1959-03-16

[Stage Direction]
A message from His Excellency the Governor General transmitting further supplementary estimates for the financial year ending March 31, 1959, was presented by Hon. Donald M. Fleming, (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I think the house would wish to know that late last week I received two telegrams from the premier of Newfoundland, the first regarding a request that 50 additional Royal Canadian Mounted Police constables be sent to that province, and the second requesting the setting up of a judicial inquiry into the troubles that have occurred there.
While this government has no intention of infringing on matters under provincial jurisdiction, I feel impelled to say that the premier of Newfoundland has greatly aggravated the present situation in that province by intervening in a labour dispute in a way which apparently goes beyond the usual role of government. The result, as might have been anticipated, has been a violent reaction on the part of the workers concerned. Under the circumstances we have concluded that it would be provocative and likely to cause further outbreaks of violence to authorize the sending of further members of the R.C.-M.P. at this time.
We feel that the Royal Canadian Mounted Police has performed its duty with fairness and efficiency. The situation in Newfoundland will be kept constantly under review and if the mounted police, in the proper discharge of their duties, are subject to or encounter intimidation or threats by lawbreakers reconsideration will be given immediately to this decision.
With regard to the request that a commissioner be appointed to inquire into and assess responsibility for acts of lawlessness and violence in Newfoundland, there seems 66968-9-1244
to be no necessity for the setting up of such a commission. I feel I speak for all hon. members in this house when I say that the important consideration now is not to have a commission or any other inquiry set up to determine a responsibility which is so apparent. The important thing and the urgent necessity at the present time is to bring about an end to the existing situation. I would think that the danger of disorder and violence would be very much reduced if all those concerned would agree to a cooling off period of say two weeks. The whole country, I am sure, would welcome some reasonable action being taken along these lines.


Mr. Speaker:: Order. I see the Minister of Justice on his feet, and I understand he wishes to make a statement which is related to the statement made by the Prime Minister. With the concurrence of the Leader of the Opposition, both these statements might be made and both commented on together.


Hon. E. D. Fulton (Minister of Justice):: Mr. Speaker, I regret to have to advise the house that I have received a letter dated March 12 from the commissioner of the Royal Canadian Mounted Police in which he submits his resignation. I have advised the commissioner by letter today that under the circumstances I have no alternative but to accept his decision and will prepare a submission accordingly to the governor in council. 1 will ask consent of the house to have these letters printed as an appendix to today's Hansard.
The facts leading up to this resignation can be summarized as follows. On Sunday, March 8, I received a wire from the attorney general of Newfoundland asking for 50 additional Royal Canadian Mounted Police reinforcements and citing the terms of the contract. I immediately consulted with Commissioner Nicholson and found that he in turn had been advised by Superintendent Parsons, the officer commanding the Royal Canadian Mounted Police in Newfoundland, that he had made a request to the attorney general of Newfoundland.
As a result of these consultations, however, it was agreed that the situation might be kept under control by the sending of some 25 members of the Newfoundland constabulary from the city of St. John's into the strike area. This was done, and a further 20 Royal Canadian Mounted Police from
1960	HOUSE OF
Newfoundland-Administration of Justice other points in the divisional area were also brought into the strike area and, on this basis, it was reported that control of the situation might be maintained. However, arrangements were made by the commissioner, with my approval, to alert the Royal Canadian Mounted Police in the other maritime provinces so that if the situation should require it and authority should be forthcoming, reinforcements could be sent in from the outside with a minimum of delay. This information was accordingly conveyed by the commissioner to Superintendent Parsons and by him to the attorney general of Newfoundland.
Following the clash that took place on the highway outside the town of Badger on Tuesday evening, March 10, the situation apparently deteriorated further and Superintendent Parsons advised the commissioner that in view of the movement of 100 further strikers into the area, he felt that the call for reinforcements should be renewed.
On receipt of this information from the commissioner on Wednesday morning, I approved his taking the steps necessary to gather the men in the maritimes who had been alerted, and to have air transportation arranged. I told him, however, that while these steps were to be taken as a precaution I was not giving authority for the plane to take off from Moncton, and that this was not to take place until I had an opportunity to consider the situation further and to consult with my colleagues with regard to it. These consultations were held on Wednesday afternoon, and it was decided that a state of readiness should be maintained but that reinforcements should not be dispatched at that time.
The commissioner thereupon informed me that he could not agree with the decision, in view of his understanding of the effect of the contract, and that he would have to resign. Perhaps, Mr. Speaker, I might stop here to say that the decision of the commissioner has been under review. I do not want to give the appearance that this was immediately precipitated; it has been under review, and the final decision has been taken and communicated by my letter to him today to which I have already referred.
In order that the issue may be clearly understood, I should read the relevant clause, which is clause 13 of the contract, as follows:
13. Where in the opinion of the attorney general of the province an emergency exists within the province requiring additional members of the force to assist in dealing with such emergency, Canada shall, at the request of the attorney general of the province addressed to the commissioner, increase the strength of the division as requested if, in the opinion of the Attorney General of


Canada, having regard to other responsibilities and duties of the force, such increase is possible.
This, in my view, makes it clear that before the government of Canada is required to dispatch reinforcements as requested, the Attorney General of Canada must form the opinion that, having regard to other responsibilities and duties of the force, it is possible to send the reinforcements. It is also clear that the ultimate responsibility for the decision rests on the Attorney General of Canada.
Further to clarify the issue leading up to this resignation, I think I should read at this point the relevant passages from the commissioner's letter. I am now quoting from his letter of March 12:
There is no doubt in my mind as to the need and I am certain that the number of men asked for can be provided without prejudice to "other responsibilities and duties".
I realize that other issues are before you which arise from this strike but I feel most strongly that the matter of law enforcement should be isolated and dealt with on its own merits. This is the attitude the force has taken throughout. It has not concerned itself with the issues back of the strike but has merely tried to maintain law and order in the area.
I think the contract clause on this matter of providing reinforcements in an emergency is clear and I cannot escape the conclusion that failure to supply reinforcements in this instance is a breach of that clause. Bearing in mind that we have similar contracts with seven other provinces the decision of the government has a particular significance.
With these considerations in mind I feel I have no option but to ask you to accept my resignation and this I now do. I hope you will be able to relieve me as soon as possible and I shall await your advice as to what arrangements will be made to that end.
I cannot close without telling you how much I regret having to take this step. I am within a year of completing my full service and I had looked forward to finishing my time in a more pleasant way. I have enjoyed serving under your direction and I have appreciated your support of the force and your active interest and understanding in all aspects of its work. I assure you that it is only a firm conviction of the correctness of my view which leads me to take this disagreeable action.
That is the end of the quotation from the commissioner's letter. I have reproduced in quotes those parts in which the commissioner discussed the issue between us. As I said, I shall ask leave to table the whole letter and my reply.
It was with deep regeret that I found that the commissioner disagrees with the decision that I felt had to be taken, and that this disagreement led him to decide that he should resign. The fact is, however, that the contract is a contract between the government of Newfoundland and the government of Canada, and that the decision called for by

the contract is a decision to be made by the Attorney General of Canada.
In acknowledging the commissioner's letter of resignation I have endeavoured to set out the position, as I understand it, in the light of clause 13, as follows:
The obligation imposed on Canada by that clause is to increase the number of members of the force in the province if, in my opinion as Attorney General of Canada, "having regard to other responsibilities	and	duties of	the	force", such
increase is possible.
In reaching	my	conclusion	on	the questionwhether "having regard to other responsibilities and duties of the force" such increase were possible, I, of course, as you know, gave the most careful and anxious consideration to your views that additional members could and should be sent to Newfoundland without prejudice to other responsibilities	and	duties of	the	force. However, upon a consideration of all the factors, including especially	the importance of preserving the character and capacity of the force to discharge its duty in connection with law enforcement in all of Canada, I came to the conclusion, after consulting my colleagues, that, as the situation existed at that time, it was not possible to send the additional men requested without prejudicing the other responsibilities and duties of the force. This decision was my responsibility. I reached it only after the most careful consideration of your views and of all the other factors that, in my judgment, were relevant. I regret profoundly that you came to the conclusion that, by reason of that decision, you should resign.
That is the end of the quotation from my letter.
Since it is obvious that the point involved here is the question of whether account should be taken of anything more than the mere physical availability of men in determining whether reinforcements should be sent, I should outline the view upon which my decision is based.
I do not accept, and the government of Canada cannot accept, that an issue of this importance-whether reinforcements should be sent under the circumstances such as existed here-can be decided on the basis of a mere mathematical calculation as to whether men are physically available. We cannot discharge our responsibility by considering only the physical circumstances prevailing and examining the need for men under those circumstances. We must also consider the over-all responsibilities of the force, and our responsibility for the force, in a much wider context.
The primary duty of the force is to maintain law and order wherever the force operates throughout Canada. It is therefore an essential responsibility of the force to maintain its full integrity and its ability to discharge that duty on a national basis. In my view I cannot overlook, in assessing the responsibilities of the force, the necessity to ensure that it is not cast in a role which in effect
Newfoundland-[DOT]Administration of Justice might disable it from discharging its responsibilities to the country as a whole by weakening its standing as a law enforcement body. The responsibility of the force in this sense I have had to keep very much in mind in assessing the request which came from Newfoundland.
The Prime Minister has in his statement indicated clearly our views as to where overall responsibility for creating this situation lies, and also what should be done now to end it. It will be apparent from the Prime Minister's statement what are the various factors that I have had to bear in mind in assessing this call for reinforcements.
In the current situation the activities of the government of Newfoundland appear to have gone beyond the usual role of a government. That role in this context is first to provide the machinery for the promotion of industrial peace and development and for the settlement of industrial disputes, and second to preserve and enforce law and order in the course of any dispute that may arise.
In the current situation, however, the activities of the Newfoundland government take on the character of an intervention in a dispute actually in progress, on the side of one of the parties and against the union which up to that time had been chosen as the bargaining agent by the workers and certified as such under the terms of the appropriate provincial legislation. This is an abnormal role for a government, and certainly has the elements of an attempt to extinguish from the province a trade union national in character and hitherto chosen by the workers in that industry, in that province, as their bargaining agent.
As I appreciate the situation, therefore, the request made by the government of Newfoundland for Royal Canadian Mounted Police reinforcements takes on the character not of a request to assist in the normal function and duty of the province in maintaining law and order, but of a request for additional help made necessary in the course of the furtherance of a project to extinguish a union from the province.
We have also had to bear in mind the possibility that under these circumstances to send additional Royal Canadian Mounted Police into Newfoundland, instead of ensuring that the situation is kept under control, might act only as provocation to further incidents of violence and defiance, so there is no certainty that the sending of them would not do more to inflame the situation than to control it.
After weighing all these factors, and discussing them with my colleagues, I have come to the conclusion that the arguments against

Newfoundland-Administration of Justice sending more men at this time outweigh the arguments in favour, and I have decided accordingly, having regard to all the responsibilities and duties of the force.
This decision, as I have said, was a decision which was my responsibility to make, and I regret that the decision was not acceptable to the commissioner; but I had no alternative but to make it, and having made it to accept his resignation if he felt he should submit it. The situation, however, will be continuously watched and arrangements are being maintained with regard to the alert of the men in the other maritime provinces. As the Prime Minister has said, reinforcements will be sent immediately should they become necessary in order to protect the safety of the members of the force who are presently engaged in their proper function of maintaining law and order in Newfoundland.
It remains only for me to express my deep, personal regret that the commissioner should have felt impelled to act as he has done. Hon. gentlemen will perhaps appreciate my attitude in this regard, particularly in the light of the close personal relationship which has existed, and of my knowledge that the commissioner is within a year of normal retirement. As I have said in my letter to him, although I disagree fundamentally with his view as to the course which he should follow, I respect his sincerity in arriving at his decision.


Hon. L. B. Pearson (Leader of ihe Opposition):: Mr. Speaker, may I begin by saying that I think all members on all sides of the house will have learned with the greatest possible regret of the resignation of the commissioner of the Royal Canadian Mounted Police. He has served his country for many years with honour and distinction, and he has always shown in that service- and I know the minister will agree with me -a high sense of public responsibility and duty. I feel quite certain that the commissioner would not have resigned for any reason which is inconsistent with his own sense of public duty and responsibility, and in the communications from which the minister has read the commissioner has indicated in quite clear terms his reason for this resignation.
There are one or two other matters, Mr. Speaker, on which I would like to comment. The first is the decision announced by the Prime Minister and elaborated on by the minister, not to accede to the request for police reinforcements made by the government of Newfoundland in accordance with section 13 of the agreement entered into on June 12, 1957 between the governments of Canada and Newfoundland. That section is perfectly clear. I do not need to read it

again; it has been put on the record once more this afternoon by the minister. The only question to be determined by the Attorney General of Canada under that section is whether the requested increase is possible having regard to other responsibilities and duties of the force.
The minister this afternoon, in making his statement, has given an interpretation of section 13 which will certainly require, and will receive, very careful examination. It was an interpretation which, although I tried to follow it, was difficult for me to understand. He related his decision to the activities of the government of Newfoundland, not so much to the request of that government for further assistance in the maintenance of law and order but because of an interpretation- and this is his responsibility, not that of the government-which he has given to certain policies of the government of Newfoundland. The minister has taken his responsibility in that regard and has decided that in view of this kind of interpretation given to a paragraph that on the face of it seems very clear he is not able to accede to a request made within the terms of an agreement reached with the province.
I also wish to discuss the matter of the request of the government of the province of Newfoundland for a public inquiry. I hope the Prime Minister will table or put in Hansard the exchange between the premier of Newfoundland and himself, the request and the reply to the request. I have not a copy of the request made by the premier, nor have I seen it except in the press. However, it would appear from the press that the request for a public inquiry was made in the following terms:
In the interest of the peace, order and good government of Canada, and to protect the good name of the R.C.M.P., the government of Newfoundland invites the government of Canada to set up at once a public inquiry.
Mr. Smallwood is reported by the press as having asked that the inquiry be made under a superior court judge from outside Newfoundland to investigate the "acts of lawlessness and violence which have taken place in central Newfoundland since the strike of the loggers began on December 31". The inquiry, according to the press, should be held "for the purpose of ascertaining the facts and assessing the responsibility".
In the first place I think the fact that such a request was made in those terms is an evidence of the desire of the government of Newfoundland to secure and make public all the facts concerned with the matter covered by this inquiry. We on this side of the house have thought that a full and objective inquiry of this kind would be

desirable in view of the uncertainty created and the differences of opinion that have been expressed over what actually happened. The conduct of the R.C.M.P. has been bitterly attacked in the press and elsewhere and as strongly defended. Charges of disorder and violence have been made and have been rejected. I suggest that if we desire to understand the situation, as we do, and if we wish to criticize recent legislation passed in the house of assembly of Newfoundland in meeting the situation, we should have accurate and full information from an objective and impartial inquiry on which to base our views.
Any differences of opinion over facts are bound to have a bearing on differences of opinion over the legislation which was passed by all the members of both parties in the Newfoundland legislative assembly, which was and which remains accountable to the people of Newfoundland. It will be remembered that last summer the federal government initiated legislation in this house, which was approved by parliament and by all hon. members of this party, and which ended a strike and sent men back to work. This was, of course, an interference with the right of free, collective bargaining.


John George Diefenbaker: Does the hon. gentleman say that the legislation in Newfoundland is comparable?


Lester Bowles Pearson: I have not said that, Mr. Speaker, but I have said that we passed legislation in this parliament last summer which was an interference with the right of free, collective bargaining, in that by legislative enactment it sent men back to work. Any interference of that kind can only be justified after all the facts are known, as I think they were known last summer, on grounds of emergency; when the public interest or the public security demands such emergency action in the face of clear and present danger to security or to the economic life of the country or of a province.
On the basis of the facts that are known with regard to the Newfoundland situation strong differences of opinion, as was inevitable, have developed over the measures taken by the government and the legislature of Newfoundland to deal with the situation which confronted that province. I have expressed my own views on this issue when I said in view of recent events in Newfoundland; I wished to repeat what I have already stated, to the effect that the policy of the national Liberal party in labour matters has been and will continue to be firmly based on the right of free, collective bargaining through unions chosen by the workers themselves.
Newfoundland-Administration of Justice


Mr. Fleming (Eglinton):: Except for Newfoundland.


Mr. Starr:: Newfoundland is the exception.


Lester Bowles Pearson: Mr. Speaker, I have said that is the policy of the national Liberal party of Canada, and those words speak for themselves. However, if hon. gentlemen would like to hear it I am prepared to express an opinion. This is the first occasion I have had to speak on this matter in parliament. On the basis of the information I have received I would be unable as leader of this party to agree with certain of the procedures that have been followed or with specific provisions of the new laws.
The people of Newfoundland feel strongly on this matter, and I know that a unanimous assembly with very strong support from the people of that province would not have supported this action of their government if they had not thought-and many of them I am sure came to this conclusion very reluctantly -that the interest and welfare of the province required it. Surely it is our duty not only to get all the facts about this matter but to try and understand the views of the people of Newfoundland with regard to it. I have tried to do that myself, even though as I just said the information I have leads me to conclude that I could not agree with all of the steps taken.
One of the most disquieting features of this whole tragic and unhappy business is the growing sense of grievance and resentment in what is an ancient colony, but a new province, over what so many of its people feel to be a lack of understanding on the mainland of the position; of its difficulties and problems and, indeed, its dangers. This feeling is bound to be increased by the fact that often the conditions, attitudes and circumstances of Newfoundland are not the same as those of the older provinces.


John George Diefenbaker: Mr. Speaker, perhaps the hon. gentleman would permit a question in view of the fact that he is speaking at great length. Would the hon. gentleman let the house know which of the elements in the legislation are those with which he does not agree?


Lester Bowles Pearson: Mr. Speaker, the Prime Minister did not give us any information on this matter from his side of the house. I have said there are certain specific provisions in this legislation with which I cannot agree, and I mention this because-


John George Diefenbaker: Which ones?


Mr. Batten:: No one interrupted you.


Michael Starr: Which ones do you disagree with?
1964	HOUSE OF
Newfoundland-Administration of Justice


Lester Bowles Pearson: Perhaps the Prime Minister will keep quiet for a moment and let me finish my speech.


Mr. Speaker:: Order. May I remind both sides of the house that this is not a debate. The Prime Minister has made a statement and the Leader of the Opposition is commenting upon it.


Mr. Churchill:: At great length.


Lester Bowles Pearson: Thank you, Mr. Speaker. As I was saying before the Prime Minister saw fit to interrupt me, the people of Newfoundland are in this matter, as in other matters, naturally sensitive to any misrepresentation of their motives and to anything they consider to be unfair in the reporting of conditions in the province.
Surely, Mr. Speaker, whatever we may think of the action taken in Newfoundland in this labour dispute, it is of vital importance to do nothing to add to this feeling of resentment or to this feeling of being misunderstood; for from that could grow a feeling of isolation which would be especially regrettable as we approach the tenth anniversary of that fortunate day for Canada when the work of confederation was completed by Newfoundland joining this nation. I suggest, Mr. Speaker, that we all have a responsibility in this parliament, as they have in the legislative assembly of Newfoundland, to refrain from saying or doing anything which would add an unnecessary strain on this union.
I can only add in conclusion, Mr. Speaker, that for the reasons I have given it is most regrettable that the kind of objective inquiry requested by the government of Newfoundland, which also would have covered the request made by the Canadian Labour Congress for an inquiry, and which might have had important and positive results along the lines advocated by the Prime Minister himself when he said we ought to have a two-week cooling off period, has been refused by this government.


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, we have all been waiting with a great deal of interest to hear a statement on the position of the government with respect to the critical and unfortunate situation in Newfoundland. After hearing the Prime Minister and the Minister of Justice, I think we can safely say we now know the position of the Conservatives, but I am doubtful whether we know the position of the Liberals; not yet, anyway.
I do want to say, Mr. Speaker, that I am not going into the question of the legal interpretation of section 13 of the contract between


the government of Canada and the government of Newfoundland as regards the utilization of the R.C.M. Police in that province; but we do unhesitatingly say that irrespective of the legal interpretation of that matter, in our opinion the position taken by the Minister of Justice is morally a correct one, and we commend him on his decision. He has shown an understanding of the probabilities if certain action had been taken in sending down at this time and under existing circumstances and situation, an additional complement of 50 R.C.M. Police reinforcements. We quite agree with the interpretation which he had the honesty to express just a few moments ago that the request for the reinforcements was not so much on the basis of maintenance of law and order as it was for assistance and as a bulwark in pushing forward the stooge union of the premier of the province of Newfoundland, and we maintain that that is not the purpose and is not the function of the R.C.M. Police.
We are quite disappointed in the statement of the Prime Minister as to the position of his government and as to their decision after reviewing the request for an inquiry. We too feel most strongly that nothing but good could have come from the holding of a judicial inquiry. As was pointed out by the Leader of the Opposition, it is necessary to try to get the absolute and correct facts as to the situation in that province. It would mean a great deal in clearing the air and in clarifying the situation. I repeat that we would ask the Prime Minister to reconsider that decision and have an honest and complete inquiry into the basis of the present situation so far as the dispute in Newfoundland is concerned.
But, sir, though we say that we feel it would be a correct and a useful procedure, we would like to have a little more information also and to know just what is meant or just what is in the Prime Minister's mind when he so emphatically recommends a two-week cooling off period. Just what is meant by a cooling off period, sir? Just what are both sides to the dispute supposed to do? What would take place-


An hon. Member:: Obey the law.


