching up with the standards of the other maritime provinces.
After three of four years of confederation we began to be reminded of the large sums of money Newfoundland was receiving from the federal government. As time went on the sums grew more fantastic and more inaccurate and misleading. The latest examples of these are the television broadcast by the Prime Minister, and we have the statements by the Minister of Justice (Mr. Fulton) during his first visit to Newfoundland in May.

But the latest example is the one put on Hansard by the Minister o f Finance yesterday and by the Minister without Portfolio, the hon. member for St. John's West today. It is noteworthy that only one side of the picture is ever emphasized, namely the burden that Newfoundland is becoming upon the mainland taxpayers. Nothing whatever has been said about what Canada is receiving and has received from Newfoundland. The greatest care is taken not to mention by way of comparison what other provinces receive from the federal government. Newfoundland is singled out and presented in the worst possible light. When I asked the Minister of Finance for comparative figures on April 30 with regard to payments to other provinces he refused to give that information. I put a question on the order paper requesting the comparative figures for Saskatchewan. That question was made an order for return on May 13, eight weeks ago, but the government has not made them available and will very likely not do so this session. Is this conducive to national unity?


Mr. Speaker:: I must inform the hon. member that his time has expired. The hon. member for Skeena-


Chesley William Carter: Mr. Speaker-


An hon. Member:: We have heard enough.


Some hon. Members:: Oh, oh.


John George Diefenbaker: If the hon. gentleman has not completed his remarks, in order to show the same consideration which has been extended from the other side, I am sure we should be delighted to have him continue.


Mr. Speaker:: Does the hon. member for Burin-Burgeo wish to continue? Very well. The hon. member for Skeena-


Frank Howard: I listened earlier today with a great deal of interest to the historical account and the statistical juggling engaged in by the hon. member for St. John's West, the Minister without Portfolio (Mr. Browne), and his account of the affairs of Newfoundland, and how well they had been managed by the federal Minister of Finance (Mr. Fleming). If the Minister of Finance has been so able in handling the financial, fiscal and economic affairs of the province of Newfoundland then it is about time he turned his attention to Canada as a whole and tried to straighten out some of the difficulties we are facing.
I am sure that all hon. members appreciate my own dislike and distaste for the premier of Newfoundland because of certain actions in which he has been engaged and certain legislation which he arranged to channel through the legislature, legislation which denied justice and freedom to people. All
Grants to Newfoundland members might expect, that because of that they would hear of a move in retaliation, but we do not operate on that basis, and two wrongs do not make a right. Because the premier of Newfoundland has decided to deny justice to people is no reason why we should persist in the same sort of underhanded game. We approach this bill as we approach all other questions on the basis of fairness and justice to the people involved.
The government's present approach is, I think, regrettable, and if this administration had a sense of decency and honesty in this matter they would withdraw this bill, redraft it and resubmit it to this house in order that it might be in keeping with the solemn pledge and promise which was made to the people of Newfoundland when they entered confederation and the pledge which was made to them with regard to carrying out the terms of the union and the recommendations of the report of the royal commission. It is regrettable that the two gold dust twins over there, the Minister of Finance and the person who sits next to him have sought here to declare political warfare, with their legalistic terms and their twisty, fork-tongued interpretation of words in order to justify the awkward position that they are in. We believe that this is a betrayal of trust bordering very closely on treason.


Mr. Speaker:: I must ask the hon. member to consider the language he is using. A minute ago he was reflecting on the honesty of the government, and now there is a mention of treason in connection with this bill. I must ask the hon. member to withdraw any suggestion of the word treason and also to moderate his language.


Frank Howard: I certainly will. I understood that during previous proceedings in this house that self-same word had been used and allowed to pass, and it was on that basis that I proceeded.


Mr. Speaker:: To remove any doubt, while I am sitting in the chair no one will impugn the honesty of any other member of the house.


Frank Howard: I am sure you will recollect, Mr. Speaker, that when you suggested the word "treason" was unparliamentary the first word I said was that I would withdraw it without qualification. Then I explained why I had made use of it. I realize I was out of order and regret I was not better informed.
But we believe that political and economic justice should be provided for the people of Newfoundland, not political tomfoolery and back-stabbing, and on that basis we intend to oppose this bill.

