1959-03-25

TRIBUTES TO DECEASED MEMBERS


Mr. Speaker:: May I convey to the house a message of sympathy which I have received from the legislative council of British Guiana, in these terms:

LEGISLATIVE COUNCIL under the
British Guiana (Constitution) (Temporary
Provisions) Orders in Council, 1953 and 1956.



SECOND SESSION

[Stage Direction]
1958 - 1959

[Stage Direction]
RESOLVED, That this council records its profound regret at the death of Mr. Sidney Smith, minister of external affairs, Canada, and directs that an expression of its sympathy be conveyed to the parliament of Canada and to the relatives.
Passed by the legislative council this 18th day of March, 1959.
(Signed) A. I. CRUM EWING Clerk of the Legislature
Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, it is always very difficult to express oneself adequately when a fellow member passes from this scene. Last evening all of us were deeply shocked at the sudden passing of Mr. J. Omer Gour, member for Russell. I had just left the house a few moments before, and on arrival at my office was informed that he had joined the group who in the service of their country pass away. He was a man of genial disposition, kindly in his relationship with his fellow members and one who without exaggeration did have the affection of all who served with him, irrespective of political persuasion.
He came into the House of Commons in 1945, having already established for himself an intimate connection with the lives of the people of his constituency. He was an executive in a number of co-operatives and was greatly interested in agriculture. He had given himself to public service in various charitable and semi-public institutions in his

community. He had served as mayor of his home town of Casselman for a period of five years. Indeed, his wide interests in the community are spelled out in the list of organizations to which he gave the benefit of his advice and to which he made a contribution.
Here in the House of Commons in a most gentle manner he epitomized those characteristics of public service which are the hallmark of good citizenship. He looked upon his membership in the House of Commons as an opportunity for greater personal service to the people of his constituency who sought his counsel at all times. Indeed, as I remember it, when he had his first office on the first floor of this building the numbers who came to him for advice were so great that he had to establish, as it were, an additional office in the hallway. He was a good member. I speak as one who liked him because of his infinite fairness and his attitude in general to the discussion of public affairs.
On behalf of the government and the people of Canada I wish to extend our deepest sympathy to his widow, his two daughters and his son. To them I trust will come the comfort that is felt by those who, having lost a loved one, realize that his service and the contribution he made to his constituency, his province and his country will be a monument in the years ahead to that life of service. I want to add as well the sympathy of my colleagues, myself and members on the government side of the house to the Leader of the Opposition and his colleagues in the great loss that he and they have sustained in the passing of one who enjoyed the affection of the house.


Hon. L. B. Pearson (Leader of ihe Opposition):: Mr. Speaker, I should like to thank the Prime Minister for what he has said about our friend and colleague. We are reminded by his words that within a week a second seat in the House of Commons has been vacated by sudden death. Once again last evening we were shocked into a realization of the transient and uncertain character of man's life and man's affairs.
We in this house have lost in the death of Mr. Gour one of our senior members, a member with 15 years of service in the house. As the Prime Minister has said, Mr. Gour reached the House of Commons after many years of

Tributes to Deceased Members public service in his own community and after achieving success in his own field of private activity.
Perhaps, Mr. Speaker, the measure of a man's worth is best judged from the feeling for him by the people among whom he lived and worked. In the case of Joe Gour that feeling was one of respect and affection for a man whose whole life was one of service to others. That same feeling, I know, was shared by all his fellow members in the house, particularly perhaps by those of us who worked with him in the Liberal party and who deeply appreciated his unselfish and complete co-operation and his wise counsel, expressed always with modesty but with frankness and sometimes with a saltiness that caused it to be remembered.
He was a strong party man, but his friendships in the house were not limited by party affiliations as happily is so often the case. We all liked him. He was a good and modest man. As the Prime Minister has pointed out, he was always fair and ever generous in his assessment of policies, with a particular interest in how they affected his farmers, his people as he always called them. In fact, Mr. Speaker, I think it is true to say that he had become a notable parliamentary personality over the years he was in the house, one who had earned and had received our regard and our affection. We shall all miss him greatly.
I join with the Prime Minister in his expression of deep sympathy to Mrs. Gour and the members of the family at this dark time. Their loss was as sudden as it is irreparable.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, the passing of Mr. Gour last evening demonstrates once again to all members of the house how fleeting and temporary is our life. I was particularly shocked because I have had the good fortune for some time to sit in the house next to him. We became close friends, and I cannot speak too highly of his personal qualities.
As has already been said, he came to this house in 1945. In parliament and in his community he worked in the interests of agriculture. He worked in his community in the interests of community life and in the interests of his church. I have admired Mr. Gour and his activities in parliament for many years because of his fairness, and because of his independent turn of mind. I can remember a number of occasions on which he spoke out most forthrightly on controversial issues. He was a man who felt, in one instance, that his government should move in the field of interest rates in order to protect the incomes of the ordinary people of this country.

He was a member of the agriculture committee, as I have been, for many years. I can agree with the statement by the Leader of the Opposition that he had the interests of the farmers, the people of his constituency, very close to his heart. We know that in parliament he worked under something of a handicap. I think, with the handicap he had, he showed great bravery in always being prepared to stand up and speak his mind in the interests of justice as he saw it.
I join with the Prime Minister in extending to the Leader of the Opposition and to the Liberal party our sympathy at the loss of a valuable colleague. We extend to Mrs. Gour and to the three children our most sincere sympathy.
(Translation):


Hon. Lionel Chevrier (Laurier):: Mr. Speaker, it does not happen too often in parliamentary life that a member has to interrupt his speech to be informed of the demise of a colleague. That was my experience last night, while I was speaking to a resolution relating to the Department of Transport.
As soon as the house adjourned, I went to my fellow-member's office, where I witnessed a very moving scene. The party whip, surrounded by our colleagues, was reciting prayers until the arrival of the priest who later administered the last sacraments, while our colleague's widow and his two children could not believe that their husband and father was no more.
Mr. Speaker, Joseph Gour had great virtues. He was a good and generous man. Many people in his riding and elsewhere frequently benefited from his generosity.
He was a most sincere man, faithful to his principles. On many occasions he fearlessly made his views known on difficult and delicate matters. Only recently, as my colleagues in the house well know, at a farmer's meeting where some of us had been speaking in general terms, Joseph Gour did not hesitate to express his opinion bluntly so that the farmers might fully know and understand exactly what he had in mind.
In addition, Mr. Speaker, Joseph Gour was a party man. That is not a bad thing. It only proves, as the right hon. Prime Minister (Mr. Diefenbaker) said a moment ago, that one can be a party man and still deserve the respect, friendship and affection of members, not only on the opposition but also on the government side.
When I was member for Stormont, Mr. Gour was my neighbour and, on several occasions, came to my constituency to give me a hand.

The two tragic events which have occurred in the house within a week, should, it seems to me, teach us a lesson. On one side of the house there was a member who had achieved great things, both in the national and international fields, while on this side, another member's activity is abruptly ended after he, too, had done great things in a more restricted field, his district, his constituency. Both, however, are of equal status before their Maker and I feel that, whatever our qualities, successes, shortcomings or failures, each and everyone of us should remember that we are all equal in the eyes of the ultimate Judge.
Mr. Speaker, Joseph Gour was a patriot. He loved French, he loved French education and culture, and hardly missed an opportunity to speak in their behalf, especially when they stood for the advancement of his own people in Ontario. I am sure that no member of the house, even among those who do not share my views in this regard, will begrudge my saying that, because of that attitude, he has been of genuine service to his constituents.
Then too, and above all, Joseph Gour was a family man. He loved and adored his wife, children and grandchildren, and lived for them. His passing will create a great void among us, but in his family that void will never be filled.
To his bereaved widow, to his son Robert and to his daughters Gaby and Raymonde we extend our deepest sympathy.
( Text):



DOMINION-PROVINCIAL RELATIONS NEWFOUNDLAND'    STATEMENT ON REVISION OF TERMS OF UNION

['Mr. Speaker, I wish to advise that arrangements have been completed under which the building adjoining Canada house in the city of London, England, and now occupied by the Royal College of Physicians will be added to the present Canada house when the new building of the royal college is completed. This is a particularly satisfactory\nStarred Questions\narrangement, because the property now occupied by Canada house was completed in 1825 for the Union club and the adjoining property, which occupies the remainder of the west side of Trafalgar square, was completed at the same time. A unique feature of these two buildings is that although they were built for different organizations, they were designed by the same architect and built by the same contractor. As a result the exterior on Trafalgar square is part of a single architectural design, with exactly the same size windows and similar decorative features.\nThe new property will give Canada house the additional office space required for its administrative headquarters. It will also provide one of the finest sites in London overlooking Trafalgar square from which historic streets such as the Strand, Whitehall and Pall Mall radiate to every part of the city.']
John George Diefenbaker: Mr. Speaker, I wish to acquaint the house with the government's proposals with reference to the terms of union with Newfoundland.
Article 29 of the terms of union provided as follows:
Review of Financial Position 29. In view of the difficulty of predicting with sufficient accuracy the financial consequences to Newfoundland of becoming a province of Canada, the government of Canada will appoint a royal commission within eight years from the date of union to review the financial position of the province of Newfoundland and to recommend the form and scale of additional financial assistance, if any, that may he required by the government of the province of Newfoundland to enable it to continue public services at the levels and standards reached subsequent to the date of union, without resort-66968-9-140J
Newfoundland Terms of Union ing to taxation more burdensome, having regard to capacity to pay, than that obtaining generally in the region comprising the maritime provinces of Nova Scotia, New Brunswick, and Prince Edward Island.
In pursuance of this provision the former government appointed a royal commission consisting of Chief Justice McNair of New Brunswick, the late Sir Albert Walsh, chief justice of Newfoundland, and Mr. John Deutsch. Their report was submitted not long before prorogation of the last session of this parliament, and by that report they recommended that Canada should pay to Newfoundland additional financial assistance after the transitional grants as follows:
Millions of dollars
1957- 58		 6.6
1958-	59	
6.951959-	60	
7.31960-	61	
7.651961-	62 and thereafter	
8
The recommendations of the royal commission have been studied with care and were discussed by the government with the premier and other representatives of the government of Newfoundland. Both governments have entertained serious reservations concerning the basis of the conclusions reached by the commissioners. We in particular have been concerned that the commissioners have used the fiscal year 1957-58 as the base year, whereas the period accepted as the basis in the presentation of all the evidence was the fiscal year 1956-57, which accords with the terms of article 29 which I read in full a moment ago. The vague nature of the commissioners' recommendation as to the duration of the payments has also occasioned difficulty for both governments. In his final submission to the royal commission, counsel for Newfoundland argued quite specifically that provision should be made for a further review of the economic and financial position of the province within a reasonable period of time. The government of the province still asserts that position as the proper interpretation of the rather uncertain and nebulous provisions of article 29.
Since the fiscal year 1957-58, and incidentally since this government came into power, Newfoundland has greatly benefited from additional forms of financial assistance from the government of Canada. The new direct payments alone aggregated over $9 million in the fiscal year 1958-59. This amount included the increased rate of standard individual income tax, the higher than average per capita benefit extended to Newfoundland through the Atlantic provinces adjustment grants, as well as various increased or new conditional grants.