Harold Edward Winch: -during the cooling off period? Well, I am afraid the Prime Minister did not give us any indication as to what he thought would take place during the cooling off period. I think we can safely state what we think would take place in this so-called cooling off period, namely that the premier of Newfoundland has outlawed a legitimate trade union in that province. He has outlawed it and has brought in severe penalties if the members try to carry on as a legitimate

trade union. The premier himself has taken the initiative in the formation of a new union.


Mr. Speaker:: Order. I should remind the hon. member that there are two matters which were dealt with in the statements made, and it would be more in accordance with practice to confine his statement to the two matters which were dealt with, namely the reinforcement of the police and the public inquiry, and not to get too broadly into a debate of the other matters.


Harold Edward Winch: I thought that was exactly what I was doing. I had already spoken, sir, on the question of the reinforcement. The Prime Minister spoke of the inquiry, and then he outlined what he thought should take place in Newfoundland and he named a cooling off period. It is the very matter of the cooling off period which was mentioned by the Prime Minister in his statement, sir, which I am discussing. However, that is quite all right except-


Mr. Speaker:: I was not objecting to that part of the hon. member's remarks but rather to his apparent departure into the realm of the actions of the premier of Newfoundland.


Harold Edward Winch: May I put it in this way, Mr. Speaker. I always like to bow to your wishes.
I believe that a cooling off period would actually function if the Prime Minister would make one announcement as to the basis of the cooling off; that is by letting it be known now that in the general interest of Canada and in the particular interest of Newfoundland and as a guarantee of the protection of citizens of that province in the free organization of an association or union of their own choice, he will use his power of disallowance to remove this legislation from the statute books of Canada. That, sir, in our estimation would be the finest thing that could be done. Most certainly sir-I hope this is in order-it would be in line with the Conservatism which the Prime Minister maintains he upholds. Therefore, sir, from the point of view, as mentioned by the Prime Minister, of an injury, or on the basis of a cooling off period, so as to give him time to take the necessary steps for disallowance, it is completely in line with Conservatism and we would ask him, sir, to consider it on the basis of basic principles and on the facts of his philosophy.
I should like to read a couple of quotations that give an indication as to the approach which we feel, coming from the Prime Minister and the government, would resolve this situation in Newfoundland in the most speedy manner. I presume, sir, that Quintin Hogg, now Lord Hailsham, would be considered a good authority on Conservatism. I should 66968-9-125
16, 1959	1965
Newfoundland-Administration of Justice like to quote an important passage from his book "The Case for Conservatism", in which he says, as found on page 69:
But just as Conservatives believe that the freedom of the individual is subject to law, so also subject to that rule must be the power of the state and the discretion of ministers to fetter the freedom of the individual.
Again, on page 73:
To some partisans of the left, democracy means no more than a tyranny based on the counting of heads. Where 51 are opposed to 49 the 51 must always have it, however arbitrary or unjust their view. The Conservative regards this doctrine as the reverse of justice and even the reverse of democracy.
I point that out in view of the statement of the Leader of the Opposition about how the law in question was carried by a majority of the house. Even if we cannot penetrate the thinking of the Liberals I draw that quotation to the attention of the Prime Minister, so that he will take note of what was said by Quintin Hogg about this principle of Conservatism.
There is a great deal more one could say, Mr. Speaker, but as you say this is not a debate. We plead with the Prime Minister to recognize that this dispute, although it is taking place in one province, has created not only an unfortunate situation there but an uproar throughout the length and breadth of Canada. All Canadians are very concerned about what is taking place there. They are very concerned that legislation has been placed on the statute books of that province which goes back 100 years to the days of feudalism.
The federal government must maintain an interest where the rights of the people and the rights of free organizations are concerned. Therefore we ask two things. First, we ask for the institution of an inquiry so as to get full and complete information. Second, we ask for the maintenance of democracy in Canada by the disallowance of this vicious legislation which has been placed on the statute books of Newfoundland by a would-be Hitler, to the disgrace of his own people.


Edmund Davie Fulton: Mr. Speaker, I do not think I obtained official leave of the house for the request I made.


Mr. Speaker:: Is the minister requesting that the documents be printed in Hansard as an appendix?


Edmund Davie Fulton: Yes.


Mr. Speaker:: Is it the pleasure of the house that these documents now being tabled by the Minister of Justice be printed as an appendix to Hansard?


Some hon. Members:: Agreed.

Inquiries of the Ministry


Hon. J. W. Pickersgill (Bonavisia-Twillin-gale):: I wonder whether the Minister of Justice would also agree to table and put in Hansard the exchange of communications he had with the attorney general of Newfoundland?


Edmund Davie Fulton: I do not think they form any part of the context of this discussion, but I will be glad to look them up and if they seem to relate directly I can discuss the matter further.
[For text of letters referred to above, see appendix.]
On the orders of the day:


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I should like to address a question to the Prime Minister. Can the Prime Minister inform the house when the government is likely to come to a decision with respect to the disallowance of the Newfoundland legislation?


John George Diefenbaker: The answer is no, Mr. Speaker.


John Whitney Pickersgill: Mr. Speaker, I should like to ask the minister from Newfoundland if he concurred in the decision of the government to repudiate the contract with the province of Newfoundland.


Mr. Speaker:: The hon. member, I think, knows that the constitutional practice is that the Prime Minister speaks for the cabinet.


John Whitney Pickersgill: Perhaps I could ask the minister a supplementary question. Does the minister intend to uphold the honour of his province by submitting his resignation?



SHIPPING


[Stage Direction]
On the orders of the day:
Hon. George H. Hees (Minister of Transport):: Mr. Speaker, on Friday last the hon. member for Lapointe asked me if the Canadian maritime commission had granted a subsidy to a Quebec passenger ship company operating in Quebec without a permit of operation issued by the public service board of that province. The answer to the question is no.



NOVA SCOTIA-INQUIRY AS TO GOVERNMENT ACTION TO ASSIST INDUSTRY

[Stage Direction]
On the orders of the day:
Mr. Donald Maclnnis (Cape Breton South):: Mr. Speaker, I have a question I should like

to ask the Prime Minister. Is the Prime Minister in a position now to make any statement on the coal problem in Nova Scotia?


John George Diefenbaker: Mr. Speaker, I think the house will be glad to know that the government has made encouraging progress in its study of the problem, and I expect to be able to make a statement to the house on this question tomorrow.


Hon. Paul Martin (Essex East):: May I ask
the Prime Minister a supplementary question. Does the Prime Minister not recall that he told the people of Sydney in the last election campaign that he had the solution to that very problem?


John George Diefenbaker: Mr. Speaker, I wonder whether that is another of that group of statistics for which the hon. gentleman has become so noted.


Paul Joseph James Martin: Mr. Speaker, may I suggest to you, rising on a point of order-


Some hon. Members:: Order.


Paul Joseph James Martin: -that under the rules of the house the Prime Minister may refuse to answer a question, but that under our rules and traditions he has no right to indulge in irrelevancies-


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: -and if he does we can only conclude, as do the people of Sydney with whom I was on Saturday night, that the government has no policy at all.


Mr. Speaker:: The hon. member has raised this matter as a point of order. Perhaps he would think it relevant to consider the nature of the question he asked in the first place.


Paul Joseph James Martin: Mr. Speaker, I will give that matter my serious consideration.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. O. J. Godin (Nickel Belt):: I should like to address a question to the Minister of Justice, to whom I sent a copy of the question earlier. In the light of the grave necessity for the appointment of a district court judge for the judicial district of Sudbury, indicated in a news item in the Sudbury Daily Star, a copy of which I have sent to the minister, and in view of the statement made in Sudbury last Saturday in my presence by the attorney general of the province of Ontario that a request had been made to

the federal government for the appointment of a judge for Sudbury and that the department was awaiting the said appointment, can the minister indicate to the house the position of the federal cabinet with respect to this matter and why the appointment has not been made?


Edmund Davie Fulton: Mr. Speaker, the hon. gentleman kindly sent me notice of his intention to ask this question.
I have not seen the details and I was not there to hear the statement made by the attorney general of Ontario, but the fact of the matter is that last year the Ontario legislature amended its county judges act by establishing six additional offices, and we at the same time amended our Judges Act to provide salaries for these positions. Five of these judges have been appointed because the areas for which they were to be appointed have been designated by the province, but the fact is the province has not yet provided for a third district court judge for the district of Sudbury.


Donald Methuen Fleming: that the house go into committee of supply.



CANADIAN-UNITED STATES RELATIONS

Lester Bowles Pearson: Once again, Mr. Speaker, this motion gives the official opposition an opportunity to comment on a matter of important policy and to criticize, if criticism is required, the action or inaction of the government in respect of that policy. Today, Mr. Speaker, I am going to raise, and I do it in no narrow partisan sense, a question of the greatest importance which concerns our external relations, and a question which has been very much in our minds, indeed which we have been discussing already in some of its aspects. I am referring to the matter of Canadian-United States relations.
I hope in dealing with this matter to do so in as constructive a fashion as possible, and to put some ideas to the government which may help in the solution of some of the problems that face us in this field, and for that purpose to move a motion toward the end of my remarks. I venture to hope, Mr. Speaker, that perhaps this discussion can be carried on without too much reference on one side to the question of what did you do, or perhaps without too much reference on the other side to the question of what did you say. I hope also, Mr. Speaker, that the discussion can proceed without too much display of press clippings and dredging up of debating points from previous occasions, 66968-9-125J
16, 1959	1967
Canadian-United States Relations because the question of Canadian-United States relations is a matter not only of the greatest possible national and international importance, but one which transcends the normal debating points that one makes in specific domestic problems and indeed at times specific problems in international affairs. Therefore I hope to consider this matter with the responsibility which it deserves.
As I said just a moment ago, and have said on many previous occasions, there is no more important subject facing us at the present time than our relations with the United States. I know of no more complicated subject, no subject more difficult or complicated for Canada, politically, economically and indeed culturally; no subject that requires more careful, cool and honest consideration, consideration which will be as free as possible, subject to our human and political weaknesses, from emotion and prejudice and which will be treated with as clear an understanding of where our true long range interest lies, the greatest of which is of course the preservation of peace and security in the world.
Now, Mr. Speaker, the problem of our relations with the United States is our most important single international problem, at least in the bilateral sense of the relationship of Canada with any other single country, even though it is only a part, a very important one, of our general international policy for peace and security. I believe that is a point upon which we are all united in this house. This problem is, of course, of far greater importance to Canada than to the United States. I am talking now of the bilateral aspect of our relationship. I do not need to waste the time of the house in elaborating upon it.
The realistic consideration of the problem is often hindered on the one hand by what I might call the unguarded boundary, 140 years of peace approach, which perhaps is less prevalent in Canada than it is in the United States. There it is based upon what many, including myself, have referred to as benevolent ignorance. On the other hand, it does not help in the solution of the problem that faces us in this field when we in Canada display self-righteousness or become oversensitive at times and yield to the temptation to give gratuitous advice to our neighbours occasionally in a fashion which has subjected us to the mild reproach of having become charter members of the international society of sidewalk superintendents.
Both these approaches, on the one side and on the other, prevent the kind of serious consideration of these problems which is required. I suggest, and I am sure my hon. friends will
1968	HOUSE OF
Canadian-United, States Relations agree with me that it is a sign on our part-[DOT] I am talking only about ourselves-of immaturity when we are petulant and captious, when we are purely negative, carping in our criticism, we are not likely to accomplish very much, and we are at a time when there is so much to accomplish in this field.
The keynotes to our relationship with the United States-it may seem platitudinous to say this-are threefold. The first is the intimacy of the relationship, and that speaks for itself. I need say nothing further about that. The evidence of it is at hand on every side in every contact we have with our neighbours across the line. The second keynote is the importance of this relationship and the growing, if you will, awareness of that importance below the line. The third keynote, which in a sense is related to the second and is an aspect of the problem which has been mentioned more than once by the Prime Minister in debates on international affairs, is our interdependence with the United States. This is something of which I believe we are far more conscious than our neighbour is, which may be a fact which helps explain something of the difficulties we have in our relations with the United States.
I should like to remind the house that this matter of interdependence, on which I shall say a few words, should be more than continental, even though it is the continental aspect of interdependence that we so often have in mind when we use the word and even though it is the continental aspect of interdependence of which we are most conscious economically, strategically and politically.
May I just say a word first about the political aspect of this continental interdependence. As reported at page 1549 of Hansard of March 3, the Prime Minister had this to say:
-we intend to continue to assert unswervingly that we shall have for Canada a fair, full and equal participation in all decisions which go to our common defence.
It seems to me, Mr. Speaker, that we would be unrealistic if we in this country based our policies on the assumption that we must have equal participation in all decisions that are concerned with common defence.


John George Diefenbaker: Would "equitable" have been a better word?


Lester Bowles Pearson: Fair consideration and full consideration, yes; but if we think-and I am sure the Prime Minister will agree with me in this statement-that in all these matters we are going to have equal consideration with the nation which bears the greatest responsibility because it has the greatest power


in the free world, we are going to leave ourselves open to disillusionment which may result in disappointment and, at times, in criticism and complaint. Sovereignty-and the Prime Minister had a good deal to say about this the other day-means equality between states in theory, but it does not and cannot mean absolute equality in practice between states of different size, power and responsibility in reaching decisions of common interest today.
There are recent statements from Washington which prove what I am trying to indicate. There are recent statements which show in an alarming way, I believe-in any event, alarming to me-that the United States government has already made up its mind what to do in certain contingencies that are related to the Berlin situation but which certainly affect the common defence. That defence, we are told-and I am not objecting to the statement because I think it is true-is now and must remain continental in the sense that it cannot be based on national plans or national policies alone. We are told that it must be based on the unity of the two countries for defence planning, or at least for the strategic and tactical side of planning. Yet as President Eisenhower pointed out at his press conference of March 4, and I quote from that conference-and these are words which are pregnant with significance-* When you have got certain circumstances that... could put your nation's life at stake . . . whatever would be necessary the President would then order.
And the measures that he felt it necessary then to order-and I hope he will never be put in the position where he has to do this -nevertheless would affect us just about as much as they would affect the United States of America.
The Prime Minister had something to say about this matter to the House of Commons on March 3 when he said this, and I quote from page 1547 of Hansard:
What is our position in Canada? Some seem to have the view that we could be neutral in any war that may take place, neutral in the event that the United States was involved . . . There is no neutrality of that kind today.
Mr. Speaker, I would not go as far as that, as to insist that we could not be neutral in any war in which the United States was involved, and perhaps the Prime Minister did not mean that.


John George Diefenbaker: Under NATO.


Lester Bowles Pearson: Under NATO there is no
neutrality. An attack on one NATO country is an attack on them all. That concept of neutrality we abandoned when we signed the NATO pact in respect of the NATO area,

but I do not think that means that we cannot at least avoid involvement in non-NATO wars that any other country might find itself engaged in in a limited way, or in an area of the world which has nothing to do with NATO.


John George Diefenbaker: I am very much interested in this matter. Suppose there was an attack on United States forces in Asia. Then what would our position be?


Lester Bowles Pearson: If there was an attack on
United States forces in the NATO area, of course we would be at war as soon as parliament met and took the necessary action. We have an international obligation to consider an attack on the forces of a NATO country inside the NATO area as an attack on our own forces. If there was an attack on United States forces in some part of the world far removed from the NATO area, in the Far East or some other place, I am not trying to suggest for a minute that we would be able to escape the consequences of any action in which the United States was involved. But I do not go so far, and I have never gone so far and perhaps the Prime Minister would not go so far, as to suggest that this means that we would have to abandon the legal concept of neutrality in any attack on a United States force in any part of the world. I certainly would not want to accept that as a doctrine guiding our international obligations or our international policy.
Yet if the President of the United States ever had to take the kind of action which he mentioned in his press conference, I repeat that we would be affected; we would certainly be involved in some form or other, because we could not escape. The President made clear a week later, on March 4, what he would order in defence against aggression, when he said at the following week's press conference:
We are certainly not going to fight a ground war in Europe.
When I read that statement I wondered. I know it was a statement at a press conference, but it was a statement by the President of the United States, a statement which seems to have been contradicted since then by one or two service chiefs in the United States. But any statement of that kind could not help but create anxiety, I am sure, in the minds of people in other countries who heard it. In the policy leading up to that kind of statement, does Canada have a full, free and equal voice? That is a statement that certainly bears on common defence. What are the implications for Canada of a
Canadian-United States Relations statement of that kind in terms of continental interdependence which we all agree must be recognized?
No doubt we shall have an opportunity to examine these matters in greater detail in subsequent debates on defence. I mention them now merely to point out what I think is one of the major problems facing us in our relations with the United States, namely the increasingly.-perhaps because of the circumstances with which we are faced-one-sided character of continental interdependence in this field and in other fields which I shall mention later.
We agree that policy in defence, trade, production or anything else cannot in this country be based any longer on the old concept of unlimited and unrestricted national sovereignty. I agree wholeheartedly with what the Prime Minister said about that matter the other day. I think there is no doubt where we in this party stand on that matter. We have shown it when we were in office in word and I think we have shown it in deed by our advocacy of NATO and other collective security arrangements. The record of 12 years in office is an indication of where we stand with regard to the matter.


John George Diefenbaker: What did the hon. gentleman understand by the swift thinking attributed to the President in that press conference? He mentioned the implications, and then he did not complete the statement.


Lester Bowles Pearson: The implication of that statement which I thought would create some anxiety in people's minds outside the United States-I do not want to say anything which will be unnecessarily alarmist-surely would be that if action were begun in regard to the defence of the rights of the NATO powers in West Berlin, which rights, as the Prime Minister and I have already stated should be firmly upheld, and that action resulted in counteraction, which in turn resulted in conflict, that conflict could only be all-out air conflict.
That is the implication to be drawn from the President's statement. It is of far-reaching importance and underlines the necessity of the fullest, freest and most equal consultation possible among allies before policies of that kind are agreed upon. If the nations of NATO and the free world cling to old, outworn concepts of sovereignty, and by doing so find they have weakened their security and created disunity within the coalition, which apart from the weakening of our strength, is the thing these people would most like to see brought about, we may find that we have saved our sovereignty but lost
1970	HOUSE OF
Canadian-United. States Relations everything else. The Prime Minister put the same idea to us the other day in another way.


John George Diefenbaker: I am listening very carefully to the hon. gentleman, and I am asking him for information. What does the hon. gentleman mean by "clinging to the outgrown concept of sovereignty"?


Lester Bowles Pearson: I think the best explanation I can give of my views in that regard is the fact that we considered it necessary in this country ten years ago to accept obligations in regard to collective security which limited our freedom of action. We felt it necessary to give up some of our sovereignty in that respect and accept limits on our freedom of action in order to increase our security and thereby, we hoped, strengthen the peace.


John George Diefenbaker: Thank you.


Lester Bowles Pearson: On the other hand, Mr. Speaker, if interdependence-which must, I submit, mean some limitation on sovereignty 

rejects, as I think it should, absolute national sovereignty, then in the continental sense it cannot rest on Canada's excessive subordination to the policies and decisions of the United States. I am now talking about continental interdependence. That is why I strongly believe that Atlantic interdependence is a far better policy and concept for us politically and economically than continental interdependence. Surely we have recognized that in our acceptance of NATO obligations, in the NATO commands, and in everything else which flows from NATO. Surely this means, because of our political situation on this continent, that intercontinental defence for us should include continental defence in the most direct manner possible. Interdependence politically and strategically, as well as economically, I submit is a preferable concept for Canada than continental interdependence.
I know that our relations with the United States in this field recognize this concept of interdependence, but that recognition on such a continental, narrow basis-if the North American continent is a narrow basis; it is only relatively a narrow basis-has surely been shown by the events of the last few years. In some aspects of our relationship that interdependence has been shown to be more apparent than real. We have learned, I think more particularly in the last year or two, that a defence system based on a genuine and equal interdependence of two nations so different in power as are Canada and the United States is very difficult indeed to work out in practice. In practice, whatever we may have in mind in theory, such a system


usually means that the more powerful nation retains most of its independence and the other, the less powerful nation, tends to become more dependent.


John George Diefenbaker: May I ask if that has applied in the NATO organization as such, in the hon. member's experience?


Lester Bowles Pearson: I do not think so, Mr. Speaker, because I think the broader the basis of the interdependence the greater opportunity there is for the various members to make their views effectively known. But whether it applies in NATO or not, and I do not think it does to the same extent as bilaterally in the North American continent, surely it is a good thing for Canada to broaden the basis of its interdependence and thereby-I was going to use the word "weaken" the pressures which come from the south when we are working together with the United States alone without the benefit of a larger grouping. This continental relationship, then, which we have to accept and work out to the best of our ability tends to become one more of dependence than interdependence, from our point of view. We have certainly learned in the last few months that this interdependence, this continental interdependence and unity, is more apparent in the field of strategy and planning than it is in the field of development of resources and industrial production.


John George Diefenbaker: So is the NATO organization under section 2.