Grants to Newfoundland


Mr. C. R. Granger (Grand Falls-While Bay-Labrador):: Mr. Speaker, I am rising to oppose this bill, and I am opposing it because it destroys one of the terms of the union of Newfoundland with Canada, and distorts the meaning of this union.
What are the terms of union? The terms of union are a solemn treaty entered into between the high contracting powers. They are a solemn contract and covenant entered into between two sovereign nations. They were signed by our representatives. They were signed by representatives of Canada. They were solemnly ratified by the parliament of Canada. As was then necessary, they were ratified by the United Kingdom parliament, and then they became part of the British North America Act, the fundamental law of Canada, the bulwark of the confederation.
It is in the British North America Act that the rights of the provinces are defined and established and set down for all time. It is to the British North America Act that Prince Edward Island looks to preserve its identity and its autonomy. It is to the British North America Act that the French Canadian looks to safeguard his language, his religion and his culture. The British North America Act is the link that crosses the Rockies and ties in British Columbia with the rest of Canada. This great sprawling nation, with all its differences, geographical, historic, climatic, ethnic, is kept together by the British North America Act and of course by the monarchy. And the terms of union are part of the British North America Act, and term 29 is part of the terms of union.
By term 29 Canada is supposed to enable Newfoundland to continue the public services at the levels and standards reached eight years after confederation without having to resort to unreasonable or unreasonably onerous taxation. As I see it, term 29 is a contract, a contractual obligation to use the Prime Minister's words. Under it there was on the part of Canada an undertaking, a guarantee that come what might, Canada would never allow the public services in Newfoundland to go below the level in 1957. Come what might, Canada would enable Newfoundland to continue our public services at the levels and standards then reached.
Of course, Newfoundland was to impose provincial taxation as heavy as the maritime average to continue the public services at these levels but if she was unable to do so without resorting to taxation more burdensome than the maritime average then Canada would provide the difference. How? By giving the additional assistance required. How


much? As much as required. For how long? For as long as required. Not for five years or for fifty years but as long as required.
The royal commission was appointed and it sat and it made its recommendations. The sum of $8 million a year was recommended. The commission established two extremely important points. In the first place it clearly recognized a contract, a contractual obligation, a financial responsibility to Newfoundland on the part of Canada. Secondly, it put no time limit upon it: "and thereafter $8 million". There was dissatisfaction with the report but no one questioned its legality. What was questioned was its generosity, its lack of imagination. After all, it is quite possible to be legal without being generous.
Take a man's legal obligations to his children embracing food, clothing, shelter, and a minimum of education. A man without a heart or soul could discharge his legal obligations at low financial cost but no one would call such a man a generous man. A man's legal obligation toward his wife or his aged parents can be set at a minimum level in terms of dollars and cents but a man who set himself such standards would not be a very admirable character. There was another cause for dissatisfaction. The commission had set a specific amount with no attempt to make provision for changing events or circumstances in the future. Surely, we said, there should be provision for an escalator clause or a periodic review. That was ten months ago. And then the Prime Minister intervened. Why? Because, he said, of the dissatisfaction in Newfoundland. Many Newfoundlanders were elated. After all, if a man notices dissatisfaction and has the power to allay it, the natural assumption is that he will allay it, unless of course he intended all the time to kick us in the teeth.
That was ten months ago. The delay caused Newfoundland financial embarrassment. Over $13 million which was due the province immediately was withheld. In order to continue public services at standards and levels then obtaining Newfoundland had to borrow the money from the bank at 6 per cent. But after all, many Newfoundlanders said, it was worth it. The government of Canada was now considering the case and all would be well. Here was our chance to see a great human document which would put the final seal on the act of confederation. After all, it is not every day in the week that a new nation is born. Here was a chance for vision and magnanimity. The government of Canada was rich in vision; they had told us so. The Prime Minister had great visions about the undeveloped parts of Canada and was most anxious to see that they should have proper