Newfoundland Terms of Union
Notwithstanding the difficulties presented by its report, it remains a fact that the royal commission was appointed to fulfil the terms of union of Newfoundland with Canada, and these terms are part of the British North America Act. My colleagues and I are accordingly of the opinion that parliament should be invited to take action on the commission's recommendations. It is proposed, therefore, to ask parliament to authorize payments as recommended by the royal commission, but in our view the duration of the payments should be limited to five years, as both Newfoundland and Canada have recognized the difficulties involved in making projections from one selected year into the future, and it has further appeared to be quite inappropriate to endeavour to provide for a fixed amount payable annually over a period of unlimited duration. A resolution will shortly be placed on the order paper asking leave to introduce a bill to carry into effect these provisions pertaining to the terms of union. The proposed payments will be unconditional and will be in final and irrevocable settlement of the provisions of article 29 and the contractual obligations of the union consummated in 1949.
On conclusion of the payments as of March 31, 1962, which corresponds with the conclusion of the present five-year fiscal arrangement between Canada and the provinces, Newfoundland's position can be considered in the light of the general methods of providing financial assistance to the provinces which may be in effect at that time.
Provision will be made in the bill for the payment to Newfoundland of the amounts due for 1957-58 and 1958-59, totalling $13,550,000, before the government accounts are closed for the present fiscal year.
I should now like to say a word respecting the 10th anniversary of the union of Newfoundland with Canada, which will be celebrated next Wednesday, April 1. As the house will not be sitting then may I be allowed on behalf of Canadians in the other nine provinces to convey to the people of Newfoundland the pride we all feel in the decision then made whereby they became Canadians.
Each of the provinces has its problems, and Newfoundland is no exception. Differences do exist as to the solution of these problems; but my certain faith, based on the achievements of the past, is that these differences will be solved in the spirit of confederation and with that understanding and common dedication that are the enduring basis of confederation.


Lester Bowles Pearson: Mr. Speaker, the Prime Minister's statement indicates that the government will
[Mr. Diefenbaker.l
ask parliament to discharge an obligation to Newfoundland, one which arises out of the terms of union with that province and one which was examined by a royal commission which made certain recommendations in regard to its discharge. I suggest that any additional forms of financial assistance which may have been given to Newfoundland since that royal commission reported or indeed before it reported have no bearing whatever on this particular contractual constitutional obligation.
I welcomed, as I am sure all hon. members of the house welcomed, the statement of the Prime Minister that action is to be recommended in the terms of the royal commission report in so far as the amount of financial assistance is concerned. I regret that this was not done many months ago, whereby the uncertainty which had been created by this delay could have been avoided, and I think the government is to be criticized for not having taken this action earlier.
I hope I am not misinterpreting what the Prime Minister said when I note that this assistance is to be for five years only. That does not seem to me to be compatible with the obligation which the government of Canada accepted in the terms of union. While it is one thing to have these terms re-examined and perhaps reviewed at the end of five years, it is quite another to assume that no obligation will exist after five years. That assumption is quite unwarranted.
The Prime Minister has made reference to the fact that we are approaching the 10th anniversary of the union of Newfoundland with Canada. That was a happy event for all of us at the time it happened, and we can all take great pride in this completion of the work of confederation. The Prime Minister has mentioned that there are difficulties between the province and the central government. We have had difficulties of that kind before in confederation, and I feel certain that with a spirit of good will and understanding-and that means understanding of the situation and circumstances of Newfoundland as well as those of Ottawa- these difficulties can be resolved and that this union between the oldest British colony and Canada will continue to develop and flourish in the years ahead as it has in the past 10 years to the benefit of the people of Newfoundland and of the rest of Canada.


Hazen Robert Argue: Mr. Speaker, members of the C.C.F. will reserve their comments on the financial announcement made by the Prime Minister until the time the resolution is before the house.
We have noted his reference to the 10th anniversary of the union of Newfoundland

with Canada. In spite of the grave mistakes we believe have been made by the premier and legislature of that province, and in spite of our very strong feeling that there has been an encroachment on fundamental human rights and freedoms, we have no quarrel with the people of that province. We are certain that while there are major differences between the C.C.F. movement and the government of Newfoundland, in the days ahead all people of good will in this nation, including the people of the tenth province, will work as one for the the improvement of the living standard of Canadians generally. We hope the day is not far distant when far-seeing governments both on the national and provincial level will have worked out policies to provide to the people of Newfoundland the same standard of living and the same rights that are afforded other Canadians.

On the orders of the day:


Hon. J. W. Pickersgill (Bonavista-Twil-lingate):: Mr. Speaker, I should like to ask the Prime Minister whether I understood him correctly to say that the legislation which he announced the government intends to bring down to implement the recommendations of the McNair commission contemplated the complete discharge of the obligation under section 29 of the terms of union by that legislation, which will expire on March 31, 1962?


John George Diefenbaker: That is so, Mr. Speaker; and any consideration at that time will, of course, be in the context of the larger situation of the nation as a whole.


John Whitney Pickersgill: Does the Prime Minister realize that every person in Newfoundland will regard this as another breach of a solemn contract?


John George Diefenbaker: Mr. Speaker, I really do not think the hon. gentleman, while he claims paternity for most good things that have been achieved on behalf of Newfoundland, speaks for all the people.


John Whitney Pickersgill: You will see.



John George Diefenbaker: Mr. Speaker, I wish to advise that arrangements have been completed under which the building adjoining Canada house in the city of London, England, and now occupied by the Royal College of Physicians will be added to the present Canada house when the new building of the royal college is completed. This is a particularly satisfactory
Starred Questions
arrangement, because the property now occupied by Canada house was completed in 1825 for the Union club and the adjoining property, which occupies the remainder of the west side of Trafalgar square, was completed at the same time. A unique feature of these two buildings is that although they were built for different organizations, they were designed by the same architect and built by the same contractor. As a result the exterior on Trafalgar square is part of a single architectural design, with exactly the same size windows and similar decorative features.
The new property will give Canada house the additional office space required for its administrative headquarters. It will also provide one of the finest sites in London overlooking Trafalgar square from which historic streets such as the Strand, Whitehall and Pall Mall radiate to every part of the city.



THE BUDGET


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, may I inform the house that barring any unforeseen contingencies I hope to introduce the budget on Thursday evening, April 9.



STARRED QUESTIONS


Mr. Caron: Is any member of the executive committee of the board of directors of the Canadian Broadcasting Corporation at present engaged in the business of broadcasting or has any pecuniary or proprietary interest, as owner, shareholder, director, officer, partner or otherwise, in a broadcasting station or in the manufacture or distribution of radio apparatus?
He said: I have consulted the minister, and if I have leave of the house I would like to withdraw the question.


Mr. Speaker:: Is it agreed that the hon. member shall withdraw his question?


Some hon. Members:: Agreed.
Order discharged and question withdrawn.


UNEMPLOYMENT INSURANCE FUND
Mr. Robichaud: What was the total amount to the credit of the unemployment insurance fund as at (a) February 28, 1958; (b) February 28, 1959?


Hon. Michael Starr (Minister of Labour):: The answer to this question is as follows, Mr. Speaker:
(a)	February 28, 1958 ... $794,547,091.77
(b)	February 28, 1959	$547,399,504.48

Starred Questions


C.N.R. TRAIN DERAILMENT, SUDBURY-HORNEPAYNE
Mr. Fisher: 1.	Was there a train derailment on the Canadian National Railways line between Sudbury and Hornepayne on March 20 or March 21, 1959?
2.	If so, what were the particulars, including the location, speed of the train, preliminary estimate of the cause and of the cost of such derailment, the length of time through traffic was held up, and details of train rerouting caused by the derailment?
3.	Has there been a reduction In the maintenance of way personnel in the past 12 months on the section where the derailment took place?
4.	If so, how large a reduction?


Hon. George H. Hees (Minister of Transport):: The answer to part 1 is yes, on March 21.
In regard to part 2, the management advise that super Continental train No. 1 had 13 cars and the diesel unit derailed at mileage 121, Ruel subdivision on the Capreol division. All cars and the diesel unit remained upright, and no personal injuries were suffered. The investigation into the cause of the accident has not yet been completed. Preliminary indications are that the speed of the train was not excessive, and the damage to the equipment was slight and is not expected to exceed $1,000. As a result of the derailment the main track was blocked for approximately 22 hours, and trains were detoured between Austin, on the Sudbury subdivision, and Oba, on the Oba subdivision, over the C.P.R. and Algoma Central and Hudson Bay lines.
As to part 3, there has been no reduction in manpower during the past 12 months in the maintenance of way forces on the section where this derailment took place, and there has been no deterioration in the standard of maintenance of this section of track.
Part 4 is, of course, answered by the answer to part 3.


BOND ISSUE DENOMINATIONS, 1959
Mr. McMillan: In connection with the issue of $200,000,000 government of Canada bonds authorized by the Minister of Finance in February, 1959, one issue to mature in 13 months and the other to mature in 21J months, how many bonds were sold in each of the following denominations, $1,000,	$5,000,
$25,000, $100,000 and $1,000,000?


Donald Methuen Fleming: Mr. Speaker, with reference to the first issue the answer is $2,055,000; $3,320,000; $16,725,000;	$44,900,000;	$18,000,000. With
reference to the second issue the answer is: $7,375,000; $12,450,000; $32,475,000; $53,700,000; $9,000,000.