Lester Bowles Pearson: The Prime Minister says this is also so in the NATO organization. But it has not been tested in the same way in that organization because there has not been the same effort yet, that I know of, between any of the NATO countries to work out any special relationship inside NATO, as there has been between Canada and the United States.
Perhaps I know as much as most people how difficult it is to do much about article 2. I think the Canadian delegations at the present time, as in the time of the previous government, have done what they can to make progress in that field. I suggest that the only alternative, Mr. Speaker, is an interdependence which means a balanced, collective defence where each nation can specialize in certain types of defence production. In the long run it seems to me that is the only approach which will make a collective system work, whether that collective system consists of 12, 13 or 14 nations under NATO, or the two nations on the North American continent. If that kind of interdependence is essential this implication must be acceptable by all members of the group,

including the United States, if the collective organization is to survive. It requires defence resource development and production sharing arrangements between governments much more far-reaching than those which now exist between the United States and Canada, and between Canada and the NATO countries.
So much, then, for that aspect of interdependence. What about our trade relations between the two countries? Surely over recent years they have also illustrated our growing dependence on the United States. Hon. members opposite have had a lot to say about that in past years, and they have called attention in no uncertain terms to the dangers to Canada's development because of that growth. I think the growth over the years of our commercial and trade dependence on the United States-I am talking now about the last 10 or 15 years-was not only inevitable, but I think if we had not had that development of economic and trade interdependence we would have been in a very bad way in this country after world war II.
Why did this occur? Why have we become more dependent in these matters on our neighbour? The reasons are pretty obvious, and I am sure are familiar to all members of the house. Perhaps the most important reason, and one we do not often refer to in discussions of this matter, is the fact that we have had two world wars with a relative decline of the western European countries brought about by their efforts and sacrifices during those two world wars. That effort weakened them economically and made them less available as markets for our goods.
The first reason then is the relative decline of the western European countries in the world economics and especially after world war II when there were currency difficulties arising out of impoverishment through war exertions and sacrifices.
Second, there were higher costs of production in North America which tended to divert more and more of our products to the only market where we could compete in price, which was the United States. Third was the important part played by United States capital in our amazing development. We could not have had the pace and pattern of that development without United States capital but it did result in the growing dependence on the United States in some phases of our economy and it resulted also in demands for measures to counter the dangers arising from this kind of development. It has now reached the point in this country where three quarters of the $7,500 billion of the foreign capital invested in Canada comes
Canadian-United States Relations from the United States. This involves an economic and financial problem but it may become a political problem. We need the capital but we want to ensure that the capital does not mean outside control.
A very good illustration of the advantages and dangers of this kind of development which emphasizes our dependence on the United States was given the other day when the Prime Minister (Mr. Diefenbaker) spoke as reported at page 1549 of Hansard of March 3 and had this to say:
How often have hon. gentlemen opposite laughed when we talked of plans for northern development to secure the northern areas for Canada so that they would not be lost.
I do not recall laughing at that policy but we will let that pass. The hon. gentleman continued:
In the last few weeks something of that development plan which was scoffed at, the design of which was to improve the economic future of Canada and also preserve those areas for our defence, has been shown to be achieving fruition in the events which have taken place in connection with those vast mineral and oil areas which are today being taken up.
I believe it is true-the minister directly concerned will correct me if I am wrong; but his own information shows I am not wrong- that this development in the way it has been brought about and is now taking place is largely through the movement of more United States capital through United States oil companies or their Canadian subsidiaries into the northern parts of Canada. This is a recent illustration, a development that has occurred in the last few weeks which reveals the advantages and may later reveal some of the difficulties that flow from that kind of assistance.
Another reason why we have become more dependent on the United States over the years than some of us would perhaps like to see with respect to economic and trade matters is the United States need for our raw and semi-processed material. Hon. members know how this works out. We are advised by the United States when there is a period of emergency in that country where our raw materials are required for strategic or defence purposes, as was the case a few years ago, to develop and produce these resources at any cost and that the market will be there in the United States at an reasonably profitable figure. We are told to go ahead and produce the stuff and then when national production in this country is stepped up or the need diminishes in the United States or as is more often the case, both, the tap is turned off in the United States and restrictions are put on the imports of those goods into Canada, goods that we were urged to produce in the first place.

Canadian-United States Relations
I need only to cite as examples lead, zinc and uranium. It was not many years ago that this country was urged by the United States authorities to proceed with the search for uranium. Washington advised us to search and hunt for all the uranium we could find here and develop it and they would make a contract to purchase practically all of that uranium. We were told it was necessary not only for our economy but for United States security that this should be done. During the period we developed this uranium

by that I mean capital from a good many countries, not only Canada-the search for uranium went on in the United States and now that they have found great quantities of uranium in that country, when the time comes to renew that contract on which some areas of Canada now depend I hope in Washington they will not point to United States production and say. "No longer do we need your help in this field, thank you very much."
The same problem is arising over oil. The voluntary restrictions that were in effect for a period extending back a couple of years have been replaced by mandatory restrictions. We have some right to complain about that item but we have more right to complain about the reason given for that kind of restriction, that is national security. National security cannot be accepted by Canadians as a valid reason for the imposition of restrictions on continental production. If we are interdependent continentally for defence we ought to be interdependent continentally for the production of oil for defence use in the planes that fly over Canadian territory. Yet we were told that for reasons of national security this cannot be done and our oil imports have to be restricted.
There are other examples. There are increased restrictions placed on our imports as I have mentioned, and increased and unfair competition in marketing abroad our agricultural products, a matter with which all hon. members are familiar. There is also the effect of escape clauses and peril points in the United States reciprocal trade agreement act which minimized the advantages we receive from the legislation. Because of this act and the arrangements made under it at GATT the duties on Canadian exports to the United States in many fields have been considerably reduced in the last ten years. The advantages we have been enjoying from that in the past may now well be threatened by the new escape clauses which the United States can impose against us. Other difficulties are created by the interference with the trade of Canadian subsidiaries of United States companies to areas of the world where it is illegal for a United States company to trade and the effect of United States anti trust


legislation applied to Canadian companies.
I have mentioned only a few illustrations. I do not .think it is an exaggeration when I say that a serious situation has developed in this aspect of our relationship. We must consider what we can do now to prevent that situation deteriorating into economic conflict from which nobody on either side would gain anything. We ask ourselves if the present arrangements in effect are satisfactory to deal with these problems. Are Canadian interests sufficiently considered in the application of the principle of continental interdependence? If not, what can we in this parliament do to improve that situation?
We have, of course, the normal intergovernmental contacts and I suppose they are just as continuous and effective under the present government as they were under the previous government when I can assure hon. gentlemen from personal knowledge they were both close and effective, both personal and official and both formal and informal. We have the use of the diplomatic machinery which I am sure works as effectively now as it has always worked in both Washington and Ottawa. We have some relatively new pieces of machinery and some which go back two or three years.
We have, for example, the intergovernmental cabinet committee on economic matters. It did not meet very often when this party was in office and I would be the last person to say it was a very effective piece of machinery so I am not trying to score any debating points when I say I do not think it is any more effective in its present operations or has met more often in the last year and a half than was the case before 1957. We also have a joint intergovernmental cabinet committee on defence which the Minister of National Defence (Mr. Pearkes) may think is an invaluable piece of machinery but it does not seem to have met very often.
However, we have something new in the joint congressional parliamentary committee which has been set up. This is a piece of machinery that is not only novel in the relationship between the two countries but it could be very important. When I say that I emphasize the word "could" because it could also be almost all window dressing. If that joint congressional parliamentary committee means that every six months there will be a trip to Washington for a couple of days and then in the next six months there will be a trip to Ottawa for a couple of days you would have a good time in Washington and a good time in Ottawa. You would meet opposite numbers in congress and the opposite numbers in parliament. That is all to the good, of course. You would

get to know the problems of Washington and the problems of Ottawa a little better and perhaps that would have some effect, but I do not for one moment believe that a joint committee of this kind, carried on in that way, will have any considerable or lasting effect on the solution of the problems with which we are faced.
I do hope that those who are responsible for the operation of this committee will perhaps discuss together to see whether there is not some way by which this committee, which is of such great potential importance, can be made actually important in the day to day examination which a committee of this kind might make through a permanent staff on both sides, through more frequent business meetings and day to day examination, give to problems which are coming up and which might be considered on this legislative basis before they became a subject of public controversy. I know this is not going to be easy.
One of the difficulties in regard to working out an arrangement of this kind is the difference between our parliamentary and congressional systems. Committees in Washington, as we all know, have an independent, effective existence and indeed an effective influence sometimes on the executive even in spite of the executive. I doubt whether that could be said of committees in a parliamentary system of government. And therefore with this different approach to the parliamentary structure and the functions of committees as they operate under congressional principles it is not going to be easy to work out this new piece of machinery in a way which might help solve this problem of throwing light on them before they become public problems. I hope the government will look at this and see if there is not some way in which this piece of machinery can be made more effective than it will be.
One of the men who has done most to make the United States more aware of the Canadian problems-in that I think we all owe him a debt of gratitude-is Representative Coffin of Maine. Representative Coffin made a speech in Portland, Maine, on February 13. He was dealing with a statement which he had made, when the two congressmen who came up here a few months ago, made a report on the new relations between Canada and the United States which, in his view, perhaps required a new form of association. I know what will be said about that when we approach the United States government, if we approach the United States government, for a new form of association. They will say, what we do for you, you will have to do for others. I say that that argument
Canadian-United. States Relations does not hold water any longer. If in fact our relationship is so important, so intimate, and if this special interdependence between Canada and the United States because of the force of circumstances is not the same as it is between the United States and any other country; if that is the case, perhaps we must ask for some special form of organizational arrangement to reflect that interdependence. Perhaps that is what Representative Coffin had in mind when he said this:
I had come to see that we could expect a reasonable solution of our boundary waters and power problems, our trade differences, our customs and immigration problems, our transportation, agricultural, and fisheries problems only if both congress and the executive were able to take the broad view. On the congressional level this meant giving enough senators and congressmen an understanding of the full range of problems so that in the consideration of any particular measure backed by those with a specific regional or occupational interest, there would be a larger number of legislators who could afford to look at the problem in perspective and strive for a sound approach. On the executive level what is needed is a device or procedure which can bring together the thinking on all of the issues between the two nations. The objective would be to consider some problems en bloc, in a package. For example, one such package proposal is the giving of corridor rights to Canada through the Alaska panhandle in exchange for an agreement as to sharing of benefits from Yukon power development. If all the elements were collected and assessed by the executive branch in an imaginative manner, other combinations might be deemed feasible ways of breaking existing log jams.
I agree with that, so far as I know anything about the United States approach to those problems, but I would go farther. Why not have all those elements collected and assessed by the two governments in the way that Representative Coffin said is becoming essential in the case of the United States? That means, surely, asking for some kind of formal arrangement-I have spoken about this before in this session-some formal treaty arrangement that laid down principles which would guide the conduct of the governments on both sides of the border.


John George Diefenbaker: What about the inflexibility of such a plan? I know the hon. gentleman mentioned this before.


Lester Bowles Pearson: I mentioned it before and,
as a matter of fact, the Prime Minister mentioned it. He had something to say about this at page 1550 of Hansard. When he spoke on March 3 he had this to say:
However, we have been speaking of the economic co-operation agreement between Canada and the United States, which is dated October 26, 1950. This document, which all hon. members have,-
This was the document which attempted to prolong the principles of the Hyde Park agreement which governed our relations

Canadian-United States Relations during the war when it was not too difficult to work out relationships of that kind. I continue:
This document, which all hon. members have, sets forth the principles for economic co-operation. The arrangements worked out under the Hyde Park agreement proved so successful that when international conditions again appeared threatening the joint United States-Canada industrial mobilization planning committee was established on April 12, 1949, to make plans in case joint action should again become necessary.
And so on. When we are threatened with some external dangers then we can find ways and means collectively or jointly to deal with those dangers. When that danger disappears we fall back on the old arrangements. Therefore, I suggest that if it was desirable in 1950 to work out a document which laid down certain principles which would govern economic co-operation between the two countries, which was done in a form which was not binding on congress or binding on parliament, and which had no treaty or other legal significance; if it could be done in 1950 in that way, then perhaps the time has come -and I put it no higher than that-to give consideration to the enshrinement of the principle of economic co-operation in a formal treaty arrangement which would be submitted to congress where it could be debated and submitted to parliament where it could be debated. And if the two legislatures agreed we would then have a document which each side could follow in case action was taken by the government of either side which infringed those principles. Perhaps it would be worth while giving consideration to that kind of situation. I think however that we should go farther than that and these are my closing words, I again refer to the speech of Representative Coffin who said:
Beyond this second level of minimizing the Canadian-United States points of contention or friction, to the benefit of both, there lies the ultimate level of Canadian-United States co-operation in policies and programs devised to sparkplug a free world effort to stabilize commodities-
He is right. This approach to the problem is somewhat different. What he had in mind in this speech was to broaden the basis of continental co-operation not only in defence, which I have spoken about, but in the field of trade and economics; broaden the basis so that it will cover the whole of the Atlantic area. The Prime Minister knows my views on this and I know the difficulties in the way of doing any such thing. I used to go to the Atlantic treaty council meetings every spring and every autumn and we used to talk about this kind of thing and it was extremely difficult to do more than talk about it. But perhaps the time has come when we may have to do more than talk about this interest in the alliance because if something


cannot be done to strengthen the non-military basis of the alliance it may fall apart. Indeed, there are some signs of even the military basis of the alliance weakening in the news in the last two or three days. The reason I say this is that there are situations, there are circumstances now which did not exist five years ago and which may perhaps provide more hope, certainly they provide greater opportunity, for progress in this direction than existed a few years ago.
What I am thinking of is the development of the European free trade area, the development of the European common market. Six European countries have now worked out among themselves something that would have been considered absolutely out of the question 15 years ago. If anybody had said that in this or any other legislative chamber before world war II that by 1959 we would have a European economic unit including these European countries it would have been considered as a visionary statement indeed. But we have it now and the other countries of Europe, including Great Britain, are considering whether they can expand this into a European free trade area.
If my hon. friend has been following the debates in the British House of Commons he will know that some very pertinent and significant questions have been asked the government of the United Kingdom as to how they could do this, what would be the effect of joining the European free trade area on commonwealth preferences and all that kind of thing. They are beginning to debate association of the United Kingdom with the European free trade area, and while there is a large gap between debate and action the first steps are being taken. If those steps should lead to a European free trade area with which the North American states, the United States and Canada, have no association at all it will be extremely bad for Canada, both economically and politically, because we will be thrown back on conti-nentalism and we will then learn in a far more vivid way than we know now the effects on our destiny of continental relationships at a time when the Atlantic is split in two between Europe and North America.
Therefore, not only is it of first importance for Canada economically and commercially to do something to widen the basis of freer trade arrangements but perhaps in the long run it is of even greater importance that our political development and political destiny should be brought about not on any continental basis, not even exclusively on a commonwealth basis but by working out in this North Atlantic area closer and closer co-operation with people and countries who think

as we do and who will work with us politically and economically in the face of the menace that confronts us today from countries who do not think like we do.


John George Diefenbaker: Before the hon. gentleman goes on, what does he conceive to be the political and economic co-operation that should exist between Canada and these countries of Europe within the free trade area?


Lester Bowles Pearson: I see no reason why we should not now begin, and we would certainly have to try to associate the United States with us, the same kind of consideration in respect of the European free trade area that Great Britain is giving to that area, a consideration of how an association can be brought about which is not based on complete free trade, which does not give up control of separate customs duties but which is based on the development of an area where there will be freer trade between those members than exists at the present time and which perhaps one day will lead to the kind of association you have in a federal state. When I say "one day" I am thinking far into the future. If the Prime Minister thinks this is an imaginative and visionary observation I would ask him and other members of the house whether, in the face of the situation we have in the world today, any other ideal will be enough to safeguard not only our prosperity but also our security.
Therefore, Mr. Speaker, in view of the considerations I have mentioned I move, seconded by the hon. member for Essex East (Mr. Martin):
That all the words after "that" be deleted and the following substituted therefor:
this house is of the opinion that recent decisions of the United States government, particularly in the field of production and commercial policy, underline the necessity for the government to make more effective arrangements with the United States to prevent the undesirable impact of those decisions on Canada, and the necessity of a more active participation by the government in working out the implications of interdependence and closer unity within the North Atlantic community.


Herbert Wilfred Herridge: Mr. Speaker, I rise to express briefly the support of this group for the purpose of the amendment. Before proceeding with my few remarks I must say that we are very pleased indeed to see the official opposition now expressing the same concern over United States influence on defence and trade policies in Canada that this group has been expressing for several years. I think I should once again compliment the Leader of the Opposition (Mr. Pearson) for moving in our direction in this important field. It is another indication of the influence that this small group in the house is having on the somewhat larger group to our left. I hope that influence will continue.
Canadian-United States Relations
We have been very concerned for some years about the impact of United States policies upon Canadian affairs, and this is understandable in view of the greater size of our neighbour to the south. We have been concerned about their influence on external affairs, defence policies, our trade relationships and industry and agriculture in Canada.
To demonstrate the influence that the Americans aim to have on our policies with respect to external affairs I want to use one illustration. We all know that there has been a growing demand in Canada for the recognition of the Peiping government, the mainland government of China. That demand has come not only from the group in this corner of the house but has been made by leading bankers, leading industrialists, particularly in British Columbia, who face the situation realistically, by the Canadian Labour Congress, by the agricultural organizations and by an ever-increasing number of Canadian people who appear to understand the realities of the situation better than the government at the present time. No doubt the growing support in Canada for recognition of the government of the mainland of China is causing some concern to the state department of the United States. I presume that is why Mr. Walter S. Robertson, undersecretary of state for the United States, visited Ottawa a few days ago and addressed a meeting of the Canadian Club in the Chateau Laurier, to which I was very kindly invited. I understand that he also addressed members of thei Progressive Conservative association yesterday and is taking every advantage of his time in Canada to influence Canadian public opinion with respect to this important question.
In that connection I want to quote briefly from an article by Charles Lynch which appeared in the Ottawa Citizen on Saturday, March 14. The article is headed, "Why U.S. Won't Recognize Peiping." Mr. Lynch was at the dinner held in the Chateau and this is what he has to say in his article:
One of the most pointed and most important speeches ever made by an official of the United States government in Canada was made here yesterday by Walter S. Robertson, assistant secretary of state for far eastern affairs.
Mr. Robertson is "Mr. China Policy" in the state department.
His speech, before the Canadian club, was as considered and as eloquent a presentation of the U.S. view on communist China as any man could make.
I certainly bear that out because the views of the United States government were very eloquently placed before the meeting by Mr. Robertson.
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The fact that he came to Ottawa to make it is evidence of the concern that is felt in Washington over the trend of Canadian opinion on the Red China question.
A short time ago, the Canadian club heard an eye witness report on communist China by Canadian correspondent Gerald Clark-a hard-hitting, well documented report on the achievements of the Peiping regime.
Mr. Robertson came to present the antidote-not only to the observations of Mr. Clark, but to those of other recent Canadian visitors to mainland China, including James Muir of the Royal Bank of Canada, and Oakley Dalgleish, the publisher of the Toronto Globe and Mail. It is also fair to say that he came to address himself to the Canadian government and its policy of increased trade with communist China.
Then, the article goes on to say in conclusion:
Mr. Robertson's words are unlikely to be echoed from any part of the house in the forthcoming commons debate. But they state, more eloquently than any of our own officials would be ready or willing to do, why the U.S. feels as it does about communist China, and why Canadian policy, as a consequence, continues to be one of non-recognition.
They make clear the size of the breach that would be blown in Canadian-American relations by an Ottawa move toward recognition.
As such, the Robertson speech is an essential backdrop against which the commons debate will be conducted.
Now, Mr. Speaker, there is an illustration of the tremendous impact of the government of the United States on this government's foreign policy with respect to the recognition of China. They send Mr. Robertson to Ottawa to address this important meeting and to meet other members of the House of Commons and try to persuade them that United States policy in this respect is correct. However, I am glad to notice, according to this morning's Globe and Mail, that the editor of the Globe and Mail has not been enamoured of Mr. Robertson's remarks. I should like to quote part of this editorial as an antidote to Mr. Robertson's remarks at this time. I think we must give credit to the editor of the Globe and Mail for writing some excellent editorials on foreign policy and other important matters. The final paragraph reads:
Finally, there is Chiang, heading what Mr. Robertson described as "a non-communist Chinese government firmly oriented to the free world". Now, Chiang is certainly non-communist, and he certainly heads a government. But it is not, and has not been for 10 years, a "Chinese" government. It is the government of Formosa, a small island 100 miles off the Chinese coast, which Chiang heads. And he is never going to head anything else. The one and only Chinese government is that at Peking, and neither Chiang nor Mr. Robertson has-if we may coin an expression-a California Republican's chance of overthrowing it.
This is the first thing Canadians must understand in their formulation of an independent, a genuinely Canadian, Far East policy. This is the first point at which Ottawa, as it looks to Asia,
[Mr. Herridge.l
must break with Washington. Chiang is nobody, his rump regime on Formosa means nothing. Canada should immediately disown him.
It will be particularly interesting to note what influence the visit of Mr. Walter Robertson has on the government of Canada in the days to come in connection with its policies with respect to the recognition of this government.
Now, then, the second influence, and a major influence, on Canadian affairs with which this group is seriously concerned is the United States government's influence on our defence policy and all the ramifications which flow from that influence. We have had some lengthy debates on this question in recent days, and I am not going to rehash those debates. We do think in this group that that influence has been increasing at a rapid rate since the signing of the NORAD agreement, this unilateral agreement with respect to the defence of the North American continent. The purpose of the agreement, the defence of the continent, is something with which we are heartily in agreement. However, as we said on the occasion of the debate on the agreement, we in this group object to this unilateral approach to defence which places Canada at an increasing disadvantage with respect to the defence policy of the United States and the United States at an increasing advantage.
On that occasion we urged that defence policy should be based, first, on the United Nations, and urged the strengthening of the international police force and the conception that goes behind that international police force. Secondly, we claimed that the defence of the North American continent should be part of the duties of NATO and that NORAD should be an integral part of NATO. In that connection, I want once again to congratulate the leader of the official opposition. I think in recent days, although I have heard him mention it before, he has been coming more and more to the C.C.F. point of view, because during the debate on the NORAD agreement there was not a word from the Liberal benches-


Paul Joseph James Martin: Oh, yes.


