1959-06-01

[Stage Direction]
A message from His Excellency the Governor General transmitting supplementary estimates for the financial year ending March 31, 1960, was presented by Hon. Donald M. Fleming (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.
(Translation) :


Mr. R. J. McCleave (Halifax):: Mr. Speaker, I have the honour to table the 14th report of the standing committee on private bills, in English and in French.
(Text):


EXTERNAL AFFAIRS
Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, by leave of the house I should like to make an announcement respecting two important matters which are referred to in the supplementary estimates.
It will be recalled that when the heads of governments of the NATO countries met in Paris in December, 1957 I brought forward a proposal for the establishment of a food bank among the NATO countries for use particularly in the event of any outbreak of hostilities.	At that time I expressed the
willingness of the Canadian government to play its part in the establishment of such an institution. The house was made aware of the facts of this question on July 19 of last year, during the debate on the estimates of the Department of Trade and Commerce. Since then and throughout the year discussions have been going forward in NATO, and directly with interested countries, to determine under what conditions a Canadian contribution to NATO food stockpiles in Europe might be made. These discussions were most useful, and I am hopeful that it will not be long before it will be feasible for a Canadian contribution to be made effective.
I would therefore advise the house that the government has now decided to ask 66968-9-266J
parliament to provide $10 million for the current year by an item in the supplementary estimates, such an amount to provide for Canadian flour for storage.
I would also, subject to the approval of parliament, like to say it has been decided to make available free of charge an additional 20 million pounds of dried skim milk to relief agencies, both national and international, for distribution to needy people in other parts of the world. While some of this milk will be used to meet emergency requirements, the bulk of it will be used to provide people, and particularly children, in the less developed countries with a supplementary source of food and a much needed means of balancing their diet.
Of the 30 million pounds which we set aside on the same basis for the use of relief agencies in the past year, nearly half has now been taken up by UNICEF, the Unitarian service committee of Canada, the Canadian Lutheran world relief agency, the Canadian council of churches and CARE of Canada. It is expected that the balance of the amount previously set aside, together with the additional supplies which are now being made available, will help these and similar organizations to carry on with the humanitarian work which they have been doing in other parts of the world.
These particular items are Nos. 506 and 510 respectively in the supplementary estimates.


Hon. L. B. Pearson (Leader of Ihe Opposition):: Mr. Speaker, the proposal for the establishment of a NATO food bank, which has been under consideration for some time, is one which certainly commends itself to those on this side of the house. This is one reason, Mr. Speaker, why we were somewhat discouraged a year or so ago-perhaps not as long back as that-when the United States state department representative indicated to the congressional committee that not much progress was being made in that direction. The Prime Minister has now announced that as far as Canada is concerned, a specific proposal has been made to set aside a certain amount-I think he said for flour-to initiate this NATO food bank.
If this food bank is to be successful it will have to be participated in by other NATO countries. I am not in a position now to express an opinion on whether the bank will

NATO Food Bank
be more effective through the storage of flour than wheat. It is one of the things that will have to be gone into, but the principle of a food bank seems to us to be a good one, and if it can be carried out on a NATO basis it will receive support from this side.
I have read, Mr. Speaker, that recently the United States, which should be participating, of course, in this kind of enterprise, has shown more interest in the President's food for peace proposal, about which there have been discussions I think in Washington or New York, I am not sure which, recently. It is to be hoped that these two ventures will not conflict.
So far as making available skim milk powder for relief is concerned, my hon. friend the Minister of Agriculture will recall that my colleague the hon. member for Essex East brought up this matter during the discussion of the minister's estimates, I think it was, and he received a rather discouraging reply from the minister in regard to his proposal. I have understood from what the minister and others have said that it has been difficult to find relief agencies and others who are interested in the amount of skim milk we have been able to make available to them, and I hope the announcement of the Prime Minister this afternoon indicates that that particular difficulty has been overcome. I cannot think of any better way to use surpluses of this kind than for the purposes indicated by the Prime Minister.


Mr. Hazen Argue (Assiniboia):: 

MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 113-Mr. Argue:
For a copy of all telegrams, correspondence, reports and other documents, exchanged between the Minister of Northern Affairs and National Resources, his deputies or officers of the national museum of Canada, and any person or persons, relating to any aspect of a circumpolar conference held at Copenhagen, Denmark, on May 19, 1958.
Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: Mr. Speaker, I have no objection to this motion subject to the usual internal privileged document reservation.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion subject to the reservation expressed by the minister?


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 114-Mr. Argue:
For a copy of the contract awarded to Polar Engineering Construction Limited by the Department of Northern Affairs and National Resources in connection with the construction of a Yukon-Northwest Territories highway.
Francis Alvin George Hamilton: I have no objection to this motion, except that I should like to see the hon. member for Assiniboia afterwards and clarify exactly what he means by "Yukon-Northwest Territories highway". I think that can be arrived at without any change in the motion.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 115-Mr. Argue:
For a copy of all telegrams, correspondence and other documents exchanged since January 1, 1957, between the Department of Northern Affairs and National Resources, and any person or persons, regarding the construction of a Yukon-Northwest Territories highway.
Francis Alvin George Hamilton: There is no objection, Mr. Speaker, except with respect to the clarification I mentioned in connection with the previous motion.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 116-Mr. Argue:
For a copy of all correspondence, telegrams, reports, and other documents exchanged between any department of the federal government, and each of the provincial governments, since January 1, 1957, regarding a scheme for crop insurance.
Hon. D. S. Harkness (Minister of Agriculture):: This is acceptable, subject to the usual reservation and particularly to the agreement of the provinces being secured.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion, subject to the reservation expressed by the minister?


[Stage Direction]
Motion agreed to.
FLOOR PRICE ON HOGS Motion No. 117-Mr. Argue:
For a copy of all correspondence, telegrams, reports and other documents, exchanged between any department of the federal government, and any farm organization, regarding the establishment of a floor price on hogs since November 1. 1958.
Douglas Scott Harkness: This is acceptable, subject to the usual limitations.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion, subject to the limitations expressed by the minister?


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, would the Minister of Finance make a statement on the important and novel financial operation announced by the government on Friday last? Perhaps in his statement he might also include an explanation as to why the announcement was not made in the House of Commons before it was given to the press.


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, on Friday morning at 9 o'clock the wires, in the usual way, were delivered to those who are interested in financial offerings of this kind. The offering is an invitation in respect of up to $200 million of government of Canada one year treasury bills dated June 10 for sale through competitive
Inquiries of the Ministry tender. Payment for the treasury bills may be made in either cash or by exchange of government of Canada bonds of the issue which matures on July 1 next. Tenders will be received up to the closing hour of five o'clock on Tuesday, June 2, that is tomorrow, from primary distributors of new issues of government of Canada securities. The Minister of Finance reserves the right to accept or reject any tender in whole or in part.
This is the first time, Mr. Speaker, the government has issued or offered treasury bills of one year maturity. We have long been accustomed to bills of three months' maturity. Recently we have been offering bills with six months' maturity. The former government for several years had offered bills of a nine months' maturity. The one year maturity is a well established treasury bill in the experience of the United States.
As to the second part of the hon. gentleman's question, may I say that it has never been the practice to announce offerings of this kind in the house before they are made public. These offerings are regularly made whether of treasury bills or of bond offerings. The treasury bill tenders are invited every week. The tenders are received and opened at noon every Thursday. That has been the practice followed for a long time both with regard to the three months' treasury bills and also lately with the six months' treasury bills.
So far as bond offerings are concerned, it has not been the practice to announce these in the house. As a matter of fact, they could not be announced in the house at a good time because the house meets in the afternoon. It has been the practice of my predecessors, as well as the practice that has been observed since we came into office two years ago, that these offerings go to the primary distributors by telegram for delivery at their offices at the opening of business on the morning chosen.


Lester Bowles Pearson: In view of the fact that the minister himself has said that this was an unprecedented offering, and in view of the fact that the information was given to the press, does the minister not think it would have been at least a courtesy to have given parliament this information at eleven o'clock on Friday morning?


Donald Methuen Fleming: There was no discourtesy to the house. The information was available. If there had been any question by the hon. gentleman I would have been glad to deal with it then. As a matter of fact I rather expected that he would have had a

Inquiries of the Ministry question. Questions have been asked repeatedly in the house about treasury bills by hon. gentlemen opposite. Their interest in this matter has been very keen. But, Mr. Speaker, the practice has not been to announce these matters in the house. If the house wishes information week by week as to treasury bills or special information of this kind, the house will certainly be given the information. But this information was made public at the same time as the telegrams of offering reached the desks and offices of those to whom they were directed.


Lester Bowles Pearson: In view of the fact that this was an unprecedented offering may I ask the minister a supplementary question with regard to it. Is it a fact that 2J per cent bonds maturing on July 1 will be redeemed at 101.25 per cent instead of 100 per cent if they are exchanged for the new issue? If that is the case, why was it necessary to offer this particular inducement?


Donald Methuen Fleming: Mr. Speaker, the basis upon which this valuation is placed on the bonds to be turned in is contained in the following sentence in the prospectus:
Where 21 per cent government of Canada bonds due July 1st are offered in exchange at a valuation of 101.25 per cent they must be in bearer form with the final coupon attached or if in registered form be accompanied by proper transfer documents.
Mr. Speaker, the hon. gentleman has made quite a play on the use of the expression "unprecedented".


Lester Bowles Pearson: You used it first.


Donald Methuen Fleming: The thing that is unprecedented is simply the fact that the treasury bill has been given a 12 month maturity. I have already pointed out that we have had in this country three month, six month and nine month treasury bills. The form of the offering is new only in so far as this is a twelve month offering in place of some of those shorter maturities as in the past.


Mr. Erharl Regier (Burnaby-Coquiilam):: Mr. Speaker, I should like to ask the minister whether he would explain to the house why unmatured victory bonds were called in last year, and now in effect one year treasury bills are being put in their place. Is the minister afraid of issuing a long term government bond?


Donald Methuen Fleming: Mr. Speaker, I am afraid the hon. gentleman is just all mixed up. Last year what we offered was a conversion bond issue in return for victory bonds of five different maturities to the extent to

which the holders were prepared to exchange them. On this occasion, those who hold this bond which matures on July 1 next have the opportunity offered to them, if they agree to exercise it, to tender for these treasury bills up to the amount stated. It is entirely a matter for their own choice whether or not they tender for these bills, and it will remain a matter for choice on the part of the Minister of Finance to accept or refuse any tender in whole or in part.


Erhart Regier: May I ask the minister why the government decided not to issue a long term government bond rather than proceed along these lines?


Donald Methuen Fleming: We considered that in the public interest this was the best form of maturity to offer at this particular time for this particular amount.


Mr. W. H. McMillan (Welland):: Is the minister aware that the highest United States short term treasury bill rate is 3 per cent, while our own exceeds 5 per cent, a differential of over 2 per cent?


Mr. Speaker:: I think we have had a fairly
complete discussion of the question initiated by the Leader of the Opposition. The hon. member for Welland has just asked a supplementary question which appears to be giving information rather than asking for it, and I suggest that we pass to the next topic.


Donald Methuen Fleming: With respect, Mr. Speaker, a very misleading impression has been left by the observation which the hon. gentleman has just made, and I would ask the opportunity to set that right. Evidently the hon. member is not aware of the situation with respect to treasury bill rates in the United States. I happen to have them with me in a statement which reached my desk only today. On the 340 day bills in the United States the rate is 3.835 per cent average; on the 220 day bills it is 3.565 per cent average, and on the 1 year certificates, the 4 per cent coupon is offered on a 4.05 per cent basis.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: wish to give the Minister of Finance an opportunity to satisfy my natural curiosity. Can the minister inform the house whether the Washington news dispatch is correct, of date May 29, to the effect that the Soviet foreign

minister, Andrei Gromyko, informed Hon. Donald Fleming, Minister of Finance for Canada, at President Eisenhower's luncheon in the White House, on Thursday, May 28, that he still prefers the Progressive Conservative and Labour Progressive parties to all others in Canada? If so, would the minister care to comment on this provocative, evocative and projective statement?


Mr. Speaker:: The question does not appear to come under any of the better known administrative responsibilities of the Minister of Finance, but since it has been asked I will not prevent the hon. gentleman from commenting if he wishes to do so.


Donald Methuen Fleming: The first part of the question asks me whether this news dispatch is correct. Well, the news dispatch does bear a resemblance to the facts. The hon. gentleman may recall that the late lamented Gordon Graydon, in the days when he used to be one of the Canadian parliamentary observers at the United Nations, struck up quite a friendship, among many others with Mr. Gromyko. All those who knew Mr. Graydon will recall his affability. In conversation with Mr. Gromyko at the President's luncheon at the White House last Thursday I made some reference to the late Gordon Graydon, and Mr. Gromyko remembered very well the way in which Mr. Graydon used to exchange banter with him.
In those days the word "progressive" was the favourite word in the communist vocabulary, and Mr. Gromyko did not always differentiate very clearly between political parties which embraced the word "progressive" in their names. I did not say to him, though I might have, that there is one party in this house, namely the party to which the hon. gentleman belongs, which sometimes has a little difficulty with its name, too.


Hon. Paul Marlin (Essex East):: A supplementary question with regard to this bit of history inaccurately accounted for in the remarks of the Minister of Finance. Is it not a fact that Mr. Gromyko told Mr. Graydon that he would become a member of the Progressive Conservative party provided the Progressive Conservative party became socialist?


Donald Methuen Fleming: I do not recall that rider, but I can well guess that by the time the report passed through the hands of the hon. member for Essex East there would be some unrecognizable accretions to the story.
Inquiries of the Ministry ST. LAWRENCE SEAWAY


[Stage Direction]
On the orders of the day:
Mr. F. E. Lennard (Wenlworih):: I should like to address a question to the Minister of Transport. Could the minister say what is being done with regard to congestion on the Welland canal of down traffic from Port Colborne?


Hon. George H. Hees (Minister of Transport):: I wish to thank the hon. gentleman for having given me notice of his intention to ask this question. The hon. members from Hamilton West, Hamilton East and Hamilton South also asked this question.


Mr. Pickersgill:: What about the hon. member for Welland?


George Harris Hees: As a matter of fact I have not heard from the hon. member for Welland. This congestion occurred last week and was brought about by the large volume of shipping, inward bound, which left the Welland canal during the first month of operations this year, and by the heavy surge of foreign shipping which has used the canal this season. On Friday there were reported to be 33 ships waiting at Port Colborne to go through the canal. This morning 22 were waiting, so it can be seen that the congestion has been reduced by practically one third in three days.
Two weeks ago I announced a system of priority for bulk carriers carrying supplies which are vital to the industries of North America, enabling them to pass through the canal more quickly. That system of priorities is still in operation. I hope the congestion at Port Colborne will be materially reduced during the next few days, and I feel sure that the system of priorities introduced two weeks ago will greatly assist ore and other carriers to pass through the canal more quickly.


Hon. Lionel Chevrier (Laurier):: Can the
minister tell me whether the report which appeared recently in La Presse of Montreal to the effect that his department is carrying on a study of the economics and costs of duplicating the single locks on the Welland canal is accurate?


George Harris Hees: No, Mr. Speaker. I spoke with a gentleman from La Presse in Montreal a week or so ago when I was down there for the christening of one of our ships, and I told him that we were looking into the possibility of putting in tie-up walls between several of the locks so as to facilitate the movement of ships, and also examining the time taken at the lock gates on the Welland

Inquiries of the Ministry canal as compared with that taken at the newer lock gates which have been constructed in the seaway proper to see if the time saved would warrant the necessary expenditure on the older locks.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: 1 should like to address a question to the Minister of Labour arising out of a telegram I have received from Mr. D. Thomson of Winnipeg stating that while Canada Packers and Burns and Company have granted medical coverage to their Canadian employees, Swift and Company, a United States corporation, refuses to permit its Canadian subsidiary to enter into a similar agreement.
Has the minister received a similar telegram, and what action can the minister take to see that this kind of coverage is granted industry-wide?


Hon. Michael Starr (Minister of Labour):: I received a message this morning to that effect. In reply I must inform the hon. member that the setting up of health and welfare benefits by employer and employees on a participating basis is a matter for collective bargaining. Labour legislation covering the meat packing industry rests entirely with the provinces, and I suggest that the only action which could be taken rests with the provinces.


Hazen Robert Argue: Mr. Speaker, I wonder if the minister would have any comment to make on that particular part of the statement wherein it alleges that a United States company is to prevent-


Mr. Speaker:: Order. I think any further questions become out of order by reason of the fact brought out by the minister that these companies are subject to provincial jurisdiction rather than federal, and that it is not a matter under his administrative responsibility.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, may I ask the Minister of Agriculture how he reconciles the statement he made in this house at page 2963 of Hansard of April 23, 1959, when he was reported as saying-
-it is apparent that our production of skim milk powder must be reduced-

-with the statement made earlier in the day by the Prime Minister with regard to moneys being provided by Canada for allocating skim milk to the international food bank about which he made reference, and whether or not-


Mr. Speaker:: Order. I ask the hon. member who is pursuing this matter whether it would not be better to deal with it when these supplementary estimates come before the house, as they undoubtedly will in a very short time. It seems to me that if he is asking for an explanation and justification it would be more appropriate to have the matter dealt with in debate.


Paul Joseph James Martin: Well, Mr. Speaker, the estimates of the Minister of Agriculture have been completed-


Mr. Speaker:: I was referring to the supplementary estimates.


Paul Joseph James Martin: Yes, I know. I was about to say that the estimates of the Minister of Agriculture have been completed. The supplementary estimates, as Mr. Speaker knows, are generally prosecuted by the Minister of Finance. In any event my second question is very important. In view of the announcement made by the Prime Minister does the Minister of Agriculture not think he ought to review his judgment and restore the 5 cents to the floor price on skim milk, the reduction of which he announced a few months ago in this house?


Douglas Scott Harkness: Mr. Speaker, apparently the hon. gentleman does not appreciate what the situation is in regard to skim milk powder. The 50 million pounds which the Prime Minister has announced will be available in toto, of which some 15 million pounds have already been taken and a few million more have been more or less contracted for, will not remove the surplus which we hold at the present time, let alone take care of any further amounts which we may obtain during the present period and up to the end of September when the present purchase program for dried skim milk will come to an end.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, may I direct a question to the Minister of Transport. Is the minister aware of a British United Press release issued this morning to the effect that fines were levied against two air lines at Gander because of

alleged infractions of the quarantine, immigration and sick mariners regulations? Has he taken cognizance of the fact that air line pilots threatened today to boycott Gander airport and use other refueling stops on the trans-Atlantic run?
I wonder if the minister would be good enough to comment on this. Unfortunately I did not send him notice, but perhaps he could comment without having had notice.


George Harris Hees: Yes, Mr. Speaker, I heard this report. I understand that the people concerned are employees of departments other than my own. We are having it looked into right away.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to direct a question to the Minister of Citizenship and Immigration. Has the minister's attention been drawn to what appears to be a factual account in a recent issue of The People, published in London, England, of the difficulties facing highly skilled, industrial craftsmen who emigrate to Canada from Britain, under present conditions as the result of what is stated to be an almost total failure of co-ordination between the unemployment authorities in Canada and our immigration officials overseas? If so, has the minister investigated the circumstances mentioned with a view to making any necessary correction in administrative procedures?


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: Mr. Speaker, one day last week I answered a question asked by the hon. member for Assiniboia with reference to the reports which have been appearing in The People. I have not seen the actual report to which the hon. member refers, but I have seen some of the Canadian press comment on that report.
In so far as the reporting of The People is concerned, I think I answered that last week. With respect to co-operation between the national employment service and this department I may say that it has always been very close, and the information that is given to our offices overseas is given only after careful consideration and with the approval and co-operation of the national employment service.


Herbert Wilfred Herridge: A supplementary question, Mr. Speaker. The report on which my question was based is contained in the most recent issue of The People, which I think is in much
66968-9-267
Inquiries of the Ministry better tone. It seems much more factual than the previous articles. Would the minister look into those articles?


Ellen Louks Fairclough: Well, Mr. Speaker, we look into all these allegations whether or not they appear to have any basis in fact. I think what I said a few moments ago is about as far as I can go. If there was any suggestion that there was lack of co-operation we would immediately investigate it without waiting for the sensational news report of The People.