FOREIGN SHIPPING SUBSIDIES, ST. LAWRENCE-GREAT LAKES
Mr. Fisher: 1.	Has the government received information that certain foreign shipping lines have had subsidies

approved by their governments for service into Canadian ports along the St. Lawrence-great lakes seaway?
2.	If so. what are the lines, and their Canadian ports of call?
3.	Under present regulations or statutes would such shipping move cargo from one Canadian port to another Canadian port?


George Harris Hees: The answer to parts 1 and 2 is that it is understood that the United States government has indicated that it proposes to subsidize certain shipping services from United States great lakes ports to Caribbean and trans-Atlantic areas. Since this is a matter of United States decision we do not, as yet, have full information as to what lines and types of service may be involved. I have seen reports that the United States company, Grace Lines, has been authorized to operate on one of these routes but I am not aware that any other companies have as yet been named. In the case of Grace Lines it is understood that the company will be permitted to carry cargo between Canadian great lakes-St. Lawrence ports and foreign ports en route. As I indicated in reply to a previous question, this situation is being watched carefully.
With regard to part 3, this information was given in the answer I made yesterday to the hon. member, namely that the Canada Shipping Act prevents these ships from moving cargo from one Canadian port to another Canadian port.



NEWFOUNDLAND


Mr. Pickersgill: 1.	Did the Prime Minister receive a communication from the premier of Newfoundland inviting the government to set up a public inquiry into the violations of the law in the labour dispute in N ewf oundland ?
2.	If so, what was the precise wording of the communication and the precise wording of the Prime Minister's reply to the premier of Newfoundland?



R.C.M.P. REINFORCEMENTS, NEWFOUNDLAND

Mr. Pickersgill: 1.	Did the Prime Minister receive a communication from the premier of Newfoundland, regarding the refusal of the government to send Royal Canadian Mounted Police reinforcements to Newfoundland?
2.	If so, what were the precise contents of such communication?
3.	Did the Prime Minister make any reply to this communication, and if so, what was the precise nature of the reply?


John George Diefenbaker: 
John Whitney Pickersgill: That will be quite satisfactory to me, sir, if the Prime Minister would ask leave to have it included in Hansard.


John George Diefenbaker: Mr. Speaker, I do not mind reading the appropriate portions, but I think there is really no need for it to be included in Hansard. If the hon. gentleman wants the exact wording I will ask that these two questions stand and when the session resumes I will see that the answer is complete.
I thought it would help him just to table it, but if that is not satisfactory I will ask that both questions stand.


John Whitney Pickersgill: I would much prefer that, sir.


Mr. Speaker:: Questions 46 and 47 stand.
Questions stand.



R.C.M.P. STRENGTH, CORNER BROOK AND DEER LAKE, NFLD.

[Stage Direction]
Question No. 48*-Mr. Batten:
1.	How many Royal Canadian Mounted Police are stationed on regular strength, at (a) Corner Brook; (b) Deer Lake, Newfoundland?
2.	Have any reinforcements been sent to either of these two areas?
3.	If so, how many?
4.	From what areas were these reinforcements drawn?
Hon. E. D. Fulton (Minister of Justice):: Mr. Speaker, the answer to part 1 is that 43 members of the R.C.M. Police are stationed on regular strength at Corner Brook and three at Deer Lake, Newfoundland.
The answer to part 2 is yes.
The answer to part 3 is that 4 reinforcements have been sent to Corner Brook and 1 to Deer Lake.
The answer to part 4 is that of those reinforcements 4 were drawn from St. John's, Newfoundland, and 1 from Hampden.



QUESTION PASSED AS ORDER FOR RETURN


Mr. Deschateleis: 1.	Was any amount paid by the federal government in the province of Quebec in connection with the elimination of railway grade crossings since 1955?
2.	If so, what amount each year since 1955, in what locations and to whom were payments made?
3.	Was any of this work requested by the provincial government of Quebec?



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 68-Mr. Fisher:
For a copy of all correspondence, telegrams, and other documents exchanged from June 1, 1955, between federal and provincial departments on the subject of old age assistance, insofar as voluntary withdrawal is concerned.
Motions for Papers
Hon. J. W. Monieith (Minister of National Health and Welfare):: Mr. Speaker, I have no objection to this motion passing, subject to the usual reservation in regard to privileged documents.


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. 72-Mr. Deschatelets:
For a copy of the transcript of the news broadcast from C.B.F.T., channel 2, Tuesday, March 10, last, at 11 p.m.
Motion agreed to.

[Stage Direction]
Motion No. 73-Mr. Fisher:
For a copy of all papers and documents regarding the Lachine section of the St. Lawrence deep waterway, and more particularly, the following:
(a)	"The Great Lakes-St Lawrence deep waterway-a brief description", by Guy A Lindsay, director, special projects branch, Department of Transport, December 22, 1951.
(b)	Copy of the documents, dated either 1952 or 1953, which recommended a change of plan from a canal and locks on the north shore of the river to a canal and locks on the south shore.
(c)	Departmental reports relating to the provision of turning basins below the Jacques Cartier bridge; above the St. Lambert lock; before the Cote St. Catherine lock.
(d)	Those communications from the Department of Transport to the chief of engineers. United States army, in which the total cost, based upon unit cost levels of December, 1952, of the work to be undertaken by Canada in the Canadian sections of the St. Lawrence river, given as $172,950,000.
(e)	Any document giving the breakdown of the figure of $172,950,000 into the total cost of the work in the several sections of the river; and also the major items of cost within each of such sections.
(f)	The letter written by Mr. R. A. C. Henry, either as head of, or consulting engineer for the special projects branch of the Department of Transport to the chief engineer, United States army, on the 25th of February, 1953.
(g)	The report of the board of engineers appointed by the Minister of Transport in 1950 to make recommendations on the improvements in Montreal harbour by the prospective opening of the deep seaway.
(h)	The text of any agreements between the seaway authority or any other branch of the dominion government on the one hand and the national harbours board or the government of the province of Quebec on the other hand, relating to the alteration or reconstruction of the Jacques Cartier and Honore Mercier road bridges.
George Harris Hees: There is no objection to the passage of this motion with the usual reservation regarding the consent of the provinces and in regard to privileged documents.

Motions for Papers


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. 75-Mr. Rouleau:
For a copy of all correspondence since March 31, 1958, exchanged between the federal government and the mayor of St. Laurent, Mr. Maurice Cousineau, requesting that postal station "O" located in St. Laurent be named St. Laurent post office.
Motion agreed to.

[Stage Direction]
Motion No. 76-Mr. Fisher:
For a copy of correspondence, briefs, and other written material exchanged between the federal government and the Canadian association of medical students and internes, the Canadian medical association or the deans of any faculties of medicine in Canada on the subject of changes in the Income Tax Act to affect medical students, since January 1, 1958.
Motion agreed to.

[Stage Direction]
Motion No. 77-Mr. Fisher:
For a copy of all correspondence exchanged between the federal government and any persons, associations or groups, regarding the establishment of a pilotage service under the Department of Transport on the great lakes, since January 1, 1959.
Motion agreed to.

[Stage Direction]
Motion No. 78-Mr. Fisher:
For a copy of all correspondence since August 1, 1958, exchanged between the federal government and the municipal authorities in Fort William and Port Arthur, Messrs. Milton Vibert, Arthur Widnall, Norman R. Wilson, and Harold G. Blanchard, concerning the appointment or selection of the lakehead harbour commissioners.
Motion agreed to.

[Stage Direction]
Motion No. 80-Mr. Fisher:
For a copy of all reports and memoranda prepared by or for the Canadian Broadcasting Corporation and which has been distributed beyond the Canadian Broadcasting Corporation administration, on any aspects of the Progressive Conservative convention of 1956, and the Liberal convention of 1958.
Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, the first part of this motion cannot be accepted by the government in its present wording because it calls for memoranda prepared by or for 
the Canadian Broadcasting Corporation, which would be in the nature of intradepartmental communications and would be privileged. That is not of so much importance as the second part, which refers to memoranda which have been distributed beyond the Canadian Broadcasting Corporation. This has reference to matters that occurred three or four years ago, and if there were any such documents I do not think anyone in the world could tell today where they might have drifted to in the meantime. I suggest that this is not a request that should be made to the government and that the motion should stand. We cannot accept it in its present wording. I do not know what the hon. member has in mind, but I suggest that he allow it to stand and perhaps he can then limit his motion to such an extent that we can accept it.


Mr. Speaker:: Is the hon. member willing to allow the motion to stand?


Mr. Fisher:: Yes.
Motion stands.



R.C.M.P. REINFORCEMENTS, NFLD.    PROTESTS OVER FEDERAL ACTION

[Stage Direction]
Motion No. 81-Mr. Pickersgill:
For a copy of all communications received by the Minister of Justice, since March 10, 1959, protesting the refusal of the government to reinforce the Royal Canadian Mounted Police in Newfoundland. together with the replies thereto.
Motion agreed to.

[Stage Direction]
Motion No. 82-Mr. Pickersgill:
For a copy of all communications received by the Prime Minister, since March 10, 1959, protesting the refusal of the government to reinforce the Royal Canadian Mounted Police in Newfoundland, together with the replies thereto.
Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


John George Diefenbaker: Subject to the usual and customary exceptions.


Mr. Speaker:: Subject to the reservation expressed by the Prime Minister-	[DOT]


John Whitney Pickersgill: I did not catch what reservation the Prime Minister expressed.


Mr. Speaker:: The usual and customary exceptions. Subject to the reservation expressed by the Prime Minister, is it the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I should like to ask the Prime Minister whether, when parliament reconvenes after the Easter recess, he will indicate to the house at as early a date as possible and in as much detail as possible the legislative program for the rest of the session, and perhaps also its timing. I believe if he could do this it might facilitate and even expedite the business of the session.


John George Diefenbaker: Mr. Speaker, I can say at once that anything that will expedite and facilitate the carrying out of the business of the session will receive my immediate approbation, and I shall endeavour forthwith after the Easter recess to place before the house in as complete outline as is then possible the legislative program.


Lionel Chevrier: May I
direct a supplementary question to the Minister of Transport. When does the minister intend to bring before the house the resolution to set up the committee on railways and shipping?