Lester Bowles Pearson: Perhaps the hon. gentleman has forgotten, but I have, from the very beginning, advocated that NORAD should be part of the NATO command.


Herbert Wilfred Herridge: I sincerely apologize.


Lester Bowles Pearson: Perhaps the hon. member forgets the amendment which he introduced was ruled out of order before anybody had a chance to speak on it.


Herbert Wilfred Herridge: I apologize if I was incorrect in that statement. I certainly accept the word of the Leader of the Opposition in this

respect. Perhaps I should say that there has been an increasing emphasis then, and that is possibly why I have noticed it in recent days, on this aspect of their policy which we are pleased to see.
I come now in my few brief remarks to the question of agricultural policies and industrial policies. Agricultural policies of the United States, particularly their disposal programs, have had a very serious effect upon the wellbeing of the farmers of this country, particularly the farmers of western Canada. Possibly if these policies had not been given effect the large delegation that visited Ottawa last week would not have had the same reason to visit Ottawa and would not be suffering the same distress. In any event, I am not going into that because the matter has been dealt with much more effectively than I could do so by the hon. member for Assiniboia (Mr. Argue). Perhaps I am a little premature in that statement. He has a thorough knowledge of the circumstances of the grain producers.
I want to add a few words with respect to the impact on Canadian industry of United States policies, particularly with respect to the control of United States subsidiaries in Canada. This subject has been mentioned in this house on a number of occasions. There was the cancellation of the order for trucks that was given by some representative or agency of the government of Peking; the cancellation of the order for aluminum under the direction of the parent company in the United States; the cancellation of the order for certain rubber products from the Goodyear tire people on instructions of the parent company in the United States. We in this group, Mr. Speaker, think it is an intolerable situation that a company operating in Canada should be subject to control of the laws of the government of the United States. If companies come to this country to operate and to reap their profits we in this group say those companies should be willing to abide by Canadian law and operate first to the advantage of the Canadian people.
In following my argument, I should like to quote briefly from the Gordon commission report. I should say that the Gordon commission discovered the reason for Canadian anxiety about foreign investment, and I quote from page 390 of the final report of the royal commission on Canada's economic prospects as follows:
At the root of Canadian concern about foreign investment is undoubtedly a basic, traditional sense of insecurity vis-4-vis our friendly, albeit our much larger and more powerful neighbour, the United States. There is concern that as the position of American capital in the dynamic resource and manufacturing sectors becomes ever more dominant, our economy will inevitably become more
Canadian-United. States Relations and more integrated with that of the United States. Behind this is the fear that continuing integration might lead to economic domination by the United States and eventually to the loss of our political independence.
That is what a great number of Canadians fear at this time,
This fear of domination by the United States affects to some extent the political climate of life in Canada today. Therefore it is a factor which has some bearing upon "the probable economic development of Canada and the problems to which such development appears likely to give rise".
The Gordon commission report notes that many Canadians are worried over the fact that such a large degree of economic decision making is in the hands of non-residents, particularly United States citizens. In that connection the report has this to say at page 389:
This concern has arisen because of the concentration of foreign ownership in certain industries, because of the fact that most of it is centred in one country, the United States, and because most of it is in the form of equities which, in the ordinary course of events, are never likely to be repatriated.
The next aspect of this problem which is also of great importance is the fact that a very large part of United States equity investment in Canada is in the form of "wholly-owned" subsidiaries and branches of United States parent corporations. This means that although such companies virtually control important sections of the Canadian economy, it is absolutely impossible for Canadians to purchase ownership in them. This situation has been the cause of protest across this country. If a Canadian wishes to buy into Canadian General Motors, for example, he must buy shares in the United States parent corporation. This means that his Canadian investment is in the entire operation of General Motors conducted in the United States and elsewhere as well as in Canada. Thus there is no Canadian investment as such. It is even possible for a Canadian to invest in one of these parent companies and lose on his investment, despite the fact that the Canadian subsidiary may be showing a substantial profit.
I might say that I have had residents in my own constituency write to me in that connection, people who were interested in the lumber industry and in the pulp and paper industry and who wanted to purchase shares in a subsidiary of the Celanese Corporation of America which operates a large forest management operation under licence, partly in my constituency. They were not allowed to do so. They were obliged to buy shares in the parent company. Other residents in my district own shares in a certain relatively small British Columbia lumber company, I think it is Canadian Western. This company has been absorbed by a United

Canadian-United. States Relations States company. Therefore their shares are included in the shares of the parent company in the United States. The very thing which they thought they were doing, namely investing in a Canadian industry, or the very thing they invested their money for has now changed its complexion.
There may be a conflict of interests, that is to say, the best interests of Canada may not at all be the same as the best interests of shareholders of a foreign parent company controlling the policies of subsidiaries in Canada. To illustrate how a clash of interests may take place, I want to quote again from the Gordon commission report which cites the oil industry as an example:
-in the oil industry the same large international companies, or their affiliates and subsidiaries, which broadly speaking dominate the producing, refining and marketing sections of the Canadian industry, are the principal suppliers of crude oil to the large market centred in Montreal, and are important suppliers in most areas of the United States. The immediate and continuing interest of the Canadian subsidiaries of these companies, and indeed of Canada, is to find increasing markets for Canadian oil in the United States, or. failing that, perhaps in the Montreal area. Without growing markets a large part of the oil being discovered in western Canada would have to be "shut in" perhaps for some considerable period. The importance and the immediacy of this problem of markets for the oil industry in Canada is clear enough to Canadians. Quite understandably, it may appear somewhat less important and less immediate to those in other countries who control the situation and who have world-wide interests to consider.
I think that is another good illustration of the effect which the policy of parent companies in the United States has on the development of Canadian national resources.
In concluding my brief remarks on this question, I want to suggest that some recommendations made by the Gordon commission could be very well incorporated in legislation and be introduced by this government. The commission recommends that subsidiaries of foreign-owned corporations should be compelled to:
1.	Sell an appreciable interest-approximately 25 per cent-in their equity stock to Canadians. In order to ensure that the 25 per cent would not revert to United States ownership, such shares would have to be made transferable only to Canadians or residents of Canada. Another method would be to provide that such shares would lose their voting rights on transfer to non-Canadians.
2.	Include on the board of directors a number of independent Canadians.
3.	Employ wherever possible a certain number of Canadians in senior management and technical positions.
4.	Publish their financial statements, and make full disclosure of their Canadian operations.
Furthermore, we believe that legislation should be enacted to prevent the passing of control or ownership of Canadian banks and insurance companies into foreign hands by providing that shares in such institutions which in the future are acquired by nonresidents of Canada be ineligible to vote.


Mr. Browne (St. John's West):: Is the hon. gentleman not aware of the fact that last year we passed some legislation to prevent the transfer of insurance companies to the United States?


Herbert Wilfred Herridge: Yes; I am fully aware of that fact but it does not cover the complete picture as would the recommendations.
We in this group would like to see the government of Canada introduce legislation to implement the remedies suggested in the Gordon commission report. While those recommendations would not meet the situation completely, from our point of view it would at least indicate that this government was taking a step in the direction that it has advocated, and which some of its members have advocated vociferously in this house when in opposition.
I was very much interested in the suggestion made by the leader of the official opposition, namely that consideration might be given, if I understood him correctly, to a trade treaty between the United States and Canada. We in this group think that suggestion merits close consideration. It would provide an opportunity for representatives of this government to go into every aspect of business that arises in the circumstances that we have mentioned and others and would codify in a sense and be a means of reaching an agreement that I think would be the commencement of laying the foundation of much sounder trading relationships in the future.
Once again, Mr. Speaker, I must say that we in this group were pleased to see the leader of the official opposition introduce this subject by his amendment into the house today. It is an important question. It concerns a large number of Canadians. As the result of the introduction of this amendment and any other amendments or subamendments that may be introduced I trust that the government will be influenced to start walking in the direction in which it has urged others to walk in the years passed, namely in the direction of Canada's interests with respect to external affairs, foreign policy, defence policy, agricultural policy and industrial policy.


Mr. A. R. Smith (Calgary South):: Mr. Speaker, I do not intend to congratulate the Leader of the Opposition (Mr. Pearson) for the introduction of the amendment, but nevertheless I do welcome the opportunity

to express a few opinions in relation to two aspects of the subject with which the resolution deals. As the Leader of the Opposition mentioned in his initial remarks, this is one of those opportunities when the opposition has the right to criticize the government and government policy; but after listening to him, I rather had the feeling that he really was not very annoyed with us. The very nature of the amendment itself, phrased in such broad generalities, reminded me so much of that old adage which is attributed to people who have been in political office for some time, "We must never build our political fences so high that they cannot adequately be straddled at all times."
I felt this was the nature of the comments which the Leader of the Opposition made, for while in these loose generalities he suggested that we should make some improvements, or some more effective general arrangements-he made a reference to the possibility of establishing a treaty-I think it can be adequately pointed out that the long range program aimed at improving the understanding between our two countries has to a very substantial measure alleviated a situation which certainly could have been considerably worse had some action not been taken. I propose to itemize these aspects in my brief remarks this afternoon.
Every member of this house is naturally concerned with the problem of our relationships with other countries, in particular with the United States. I rather feel, Mr. Speaker, that I have some particular interest in that matter, because in the consular area of my own constituency there are some 46,000 Americans. I think we have set an example to the rest of Canada, and certainly to the rest of the world, of how good neighbours can exist side by side in the working out of many domestic problems and, yes, of many national problems.
Let us look at the history of our problems very briefly. The long standing complaint, of course, by Canadians has been that we for the most part have been ignored by the United States. I suggest that the action of the United States congress in the past year, associated with the economic life of that country, has to a very substantial degree alleviated and reduced, in fact almost eliminated the argument that we have been ignored. There are four very obvious examples of that. First of all, the visit of the President of the United States to this house of parliament. Second, there was the extension of the reciprocal trade act. Third, there was the production of the Hays-Coffin report which has already been referred to; and fourth, there was the acceptance by
Canadian-United States Relations United States congress of the need of a joint legislative committee between our two countries.
I was not in a position to thoroughly understand whether the Leader of the Opposition approved or disapproved of the establishment of this committee. I think in effect what he did question was its effectiveness. I suggest to you, sir, that the first advantage to be gained from this committee and its appointment has already been accomplished. At long last we have some body which can deal effectively to define the area where our disagreement actually lies. So often we hear individuals on both sides of the border complaining about certain frictions which they insist exist.
Then when you examine them you find that many are actually imaginary. So I believe that the Canada-United States committee has, by its very appointment and through the work it has in front of it, the opportunity to define the area of disagreement, and once that has been accomplished it can bring back its report to the two legislative bodies they respectively represent. There we can see some attempt to reconcile the differences wherever they may exist.
I propose to deal with two of those difficulties. The first, which has been introduced many times into the house since March 10, is the question of the United States imposition of mandatory controls on the importation of Canadian oil. The history of this particular problem is one which has its basis of fact in that area of the United States which in past years had become oil deficient or short of oil is now in a surplus position. Then in June of 1957 we saw the introduction, first, of the voluntary controls which were later amended and made somewhat more severe. Then secondly, and more recently, as a result of the justice department of the United States advising the United States government that mandatory controls were essential because the voluntary controls offended the United States anti trust act, we saw the imposition of controls providing restriction to a greater degree than we have ever experienced before.
I think the first point that should be made, is that these controls were directed against all foreign importers. They were designed primarily against the largest importers of oil into the United States, the Venezuelan and Middle East countries bloc. The President and the United States government have said that they were designed to have least effect on Canada, and I think to a degree it can be said that there is some truth to this in that certain exemptions were made in the marketing area in the United States into which the Saskatchewan crude flows. But no one will

Canadian-United. States Relations disagree with the argument offered by the Leader of the Opposition that this was indeed a slap in the face to Canada, certainly based on the argument that in the interests of continental defence the United States could not declare our country exempt from the restrictions imposed on the other countries. I suggest that the real basis of the United States action was not the question of continental defence or the maintaining of a healthy petroleum industry, but was rather that the United States government succumbed to the very large and effective oil lobby which exists in Washington.
The problem we have, however-and let us look at the future-is that while Canada, it is true, was unable under certain circumstances to take advantage of the full quotas, it is certainly a wrong impression for anyone to suggest that these quotas were not harmful. Actually the restriction had this effect on us: We found that the market area of the United States was reduced. The net result was that the effect of competition had a very serious effect in particular on the markets which we refer to as district No. 5, the Pacific northwest of the United States, because all other foreign importers began to concentrate on the availability of the quotas open to all countries. In such a circumstance the Canadian found that he could not compete with the low concessional oil which, in many instances, was produced anywhere from 14 cents to 25 cents a barrel, compared with oil in Canada which would average $1 to $1.10 per barrel. So during the past year we as a country, because of the voluntary, now mandatory, restriction, reduced our imports into the United States by better than 40 per cent. Fortunately the domestic demand, particularly in Ontario, maintained a reasonably healthy oil situation, but the industry has been able to produce only about 50 per cent of its capacity compared with the United States average of 75 per cent.
Let us look at the action that has taken place. As I mentioned, these quotas were imposed on all importers. On several occasions Canada made representations to the United States government pointing out that in the interests of continental defence and our general trading relationships we should be declared exempt, first of all because we are separated only by a pipeline and not a waterway. In addition to this the report prepared by Messrs. Hays and Coffin which pointed out there should be no difference between the oil produced in Texas and the oil produced in Alberta in the interests of defence. The many important groups and bodies within the United States in addition to those in Canada that have asked the United

States government to give consideration to the Canadian people in this respect have all been ignored. Today we find ourselves in a situation where if the door has not been completely closed to us it has most certainly to a large extent been shut.
We should remember that this restrictive action began as early as May or June of 1957 because of the building up of the surplus supply of oil in the United States that started immediately following the Suez crisis. After representations made to the United States government were turned down Canada was required to develop other markets within its own borders. As I mentioned, Ontario fortunately took up part of the demand. We now find ourselves on the horns of a dilemma. On the one hand we have been told that these quotas are essential in order to maintain a healthy industry in the United States and on the other hand our application for exemption was rejected. We cannot be declared exempt because we lack a continental agreement.
The Leader of the Opposition spoke today of the need to make more effective arrangements on the basis of some treaty. This is by no means a new idea. The greatest obstacle in this proposal would be endeavouring to spell out in an agreement arrangements in relation to an industry such as the oil and gas industry. Let us bear in mind that voluntary oil import quotas represent only one aspect of the problem of this industry and our relationship to the United States in this field. In many instances the United States federal power commission has failed to co-operate with Canadian interests. Licences have been granted to Canadian exporters in the past by the Canadian government; however, if I may use the term, we in Canada have had the short end of the stick in that the federal power commission has failed to act. With respect to this aspect of the problem it is understandable that the Canadian government has adopted a firm attitude prior to granting any export licence for gas and I suggest that now is the time for even firmer action to be taken with respect to oil.
We have seen the building up of reserves of oil in the United States which have prevented our marketing our products in that country. We have seen little likelihood as a result of the presidential statement of any hope for a change in this policy although the press release made a loose reference to future defence arrangements to be worked out between Venezuela, Canada and the United States. If the Canadian government is not in a position to negotiate a general agreement on a top level basis with the two

countries to which I referred surely this government must adopt a policy that will tend to sell more oil to Canadians.
I believe, in other words, we have reached the time when a quota system in Canada should be seriously considered. This is not a means of retaliation; rather, it is merely a matter of adjusting our own economy to make absolutely certain that we provide the required markets for Canadian producers. This is not a criticism of any policy that has been introduced up to this point. There was every reason to follow the policy of retaining the most economic markets in the United States, especially that of district No. 5 in the Pacific northwest. It is wrong for us to endeavour to obtain markets that are many miles distant only if we are unable to work out some arrangement with the United States.
I suggest, therefore, that now is the time to introduce legislation of our own in this field as a protection to Canadians, although this government through no fault of its own, has nevertheless been unsuccessful in persuading the government of the United States to change its policy. It will not be easy to work out arrangements under which the United States market may be retained. We have frequently been told by the United States that if we could satisfy Venezuela in terms of persuading that country that our being exempted from United States restrictions would not affect them we would better be able to negotiate an agreement with the United States. The complications involved in working out any agreement render it a near impossibility. I therefore believe it is time that we developed our own markets and examined how we might introduce policies to adequately deal with the situation.
I wish to speak for a moment about investment capital. The Leader of the Opposition suggested that we should not become completely reliant upon this for the development of our country. This is an obvious statement we all accept. May I urge, however, that in our desire to judge fairly whether or not this capital has been dangerous in terms of its volume putting us in the position of being subject to United States dominance and in generally assessing its effect on the economy, let us not discourage United States capital from coming into Canada. Let us examine the history of what it has produced for us. The oil industry which requires over $1 million a day to operate could never have developed to its present stage without the assistance of United States capital. We do not generate enough capital in Canada to take care of the demands of this industry alone.
Canadian-United States Relations We could also consider the development of our mining industry and the pulp and paper industry. To a substantial degree these have been assisted by United States investment.
I suggest that we have all the legislation and lawmakers we require to ensure that the rights of Canadians are protected which is of course essential but if we do anything to discourage the flow of United States capital into Canada we will regret it for many years to come, for it will affect the orderly progress and development of our country. We should not forget that we have also attracted European capital to Canada.
I fail to understand those people who on the one hand criticize the advantages to be gained by having United States investment capital in Canada and on the other indicate concern about the lack of progress and development of Canadian industries. I believe it is fair to say that during the past year the oil and gas industry led the boom in this country in its period of prosperity and progress. If we do anything to discourage investment capital it will retard our expansion and reduce the level of prosperity we are enjoying today.
We should bear in mind that this capital is employed in a variety of industries producing new wealth and higher standards of living for Canadians and therefore we cannot be concerned with the nationality of the dollar that serves us so well. Instead we should lay ground rules so the dollar can be employed in Canada's development, and in Canada's interest.
The majority of United States companies in the petroleum industry already recognize the above fact. Many insist on employing Canadian management and staff in their subsidiaries. Many are taking an active part in the community life of Canadian cities and many invite Canadian participation in their new underwritings. Through their affiliates and subsidiaries in the development of the by-products of the industry these companies have generated vast wealth for the benefit of Canadians.
Finally, may I say, Mr. Speaker, to the Leader of the Opposition that when we enter into a debate which on the one hand suggests that the rights and the sovereignty of our country are at stake and in jeopardy we must also assume the responsibility of recognizing that to a very large degree we have obtained the level of development which we have today because of the co-operative attitude we have worked out with the United States. On the other hand, it is not inconsistent to say to the United States, as the Prime Minister (Mr. Diefenbaker) has said on a number of
1982	HOUSE OF
Canadian-United States Relations occasions, that we as Canadians will insist on our rights. We recognize that there are disagreements between us. These, however, are not insurmountable. They may be worked out on a basis of common understanding.
I take pride in the fact that in Canada we have developed a growing nationalism, a nationalism which has for the first time in many years made Canadians realize that we have a common bond-that we are not poor relations in the family of world nations. I think it is a very sound thing that we have developed an appreciation of what we own, and the assets that we have, within our borders. I think however that it would be a sad day if in the building up of any animosities-because to a large degree many are purely imaginary-we were to do anything which would destroy a relationship between our two countries which has been second to none. I suggest that if we did that we would be doing a disservice to the people of Canada.
I suppose it will be said of me, as one who is concerned more than any other in this house with the problems of this one industry, that this is being inconsistent. This is not the case at all, Mr. Speaker. I have stated very clearly that because of the position in which the petroleum industry is now in, a mineral industry which is the No. 1 industry in Canada and so important to the welfare of the entire dominion, it is necessary for us to take our own action in the interest of Canadians. If we do that the United States administration will be the first to appreciate not only our right but the need for such action. Therefore, in speaking to this admendment I suggest that it is very difficult on the one hand to talk about the great concern which we have about the encroachment on our sovereignty and on the other to accept the benefits that we have obtained by the building up of a great nation in this country which to a large degree has resulted from the cooperative attitude which has been taken in that one country of all the countries of the world.