PAY DEDUCTION FROM IMMIGRANTS ATTENDING COURT FOR CITIZENSHIP CERTIFICATES

[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Minister of Citizenship and Immigration. Would the minister investigate the possibility of discouraging certain corporations from deducting wages from new Canadians who are obliged to attend court to try their examinations and receive their certificates when making application for citizenship?


Ellen Louks Fairclough: Mr. Speaker, if this has happened in a court located in the same city as the industry concerned I am sorry to hear about it. I do not think it is usual, but I am afraid, in so far as the department is concerned, there is no action that can be taken in the matter. It would be a voluntary courtesy on the part of the industry itself to the employee.



INDUSTRY


[Stage Direction]
On the orders of the day:
Erhart Regier: Mr. Speaker, may I direct a question to the Prime Minister. Has the Prime Minister received advice concerning the proposed closing of the large Canadian Cottons textile plant at Hamilton? If so, is he in a position to say what action the government is contemplating that will provide employment to the workers concerned?


John George Diefenbaker: Mr. Speaker, I noticed in the press that the textile plant in question was closing. In so far as providing alternative employment is concerned, that is a continuing problem which receives the fullest consideration by the government.

Inquiries of the Ministry ROYAL VISIT



REQUEST FOR BILINGUAL PRINTING OF TOUR BROCHURE

[Stage Direction]
On the orders of the day:
Mr. Augustin Brassard (Lapointe):: Mr. Speaker, I should like to direct a question to the Minister of Northern Affairs and National Resources. In view of the fact that the official program for the royal tour has been printed in English only by the Canadian government travel bureau under the authority of the minister, and also in view of the fact that protests have been filed with the bureau, I wonder if the minister would be kind enough to see that this situation is remedied and that the program is printed in both official languages of Canada.
I would also like to say that Her Majesty is going to visit Chicoutimi, Jonquiere and Kenogami, and these three names do not appear in the official program.


Francis Alvin George Hamilton: Mr. Speaker, I received notice of this question over the lunch hour. I have not been able to get the full story, so I will have to tell what I know from memory.
The Canadian tourist association wrote the Minister of Transport about having a brochure of the royal tour printed. The minister wrote my department, under which the travel bureau comes, and asked if we could provide some sort of brochure for the royal tour. One was produced and I see that it went beyond the actual confines of the brochure as originally conceived and contains something of the itinerary.
The travel bureau prints these documents for distribution in the United States, and I understand that some will be available for distribution in Canada. The department has not followed the practice of printing these in French. May I point out that this is not the official itinerary. If the hon. member wishes to inquire about it, I suggest that he direct an inquiry to the appropriate minister.



HOUSING

[Stage Direction]
st. John's east, nfld.-inquiry as to

[Stage Direction]
On the orders of the day:
Mr. J. R. Tucker (Trinity-Conception):: Mr. Speaker, I should like to direct a question to the Minister of Public Works. Would the minister please advise the house when he expects the land assembly project in St. John's East, Newfoundland, will begin?
[Mr. Diefenbaker.J

Hon. Howard C. Green (Minister of Public
Works): Mr. Speaker, a land assembly project in St. John's, Newfoundland is presently under consideration, but as yet no definite announcement can be made as to date of commencement.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. M. A. Hardie (Mackenzie River):: Mr. Speaker, I should like to direct a question to the Prime Minister in regard to the Pine Point railway. I would like to refer to the Powell River Digester of March-April, 1959. There is an article in this Digester written by Hon. Alvin Hamilton, which reads in part as follows:
The time honoured means of transportation-by rail-is also to add its quickening influence to the development of the north. The federal government's decision that a railway connection is to be extended to the south shore of Great Slave lake is another good omen for the early opening of a new and exciting chapter in the economic development of Canada's last frontier.
Can the Prime Minister tell the house when the decision was made, if there has been a decision made, and when the start will be made on the construction?


John George Diefenbaker: Mr. Speaker, I will have to see the article in question before making any answer.



INQUIRY AS TO FRENCH EDITION OF &quot;TRADE AND COMMERCE&quot;

[Stage Direction]
On the orders of the day:
Mr. Alexis Caron (Hull):: Mr. Speaker, may I direct a question to the Minister of Trade and Commerce. Can the minister tell the house why the supposed to be French equivalent of the publication Trade and Commerce, namely Commerce Exterieur, is not as complete and is published monthly only, when Trade and Commerce is published bi-monthly.


Hon. Gordon Churchill (Minister of Trade and Commerce):: I did not receive notice of the question, Mr. Speaker, and I will take it as notice.



REPORTED DROP IN SHIPMENTS FROM LAKEHEAD

[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce, arising out of the very drastic reduction in shipments of

grain from the lakehead. Can the minister explain why shipments from the lakehead since the opening of navigation have dropped from 86 million bushels last year to only 42 million bushels this year, a*d whether anything is being done to speed up shipments through the St. Lawrence seaway?
Hon. Gordon Churchill (Minister of Trade
and Commerce): Mr. Speaker, this question in almost similar form was asked ten days ago. Already today the Minister of Transport has given an explanation with regard to shipping facilities on the great lakes. I do not know whether my hon. friend from Assiniboia is attempting to cause some alarm with regard to the situation but, as I pointed out ten days ago, our export market has not been interfered with at all because grain has been in position in the elevators on both coasts, and our export of wheat and flour up to the end of March of this year has just been 9 million bushels below the same period last year.
Now, if the hon. member for Assiniboia is worried about producers' marketing deliveries to the country elevators, may I assure him that for the period of the crop year up to May 20, 1959 wheat delivered by producers exceeded that delivered for the same period last year. The same is true for barley and flax; it is a little bit down on oats and rye. The general situation with regard to producers' marketing is just about the same as a year ago.
If he has any further worry with regard to the quota distribution in the prairie provinces, may I assure him that this year at this time there are 264 stations on a 7-bushel quota per specified acre; last year there were none. This year there are 308 stations on a 6-bushel quota per specified acre; last year there were 341. Generally the picture is much better than it was a year ago.


Hazen Robert Argue: Mr. Speaker, I wanted to know whether there might be some improvement in this very drastic reduction in shipments out of the lakehead, and I am asking the minister whether he can make any statement on that point. I would like him to comment as to why almost consistently since the opening of navigation Canadian exports are down this year as compared with a year ago.


Gordon Minto Churchill: Mr. Speaker, that last statement is quite incorrect. Canadian exports are holding up extraordinarily well.


Hazen Robert Argue: I am not talking about the year in question; I am talking about recent weeks since the opening of navigation. The graph put out by the minister's own department shows a very substantial reduction. I can send it across to the minister.
66968-9-267i
Inquiries of the Ministry


Gordon Minto Churchill: There was a delay in the opening of navigation this year, as my hon. friend knows, because of ice conditions not only in the canals but at the lakehead, and there has been some difficulty in the speeding up of shipping on the lakes; but I do not think there is any need now for despair, gloom and despondency, of which my hon. friend is a great purveyor.


Hazen Robert Argue: Mr. Speaker, the minister has told us that shipments out of the lakehead did not reduce overseas clearances, yet-


Some hon. Members:: Order.


Hazen Robert Argue: I ask the minister how he relates his comment now that exports are down because of the delay in the opening of the navigation season with his previous statements. He cannot have it both ways.


Gordon Minto Churchill: I explained with regard to our exports overseas that grain was in position at the elevators in eastern Canada and on the west coast. They have been full, and grain has been moved from there as it has every year. The same is true of the elevators at Fort Churchill, from which 20 million bushels will be used as soon as navigation opens there. I do not think there is any need for alarm with regard to our export position.


Hazen Robert Argue: On a point of order, I did ask a very proper question, I feel, that had nothing in it about alarm. I was merely trying to get from the minister in charge a statement as to whether or not this drastic reduction might be overcome in the weeks ahead. It was a very simple and very proper question, and I am asking the minister when this increase is likely to come about.


Mr. Speaker:: I suppose the hon. member might raise a point of order on the nature of the answer, but I do not know what his point is, if he has one.


Hazen Robert Argue: My point is that I asked a very simple question and the minister has talked about everything else. I asked him a simple question and-


Some hon. Members:: Order.


Hazen Robert Argue: I asked him the reason for the reduction in the shipments and whether this difficulty was likely to continue in the future.


Mr. Speaker:: I suggest that the hon. members may find another time and occasion to carry on this dispute.
4198	HOUSE OF
National Energy Board NATIONAL ENERGY BOARD



PROVISION FOR ESTABLISHMENT AND OPERATION, APPOINTMENT OF MEMBERS, ETC.

[Stage Direction]
The house resumed, from Friday, May 29, consideration in committee of Bill No. C-49, to provide for the establishment of a national energy board-Mr. Churchill-Mr. Rea in the chair.
On clause 47-Revocation and suspension of certificate.
The Chairman:: When the house rose on Friday last we were discussing clause 47 of the bill and the amendment proposed thereto by the hon. member for Burnaby-Coquitlam. Is the committee ready for the question on the amendment?


Erhart Regier: Mr. Chairman, at the time the committee concluded the discussion last week I had moved, as you have indicated, an amendment to the effect that we omit from clause 47 the words "with the approval of the governor in council". I should like to remind the committee that clause 47 reads:
(1) Subject to subsection 2, the board may by order, with the approval of the governor in council, revoke or suspend a certificate-
-and so on. I would like to underline the word "may". When the minister replied to our amendment on the first occasion he indicated that there might be times and conditions under which a company that had received a certificate should not automatically be obligated to lose its licence or its certificate. He indicated that certain unforeseen conditions might arise. However, it is our submission that the bill as it reads enables the energy board to take such matters into consideration, in that the clause provides that the board may revoke or suspend a certificate once it is issued if the terms and conditions of the certificate are not, in the opinion of the board, being complied with. We feel that the word "may" is the important word and that the board would act in the national interest and would take all circumstances into adequate consideration. We do not see why the governor in council or government of the day should want to delegate unto itself the authority to police the implementation of the act.
I can remember well that a number of years ago we were considering in the house a pipe line company that had been issued a permit to build a trans-Canada natural gas pipe line. Time after time this particular pipe line company was unable or unwilling to meet the terms and conditions upon which it had


been granted its rights. I can remember the Conservatives, who were in opposition at the time, asking the government of the day to enforce the terms and conditions that had been imposed upon Trans-Canada Pipe Lines Limited, but the government of the day procrastinated and continued to procrastinate. Six month extensions were granted one after another until many years elapsed from the time the pipe line was to have been built until it actually was built.
The Conservatives in the house at that *time expressed the opinion that the government of the day ought not to extend indefinitely the rights obtained by this pipe line company, and that if the company was unable to meet the terms and conditions which it had agreed to meet it should move out of the way and allow the formation of another pipe line company which would meet the needs of the Canadian nation in this regard. But here we have the Conservatives in office and asking that they be granted in this bill the same rights that were being exercised at that time by Right Hon. C. D. Howe. They are asking that we deny the energy board the right of enforcement of the terms and conditions attached to certificates. We find that the cabinet wants to retain this authority for itself.
We feel that once the energy board has recommended the issuance of a certificate and has set the terms and conditions the company must meet, once these terms and conditions have been reviewed by the cabinet and approved, thereafter the energy board, having issued a certificate either to build a pipe line or an international power line, should have the right to police the terms and conditions. In other words we believe that political considerations should not be a factor with regard to whether or not a company will be allowed to retain its certificate indefinitely irrespective of whether it obeys or flagrantly violates the terms and conditions to which it agrees. We cannot understand why the cabinet wants the authority to police the implementation of the conditions attached to the issuance of the certificate.
I remember quite well that on another occasion several years ago the house had under consideration the extension of the powers of the governor in council under the Emergency Powers Act. In my opinion one of the strongest arguments put forward by the Conservatives, then in opposition, against the extension of the Emergency Powers Act was, as one of their members said at that time, that this would allow the government to aid and abet any corporation politically friendly to the government in office, and would also enable the cabinet to extinguish completely

a Canadian corporation that did not subscribe to the particular political aspirations of the government in office. That was when the Conservatives really put on a fight in the house. That was the beginning of the road into office for the Conservative party.
Yet now that they are in office they are in effect, in expressing their non-approval of the amendment, asking for the very same authority, the authority to reward their friends and punish their enemies, an authority which in years gone by they regretted was being held by the Liberal government of the day. We contend that once the rules of the game have been established by the energy board and approved by the government of the day the board should be allowed to be the referee. We should give the energy board the authority to enforce, wherever they may deem it advisable, the terms and conditions of the certificate.
Amendment (Mr. Regier) negatived: Yeas, 4; nays, 58.


The Deputy Chairman:: Shall clause 47 carry?


Mr. Mcllraiih:: No, Mr. Chairman. In explaining this clause on Friday last the minister indicated that it was modelled on section 3 of the Exportation of Power and Fluids and Importation of Gas Act, and left the matter there. On checking that section I notice that a substantial change seems to have been made in the bill now before the committee. I wonder if the minister would explain why the change was made, and the purpose of the change.


Gordon Minto Churchill: Mr. Chairman, what is the substantial change to which the hon. member is referring and about which he wishes an explanation?


George James McIlraith: The former legislation provided an opportunity for any person licensed and in business, if he was not complying with any term or condition, to be given notice to bring himself into compliance with the term or condition. Under those circumstances the licence could not be revoked. Now a person has no protection; the new legislation gives him no protection at all.


Gordon Minto Churchill: I fail to understand that. Does not subclause 2 cover everything the hon. member has in mind? It reads:
No order shall be made under this section unless notice has been given to the holder of the certificate who is alleged to have violated or failed to comply with any term or condition thereof and an opportunity has been afforded to him of being heard.


George James McIlraith: Perhaps I had better explain more fully the point I have in mind. The clause before the committee now reads in this way, clause 47 (1):
National Energy Board
Subject to subsection (2), the board may by order, with the approval of the governor in council revoke or suspend a certificate if, in the opinion of the board, the person to whom it was issued has violated or failed to comply with any term or condition thereof.
(2) No order shall be made under this section unless notice has been given to the holder of the certificate who is alleged to have violated or failed to comply with any term or condition thereof and an opportunity has been afforded to him of being heard.
It will be noted that if there is an allegation of failure to comply with a term there is an opportunity of being heard; but the board, after the hearing, may still revoke the licence. The relevant part of section 3 of the exportation of power and fluids act provides, as follows:
A licence granted under this section may be revoked if the governor in council is satisfied that
(a)	the licensee has refused or neglected to comply with any of the terms or conditions of the licence-[DOT]
That is practically the same in its meaning.
(b)	notice of such refusal or neglect has been sent to the licensee, and
(c)	the licensee has, after receiving such notice, refused or neglected to comply with any such terms or condition.
The point is that under that legislation the licensee had an opportunity of bringing himself into full compliance with the terms and conditions. Under the legislation now before the committee the licensee may neglect or fail to comply with some term or condition, and it is quite true he is given notice, but the board still has the power to revoke his licence even though the licensee has brought himself into full compliance with the terms and conditions. What I fear in that is that we are putting these licensees in a position of uncertainty that is not going to be helpful to all concerned. I would fear, looking at the clause, that it is something more than was intended when the legislation was being considered.


Gordon Minto Churchill: I do not think it was intended to be more stringent than the provision in the exportation of power and fluids act. I see the hon. member's point, that the wording in that act permits the licensee to restore his position. We thought the fact that there was a hearing, or an opportunity to state his position, would obviously lead him to restore himself to the position in which he was before if he inadvertently failed to comply with some of the terms or conditions.
In any event there is a further protection, is there not, in that if the board errs in making an order after the licensee has complied with the conditions, the governor in council has a chance to review that decision because the approval of the governor in council is required. May I assure my hon. friend that

National Energy Board there was no intention of making it more stringent than the old clause. I feel that the new wording is not overly severe and that the licensee, because of the public hearing, will have a chance to get his position understood by the board.
There was not a hearing in the exportation of power and fluids act. There was first the alleged refusal or neglect to comply with conditions, then the notice, and then the order if the licensee refused or neglected to comply with the terms or conditions. The hearing provides him with an opportunity to appear and state his case, and this opportunity was not granted to him under the other legislation.


George James McIlraith: I am afraid it is not quite as simple as that. It is reasonable to assume that there will be terms and conditions to a great many of these licences, some of them of a fairly technical nature but not, in themselves, of major importance. We are being asked in the present bill to give the power of revocation of a licence because of neglect to comply with one of such terms or conditions, an absolute power of revocation. I am suggesting to the minister that this provision is much more severe than the facts warrant in such cases, and that the effect will be to leave a cloud hanging over these licences that may do the very thing the minister desires not to do.
He spoke, at several earlier stages of this bill, of the necessity for large investment in these operations. It is clauses such as this one that make the obtaining of such investment needlessly difficult. What we want to be sure of here is a proper hearing and proper protection when licences are granted, and once they are granted we do not want to give a right to revoke a licence needlessly. I feel this is the real point, and I believe it is something that should be investigated because of the fears I have mentioned.


Gordon Minto Churchill: I certainly appreciate the hon. member's views on this matter. He quite approves of the review by the governor in council or the approval of the governor in council being required before orders such as these are made. I believe there is sufficient protection because of that opportunity for the person to be heard. The board would hold a hearing and then make its findings after a full discussion of all the facts involved. This is like clause 44, in which the approval of the governor in council is required.
The seriousness of the whole situation I pointed out, myself, when we were debating this on Friday. We appreciated that in both instances, in the granting of the certificate and second in a case where it had to be

revoked. We were relying on a public hearing in both instances, and then an actual act by the board by way of an order which finally had to come to the governor in council for approval. I think in both instances there is sufficient protection.


George James McIlraith: There is one small point that perhaps I should clarify first. I do not want my remarks on this section to necessarily indicate approval of the governor in council. I merely took the position that as the minister will recall, having granted that power in clause 44 it seems to me that it is necessary to grant it here. I do not want to raise or reopen that matter.


Gordon Minto Churchill: I realize the situation.


George James McIlraith: I think I had better bring the matter to a head. I think there should be an amendment to this clause. 1 therefore move:
That section 47 of Bill C-49 be replaced by the following:
"A certificate may be revoked or suspended by the board, with the approval of the governor in council, if the board is satisfied that:
(a)	the holder of the certificate has refused or neglected to comply with any of the terms and conditions of the certificate;
(b)	notice of such refusal or neglect has been sent to such holder; and
(c)	the holder has, after receiving such notice, refused or neglected to comply with any such term or condition."
Perhaps I do not need to elaborate on it.


Charles Edward Rea: Is the committee ready for the question?


Some hon. Members:: Question.
Amendment (Mr. Mcllraith) negatived: yeas, 13; nays, 30.


Charles Edward Rea: I declare the amendment lost.


[Stage Direction]
Clause agreed to.
On clause 48-Compliance with conditions and Act.
Mr. Robichaud:: This clause makes it a condition that the person to whom a certificate is issued shall comply with the provisions of the act and the regulations as in force at the date of the issue of the certificate and as subsequently enacted made or amended. Can the minister explain why these words have been included, "and as subsequently enacted, made or amended"?


Gordon Minto Churchill: I think the reason it is drafted in this way is that from time to time there has been uncertainty as to a clause of this nature respecting regulations. People will say, "Are they the regulations presently in existence or the regulations which you

are going to put into effect shortly or the regulations which may subsequently be subject to amendment?" It has been spelled out here as follows:
-and the regulations as in force at the date of the issue thereof and as subsequently enacted, made or amended,-
That is done in order that there may be no lack of clarity in the section.


George James McIlraith: It could very well be a prohibitive amendment in so far as a particular company is concerned. It seems to me that this is another example where, without any adequate explanation, we are doing something that gives more insecurity to these licencees, and that we are by this clause creating a condition where we are deterring capital investment which we admittedly need in this enterprise and in this whole field.


Mr. Winch:: That is the one section of this act with which I agree.


George James McIlraith: Does the hon. member mean that he agrees with the principle of retroactive legislation? That is what this section means.


Harold Edward Winch: I do not see how you can do anything else.