George Harris Hees: That will be the responsibility of the house leader.



DOMINION-PROVINCIAL CONFERENCE INQUIRY AS TO CALLING OF CONFERENCE ON FISCAL MATTERS

[Stage Direction]
On the orders of the day:
Hazen Robert Argue: I should like to direct a question to the Minister of Finance. I wonder whether the minister can bring the house up to date as to what progress his officials and his department are making in bringing the finance ministers of the provinces together in a conference with the minister?


Donald Methuen Fleming: Mr. Speaker, I am happy to report that excellent progress has been made in this direction. Mr. Burns, the director of the federal-provincial relations branch of the Department of Finance, has now visited five of the provincial capitals, four in western Canada and Quebec, and has received full co-operation everywhere he has gone. He will be completing his visits to the other five provincial capitals very soon, and plans can then be definitely concerted for the holding of the meeting of the provincial treasurers and the Minister of Finance.
66968-9-141
Inquiries of the Ministry Mr. Argue: Can the Minister of Finance say whether or not the meeting with the provincial ministers of finance will be somewhat of a preliminary meeting to an eventual summit meeting that will include the Prime Minister and the premiers of the provinces?


Donald Methuen Fleming: That is a matter that remains to be determined. In the meantime this first, important and I think essential step is being taken and good results seem to be indicated.



NATIONAL REVENUE


[Stage Direction]
On the orders of the day:
Mr. W. L. Houck (Niagara Falls):: Mr. Speaker, I should like to ask the Minister of National Revenue a question and I hope he will pay me the courtesy of not looking at me with a suspicious eye. A few weeks ago the minister described in the estimates committee a new gadget that his department had recently made available and, as one newspaper columnist put it, "the electronics man will get you if you don't watch out." I should like to ask the minister if this gimmick is now in operation at all border points.


George Clyde Nowlan: Mr. Speaker, I could never look at the hon. gentleman with a suspicious eye. Even the electronic one to which I referred would, I am sure, gaze upon him with a high degree of kindness. With respect to the machine in question, all the processing is done at headquarters in Ottawa, and the information is sent here from the various ports to be processed.



OATS, BARLEY AND WHEAT  FINAL PAYMENTS

[Stage Direction]
on 1957-58 pools On the orders of the day:
Mr. Reynold Rapp (Humboldl-Melfori):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Is he able to inform the house when the final payments will be made on the oats and barley pools for 1957-58? I must apologize to the minister for not giving him notice of my intention to ask this question.


Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Speaker, I will be very pleased to answer the hon. member. The barley and oats pools for 1957-58 have been closed out, both in a surplus position, with the amount available for distribution something over $6 million in the barley pool and over $2 million in the oats pool. The oats

Inquiries of the Ministry pool is in a much better condition than in the preceding year, when there was a deficit of about $2 million. Cheques for both pools will be issued early in April.


Hazen Robert Argue: I should
like to ask a supplementary question. Can the minister say when the wheat pool account will be closed out, and when final payment will be made?


Gordon Minto Churchill: That will be announced in due course, Mr. Speaker.
(Translation):



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Guy Rouleau (Dollard):: Mr. Speaker, I should like to ask the hon. Secretary of State a question. Would he care to comment upon the statement credited to the premier of Quebec, as published in today's Mont-real-Matin? According to that paper, the provincial premier has stated, with the charm and courtesy for which he is noted, that the system of taxation applied by the federal government constitutes a theft of money that belongs to the provinces.
(Text):


Mr. Speaker:: Order.
(Translation):


Hon. Henri Courlemanche (Secretary of State):: Mr. Speaker, the premier of the province of Quebec never consulted me before making that statement.
(Text):



BUREAU OF STATISTICS FIGURES ON U.S. AND U.K. CAPITAL ENTERING CANADA

[Stage Direction]
On the orders of the day:
Mr. Augustin Brassard (Lapointe):: I should like to direct a question to the Minister of Finance. I must apologize for not having been able to give him earlier notice of my intention to ask the question. In view of the fact that the dominion bureau of statistics bulletin of March 24 points out that United States capital in form of portfolio security transactions entering Canada in 1958 increased by 8 per cent while British capital entering Canada during the same year decreased by 70 per cent, will the minister tell the house whether this took place as the result of government policy?


Mr. Speaker:: Order. The hon. member is not raising a question of immediacy or urgency. It is a rather broad question which probably would be a suitable subject for a debate.


Mr. J. P. Deschateleis (Maisonneuve-Rose-mont):: Following the question asked of the Secretary of State by the hon. member for Dollard, I should like to direct a supplementary question to the Prime Minister. As a result of the serious stand taken by Mr. Duplessis in respect of federal grants, does the Prime Minister not feel that the time has now arrived for a summit conference in Quebec with the premier?



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: I wish to direct a question to the Minister of Transport. Will the minister advise the house what action is being taken by his department to assure the early opening of northeastern New Brunswick ports, particularly Caraquet and Shippegan in Gloucester county, to allow early operation of the fishing fleet?


George Harris Hees: I wish to thank the hon. member for Gloucester for his courtesy in advising me of his intention to ask this question. The majority of our fleet of icebreakers are now concentrating in dealing with the extremely heavy ice conditions in the lower St. Lawrence gulf, maritime and Newfoundland areas, where requests for assistance continue to be far in excess of our capacity. We will do everything possible to be of assistance, however, in meeting any request submitted to our marine agents.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: should like to direct a question to the Minister of Transport. I do so, sir, because tomorrow I hope to return to my home city where I have not been since the first week in January, and I know I will be asked a certain question. Will the minister advise the house, and particularly the members from British Columbia, as to the present situation with reference to a secondary airport outside the city of Vancouver? In view of the confusion that has arisen in the past few weeks, could he outline the present situation, what is going to occur and what is being considered; because when I arrive in Vancouver I will be asked this question and I should like to be able to say I got the answer from the minister this afternoon.


George Harris Hees: As the hon. member has said, this is a rather complicated question. I discussed it with representatives of the city of Vancouver about two weeks ago when they were down here. The answer required by this question would be too lengthy for the orders of the day, but I shall be glad to discuss the matter with the hon. member if he will come over here and speak to me after the orders of the day are finished.


Harold Edward Winch: Perhaps it would be preferable for the minister to come over here.


George Harris Hees: I am very glad the hon. member asked that question, because in the truly democratic spirit the representatives of this government always go to the members. However, on this particular day I have not one but two bills coming up, and I am afraid I shall be in my seat until six o'clock.



VANCOUVER


[Stage Direction]
On the orders of the day:
Mr. J. R. Taylor (Vancouver-Burrard):: Mr. Speaker, can the Minister of Transport inform the house whether a $1J million contract has been approved providing immediate work for B.C. Bridge and Dredging Company and Tide Bay Dredging Company, both of Vancouver?


George Harris Hees: Yes, that contract was recently passed by treasury board.



ST. LAWRENCE SEAWAY LACHINE CANAL  FEDERAL ACTION FOLLOWING LAY-OFF OF WORKERS

[Stage Direction]
On the orders of the day:
Lionel Chevrier: May I
direct a question to the Minister of Transport. In view of the strike which workers on the Lachine canal are now contemplating because of the 38 men who are being laid off on March 31, some of them having had 38 years of service, may I ask the minister what steps he or his officials are taking to find comparable jobs for these men?


George Harris Hees: I am afraid I cannot add very much to the answer I gave the hon. member for Jacques Cartier-Lasalle when he asked me the almost identical question yesterday. I told him and the house that we are doing everything possible to find jobs for these men through the Department of Transport, the St. Lawrence seaway authority, and the civil service commission. We shall continue to do everything possible to place all these men.
66968-9-141J
Inquiries of the Ministry


Lionel Chevrier: May I ask a supplementary question. Why are these 38 men being replaced by newcomers who are unknown to the canal workers on the Lachine canal, and many of whom are inexperienced in canal work?


George Harris Hees: I have no knowledge of that situation. I have given instructions to the St. Lawrence seaway authority and to my department, and we are working through the civil service commission to place these men. I do not know of other men being hired. However, because the matter was brought up yesterday I am having it looked into, and everything possible will be done to see that these men get a fair break.



SOULANGES CANAL


[Stage Direction]
On the orders of the day:
Lionel Chevrier: May I
direct a question to the Minister of Transport. Is the minister aware of the fact that some 132 employees of the Soulanges canal have been laid off as of March 31, many of whom have been in the employ of the department for 25 years and more? Can the minister tell the house for how many of these employees the department has found work?


George Harris Hees: Mr. Speaker, the hon. member for Laurier, having once been minister of transport, I think knows that in a department the size of the Department of Transport one does not carry figures of that kind in one's head. Therefore it is of course not possible to give the answer offhand. All I can say is that I shall be glad to look it up for the hon. member and to assure him that, as in the case of all other canal employees, we have been trying in every way possible to find other employment for them.


Lionel Chevrier: May I ask a supplementary question. Notwithstanding the fact that the minister has been trying-and I am sure he is doing his best-the point is that few if any of these employees are being taken on. That is the purpose of my question in asking the minister how many of these men, first on the Lachine canal and now on the Soulanges canal, have been taken on.


An hon. Member:: He gave the answer.


George Harris Hees: The last time I checked on this matter I was informed that most of the employees who were out of jobs had been found other employment or had found other employment for themselves.


Lionel Chevrier: On a point of order, Mr. Speaker, may I say that that statement is totally inaccurate, because I happen to have-*

Inquiries of the Ministry


Gordon Minto Churchill: That is not a point of order.


Lionel Chevrier: I rise on a point of order.


Mr. Speaker:: I am sorry, but that is not a point of order. If the hon. member wishes to raise a question of privilege I suppose he may do so.


Lionel Chevrier: I do so, Mr. Speaker; I raise a question of privilege. I say that the statement made by the minister is not accurate. I now make the statement that on the Lachine canal and the Soulanges canal-and particularly the Lachine canal-there are large numbers of people out of work.


George Harris Hees: Mr. Speaker, all I can say is this. As in the case when employees are laid off on the C.N.R. or under any other operation which comes under the jurisdiction of the government, the operation under the jurisdiction of the government does everything possible to find work as soon as possible for the people who are laid off, and they are not laid off unless there is no work for them to do. I make the same answer to the hon. member today. We find work for every single employee for whom we possibly can find work, and we do so as quickly as we can. We cannot do more than that.