Mr. Hubert Badanai (Fort William):: Mr. Speaker, the subject of the discussion is perhaps one which affects the lives of more people than any other topic, which cannot be treated lightly and upon which there should be a broad area of agreement in all parties.
One of the greatest factors in international relations is the problem of mutual understanding between the citizens of neighbouring nations such as Canada and the United States. Happily, there exists a community of interest between those two nations which is rather unique in the world today, a community of interest which provides the greatest


opportunity for the exemplification of international understanding and good will. For that understanding to deteriorate would be a sad blow to both countries as well as a sad blow to the other free nations of the world.
One of the world's greatest needs today is understanding and good will in the international field. These two nations, Canada and the United States, are very fortunate to have the opportunity to demonstrate to the world how to get along together even in the face of some conflict of interest. Understanding, friendship and good will must remain as solid as the rock of Gibraltar between those two nations, but unless we work steadily and constructively for this development the rock will give way and misunderstanding will set in. However, in our dealings with our powerful neighbour, while always friendly, we must also be firm whenever our interests are in serious jeopardy, caused by some contemplated action of the United States.
Apart from the delicate relationship of mutual defence and recurring irritations about mutual trade, there is one other very serious problem which concerns my own constituency in a very particular way and it concerns every municipality along the St. Lawrence seaway. I am speaking of the diversion of water from lake Michigan by the city of Chicago which in effect will threaten the water levels of the great lakes, thus affecting navigation along the St. Lawrence seaway and most certainly the new projected seaway terminal at the lakehead. What worries the people of the lakehead and elsewhere is the feeble protest of our government, if it can be called a protest, against this new attempt of water stealing by the city of Chicago.
The supreme court of the United States issued a decree which provided that after December 31, 1958 the diversion of water from lake Michigan through the Chicago canal should be limited to 1,500 cubic feet of water per second. However, the city of Chicago is now trying to increase the diversion permitted by an additional 1,000 cubic feet of water per second. In spite of the fact that a bill to permit this addition was blocked in the United States, senate in 1958, the demand by the city of Chicago is on again and with added vigour.


Paul Joseph James Martin: The bill was passed.


Hubert Badanai: No, the bill is not passed. Only a few days ago the mayor of Chicago made a statement to the effect that the diversion of water from lake Michigan was none of Canada's business. I submit that

this is very much our business and the mayor of Chicago should know better than to make such a statement, unbecoming to the office which he holds; but perhaps it may be that he is preparing himself for an election. As a matter of fact, I understand there is an election going on now in the city of Chicago.
It is generally admitted that the lowering of the levels of lake Huron and lake Erie would handicap the seaway project, which is Canada's business and Fort William and Port Arthur-in fact all of northwestern Ontario

would be directly affected and indirectly even the interests of the prairie provinces would feel the impact by injury to the shipping route.
Today I received a letter from the city clerk of the corporation of the city of Fort William which illustrates the deep concern of our city in this matter of diversion and I now wish to read it to the house:
I am directed to advise you that at a meeting of the council of the corporation of the city of Fort William held on the 10th instant, the following resolution of its finance committee was unanimously adopted, a copy of which I was instructed to forward you for your consideration:
"That whereas the metropolitan sanitary district of greater Chicago in the United States of America is contemplating the further diversion of water from lake Michigan for its sewage disposal systems;
And whereas this diversion of water is detrimental to the harbour development of the city of Fort William;
Be it therefore resolved that representations be made to the federal government to protest the action of the Chicago authority and to halt the unwarranted diversion of water by the metropolitan sanitary district of greater Chicago;
And that a copy of this resolution be forwarded to the Prime Minister of Canada, the Ontario water resources commission of Ontario, and to Mr. H. Badanai, M.P., and to Mr. Clare E. Mapledoram, M.L.A., for Fort William."
The suggestion has also been made that the city of Chicago is interested in the diversion for the purpose of developing hydro power in that area. If that is true, Mr. Speaker, this matter is even more serious than it appeared to be at first. According to the records, when the Prime Minister and his supporters were in opposition they were loud in condemning the Liberal government for not speaking loudly enough to the United States in the protection of Canada's interests. But the question now is, is the government doing anything about them?
What has been the attitude of the government since it came into power with respect to the present water diversion? Some of the answers can be found in Hansard. On August 2, 1958, the Secretary of State for External Affairs (Mr. Smith) gave the following answer to a question put to him by the hon. member
Canadian-United States Relations for Lambton West (Mr. Murphy). I quote from page 3009 of Hansard:
Mr. Speaker, I wish to take this opportunity to answer the question which was addressed to me on Wednesday, July 30, by the hon. member for Lambton West dealing with water diversion at Chicago. My answer to his question, which was directed to three main points, is as follows:
1.	The position taken by Canada with respect to a proposed additional diversion of 1,000 cubic feet per second from lake Michigan at Chicago is set forth in an aide memoire dated January 6, 1958. As the document is somewhat long, I ask leave to have it printed as an annex to Hansard.
2.	To the extent that any additional diversion of water may take place at Chicago, the level of the lower lakes and connecting channels will be reduced as far as Montreal, and there will be a corresponding reduction in the availability of water for hydroelectric generation at Niagara, Barnhart and Beauharnois. The effect, however, varies at different places and at different times over a period of years. I should be pleased to arrange for the hon. member to consult tables and graphs in order to determine precisely what effect a particular diversion would have at a specific time in a specific place.
3.	Principles applicable to a diversion from lake Michigan would not necessarily apply to boundary waters, as lake Michigan is not a boundary water.
I think I should perhaps read the aide memoire because it is very important to understand exactly what we are talking about. The aide memoire alluded to by the Secretary of State for External Affairs is headed, "Chicago Diversion-Aide Memoire from Canada to United States", and reads as follows:
Useful conversations between United States and Canadian officials were held in Ottawa on July 7, 1957 on the subject of the sanitation problems which gave rise to proposed legislation for a three-year temporary diversion of 1,000 cubic feet of water per second from the great lakes system and on the subject of studies to be carried out under the proposed legislation.
The Canadian government understands that if such legislation is enacted these sanitation studies will not be limited to evaluating the effects of dilution but will also include consideration of all possible measures for dealing with waste disposal facilities at Chicago. Such measures would include:
(a)	complete separation of storm sewers from the domestic sewerage system or expansion of the existing treatment facilities to serve a total combined flow;
(b)	treatment of organic wastes in industrial plants before discharging these effluents into the sewerage system;
(c)	chlorination of effluent before discharge into the Illinois waterway; and
(d)	artificial aeration of the waterway.
The treatment of sewage in the Chicago area is, of course, a matter entirely within the jurisdiction of the competent legislative bodies within the United States. It is understood that present treatment of waste represents a vast improvement over conditions which existed in former years and that under the present day uses of the water the waste is more a nuisance than a menace to the public health in the area.
In considering the economics of alternative methods of improved waste disposal, it is assumed that full consideration will be given to the economic harm which may be done to navigation and

Canadian-United States Relations hydroelectric generation in both countries by extended use of dilution methods.
It is not possible to give a firm undertaking to provide flows of a particular volume through the existing Longlac and Ogoki diversions to the great lakes basin during the three-year period envisaged by proposed United States legislation. However, if it were possible to offset part of the effects of the Chicago diversion by inflows from the Albany basin in Canada, it would be equitable that an equivalent amount of water should remain available for use in hydroelectric power generation by the Ontario interests at St. Marys falls, Niagara falls and in the international section of the St. Lawrence river until the effects of the proposed temporary diversion will have ceased to be felt in the great lakes system.
All rights under the provisions of the boundary waters treaty of 1909 are specifically reserved.
That is the aide memoire from the Canadian embassy in Washington, dated January 6, 1958. As found on page 620 of Hansard for February 3, 1959, the hon. member for Laurier (Mr. Chevrier) asked this question:
Mr. Speaker, may I direct a question to the Secretary of State for External Affairs. I should like to know whether the government has sent a note of protest to the United States government in connections with Bill HR-1 now before congress for the further diversion of water out of the great lakes into the Chicago drainage canal.
The Secretary of State for External Affairs replied:
Mr. Speaker, as I informed the house a few days ago this matter relating to the purport of Bill HR-1 is under consideration. We are considering various representations that have been made by officials and by other organizations. We have not made a protest.
As late as February 12 the Leader of the Opposition (Mr. Pearson) asked the following question, as found at page 946 of Hansard:
Has the minister yet sent a protest on behalf of this government to the United States government? If not, does he realize that he has only a week left before the hearings begin in the senate on this matter?
The Secretary of State for External Affairs replied:
As I informed the house on two recent occasions, this matter is under close study by our officials and, as I indicated a moment ago, we are ready and anxious to get information with respect to the discussions. We do realize that the hearings will begin in the near future, but that does not indicate that the bill then will be adopted.
Now, Mr. Speaker, after studying the answers to the questions asked on the subject, one cannot help but come to the conclusion that the indication of softness in the Canadian aide memoire must have created the impression in Washington that all was well and that Chicago could go ahead with its plans for diversion.
At a convention of the lake carriers' association of the United States and the dominion marine association, held in Ottawa last January, a resolution was passed unanimously

opposing the diversion of water from the great lakes watershed. I wish to read that resolution:
Whereas, the several states and provinces bordering on the great lakes hold title to those waters under a high public trust to protect and preserve them for the benefit of all their citizens; and
Whereas, by the Boundary Waters Treaty of 1909, the United States and Canada have dedicated the waters of the great lakes to the primary purpose of commerce and navigation to be enjoyed by their citizens, subject only to certain uses by riparian states and provinces not inconsistent with such primary purpose; and
Whereas, by the law common to the United States and Canada any diversion of such waters by any riparian or other user constitutes a wrong against all other riparian owners; and
Whereas, any diversion of water from lake Michigan lowers the natural level of that lake and lakes Huron, Erie, Ontario, their connecting and tributary waters and the St. Lawrence river; directly impairs the natural depth of rivers and harbours, nullifies improvements therein, reduces the carrying capacity of Canadian and the United States great lakes fleets and increases transportation costs, all to the detriment and injury of the people; and
Whereas, the waterborne commerce of the great lakes is indispensable to the growth and wellbeing of the United States and Canada; and
Whereas, any diversion in one country gives rise to dispute between the people of that country and the people of the other country, which should in the interests of their friendly relations be referred for investigation and recommendation as to solution to some tribunal in which the people of the two countries have equal voice:
Now, therefore, be it resolved that the dominion marine association and lake carriers' association, in joint meeting assembled at Ottawa, Ontario, Canada, this 26th day of January 1959, do hereby express their unalterable opposition to any diversion of water from the great lakes watershed and urge that the Congress of the United States refrain from passing legislation authorizing any diversion of water from the great lakes, which diversion would violate solemn treaty rights and obligations between the two nations and would pillage the natural resources of the great lakes watershed vested by law and by decision of the Supreme Court of the United States in the people of the great lakes basin; and
Be it further resolved that the two associations hereby urge that the United States and Canada refer to the international joint commission all questions concerning the diversion of water from the great lakes for full investigation and recommendation as to solution to the end that all controversies may be laid at rest and the rights of the people of the great lakes watershed be preserved; and
Be it further resolved that a copy of this resolution be furnished to the chief executive of the respective national governments of the two countries and to each governor or prime minister, as the case may be, of states and provinces bordering on the great lakes and St. Lawrence river.
Those people who are saying that there is no cause for alarm should ponder over the meaning of some editorials which appeared in the Chicago Tribune, one in February, 1957 and the other in February, 1959. As an

illustration of the seriousness of this matter, I should like to quote from the editorial of February, 1957, which says:
Twice President Eisenhower has vetoed bills permitting a slight increase in lake diversion at Chicago. In the second veto message last August 9 he said he believed no increase should be granted without negotiation with Canada, and he announced that he had asked the state department to undertake discussions with that country.
We said at the time that such parleys were unnecessary, since neither congress nor the supreme court has recognized that Canada has any legal right to interfere with diversion from lake Michigan. Now it appears that the state department has not bothered itself to carry out the president's directive.
Members of the Canadian parliament who recently sought to get their government's views on the matter were told that no consultation had been requested by the United States. The questioners were referred to the terms of the 1909 boundary waters treaty which says that each government reserves to itself-


Mr. Speaker:: I think the hon. member is reading a comment upon what has taken place in the house, which strictly is not in accordance with the practice. As I understand what he is reading, it refers to what has already been done earlier this session.


Hubert Badanai: I am speaking on the contemplated water diversion from the great lakes at Chicago. This has a direct bearing on the relations between Canada and the United States, and that is why I am taking the liberty of reading this portion of the editorial.
The Canadian government might have added, for further clarification, that the treaty was made when the diversion rate was assumed to be 10,000 cubic feet a second, and the agreement specifically provided that its terms did not apply to "cases already existing", which included the diversion rate at Chicago.
Now the rate is fixed by a supreme court decision at only 1,500 cubic feet a second. The bills vetoed by the president would have increased the rate to 2,500 cubic feet for a three-year experimental period during which army engineers would study the effects.
We have no objections to the failure of the state department to negotiate with Canada. Perhaps the department has at last discovered that the question is one for congress to decide and that Canada's opinion is irrelevant. If so, President Eisenhower ought to be advised by the department. The bill for increased diversion then can be passed promptly by congress and there will be no excuse for another veto.
Then, I should like to quote a few paragraphs from this other editorial which appeared in the same newspaper in February, 1959.
If Chicago is "stealing" water, it is doing so by order of the United States supreme court and by an act of congress authorizing the diverted water to be used for navigation in the Illinois waterway. The matter of how much water is needed for navigation in the waterway has never been decided, but the supreme court has ruled that congress has the power to fix that amount.
Canadian-United States Relations
The army engineers say that permanent regulation of the lake levels to prevent the cyclical changes would present no great engineering difficulties. Illinois would be glad to take part in such a program and to pay its share of the cost. The other lake states would do the same, abandoning their false propaganda and mischievous litigation, if they really wished to stabilize lake levels.
That is the end of the quotation from that editorial. The Minister of Northern Affairs and National Resources (Mr. Hamilton) speaking to the Canadian club at Montreal on December 9, 1957, had this to say about our water resources and I shall quote just a few paragraphs:
The importance of water conservation is growing along with the nation. It must consist of more than a response to immediate emergencies such as floods or water shortages as it has too often been in the past. The conservation of water, as indeed of any natural resource, looks to both the present and the future; it is this characteristic which gives it special significance. In seeing to it that our resources are used wisely and well we recognize that, however important they may be to us today, they have a still greater role to play. Meeting the problems of conserving our water resources is both a challenge and an opportunity measured by the contribution which these resources can make to Canada's future development.
The minister is to be congratulated for pointing out the challenge for the conservation not only of our water resources but also of our rights whenever and wherever they may contested. I respectfully submit that the Secretary of State for External Affairs, for whom I have great respect, or the Prime Minister should give the house a clear statement without any equivocation as to what action the government contemplates taking to safeguard our interest in the great lakes.


Mr. H. F. Jones (Saskaioon):: Mr. Speaker, the remarks of the hon. member for Fort William (Mr. Badanai) with regard to the Chicago diversion have already been dealt with in advance by the Secretary of State for External Affairs (Mr. Smith) and I think there is no need to refer to that question at this time. I should like to refer, however, to the remarks of the Leader of the Opposition (Mr. Pearson) which were confused as to the present, bemused as to the future and apparently forgetful of the past. The amendment he moved was in these terms:
This house is of the opinion that recent decisions of the United States government, particularly in the field of production and commercial policy, underline the necessity for the government to make more effective arrangements with the United States to prevent the undesirable impact of those decisions on Canada, and the necessity of a more active participation by the government in working out the implications of interdependence and closer unity within the North Atlantic community.
We must wonder at once just what he has in mind when he mentions the North Atlantic

Canadian-United States Relations community. Is he referring to the nations of the NATO alliance or has he in mind some wider group of nations? Is he referring to that great trading area upon which the nations of the North Atlantic depend for trade but which by no means is restricted solely the nations of the North Atlantic? The trading area of the nations of the North Atlantic goes far beyond that ocean. That area depends for its trade on the Far East and the Middle East as well as other parts of the world. This amendment, I submit, is confused in that particular.
I should like to deal for a moment with the proposal he made as to the future relations between this country and the United States. This proposal is similar to the one he made in the House of Commons on February 26, when, as reported at page 1410 of Hansard, he said:
I have been wondering whether the time has not now come for a top level formal conference between the leaders in Canada and the United States to see if some formal agreement could not be reached and embodied in a formal convention, perhaps for ratification by legislatures-because this would be one way of bringing these matters to the attention of congress as well as parliament-embodying principles that should govern our relations.
On that occasion, when I rose to speak, as reported at page 1435 of Hansard, I said:
The Leader of the Opposition mentioned at some length a suggestion with regard to the formulation of a new group-a formal conference, I believe he called it-to deal with problems relating to the United States.
The Leader of the Opposition rose at that time and said this:
On a point of order, I wish the hon. member would explain what he means, because I made no such suggestions, nothing remotely approaching it.
By reference to Hansard we can see now that is exactly what he was proposing then and that is exactly what he is proposing now.
One of the difficulties raised in connection with this question-which the Leader of the Opposition has raised at this time and which I dealt with on February 26-is the very nature of the difference between our two governments. May I refer for a moment to the terms of the exchange of notes that was made between Canada and the United States on October 26, 1950, a document to which he has referred, which clearly illustrates the limitations of this sort of agreement. The note reads:
In the Interests of mutual security and to assist both governments to discharge their obligations under the United Nations charter and the North Atlantic Treaty, it is believed that this field of common action should be further extended. It is agreed, therefore, that our two governments shall co-operate in all respects practicable, and to the extent of their respective executive powers-

I emphasize that particular point, because of course the executive powers of the government of the United States are different from the powers of the government of Canada. The executive powers of the United States, under their system of government, are restricted. To make such an agreement binding in fact on our two countries the restriction would require, as I said on February 26, a self-denying ordinance on the part of the House of Representatives and the Senate of the United States, denying them the right to deal with these matters of international obligations with which it is at present their right to deal. I am sure they would not accept-and up to the present time they have shown no indication of any desire to accept-any fetters on their rights in this regard. That is why the agreements of the past between Canada and the United States, such as the one I have mentioned here, restrict the agreement to cooperation between the governments in all respects practicable to the extent of their respective executive powers. In my view there is no possibility that we could get the congress of the United States to agree to a set of principles in advance in order to deal with situations which could not be foreseen in advance, and which would restrict the activities and the rights of their legislative bodies.
I mentioned again, when dealing with this proposal previously, that there are already in existence many channels of communication between the United States and Canada, both formal and informal-and they were mentioned today by the Leader of the Opposition -by which the problems of the respective countries can be brought to the attention of the other in order that they may be dealt with in accordance with the legislative practices of the two countries. In regard to this particular problem it seems to me that the introduction of a further group in this connection would have a shackling effect on the relationship between the two countries. In view of the fact that we already have these many existing agencies for conveying international thoughts from Canada to the United States, the introduction of yet another would clog and confuse the present channels of communication. Each of the channels of communication would again have to refer to this document which the Leader of the Opposition (Mr. Pearson) wants to have formulated in order to make sure that their particular proposals fall in line with these principles.
It seems to me that the relations between this country and the United States, two great and expanding nations, cannot be fettered by this means in our future relationship. Surely it is wiser to ensure, as this government has done and as the Leader of the Opposition has acknowledged it has done since it came to

office, that the United States is made aware ol the determination of Canada to protect its sovereignty, its economic interests, and to assure in co-operation with the United States the survival of our two countries, as well as the countries of the NATO nations.
The Leader of the Opposition in making his submission dealt at very great length with this proposal of a new treaty between Canada and the United States. He based his remarks- indeed, the phraseology of the resolution supports this-upon the necessity of working out the implications of interdependence and closer unity within the North Atlantic community; at any rate, within a larger field than that of continental interdependence. He stressed that several times in the course of his remarks. I would suggest that the proposal that the Leader of the Opposition made in this regard would work exactly contrary to the expressed intentions of his motion. Surely the implications of such an agreement, if that were possible, would be such as to divide the European nations of NATO from us, and make them suspicious that there was developing such a division between the European and North Atlantic sides. In this regard I would like to refer to his speech of February 26, on page 1411, of Hansard, where he dealt with this particular problem. He said:
If we on this continent do not give some degree of consideration to and take some action about this development which is taking place in Europe-and I have said this a good many times-we will perhaps one of these days be faced with the division of the Atlantic world between the North American and European segments.
He goes on to say, quite rightly:
No one will gain from any division like that except those who are attempting to destroy the whole Atlantic community.
The very proposal that he has made today would be one which would tend to destroy the unity which there is in the NATO nations, and would divide them. In this regard I would like to refer to the record of what has gone on in this field of interdependence.
I would like to refer to what have been the developments in the years since the war in this portion of the world, which the Leader of the Opposition refers to as the North Atlantic community. In March, 1947, the economic and social council of the United Nations organization established the economic commission for Europe, whose aim was stated as being to initiate and participate in measures for facilitating concerted action for the economic reconstruction of Europe, for raising the level of European economic activity, and for maintaining and strengthening the economic relations of the European countries. Of course, its initial start was not a start which could have a life of great duration
Canadian-United States Relations because Soviet membership was included in that particular organization. Therefore it was necessary in 1948 to form the organization for European economic co-operation excluding the Soviet states.
Originally the O.E.E.C. aimed at enabling its members to co-operate closely in their economic relations and to formulate and execute a joint European recovery program based on Marshall Aid from the United States. As all hon. members will recall, the accomplishments of this body exceeded the hopes of its founders. Mutual consultation on economic policies among its members increased, and it carried out a program of trade liberalization. It stimulated production in its member countries and developed the European payments union to facilitate payment for articles of European commerce. Side by side with the attempts at economic revival, efforts were made to establish a new pattern of political and military co-operation.
The Dunkirk treaty of 1947, which bound Britain and France to resist any revival of German aggression, made way for the Brussels treaty of economic, social and cultural collaboration and collective self-defence, out of which developed western European union and provided for mutual defensive action by Britain, France and the Benelux countries in the event of an armed attack in Europe. I am going into this history, in order that we in Canada may recall at this time, in view of the comments made by the Leader of the Opposition, the record of the part which Canada took in those events in the past.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
Henry Frank Jones: Mr. Speaker, before the six o'clock adjournment I had been dealing with the resolution which is proposed by the Leader of the Opposition and I referred to another proposal he made in his speech which was similar in character to that which he had proposed in this house on February 26 and to which I replied on the same date as reported at page 1435 of Hansard.
I also attempted in my earlier remarks to deal with the record that had been established in the field of interdependence arising out of the communist threat in the early postwar days. The purely national response to the threat of aggression in that period gave way after the treaty of Dunkirk of 1947 to the limited regional response of the western European union which in time was largely supplanted by the North Atlantic Treaty Organization with its much wider concept, an organization which in its original form had