Paul Joseph James Martin: After listening to the hon. member for Ottawa West I think the minister should give us some explanation. We can all appreciate, of course, the desirability of regulations that will have the effect of protecting the public. But my impression is that these words are unusual, certainly in their present application. The regulation could be of such a kind, as the hon. member for Ottawa West has said, as to be prohibitive or to be impossible of performance. At the moment I cannot think what such a regulation would be, but it is conceivable that if the governor in council, for some reason or another, wished to avoid the continuance of benefit of a particular holder of a certificate, the governor in council might well pass a regulation which could not possibly be met by the owner of the certificate at the time. In the absence of some comment by the minister on the point made by the hon. member for Ottawa West, it would seem to me that the suggestion he has made is valid indeed.


Gordon Minto Churchill: I perhaps do not fully appreciate the reasoning of my hon. friend, who is generally so fair about all these things. The assumption is that people will abide by the act and by the regulations. I have pointed out that in order that there may be no doubt about what regulations are meant, lines 10 and 11 have indicated that situation more
National Energy Board fully. Then of course my hon. friend recognizes the fact that acts are sometimes subject to alteration in subsequent sessions. This clause ensures that, despite changes of that nature in the act or in the regulations, the holders of certificates are expected to comply.


Paul Joseph James Martin: I am not satisfied. If section 48 said that the certificate in the situation outlined could be withdrawn on an order of the board, that would make me feel a little more comfortable. But under this act the governor in council is empowered to make regulations. Notwithstanding the generality of the foregoing and so on. The governor in council is given authority to make regulations. We are jealous on this side of undue power being entrusted to the executive in a matter of this sort.


Harold Edward Winch: Ye gods.


Paul Joseph James Martin: Therefore we have the right to say that since the governor in council has power to make regulations, it is not fanciful to suggest that the governor in council, as distinguished from the board, might make a regulation that would prevent the continuation in benefit of the holder of a certificate. It seems to me that my hon. friend, who will remember the position which his party took on this kind of matter with regard to legislation before this house in recent years, will see the wisdom of the course that we are taking in our discussion at the present time.


[Stage Direction]
Clause agreed to.
On clause 49-Exemptions.
Gordon Minto Churchill: There is an amendment here. Perhaps we could have the amendment first and then comment on it. The suggestion here is that clause 49 should be amended by striking out line 18 which reads "this part relating to location, construction or operation of lines" and that the words "sections 25 to 28" be substituted. My colleague will move the amendment.


Mr. Green moved:: That subclause 1 of clause 49 be amended by striking out the words "this Part relating to location, construction or operation of lines'' in lines 18 and 19 and that the words "sections 25 to 28" be substituted therefor.


Lester Bowles Pearson: This amendment does not remove my desire to ask a question on this clause. In view of the fact that under this clause the government could exempt any pipe line from the regulations contained within the clause and the amendments, why was it necessary to put in the words "not exceeding in any case a length of 25 miles"?


Gordon Minto Churchill: Clause 49 is modelled on section 37 of the Pipe Lines Act. There is

National Energy Board no change in that wording. The limit to the length of the line which may be exempted is still 25 miles, just as it reads in the Pipe Lines act.


Some hon. Members:: No.


Gordon Minto Churchill: But this limit may now be raised in any specific case if the approval of the governor in council is obtained.


Harold Edward Winch: That is the very point. Under the original wording the board is absolutely supreme up to 25 miles. There is an amendment now being suggested, and I think I agree with the amendment as far as it goes, but it does not go far enough because there are still left in the words "or such other length as the governor in council may prescribe." I personally have no criticism of the fact that the board might have the power to make exemptions in certain circumstances when the line does not exceed 25 miles in length, but I cannot understand why the governor in council should be given authority to make exemptions covering lines longer than 25 miles. The lines subject to such exemptions could go right across Canada. Under this clause as it reads at present there is actually authority to construct a second trans-Canada pipe line, exempted from all the regulations and rules of this entire bill at the whim and purpose of the governor in council.
Surely if this act means anything at all, regulations, once they have been made, should be enforced. Surely the exemptions from the provisions of this bill of lines up to 25 miles is sufficient. When I said "ye Gods" a few moments ago I was referring to some of the acts which are already on the statute book and to what the hon. member has just said about the power of the executive cabinet. As long as these words "or such other length as the governor in council may prescribe" are left in the bill complete authority is given to the governor in council to wipe out this entire bill together with all its regulations and provisions, setting aside all questions of financial conditions, locations and operation across the length and breadth of Canada. That is exactly what these words mean.
I do not know just how to proceed, now that the leader of the house has moved an amendment, but I certainly wish to suggest an additional amendment to the effect that subclause 1 of clause 49 be amended by deleting the words "or such other length as the governor in council may prescribe".


Charles Edward Rea: Order.


Harold Edward Winch: I said I was not quite certain how to proceed but that I should like to have this done. I thought I had made that

clear. If these words remain in the bill one might as well wipe out all these powers as far as parliament is concerned.


Hédard-J. Robichaud: Before a decision is taken on the amendment which the leader of the house has proposed, may I say that I intend to move an amendment which deals particularly with the points which have been brought up by the hon. member for Vancouver East. I think in respect to the words "or such other length as the governor in council may prescribe" that this is a function which should be exercised by parliament and not by the governor in council. Therefore, as soon as the amendment moved by the leader of the house has been taken care of, it is my intention to move the amendment to which I have referred.


Harold Edward Winch: Me too.


Gordon Minto Churchill: First, I should like to say a word by way of explanation. I admit the force of the argument made by hon. members with regard to what may happen under certain conditions which they envisage. But what was intended was by no means as serious as they have been pointing out. What was intended was to make it not too inconvenient for the industry if a line exceeding 25 miles in length-perhaps only 26 miles long, or something like that; a few miles longer-were to be constructed. This would relieve the sponsors from the necessity of going back and undertaking the whole procedure of obtaining another certificate of public convenience and necessity. That was the reasoning behind this phrase-to make things a little less inflexible. But when the imagination of hon. members opposite carries them to the extent of distances such as 2,700 miles, the clause is put into a somewhat different light. If the committee will consider the amendment which has been moved already by the Minister of Public Works, I believe my colleague will put forward a second amendment which will meet all the wishes of the opposition.


[Stage Direction]
Amendment agreed to.
Howard Charles Green: That the words "or such other length as the governor in council may prescribe" be deleted from clause 49.


Harold Edward Winch: Hear, hear.


Hédard-J. Robichaud: We have heard the amendment moved by the leader of the house, and we of the opposition accept it and wish to thank the minister for having taken our wishes into consideration.


Harold Edward Winch: I have already said "hear, hear". I do not want to say any more.


[Stage Direction]
Amendment agreed to.
Herbert Wilfred Herridge: May I say that I am in entire agreement with my hon. friend. Had the government taken another course I was ready to intervene at some length. I can recall, in one case which came before the courts, a defendent using a minister's interpretation of a bill in an effort to show what the legislation was intended to do, and the judge telling him that it was not what the minister said in the house or anything else that mattered when it came to interpretation, it was simply the wording of the act.
Clause as amended agreed to.
Clause 50 agreed to.
On clause 51-Tolls to be approved.


Herbert Wilfred Herridge: Mr. Chairman, while the vote on our last amendment was being taken I distinctly heard the tall and elongated hon. member for Halifax refer to this group as dedicated dough heads. I think that is getting marginal as far as parliamentary language is concerned. My colleagues remind me that a speech made by one of the so called dedicated dough heads prior to my rising influenced the Minister of Public Works to rise and move an amendment along the lines he suggested. I do not think, therefore, it is fair to refer to this small but hard working group as dedicated dough heads.
It is not my habit to indulge in unparliamentary language but when I look at the hon. member he reminds me of my asparagus patch and of the fact that the higher you go up an asparagus stalk the softer and less useful it becomes.
We take strong exception to clause 51 because it differs entirely from the recommendations of the royal commission on energy. I want to place on the record a few of those recommendations and a paragraph commenting upon them. The commissioners dealt at considerable length with this problem. At page 27 of the report we find recommendations in this respect as follows:
The commission recommends:
1. That the Pipe Lines Act, R.S.C., 1952, Chapter 211, be amended to provide that:
That, of course, refers to the Pipe Lines Act as it then stood. I continue:
(a)	It shall be mandatory for the Board of Transport Commissioners for Canada to exercise the powers conferred upon it under part II of the Pipe Lines Act, with respect to the regulation of the traffic, tolls or tariffs of oil pipe-line companies subject to the jurisdiction of the parliament of Canada.
(b)	It should not be a condition precedent to the exercise of such powers that an oil pipe-line company be declared to be a "common carrier";
(c)	It shall be mandatory for the Board of Transport Commissioners for Canada to regulate
National Energy Board the prices of rates of gas pipe-line companies subject to the jurisdiction of the parliament of Canada, and, in so doing, to require, if necessary, any such gas pipe-line company to renegotiate the terms of any existing contracts for the sale or delivery of gas for distribution or consumption within Canada;
(d)	It shall be mandatory for the Board of Transport Commissioners for Canada periodically, and at least once in every 24-month period during the early years of regulation, to review and, if deemed necessary, to adjust the prices, tolls, rates and tariffs of pipe-line companies regulated by it;
At the conclusion of the recommendations the report states:
That the prices, tolls, rates or tariffs of a company owning or operating an oil or gas pipe line, as regulated by the Board of Transport Commissioners for Canada, should be just and reasonable, non-discriminatory and calculated to yield a fair rate of return on the shareholders' equity, after making due allowance for reasonable and proper operating expenses, depreciation, interest, income and other taxes.
We agree with that recommendation. In commenting on the recommendations, the commissioners say:
Although the Pipe Lines Act gives the board of transport commissioners the authority to regulate the traffic, tolls or tariffs of oil pipe lines, subject to the jurisdiction of the parliament of Canada, this authority has not been exercised, although the board did conduct a formal hearing on a complaint raised by a shipper of crude oil. No regulatory body of the government of Canada has the authority at the present time to regulate the selling prices or transportation charges of gas pipe lines subject to the jurisdiction of the parliament of Canada. The commission considers that a more positive and active approach to the question of regulation has now become necessary.
The members in this group agree 100 per cent with that opinion of the royal commission. I go now to another paragraph in the commentary:
In view of the great need of the Canadian economy for supplies of heat and energy producing fuels, it is desirable to ensure not only that adequate supplies are available at all times, but also that prices are kept at a reasonable level. As crude oil and natural gas must be moved over long distances to reach the principal market areas of Canada, transportation charges must be no more than are fair and reasonable. The commission is of the view that the board of transport commissioners should have all the powers needed for the regulation of the prices or rates, traffic, tolls or tariffs or pipe-line companies subject to the jurisdiction of the parliament of Canada.
We believe those are very wise recommendations and comments. We believe it is very necessary that the national energy board have the same responsibilities in this respect as the public utilities commissions in the provinces. In British Columbia power companies, provincial transportation companies such as bus and trucking firms, public carriers and telephone companies, go before the public utilities commission in order to have their rates established by that body. That has been found an excellent practice since it began. It is not

National Energy Board a question of those companies establishing rates and then going into operation and the commission reviewing them after some period, but before they are established they must be set on the basis of an order from the public utilities commission.
We believe for the protection of the interests of industry and of the Canadian people generally the same practice and procedure should be followed in this bill and that we should accept the recommendations of the royal commission in this respect. I therefore move seconded by the hon. member for Vancouver East:
That section 51 be amended by inserting the words "and approved by" alter the words "filed with".


Joseph Pierre Albert Sévigny: Is the committee ready for the question?


Herbert Wilfred Herridge: Mr. Chairman, we in this group would just love to hear some comment from hon. members in the Liberal party on this matter. I am sure that the hon. member for Essex East has some contribution to make.


Harold Edward Winch: This amendment is so necessary and fundamental it will be accepted as was the previous one.


Paul Joseph James Martin: Mr. Chairman, since my name was mentioned perhaps I should observe that we thought it was so obvious as not to require further comment.


Herbert Wilfred Herridge: And so, Mr. Chairman, the so-called dedicated dough heads again have had some influence on this committee.


Robert Jardine McCleave: Mr. Chairman, the dedicated dough heads have a large amount of crust and that is about all.


Gordon Minto Churchill: Mr. Chairman, I was just giving consideration to the amendment which seeks to insert the words "and approved by" in addition to the requirement for filing. I rather question the necessity of having the approval of the board before the filing of the tariff because there are ways and means of dealing with these tariffs after the board has had a chance to look at them. I would draw attention to clause 53-


Charles Edward Rea: Has the minister the amendment? The amendment inserts the words "and approved by" after the words "filed with".


Harold Edward Winch: I point out to the minister that there is nothing in the previous clauses, as I read them, which states that filing means approval. I know there are other acts, such as the Transport Act, where it can be taken for granted. Is there any objection to it? I am certain that the intent of the minister was that filing automatically included


approval; otherwise it would have no meaning at all. What we are asking is that we clarify it by inserting the words "and approval by" after "filed".


Gordon Minto Churchill: We did not have in mind that it was an automatic approval by any means because, as I had intended to point out, clause 53 gives the board the power to disallow after it has had a chance to review the tariff. Clause 54 gives the board power to suspend. It is because of those provisions that it did not seem essential to us to insert the word "approval" here. It does not automatically follow that it is approved just because the tolls have been filed.


Lester Bowles Pearson: Is it not a fact that clause 50, which we have passed, gives the board power to make orders with respect to tolls, that is, to levy tolls? We on this side of the house assume that any toll filed before the board would be one which had been approved by the board. That is why we assume that this particular amendment is perfectly in order even though it may not be necessary.


Harold Edward Winch: I believe the rule is that one cannot refer to proceedings in a committee of the house, but in one of the committees of the house this year we have had a number of meetings in which there were a number of questions asked about the rates of the air transport board. Once a rate is filed and accepted by that board it remains a tariff and is unchanged; but there is nothing here that makes it clear that a tariff which is filed has to be accepted. The evidence before the committee dealing with the air transport board tariff situation was that the tariff could be challenged; it could be changed; it could be amended. We found nothing there to indicate that it was an actual order. All we are asking here is to make it clear that with the filing there shall be an approval so that it is an established tariff. The minister's parliamentary assistant can give him all the advice that he needs because he knows all about it.


Charles Edward Rea: Is the committee ready for the question?


Gordon Minto Churchill: Mr. Chairman, if the committee is agreeable this clause could stand over for a while for further consideration.


Charles Edward Rea: Is the committee agreeable to standing clause 51?
Clause stands.
On clause 52-Tolls to be just and reasonable.


Hédard-J. Robichaud: Mr. Chairman, clause 52 is a very important one; it is one of the most important clauses in the bill because it has to do with tolls which will be charged under

this legislation. I notice that its terms are identical with those of section 43 of the Pipe Lines Act. In view of the remarks which were made during the course of the second reading of this bill by the hon. member for Edmonton West and the hon. member for Calgary South, remarks which I drew to the attention of the committee on Friday, as reported at page 4153 of Hansard, I should like to have the minister comment on this. Perhaps the minister can tell us why no provision is made for an appeal in connection with the setting of these tolls. This also has some connection with the minister's own statement when he referred to the profits which could be made or which such pipe lines would be allowed to make.


Gordon Minto Churchill: I think, Mr. Chairman, we did discuss this subject matter the other day when we were discussing other appeals.


Hédard-J. Robichaud: On clause 18.


Gordon Minto Churchill: Yes.


Hédard-J. Robichaud: It was a different point. It had to do with a question of law or jurisdiction.


Gordon Minto Churchill: That was on clause 18, but certain people went on to discuss other matters, and the question of an appeal on fact was also under consideration, and an explanation of that was made. We looked at it in this way. There has to be some element of finality somewhere and with a board of competent and experienced people examining all the facts that they would have to examine prior to determining whether tolls are just and reasonable, it would be undesirable for that fact finding activity of the board to be placed under review through an appeal. With the provision of an appeal on law and jurisdiction we thought that the rights of Canadians were adequately protected; but this is a specialized operation, determining from a mass of figures and calculations what constitutes a just and reasonable toll, and we were placing this responsibility on the board to make that decision. If, for example, an appeal on fact were carried, as it is in some other matters, to the governor in council, we would be in a difficult position in having to review all matters pertaining to what is admittedly a complicated problem, and we would not be in the same position as the board itself as it gathers experience on this subject. Therefore, it was for these reasons we decided that we should give this a trial, anyway. We are not making claim to any superior intelligence in drafting clauses of this bill. This is our best judgment at the moment. If in the course of time we find that this is not the most satisfactory method of dealing with the matter we shall have to
National Energy Board take a second look at it, but for the moment we think the board should be given the opportunity of gaining experience, sizing up the problem, and as time elapses advising us as to whether or not this is the best way in which this difficult subject should be considered. This is another reason why we have placed it as we have and have said that there shall be no appeal from its finding of fact.


George James McIlraith: There is another point pertaining to this clause. The minister will recall that at the resolution stage, I think it was, he was in some difficulty in a statement he made in his preliminary remarks on the point as to charges, and then he took the opportunity, as a question of privilege, to rectify his remarks.


Gordon Minto Churchill: The hon. member will not mind if I interrupt him here. I was not in difficulty with regard to my statement, but some person misinterpreted it and used different words and was in difficulty and I was extricating the unknown person.


George James McIlraith: The point, in any event, is that the words used by the minister in introducing the resolution were misinterpreted by some persons, and I have reread them since-


Gordon Minto Churchill: That is right.


George James McIlraith: -and I am afraid-and this applies to many of us-words uttered are not always monuments of clarity. His certainly were not clear on that point. He considered it to be sufficiently important to rise on a question of privilege and attempt to clarify the matter. I have reread the clarification and I must say that the original remarks taken with the clarification have tended to confuse me as to just what the minister did mean. I found myself a little clearer as to the meaning when I read the original remarks by themselves. Would the minister take a moment or two to indicate what he visualizes by way of charges and tolls under this clause, and particularly to try to clarify further the misunderstanding that did arise?


Gordon Minto Churchill: I was just attempting to look up the remarks I made on the resolution stage and I cannot lay my fingers on them at the moment.


George James McIlraith: It is page 3775 and page 3768.


Gordon Minto Churchill: However, I was discussing returns and whoever sounded off on the radio that very day spoke of profits. Having heard about that comment, I felt obliged to rise in the house on a question of privilege and indicate to the house that when I had used the term, "regulating the returns of gas pipe line companies", I had not specifically referred to profits. Of course, I grant you that you can

National Energy Board argue that in some form or other the regulation of the returns will perhaps have some effect on profits but the comment that was made at that time on the radio was directly on the question of profits whereas the word "returns" is common parlance in the industry. It relates to all matters with regard to financial operations, and was understood in that way. That was why I rose on that occasion to indicate what was meant and that is the way the explanation stands, that it is a question of dealing with returns in general.


Charles Edward Rea: Shall clause 52 carry?


George James McIlraith: No, Mr. Chairman. I think we have to go a little farther than that. The first report of the royal commission on energy, the Borden commission report, went a very great length in its recommendations dealing with the regulation of pipe line companies and on this particular point a recommendation was made that tolls, in addition to other requirements, be calculated to yield a fair return on the shareholders' equity and so on. The minister rejected that and adopted a provision which has been in the law for some years and which I think is a much better clause. But the Prime Minister in his speech on second reading of the bill went on to indicate that the board had much wider and different powers in respect of tolls than in fact it has under the clause we are discussing, and that is a point that I think should also be cleared up.


Gordon Minto Churchill: Mr. Chairman, I always listen with attention to my hon. friend who has been looking at this bill with care but I doubt very much if we need to go into a lengthy debate with regard to what was intended and meant by the Borden commission and what was intended by somebody else's remarks. We have accepted certain recommendations of the Borden commission. Other recommendations have not been oc-cepted. In this particular instance clause 52 is identical with section 42 of the Pipe Lines Act. Here again we are leaving the matter to the board, rather than setting out some rigid, specific formula, so that the board may determine what is just and reasonable. We weighed very carefully the submission in the Borden report and gave it full consideration. But again we decided that for flexibility it would be wise to let the board work this out, determine how these tolls shall be applied, what is a just and reasonable toll and how it shall be related to the company's operations.