Lionel Chevrier: You have not succeeded on those two canals.


George Harris Hees: Perhaps we have not succeeded, Mr. Speaker, but we have done our very best, and nobody can do better than his best.


Lionel Chevrier: I have a supplementary question. Will the minister tell the house when it reconvenes next month what is the number of people for whom jobs have been found on those two canals?


George Harris Hees: I shall be glad to do so. At any time the hon. member for Laurier, the former minister, wants any information I have given it to him, as he knows, either on the floor of the house or privately. I have never held back anything from him or any other member. Since he wants to find out, I will give it to him this afternoon if he wants it.


Lionel Chevrier: I want it.


Mr. Ricard:: He wants to make a show.


George Harris Hees: I will give it to the hon. member this afternoon if he wants the information.


Lionel Chevrier: I rise on a question of privilege. The hon. member just said that I wanted to make a show.


J.-H.-Théogène Ricard: That is right.


Lionel Chevrier: Mr. Speaker, the questions I have asked were for the purpose of eliciting the fact that there are at least 200 men being laid off at the end of this month for whom
[Mr. Chevrier.!

work or jobs have not yet been found. Yet this hon. member says I am trying to make a show.


J.-H.-Théogène Ricard: Yes, that is right. You are trying to make a show.


Lionel Chevrier: Why does the hon. member not do something about it by making representations?


Mr. Speaker:: Order.


Lionel Chevrier: The hon. member should be held to account.


Mr. Stinson:: Shame.


Lionel Chevrier: I ask the hon. member to come on over here and I will show him when he says "shame".


Mr. Speaker:: Order. There is room for only one debate now. I hope hon. members will not get into a private altercation on the last day before the Easter recess.


Harold Edward Winch: would like to direct a question to the Minister of Transport; I think it is a simple one. In view of the lay-offs on certain projects on the Soulanges canal, can the minister explain why men with as much as 35 years of experience are laid off and men without any experience are now being hired?


Mr. Speaker:: I think the hon. member will appreciate that this matter has been explored as far as it can be, and the information available to date has been given.


Harold Edward Winch: No, sir. We have not seen-


Some hon. Members:: Order.


Harold Edward Winch: Is it patronage or is it not?


Mr. Speaker:: The hon. member is seeking to give the house information, not asking for it.



CORNWALL CANAL


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, I am sorry to annoy the Minister of Transport, but I would like to ask him this question. In view of the fact that there are some 85 men who have been laid off, or will be laid off at the end of this month, on the Cornwall canal, has any attempt been made to place these men on the Iroquois canal?


George Harris Hees: Mr. Speaker, we have been trying, as I have said over and over again, to place the men who have been laid off anywhere we possibly can.

(Translation):



SECRETARY OF STATE


[Stage Direction]
On the orders of the day:
Mr. Alexis Caron (Hull):: Mr. Speaker, I should like to ask the hon. Secretary of State a question. Last Friday, March 20, I asked him to give the house certain information on bilingual stamps and money. Is he in a position today to answer that question?


Henri Courtemanche: Mr. Speaker, when I looked into this matter I was informed that, because stamps are not negotiable instruments, the matter comes under the Postmaster General.


Alexis Pierre Caron: May I ask a supplementary question, Mr. Speaker? Does the same thing apply to bilingual money?


Henri Courtemanche: I may tell the hon. member for Hull that special legislation in this regard was passed in 1934.


Alexis Pierre Caron: Mr. Speaker, the special legislation concerned French money and English money; as for bilingual money, I think the bill was passed in 1937 and-


Mr. Johnson:: If you know all about it, why do you ask?


Mr. Pigeon:: Yes, if you know, why put questions about it. You are just out to make trouble.


Alexis Pierre Caron: I haven't been a minister's secretary, to get information.


Louis-Joseph Pigeon: You lack the required ability.


Alexis Pierre Caron: I	possibly didn't lack the
required brains.


Louis-Joseph Pigeon: You never had the know-how.


Paul Léo Maurice Johnson: This is just a build-up for his election as mayor.

On the orders of the day:


Alexis Pierre Caron: May I ask a
question of the hon. Secretary of State? Could the hon. Secretary of State tell me how it is that the invitations and the program for the commemoration of the tenth anniversary of the North Atlantic Treaty were printed in English only, rather than in both languages?


Henri Courtemanche: I shall check on that, Mr. Speaker, and reply to the question later.


Alexis Pierre Caron: A supplementary question. I hope it will not be necessary to pass a special bill for that purpose.
Inquiries of the Ministry


An hon. Member:: No. It is merely a matter of convincing the Liberals, in the department, to do their job properly.
(Text):



DEFENCE PRODUCTION


[Stage Direction]
On the orders of the day:
Mr. Hubert Badanai (Fort William):: Mr. Speaker, I have a question for the Minister of Defence Production. Has the Canadian government made any request to manufacture in Canada, under licence, the SA-16 Grumman for the R.C.A.F.?


Hon. Raymond O'Hurley (Minister of Defence Production):: In answer to that question I would say that when the government makes a decision on the replacement of the Canso aircraft for rescue work they will certainly take into consideration the advantages and disadvantages of manufacture under licence in Canada.



U.S. NAVY    ALLEGED REFUSAL TO ACCEPT BIDS FROM CANADIAN COMPANIES

[Stage Direction]
On the orders of the day:
Lionel Chevrier: May I direct a question to the Minister of Defence Production. Is it a fact that the United States navy will not accept bids from Canadian companies for naval contracts unless these companies are providing such items for the Canadian government?


Donat Raymond: In reply I may say that this is news to me. I do not think this report is true, but I shall attempt to have it verified and give the hon. member an answer.


Lionel Chevrier: May I direct a supplementary question to the Minister of Defence Production. Will he produce and table in the house the speech alleged to have been made by the director of the aircraft branch of his department, to which reference was made in Hansard of yesterday?


Mr. O'Hurley:: I cannot give this information. This was a closed meeting with the association and that information relates to security, so I cannot give it.


Lionel Chevrier: I have a supplementary question. Does the minister feel that he cannot table the speech, notwithstanding the fact that it was substantially reported in the press by a number of papers?


Raymond Joseph Michael O'Hurley: There was no speech. It is speculation. There was no speech prepared and given at this meeting.



CHAMBRE DES COMMUNES

[Stage Direction]
Inquiries of the Ministry

[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, may I direct a question to the Minister of Defence Production. Will the minister advise the house what the procedures are for obtaining contracts under production sharing, which his officials outlined to members of the aircraft industry at a meeting on March 23, and to which the minister referred yesterday?


Donat Raymond: Mr. Speaker, in reply to the question asked by the hon. member for Laurier in connection with the procedures discussed at this meeting, I said I would restate the policy of the government on every occasion. That policy is to brief companies on how to approach prime contractors of the government of the United States in order to get contracts, and I can say that several companies have been very successful. I will be making a statement in due time about the success we are having. Our department is prepared every day to brief Canadian manufacturers as to where to go in the United States, whom to contact, at what time and on what contracts.


Lionel Chevrier: Is there a special procedure in connection with that statement the minister has made, and if there is would he table it in the house?


Raymond Joseph Michael O'Hurley: There is no special procedure, so I have none to table.



CANNED APPLES


[Stage Direction]
On the orders of the day:
Hédard-J. Robichaud: Can the
Minister of Trade and Commerce inform the house if any canned, solid pack apples have been imported into British Columbia from Japan since January 1, 1958? If so, in what quantities and at what values?


Mr. Speaker:: I do not know whether or not the minister carries that information around with him. I suggest the question might better go on the order paper.


Hédard-J. Robichaud: On a point of order, Mr. Speaker, notice of this question has been sent to the minister.


Gordon Minto Churchill: The notice was sent to me about half an hour before the house assembled. How the information could be assembled in that time, I do not know. The question is a proper one for the order paper, because it refers to statistics.
[Mr. O'Hurley.1


Hédard-J. Robichaud: On a point of order, Mr. Speaker, notice was sent this morning before lunch.


An hon. Member:: What time do you have lunch?



REPORTED DEFICIT FOR FIRST TWO MONTHS OF 1959

[Stage Direction]
On the orders of the day:
Mr. Maurice Bourgel (Levis):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Owing to the fact that our external trade deficit for the first two months of 1959 is almost $130 million, which is approximately three times higher than it was last year and the second highest for that two-month period in our history, can the minister tell the house whether he intends to take steps to meet the situation?


Mr. Speaker:: I think the hon. member will agree that this question is of the same order as the one asked by the hon. member for Lapointe (Mr. Brassard). It is a general inquiry with regard to a continuing situation, and not suitable to be answered by a short answer on the orders of the day. If he had some specific inquiry about the responsibilities of the Minister of Trade and Commerce I would let it go, but not to invite him to give a general discourse on the balance of trade.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: I should like to direct a question to the Minister of Citizenship and Immigration; I regret not having been able to give her notice. This question arises out of a news item in the Gazette this morning to the effect that Attorney General Roberts of Ontario felt there was need for an inquiry to correct the provisions of the Indian Act. I wonder if the attorney general has ever communicated any suggestions for changes to the minister.


Hon. Ellen L. Fairclough (Minisier of Citizenship and Immigration):: The answer is no.


John Whitney Pickersgill: May I ask a supplementary question. Is it the intention of the government to comply with the request of the attorney general that the federal government set up an inquiry into the situation on the Six Nations reserve?


Ellen Louks Fairclough: I do not know what the hon. member has in mind. I must also admit that I do not know precisely what the attorney general had in mind.


John Whitney Pickersgill: I was wondering that myself.


Ellen Louks Fairclough: As all hon. members of this house know, there will be a joint committee of both houses of parliament which will meet after the Easter recess. It seems to me that will provide the very best opportunity that the members of the Six Nations could have to present their case to a most sympathetic inquiry board.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: In the absence of the Minister of Justice, who has just been called out of the house, I should like to direct a question to the Prime Minister. Can the Prime Minister say whether the controversial Newfoundland legislation is still being studied by the cabinet and whether a decision as to disallowance has yet been made?