levels and standards of public services. Here was a chance for generosity and sympathy. The way many thought the government of Canada would allay our dissatisfaction would be to take the bare bones of the contract and breathe the breath of life into it and make it a warm and living thing. What they actually did to allay our dissatisfaction was to take our contract, tear it into pieces and throw it back in our face. It was a gross betrayal.
Legalities have been mentioned but more than legalities are needed. If I understand history correctly nations are not built on technicalities. Nations grow in strength and greatness because of a union of hearts, and because of mutual understanding and aid between the various peoples who make up the whole. The measure of a nation's destiny can be gauged by the greatness of the comprehension of the peoples and their leaders of the mutual interests involved.
In term 29 the nation of Canada and the people of Newfoundland pledged their mutual faith in each other and left it for other people of similar goodwill to complete the union which they had begun. It is a pity that this final part of the creation of a mighty modern nation which should be a bright moment in its history should be tarnished by bad faith. It is degrading to see those who are walking with history attempt to reduce a great moment in a nation's development to the lowest common denominator in dollars and cents.
But the final act is not yet over. The time will come, and come it will, when those of us on this side of the house will be in a position to rectify this wrong being done today and justice will be done to the province of Newfoundland by a Liberal government of the future.


Mr. H. M. Batten (Humber-St. George's):: Mr. Speaker, we have before us Bill No. C-72 which in my opinion is a complete and definite denial of the constitutional rights of Newfoundland. I said yesterday and I repeat now that term 29 gave to Newfoundland some special rights under the terms of union. I say that it was a special term because it was an agreement made between two countries. My friend the hon. member for St. John's West (Mr. Browne) quibbles about whether or not Newfoundland at that time was a sovereign country, but at least Canada and Newfoundland were two separate countries within the British commonwealth and had the right to make an agreement as to union between them. I believe that those terms of union which included term 29 represented a solemn declaration between two separate countries to enter into a union.
Grants to Newfoundland
I believe that term 29 is an agreement altogether different from any entered into between the central government and a province, after Newfoundland became a province. If we examine the tax agreement contained in article 27 of the terms of union of Newfoundland with Canada we find there are five subsections. The first begins with these words:
The government of Canada will forthwith after the date of union-
The second begins:
The offer to be made under this term-
The third begins with these words:
The offer of the government of Canada to be made under this term-
The fifth commences:
If the province of Newfoundland enters into a tax agreement-
In every case with one exception we find that the agreement entered into between the central government of Canada and the province of Newfoundland as regards tax agreements refers to that period after Newfoundland had become a province of Canada. Term 29 was a different agreement altogether. I believe it was a solemn undertaking between the two parties and if any change is to be made in term 29 it should be made by agreement between the two parties.
I listened to the Minister of Finance (Mr. Fleming) yesterday and today as he talked about the fairness and the fair play which he would like the government to give to Newfoundland. I believe he was sincere. I heard the Prime Minister (Mr. Diefenbaker) use the same argument. I think he was sincere but I want to point out that the concept of fair play, surely, is not all on one side. I believe that if the two parties concerned in this agreement were to get together now or in the future it would be found that both parties have a concept of fair play which would result in a proper decision being reached between the two parties; but in the present situation we have a unilateral action taken by the government which destroys, eliminates and extinguishes this special right that was given to Newfoundland in the terms of union.
Yesterday the Minister of Finance in his opening remarks placed on Hansard at page 5901 a table showing all the payments that had been made to Newfoundland from the year 1949 to the estimated payments for 1959-60. To place only this table on Hansard may very well leave the impression in the minds of some people that these were special grants and that no grants under similar headings were made to other provinces. But what I would like to see here, and I would hope that during the committee stage the Minister

Grants to Newfoundland of Finance would be prepared to provide this information, is a similar table for Nova Scotia and New Brunswick and maybe one of the western provinces. I would like to see a table showing the amount of money that has been collected in Newfoundland under income tax, corporation tax, succession duties and customs and excise, to show that the amounts of money which are included in this table which the Minister of Finance placed on record are only one side of the coin. There is another side showing the amount of money which has been collected over those years in the province of Newfoundland. I should like to have a further look at these figures.
My hon. friend from St. John's West compared the amount of unconditional grants for the year 1957-58 with the year 1958-59. The total amount of unconditional grants, according to this table, for the year 1957-58 was $19,244,000. For the year 1958-59, according to this table, the total amount of unconditional grants was $40,847,000. The Minister without Portfolio says that here is an increase of over 100 per cent; but let me point out something here.


John Ferguson Browne: Mr. Speaker, I would like to say that I did not say that at all.