George James McIlraith: Perhaps I can clarify it. I do not want to delay the thing unduly but

it seemed to me that in part of recommendation No. 12 the Borden commission went quite too far and made a recommendation that was defective, to use a very mild word to describe it. I am glad to see that the minister has recognized that the legislation in force on this point, put there by the former government, did assert proper principles and that those principles are the ones that are being carried forward in this bill. I found myself in some difficulty with respect to the minister's and the Prime Minister's remarks because the impression seemed to be capable of being drawn from the two sets of remarks, together with the Borden commission report, that a change was being made in the clause as to tolls now being adopted and it is not. It is not changed at all. I think that clarifies the matter a good deal. I do not like making general remarks about the minister's statement on the earlier stage of the bill but his remarks and the Prime Minister's on this point were certainly of a nature, when read together with the Borden commission report, as to create a very bad misunderstanding on this subject and really were capable of misleading those who were not careful in trying to understand the subject and who did not read the remarks carefully.


Lester Bowles Pearson: Mr. Chairman, there is no doubt that a reading of the Prime Minister's statement on May 26 cannot but give the impression that the alleged weaknesses of the previous legislation on the subject with respect to the protection of the public interest were to be removed by this particular bill. The Prime Minister stated, as found on page 4021 of Hansard:
Finally there is the question of whether the public interest will be protected.
Then he went on to show how this bill would be more effective in that regard than the previous legislation. Also, on page 4025 the Prime Minister said:
As to the price to be charged for gas and power, it must be just and reasonable in relation to the public interest. With the implementation of this legislation, no longer will there be any suspicion that the Canadian consumer is being forced to subsidize the foreign markets or that Canadian industries will be asked to pay higher prices for their energy than those paid by foreign industries using Canadian energy.
Presumably this is the clause of the bill under which that is to be guaranteed, so I should like the minister to tell us how this particular clause, which lays down the general criterion of equity and reasonableness, is to be more effective in the protection of the public interest, the prevention of unnecessary profiteering and all that kind of thing than the previous legislation.


Gordon Minto Churchill: Mr. Chairman, it is hoped that the board, through its careful consideration of all these problems, will end up with formulae which will be just and reasonable and that the interests of Canadian consumers will be protected. I feel that, from the experience of the past, that will be very much in the minds of the board. It is difficult to spell out things like that in legislation but a board, with all the facts before it, and with the public interest in mind, will be able to determine for us, in the Canadian interest, what is just and reasonable. We have deliberately left this flexible so that the board will have room to manoeuvre and come to conclusions in an area of business, and business regulation, which is new to Canada.
We have noticed the experience of the people across the line with regard to this and we gather from observation that some flexibility would be very much worth while. Starting off as we are here, with the intention to bring together the various methods that have been used in the past with regard to the oil and gas industry and with regard to electric power, we feel this is the best way to make a start by allowing the board, in its wisdom, to determine what is just and reasonable. We thought it was better that flexibility should be permitted rather than spelling out the specific means right in the bill.
If my hon. friend finds, as time passes by, that the national interest has suffered or that Canadians have been discriminated against, I am sure he will be amongst the first to rise and point out this fact to us. I hope he will do so. However, I feel that we have a great chance here of having the Canadian interest protected by giving the board this freedom of action.


Lester Bowles Pearson: The minister's language is very much like that which used to be heard in this house from his predecessor, whom he used to criticize strongly when the former minister was emphasizing the merits of flexibility in these matters and the impossibility of spelling out everything in legislation. It is interesting to hear that statement from him.
I have no quarrel with the statement as such, but I have a quarrel with the relationship of the statement to the very inflexible words of the Prime Minister to the effect that the price to be charged for gas and power must be just and reasonable in relation to the public interest. I suggest to the minister there is nothing in this particular provision, or any other provision in this bill, that ensures that the price to be charged for gas and oil must be just and reasonable in relation to the public interest. It is just as well that that should be made clear.
National Energy Board


[Stage Direction]
Clause agreed to.
Clause 53 agreed to.
On clause 54-Suspension of tariff.
Gordon Minto Churchill: I should like to ask the
committee to allow this clause to stand because I have an amendment under review.


Harold Edward Winch: I hope the amendment you have under review is exactly what I have in mind.
Clause stands.
On clause 55-No unjust discrimination.


George James McIlraith: There is a question of clarification in connection with clause 55 which does not have to do with the purpose of the clause but has to do with the word "company". Formerly, the regulation in this respect was of companies that had been declared common carriers. This principle has been dropped from the bill now before us. I am wondering what the significance of that is in relation to this clause of the bill, and in relation to companies whose shareholders are two or three producing companies who are using the full capacity of their lines to carry their own product. This question does not arise specifically under this clause only, but it arises under several of the clauses. I can see no other clause under which I could discuss it, and if there is any clause under which that point could be discussed, if the minister would indicate it I would like to hear about it.


Gordon Minto Churchill: I am not sure that there is another clause under which this point arises. In reply to my hon. friend, if a company owning a pipe line is carrying only its own produce through that pipe line, there is no possibility of any discrimination. If it is carrying the material of other companies, then there might be room for discrimination in tolls, services or facilities, hence the clause has been written the way it is. I grant that in the old act the reference was to a common carrier.


George James McIlraith: It was declared to be a common carrier.


Gordon Minto Churchill: There was a reference to a common carrier and the fact there should be no unjust discrimination.


George James McIlraith: I am not concerned about the unjust discrimination part of the clause. My point is that under the former procedure an application could be made to declare any company a common carrier. Most of the companies operated as common carriers but so far as I am aware none of them was declared to be a common carrier. This means that all the procedures concerning pipe lines did not have to be carried out in relation to

National Energy Board those companies or a great number of the companies, in any event but only applied to those that were declared common carriers.
What I am concerned with here is this: Those classes of companies that are not in any way common carriers, but whose shareholders are in reality two or three producing companies, and who carry only their own products to the full capacity of the line, now are going to have to go through all these procedures with regard to tolls, just as any other company. I am not arguing at the moment that that is desirable or undesirable. I want to know from the minister whether or not he has considered that point because the provision for tolls is absolute and applies to all companies under this bill.


Gordon Minto Churchill: I think it will not apply to the type of company to which my hon. friend refers, which is picking up and carrying its own material and not disposing of the material of others. Why would there be tariffs or tolls?


George James McIlraith: The reason would be that a company, within the meaning of the bill, is a pipe line company incorporated by a special act. This sort of company must charge tolls to the three companies whose products it is carrying. You see, such a company is virtually a private company, yet it is going to have to go through all the tariff procedures. The point I am raising is that the former act took care of that situation, but this bill does not.
If the minister will look at the point I am raising in connection with clause 51, he will see what I mean. It has to do with the definition of the word "company" and deletes the words "common carrier". The distinction in relation thereto is provided for under the former Pipe Lines Act but not under this bill.


Gordon Minto Churchill: I appreciate the problem, but I do not know that I consider it to be quite as large as my hon. friend indicated. Do you think it is going to cause any difficulties that cannot be solved by the board?


George James McIlraith: I was looking at the special acts I had here on Friday in connection with another point. There were some 31 of them in the particular binding that I had. When I started to leaf through them I was appalled at the number that were of such nature in relation to the number which were carrying on as common carriers and were in effect, although not declared as such, common carriers. It is a point for which I just cannot find a solution in the bill put forward by the minister. I hope he has not completely overlooked the point.


Gordon Minto Churchill: I think this is one among many problems which the board will have to consider and determine. The hon. member has raised a very good point; but unless he considers that somebody is going to suffer thereby, I wonder whether he would be content to let it stand as it is and then to see how the board deals with this particular matter.


George James McIlraith: Yes, Mr. Chairman. I am content to let it stand and to see how the board deals with it. But there is this problem. The whole purpose of the legislation on the subject is to protect the public interest. But where you have companies operating where they are not jeopardizing the public interest in any way it seems that an unnecessary and excessive burden is being put both on the board and such companies. I think that this result is not intended and that it certainly does not accomplish a good purpose.


[Stage Direction]
Clause agreed to.
Clause 56 agreed to.
On clause 57-No rebates, etc.
George James McIlraith: I notice that this clause is modelled on one in the Pipe Lines Act. But clause 57 deletes provision for a fine and leaves the question of punishment to the provisions of the Criminal Code. Is there any explanation for that deletion?


Gordon Minto Churchill: Yes. There was that deletion of a fine not exceeding $1,000 and the substitution of the phrase "is guilty of an offence punishable on summary conviction as provided in the Criminal Code." That is the standard method of dealing with it, and it is a smaller fine.


George James McIlraith: Yes. That is what concerns me. I wondered why you wanted a smaller fine for this type of offense.


[Stage Direction]
Clause agreed to.
On clause 58-Contracts limiting liability of company.
Gordon Minto Churchill: To clause 58 there is an amendment which my colleague is about to move. It is with regard to subclause 1 of clause 58.


Howard Charles Green: Mr. Chairman, I move:
That subclause (1) of clause 58 be amended by inserting the words "is included as a term or condition of its tariffs as filed or" after the word "notice" in line 32 on page 16.


George James McIlraith: Will the minister make clear the purpose of this amendment?


Gordon Minto Churchill: Yes. It is to clarify a possible ambiguity. The words now printed in the bill left in some doubt the status of

terms and conditions which were filed as part of the tariff but where not the subject of an order or a regulation by the board. The amendment would make clear that terms or conditions filed as part of a tariff pursuant to section 51 would be in the same position as a term or condition approved specially by a board order. It is no change; it is just clarification.


George James McIlraith: There is just one point. On a quick reading of the amendment I see no objection to it. But is this not going to depend somewhat on what is done with clause 51 which has been allowed to stand? As I understand it, clause 51 stands.


Gordon Minto Churchill: That is true.


George James McIlraith: I am not raising any objection to the amendment to clause 58, but it seems to me that probably it should stand in case there are changes in clause 51.


Charles Edward Rea: Shall clause 58 stand.


Some hon. Members:: Agreed.
Clause stands.
On clause 59-Duty of oil pipe line company.


Harold Edward Winch: There is one point in connection with this clause, and I spoke about it on Friday on second reading. I am afraid I find it difficult to understand the wording of subclause (2), where it is stated:
(2) The board may, if it considers it necessary or desirable to do so in the public interest, require-
And certain things are mentioned. What I have never been able to understand in some acts, but in particular in this one, is this. If the board deems it in the public interest to require a company operating a pipe line or transmission line to do a certain thing, I think it should say that it shall do so. I think this is an important matter. If something is required in the public interest I should like to know why the legislation should not say that it shall take the action as set forth, and not that it may in the public interest do so. If it is in the public interest, surely the word should be "shall" and not "may". Otherwise, why have in there at all the words "in the public interest"?


Paul Joseph James Martin: The explanation is found in the last line of the section.


Gordon Minto Churchill: We had this matter under discussion in part on Friday. It was not made a mandatory because of the final clause in that subsection which states as follows:
-if the board finds that no undue burden will be placed upon the company thereby.
National Energy Board


George James McIlraith: The whole clause raises the point that I dealt with a few minutes ago in connection with clause 55, namely the failure to distinguish between common carriers and companies that are not common carriers. Perhaps I will not repeat the remarks that I made on that clause but they are applicable with variations to this clause.


[Stage Direction]
Clause agreed to.
Clause 60 agreed to.
On clause 61-Tolls for transmission of gas.
Hédard-J. Robichaud: I understand that this is a new clause which was not included in the Pipe Lines Act. Can the minister explain why certain provisions are necessary in the case of gas but there is no comparable provision with respect to oil? I understand the minister is out for a few moments.


Howard Charles Green: Go ahead with your question.


Hédard-J. Robichaud: Could the minister explain why there are provisions with relation to gas when there are none with respect to oil? I understand this is a new provision altogether and I should like the minister to give the committee an explanation.


Harold Edward Winch: This is one clause which has completely got me stumped. I have read it and re-read it but I have completely missed the purport of it. Maybe I am missing the odd words which would give me the intent of the clause, but I simply cannot understand what is the purport of clause 61. Perhaps the minister could explain it in layman's language. Perhaps the hon. member from Calgary South already understands it.


Mr. Smith (Calgary South):: I will wait
until the minister can tell me.


Hédard-J. Robichaud: There is a further explanation which the minister may give when he comes back. This clause provides that where the gas transmitted by a company through its pipe line from any place within a province to any place outside the province is the property of the company, the board can fix a proportion of the difference between the amount paid by the company for the gas and the amount for which the gas is sold. But there is no such provision in the case of oil.


Harold Edward Winch: Let us look at the terms of the clause. The wording reads:
Where the gas transmitted by a company through its pipe line from any place within a province to any place outside the province is the property of the company-
Here we have a situation where a company owns the pipe line. It buys the gas in one province and sells it to another end in

National Energy Board another province, but it owns the pipe line in which the gas is being transmitted. That,
I can understand. But what is the meaning of what follows?
-such proportion as the board may fix of the differential between the amount paid by the company for the gas and the amount for which the gas is sold by the company shall for the purposes of this Part be deemed to be a toll charged by the company to the purchaser for the transmission thereof.
What in the name of heaven does that mean?


Gordon Minto Churchill: This clause 61 has no
counterpart in existing energy legislation. Recommendation 11 subsection (c) of the Borden report has been questioned on the ground that parliament had no power in peace time to control the prices charged for gas by transmission companies. The provinces, of course, claim jurisdiction over the price of gas at the point of origin and at the point of consumption. The price jurisdiction which the government would exercise is that on prices charged by interprovincial companies transmitting gas to their customers, that is, to the companies which buy gas for resale either to other gas companies or to consumers. While these prices cannot legally be controlled, the actual transmission charges of the pipe line company can, since they are similar to the freight rates on railroads. In the case of gas pipe lines the commodity carried is generally the property of the carrier and no transmission charge as such is levied. It is, however, provided here that in such case a proportion of the difference between the price paid for the gas and the price at which it is sold by the transmission company shall be deemed to be a toll.


George James McIlraith: Is it not simply a matter of the provinces having jurisdiction over the purchase price and the sale price of the gas and an attempt by this government to put forward something which would prevent exorbitant differentials? This is only a partial protection of the public in the sense that the companies can pay any price they wish for their product, or sell it at any price they wish but that the differential, which is the only element which this parliament can control, may be subjected to a limiting toll. The clause could very well have been put in in the early part of the bill as a definition of the word "toll". That is where it should have been included. This is the only way in which the board can control the price paid by consumers in the event of an abnormal transmission charge being made. I am not suggesting that this would happen, because I am sure that no producer would want to do any such thing. But the problem is still there.

It still remains, and this clause does not really take care of it. However, it goes about as far as we can go constitutionally.


John Whitney Pickersgill: May I ask the minister if this is not precisely what he and his friends used to call centralization when they were on this side of the house?


Hazen Robert Argue: I am wondering if under this clause the board is permitted to bring only a part of the difference in price under its control, in the case of a company which owns both the gas and the transmission lines? In this case that would mean the possibility of a much smaller share than in the case of a pipe line company which is merely transporting the gas. I ask this specific question: supposing the company which owns the pipe line also owns the gas. These figures might not be realistic, but supposing the gas going into the pipe line is bought at a price of, say, 30 cents and it is sold out of the pipe line by the company which owns the pipe line and owns the gas to a company that is distributing the gas, to a retail company, at a price of 60 cents. I want to know whether, according to this clause, the difference between 30 and 60, or part of the difference between 30 and 60 can be exempted from this provision. If this is the case I think the clause is wide open for an interpretation by the board which would allow the company to proceed almost free of all regulations. I can understand that if the 30 refers to the price of the gas going into the line and the 60 refers to the price of the gas going to the consumer, this clause would exempt a proportion of the cost which ordinarily might be considered a retailing cost. But my question is this: if the 60 is the price to a distributor is it then possible for the board to say whether or not it should regulate the full difference between the 30 and 60?


Gordon Minto Churchill: That is a question which has received a good deal of study. It has arisen in the minds of many people and a great deal of midnight oil was burned over clause 61, I can assure the hon. member. The difference between the 30 he mentioned and 60-the entire amount-the board could take as a differential or it could take any proportion of that which it saw fit in view of all the circumstances and in view of what it considered to be just and reasonable.


Hazen Robert Argue: The minister's explanation to me is not satisfactory. It may be an accurate explanation but I take it that the board has the right to decide what proportion it feels it should control in this specific case in view of all the circumstances. I would submit that is a very loosely worded clause. It means in fact that the board could decide to regulate

only a small proportion of the difference in cost and the whole bill, whatever it may be worth,-and as we go from clause to clause I see less and less value in it-would fall to the ground. I do not know why the board is not given the power to regulate the entire difference between the price of gas going into the line and the price of gas coming out of the line.
If the gas pipe-line company is itself in the retail field I think the board would have to set an arbitrary figure as to what should be the price coming out of the line. Under this clause I do not see why the board should be given the power in the instance of a company that owns the gas to exempt most of its operating margin from control.


Harold Edward Winch: Perhaps I am not getting this through my head but I do not want it to pass until I understand it. Is my interpretation of this correct? Does this deal wholly and solely with the transmission of gas on an interprovincial basis purchased in one province and sold in another? Do the words "the board may fix of the differential" mean that the board may decide the differential between the purchase price of the gas at one end and the selling price at the other? Is that basically what it means or is the minister now as confused as I was when I started?


Gordon Minto Churchill: Mr. Chairman, in answer to the hon. member's first question I would say that this does refer to a pipe line crossing a provincial boundary. It reads that the board may fix of the differential between the amount paid by the company for the gas and the amount for which the gas is sold by the company. This means whatever proportion it chooses; the whole thing, if it likes. Using the figure the hon. member for Assiniboia put forward, if it is 30 cents at the intake end and 60 cents at the point where it leaves the pipe and goes to the consumer the difference is 30 cents and the board may say the 30 cents is the toll. On the contrary it could say that of that 30 cents it considers that 25 cents or 20 cents should be the toll charged. The board determines the proportion of the 30 cents that shall be declared to be the toll, but it could be the whole 30 cents.


[Stage Direction]
Clause agreed to.
On clause 62-Powers of company.
George James McIlraith: Coming to part V of the bill, I take it that clauses 62 to 74 are virtually identical with those contained in the Pipe Lines Act, is that correct?


Gordon Minto Churchill: All of part V with minor changes represents sections from the Pipe
National Energy Board Lines Act. Clauses 62 to 65 of the bill correspond to sections 7 to 9 of the Pipe Lines Act; 66 to 69 correspond to 21 to 24 of the act; clause 70 is section 25 of the act; clauses 71 to 74 are drawn from sections 26 to 29 of the act; clause 75 is section 30 of the act; 76 is 31; 77 is 32; 78 is 36; 79 is a new clause and clause 80 is taken from section 3 of the act. The changes within those clauses are minor changes. Where there is a major change I shall draw it to the attention of the committee.
Before we go on, there is a change in clause 62 which I would ask my colleagues to move in the form of an amendment.


Howard Charles Green: I move:
That clause 62 be amended by inserting in paragraph (e) thereof the word "houses" after the word "buildings" in line 23 on page 18.


[Stage Direction]
Amendment agreed to.
Gordon Minto Churchill: There is a further amendment to this clause. Some of these amendments, I might say, have come to us from people within the industry who have been studying the bill with great care. They have asked for some of these things for the purposes of clarification.
After the number 62 in line 1 on page 18 the figure 1 in brackets should be inserted, and then at the bottom of the page a new clause will be added which will be subclause 2. Here the intention is to clarify the expression "pipe line".
My colleague will move an amendment to this effect in just a moment. It is sought to extend the definition of a pipe line to include a line for the transmission of sulphur or sulphur compounds obtained from an oil or gas well connecting a province with any other or others of the provinces or extending beyond the limits of a province.
I will give the explanation after my colleague has moved the amendment.


Howard Charles Green: Mr. Chairman, I move:
That clause 62 be further amended by inserting "(1)" after the number "62" in line 1 on page 18 and by adding thereto the following subclause: "Lines for transmission of sulphur."
(2) for the purposes of this part the expression "pipe lines" includes a line for the transmission of sulphur or sulphur compounds obtained from an oil or gas well, any product thereof, connecting a province with any other or others of the provinces or extending beyond the limits of a province.


Gordon Minto Churchill: Mr. Chairman, the purpose of this amendment is to provide that pipe lines incorporated by special act for purposes including the transmission of sulphur and sulphur compounds would come under part V of this act. This will enable such a company to exercise the powers of expropriation contemplated in its special act. Later when we

National Energy Board come to clause 75 I shall propose another amendment to ensure that in exercising those powers such a company will come under the scrutiny of the board.