John George Diefenbaker: Mr. Speaker, the fullest consideration is being given to that problem.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
George Harris Hees: Mr. Speaker, yesterday the hon. member for Skeena inquired about a C.N.R. derailment near Hazelton.
The management of the railway advised me that a freight train was derailed on Saturday, March 21, on the Bulkley subdivision, near Hazelton, because of a rock slide. Unfortunately the engineer was fatally injured. An investigation is under way, but the management point out that it has been established that a rock slide was the cause of the accident.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I should like to ask the Minister of National Defence whether he can comment on a statement reported in today's Globe and Mail and attributed to the commander of the Canadian brigade in Europe. The statement to which I refer is, "Our defence plans are based on the nuclear weapon".
Inquiries of the Ministry


Hon. G. R. Pearkes (Minister of National Defence):: Mr. Speaker, the commander of the brigade in Europe operates under the general term of SACEUR, the commander of the European forces in Europe.


Lester Bowles Pearson: I have a supplementary question. From that statement am I to infer that the decision whether to use or not to use nuclear weapons by the brigade in Europe will be made by SACEUR?


George Randolph Pearkes: A statement was made in the house about a month ago by the Prime Minister which explained the arrangements that were being worked out between Canada and the NATO authorities for the use of nuclear weapons by the brigade. I have nothing further to add to that statement.



REPORTED U.S. RECOMMENDATIONS FOR CO-ORDINATION OF SYSTEM

[Stage Direction]
On the orders of the day:
Hon. Paul Martin (Essex East):: Mr. Speaker, I would like to direct a question to the Minister of National Defence based on a press report in the Ottawa Journal of March 23 that a special division of the United States air force is now preparing recommendations for co-ordinating the North American air defence system. Can the minister say if, in view of the fact that NORAD is a joint command, representatives of Canada are taking part in the work of this special division?


George Randolph Pearkes: I have not seen the report, Mr. Speaker, and I would rather not answer the question until I have had an opportunity of studying it.



ROYAL CANADIAN MOUNTED POLICE


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, on Thursday last I asked the Minister of Justice, who I regret to say is not in the house now, what steps the government proposed to take against those persons who had made defamatory and libellous statements about the conduct of the police in Newfoundland. The minister asked me to identify the statements, and I furnished the government with that information yesterday. In the absence of the minister I would now like to ask the Prime Minister what action the government proposes to take to uphold the integrity and defend the good name of the Royal Canadian Mounted Police in Newfoundland.



CHAMBRE DES COMMUNES

[Stage Direction]
Freight Rates
John George Diefenbaker: Mr. Speaker, the hon. gentleman, I am sure by misadventure, failed to ask the question while the Minister of Justice was in the house, and I think he will have to allow his desire for information to await the resumption of the session.


John Whitney Pickersgill: I would like to ask the Prime Minister a supplementary question. Is the government reluctant to act because they are afraid of incurring the displeasure of Mr. Knowles-


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: -and other politicians now in the labour movement?


John George Diefenbaker: Mr. Speaker, the hon.
gentleman was at one time over here, and apparently his statement is a reflection of the state of mind he exhibited on so many occasions when he occupied a treasury seat.


John Whitney Pickersgill: Mr. Speaker, I wonder if the Prime Minister would now like to answer my question as to whether the failure to act is in order to curry favour with Mr. Knowles and his friends?


John George Diefenbaker: Mr. Speaker, I would
suggest that my hon. friend get in touch with the hon. gentlemen to his right, with whom in this session there has been a close relationship.



THE MINISTRY


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I would like to ask the Prime Minister whether, having regard to the heavy responsibility of his position and the seriousness and developing importance of the international situation in the next few months, he will be in a position to announce before long the appointment of a secretary of state for external affairs?
Right Hon J. G. Diefenbaker (Prime Minister): Mr. Speaker, at the moment I think the answer I gave to the last hon. gentleman, with great respect, applies. When the house resumes the question might be asked again.



FREIGHT RATES


[Stage Direction]
The house resumed, from Tuesday, March 24, consideration in committee of the following resolution-Mr. Hees-Mr. Rea in the chair:
That it is expedient to introduce a measure to direct the board of transport commissioners to

require by order the reduction of class and commodity freight rates (other than competitive rates) charged by carriers subject to the order of the board dated November 17, 1958, and to authorize payments to reimburse carriers for the resulting reduction of their revenues up to an aggregate amount of twenty million dollars.
Lionel Chevrier: Mr. Chairman, last evening I had just begun to discuss the merits of this resolution when as the house knows I was unfortunately interrupted by an incident which we have all had occasion to regret. At that time, sir, I was discussing the resolution and its implications in so far as the board of transport commissioners' judgment of November 17, 1958 is concerned. I was about to say that the decision in its recital of the facts, which may be found on pages 5 to 7, indicates that the application made to the board stated that the cost of applying the recommendations of the conciliation board to all railway employees in the two-year period from January 1, 1958 to December 31, 1959 would add to rail expenses for the Canadian National Railways $41.5 million, and for the Canadian Pacific Railway Company $26.5 million. As will be seen from the two statements which are to be found on exhibits 58-17 and 58-27, the burden of the judgment is unequally distributed between the two calendar years 1958 and 1959, being respectively $11.5 million and $30 million for the C.N.R., and $7.1 million and $19.2 million for the C.P.R.
The decision, sir, also indicates that the application stated that in order to enable Canadian National Railways to secure full requitement of the additional labour cost would require a general increase in freight rates of 19 per cent, with 25 cents on coal and coke.
Furthermore, the decision of the board sets forth in clear and unequivocal language the facts that entered into its consideration and contains an excellent review of the contention of the various parties to the application as well as a clear consideration of the law and the method followed by the board in the application of these freight rate hearings. It is sufficient, however, for my purposes at this time to say that the board considered that an increase of 17 per cent with 22 cents on coal and coke would yield revenue approximately equivalent to the amount of the Canadian Pacific's additional labour cost and accordingly authorized such increases in freight rates to be made effective on or after December 1, 1958.
During these hearings both the Canadian National Railways and the Canadian Pacific railway submitted estimates of additional revenues they would respectively receive from the increases they had applied for and these figures will be found on pages 28 and 29

of the judgment. These figures show by implication the difficulties which the railways expect to encounter in applying an increase in rates. Thus, the statement of the Canadian National Railways on page 29 indicates that on traffic moving under competitive rates, for instance, they expect to earn in 1959 revenues of $73.8 million and to receive from a 19 per cent increase additional revenue of $7,011 million, which are equivalent to an average increase of 9.5 per cent; and the Canadian National Railways expect to earn revenues of $175.1 million from all other freight traffic and to receive from a 19 per cent increase on this traffic a further $25.9 million which is equivalent to an average increase of 14.8 per cent.
In the case of the Canadian Pacific Railway the additional revenues from these two classes of traffic are estimated at amounts equivalent to average increases of 9.5 per cent and 15.2 per cent, the difference between the C.P.R. and C.N.R. percentages being attributable no doubt to different operating conditions.
The clear inference to be drawn from these estimates is that the railways believe on a substantial part of the traffic falling into one or other of these two classes it will not be possible to apply the full amount of the increase authorized. All traffic does not move under the same conditions and in some instances because of competition or because of the harsh realities of economics it is just not possible to impose a higher rate and the traffic simply will not stand for it. This is not merely a debating point, it has greater significance than that. It opens up the enormous if not insuperable difficulties of giving effect to the proposal which the minister has brought before the committee.
These are some of the questions that come to my mind: How is this subsidy to be provided for by the government? How will it be allocated? Where is the formula that will be applied in distributing this subsidy? There was no indication of that given by the minister in his statement and I presume we will not receive that, if at all, until we get the bill.
I believe it is of tremendous importance that before the committee moves on this it knows on what basis, on what formula and by what method the board or the government will apply this subsidy of $20 million. That leads me to submit to the minister and to the committee the following examples.
Let us suppose that of the great volume of traffic moving at class and commodity rates there are three items and that the railways believe that on item A the maximum increase they can apply is 5 per cent; that the maximum they can apply on item B is 10 per cent and the maximum on item C is 15 per cent.
Freight Rates
Are all the rates to be reduced by 5 per cent so that item A will not be increased at all while items B and C will be subject to increases of 5 per cent and 10 per cent, or is there to be a ratable reduction; that is, a reduction of the same percentage applicable to each? For example, will all of these rates be reduced by 40 per cent so that the new reduced rates on items A, B and C would be respectively 3 per cent, 6 per cent and 9 per cent?
The number of items in the freight rate structure, as the minister knows, is very great and it seems logical to anticipate that a percentage reduction would be the simplest solution; in other words, a horizontal reduction of horizontal increases. This brings me to a point that will probably bring memories back to the minister. I remember so well when I was on the other side of the chamber how we were taunted about horizontal increases and how we were told that every time there was an increase in freight rates the effect of that increase was unjust and unfair because of the horizontal increases to which it applied. As I look at this subsidy I can see no remedy that will in any way attenuate the effect of horizontal increases.
I should like to bring to the attention of the committee a statement that was made by the acting Prime Minister on behalf of the government, the Minister of Public Works, in the absence of the Prime Minister, when the decision was taken by the government concerning this matter. Amongst other things, Madam Chairman, the hon. gentleman said:
It is however recognized by the government that there are serious inequities in the present freight rate structure which have both contributed to, and been aggravated by, the system of horizontal rate increases. The government has already indicated its intention to move toward a solution of these problems.
I submit that this subsidy is not in any way going to reduce the effect of these horizontal increases.
Perhaps at this point I should pause to commend and congratulate the hon. member for York-Humber who is now in the chair. I have been on the point of saying, "Mr. Chairman" once or twice, but on realizing who was in the chair I changed it to "Madam Chairman". This is a unique experience for me which I enjoy and I am sure I bespeak words on behalf of all hon. members, even my hon. friend to my left with whom I perhaps lost my patience a little too quickly this afternoon; on behalf of all of us I extend our congratulations.
I wish now to continue my argument. I am afraid the minister who made the statement to which I have just referred was not aware of the judgment; neither did he read

Freight Rates
the judgment of the board of transport commissioners. It runs right in the teeth of the statement he made. I do not think, sir,-


George Harris Hees: Madam.