Canadian-United, States Relations been thought of primarily as a military and political alliance embracing the fifteen member nations of NATO: Norway, Denmark, the Benelux countries, West Germany, Portugal, the United Kingdom, France, Italy, Germany and Iceland as well as Canada and the United States and extending as far east as Greece and Turkey.
Since the formation of NATO in April 1949 a number of other organizations have been created which to some extent perhaps have reduced the emphasis which might otherwise have been placed on development through NATO with respect to the ways and means to promote the non-military side of the alliance. There is, for example, the council of Europe which was launched in 1949-the talking shop of Europe as it has been called -an organization which has nevertheless been useful. Its purpose was to encourage social, economic and cultural co-operation among its members. It also had its intentions directed toward the formulation of European as opposed to purely national opinion.
There is the European coal and steel community of 1950, a remarkable and successful adventure in the creation of an organization which in itself has certain sovereign powers and rises in respect of those powers above the national states in whose territory it operates. More recently there has been the European economic community inaugurating a common market for its six member countries and finally the European atomic energy community, EURATOM, which aims to develop nuclear energy for peaceful uses with a view to raising the standards of living of its member states.
Much has been said in the past about the implementation of article 2 of the North Atlantic treaty. I wish to make reference to a statement that appears at page 48 of the report of the Princeton University conference on NATO of June 1957:
Many specific proposals for expanding NATO's role in the economic sphere have been put forward by both official and private persons. But the facts are that NATO was not designed as an instrument for economic collaboration, and it has not acted as such an institution. The various suggestions that it do so have virtually come to naught.
In view of the existence of other organizations for economic co-operation the communique of the heads of government meeting in Paris in December of 1957 put its stand in these words:
We will accordingly lend encouragement to a successful development of the European economic committee and of a European free trade area.
I may say that apart from the purely military aspects of economic co-operation the emphasis has been to give importance to those

initiatives in such a way as to-and again I refer to the text of the communique:
-strengthen not only the participating countries, but also the relations within the Atlantic community and the free world as a whole.
In fact, clause 34 of that communique outlined what may be expected in the thinking of that time when it described the most that NATO can and should do in these words:
-without duplicating the work of other agencies, it should review from time to time economic trends and assess economic progress and make suggestions for improvement either through existing organizations, by the efforts of individual countries or in special cases by new initiatives.
I would recall to hon. members that last November the secretary general, Mr. Spaak, in addressing the NATO parliamentarians conference said:
A more competent body than NATO is necessary to face the Russian challenge for world domination in the political and economic fields.
He went on to say that at present the western nations:
-lack a body which would consider all economic angles, as the Russians are able to do. As a matter of fact-
He said,
-I do not even think that NATO should be this body for the needs in this sphere exceed the limits of our Atlantic alliance.
Mr. Spaak also said in a more general way:
NATO is no longer the perfect answer to the problem of communist expansion which it was when it came into being. The communist menace has now become more African and Asian than European, more economic than social and military.
Although we may not agree with Mr. Spaak's general interpretation of the situation, particularly in view of the present situation in Berlin where in fact military pressure is being threatened, nevertheless something of what he said points up a problem for Canada. Outside NATO the majority of the existing international organizations I have mentioned either attempt to deal with economic matters on a universal or worldwide scale or on the other hand are basically European rather than Atlantic and hence exclude Canada in the nature of their organization. The inverted protectionism of the common market excludes this country.
The O.E.E.C. excludes this country. All these organizations or proposals for organizations of European rather than Atlantic nature may assist in the recovery of Europe and for this we must be thankful. Those organizations were created or were in the process of being created at a time when the Leader of the Opposition was in the government of this country and when Canada's bargaining power in economic matters was never higher but still we were excluded.

Those were the days when the European nations were struggling to recover from the ravages of war and when for their very survival they depended upon Marshall aid, which was supplied by the United States. Never was there a time in the history of this country when Canada was in a better position to insist on interdependence than in those days. But now the Leader of the Opposition comes along and complains that this government should have been more active in working out the implications of interdependence and closer unity within the north Atlantic communities.
Those days I have mentioned, Mr. Speaker, were the days when he was in power, and it was at that time that those matters should have received his attention. Those days were different from the present, when the situation in the European countries has improved as a result of Marshall aid to the point where they have been restored in large part to the position they occupied before the war. Therefore, they are reasserting their independence in those matters. How much better would it have been if during those years when the Leader of the Opposition was a member of government, and at a time when Canada's bargaining position was never better in this field because of the economic weaknesses in the European countries which was brought about by the war, he had pushed the view then that he condemns the government for not pushing at this time?
The implications of western European economic integration are an aspect of this matter which I think deserve the consideration of this house. The two treaties of Rome, establishing respectively the European economic community and the European atomic energy community, were signed on March 25, 1957 by France, Germany, Italy, Belgium, Luxembourg and The Netherlands. They came into effect on January 1, 1958 and on January 1, of this year. The six signatories of the European economic community treaty put into effect among themselves a 10 per cent cut in tariffs and started to dismantle their remaining quantitative import restrictions.
These are the first steps which they took toward full customs union which it is proposed to establish in the course of a 12 to 15 year transitional period. At the end of that time, the six countries will thus form a free-trading area surrounded by a common external tariff and will also have undertaken a large degree of co-ordination of their commercial, social and financial policies, including the establishment of a European investment bank. Certain overseas territories of the member countries are associated with the community and will receive the benefits of the trade 66968-9-126
Canadian-United States Relations liberalization put into effect by the six countries without being called upon fully to reciprocate.
The other countries of western Europe have been apprehensive, as we in Canada have been apprehensive, lest the economic integration upon which the six have embarked create a grave economic and political division. Led by the United Kingdom, the remaining 11 members of the organization for European economic co-operation have accordingly striven for almost two years to negotiate some form of multilateral association with the six which would create a free-trading area among all 17 countries but which would leave each participant free to maintain its individual external tariff, and would stop short of the degree of integration aimed at by the European economic community. The efforts to reach agreement on the United Kingdom free-trade area proposals broke down in November, 1958. The commission of the European economic community is shortly, I understand, to produce a report suggesting how a multilateral association of the six and the 11 might be developed. In the meantime the United Kingdom and France are engaged in bilateral negotiations which may possibly provide a formula which could be used as a basis for a series of other bilateral arrangements intended to prevent the development of a discriminatory trading situation between those six on the one hand and the remaining members of the organization for European economic co-operation on the other.
The movement for European economic integration among the six at least has rested on the hope that by creating an economic unit comparable in size and resources with the United States they would be able to build up their economic efficiency and strength and by so doing would lay a foundation for an ultimate political integration. The free trade area countries, not being prepared to accept the long term political goal, have tended for their part to stress the disruptive effect which the emergence of an exclusive trading bloc in Europe might have on existing political cooperation. The same consideration would apply to co-operation within NATO, and for this reason it is of the utmost importance that any new economic relationships established in Europe, whether among six, or in the wider grouping of a free trade area, should be forward-looking and outward-looking and should not tend to create a regional and restrictive trading bloc.
In speaking in the budget debate on June 17, 1958, the Minister of Finance (Mr. Fleming) has this to say:
The Canadian government is following with sympathy and interest these European efforts to

Canadian-United. States Relations integrate their economies and to develop a broader and more competitive system of production ... We attach high importance to the economic and political strength of western Europe as a safeguard of world peace and prosperity. Europe, however, has extensive trade and economic links with the rest of the world. In our view it is vital that eiforts to solve European regional problems should not weaken these wider connections.
This, Mr. Speaker, is the situation as I see it at the present time. The Leader of the Opposition, in his amendment, when viewed in the light of his speech, is contradictory, confused and completely woolly. On the one hand he advocates the taking of certain steps by Canada and the United States with regard to the relationship between our two countries which would tend to create on this side of the water an economic bloc, which would be divisive in so far as our NATO alliance is concerned. It completely fails to deal with the serious situation in which Canada finds herself as a result of the events of the years since the war for Canada, in her progress in those years, has found herself excluded from various organizations which have been formed in Europe. Admirable as they are in the purposes for which they were originally formed, namely to assist in the economic recovery of Europe, they do in fact not take account of Canada's vital interest in maintaining her trading relations with Europe.
After all these years, Mr. Speaker, the Leader of the Opposition comes along with the amendment he has moved today, apparently in repentance for the past but with hope for the future. But in view of the woolly speech he made this afternoon in relation to the amendment before us I think it must be apparent to all members of the house that the ineffective suggestion he made can only have been made on the basis that the opposition can find so few thing about which to criticize the government that they have to fall back on this completely inadequate suggestion to bring before the house at this time. Repeatedly they have charged us with following courses that they thought were defective and have urged that the business of the house should be adjourned to discuss these various matters. But when they have an opportunity for a full debate, for full criticism of any of the government's policies, they bring forward this dismal production today and, as I said before, all members of the house can only be heartened by the effort they have made in that it is an assurance that there must be so little with respect to which they can criticize the present government.


Paul Joseph James Martin: Mr. Speaker, the amendment before the house is

in terms which I think justify repetition at this time after the beginning of the evening sitting. It is in these words:
This house is of the opinion that recent decisions of the United States government, particularly in the field of production and commercial policy, underline the necessity for the government to make more effective arrangements with the United States to prevent the undesirable impact of those decisions on Canada, and the necessity of a more active participation by the government in working out the implications of interdependence and closer unity within the North Atlantic community.
I regret that the hon. member who has just taken his seat should seemingly have misinterpreted the motive behind the action taken in the opening speech made by the Leader of the Opposition (Mr. Pearson) which was intended to provide the house with the opportunity of discussing the important relations that prevail between our country and the United States, one of the most powerful, if not militarily and economically the most powerful country in the world today. The utterances of the Leader of the Opposition were, I think, couched in language which, while on occasion involving criticism of the administration in some particulars, was generally aimed, as the reactions of the Prime Minister (Mr. Diefenbaker) indicated, at the elucidation of a problem which increasingly is engaging the attention of serious-minded Canadians. As the Leader of the Opposition said, while all of our relations with friendly and not so friendly countries are important, it may be that in the complexity of modern life, both in terms of continental and other relationships, no bilateral relationship is as important as our relationship to the United States, both because of the fact that that country means a great deal to us in terms of our economic welfare and also because, through her position in world affairs, she is such a determinant factor in the easing of tension between nations and in the preservation of peace.
Therefore it is of the greatest importance that we should take advantage of opportunities such as this to assess the character of some of our problems as a result of our proximity to the United States, our association with her and our respective national ambitions and aspirations. Canadian-American relations have taken on an evolutionary form particularly in the last decade. For a long time we on both sides of the border referred with satisfaction to the fact that Canada and the United States in the Rush-Bagot treaty had developed possibly the first successful disarmament covenant among the nations. For a long time we have referred to the existence of the international joint commission as an

exemplar of our instrumentality in preserving peace between two nations and providing a method for adjudication of their differences and conflicts.
Then too, we have often mentioned the importance of the Ogdensburg discussions between the president of the United States and the prime minister of Canada during the days of the second world war and the Hyde Park agreement that had such significance in smoothing our common participation for the preservation of freedom and the resulting establishment as a result of the informal discussions between the president and our prime minister of the permanent board on defence, an organization which, having no more than the power of recommendation, nevertheless did lay down in the early stages of the postwar period the continental defence arrangements that have now taken on a more mature character.
Since that time, as a result of meetings between the presidents and the prime ministers, further instruments for joint collaboration and consideration have been created such as the ministerial committee dealing with economic affairs, the defence committee of interested ministers from the two governments and now finally, as a result of the last visit of the President of the United States and his conversations with the Prime Minister of today and his colleagues, the decision to set up, in collaboration with Your Honour and His Honour in the other place and opposite numbers in the congress of the United States, a congressional and parliamentary group which is intended to provide a further opportunity of informing both our legislative bodies about problems that are regarded as having mutual interest and concern. I think we must observe that these various instruments that have been created for these purposes can, if fully employed, render very satisfactory and useful service to the relations which we hope and believe and know will prevail notwithstanding all the difficulties between our two countries.
But I must say that I am sure hon. gentlemen sitting in the ministerial benches will concur that we do not altogether feel too happy about some of the meetings of the joint ministerial groups. The last meeting perhaps is the best example of some of the weaknesses in this particular arrangement. I note that the Minister of Finance (Mr. Fleming) has said it is hoped that on some occasion within the very near future this ministerial group will meet again, but quite obviously from the long communique that followed its deliberations a few months ago that medium, not without its value, did not come up to expectations which hon. gentlemen on all sides had for it.
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Canadian-United States Relations
We may expect that with frankness and proper direction, both from the government side and this side of representatives from this house and from the other place, the representatives who sit on the joint parliamentary-congressional committee will be able to render valuable service, particularly to the people of the United States in indicating to them how Canadians feel about some of their domestic policies and the implications of some of their international policies, particularly the consequences of their natural supremacy in the matter of intercontinental defence.
We must, of course, pay our tribute to two distinguished members of the house of representatives who have projected our concern and our irritation in a very courageous manner. I refer to Mr. Brooks Hays, former representative from Arkansas, and Mr. Frank Coffin, from Maine. To these men, we must express the gratitude of this house and the people of Canada for bringing our problems to the attention of their colleagues, and we would hope to the people of the United States, what Canadians, regardless of party, feel about some of the commercial and economic policies pursued by the government of the United States which seriously affect the economic welfare of Canada, as we were reminded today by the hon. member for Calgary South (Mr. Smith).
It is with interest that I note from this report to which I have just made reference that until the middle of 1957 the main Canada-United States trade problem was the United States surplus disposal program on agricultural products which received its main impetus in 1954. I note that in commenting on some of the conclusions it is suggested by the Canadian-United States committee in a recent study that in the crop years 1954-55 over 40 per cent of the United States exports of agricultural commodities were aided under various governmental programs. With respect to wheat and wheat flour, virtually all such exports were subsidized and about one half moved under the stimulus of special disposal arrangements and the other half under the normal subsidies resulting from sales by the C.C.C. at prices below world levels. In so far as feed grains are concerned, oats, barley and corn, some 20 per cent of the total exports were disposed of under the special program and of the remainder some were sold under the C.C.C. subsidy and the rest through ordinary commercial channels.
Now, the important matter that I wish to bring to the attention of the administration is that a new development has taken place in our commercial relations with the United States since the middle of 1957 when the

Canadian-United States Relations basic provision of the United States disposal program was not changed substantially. It is true also that direct consultations regarding the wheat disposal had developed since that time, but nevertheless, in addition to the agricultural difficulties, we have had the introduction as a result of United States government policy of certain abridgements of Canadian imports which extend particularly to our mineral resources, notably oil, lead, zinc, aluminum and possibly copper.
These policies have been extended to the extent that they interfere with the trade policies of Canada with regard to certain corporations doing business with particular countries in particular parts of the world. The United States government has likewise resorted to extraterritorial legislation which affects Canadian corporations subject to Canadian law, and which apply to residents and to corporations domiciled in Canada. These are matters that represent a very considerable extension of the area that concerns the Canadian people in their relations with the United States.
Latterly we have had, as the hon. member for Calgary South mentioned earlier, the imposition of mandatory curbs on oil which have created, to use his own language, a very serious problem with a semblance of much permanence attached to it. It was serious, as he himself stated, a year ago when the curbs were of a voluntary character, but now the United States government on the congressional level and on the level of the highest executive of the United States, the President, has decided to impose mandatory curbs on Canadian oil imports. There are some Canadians who have regarded this decision as a blessing which will enable them, according to plans which they properly have in mind, to find a wider market in Canada for much of the products of the oil industry in western Canada.
But generally speaking, this mandatory curb cannot but be regarded, as the hon. member for Calgary South regarded it, as a matter of the greatest concern to all in Canada. I wonder now if this is not the legitimate place to register some complaint about the way in which the Canadian government registered its protest against this decision, first in the recommendation stage by a congressional committee and later the decision made by the President of the United States. It will be recalled that the Secretary of State for External Affairs (Mr. Smith) told the house that he had caused a note of protest to be sent to the secretary of state for foreign affairs of the United States. This was on February 19. After that note had been dispatched, the President of the United States


asked for an extension of time after February 28 in order to enable him to give further consideration as to whether or not the recommendation should receive the presidential veto.
It was at that point that we on this side of the house suggested to the Secretary of State for External Affairs that, notwithstanding the discussions in the ministerial committee last January, and notwithstanding the protest of February 19, consideration should be given by him, on behalf of the government, to direct representations to the White House. While one does not want to be unfair to the Secretary of State for External Affairs, Hansard does record he did reply, in answer to that suggestion, that he was not familiar with the communications to the White House. He may be able to offer-as I am sure he can-an explanation of what he meant when he made that reply. But those are the words he used.
Then a suggestion was made directly to the Prime Minister who was asked whether, as this was a matter involving action of the highest authority in the United States, he did not think that he himself should make direct representations to the President of the United States? The replies made in answer to those questions are on Hansard. The Prime Minister replied by saying that he had discussed this matter at various times with the President of the United States and had discussed it on the occasion of the President's visit to Ottawa last summer. But those replies were certainly not answers to the interrogations put from this side of the house. The question was whether the Prime Minister did not think that at this stage, before the expiry date of March 10, he should direct, in whatever form he wished, an expression of hope and protest, in terms of the greatest urgency, to the President of the United States himself.
I am sure the Prime Minister will find that there are precedents in Canada-United States relations when the head of the government of Canada has made telephonic representations to the President of the United States in respect of matters which were of the greatest concern to Canadians. It is true that the Prime Minister said that these were matters which were continually engaging the attention of the government. But the decision has been taken and the effectiveness of representations made by the head of the government of Canada to the President of the United States after the event are not-as the hon. member for Calgary South indicated in his language, referring to the matter of mandatory controls -likely to be very effective and certainly not as effective as they would have been if the Prime Minister of this country, before the 10th

day of March had indicated-as his predecessor did at least on two occasions-what an act of this sort would mean to Canada.


Arthur Smith: I wonder if I might ask the hon. member a question?


Paul Joseph James Martin: Yes.


Arthur Smith: I wonder
whether the hon. member is aware of the fact that the voluntary controls introduced in June, 1957 were actually prescribed or arranged for during the period of the Liberal administration of which he was a member? Can he tell us whether or not he or his government was in any way successful in seeing that any negotiations prevented the voluntary controls which led to the mandatory controls?


Paul Joseph James Martin: I can tell my hon. friend that when that was done and before, and on another occasion, the prime minister of Canada of that day let the President of the United States know what he felt about the possibility of these things happening.


Arthur Smith: And the results?


Paul Joseph James Martin: The results speak for themselves.


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: The fact is that they were voluntary. I will tell my hon. friend who is very much interested in this matter that in 1956, if it had not been for the representations strongly made at the highest level in Canada, instead of voluntary curbs coming into being when they did, they would have come much earlier. Whether or not that is the case, my hon. friend who represents-


Mr. Fisher:: The oil lobby.


Paul Joseph James Martin: I do not think that is a fair observation.


Mr. Harkness:: It is the usual C.C.F.
observation.


Mr. Marlin (Essex Easl):: My hon. friend who represents a constituency which is vitally concerned in this matter should join with me in saying that from February 19 there was no protest made by the government of Canada to the United States government and there was no protest made whatsoever by the Prime Minister from the date- it was a Saturday morning-when the President announced that he had asked for an extension of time up until March 10. I would have thought that my hon. friend who is generally very alert would have been on the doorstep of the Prime Minister saying, "Contact the President at once; at least try and see if we cannot do something to avoid the mischief of this particular act".
Canadian-United. States Relations


Arthur Smith: Mr. Speaker, I know that the hon. member would like to be accurate. Unfortunately he missed a meeting of the committee on external affairs in which it was indicated that representations were made, and that is as recent as today.


Murdo William Martin: My hon. friend now says that representations were made. As of what date were they made?


Mr. Smith (Calgary Soulh):: This was prior to and during the period of discussions when the extension of mandatory controls was made.