George James McIlraith: Mr. Chairman, this clause goes part way to meet the difficulty I raised the other day when we were dealing with another clause of the bill, I believe the clause having to do with the definition of the word "company". In any event, it puts the type of very large pipe line to which I made reference on that occasion under this act in so far as certain rights and privileges of the company are concerned. Some of the rights and privileges given to such a private company incorporated by special act are quite extensive. I would point out-and I want the minister to correct me if I am wrong-that the amendment gives such a private company the very extensive right of expropriation of lands, but at the same time does not protect in any way the public who may be investors in such a pipe line company. We are not giving any protection by way of public hearings by the new board before the company constructs its line. There is no requirement that they apply for a licence, and the fact may well be that such a company will be thought by many of the investing public to be another pipe line company under the jurisdiction and control of the national energy board.
I would point out that the particular company to which I made reference on Friday- and I may say I know very little about it- uses in its name the words "pipe line company", a name very similar to the type of name commonly used by oil and gas transmission lines. We are doing something here that causes me some concern. It is a real point. I must say that I for one dislike intensely the common habit of this parliament and of legislatures in the provincial field of extending the right of expropriation pretty freely, and here we are doing that very thing and at the same time not giving the public the corresponding type of protection that parliament in its wisdom has seen fit to apply to all other pipe lines dealing with the transmission of products arising out of the oil development in the west. This is something that concerns me very considerably.


Gordon Minto Churchill: I may say on this point that the amendment which will be proposed to clause 75 brings that type of company under the scrutiny of the board. This amendment will be moved subsequently. The provisions of part III respecting the plan, profile and book of reference apply mutatis mutandis to a company in the exercise of its powers in this section in respect of the matters

described in clause 62 that we are dealing with. Perhaps that would meet in part at least my hon. friend's suggestion.


George James McIlraith: It meets a small part of it but it does not give any protection to the investing public. There is a real difficulty here. I am grateful to the minister for bringing such a company under some control, but it is very little control. After all that has been said in this parliament over the years, here we are enabling certain types of companies to take the extraordinary rights of expropriation and other rights of that sort, and at the same time removing them from all control. It is something that concerns me a good deal. I am wondering how much the government has really thought through this point because I must say I frankly did not think of the difficulty until I saw that special act of incorporation of the one company to which we made reference.


Herbert Wilfred Herridge: Mr. Chairman, I thought we were dealing with the amendment. If it is satisfactory to deal with the question of compensation I would like to say something on it.


Charles Edward Rea: Is the committee ready for the question? You have heard the amendment. Shall it carry?


Paul Joseph James Martin: Just a minute; the thought occurs to me-and this question was raised the other day-that the company here is given power, subject to the provisions of the special act, and this provision may cover the point I have in mind. The power given is to go into and upon any crown land. What right has this parliament to empower any company to enter into and upon any crown land? We certainly have the right to give a company the right to enter into and upon any crown land in the right of Canada, but certainly not on lands held by the provinces. I know this is not a new clause, but I would be interested in the minister's comments.


Gordon Minto Churchill: I appreciate the hon. member's inquiry, but I think I would have to refer that to my colleague, the Minister of Justice, for an appropriate reply. I have not the reply myself right now. In any case, Mr. Chairman, in view of the comments with regard to the amendment which we have proposed I ask that we let this clause stand and perhaps an answer to the latter question might be given later.


Charles Edward Rea: Is the committee agreeable to have this clause stand?


Herbert Wilfred Herridge: If the clause is going to stand I would just like to say the few words I intended to say on this clause before it stands. As a matter of fact, I was rising to make the

same comment as the hon. member for Essex East made with respect to what right has this parliament to authorize a company to take land in the name of the queen in the right of a province? I also want to deal with the question of crossing private land. I am thinking particularly of farm land, because we had rather an unfortunate experience in our district in the laying of a pipe line there. I notice that this clause, particularly in paragraphs (b) and (c), makes provision for a company to purchase, take and hold of and from any person any land or other property necessary for the construction, maintenance and operation of its pipe line and alienate, sell or dispose of any of its land or property that for any reason has become unnecessary for the purpose of the line.
Paragraph (c) reads:
Construct, lay, carry or place Its pipe line across, upon or under the land ot any person on the located line of the pipe line.
When I go to clause 68 I notice there appears to be more protection given to mining companies. Clause 68 reads:
No company shall, without the authority of the board, locate the line of its proposed pipe line, or construct the pipe line or portion thereof, so as to obstruct or interfere with or injuriously affect the working of or the access or adit to a mine then open, or for the opening of which preparations are, at the time of such location, being lawfully and openly made.
My point is that there appears to be much greater protection provided under the legislation for a mining company, or mining operations, than there is for a farmer. In our section during the construction of a pipe line the engineers for a certain company laid out the route, and this route was over a distance of some 15 miles just beside a highway, some 100 feet back from the highway, but in front of a considerable number of farm residences, and in some instances going within 10 feet of the farmers' verandahs and through their barnyards along this considerable distance. When the local people, the owners, protested, the engineer in charge said, "No, we have got the right and that is where the line is going." When the people of Kootenay West are in trouble it is only natural that they come to the member for Kootenay West under such circumstances and at that time they did so although this was a provincial matter. I went and saw the farmers and told them not to sign anything. The engineer in question threw the easement document on the ground and said, "If you will not sign it we will go to court and get the right very quickly." I said to the farmers, "Do not sign anything".
I called a meeting of all these people. They all happened to be members of the Doukhobor sect although not Sons of Freedom. At the meeting they discussed their problem and they
National Energy Board had a legitimate complaint. Fortunately we were able to have the matter considered by a prominent lawyer in Vancouver. He went to see the attorney general who saw the injustice and called in the heads of the company and as a result of what in effect was almost an order they had to change the route of the line to the back of the farms which all bordered on mountain ground. The area is between Brilliant and South Slocan and the Minister of Public Works understands exactly what I am talking about.
There was no provision there for reference to a board or anything of that sort. Apparently they had the right to do this. It was only after meetings, united opposition and the realization on the part of the government that this was a very unwise thing to do in that county, to say the least, that the company concerned was forced to change the location of the line at an increased cost of $30,000 to $40,000. I think we should do everything possible to make certain that the rights of farmers and small property holders are protected. In another case this company went right through a man's farm, and with an oil pipe line it is not simply a question of burying the pipe. A certain area of ground on each side of the pipe cannot be cultivated or used and has to be kept free of weeds so that if gas escapes it will not be inflammable. There are several disabilities to property owners who, in my opinion, are not sufficiently covered just by the payment of so much per acre for the land used.
Because of my experience in this respect and the experience of some of my constituents I should like the minister to explain to the committee what protection there is in this clause for the farmer or small property holder in order to prevent a recurrence of such circumstances and also why more protection apparently is provided to mining companies than to farmers and small property holders when it comes to the question of entering their property for the laying of a pipe line.


Harold Edward Winch: The minister has said that this clause may be allowed to stand. I should like to ask him whether it would not be possible to reopen clause 61 and allow it to stand. I have just been informed that some very eminent members of the legal profession in this city are also very disturbed about clause 61 on account of the confusion. I do not think it would bother the minister if it were reopened and allowed to stand for a few hours. Would the minister agree?


Gordon Minto Churchill: The member is making a rather unusual request with respect to a clause which has been passed. I hope he is not anticipating too lengthy a debate. I am
4214	HOUSE OF
National Energy Board glad to hear from everybody on clause 61. As I said earlier, it is a difficult clause.


Harold Edward Winch: I only ask because in the past few minutes I have received what I consider very good advice that eminent lawyers in this city are very much disturbed about clause 61 because they find it most confusing. If I possibly can I should like to find out in the next few hours just why they are confused.


Gordon Minto Churchill: All right.


Charles Edward Rea: Does the committee give unanimous consent to allowing clause 61 to stand?


Some hon. Members:: Agreed.
Clause stands.


George James McIlraith: Just before we leave clause 62 there is one comment I might add the minister might wish to have in mind when he is considering this clause further. In discussion on earlier clauses I advanced an argument having to do with the difference between common carriers and companies that are not common carriers. I would point out that clause 62 is another clause illustrating the need for that same distinction. There are many companies transmitting oil or gas several hundred miles which have never used the power of expropriation. Yet we are not making any provisions for such companies that are not in fact operating as common carriers and not using powers of expropriation to be treated any differently from companies that are using the power of expropriation and operating as common carriers.


Paul Joseph James Martin: The minister has agreed to let this clause stand and as my remarks were confined only to crown lands the minister will look into further similar aspects of the clause. For instance, in subclause (a) it says, "enter into and upon any crown land," and in subclause (b) it says, "purchase, take and hold of and from any person any land or other property necessary for the construction", etc. I think the examination that is going to be made should be made not only with respect to any crown lands but any lands, particularly those held by private individuals.


Mr. Henderson:: Where I come from a pipe line was built and they came there and wanted to go through our lands. We did not want them to go through. They said that they could go through so we stopped them by force and they moved two miles south and came in over V.L.A. land. Apparently V.L.A. let them go through that land and they bypassed us. There was no protection whatever, only brute strength. This fellow came along


and said, "Where are you and I going to have 'rassle', behind the barn"? I said that I did not know that "rassling" was mixed up in this. I said ,"You are not coming through our land." We had eight quarters there and we really had him blocked.


Paul Joseph James Martin: I would bet on the hon. member for Cariboo anytime.


Walter Clarence Henderson: The outcome was that they went and saw the soldiers' settlement officer and he told them to go through the V.L.A. land. They went south of us and there they are. We had no redress, only brute force.


Charles Edward Rea: Shall clause 62 be allowed to stand?


Some hon. Members:: Agreed.
Clause stands.
Clauses 63 to 65 inclusive agreed to.
On clause 66-Crown lands.


Paul Joseph James Martin: Subclause 1 of this clause reads as follows:
No company shall take possession of, use or occupy lands vested in Her Majesty without the consent of the governor in council.
If the lands in question are lands vested in Her Majesty in the right of a province surely it is no concern of the governor in council. The same point is involved here that I made with regard to clause 62. Perhaps that ought to be considered, unless the minister has an explanation.


Gordon Minto Churchill: I take it to be a matter
of interpretation. As I mentioned earlier, virtually all of part V of the bill has been carried forward from the Pipe Lines Act and these clauses or sections have been standing on the statute books for a number of years.


Paul Joseph James Martin: My objection is
technical, but it is important. The illustration given by the member for Cariboo is perhaps the most persuasive argument we have had that there are occasions when there are violations or invasions of property in the manner suggested. No matter how long something has been on the statute books, if it is incorrect-I know it would not have been put there intentionally-it is our responsibility to correct it at the first opportunity and now is the opportunity. If the law officers of the crown are not able to give us satisfactory answers, then surely there is only one course open to us and that is to correct it. I am not trying to hold up my hon. friend's legislation, but he might have that clause looked at as well.


Gordon Minto Churchill: My hon. friend raised this
question on clause 62, which we are holding open.


Paul Joseph James Martin: Yes, but I am
now raising it on clause 66. My friend has left clause 62, but if we pass clause 62 then we have no way of bringing this to the minister's attention again.


Gordon Minto Churchill: We can stand clause 66,
then.


Charles Edward Rea: Is it the pleasure
of the committee to allow clause 66 to stand?


Some hon. Members:: Agreed.
Clause stands.
Clauses 67 to 74, inclusive, agreed to.
On clause 75-Expropriation provisions of Railway Act incorporated.


Gordon Minto Churchill: I have an amendment to
suggest, and it is an addition to clause 75, so there will be a subclause (1) and subclause (2). I believe I read out this amendment earlier, and this is related to what we were doing with regard to clause 62. Perhaps for the record, we might have the amendment moved now, and I presume we would have to stand clause 75 until we determine what shall be done with clause 62.


Howard Charles Green: I move:
That clause 75 be amended by inserting "(1)" after the number "75" in line 1 on page 22 and by adding thereto the following subclause:
(2) the provisions of part III respecting a plan, profile and book of reference are applicable mutatis mutandis to a company in the exercise of its powers under this section in respect of a line as described in subsection (2) of section 62.


Charles Edward Rea: Is the committee agreeable to clause 75 standing, with the amendment?


Hédard-J. Robichaud: Could the minister explain if this amendment has something to do with clause 27 which was allowed to stand on Friday?


Gordon Minto Churchill: No, clauses 27 and 29 have been allowed to stand because we are waiting for the return of the hon. member for Ville-neuve who suggested a change. I shall have an explanation for him. If we complete the bill tonight, of course, we will deal with them then. Otherwise, it will be tomorrow.


George James McIlraith: Before this clause is allowed to stand, I notice a reference to section 251 of the Railway Act in the corresponding section of the Pipe Lines Act has been left out. I take it that is because it is felt it is not needed.


Gordon Minto Churchill: Section 251 is to be replaced, and it will be discussed under clause 76.
National Energy Board


Charles Edward Rea: Is the committee agreeable to allowing clause 75 to stand?


Some hon. Members:: Agreed.
Clause stands.
On clause 76-Definitions.


Gordon Minto Churchill: There is another amendment to line 17 on page 22, and my colleague will indicate the slight change there.


Howard Charles Green: Mr. Chairman, I move:
That subclause (1) of clause 76 be amended by striking out the words "hydrocarbons or power" in line 17 on page 22 and substituting therefor the words "hydrocarbons, power or any other substance".


Gordon Minto Churchill: I might say that the purpose of this amendment is to include in the definition of utilities, lines of pipe such as those, for example, conveying water, sewage or chemicals other than hydrocarbons.


Charles Edward Rea: The committee has heard the amendment, is the committee agreeable to the amendment?


[Stage Direction]
Amendment agreed to.
Gordon Minto Churchill: There is another amendment to clause 76. We intend to strike out subclause (6) and substitute therefor a different wording.


Howard Charles Green: I move:
That clause 76 be further amended by striking out subclause (6) thereof and substituting therefor the following:
(6) The appropriate authority may grant leave under this section after construction of the proposed work has commenced if the appropriate authority is satisfied that the work was urgently required and, prior to the commencement of construction, the appropriate authority was notified of the company's intention to proceed with the proposed work.


Gordon Minto Churchill: I might make an explanation of the purpose of this amendment. It is to take care of an emergency situation with regard to the crossing of utility lines. Various companies engaged in the operation of pipe lines have indicated to us that the words now appearing in the bill are so restrictive as to be little better than requiring formal prior approval by the appropriate authority. The kind of situation contemplated is, for instance, where a pipe line construction crew comes upon another line of pipe running across its right of way and rather than stop work, under this amendment it would be possible for the company to notify the appropriate authority and unless strong objection is expressed by that authority, proceed with the crossing. The applicant would, of course, bear the onus that the work was urgently required and
4216	HOUSE OF
National Energy Board that it was carried out in a manner consistent with the statutes, regulations and any relevant orders of competent authorities.


Herbert Wilfred Herridge: Does that mean a company, in theory, could proceed with a pipe line without bothering to investigate what other pipe lines of utilities would be crossed, and just consider them as the construction crews came to them on an emergency basis as provided for in this clause?


Gordon Minto Churchill: Are you ready to put the
question on the amendment, Mr. Chairman?


Herbert Wilfred Herridge: I have asked the minister a very simple question. I was just waiting for an answer.


Gordon Minto Churchill: Would the hon. member please repeat his question.


Herbert Wilfred Herridge: I asked the minister, Mr. Chairman, whether under this section in theory a company constructing a pipe line could ignore going to the trouble of finding out the public utilities it would be crossing in the way of municipal water works or sewers or others and then when they came to them could treat them all as emergencies without previously getting permission from the board. I am rather suspicious, Mr. Chair-main. The municipalities in my constituency have had some rather unfortunate experiences with respect to getting permission to do things and getting consideration for municipal, individual and community rights. We have had a similar experience as that of the hon. member for Cariboo.


Hédard-J. Robichaud: Mr. Chairman, may I call it six o'clock?


Gordon Minto Churchill: I was wondering whether we could not proceed with this matter.


Hazen Robert Argue: Six o'clock.


Gordon Minto Churchill: There has been some discussion with regard to this matter but we think that the appropriate authorities have every protection under the proposed amendment here which provides in part:
-if the appropriate authority is satisfied that the work was urgently required and, prior to the commencement of construction, the appropriate authority was notified of the company's intention to proceed with the proposed work.
We think that is adequate to protect the various organizations mentioned by my hon. friend. The wording follows closely that of the present act. The difference there is simply the question of consent in writing.


Herbert Wilfred Herridge: The appropriate authority, I assume, would be the national energy board. Is that correct?


Gordon Minto Churchill: It depends. At the beginning of clause 76, as my hon. friend will note, "appropriate authority" is defined under four headings.


Herbert Wilfred Herridge: Yes; but in each case the situation is the same. I would not blame the individual concerned for a moment. But, as an illustration, suppose the Minister of Public Works has a matter like this referred to him. He has no personal knowledge of the circumstances on the ground or of the conditions under which the pipe line is being built, and the tendency would be to accept the word of the company. What I am concerned about is this. I can see the necessity for the provision under emergency conditions but it should be used only under strictly emergency conditions. I mention this matter because in our constituency a company blundered ahead across various properties and caused considerable unexpected damage. This action was covered in some way by our provincial legislation but a great deal of dissatisfaction was caused by the way in which this pipe line was built, in some cases. I refer to failure to respect the rights of municipalities, communities and individuals.


Gordon Minto Churchill: With experiences such as that in mind I think the energy board will exercise closer supervision over these companies and give closer examination to their plans when they are applying for a certificate of public convenience and necessity. That is not to say that the board of transport commissioners has not done its job adequately; but obviously various unforeseen things occur in the construction of these pipe lines. It all now becomes a matter of history of which the board will be cognizant and perhaps greater care will be observed in the future.


Charles Edward Rea: The committee has heard the amendment. Is it the pleasure of the committee to adopt the motion?


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
On clause 77-Leave to construct highways, etc., across pipe lines.
Gordon Minto Churchill: There is an amendment here, Mr. Chairman. It is just a slight change such as we made earlier, with the addition of four words.


Howard Charles Green: I move:
That subclause (1) of clause 77 be amended by striking out the words "for the transmission of hydrocarbons or power" in lines 5 and 6 on page 2S and substituting therefor the words "or a line for the transmission of hydrocarbons, power or any other substance".


Charles Edward Rea: The committee has heard the amendment. Is it the pleasure of the committee to adopt the motion?


[Stage Direction]
Amendment agreed to.
Clause 2 as amended agreed to.
On clause 78-Company to cut down weeds.
Herbert Wilfred Herridge: I should like to ask the
minister a question with respect to this clause. What supervision over the company is provided to make certain that the weeds such as thistles and so on are cut on these strips that are taken through cultivated land? How does the national energy board make certain that section 78 is complied with in connection with the cutting of noxious weeds and thistles and so on across the farmer's land?


Gordon Minto Churchill: I think in the same way as the board of transport commissioners has satisfied itself in the past. It would be through inspection or inspection following upon complaint or through certification by the company that it had lived up to the sections in this act and had disposed of the thistles, noxious weeds and so on. I think there are various ways in which the energy board could satisfy themselves that the company had maintained or continued its work properly and held to the sections of the act.


Herbert Wilfred Herridge: I judge, then, that if a farmer complained to the national energy board they would at once see to it that this section was complied with.


Gordon Minto Churchill: I hope the situation will not reach the stage where a farmer is obliged to complain to the energy board in order to get a company to do what it is supposed to do. Experience again will show whether or not that is done. But in so many instances the pipe is buried and the land above the pipe is plowed and sown. It is not left vacant just to grow weeds. This situation will occur in areas of uncultivated land and various parts like that going through bush country perhaps where action will have to be taken because of the effects of these weeds on adjoining cultivated property.


Mr, Herridge:: In our district, Mr. Chairman, there is a strip-I think it is 25 feet wide- along the pipe line and the farmer is not allowed to cultivate it or to grow any more crops.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m. Clause 78 agreed to.
National Energy Board
On clause 79-Assets of company subject to execution, etc.
George James McIlraith: Clause 79 is a new clause, and I wonder what the basis of it may be.