Herman Maxwell Batten: If the hon. gentleman has any remarks to make he can make them after I have finished.


William Joseph Browne: On a question of privilege-


Some hon. Members:: Order.


Mr. Speaker:: The minister will be given a chance after the hon. member has completed his remarks.


Herman Maxwell Batten: We notice that for the year 1958-59 there was included in the unconditional grants for that year an amount of $7,500,000 which, for that year, was Newfoundland's part of the Atlantic provinces grants. I have said in the house before and I still say now-and I hope I shall have the opportunity to say it in the future both here and in other places-that I believe the present government, when they made the grants to the Atlantic provinces, did a very fine thing. I have agreed with them before and I agree with them now. I believe that the money they have given to the eastern provinces under these particular grants will do a lot of good, and any credit which the provinces can give this government for those grants it justly deserve. I have no argument there at all and I agree with what the government has done, but I do disagree with the hon. gentleman including in the $40,847,000, $13,550,000 which has not yet been paid.


John Whitney Pickersgill: Or even voted.


Herman Maxwell Batten: And not even voted, and will not be voted until this bill is passed.


William Joseph Browne: Who is
holding it up now?


Alexis Pierre Caron: An hour and a half.


Lester Bowles Pearson: How long did you speak?


Herman Maxwell Batten: In talking about the conditional grants made to Newfoundland the hon. gentleman went on further and referred to the $4,900,000 which had been given to Newfoundland under the hospital insurance scheme and now claims credit for legislation which was placed on the statutes of Canada before this government came into office.
The hon. gentleman wants to know what happened to the transmission line that this government offered to the province of Newfoundland. I will tell him what happened to the transmission line. Two years ago we had in this house a bill known as the Atlantic power bill. Under that bill the provinces of Nova Scotia, Prince Edward Island and New Brunswick were able to get assistance in the building of thermal power plants. I argued then, as I argue now, that the thing to do in Newfoundland, because we did not have supplies of coal and oil, and they would have to be transported there, was to use the available water power. I even moved an amendment to the bill but it was turned down by the government. If that amendment had been accepted and if the same assistance had been given to the province of Newfoundland to build hydro power plants that was given to the other maritime provinces to build thermal power plants, maybe we would have something to hook this line up to.


William Joseph Browne: May I ask
the hon. gentleman a question?


Herman Maxwell Batten: No. That is where the transmission line went. It is true that this government made the offer to Newfoundland but surely it would be a little bit silly to build a transmission line without any power plant at the other end of it.


Mr. Mcllraiih:: That would be like the bridge at Prince Albert.


Mr. Speaker:: Order; ten o'clock.
Mr Churchill: I wonder whether the house would consent to continue this interesting debate for some time?


Some hon. Members:: Ten o'clock.


Lionel Chevrier: Agreed; carry on.


Mr. Speaker:: I hear that it is ten o'clock.


Some hon. Members:: No.


Lionel Chevrier: Mr. Speaker, in so far as we are concerned, there is no objection to carrying on.


Gordon Minto Churchill: Is there some objection to carrying on? I think the house generally is agreed to proceed with the business tonight.


Mr. Speaker:: The hon. member for Tim-iskaming draws my attention to the fact that it is ten o'clock.


An hon. Member:: He does not have to sit here; he can go home.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I ask the acting house leader what the business will be for tomorrow and the rest of the week?


Gordon Minto Churchill: Mr. Speaker, the Secretary of State for External Affairs (Mr. Green) announced a tentative program last night which naturally will be subject to modification from day to day but tomorrow we will continue this debate and on its completion we shall then proceed with the second reading of Bill No. C-71, to provide for the humane slaughter of food animals. On that being completed we shall go on with estimates in the order in which they were indicated last night, namely trade and commerce, mines and technical surveys, fisheries, post office, northern affairs, secretary of state, privy council, national revenue and the C.B.C., legislation, health and welfare and finance.
I have to announce one change in the program as indicated last night. It is impossible for the Minister of Justice to be present on Thursday, as was thought then, so the two bills standing in his name will not come forward on that occasion. Last evening the minister of external affairs indicated that there had been a tentative agreement amongst the parties to commence sitting at 2.00 instead of 2.30 on Wednesday and at 7.00 in the evening, through Wednesday evening. I trust that will meet with the approval of the house.