Murdo William Martin: I put this question to the hon. member. Why did the Prime Minister say that representations had been made last summer?
I want to point out to the house, Mr. Speaker, that I believe that the developing problems in our country in connection with the United States are now such that the Prime Minister ought to give consideration to meeting with the President. It will be recalled that the President came to Canada last summer. He spoke in this house. We all recall that the reactions to his speech were not particularly acceptable to hon. gentlemen opposite. Nevertheless, the fact is that the President did come to Canada. I am sure that both the President and the Prime Minister and the latter's colleagues profited greatly from their discussions with the President and with Mr. Dulles, the secretary of state for foreign affairs. But in view of the developing problems that are seemingly accruing now between our two countries on the economic front, and particularly in the matter of continental defence and defence purchases and their implications on our economic life, I wonder whether the Prime Minister will not give consideration to meeting the President at the earliest possible moment.
This is a matter in which Canadians generally are interested. It is not only the matter of the disposal of surplus commodities; it is not only the matter of embargo on our mineral deposits and the curbing of oil imports, there are gathering situations now which particularly arise as the result of the cancellation of the Arrow which placed us in a measure of increasing dependence on the productive capacity of the United States and on its defence arrangements.
Such a meeting could usefully take into account some of the recommendations, for instance, on the economic front made by the Hays and Coffin report. I refer to page 28 of the second part of the report where with regard to the matter of the problem of

Canadian-United States Relations surplus disposal of wheat, no less than five different proposals are made which might mitigate the severity of this problem in so far as Canada is concerned. Those proposals are worth studying. Undoubtedly the Minister of Agriculture (Mr. Harkness) knows of them. Undoubtedly he is giving them his serious study. I should like to think that the Prime Minister, with his prairie background and interest in this problem, would find this an additional reason for meeting with the President at this time.
I make that suggestion in the light particularly of the recommendations made by the Leader of the Opposition this afternoon when he included among our concerns the situation with regard to uranium production in Canada. I do not know whether or not I am accurate, but I saw a press report about five weeks ago to the effect that the Minister of Trade and Commerce (Mr. Churchill) had received a delegation of uranium producers; and the report suggested that there was going to be some confrontation of this problem by the minister or by someone on his behalf. In view of the great stake that Canada has in uranium production and in view of the fact that our initiative and our resources went into this particular form of endeavour at a time when it meant so much in the prosecution of the war, we have, at least morally, a strong bargaining position which I know the Minister of Trade and Commerce will want to have placed before the authorities of the United States at the earliest possible moment so that we can await the reaction of that country to the events that will ensue in 1962 or 1963. In any event those are matters, together with the other matters which concern us, which warrant a meeting with the President of the United States.
I am sure that the house is not fully satisfied with the visit of the Minister of Justice (Mr. Fulton) in the matter of the application of extraterritorial powers by the government of the United States. All that the Minister of Justice was able to get from his opposite number in the United States was an assurance of consultation. There was no guarantee that such an infringement of our sovereignty would not occur again. I think that the Leader of the Opposition has proposed the only effective way to deal with that particular situation, and that is to embody in the form of solemn treaty the commitments in that and in other matters which the two governments are prepared to accept.
There is one other matter which I think, in a discussion of Canadian-United States relations, we cannot but carefully note at this time. I say this not without a full appreciation that when we were in power the United States was able to acquire certain rights in
[Mr. Martin (Essex East) .1
Canada in the common interest, such as the
D.E.W. line, the various preventative measures taken in that regard, the installation of radar and so on. All of those matters would be regarded in one sense as a violation of the principle of sovereignty. I think we have reached a stage in our relations with the United States when we have to think of the implications of our dependence upon that country for our security, and upon that country as the initiator of so much of what flows by way of economic buoyancy through defence contracts and the like.
When in 1948 the United States and Canada agreed to join the North Atlantic Treaty Organization and place themselves under the command of one responsible to a group of nations-the NATO commander-that was, on the part of the United States, a transfer of sovereignty. It was also a transfer of sovereignty on our part when we and they joined the United Nations. This country and all the members in that body, in the interests of the preservation of peace, transferred some of their sovereignty. That kind of transfer in our interdependent world is inevitable, and it is certainly desirable.
The Prime Minister of Great Britain will be here on Wednesday. When he was here last his theme was interdependence. He told us in this parliament that today all of the nations of the world were interdependent one of another. That did not mean that they were all equally involved in the mischief of war, but it did mean that in their common interest they had to pool their responsibilities, as well as the advantages which flowed from the international community. The Prime Minister of Great Britain will be here again, and this visit will give us the opportunity of once again emphasizing the significance and implication of his concept of interdependence.
So that when we joined NATO, and the United States and ourselves and other countries joined the United Nations, we recognized the force of interdependence in the world in which we live. But now we have to realize in Canada that the situation which confronted the European powers in 1948 in terms of contributions made by Canada and the United States now confronts Canada and the United States on the North American continent. Whatever power France or Great Britain has transferred to NATO has been transferred to a collective group of nations.
In the matter of our continental defence the transfer of sovereignty now from Canada to the United States is not to a collectivity; it is not to a grouping of nations; it is a transfer to one single power. We are now increasing our dependence on that power, and while we enjoy with that country the

greatest possible friendship, while we share together common objectives, each of us-they in the United States and we in Canada-is anxious to go our separate national way, pursuing our own national aspirations and integrities, wanting to see nothing happen which will violate the independent position of each nation.
It is all very well to assume that because of current friendship nothing but the continuation of that collaboration will eventuate in the long future, but some Canadians have doubts on that score. Mr. Speaker, this middle power country of ours has been able during the past decade to make contributions in the field of foreign policy. Because of our association with the United States, because of our membership in the commonwealth, because of our friendship with Ceylon, India and Pakistan, the newer members of the commonwealth, and because of the fact that we have had a short history and on that account have not been able to antagonize other peoples, we have special opportunity in the field of international mediation which on occasion we have exercised with great and telling consequence.
I think that is important to preserve, and while this does not confront us immediately, one can envisage how growing dependence on one single power in a military way would destroy our freedom of exercise in the particular to which I have addressed myself in these last few minutes. So I think that in no way, as we argued a year ago, should the organization or arrangement involving continental defence known as NORAD be unequivocally made responsible in so far as Canada is concerned, and so far as Canadian forces in the United States are concerned, to the President of the United States, but rather to the NATO commander himself. In other words, we would be transferring in that particular our sovereign interests, as European nations have done and as we have done along with the United States in Europe, to the person directed by the group of nations constituted by the North Atlantic Treaty Organization, in that way we wbuld preserve not only psychologically, but I believe in fact, all of the advantages and safeguards that come from a real pooling and sharing of duties and privileges.
I know this is not an easy matter. The very fact that we recognize the difficulties, however, should not stand in the way of our emphasizing and re-emphasizing the importance of this position, not only because of ourselves and because of our relations with the United States, but because of our relations with other partners in the North
Canadian-United. States Relations Atlantic treaty alliance. Toward that end is it unreasonable to suggest that several steps should now be taken to make sure that satisfactory development and productionsharing arrangements will be made along the lines of genuine interdependence? Not only should the commander of NORAD be made responsible to the NATO commander. That would not in any way diminish the authority of General Partridge. His capacity under the exigencies of his command could still be the same as they are now, but the lines of authority could be postulated by the NATO council and General Norstad, the general in charge of NATO, rather than by a military commander or the head of a single government. That is my point.


Gordon Minto Churchill: Mr. Speaker, may I ask
the hon. gentleman a question. If an attack were made on the North American continent would the hon. gentleman suggest that communications should be commenced with the commander of NATO forces of Europe before action were taken here?


Paul Joseph James Martin: Mr. Speaker, I
thought I just dealt with that point. I am glad my hon. friend asked that question because apparently I did not make myself clear. In reply I would say no. Obviously whoever is in charge of SAC or NATO must be able to act with expedition. What I am saying is that the authority he now has from the President of the United States and from the government of Canada to act quickly without hesitation can be given to him by the NATO council just as well as by the President of the United States. I quite agree that there must be no impairment of the efficiency of his operation but it is important that the chain of authority be established in such a manner as to diminish the dependence of one country on another and to extend that dependence not to a dependence on one power but to dependence on the group, namely NATO itself.
In fulfillment of these needs, having talked about continental defence, may I say a word about production-sharing arrangements. It would seem that we should see to it that free trade should be established as soon as possible between NATO countries with respect to defence production. If we are going to recognize interdependence effectively in this field surely we will have to abolish measures such as tariffs and all other obstacles to a free and easy movement of defence products within the NATO alliance. Second, sharing arrangements should not be restricted to the possible participation by one country in another's defence production program. It must involve the assignment by

Canadian-United States Relations the whole alliance of specific defence production schedules to individual countries so that those countries can really specialize in those fields and be sure to have sufficient opportunity to develop manufacturing facilities under optimum conditions of efficiency without fear that other countries will enter into those production fields.
Finally, we must ensure that specific programs assigned to a given country will be carried out effectively so that other countries could safely rely on the quality of the work being done by that country. Arrangements should be made to staff the development teams with the most qualified personnel available for that purpose in NATO and to provide continuing information to and consultation with all other interested countries of the alliance.
Those are general directions which I know it is not humanly possible to bring about immediately. It seems to me, however, that Canadian thinking at this moment is directed along these lines. This kind of thinking in no way involves our friendship and collaboration with the United States. Indeed, the fact that it is possible in this free parliament to discuss these matters as we are doing with respect to our relations with our great neighbour is the best demonstration of the fact that we do get along and will get along with that great and important country. Only friends can talk in the friendly spirit we do about one another and about our problems.
In resuming my seat I can only say that as our country grows and develops in the complexities of modern international society with the tremendous obligations that are now imposed on us because of the fact that we are the closest neighbour of this powerful nation with whom we have these common objectives we are not relieved in this house of the responsibility for thinking of methods by which we may contribute to peace in our time simultaneously giving thought and consideration to the problems that vitally affect the future integrity, character and the maintenance of the national purposes and character of this nation, Canada.


Mr. Erik Nielsen (Yukon):: Mr. Speaker, in my remarks I plan to approach the subject from a somewhat different approach from those taken by other hon. members who have spoken in the debate thus far. I should like to discuss briefly the importance of United States leadership and in relation thereto the vital importance of the Canadian partnership in the roles the two nations are playing in containing the encroachment of communism across the world. I should also like to discuss my views on the battlefield, namely


increased production in our country and the effect this has on our trade relations with United States.
Before doing so, however, I should like to say I do not share the pessimism my hon. friend, the hon. member for Essex East (Mr. Martin), seems to have with regard to the success of the United States-Canada parliamentary group nor the pessimism that seemed to be implicit in the remarks of the Leader of the Opposition (Mr. Pearson) in presenting the amendment. I believe that this group got off to a good start and that it will not develop into a social organization or one that does not devote its time to the vexing and pressing problems that exist between our two nations today. This group will work because there are in it hon. members from all sides of the house who intend to see that it does.
Before embarking on my general theme I should like to state my basic agreement with the Leader of the Opposition when he said there can be no disagreement with the assertion that our relations with the United States today are the most important single item of our foreign policy. This I believe. Fostering the growth of the economic strength of Canada and of the north American continent as a whole is vital to us if our way of life is to be preserved and if we are to constitute any sort of defence at all to military aggression, ideological aggression or to commercial aggression which as our Prime Minister (Mr. Diefenbaker) has pointed out on so many occasions in the past is becoming a very real threat. I believe this is the challenge before the free nations of the world today.
Reference to the free nations brings me to the criticism I have of the amendment proposed by the Leader of the Opposition. Apart from its general circumlocution and vagueness it is restrictive to the extent that it concludes with words to the effect that we should endeavour to work out the implications of interdependence and closer unity within the North Atlantic community. The threat that is posed today by the communist economic policies to which I will refer later is not confined to the North Atlantic community. It is a very real threat aimed at the whole of the free world. I wish to make one further point before continuing. I do not feel you can isolate political policy, economic policy and military policy. You cannot sit down at a bargaining table and workout an economic policy completely forgetting about a military need or a political necessity. All these factors constitute that fabric which will contain the threat of communist aggression in whatever form it appears.

The United States has quite properly assumed political leadership in the free world today. Because of its economic position it must likewise assume in a more active fashion -and in my humble belief a more responsible fashion-economic leadership and military leadership. I think there can be no argument in this regard. With all due respect to the remarks of the hon. member for Essex East (Mr. Martin) as to the activities of the cabinet committee which met last January, I might, perhaps for the purpose of illustrating that his opinion works both ways, quote from a speech made by Congressman Frank M. Coffin at Portland, Maine, on February 13, 1959, as follows:
Shortly after our report was issued, in early January of this year, the joint cabinet committee on trade and commerce met in Ottawa. In the past, meetings of this group had been noticeably infrequent. The holding of this January meeting was another proof that we were determined to attain the best possible relationships with Canada. Unfortunately, both secretaries Dulles and Benson were unable to attend because of sickness. And, more unfortunately, the meeting suffered from two chronic bureaucratic diseases:	inadequate
briefing and co-ordination of our delegates;-
He was speaking of the United States delegates. I continue:
-and premature and intense preoccupation by all concerned on the press release that became the work product of the meeting. In the future, when the mere fact of a meeting ceases to be a novelty, I doubt that we can avoid serious criticism for this kind of a performance.
The shortcomings are therefore fully realized by those who are vitally concerned with those relations and have been working so well in the past toward achieving an improvement therein.
I have said that in the adoption of sensible military, economic and political policies, particularly by the United States and Canada, rests our future internal well-being, rests our national security and indeed the fulfilment of our external defence and economic obligations. I think I can do no better than state the challenge as it was set forth by Mr. Khrushchev himself in the meeting of the twenty-first extraordinary congress of the communist party of the Soviet union on January 27, 1959 in announcing the new seven-year plan, in which he said this, and I am quoting from his remarks:
Today, our task is to tip the scales in world production in favour of the socialist system against the capitalist system-
I emphasize Mr. Khrushchev's use of that word "against". I go on with the quotation:
-to surpass the most advanced capitalist countries in productivity of social labour and output per head of population, and to attain the world's highest living standards.
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Mr. Khrushchev claims that the national income of the Soviet union can be made to increase each year by 8.6 per cent, not only in the early stages of industrialization but as a permanent feature of the soviet economy. It may be startling for hon. members to reflect that the normal western rate of growth has never gone much beyond three per cent. This is the first challenge, as I see it, that the soviet government can maintain double or more the western rate of growth.
The second challenge, as I see it, is the manner in which the soviet intends to go about achieving the industrial expansion that Mr. Khrushchev says she is going to do. I do not believe, from the reading that I have done on the subject, that there can be any doubt that the Soviet union can achieve what Mr. Khrushchev says is their national objective. This presents a very real challenge, despite the fact that the soviet labour force has been depleted by a low wartime birth rate, and they surely must by now prefer a spending sort of living rather than a savings sort of living after four years of perpetual crises. But despite these difficulties, as I say, the soviets intend to reach this goal and the recent western belief is that they can do it.
The challenge that is presented to the western world-and this is where our trade relationship with the United States becomes so important-is in the chosen field of the west, namely in the field of increased production. If western management, western ingenuity, western skills and technological ability cannot meet that challenge, then one may as well say that the rest of the world is lost. This is where it becomes so important for us to support policies which will give aid to foreign countries not just in the north Atlantic community, because the Far Eastern countries and the Middle Eastern countries, those free nations, in my view are just as important as those close by.
How does the question of United States leadership bear on the manner in which the free world is to meet this challenge? I have stated the challenge and the adverse effect that it will have on our way of life if it is not vigorously taken up. I think it is well to consider now, as I have tried to point out, who are the protagonists, I do not think,-as this amendment of the Leader of the Opposition would suggest-that we should confine ourselves to the North Atlantic community. The challenge must be taken up by the whole of the free world because Mr. Khrushchev used these words, that this economic offence is aimed against the free world, which I suggest should take it up. Canada is very important, Mr. Speaker, in this whole fabric, but I think Canadians everywhere should be

Canadian-United States Relations asked just where does Canada's responsibility lie? How can we be of the greatest assistance in meeting the soviet challenge? This is where the importance of our trade relationship is pointed out most dynamically. Dr. Norman M. Littell, of the American bar, has said:
Canada is our most indispensable ally in the world battle to maintain our free way of life.
Canada's rapidly expanding economy and growing wealth will enable this country to assume a greater share of the costs which a free world has to incur in order to achieve greater security and greater internal wellbeing and greater internal welfare; and Canada is in a unique position to achieve and discharge this responsibility. She is a British commonwealth nation; she is a Colombo plan nation. Forty per cent of our nation lies above the 60th parallel; therefore we are an Arctic nation. In defence we are a North Atlantic treaty nation; in trade we are a North Atlantic triangle nation. We are a western nation; we are a North American nation. Surely, it must be realized that the maintenance of this intricate network of relations is of vital interest to and should be the vital concern of the United States.
Canada is in the unique position, as I have said, to be an invaluable instrument in the looming economic struggle with the Soviet union, or rather should I say with the communists, because China on the horizon is just as real a threat as the Soviet union. We are a natural, and indeed, an inevitable partner with the United States in meeting the soviet challenge. How can we in Canada assist in meeting that challenge? Here again this is so important in our relations with the United States. In my view, we can meet the challenge by increasing production. As I said, I feel this is in our chosen field. This involves economic policies which have to be shaped. This involves military and political policies which have to be shaped. These policies have to be shaped not in a vacuum, not in isolation but shaped with the one having regard to the other.
When the Leader of the Opposition proposed this amendment he said that he did not want to hear the words, "Why didn't you do something about these matters when you were in power?" The fact is, however, that we are saddled today with policies which were made by the previous administration when dealing with these matters and they simply cannot be tossed aside in a moment.
I wish to make the point clear that in my view no commercial policy is possible without taking a complete inventory of our resources. It is like shouting in a vacuum to say that you can formulate a policy concerning resources if you do not know what you


have. We as Conservatives believe that we are responsible to future generations of Canadians for our decisions today. We believe that we have to answer to future generations for policies we adopt with regard to the disposition of our resources. I say that very little was done in the past. I say that we are saddled with this situation today because the previous administration determined commercial policies dealing with the disposition of our natural resources without knowledge of the facts, without knowledge of what resources we have.
As a result today we have policies of whole cloth, policies that we have to patch up here and there until we can catch up to the position we should be in and be in possession of all the facts. We will not be in possession of all the facts until we have a complete inventory of what Canada has to offer, and certainly no policies with regard to the disposition of these resources should be made until we do know.
One of the finest examples I can think of in that regard is the Columbia river. The first thing this government did when they came into office to deal with this problem which had been hanging fire was to order a study made to see what we had. There was no point in trying to make a decision as to what we were going to do with Columbia river power until we knew what we had. The way the matter had been dealt with by the Liberals is typical of their thinking all along. As I said, I can think of no better phrase than to term it a policy of whole cloth.
In this regard I should like to go back a few years to the time when the northern affairs department was set up as the Department of Northern Affairs and National Resources. As many hon. members will recall this was done on December 8, 1953. I should like to quote now from the remarks of the prime minister of that day, Mr. St. Laurent, found on page 698 of Hansard for December 8, 1953. At that time he said:
But there has not been for a long time any special occasion offered to discuss these vast areas of Canada which compose the Northwest Territories and the Yukon Territory. It has been said that Great Britain acquired her empire in a state of absence of mind. Apparently we have administered these vast territories of the north in an almost continuing state of absence of mind.
This is what we are saddled with today, policies which have been shaped with a complete absence of mind. There could not have been anything else because we have certainly emphasized the need of having an inventory. The Prime Minister and the Minister of Northern Affairs and National Resources (Mr. Hamilton) have said many times throughout the country that the first thing that is necessary is to take an inventory of