Mr. Lambert:: I wonder if I could address myself briefly to clause 79? Contrary to some prognostications that there is nothing new in this bill, this is an innovation and one upon which the government is to be commended in my humble estimate. Briefly, this clause provides that subcontractors, suppliers and workmen who, unfortunately, have not been paid, may attach a lien under the various provincial statutes to contractors' claims. We had an unfortunate experience a few years ago during the construction of an interprovincial pipe line when a substantial subcontractor was unable to collect because he was not able to file his lien. I think it would be highly unfair that while pipe lines within provinces are subject to the right of every citizen to recover in respect of unpaid claims, promoters of a pipe line which crosses a boundary should escape such responsibilities.
It must, of course, be recognized that the right to file a lien is subject to the statutes and provisions which exist within each province. I do not think there are good grounds for the fear expressed by some people that this provision may harass the pipe line companies. I do not think this will necessarily follow, and I submit that this is an excellent provision.


Paul Joseph James Martin: I do not intend to deal with the merits of this clause because, naturally, I do not quarrel with it. But the hon. member who has just spoken is a lawyer. Does he think that this provision in any way changes the rights of the provinces with regard to executions of any property or in connection with the creation of any lien. This bill says, of course:
that nothing in this act restricts or prohibits any of the following transactions-
I wonder if the hon. member would agree that this clause is, in a sense, superfluous in that it clearly cannot restrict or prohibit anything mentioned in clause 79 (a) (i) or (ii) since these are matters seemingly within the jurisdiction of the provinces.


Norman Platt Lambert: Perhaps I may briefly recall the experience of a fellow lawyer in the Comstock-Midwestern case a few years ago. Notwithstanding the fact that there was a provincial statute permitting a lien, in that case, because a pipe line was an interprovincial construction, the provincial statute was not deemed to apply. This clause, I suggest, is a means whereby an interprovincial

National Energy Board pipe line is taken out of this refinement of the interpretation of provincial legislation.


Walter Clarence Henderson: We want protection in this part of the bill for companies like Northern Hardware at Prince George which paid $13,000 for dynamite for a pipe line outfit and lost every cent.


An hon. Member:: Too bad.


[Stage Direction]
Clause agreed to.
Clauses 80 and 81 agreed to.
On clause 82-Issue of licences.
George James McIlraith: Before we pass clause 82, is the minister satisfied that the releasing from control of export of fluids other than hydrocarbons as defined in this new legislation is not going to create any difficulties?


Gordon Minto Churchill: We examined that point very closely and we reached the conclusion that no difficulties would arise.


[Stage Direction]
Clause agreed to.
On clause 83-Considerations applicable to issue of licences.
Gordon Minto Churchill: I have an amendment to move with respect to this clause. If my colleague will move the amendment, I will give the explanation.


Howard Charles Green: That clause 83 be amended by inserting after the word "Canada" in line 19 on page 24 the words "having regard to the trends in the discovery of gas in Canada."


Gordon Minto Churchill: May I say that the intent of these words proposed to be added is to make dear that the board shall have regard to trends in the discovery of gas in Canada as well as to the reasonably foreseeable requirements for use in Canada. Thus the board will consider not only the present reserves of gas in relation to future requirements but also the trend in the discovery of gas, or the potential reserve which could be assessed.


Charles Edward Rea: May I draw the minister's attention to the fact that the amendment should read "in line 20 on page 24." I will change the amendment to read "line 20". Is the committee ready for the question on the amendment?


George James McIlraith: Far be it from me to question the Chair, but I am wondering if it should be line 20.


Charles Edward Rea: "Canada" is in
line 20.


George James McIlraith: There seem to be two sets of the bill. In mine, it is in line 19.


Lester Bowles Pearson: I take it that this amendment is designed to ensure that there shall not be

an unnecessarily restrictive policy applied by the board in respect to the export of gas and power and that foreseeable requirements for use in Canada which, of course, as the minister implied, is the first essential in any decision made by the board, should be interpreted in the light of potential production. The purpose of this amendment is to make easier rather than more restrictive the possible export of gas from this country.


Gordon Minto Churchill: That is precisely the way we understand it. I thank the Leader of the Opposition for the clarity of his request.


[Stage Direction]
Amendment agreed to.
Hédard-J. Robichaud: Mr. Chairman, I have a few words to say on clause 83 which, notwithstanding the amendment which has been introduced by the minister, is very important as far as this bill is concerned. Clause 83 imposes on the board the duty of having regard to all considerations that appear to it to be relevant though no such duty is imposed under the Exportation of Power and Fluids and Importation of Gas Act. We have no objection to this change but clause 83 also requires the board to ensure that the quantity of gas or power to be exported does not exceed the surplus remaining after allowance has been made for the foreseeable requirements for use in Canada.
When the Prime Minister spoke on second reading of this bill he insisted that the bill was introduced to protect the public interest. We feel there is no clause in this bill which protects the public interest from the tolls to be charged in comparison with those that could be charged when such commodities are exported. I therefore move:
That paragraph (b) of section 83 of Bill C-49 be replaced by the following:
83(b) the price to be charged by an applicant for gas or power exported by him is not lower than the price at which gas or power, respectively, is supplied by him or his supplier in similar quantities and under similar conditions of sale for consumption in Canada.
My main reason for introducing this amendment is that in certain cases power is being exported and sold to consumers in the United States. There is no provision in the bill to give assurance that the rates charged to United States consumers will be comparable to those charged Canadian consumers. We think the best illustration can be found in New Brunswick where the New Brunswick Electric Power Commission exports power to the state of Maine where a certain company exports in turn this same power to Canadian consumers along the Saint John river valley. We feel there should be protection under which Canadian consumers would not be charged rates exceeding those charged United States consumers and

under which a Canadian company exporting power to the United States would not charge rates lower than those it would charge Canadian consumers for the same power.


Norman Platt Lambert: Mr. Chairman, may I pass one observation on the amendment. Surely the hon. member who proposes this amendment must realize that market conditions in the two countries may be entirely different. The United States distributor may be competing with other types of power or fuel which are not applicable in Canada. How could the Canadian government absolutely determine what the ultimate rate would be to the consumer in the United States? Once a contract has been established there may be a change in the situation. Whereas in Canada the rates may be allowed to go up after various hearings, in the United States the rates might be driven down by reason of competition or otherwise; yet the hon. member would forbid export under those circumstances. I feel that the hon. gentleman is getting into some horrible difficulties.


Hédard-J. Robichaud: In many instances, Mr. Chairman, the power that is being exported to the United States is being subsidized by the Canadian taxpayers. This should be an important consideration in a case like this. I have in mind particularly the case of the New Brunswick Electric Power Commission.


Herbert Wilfred Herridge: Mr. Chairman, we in this group express the strongest support of this amendment. To meet the objection raised by the hon. member for Edmonton West, who I admit has not had an opportunity to read the amendment, I would suggest that if he looks at the last sentence of the amendment he will see provision for the thing he fears. This means that under comparable circumstances gas should not be sold in the United States for a price less than for which it is sold in Canada. We in this group give strong support to this amendment because we have suffered from this in British Columbia and appear to be going to suffer from it in the southern interior of that province.


Lester Bowles Pearson: Mr. Chairman, I draw attention to the words of the Prime Minister on second reading of this bill as reported at page 4025 of Hansard of May 26:
As to the price to be charged for gas and power, it must be just and reasonable in relation to the public interests. With the implementation of this legislation, no longer will there be any suspicion that the Canadian consumer is being forced to subsidize the foreign markets or that Canadian industries will be asked to pay higher prices for their energy than those paid by foreign industries using Canadian energy.
The purpose of this amendment is to make the Prime Minister's words mean something.
66968-9-268
National Energy Board


Harold Edward Winch: It will also give the Conservatives an opportunity to fulfil an election promise made in British Columbia. I was reading in the paper a few moments ago that the Minister of Justice was speaking in British Columbia and boasting about how many promises the Conservatives had implemented. In British Columbia the Conservatives promised that there would be placed on the statute books of Canada a piece of legislation that would never again allow a situation like that which presently obtains in that province. Gas in Alberta and northern British Columbia is shipped all across the province of British Columbia on one line which remains unbroken until it reaches a point approximately fifty miles from Vancouver where it divides two ways. It goes to New Westminster, Burnaby and Vancouver through one branch and across the border through the other. The price to the wholesaler at the border on gas going south of the border is less per thousand cubic feet than the price to the wholesaler who supplies it to Canadian citizens in Vancouver, New Westminster, Burnaby and the Fraser valley.
This is an extraordinary and damnable situation which the Conservatives during the election said they were going to correct. Through this amendment we want to make sure a correction takes place. We are certainly in support of this amendment and we feel that the Conservatives are, too, unless they have changed their minds in the last two years.


Gordon Minto Churchill: The amendment that has been proposed is almost identical in wording with regulation 9 under the Exportation of Power and Fluids and Importation of Gas Act. This is the regulation which the Borden commission recommended should be rescinded. Recommendation No. 4 of the Borden report reads as follows:
That regulation 9 of "Regulations respecting the exportation of power and fluids and the importation of gas" made and established by order in council P.C. 1955-907, in so far as it applies to natural gas, be rescinded.
My hon. friends, now faced with that, are attempting to have it re-established in the legislation. That regulation is precisely the one which gave rise to the difficulties out at the west coast because of the phrasing, "in similar quantities and under similar conditions of sale", and it is very difficult to get two situations exactly similar. For that reason, along with other things that we have done in the legislation, we have left it to the board to determine what is just and reasonable in the circumstances; is it just and reasonable with regard to the price to be

National Energy Board
charged by an applicant for gas or power exported by him, and it is just and reasonable in relation to the public interest.
The board we think will have to take into account the very factors my hon. friends are pointing out as to whether the public interest is protected, and to make sure that Canadians are not placed at a disadvantage with regard to their competitors in the United States. Our experience in Canada dates back to the days long before gas was used in this country, when hydroelectric power was being developed, and when hydroelectric power was being developed in this country some of it was done by United States capital. The power was exported across the line and used to build up United States industry there. Many years ago our people discovered that the advantage lay with the United States using the power that was developed in Canada. With that experience behind us we do not want to have the same thing happen with regard to this other great source of energy, namely natural gas.
Surely this is something that the energy board will take into account when it is considering the applications for export. At the same time I am sure they will have to take into consideration the cost to Canadian consumers if there is no export of gas. A line built at tremendous expense might operate at only a fraction of its total efficiency unless some gas were exported. If it operates lower than its full efficiency, obviously the price to the Canadian consumer will rise. The board will have to weigh and balance these factors one against the other and see what is to the advantage of Canada. With the difficulties that have already arisen and are apparent to Canadians under regulation No. 9 which I have just read we thought the wise thing to do was to give the board freedom of action to weigh all those factors and determine what was just and reasonable in relation to the public interest, and that is why the clause is worded as it is.


Hédard-J. Robichaud: Mr. Chairman, the minister will realize that we have listened carefully to his argument and we have also noticed this afternoon and this evening that the minister has at his side the Minister of Public Works who has been moving quite a few amendments to this bill which proves why we were insisting that this bill be sent to a committee where it could be studied. Right from the time the bill was introduced we argued that it was a bill which needed careful study, and it should have been sent to a committee.
To answer the minister I would refer him to the remarks made by the Minister of Public Works as reported at page 1528 of

Hansard, for February 25, 1955, when he was the member for Vancouver Quadra. Here is what he said on that occasion:
I do not suppose it would he possible to have a power of revocation much wider than the one contained in the present act.
He was speaking then on the power, fluids and gas act. Then he added:
Then there is the power to limit exportation to the surplus after Canadian needs have been met, and also to regulate the price on export so that price will not be lower than the price charged to Canadian consumers.
The amendment which we have moved is to cover exactly this point. It is to protect the Canadian consumers so that the price they will be charged for power is no higher than the one which can be charged for power exported to the United States.


Lester Bowles Pearson: In the circumstances perhaps the Minister of Public Works would like to second our amendment. If he would not, perhaps the hon. member for Vancouver South, if he were in the house, would like to do it because only the other day he said, and I quote from page 4048 of Hansard:
I believe one of the first acts of the energy board should be to review this matter to the end that the gas sold in the United States or any exported gas is not sold at any more favourable price than it is offered to Canadian consumers.
It is in order to assist the energy board in applying this very criterion to this problem that we have introduced this amendment. The minister emphasizes the desirability of giving the board flexibility in this matter. We think this particular question is so important that the board should also be given protection.


Francis Alvin George Hamilton: Mr. Chairman, I rise to say just a few words about the sale of electrical power across the border. I think there is some misunderstanding in the mind of the hon. member for Gloucester on this score because I have been in conversation with the New Brunswick electric power commission and with other power commissions in various parts of the country. It is very clear to me that in the sale of hydroelectric power you have to keep in mind three or four types of power. If you are talking about firm power which will sell under a base load obviously it would be very simple to have the type of amendment you have in mind. Basic power can be sold at lower rates in the country of the source of origin sometimes.
You come now to the question of secondary power either as peak or dump power. If you can get a contract for your secondary power sometimes it can be sold at a lower price in your home country; but if you are up against a situation whereby your power surplus has a dumping factor in it then you do have to sell any place. This dumping

power comes up without any knowledge simply because of the flow or lack of demand. Then, it is customary in power systems to get rid of this power at any price whatever and that, of course, is the case in the New Brunswick electric power commission, the example which the hon. member gave. Last year because of the high flows in the Saint John river they had a power surplus beyond all their expected demands and beyond all they could use in their own country. Therefore, rather than let the power go to waste they sold it to the systems to the south for what I consider was an attractive price of five mills.
Therefore, getting back to the amendment, if you put in an amendment-and I can interrupt myself here by saying that no person more than I wanted, in all the cases listed, something that would prevent the things I complained of in the last few years-when you take a look at the direct benefit, if you put the amendment in that you have to sell at a lower price for similar quantities, then in the case of electric power you can do great harm to the efficiency of the Canadian-operated system. If we are to measure ourselves as to how good Canadians we are I think the test should be one that gives the best for Canadian interests all along the line. In the case of hydro power, when you are referring to dump power particularly, it would be absolutely wrong and hurt Canadian interests if you put such a statutory proviso in the bill which would limit the board to make adjustments that would be advantageous to Canada.
The same thing could apply to natural gas. No person in this house has over the years stood up and complained more about what has happened with the Westcoast Transmission and could have happened at Emerson and may even happen at the Niagara connection of those United States competitors who are processing using Canadian power cheaper than we in Canada can get it. If you limit this board to regulation 9 in the old act you might legally allow the very thing to happen that happened before, and I think we should all be determined not to let that happen again in the future.


Hédard-J. Robichaud: No remarks have been made this evening which are more in support of our amendment than those just made by the Minister of Northern Affairs and National Resources. After all, the minister has referred to basic power, secondary power, power surpluses and the dumping of extra power but the minister has failed to consider the last part of our amendment which reads as follows:
66968-9-268J
National Energy Board -than the price at which gas or power, respectively, is supplied by him or his supplier in similar quantities and under similar conditons of sale for consumption in Canada.
This is exactly the point which the minister has failed to recognize in the remarks he has just made.


Francis Alvin George Hamilton: I hesitate to speak again but I have not failed to recognize that. Using that example of similar conditions, if you were a power entity in Canada and were supplying your own market and if you had a surplus beyond that market and dumped that on your own market and destroyed your whole price structure you would break your own market but if you dumped that extra power into another country which could use it, then any price you got above zero would be a good deal. If the hon. member thinks that through for a minute I think he will see that is true.


Hédard-J. Robichaud: In other words, the minister is making the point that Canadian taxpayers can subsidize power and export it to the United States and that it is a good deal to export power which has been subsidized by the Canadian taxpayers and sell it abroad at a lower rate than that offered Canadian consumers.


Francis Alvin George Hamilton: You are putting words into my mouth which are not so.


Paul Joseph James Martin: I am sure we have listened to a very extraordinary argument by the Minister of Northern Affairs and National Resources in support of the clause as it is proposed by the Minister of Trade and Commerce. As has just been pointed out, the conditions and circumstances of the foreign sale of gas, which have been mentioned by the hon. gentleman, can be safeguarded in the public interest by bearing in mind the concluding words in the proposed amendment which bear repetition, namely "is supplied by him or his supplier in similar quantities and under similar conditions of sale for consumption in Canada."
The hon. gentleman has made the same argument that was made by his colleague who argues for what he calls the principle of flexibility or perhaps we should more accurately say the principle of doubt. If the Canadian interest is such that the situation is as revealed by the two ministers speaking for the government, then surely the necessary safeguards are provided in the concluding part of this amendment. We have had placed on Hansard tonight the words of the Minister of Public Works, words uttered by him as a responsible member of the party in power. Those words must be taken as reflecting the principles that the

National Energy Board government had in mind with regard to this measure, and if there could be any doubt about the authority of this position the Leader of the Opposition has removed that by referring to the observations made by the Prime Minister in his speech on the bill on May 26 last when he said on this very point, as the Leader of the Opposition reminded us, as found at page 4025 of Hansard:
As to the price to be charged for gas and power, it must be just and reasonable in relation to the public interest. With the implementation of this legislation, no longer will there be any suspicion that the Canadian consumer-
These are the important words.
-is being forced to subsidize the foreign markets or that Canadian industries will be asked to pay higher prices for their energy than those paid by foreign industries using Canadian energy.
With the safeguard in the amendment, "in similar quantities and under similar conditions", how is it possible for the government tonight to persist in this particular clause in the face of this statement by the Prime Minister? The Prime Minister is the head of the government and if hon. gentlemen pursue the present clause in its present form we are confronted with a division of view in the ministry itself. The Prime Minister had no doubts about this matter. I refer to other words of his which will be found on page 4021 of Hansard in which he said:
Finally there is the question of whether the public interest will be protected. One of the matters that was the cause of infinite unfairness to Canadians under some of the licences granted when the former government was in power was that Canadians paid through the nose for consumption in Canada while the price in the United States was lower.
These are not the words of a private member among those who sit on Mr. Speaker's right. These are not merely the words of a minister of the crown. These are the words of the Prime Minister spoken in this very debate on this very bill. When the Prime Minister spoke his words went all through the country. They were widely reported as reflecting the opinion of the government and these words of the Prime Minister were also widely applauded. The Prime Minister cannot expect parliament or the Canadian people to accept his words as representing government policy if the amendment now before the committee is not accepted or if there is no other appropriate modification of the words in the existing clause. The Prime Minister went on to say on page 4021:
These are a few of the material matters with which this legislation is concerned. Somebody said that the powers should be spelled out. In reply I affirm that they are spelled out-
We are asking that they be spelled out. We are asking that under similar conditions

where there are similar quantities involved Canadians will not be charged more than citizens or industrial corporations of the United States. That is the principle, that they shall be treated alike. That is what the Prime Minister said. Our amendment carries forward the principle stated in the Prime Minister's observations. The bill as now drawn without this amendment is absolutely contrary to what the Prime Minister said. I can only say to the Minister of Trade and Commerce, who has carefully piloted this legislation and, if I may say so, has done so with an understanding of the position of those who have sought to improve it, that he is placed in the invidious position of putting forward a clause in a bill which is diametrically opposed to the statements to which I have referred and which were made by the Prime Minister in his speech on this bill.


Mr. Drysdale:: Would you like to finish reading that particular quotation?


Paul Joseph James Martin: Yes.
In reply I affirm that they are spelled out and are sufficiently flexible to assure through public hearings and through maintaining the inviolability of the board by its appointment for a period of seven years-
I want to remind my hon. friend who has just asked me a question that he should remember these words of the Prime Minister:
Finally there is the question of whether the public interest will be protected. One of the matters that was the cause of infinite unfairness to Canadians under some of the licences granted when the former government was in power-
This is the important point.
-was that Canadians paid through the nose for consumption in Canada while the price in the United States was lower.
These words are on all fours with this amendment. The Minister of Trade and Commerce tonight, in putting forward this particular clause in its present form, presents to the house the most unusual sight of cabinet division that we have seen since this government came into office. The Prime Minister is advocating a policy that is fully consistent with this amendment. The Minister of Trade and Commerce is advocating another policy. He might not have recalled the words of the Prime Minister, and it is because of that that I hope he has taken advantage of the reading of those words of the Prime Minister to reflect on the position in which I think he is unfairly placed. Under our system of government, the cabinet must speak with one voice. The Prime Minister, on a matter of policy, cannot have one view and one or more of his ministers another.

If the Minister of Trade and Commerce persists in presenting this clause, without the amendment or the kind of amendment proposed, then hon. members and the country-can come to no other conclusion but that the cabinet is divided on this matter, and the consequences of such a division of ministerial view are well known to the Minister of Trade and Commerce.