Mr. Speaker:: In order to have a definite arrangement about that I think the house should make its order now as to the hours of sitting, if it could be done by unanimous agreement. Will the minister state the arrangement again?
Business of the House


Gordon Minto Churchill: The arrangement being that on Wednesday, and on subsequent days, the house assemble in the afternoon at 2.00 rather than 2.30 and assemble again at 7.00 o'clock rather than 8.00, and in addition continue on Wednesday evening from 7.00 to 10 or whatever time the house determines.


Lionel Chevrier: This arrangement, as announced by the acting leader and as stated also by the house leader last night, is satisfactory to us.


Mr. Speaker:: I take it that is for the duration of the session? Does the house give unanimous consent?


Some hon. Members:: Agreed.


Mr. Peters:: In connection with this matter, I feel that many of the matters that are coming up now are of grave importance, and we expect to extend some of these hours. We gave one hour today, and we are in agreement to do that but Wednesday night was not one of the matters that was discussed. I think we would like to reserve the right to make an agreement beyond this week if the work is not finished this week. I do not think we should be bound, and particularly I do not want to be bound, for next week.


Mr. Speaker:: Could we have unanimous agreement, then, to the times stated by the minister, excluding Wednesday night?


Some hon. Members:: No.


Gordon Minto Churchill: I think I understood the hon. member to say if it did not go beyond this week he was satisfied with that arrangement. I think I can give that assurance.


Mr. Speaker:: The hon. member will be satisfied if the arrangement set forth by the minister is limited to this week?


Some hon. Members:: Agreed.


Mr. Speaker:: It is so ordered and the sitting hours will be according to this arrangement to which unanimous consent has been given at this time.
It being five minutes after ten the house adjourned, without question put, pursuant to standing order.

Question



ANSWER TO QUESTION

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

Mr. Argue: 1.	Is a Mr. Graham Moses, presently employed by the Canadian government in any capacity?
2.	If so, in what department, on what date was he appointed, by what authority, what are his duties, his salary, and what qualifications has he for this position?
3.	On what date did Mr. Moses first enter government employment, what positions has he held, the date he took up service in each, and where has he served?
4.	Were all of these appointments made through a civil service competition?
5.	If so, what was the date and number of the competition?
6.	If not, which ones were not, under what authority were they made, and on what date?
7.	What moneys have been paid by the Canadian government to Mr. Moses in (a) salary; (b) expenses, each year since his first appointment, to January 1, 1959?
Answer by: Hon. Raymond O'Hurley (Minister of Defence Production):
1.	Yes.
2.	Employed by Defence Construction
(1951) Limited, June 14, 1955. Authority: section 7, Defence Production Act. Duties: presently project manager at Frobisher Bay, Baffin island, Northwest Territories, responsible for supervision of all construction work on refuelling facilities project. Salary:	it
has not been the practice to make available
the salary arrangements or remunerations paid to crown company employees. Qualifications: twenty-nine years' experience in construction industry, specializing in metallurgy, steel erection and fabrication, welding, underground steam distribution systems, reinforced concrete, and supervision of large multi-building projects.
3.	First entered government service when employed by Central Mortgage and Housing Corporation January 2, 1952, as a construction inspector at the corporation's branch office in Ottawa; was employed by Central Mortgage and Housing Corporation until March 31, 1953.
Mr. Moses was hired by Defence Construction (1951) Limited, on June 14, 1955.
Positions held:	June 14,	1955-project
engineer, head office, Ottawa, Ontario. July 9, 1955-zone engineer, Winisk and Moos-onee, Ontario. December 1, 1957-project engineer, head office, Ottawa, Ontario. September 13, 1958-project manager, Frobisher Bay, Baffin island, Northwest Territories.
4.	No.
5.	N/A.
6.	Appointment as construction inspector C.M.H.C., under authority of the Central Mortgage and Housing Corporation Act, section 14 (1). Taken on strength January 2, 1952.
D.C.L. appointments described in answer to question 3 were made on the dates indicated, under authority of the Defence Production Act.
7.	See answer to question 2.

Wednesday, July IS, 1959



INDIAN AFFAIRS

[Stage Direction]
Second report of joint committee on Indian Affairs.-Mr. Dorion.