what we have. I want to relate these remarks to the proposition that you cannot make any disposition of these resources by commercial or any other policies adopted by government without knowing what you have. The difficulties we would get into if we did are evidenced by the difficulties confronting this country today with regard to United States-Canadian trade relations because of a policy of whole cloth which has had to be patched here and there.
Another good example, of course, is the fact that at our present rate of progress it will take approximately 100 years to complete the mapping and hydrographic work in the Arctic islands. No work was done by the past administration in the sense of embarking on a dynamic program of establishing the extent of Arctic resources. Nothing was done until this government came into power. In the last year and a half some very dynamic work has been done by the Department of Mines and Technical Surveys. This department, the orphan of the government in the past, is waking up. The brilliant men in the lower echelons of scientific endeavour in the department have had their ideas stifled in the past by bureaucratic shortsightedness, by an absence of mind, as the Right Hon. Louis St. Laurent so ably put it.
I say that the field of increased production is the field in which we can meet this challenge. As far as Canada is concerned, this means increased production of our raw materials. As I see it, there are four reasons for not only increasing production of raw materials but bringing about increased unit productivity, an increase of production in which management and labour must take an extremely active part. The four reasons I put forward as justifying the approach I advocate are defence, research, foreign aid and education.
To deal first with defence, after the debates of recent weeks I think no Canadian is unaware today of the fact of our absolute interdependence with other free nations of the world in matters of defence. I do not think any useful purpose would be served by rehashing those debates. Suffice it to say that it is vital for us to embark on a program of increased production so far as defence is concerned. In this regard I might recall the Prime Minister's remark that there is not much point in worrying about national security if survival is lost.
The second reason I have given is research, and I think its importance is apparent to all hon. members. In terms of absolute results in this field, comparing the United States and Canada with Russia, one has only to reflect 66968-9-127i
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Canadian-United States Relations on sputnik and lunik and the marvellous scientific advances made by the Soviet union in recent years.
The third reason I have mentioned is foreign aid. I think this is a very vital program, a program that must continue and to which we must give complete support. The Russians are in this field too. Although they only entered it in 1955, I believe they have expended about $2 billion up to the present. This amount is only about 25 per cent of what the west is contributing, the United States particularly, but nonetheless the Russians are in the field and intend to be even more vigorous in their activities.
The fourth reason I have advanced is education. The priority which has been given to education in Russia has allowed that country to leap forward from virtual illiteracy 40 years ago to their sputniks and luniks that are circling about what I might call a startled western world today and they are evidence that we must approach this field of endeavour with more vigour than ever before.
Now, with regard to trade policies themselves, I wonder if you will allow me, Mr. Speaker, to recall to hon. members the observations which have passed from one side of the floor to the other in recent months, and indeed during the last session, concerning the policy of trade diversion which was enunciated by our Prime Minister. I shall repeat them, just to refresh hon. members' memories. Our Prime Minister said:
Our hope is to achieve ... a better balance of trade and a greater diversification of that trade. . . . We believe it is in the interest of both Canada and the United States to pursue long term policies which aim at achieving this objective.
Now, this statement has been ridiculed and it has been belittled. I thought perhaps hon. members might be interested to learn of the opinion of some of the hon. members who used to sit on the government benches in so far as this matter is concerned. So far as Canada-U.S. trade relations are concerned, I think it is absolutely vital to recall that every further restriction, every further import control, every further quota placed on our exports to the United States does nothing more than weaken Canada for the job ahead. Whether or not the United States is aware of this fact, and I believe quite sincerely that they are aware of it, they must realize that it is in their interest not to disturb the economic health of Canada.
The Prime Minister is not alone in his hope of achieving a greater diversification of trade and the removal of trade restrictions. This is what the Right Hon. C. D. Howe said in October, 1949 when he was
2000	HOUSE OF
Canadian-United, States Relations minister of trade and commerce and addressed the Canadian exporters association in Montreal. He said:
Obviously, our policy must be to export more to the United States, or alternatively, to buy less from that country.
It also is obvious that if we can divert about $400 million worth of imports from the United States to the United Kingdom, our problem is solved.
Certainly, it is true that there is a difference between the circumstances in 1949 when Mr. Howe made this statement and the circumstances in 1957, but the point I want to make is this: The basic problem and the suggested solution are identical. In addition to this, the present Leader of the Opposition also made a statement as recently as December 2, 1958, in a speech delivered at Rochester, New York. The hon. member said, and I quote:
Canada's great need is an expanding and diversified export trade.
I have tried to show that there are four areas in which Canada can meet the economic threat of the Soviet union, and it is within those four areas that there is a concern which must be met with regard to the improvement of Canada-United States trade relations.
Before I resume my seat, I should like to discuss for a moment the terms of the amendment itself. I think I would not be far wrong if I said the amendment is perhaps a bottom drawer amendment which was produced in the emergency of the moment. The amendment sets forth that by reason of recent decisions of the United States government, particularly in the field of production and commercial policy, and here I quote:
-underline the necessity for the government to make more effective arrangements-
I think I agree with that. I think that more effective arrangements are necessary. I think that the reason more effective arrangements are necessary now is because of the policy of whole cloth to which I referred before, and which has been left with us by past administrations. I have endeavoured to show the approach that was taken by the previous prime minister with regard to that 40 per cent of Canada which lies above the 60th parallel and which is the storehouse of resources that will prove to be vital if we are going to accomplish these wise and intelligent policies. I think I am in agreement, therefore, with the necessity for more effective arrangements being made.
I think, too, I agree that this is the only way to prevent the undesirable impact of these decisions on Canada-I think we should expand those words and include other countries because we cannot isolate, as I have


attempted to suggest, the economic policies of one country from the political and military policies. They must live together. They must be fashioned together. I think there is a need for more effective participation by the government in working out the implications of interdependence. I do not agree that this should be restricted to closer unity within the North Atlantic community because I think that is isolationism in perhaps a mild sense but still isolationism and something that is undesirable.
I would say, therefore, in the words of the hon. member for Essex East (Mr. Martin) that the motivation of the amendment itself is, in general terms, good. I think if you were to strip the resolution of its circumlocution and its vagueness, I would be going along with it. However, I would want to spend the night reading it because I would want to understand it. As it is phrased now, there is quite a bit of it with which I agree, and I agree with the motivation. I agree that more effective arrangements are necessary for all the reasons I have stated.


Mr. Erharl Regier (Burnaby-Coquitlam):: Mr. Speaker, I was very interested in hearing some of the arguments put forth by the hon. member for the Yukon (Mr. Nielsen). I noticed his great concern with the problem of production in the western world. He seemed to indicate that there was a fear in his heart that it might be possible the communist world might exceed us in the production race. Along with that expression of fear I seemed to sense an expression of fear that all these values that we hold dear would be lost if we should lose in the race to increase our production.
I am pleased to see the west becoming aware of the need for increasing production. However, I like to see a growth in production because a greater production will help to fill more of the needs of the many people in the world who are in need. I believe that if we have values that are worth preserving, that are worth sponsoring, and I believe that we have, they will continue to exist regardless of what side of the iron curtain should eventually win the race for production. I have not so much confidence in materialism that I am overly afraid of the long term implications of us having a slightly lower rate of production than others in the world.
In looking at the Liberal amendment to the supply motion I can certainly see that the Liberal party is not a very great admirer of some advice that Sir Winston Churchill once offered when he said that in politics the best English is the simplest English.
I must say that half of us in this section of the house are graduates of universities. Yet

we have to read, reread and reread once again the Liberal amendment before we really begin to understand what is meant. Instead of the word "necessity", they might easily have used the word "needs"; instead of "participation", they might have used "part"; instead of "undesirable impact", they might have used "bad effect". They might have used a semicolon to separate at least the two main parts of their resolution. It is so long winded and so complicated as to its wordage that it is almost as hard to understand as is the present policy of the Liberal party on many matters of public concern at this time.
The matter raised by this amendment is not a new matter for this House of Commons. It is many long years now since the House of Commons began to express its concern with regard to United States actions which affected the export of Canadian minerals, Canadian grain, Canadian potatoes, Canadian forest products, Canadian oil and Canadian natural gas. It has been several years now since this house has expressed concern lest Canada not receive its proper share of the defence production that was needed for North American defence. For some years now we have heard complaints in this house about the actions of the United States government in subsidizing its exports. In that connection may I just mention the fact that the United States government is not the only foreign government that is subsidizing certain of its producers. I was very much surprised, Mr. Speaker, to read in the papers last week, when the farmers were here, that the West German government or the parliament of West Germany has now been informed that the farmers of West Germany will be subsidized in this year to the extent of $300 million. It is not only the subsidization program of the United States government that is of concern to us; it is the subsidization programs of many foreign nations.
I feel that there is another problem that concerns us and this one may be not as obvious. I refer to the competition, if you wish to call it that, which Canadian production is obliged to face in the world markets from United States-owned plants in countries outside of the United States of America and outside of our own Dominion of Canada. That problem is making itself evident as each month rolls by. The angle that I wish to pursue in my contribution this evening, Mr. Speaker, is to appeal to this house to have an end to this constant harping against the activities of the ruling authorities in the United States of America; to realize that they at least believe that they are acting in the best interests of their own national producers; and to realize that if members of this house were sitting in the United States House of
Canadian-United States Relations Representatives the actions they would take would not be very far removed from the actions being taken by their counterparts in Washington. The United States government and its members must be elected and hope to be re-elected; and it is only natural that they will apply themselves to the urgings of their electors. I feel that our answer does not lie in continuously appealing to the Americans to consider the interests of Canadian producers. Those appeals are unrealistic. After all the years of appeals that we have made, I think it is about time that we began to look elsewhere for a solution.
I realize that much can be done and I wish this interparliamentary committee well in building greater understanding of our needs south of the border. Conversely, it is likely that we shall gain a greater understanding of the pressures and the forces at work in the United States of America. There are many matters of difficulty which are simply misunderstandings, and they should be removed at the earliest possible date. However, I submit that the economy of the United States-and also, I might say that of the U.S.S.R.-is so analogous to our economy that we shall continue, in times of economic stress and strain, to realize that those countries whose natural resources and productive capacities are so similar to ours are not our finest commercial allies and that we should rather look around in the world-especially in the North Atlantic community, if possible -and attempt to find an economy that is or economies that are complementary to the natural economy of the Dominion of Canada.
I regret very much that so many of our eggs have been placed in one basket. Most economists could have told us that if and when the time comes when the United States is plagued with surplus production in many lines they will eliminate the importation of Canadian supplies. Over the years we have warned of the danger of putting all our eggs in one basket. I find it rather odd that of all people to complain about the situation at the present time the Liberals of Canada are doing so. They, more than anyone else are responsible for our eggs all having been placed in that one basket. The Conservatives, of course, gave their word to the Canadian electorate that all of this was going to be changed if they were given the chance to form a government. We have not seen very much of a change yet.
While I can appreciate cabinet ministers' looking up old Hansards and finding out how former Liberal counterparts used to reply on orders of the day, I fail completely to see the need for leading members in the official opposition now to go back to Hansards of three and four years ago, and this afternoon to be

Canadian-United, States Relations repeating, almost thought for thought the expressions that were emanating from the official opposition only two or three years ago. I feel that the Liberals ought to consider how weak the Tory arguments were and how long they had to sit in opposition. I am sure they will agree that was the Messiah that put them in office and that it was not the validity of the arguments that put them in the role of government where they are today.
We feel that not very much has been done. We continue to hear the same answers which we have heard for the last five years. We have made our views known to the United States government. We have made serious representations. We have made serious protests. Members of the cabinet have met with their counterparts in the United States government, and we feel that not very much has been accomplished, and as I expressed previously, I can well understand some of the real factors why so little is being accomplished.
I feel that we have to be realistic and recognize that it is very, very hard indeed. It is most difficult for the United States legislators to withstand the pressures of their own people in these matters. We are in effect asking them to pay less heed to their own interests and more heed to our interests. I had felt for a long time that the formation of the European economic union would be very, very harmful indeed to Canadian interests.
I welcome the formation of the European economic union none the less, because it removes a sore point in western Europe. It removes many of the frictions which have often been the cause of bloody wars in the past. I welcomed the efforts of the United Kingdom when they attempted to expand the European economic union to take in 17 Atlantic nations instead of only six. I only wish that the United Kingdom would have included the Dominion of Canada in a proposal of this type.
Our problem is, where do we stand now? The European economic union ruled us out. We have a serious problem on our hands. The United States economy is largely selfsufficient; the western European nations are beginning to look after themselves and do not have to depend on us. We feel that we should take more aggressive measures for the sponsoring of a real, effective north Atlantic economic community either with or without the United States of America.
I remember very well a really worthwhile speech made in this House of Commons on this subject some years ago by the former member for Winnipeg North, Alistair Stewart. His proposal at
tMr. Regier.]

that time to the House of Commons was that the member nations of NATO should reach an agreement whereby they would progressively reduce their tariff barriers, one NATO nation to another, by a flat percentage of 10 per cent per annum. His argument was that that would not be so severe that member nations would not be able to afford to smooth over the hardships that might be imposed by dislocations in each of the participating nations. Then his argument was that we could look forward to the day when the whole western world as we now know it would be one economic unit with a fairly uniform standard of living for all of its people. This would lead to closer social, cultural and he hoped eventually political, ties.
I do not see this as running counter to the interests of world brotherhood, because if we are to build world brotherhood, we have to begin to build it with our immediate neighbours and with people who are most closely allied with us. When we have established some feeling of brotherhood there-a brotherhood, I may say, based on more than military alliances-then we can begin to proceed with more assurance toward establishing a world brotherhood.
Our present method of going about things in the western world, Mr. Speaker, is going to give us cause for regret in the not too distant future. The United States government, if it wants to be loyal to the interests of its own people in the western world as it exists today, cannot give us treatment which is very radically different from what we are receiving today. I also feel that if we are going to allow the European economic union to operate for any number of years, it is going to become more and more difficult for us to ally ourselves with the economy of western Europe. I feel that the longer we postpone closer economic ties with member nations of the commonwealth, the more difficult it is going to be for us to cement those ties, because they are not exploring ways and means of allying their economic lives with the economic lives of other parts of the world.
I feel that we have done ourselves a lot more harm than good over the past five years by protesting so loudly yet never being prepared to follow up any protest with any action. We have established much ill will south of the border. We have deliberately- I blame in the main the former Liberal government for this-alienated ourselves from the markets of Europe, the United Kingdom and the commonwealth. I regret that I fail to see any substantial action which

has come out of this government in the past eighteen months of its life to indicate that there has been any fundamental and basic change. They, like the former government, keep on running to Washington hoping that they will get a better deal out of Washington. I feel, Mr. Speaker, that that better deal is going to be a long, long time in showing itself.



BUSINESS OF THE HOUSE

Mr. Chevrier:: Mr. Speaker, may I ask the house leader what the business is for tomorrow and Wednesday, and for the rest of the week if he can so indicate?
Business of the House


Mr. Green:: Tomorrow, of course, we will continue with this debate. On Wednesday we will take interim supply and the supplementary estimates. Then we will go on to agricultural estimates. The first item on today's order paper, item No. 2, deals with amendments made by the Senate to the act to amend the National Defence Act. We want to move concurrence in those amendments.


Lionel Chevrier: Will that be done on Thursday?


Howard Charles Green: Wednesday or Thursday.


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

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

Mr. Argue: 1.	Did Dr. Jacques Rousseau hold a position at the Montreal botanical garden prior to his appointment as a director of the national museum of Canada? If so, what position?
2.	How long had he held this position, and what were his responsibilities in this regard?
3.	How long had Dr. Rousseau been employed by the Montreal botanical garden prior to his last appointment and what positions had he held during this time?
Answer by: Hon. Alvin Hamilton (Minister of
Northern Affairs and National Resources):
1.	Yes. Scientific director.
2.	From March 15, 1956 to March 12, 1957. The department has not determined what were his responsibilities other than to learn that Dr. Rousseau no longer had administrative responsibilities after March 14, 1956.
3.	The department is informed that, from 1938 to 1942 Dr. Rousseau was part time and full time assistant director; that from 1942 to March 14, 1956, he was superintendent of the garden; on March 14, 1956, by resolution of the Montreal executive committee, he was relieved of any responsibility for the staff and became "scientific director" of the garden until he resigned on March 12, 1957.


AIR CONDITIONING SYSTEM REPAIRS, PRINTING BUREAU
Mr. Pigeon: 1.	Is the government repairing the air-conditioning system of the printing bureau?
2.	If so, what is the cost of such repairs?
Answer by: Hon. Howard C. Green (Minister of Public Works):
1.	Yes. The new work provides for improvements to the existing air conditioning system.
2.	Funds were provided in estimates for $800,000. Tenders were called recently and are being processed through treasury board.


APPENDIX
[Stage Direction]
Royal Canadian Mounted Police Office of the Commissioner Ottawa
March 12, 1959.
The Hon. E. D. Fulton, Q.C., M.P.,
Minister of Justice,
OTTAWA, Ontario.
Dear Mr. Fulton:
On Sunday last you received a wire from the attorney general of Newfoundland asking under the terms of the contract that 50 R.C.M. Police reinforcements be sent to that province for duty in areas where the loggers are on strike. At about the same time I received a telephone call from Superintendent A. W. Parsons, the officer commanding the R.C.M. Police in Newfoundland, advising me of the situation and informing me that he had requested the attorney general to apply for help.
Superintendent Parsons told me that he might be able to get some assistance from the Newfoundland constabulary, the provincial force which polices St. John's, and I asked that he follow up on this possibility at once in the hope that help from that quarter might avoid the necessity of sending in reinforcements from outside.
I discussed the situation with you during the afternoon by telephone. I also received a further call from Superintendent Parsons letting me know that he had been able to get a detail of 25 men from the Newfoundland constabulary and had also scraped up another 20 from his own resources. With this help he felt that his request for reinforcements from outside might be held in abeyance.
On Tuesday, March 10, at your request I dispatched the following message to Superintendent Parsons:
Please deliver following message to Mr. Curtis begins re your tel. March 8 to Minister of Justice Stop Mr. Fulton has referred matter to me with instructions to watch situation closely Stop Have accordingly taken steps necessary to insure that RCMP reinforcements are ready with air transport available Stop I am advised changing situation including steps taken within provincial establishment and help from constabulary indicate reinforcements from outside province may not now be needed Stop Accordingly situation will be watched closely and readiness maintained pending further developments ends
At 11 o'clock Tuesday evening, March 10, Superintendent Parsons informed me of the clash which had just taken place on the highway outside the town of Badger between approximately 300 strikers armed with clubs, bottles and other weapons, and a detail of about 50 police including 15 men of the Newfoundland constabulary. Parsons felt that this clash might be the turning point and might convince the strikers that the police were determined to maintain law and order.
At about 6 a.m. yesterday Parsons telephoned me again and told me that instead of improving the situation in the Badger area was deteriorating. Another 100 men had come in during the night and the total number of strikers in this little town now stood at about 400. These were almost all from outside points.
At 8:30 a.m. yesterday I informed you of the situation and, with your approval, took steps to get a body of 50 men ready in the maritimes and to arrange for air transportation. Later you asked that the plane be held at Moncton where some of the men were to be gathered until the cabinet had time to consider the Newfoundland request. At about 5:20 p.m. you informed me that the cabinet had decided the request from Newfoundland was to be refused. I thereupon told you that I could not understand or agree with the decision and that I would let you have my resignation the following morning.
The clause in the contract dealing with the provision of reinforcements is to my mind quite clear. It reads as follows:
Where in the opinion of the attorney general of the province an emergency exists within the province requiring additional members of the force to assist in dealing with such emergency, Canada shall, at the request of the attorney general of the province addressed to the commissioner, increase the strength of the division as requested if in the opinion of the Attorney General of Canada, having regard to other responsibilities and duties of the force, such increase is possible.
There is no doubt in my mind as to the need and I am certain that the number of men asked for can be provided without prejudice to "other responsibilities and duties."
I realize that other issues are before you which arise from this strike but I feel most strongly that the matter of law enforcement should be isolated and dealt with on
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its own merits. This is the attitude the force has taken throughout. It has not concerned itself with the issues back of the strike but has merely tried to maintain law and order in the area.
I think the contract clause on this matter of providing reinforcements in an emergency is clear and I cannot escape the conclusion that failure to supply reinforcements in this instance is a breach of that clause. Bearing in mind that we have similar contracts with seven other provinces the decision of the government has a particular significance.
With these considerations in mind I feel I have no option but to ask you to accept my resignation and this I now do. I hope you will be able to relieve me as soon as possible and I shall await your advice as to what arrangements will be made to that end.
I cannot close without telling you how much I regret having to take this step. I am within a year of completing my full service and I had looked forward to finishing my time in a more pleasant way. I have enjoyed serving under your direction and I have appreciated your support of the force and your active interest and understanding in all aspects of its work. I assure you that it is only a firm conviction of the correctness of my view which leads me to take this disagreeable action.
Yours sincerely,
L. H. Nicholson
(L. H. Nicholson), Commissioner.
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Minister of Justice and Attorney General of Canada
Ottawa, Canada,
March 16th, 1959.
Commissioner L. H. Nicholson,
Royal Canadian Mounted Police,
Ottawa, Canada.
Dear Commissioner Nicholson,
I have received your letter of March 12 and have learned with regret your decision to submit your resignation as commissioner of the Royal Canadian Mounted Police.
You first indicated your intention to resign on Wednesday evening, March 11. This was in the course of a telephone conversation, immediately after I had informed you of the decision that the reinforcements requested by the attorney general of Newfoundland should not be sent at that time. My recollection of the developments leading up to that point is in accordance with the
facts as set out in your letter of March 12, with one minor exception to which I shall refer later.
The fundamental difference between us, as I view the matter, centers around your conclusion that there has been a breach of the clause quoted by you from the contract between Canada and Newfoundland.
The obligation imposed on Canada by that clause is to increase the number of members of the force in the province if, in my opinion as Attorney General of Canada, "having regard to other responsibilities and duties of the force," such increase is possible.
In reaching my conclusion on the question whether "having regard to other responsibilities and duties of the force", such increase were possible, I, of course, as you know, gave the most careful and anxious consideration to your views that additional members could and should be sent to Newfoundland without prejudice to other responsibilities and duties of the force. However, upon a consideration of all the factors, including especially the importance of preserving the character and capacity of the force to discharge its duty in connection with law enforcement in all of Canada, I came to the conclusion, after consulting my colleagues, that, as the situation existed at that time, it was not possible to send the additional men requested without prejudicing the other responsibilities and duties of the force.
This decision was my responsibility. I reached it only after the most careful consideration of your views and of all the other factors that, in my judgment, were relevant. I regret profoundly that you came to the conclusion that, by reason of that decision, you should resign.
Much as I regret your decision to tender your resignation, under these circumstances I have no alternative but to accept it and am prepared to make a submission to the governor in council accordingly. However, there will be a number of administrative arrangements that must be made to meet the situation thereby created, and I shall appreciate it if you will carry on until such time as a successor can be appointed. I expect this will be in the very near future.
While the point of minor difference to which I referred at the beginning of this letter may not be of any real significance, I should mention it for the purposes of the record. It is my clear recollection of our conversation at 5:20 p.m. on March 11 last, that I informed you that the decision taken as of that time was that the dispatch of reinforcements was to be delayed pending further consideration, and not that it had

been finally decided to refuse the request, as appears from the third paragraph on page 2 of your letter. I appreciate that, from your point of view, this difference may not be of any significance in its implication. Nevertheless I thought that I ought to mention it.
It remains only for me to express my deep personal regret that you should feel impelled to make this decision. You know that I disagree with your view as to the course you should follow but I respect the sincerity and conviction with which you
hold it. I have enjoyed our association since I became minister responsible for the force and have appreciated your advice and support and the very pleasant relationship we have enjoyed in every aspect of the work of the force. You can rest assured that whatever may be the views as to the present situation you have earned the respect and esteem of all those with whom you have served.
Yours sincerely,
E.	D. Fulton.
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Tuesday, March 17, 1959

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A message from His Excellency the Governor General transmitting further supplementary estimates for the financial year ending March 31, 1959, was presented by Hon. Donald M. Fleming, (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.