Gordon Minto Churchill: I always listen with a great deal of interest to my hon. friend. I want to assure him that there is the greatest exposition of cabinet solidarity here-


George James McIlraith: Not Friday night, there
was not.


Gordon Minto Churchill: -that he has seen. As a matter of fact, the entire house is in agreement on the principle of this matter, the principle being that Canadians shall not be placed at a disadvantage when their natural resource, gas, is exported. We are in agreement upon that, but my hon. friends want to continue as the law of the land regulation No. 9 which I read some time ago. They want to continue this regulation which has caused all the trouble.
This regulation was examined by the Borden commission and they rejected it. They said to rescind it. Let me quote to you what the royal commission on energy had to say on page 13 of their first report. After reprinting the regulation, the commission wrote as follows:
While the commission believes it understands the result which regulation 9 was designed to accomplish, nevertheless we have found it most difficult and, indeed, almost impossible to interpret. In the first place, the quantities and conditions of natural gas sales vary greatly as between contracts, so that price comparisons are difficult to make. The usual method of determining appropriate prices is based on a computation of cost of service and there are various methods of allocating certain of these costs to different types and quantities of sale. Furthermore, the regulation does not take into account other factors, such as competitive prices and value of service, factors which many authorities believe should be taken into account in the setting of prices. In the opinion of the commission, regulation 9 should be rescinded.
The commission believes that, if a national energy board enquires into the terms and conditions of each proposed export contract, satisfies itself that the terms are fair and reasonable and in the public interest, and discharges the other responsibilities which the commission is recommending should be placed upon it, the objectives which the commission assumes were envisaged by regulation 9 will be achieved.
Regulation 9, as the hon. member for Kootenay West pointed out, is the regulation under which the situation developed about which he complained. The Prime Minister drew attention to this regulation on page 4021 of Hansard for May 26, 1959. He said this:
Members of the former administration said, "We cannot protect you because the regulations say that
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regard must be had to similar conditions and similar quantities before determination in this regard can be made."
It is because regulation 9 did not give the protection that everybody wants, and the whole House of Commons is in agreement on this, that the Borden commission rejected regulation 9 and suggested another way of dealing with it. Our drafting of the bill is made to achieve exactly that desired end. We put it up to the energy board to size up all the factors concerning each contract for export and determine, as it says here, that the price to be charged by an applicant for gas or power exported by him is just and reasonable in relation to the public interest. The public interest means the Canadian public interest, and surely the public interest means the development of Canadian industry. This does not mean to make it possible for a competitor across the line to gain an advantage from the use of our natural resource, gas.
How is it to be done? Regulation 9 has been tried and has been found wanting, so the suggestion is that the board be given this power to determine the method by which the public interest can be protected. It was not protected under regulation 9. My hon. friends, who are striving to bring regulation 9 back into the statutes, are surely on the wrong track. This has been proven to be wrong. The regulation was examined by the Borden commission and rejected and a new method suggested which is calculated to do exactly the things that regulation 9 did not do, one of which is to protect the public interest. I have read and re-read regulation 9, which is really the amendment before us. There is a change in only one or two words. Regulation 9 falls on that phrase, "in similar quantities and under similar conditions of sale", because you cannot get those things exactly equal. A person who is buying in great bulk, as was done out on the west coast, is buying under different conditions from the person who is operating a very small business on the Canadian side. This was the argument under regulation 9, that prices for export, therefore, should be lower than the prices in our own country, and it is to that the people are objecting.
Then how do we get the safeguard? Our suggestion is embodied in this clause with which we have been dealing, clause 83, paragraph (b). This will give us the safeguard that everyone wants. Certainly we cannot get it if we just simply carry along with regulation 9. My hon. friends, therefore, who have been trying to make out a case of

National Energy Board cabinet disunity and a case for lack of concern with regard to the Canadian people, have been arguing from a false premise. Our concern is exactly the same as that of our hon. friends opposite. Our concern was expressed by the Prime Minister in the words that have been quoted and re-quoted. Our concern has been shown by the wording which we have put into this bill.


Lester Bowles Pearson: It is refreshing, it is almost unique, to listen to the minister produce a recommendation of the Borden commission in support of the position of the government. Against this recommendation we place the words of the Prime Minister, most of which are clear, and all we are asking the minister to do is to make an honest man of the Prime Minister by this amendment.


Mr. Brooks:: I just wanted to say a few words on this amendment. I was rather surprised at the example cited by the hon. member for Gloucester in support of his amendment. He cited the export of electricity or power from the province of New Brunswick. He knows as well as I do that there is very little power exported from New Brunswick, an infinitesimal amount. As a matter of fact, up until the time the present government in New Brunswick came into power New Brunswick was starved for power. We feel very proud today that we not only have sufficient power for our own use but last year, as was pointed out by the minister for northern affairs, had power to export.
If we had charged the same price for the power that was exported as we charged for the power that was used we would not have been able to sell it. It would have been an entire loss. I suppose we used about 95 per cent at least of the power that was produced. The other small quantity was exported. The New Brunswick power commission found that they could make a good sale in the United States. They were well satisfied. I am satisfied, Mr. Chairman, that the people of New Brunswick felt that the public interest was well served by the amount that they received. I think that had this act with this proposed amendment been in force at that time the province of New Brunswick would have lost the sale of this amount of power and would have had this surplus on its hands. Frankly, as I said a few moments ago, I feel that a great disservice would have been done to the province of New Brunswick which is today in the proud position of obtaining all the power that it needs and, in addition, has some to export.


Hédard-J. Robichaud: I have listened with great interest to the remarks that have just been made by the Minister of Veterans Affairs, and

I am sure that if the minister had read the amendment-and I want to read again the last sentence, which has been repeated three or four times; I refer to this amendment that I have just moved-if the minister had read the last part of it, he would not have made the remarks which he has just made. The last part of the amendment reads as follows:
-Is supplied by him or his supplier in similar quantities and under similar conditions of sale for consumption in Canada.


Alfred Johnson Brooks: May I ask the hon. member a question?


Hédard-J. Robichaud: Yes.


Alfred Johnson Brooks: The amount that was exported,
I think he will agree with me, was a very small quantity. I think it was in the vicinity of 5 per cent, although I have not the exact figure. To whom would he have sold in the province of New Brunswick 5 per cent at a lower price than he would have sold the other 95 per cent? Is he going to discriminate against the buyers in the province of New Brunswick simply in order to satisfy the sale of a very small quantity of power abroad?


Hédard-J. Robichaud: Notwithstanding what the minister has said, we should also take into consideration the fact that we are selling power that is being subsidized by the Canadian taxpayer.
As to the statement made by the Minister of Trade, may I say that I followed it with great interest. I noticed that the minister was more interested in rejecting certain recommendations or certain aspects of the bill or of the Pipe Lines Act which were not recommended than those sections which were opposed by the Borden commission. This is being done by the same minister who incorporated in the present bill 23 out of 34 recommendations of the Borden commission. I therefore think it is a very weak argument for the minister to make when he states that the Borden commission could not approve regulation 9 of the Exportation of Power and Fluids and Importation of Gas Act, and to use this as an argument for not accepting our amendment.


Joseph Pierre Albert Sévigny: Is the committee ready for the question on the amendment?


Paul Joseph James Martin: I do not think this matter can rest at this point because the principle involved is too important. It will be recalled that when the Prime Minister spoke on May 26 he was followed by the hon. member for Ottawa West who put on the record a statement my Mr. John Davis who wrote in the "Behind the Headlines" series a pamphlet entitled "Canadian Energy Policy". At page 6, in the second last complete

paragraph, in the last sentence of that study, the following appears: He goes on to point out:
The quantities of energy used in both countries-
That is Canada and the United States.
-are about the same per unit of gross national product. Hence, the basic difference is one of price. Even in 1958, consumers in Canada were paying between 30 and 50 per cent more for their energy than were their opposite numbers in the U.S.A.
At that time we were discussing the second reading of the bill. We had not reached an examination clause by clause of the measure as we are now doing tonight. What the Leader of the Opposition and those of us who have spoken on this point have been endeavouring to do is to point out that the head of the government has taken one position and that the Minister of Trade and Commerce is taking another. In the absence of a statement from the Minister of Trade and Commerce I think we can only conclude that the point of view stated by the Prime Minister is for some reason or another not now being accepted by the government.
The Leader of the Opposition has put on the record observations made by the Prime Minister in his speech during this debate and a few moments ago I put on the record another statement of his. I now wish to put on the record a third statement which was made by the Prime Minister and which is seemingly even stronger and more pertinent than were the other two and only accentuates the difference that prevails between my hon. friend who has the responsibility of piloting this measure and the Prime Minister.
As reported at pages 4025 and 4026 of Hansard the Prime Minister stated as follows:
As to the price to be charged for gas and power, it must be just and reasonable in relation to the public interests. With the implementation of this legislation, no longer will there be any suspicion that the Canadian consumer is being forced to subsidize the foreign markets or that Canadian industries will be asked to pay higher prices for their industries than those paid by foreign energy using Canadian energy. That matter is extremely important.
Then the Prime Minister went on to say this, and I underline these words:
In the trade world in which we are living, with the conflicts that are accelerating from month to month in the communist trade offensive, above everything else it is necessary for us in Canada, if our international trade is to be maintained, to see to it that we shall not be placed in a position where our costs in connection with energy derived from Canada are greater to Canadians than they are to any other nation, however friendly that nation may be.
Can there be any doubt about those words? The head of the government says that we must take steps in the bill, second reading
National Energy Board of which was then before the house, so as to see to it that we shall not be placed in a position where our costs in connection with energy derived from Canada are greater to Canadians than they are to any other nation, however friendly that nation may be. Those are the words of the Prime Minister. Either those words mean something or they do not. Either they meant something when they were uttered or they were intended to give an impression which I am sure the Prime Minister did not intend. But the only conclusion is that his indications of intention are not being carried out in this bill. All that is being provided for in section 83 is that the board shall have regard to all considerations et cetera and that the board shall satisfy itself that the price to be charged by an applicant for gas or power exported by him is just and reasonable in relation to the public interest.
That is not what the Prime Minister said. The clause before us is not a direction. It is simply an indication that in considering an application for gas or power export the board will determine whether or not the price to be charged is just and reasonable. It says nothing about the price being charged to foreign corporations or industries being the same as the price being charged to Canadians.
Unless the minister is able to reconcile the difference between the words of the Prime Minister and the terms of this bill, the minister guiding this legislation tonight is, I repeat, in the unfortunate position of proposing something which represents a serious division between himself and the Prime Minister. The minister smiles, and I can understand why he should smile-I can understand his desire to smile-but that does not alter the fact that there is this difference between him, in his bill, and the words of the Prime Minister and this, under our constitutional practice, requires from the minister an explanation of the reasons for that variation in opinion which he has not yet given to the committee.


Gordon Minto Churchill: The hon. gentleman is very entertaining indeed, but he is not logical and I regret that, because he used to be logical. There is no difference of opinion between the Prime Minister and myself. If there were I should be happy to find it out from the Prime Minister and not from hon. gentlemen opposite.
The words of the Prime Minister have often been quoted. He pointed out in his statement on May 26 that regulation 9 had failed to

National Energy Board give Canadians the protection they required. He stated in the same speech:
As to the price to be charged for gas and power it must be just and reasonable in relation to the public interest.
That is precisely what we have here in this bill, almost word for word.


George James McIlraith: No, no.


Gordon Minto Churchill: Almost word for word. The hon. gentleman says "no" but let me read out part of clause 83:
The price to be charged by an applicant for gas or power exported by him is just and reasonable in relation to the public interest.
That is what the Prime Minister had in mind, that the public interest would be protected by giving this type of authority to the energy board who would not be cribbed, cabined and confined by regulation No. 9 which is a restrictive regulation. Here the board can take account of all the factors which should be considered, and there is no no doubt in my mind, after the Borden report and after the lengthy discussion here in the House of Commons, but that the energy board to be set up will take fully into account the Canadian national interest and take fully into account the expressions of opinion here from both sides of the committee, leading toward the same objective.
I commend hon. members opposite for their helpfulness in discussion throughout this debate. They have been of assistance to us in clarifying the measure. I think, however, that in this particular instance they have been somewhat less than helpful, although they have very clearly stated that in their opinion the national interest requires the same thing as we consider that the national interest requires. Thus we are at one as far as that goes. We differ as to the wording by which that objective is to be achieved. I see no difference of opinion between the Prime Minister and myself with regard to the substance of clause 83.


John Whitney Pickersgill: I should like to ask the minister one question, if I may. What objection could the government have to accepting the amendment moved by the hon. member for Gloucester unless he and his colleagues intend that energy should be sold at a lower price to the United States? All this does is to impose one test-that it must not be sold at a cheaper price to the United States. What conceivable objection could there be to this amendment unless it is intended to sell at a cheaper price to the United States?


Gordon Minto Churchill: I do not mind answering the hon. member for Bonavista-Twillingate. The amendment, as I pointed out before, is just a rewrite of regulation 9 in which there was

no provision for the public interest and under which gas is today being sold in the United States at a lower price than to Canadian citizens.
Amendment (Mr. Robichaud) negatived. Yeas, 23; nays, 76.


[Stage Direction]
Clause agreed to.
On clause 84-Revocation and suspension of licences.
Lester Bowles Pearson: Clause 84 deals with revocation and suspension of licences for export and import, and it merely states that subject to subsection 2 the board may revoke or suspend a licence issued under this part. But in the earlier part of this bill when we were dealing with revocation and suspension of certificates under part III, we found clause 47 reads:
Subject to subsection 2, the board may by order, with the approval of the governor in council, revoke or suspend a certificate-


Gordon Minto Churchill: In clause 84 it is not only subject to subsection 2 but it is also subject to the regulations, and in clause 85 the governor in council may make regulations with regard to the purposes and provisions of this part, and in the regulations it is open to the governor in council to require that any revocation or suspension of licences must have the approval of the governor in council.


Lester Bowles Pearson: Is the minister's explanation that it is because in clause 82 the board does not require the approval of the governor in council to issue the licences, that approval is not required in this instance?


Gordon Minto Churchill: In clause 82 it is subject to the regulations and the regulations when drawn up may require the approval of the governor in council.


George James McIlraith: Mr. Chairman, perhaps I should read this clause into the record in order to make my argument clear:
84. (1) Subject to subsection (2) and the regulations, the board may by order revoke or suspend a licence issued under this part if, in the opinion of the board, the person to whom it was issued has violated or failed to comply with any term or condition thereof.
(2) No order shall be made under this section unless notice has been given to the holder of the licence who is alleged to have violated or failed to comply with any term or condition thereof and an opportunity has been afforded to him of being heard.
My point is this. Presumably on these licences there may be several terms and conditions, some very important and some of lesser importance. It is possible that an exporter or a person licensed under this part may inadvertently fail to carry out one of the terms or conditions attached to the licence.

This present cause provides that he would be given notice and an opportunity of being heard. The legislation on which this is modelled is section 3 of the Exportation of Power and Fluids and Importation of Gas Act.
That act provided that in addition to their being a breach there must be notice to the licensee and the licensee must have an opportunity of rectifying the matter when drawn to his attention, and if he rectifies it there was no power of revocation. I point out to the minister the same argument I made on clause 47 which is similar when I outlined the danger of what he is doing by taking away that right of a licensee to rectify his breach in those circumstances.
I could perhaps move an amendment similar to that I moved previously but I do not think it is necessary. I made the point on the similar clause and I believe it is well understood by the committee. What the minister is doing here is putting an uncertainty on the value of these licences and that value is going to impair the right of the holder of the licence to finance his enterprise.
The minister pointed out at some length the need for investment in this whole industry and in the development of the sources of energy with which we are concerned and yet by this clause he is doing something that will interfere with obtaining investment and indeed tend to prevent the realization of what he indicated on second reading was so necessary. I therefore want to again draw the attention and point out this defect in the clause.


Joseph Pierre Albert Sévigny: Shall the clause carry?


George James McIlraith: Has the minister anything further to say?


Gordon Minto Churchill: Mr. Chairman, I was not certain that the hon. member wanted me to comment at length on this. I appreciate that his argument is the same as he made so effectively on clause 47. We will certainly bear in mind the point he has raised but again I doubt there is any real danger. We have written in here the opportunity for the holder of the licence to be heard under the circumstances. If his licence is to be revoked or suspended notice must be given and an opportunity for him to be heard must also be given. We think that provides adequate protection. When discussing clause 47 I pointed out that the argument advanced by the hon. member is certainly deserving of attention and his points will be borne in mind.


[Stage Direction]
Clause agreed to.
On clause 85-Regulations.
Hazen Robert Argue: Mr. Chairman, subclause 2
of clause 85 reads as follows:
66968-9-269
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The governor in council may by regulation exempt any person or class of persons or any product or class of products or any transactions, persons or areas from the operation of all or any of the provisions of this part or the regulations.
It seems to me that this is another of those paragraphs that gives sweeping powers to the governor in council under which in fact, if the governor in council wished, it could take away all of the powers the board has under this clause. I think it is perfectly ridiculous for parliament to go to great lengths to spell out the specific powers of the energy board which the government says is going to be staffed by competent men and then include provisions of this kind.
Part VI in my opinion contains sufficient qualifications and escape hatches for the board to make decisions in the interest of Canada. I do not know why the governor in council should wish to retain this allembracing power. I therefore move:
That subclause 2 of clause 85 be deleted.
If the governor in council wishes to strengthen the powers of the board the members of the cabinet should have no hesitation in accepting this amendment. They have been in a receptive mood as far as some suggestions are concerned. If the board is going to be competent surely the cabinet does not need to retain this complete power of veto over every action of the board.


Gordon Minto Churchill: Once again in relation to
this clause there appears to be in the mind of the hon. member a tendency to go beyond what was intended. If it seems suitable to parliament to accept the subsequent clause No. 87 and if in time oil becomes controlled as to export and import, unless exemptions are permitted there would be an endless amount of red tape in the issuing of permits and licences for a product which would be moving not only by pipe line-in which form it is easy to control-but moving in small quantities, in tins and in forms like that.
Without an exemption provided for in the regulations every single bit of oil including the small cans of sewing machine oil would have to come in by permit. It was to guard against red tape and a great increase in the number of people who would be required to administer a program like that that this exemption clause was written in.
If my hon. friend thinks that it destroys the power of the board, or that the governor in council might be somewhat arbitrary in its use, there is always the responsibility surely to the House of Commons and to parliament. The government has to answer for everything that it does, so there is a check, and an effective check, on the misuse-which my hon. friend is thinking of-of subclause (2) of clause 85.

National Energy Board


Hédard-J. Robichaud: Mr. Chairman, we on this side of the house are definitely in support of the amendment moved by the hon. member. This is a clause which gives so much power to the governor in council that it may completely nullify the purpose of this legislation. It is a case of the government coming in by the back door to nullify the provisions of the legislation, and it makes the bill practically worthless notwithstanding the remarks which have just been made by the minister. For this very reason we will definitely support the amendment.


Hazen Robert Argue: Mr. Chairman, if the cabinet is going to spend its time deciding whether there should be certain exemptions on sewing machine oil coming into Canada, and quarts of oil and thimblefuls of oil, they are going to be a very busy cabinet in considering all these exemptions.


Gordon Minto Churchill: That is not the way it will be done.


Hazen Robert Argue: I do not know what the cabinet does in its spare time. It must apparently have a great deal of spare time.


Gordon Minto Churchill: You will never find out either from actual experience.


Hazen Robert Argue: I will never find out because it will all be hidden; it will be kept away from parliament, that is right. "You will never find out", never find out what the cabinet is doing.


Gordon Minto Churchill: The hon. member did not catch my last phrase, "from actual experience".


Hazen Robert Argue: Hidden reports; cabinet secrecy.
We have a bill before us, Mr. Chairman, setting up an energy board, and every important decision is subject to the approval of the cabinet. The hon. member for Vancouver East says now, "all of the unimportant ones". We may have sewing machine oil in 6-ounce cans, or we have quart containers, and all these trivial things that the minister says will be dealt with under subparagraph (2). Surely the cabinet, in carrying out the public business of the country under its jurisdiction, has a tremendous burden now without having this all-embracing power which the Minister of Trade and Commerce says will be used only on trivial matters. I think the whole purpose in setting up this energy board should have been to give to the energy board the right to make important decisions which are not subject to cabinet veto every day of the week. There are certain things I would not object to, such as an appeal on general rates to the cabinet as there is on freight rates now from the board of transport commissioners; but to have

every single decision of the energy board subject to cabinet approval I think would be a very great mistake. The cabinet complains of its burdens.