Lionel Chevrier: Thank you. I do not believe that horizontal increases can be disposed of in their serious implications on freight rates generally by this resolution. Let us see what the board of transport commissioners said about this question at page 14 of the judgment:
On every application for a general increase in freight rates the matter of a uniform percentage increase has been spoken to by the parties and considered by the board. The most recent expression of the board's views is contained in its 11 per cent judgment, and in the determination of this application for interim relief the board adopts those views, which are set forth as follows:
"The representations which have been made as to increased 'spreads' between long and short haul rates is by no means new. There are many critics who point up the undesirability of horizontal increases, particularly stressing the amounts in cents per one hundred pounds by which such 'spreads' increase, but it has not been shown in what way this feature can be avoided without either placing a higher rate burden on short haul traffic or reducing the earning power of the carriers by granting them rate levels too low to produce the revenue they should be entitled to seek for the service they provide".
Again, in the report of the royal commission which was established on transportation to deal with this matter of freight rates, there is a whole chapter by Mr. Justice Turgeon in which he deals with the effect of horizontal freight rates. On that occasion he made no recommendation in so far as a remedy for those rates was concerned. On the contrary, he stated that the matter was one for the railways and the board to determine.
The question naturally arises as to what the reduction would amount to in relation to the additional revenue which the increases are expected to yield. We know now that certain rates are being excepted; that competitive rates, international rates and import-export rates and the like are not covered in this resolution. But the minister said nothing about agreed charges. What about agreed charges? Are they covered in the subsidy? What about the piggy-back rates? Are they covered in the subsidy? When he rises to reply the minister should tell us because it is a matter of some importance to the house. What about coal and coke? Do they move under commodity rates, or are they excluded? If we assume that coal and coke, which always have been treated separately by the board, are outside the scope of the resolution, what is the amount of increase which would be subject to being affected by the proposed subsidy? To some extent the answer

is found on pages 29 and 30 of the judgment which gives the estimated results of this requested increase. From the traffic under the description "all other freight traffic" the C.N.R. expected a 19 per cent increase would yield $25.9 million, while the C.P.R. expected that on its traffic such an increase would yield $20.2 million, or a total of $46.1 million. The board, however, allowed an increase of only 17 per cent. If we assume that a 17 per cent increase would yield 17/19ths of the railways' estimate, we arrive at a figure of $41.2 million as the additional revenue that may be expected from a 17 per cent increase on this traffic.
However, as the minister stated, this resolution will apply in its implications not only to the Canadian National and the Canadian Pacific railways but to other railways. There are other class 1 and class 2 railways to which application of this resolution will be made. Exact figures are not available to me of the dollar volume of this additional traffic, but we may safely assume that the aggregate increase for all carriers would be $41.2 million plus $4.8 million or a total of $46 million. A reduction for the whole of 1959 of $20 million applicable to that total would be equivalent to 43.5 per cent. But there is nothing in the resolution to indicate whether the reduction is to be made as a specific percentage of the increase, such as 43.5 per cent, or as a specific deduction from each rate; that is, 6 per cent or 7 per cent or 8 per cent to be deducted from the 17 per cent or whatever was the actual rate of increase, which would, in my view, be wholly impractical. However, the minister did say that this was the equivalent of a 7 per cent increase. I do not see how the minister is able to make that statement because I here say that the Canadian National and the Canadian Pacific railways themselves are not able to say what increase they will receive in commodity rates, in normal rates, from the 17 per cent order, and if they are not able to say this, how then can the minister say that the reduction will be a 7 per cent decrease?
Some questions come to my mind along these lines. One of them has already been answered by the minister. I was going to ask him how long was this subsidy going to remain in force? He has answered by saying 12 months. What happens after the 12-month period? What will happen in the light of the present application which is now before the board for a 15 per cent increase in freight rates? The minister says that it will be held up pending the determination of the long term policy of the government. Suppose it takes two years before the long term policy of the government is determined. Does that

mean that meanwhile if there is an increase in cost, if there is an increase in the wages of the railway workers, the railways will not be entitled to receive the increase in freight rates because of this? The minister has certainly not cleared this up. I think that is one of the things he must do when he rises to reply because we know that if a royal commission is established, as has been indicated, it may take many months, it may take a year or two years before a recommendation is made upon the terms of reference which will have been given to it. Does this mean that in the meantime those workers who may be entitled to increased wages because of the increased costs will be held up in their demands, or does it mean that the minister will then come along with another such resolution in which he will increase the $20 million by another amount which will look after those increased wages? If that is so, then this is in effect a way a subsidizing of wages.
Another question which arises is the following. We have observed that not all competitive rates will be increased to the full extent authorized by the board. Some of this traffic will stand only a smaller increase, perhaps 10 per cent instead of 17 per cent. In the same way some normal rated traffic may be able to stand an increase of 10 per cent. Let us suppose that such is the case. Is it the government's intention that the traffic moving under the competitive rate shall pay the full increase of 10 per cent, because in the resolution traffic moving under competitive rates is expressly excluded, but the traffic moving under normal rates shall pay only a part of the increase of 10 per cent? Would this not lead in some instances to a further revision of the rates, so that the shipper would qualify for the lower rate, with the government making good the resulting deficiency?
But apart from these questions which arise from an examination of how the proposed subsidy will work out and how it is to be applied, there is a much more important question than that. What problem is solved by this subsidy? Does it solve any problem or is it not merely a complicating factor? Does not the granting of this subsidy merely postpone this very serious and grave issue which is before the government? Does not the granting of this subsidy merely in effect do what the government ought to have done many months ago when the serious railway problem came before it for attention?
So, sir, I have no hesitation in declaring to the house that this resolution is nothing but a stop-gap arrangement. It is nothing more than the kind of solution that the government has applied to all problems. It
Freight Rates
allows all major problems to develop to a state of crisis before it acts and then it acts by writing out another cheque.
The government has known that it would have to deal with this problem since November of 1957 when the unions representing the non-operating employees of the railways served demands for increased wages, improved fringe benefits and changes in working rules. It may not have known with certainty what amount of money would be ultimately involved when these demands were finally dealt with but the government did know after the award of the conciliation board in September, 1958 how much money would have to be found. However, in characteristic fashion it waited until the last minute before it came to a decision that can only be regarded at best as an interim. I strongly believe that the interim measure will make the problem more difficult to solve and will give rise to innumerable smaller problems.
What is the government's long term policy? I think the minister owes it to the committee to tell us what the government's long term policy is. After all, parliament is being asked to vote a subsidy of $20 million and then, when it suits their convenience, the government will announce their long term policy either in the form of an investigation as I indicated last night or a royal commission. I do not think it is fair to parliament any more than it is to the people of Canada to ask for the passage of this measure without knowing what the intention of the government is. Is it intended to have an investigation into the complex freight rate structure of the country? Is it intended that there shall be a royal commission to consider the whole railway transportation problem of Canada? I believe that these things should be known before the passage of this resolution is approved.
I think we should also be told, as I said earlier, on what basis the $20 million is to be handed out. What will happen to the freight rate structure as a result of the application of the $20 million? All the minister said was that certain rates were excluded but that is not clear enough. I think that those who are particularly interested, the provinces and the railways, will want to know how this formula is to be applied. When the railways themselves have some difficulty even today in arriving at the amount of money which will be derived from the 17 per cent increase, it becomes all the more difficult to ascertain how this formula is to be applied. The minister knows that the railways are having difficulties today in increasing their rates in the light of the 17 per cent judgment. The ceilings go up but the amounts they

Freight Rates
are able to charge for traffic is uncertain and very often freight will not move on the increased rate. If the railways are having difficulties in the application of the 17 per cent increase, then a fortiori there will be difficulty unless there is a clear formula in the application of the $20 million reduction.
I think the minister is oversimplifying the situation. I think the minister believes that it is an easy formula and easy to work out. I can tell the minister that when it came to providing a formula for the $7 million bridge subsidy a tremendous amount of thinking went into the matter and the situation then, I submit with deference, was not nearly as serious as it is now. The committee on railways, canals and telegraph lines spent many hours, indeed many days, in trying to iron out a formula. It heard many representations and arrived at a formula on the basis of the trackage, the mileage, and the maintenance of that trackage over the bridge.
How is the formula going to be applied here? There is nothing indicative of that in anything that has been said by the minister so far. So I say that this matter certainly cannot be dealt with on an interim basis but must be carefully studied. The previous administration, which had a great deal of experience in this regard, proceeded by a measure which directed the board of transport commissioners to equalize freight rates and by the appointment of a royal commission to study the whole railway problem. Is the government going to do the same thing? I think the minister should tell us.
While I am on that subject, I should like to say that all of the recommendations made by the royal commission on transportation with regard to freight rates were put into effect by the former government. The minister will recall that when he sat on this side of the house we were condemned by the minister and his friends because of what we were doing at the time. The board of transport commissioners was condemned. It was said that the board of transport commissioners was useless, that its members were not performing their job. As a matter of fact, at one stage there was a motion to reduce the estimates of the board of transport commissioners to $1. That was the extent of the contribution made by some hon. members on the other side of the house at that time, but now when they are in office not only do they not dismiss the members of the board of transport commissioners but they do exactly what was done by their predecessors. They renew the appointments of certain members of the board.


The Deputy Chairman:: Order.


Lionel Chevrier: I just have one sentence before I conclude. In my opinion this measure will not solve the difficult railway and railway freight problem. We on this side of the house are extremely anxious to see the formula which will be applied and under which the board of transport commissioners will operate in distributing the subsidy of $20 million. I hope the minister will be able to let us see the bill after the passage of the resolution so that we can study all its implications.


George Harris Hees: Before the hon. member speaks, may I answer the questions put to me?