Mr. Fulton:: We do not complain.


Hazen Robert Argue: Oh, you do complain. You want sixteen parliamentary secretaries. That is the result of your complaint. The hon. gentlemen in the other place may have had the Minister of Trade and Commerce in mind, seeing that he has grouped around him a number of potential parliamentary secretaries, and they may have thought he needed more than one. Of course he has the advantage of many ministers. That is the solidarity of the cabinet, speaking with many voices. We are on energy, but I am not sure what kind at the moment, Mr. Chairman; but I do feel that this is a mistaken use of the important time of the cabinet to have in this bill, as in the other parts and in so many clauses, the right of veto. If the cabinet is going to consider all of these decisions-and they must, according to the legislation-I think it is taking upon itself a great burden of detail that it is not able to discharge. That is a bad thing in itself, and I think it is a very bad thing to have this board subject to cabinet veto on so many decisions.


Lester Bowles Pearson: Mr. Chairman, we on this side would have moved the same amendment that has been put forward by the C.C.F. if they had not done it because this is an extraordinary provision to have in legislation of this kind, particularly as it comes from the Minister of Trade and Commerce who used to talk so vigorously and violently on the rights of parliament and the necessity of reducing the power of the executive.
The minister has said, of course, that their intentions in the exercise of this particular power will be good but, as the minister must surely recognize, good intentions do not ensure good legislation. He has also said-and this is a most extraordinary argument-that the reason for this provision is so that the cabinet can protect the public interest against unnecessary red tape and all that kind of thing. In other words, we are setting up a board of five responsible members. We are giving that board great powers, and yet the governor in council cannot entrust this particular board with enough power to deal with those minor matters. They must themselves put a provision in the legislation allowing the cabinet to take from the board not only its powers in minor matters but all powers because this particular clause empowers the governor in council to exempt any person or class of persons or any product or class of products or any transactions persons or areas

from the operation of all or any of the provisions of this part or the regulations. If that is not an arrogation unto itself by the executive of all powers over legislation, then I do not know what arrogation of power means. The only excuse the minister has given us, or the only one he has given us so far, is that there may be some quantities of this and that come in, some kind of oil, some kind of gas.


Hazen Robert Argue: Cod liver oil.


Lester Bowles Pearson: Cod liver oil or castor oil. It would not do to have this board wasting its time on matters of this kind; we have to give this kind of thing to the cabinet. Surely in the circumstances the minister himself will realize that this provision is not only unnecessary but ridiculous, and if it is not ridiculous it is dangerous.


Paul Joseph James Martin: This matter is too important to allow it to pass without further observation, particularly in the absence of a strong statement from the minister.
The clause before us gives the governor in council power to make regulations for carrying into effect the purposes and provisions of this part and, without restricting the generality of the foregoing to make regulations respecting (a), (b), (c), (d), and so on. Usually, where the board or a minister or the governor in council is empowered to make regulations there is a provision for the tabling of those regulations. There is nothing in this legislation or the regulations requiring the governor in council or the minister to table the regulations within 15 days of the opening of parliament. I well remember the criticism which was levelled by hon. members over alleged assumption of power by the executive, by the present Minister of Justice.
We were going to give to a board, I think it was the old age pensions board, the power to make regulations, and those regulations the country and parliament would never know about. It was argued they would be kept within the confines of the knowledge of officials from the provinces or the federal government. There must be a requirement of the ministry, it was argued, that these regulations shall be tabled so that parliament will know what they are.
If there was justification, and there was, for that argument, how much more there is for a measure of this sort affecting as it does civil liberties and civil rights of the greatest kind. I suggest to the minister that on his own initiative he will see the force of this argument and that he will take steps to modify this clause at once so that there will be a requirement to table in parliament within a 66968-9-269J
National Energy Board specified number of days the regulations which the governor in council will be empowered to make.
With regard to subclause 2, certainly there ought to be a requirement for the tabling of such a regulation. That subclause reads:
The governor in council may by regulation exempt any person or class of persons or any product or class of products or any transactions, persons or areas from the operation of all or any of the provisions of this part or the regulations.
Yet there is no requirement to table a regulation so fundamental in its implications. I hope that the minister will take the initiative, as I said, to make provision in the bill for tabling the regulations envisaged in subclause 1 and in subclause 2. What can be the purpose of this particular clause? Here we have decided to pick a board, not a board of three as was suggested from this side in the interests of economy but a board of five, of five of the best and most competent individuals who can be obtained.


John Whitney Pickersgill: Already selected.


Paul Joseph James Martin: Already selected, one hon. member suggests-a board that is going to have the powers covered by various clauses we have already dealt with, and all of a sudden in one of the concluding clauses of the bill the governor in council takes the power to vitiate in whole or in part anything that the board may have done.
Let us just see how far-reaching this clause is. It is one thing to have government by the executive and parliament but under our system it is another thing to have government only by the executive. How often have we heard the Minister of Justice, who laughs now, the Minister of Trade and Commerce and others, speak about preserving the rights of parliament? I do not recall the Minister of National Defence in this particular but I am sure the Minister without Portfolio from Newfoundland was among those who spoke feverishly about preserving the rights of parliament against an executive that wanted to assume exclusive power. Hon. gentlemen have the opportunity tonight to repeat their speeches. Let them look at this particular clause and observe the power given to the executive by a government that was going to preserve the rights of parliament at all times, a government headed by a right hon. gentleman who went up and down the length and breadth of the country complaining about the invasion of the rights of parliament by the preceding government. Yet this present government, with less than two years in office, comes to parliament and puts before us a clause like this, the like of which perhaps no government in the history of Canada has ever tried to put before parliament.

National Energy Board


Some hon. Members:: Oh, oh.


Mr. Marlin (Essex Easl):: Hon. members
object. I see the hon. member lor Rosedale laughing. He is a lawyer and one who theoretically at any rate, and I am sure in fact, appreciates the value of the rule of law. I ask him to look at clause 18 of the bill where the right of appeal to the Supreme Court of Canada is given on matters of law and on matters involving a question of jurisdiction. That is a precious right given by the bill in accordance with our traditions, those traditions which accord to the individual the right to seek the support and preservation of privileges and rights by the judicial arm. Under subsection 2 of the clause we are now discussing the cabinet can simply wipe out by order in council the right given to individuals and corporations under clause 18 of the right to appeal to the Supreme Court of Canada on a matter of law or on a matter involving the question of jurisdiction. Hon. members laugh at that but if they do they will be laughing at something that was uttered repeatedly in this house by hon. gentlemen when they sat on this side of the house and by no one more vigorously than by the Prime Minister. I have here the words of the Prime Minister as found at page 4563 of Hansard for June 9, 1955. Listen to these words of the then member for Prince Albert:
I ask the Prime Minister now: Do you have to circumvent the rule of law in order to achieve power under this legislation? Nothing of the kind! Have the powers, but in order to assure-


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: My hon. friends laugh. These words were so important at the time that I want to make sure that every word is underlined so that they will sink into the mind and heart of the Minister of Public Works for one, into the mind and heart of the Minister of Justice who should be the custodian of these things, who should be the first to rise tonight and say, "Of course we have made a mistake; we must not give the governor in council the power to take away the right of an individual to lodge an appeal on a matter of law or on a matter of jurisdiction to the highest court in the land."


Norman Platt Lambert: They do not take it away.


Paul Joseph James Martin: But what hon. gentlemen said on another occasion is not to be pleaded tonight. The situation is different. They are now on the ministerial benches. It was all very well for them to complain about violations of the rule of law when they were in the opposition but now they are sitting in the seats of government. They say they are not going to do anything that will interfere in any way with the rights


of the individual but at the same time they want this power of veto. They have not told us why. Just as we on another occasion were subjected to criticism because we did not give answers regarded by those in opposition as satisfactory, it is now our duty in the opposition to ask the Minister of Trade and Commerce to explain to us in careful detail why he takes these wide powers in the face of this statement of the Prime Minister who said:
Have the powers, but in order to assure that no individual shall be discriminated against and denied equality before the law, to assure that the individual shall not be a puppet in the hands of the minister, give to the individual who is able to establish that he has been discriminated against a right of review by the courts of the land. Surely we have not arrived at a state of mind in this country when parliament is asked to abdicate the rights of the courts for an indefinite time in the future in order to satisfy the desire for power of any minister or of any government.


Edmund Davie Fulton: Can you give us the page reference?


Paul Joseph James Martin: I have already given it, page 4563, June 9, 1955. These are words which I am sure the Minister of Justice recalls very well because, if I remember rightly, he too made some speeches in that same debate complaining about the power given to the executive. I ask him tonight as Minister of Justice, in charge of the law offices of the crown, as the minister supposed to advise his colleagues on those matters that have to do with preserving the rule of law, what does he think of a clause in a bill that gives to the governor in council the power by a single act, an order in council based on a regulation that need not be tabled in the house-


Edmund Davie Fulton: Certainly, it must be tabled.


Paul Joseph James Martin: My hon. friend says it must be tabled. Will he point out where, in this clause, there is anything that requires the governor in council to table a regulation or where there is anything in this clause that requires the governor in council to table particular regulations exempting any class or any person or any class of persons or any product or class of products or any transactions, persons or areas from the operations of all or any of the provisions of this part of the regulations.
Talk about government by executive-I say again there has never been-


Edmund Davie Fulton: Has my hon. friend never heard of the Regulations Act?


Paul Joseph James Martin: -on the part of any government less appreciation of the importance of its relationship to parliament. What was that?


Edmund Davie Fulton: Has my hon. friend never heard of the Regulations Act when he says there is no provision that these regulations shall be tabled?


Paul Joseph James Martin: My hon. friend says, have I heard of the Regulations Act? Of course I have heard of the Regulations Act, but I have also seen acts that insist upon a board having this power also making it mandatory that these regulations be tabled. I have seen other acts under which the governor in council had to take such powers as these, making these bodies responsible to parliament.


Edmund Davie Fulton: Does my hon. friend know the provisions of the Regulations Act?


Paul Joseph James Martin: My hon. friend says, do I know this or do I know that.


Edmund Davie Fulton: The answer is obvious, you do not.


Paul Joseph James Martin: Does my hon. friend not know that one of his first responsibilities as Minister of Justice is to see that the executive arm of government in this country is given powers consistent with the traditional role of the executive in relation to parliament, and powers which will not place the executive in a position where it is capable of overriding the wishes of parliament, the wishes of the people in the country, by order in council? I say to the Minister of Justice, pass this clause and you will have given the best demonstration of the insincerity of the words used by hon. members opposite when they criticized us with regard to legislation which they thought was a violation of the rule of law.
Hon. gentlemen now have the opportunity of proving their worth by changing this clause and making it consistent with the declarations of the Prime Minister and of hon. members who sit opposite, declarations made in this house when they were the great champions of the rights of the people and the rights of parliament itself.


Lester Bowles Pearson: The Minister of Justice finds this very amusing. Let me put on the record-


Edmund Davie Fulton: I find my hon. friends amusing, not the subject.


Lester Bowles Pearson: Let me put on the record-


Mr. McPhillips:: Is your lieutenant not good enough?


Lester Bowles Pearson: -what the minister himself had to say on June 13, 1955. What was that witty intervention?


Albert DeBurgo McPhillips: Is your lieutenant not good enough?
National Energy Board


Hédard-J. Robichaud: He is back to his dreams.


Lester Bowles Pearson: That is the kind of intellectual intervention which we are accustomed to expect from my hon. friend. That is what the Minister of Justice had to say on June 13, 1955, page 4732 of Hansard:
Those who give and those who receive arbitrary power are alike criminal and there is no man but is bound to resist it to the best of his power, whenever it shall show its face in the world. It is a crime to bear it when it can be rationally shaken off . . . Law and arbitrary power are in dreadful enmity.
I suggest the Minister of Justice ought to shake off some of this arbitrary power.


Gordon Minto Churchill: Mr. Chairman, when I was listening to the hon. member for Essex East rising to those heights of oratory I saw before me what I had often hoped to see, a member of the House of Commons exhibiting, the meaning of that classic phrase that I think was used by Winston Churchill with respect to a member of the House of Commons being carried away by the exuberance of his own verbosity.


Lester Bowles Pearson: That was Disraeli.


Gordon Minto Churchill: Yes, but I believe it was repeated by Winston Churchill. Tonight the hon. member was carried away off the beaten path, away from the root of the matter. He became frightfully excited over what he tried to make out was a vital matter. The Minister of Justice and I were quite pleased at his reference to the debates of 1955. The Minister of Justice said to me, apparently we taught them a lesson which they have not forgotten. Now, they are making us immortal by quoting those words that we spoke in 1955 concerning the rights of parliament,
I should like to mention one or two of the matters referred to by the hon. member for Essex East, the first one of which was with regard to the tabling of the regulations. This is required by the Regulations Act, section 7 of which reads as follows:
Every regulation shall be laid before parliament within 15 days after it is published in the Canada Gazette or, if parliament is not then in session, within 15 days after the commencement of the next ensuing session.
The regulations, therefore, will be made public. They will be disclosed to parliament. They can be called into question by my hon. friends, if they so desire.
My hon. friends attempted to make us believe that this proposed subclause of clause 85 would take away rights which we have already declared to exist for citizens under clause 18. It has nothing to do with that at all and does not remove any rights whatever. Let us descend from the summit and get down to the facts that are involved. Here we are

National Energy Board dealing with part VI, dealing with exports and imports; that is all. We are not dealing with certificates of public convenience and necessity or any of those major matters that the board has to determine. We are dealing here with exports and imports of gas and we suggest that here, by regulation, certain exemptions may be allowed, not for the purpose of burdening the cabinet, as the hon. member for Assiniboia was trying to make out. These regulations will express where the exemptions shall lie and will remove, as I said before, or prevent a great deal of red tape being accumulated in the issuance of permits for small quantities that are exported or imported. Surely, this is a sensible arrangement.
If we accepted the suggestion of my hon. friends in Her Majesty's loyal opposition they would give all the power to the board. We have been debating this back and forth now for seven or eight days, as to who is to have the power. Some of my hon. friends opposite want to give full power to the board. We say it is more sensible to give the board certain powers subject to approval by the governor in council because, the government being responsible to parliament, that is where the responsibility should lie.
However, let us not magnify the importance of subclause (2) of clause 85 which deals with regulations to provide exemptions and simply makes it easier to operate this act under conditions, if and when clause 87 is applied and controls are exercised over oil. This power would not be required to anything like the same extent with regard to gas.


George James McIlraith: The minister concludes his argument by appealing to us to leave the section intact on the grounds it would make it easier to operate this act. I do not believe the test of legislation is whether or not it is easy for a government to operate an act.


Gordon Minto Churchill: Not for the government, easier for industry.


George James McIlraith: I hope the minister, when he reads his words, will not put on them the meaning of which they are capable, and the only meaning that they can have, that the test is whether an act is easy to operate; that is not the test of good legislation.
There is one point I must correct. He pointed out, with reference to my hon. friend from Essex East, that subclause (2) of clause 85 did not interfere with clause 18 of the bill. I cannot follow that argument at all. Clause 18 is a general clause giving a right of appeal to the Supreme Court of Canada over matters of law and jurisdiction. That applies to all orders under the board. But the minister, under paragraph 2 of clause 85 can exempt all companies from the operation

of this part of the bill. By doing that, he completely nullifies the bill in so far as those rights are concerned.
It seems to me that he has made no case at all and no cause that would justify the governor in council rendering inoperative this whole part of the bill which has to do with gas and power exports and imports. The effect of clause 85 (2), as it now stands, is that the governor in council can exempt all companies in Canada from the operation of the part. Surely that is not desirable or defensible legislation. I leave it on that simple ground and ask the minister to make some defence of that extraordinary request for arbitrary power that is quite out of keeping with any principle of legislation that I have ever heard asserted in this house.


Charles Edward Rea: Is the committee ready for the question?


John Whitney Pickersgill: If the minister examines this language at all carefully, surely he will see that it would be perfectly competent for the governor in council-if parliament saw fit to accept this subsection (2); and may I say that when I have the minister's attention I shall be glad to continue-to exempt one pipe line and not another, or in other words, to have one come under the law and another not to come under the law. In other words, what the government is doing here is giving itself the power to make one law for one company and another law for another company. There is no limitation whatsoever upon the kind of company or the area or anything else that can be exempted. In other words, under this legislation you can at one fell swoop have a favoured instrument decided in secret in the cabinet, as was pointed out when the amendment was moved. Surely that is an entirely objectionable power to give to the cabinet. If they want to pick some special instrument and to clothe it with some special power and some special exemption, surely they could come to parliament and ask parliament to do that and disclose their reasons.


Erhart Regier: This part of the bill, Mr. Chairman, has to do with, among other things, the export and import of power or gas and also with the price that is charged therefor. The amendment now before us seeks to remove from the act the provision giving the authority to the governor in council by regulation to exempt any person or class of persons or any product or class of products from the provisions of this act.
I can very well recall how, only a limited number of years ago certain members of

this house did not want United States buccaneers, as they called them, to be instrumental in the building of the trans-Canada pipe line. Who did they initially have confidence in? It was an individual by the name of Mr. McMahon. They implored the Liberal government of the day please to invite Mr. McMahon and to see whether or not he would not be willing to build the trans-Canada pipe line.
We in the lower mainland of British Columbia have a "beef" against Mr. McMahon. Our complaint was investigated by the royal commission on energy. The royal commission had certain things to say with regard to the prices that were being charged to Canadian wholesalers of natural gas or Canadian distributors, prices in excess of those that were being charged to United States wholesalers south of the line. The Borden commission did not mince words in roundly and soundly condemning the practice of the Westcoast Transmission Company Limited.
Now we see what is happening with regard to this man who was a hero in the eyes of the Conservatives of this house only a limited number of years ago. We now see where this cabinet is asking for authority to exempt such an organization as Westcoast Transmission Company from any decision of the board that would have regard to the price to be charged by an applicant for gas or power exported by him in relation to the public interest. We contend-and we have done so for a considerable length of time on the
Business of the House
lower mainland-that the public interest in British Columbia is not being served by the practice of Westcoast Transmission Company Limited. We were confirmed in our contention by the findings of the Borden commission, and now the government is asking us to authorize the company to continue these practices.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I ask what the house will do tomorrow? Might we have some indication of what the business will be for the rest of the week?


Howard Charles Green: Tomorrow we will commence with the motion which stands in the name of the Prime Minister concerning the extension of the times of sittings of the house. Then we will continue with this present debate and, should it be terminated, go on with the order of business which I listed on Friday. On Wednesday we have to take interim supply first.


Lionel Chevrier: Can the leader of the house give us any indication of what estimates we shall take if we get through interim supply?


Howard Charles Green: I am not sure of that. I will let the opposition know. If we do not finish the energy bill on Wednesday night we will go on with it on Thursday.


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

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

Mr. Crouse: 1.	How much raw sugar did Canada import in 1958?
2.	How much of this raw sugar came from (a) the British West Indies including British Guiana; (b) Cuba; (c) Dominican Republic?
3.	What was the amount of money collected by the Canadian government in import tariffs or duties on this raw sugar imported from each of the above countries?
Answer by: Hon. Gordon Churchill (Minister of Trade and Commerce):
1. Imports of raw sugar cleared through customs ports in Canada during 1958 amounted to 14,622,666 cwt. valued at $58,578,134.
2 and 3. The amounts, value and money collected on imports of raw sugar cleared through customs ports in Canada during 1958 for selected areas follow:
Amount	Value	Customs duties
(a) B.W.I. (including British
Guiana)	
5,045,855	cwt.	$21,238,026	$1,573,605.60(b)	Cuba	
4,267,124	cwt.	$14,773,274	$5,582,618.97(c)	Dominican	Republic ..	71,700	cwt.	$	267,439	$	97,366.49
Tuesday, June 2, 1959



SUPPLEMENTARY ESTIMATES, 1959-60

[Stage Direction]
A message from His Excellency the Governor General transmitting supplementary estimates for the financial year ending March 31, 1960, was presented by Hon. Donald M. Fleming (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.
(Translation) :