Hazen Robert Argue: No. It is the custom of the house to hear a representative from each of the parties. I know the Minister of Transport is most anxious to follow our normal procedure because he is one who takes a great interest in the rules of the house and is always most co-operative on that score. This announcement by the Minister of Transport demonstrates that the government has broken another solemn commitment to the Canadian people, namely to prevent further increases in discriminatory freight rates. The policy of the Conservative party has been made clear in the past. The Prime Minister has made it clear. The Minister of Transport himself has spoken very often on this and other questions. The Prime Minister, in Drumheller, Alberta, on May 18, 1957, had this to say, according to press reports:
At Drumheller he said there should be equalization of rail rates in Canada "within reasonable limits" to give a shot in the arm to agriculture and industry on the prairies.
The Canadian Press report says:
On freight rates, he said, that a rate pattern discriminatory to the west has been made worse by recent increases. This had struck "an almost paralyzing blow" to industrial development in the west.
In the Globe and Mail, we find this report:
He said a Conservative government would equalize freight rates as far as possible to help both agriculture and industry on the prairies compete with the rest of Canada.
Before the last general election when the board of transport commissioners had granted a 3.6 per cent increase and the government did not have this tremendous majority, they acted forthrightly, they acted with courage. They said to the board of transport commissioners that this increase would not be allowed. However, in this instance, the government not only failed to prevent an increase in freight rates but through this legislation which is forecast by the resolution and in the words of the minister they are allowing a net increase of 10 per cent even after this $20 million subsidy becomes effective.

We have now had in this country since the end of the war, a long series of increases in freight rates. The total increase to date amounts to 157 per cent. This imposes a great burden upon the remote areas of Canada, particularly the prairie provinces, British Columbia and the maritimes. Even with this legislation, this government is allowing the same practices and the same conditions to prevail as were allowed under the previous administration. We think the government should have taken the same position they took with regard to the 3.6 per cent, namely to have disallowed the 17 per cent. The government was requested to disallow the increase by eight provinces. Seldom on public matters do the provinces of this country speak with the type of unity with which they speak with regard to freight rates. Only two provinces did not join with the others in protesting increases in freight rates. I think the provincial governments of Ontario and Quebec make a mistake in not protesting increases in freight rates. I believe this is particularly true because these rates affect the more remote regions of these provinces.
The Ontario government is apparently quite ready to allow horizontal increases in freight rates to discriminate against the whole of the northern sections of Ontario. I feel the premier of Ontario has been derelict in his duty in not joining with the other eight provinces that have protested the increases in freight rates. There are a number of reasons why I feel the premier of Ontario should join with the other provinces in this regard. The main reason, of course, the economic reason, is that an increase in freight rates damages the economy of northern and northwestern Ontario. The premier of Ontario should show concern when that large section of the province is adversely affected by the actions of this government.
There is another reason why I feel the premier of Ontario should join with the other provinces and that is that perhaps he, above all others, may have some influence on this government. I would hope that in the future he would correct this very serious error and mistake. The board of transport commissioners over the years has allowed a great many increases in freight rates. I have in my hand a list of the various increases in freight rates which have been allowed since the end of the war. The number of increases, although some of them were parts of subsequent total increases, amounts to seven since the end of the war.
In assessing the need for an increase in freight rates, the board has taken the financial position of the Canadian Pacific as a yardstick, that is the net profit position. There
Freight Rates
has been a consistent and continuing complaint from the eight provinces that on this basis of assessing the freight rate requirements of this country the board of transport commissioners has been in very serious error. The board has failed to take into account the fact that the Canadian Pacific has set aside very large depletion and depreciation reserves which, in the opinion of the eight provinces, are excessive and should not be allowed. The Canadian Pacific is a mammoth organization which operates steamships and hotels and owns the controlling interest in Consolidated Mining and Smelting Company, owns very large tracts of lands and holds the mineral rights on those tracts of land.
A few years ago the Canadian Pacific was showing a substantial profit because of oil revenues and revenues from its mineral rights on the land it holds, so they transferred the land from their general account to a separate account in order to make the Canadian Pacific balance sheet show a smaller profit. The board of transport commissioners by its actions in the past has shown that it is incapable of solving the problem of discriminatory freight rates in this country. We require today, I believe, a firm announcement by the government that there shall be no further horizontal increases in freight rates. The minister has said there will be no increases for a certain period of time until certain studies are made. I do not believe that is an adequate guarantee. We should have a forthright statement from the government that they will not allow further increases in freight rates in this country.
The railway must have sufficient revenue to operate. The workers who are employed by the railway companies should have a wage level in keeping with the workers in comparable occupations in this country. However, there is no reason, in our opinion, why the board should take the Canadian Pacific as the yardstick and grant increases as it has done in the past. There should be no automatic increase in freight rates because of an increase in costs, no matter what those costs may be. In the early years of confederation, it was decided under the national policy that it was necessary to the preservation of Canada as a nation to have a transcontinental railway, and subsequently to have further transcontinental railways.
It was recognized that the railroad was in some instances built through areas that were not productive, when the normal course of the railway might have been to go south of the great lakes through the United States; and some recognition was given to that consideration by the payment of a $7 million subsidy for the so-called bridge. In the opinion of the C.C.F. it is time that we adopted

Freight Rates
a national transportation policy. We believe that the government should set up a national transportation authority that would have jurisdiction over all transportation matters coming under the federal government and that its declared policy should be to equalize freight rates and to make them apply equitably in all parts of Canada.
The government is going to have to decide whether or not it will continue the present rule, namely to grant freight rate increases so that the C.P.R. will show extremely large profits, or whether it will take into account the legitimate economic interests of the maritime provinces, western Canada and the remoter sections of the province of Ontario and the province of Quebec.
From the Minister of Transport we have had so far a brief statement. In introducing a measure such as this one which entails the expenditure of $20 million, I would have thought that the minister in charge of it would have given the house the benefit of a comprehensive review of this whole question. The minister has not done that. Although the minister's major statement to the house was relatively short, I doubt that it contained as much pertinent information as the statements he made during the speech delivered last night by the hon. member for Laurier. We seem to have the government policy coming out by dribs and drabs. The Minister of Transport, interrupting the hon. member for Laurier, gave us some important information. He said this as reported at page 2208 of Hansard:
In the meantime the government does not propose to permit any further general increases in railway freight rates.
It would be interesting to know what period this statement covers. Does the government during this parliament intend to prevent further increases in freight rates or does the government merely intend to prevent further increases in freight rates during the next 12 months? What is the government's policy with respect to further increases in freight rates?


Mr. Morris:: Would the hon. member permit a question at this point? It is only intended for explanatory purposes and is not antagonistic.


Hazen Robert Argue: Yes.


Edmund Leverett Morris: Did I understand the hon. member to say that his group favoured the fixation of the present rates and that no permit ever be granted to raise the rates and at the same time to assure that the railways would continue to operate services of benefit to Canadians and pay what we all hope would be decent living wages to railway

employees? I wonder what policy he had in mind. How can he reconcile these two objectives? How can you procure from the railroads this type of service and salaries or wages without providing some method for them to recoup their income?


Hazen Robert Argue: Of course there must be some method. I made the statement-and I think the hon. member was able to grasp it-that there should be no further horizontal freight rate increases in this country, and that there should be no further increases in commodity rates in this country. If it is necessary-and it may well be-from time to time to provide additional revenues to the railways because of increased costs, the necessity of providing additional services or improved services, then those additional costs should come from the national treasury. That is not a new statement. That is not something that is new today. The province of Saskatchewan argued this matter before the board of transport commissioners long before the establishment of the Turgeon royal commission which subsequently reported on February 29, 1951. It is interesting to know that that particular policy which the Saskatchewan government originated and initiated is getting greater and greater support from provincial governments across this country.


Edmund Leverett Morris: Will the hon. member permit one further question?


Hazen Robert Argue: Yes.


Edmund Leverett Morris: Is the hon. member suggesting that as a form of policy his group would support the endowing of a private corporate carrier, namely the Canadian Pacific Railway Company, out of the national treasury in such circumstances as he sets forth?


Hazen Robert Argue: We do it all the time. This government is doing it now. The hon. member has been asking me questions. I think I have the right to answer his questions. The government is doing it now with $20 million. When the question is put to the house I am certain it will receive a unanimous vote. But we also say that when the government is endowing the C.P.R. with a large part of the $20 million, an entirely different yardstick should be taken in the setting of freight rates. We say that the C.P.R. has been given larger freight rates than are necessary had the board of transport commissioners taken into account the total financial position of this mammoth and sprawling octopus, the Canadian Pacific Railway Company, instead of taking into account merely the freight and railway operations of the company. The C.P.R. is in a wonderful position. The air

transport board, with the government's approval, has given C.P.A.L., a C.P.R. subsidiary a chance to extend their facilities to haul passengers on transcontinental operations. The C.P.R. is in the trucking business in an extensive way. This company is in competition with itself. The more successful the C.P.R. trucking firms become, the higher the freight rates that must be paid by my hon. friend's constituents and the people of the maritime provinces and by the people who live in the western provinces. We say that it is time for a national transportation policy that would prevent further discrimination and further burdens upon the remote areas of this country. Of course that has been the declared policy of the Prime Minister since 1940. But he has made a complete reversal since he has become Prime Minister. Even with the $20 million subsidy the government is allowing a further increase in discriminatory freight rates.
We would be greatly interested in knowing whether we are to have another royal commission to look into the freight rate question. We had the Turgeon royal commission which presented a comprehensive and detailed report. The hon. member for Laurier says that all of the recommendations dealing with equalization have now been implemented. Yet freight rates are more unequal in this country than they were when the report was given to this house. As the years go by, under the corrective policy of the former administration, and under the new freight rate policy in revision, freight rates become higher, discrimination increases, and the burden on the remote sections of this country goes up. We are interested to know whether there is to be another royal commission. The member for Laurier last night said this:
When I interrupted the minister I gathered from him that it would follow in due course that a statement would be made about the appointment of a royal commission. I did not hear that statement made but I take it that in the course of the debate at a later stage it is the intention of the minister to make that kind of announcement and to state also the terms of reference of the royal commission.
The minister replied as follows:
I might answer the hon. member for Laurier on that point now, Mr. Chairman. A much larger, long term inquiry is under very active consideration by the government at the present time and I expect that in the very near future the Prime Minister will be making the kind of announcement to which the hon. member has referred.
I ask, is that a royal commission? How can the Prime Minister make the announcement at a later date when the Minister of Transport leaks it to the house in making the announcement that he made last night in advance of the Prime Minister?
Freight Rates
I notice that the Minister of Trade and Commerce is in his seat. There has been a great deal of speculation as to what went on in the cabinet circles last fall when they were considering the 17 per cent increase in freight rates and the judgment which had been made by the board of transport commissioners. I have in my hand the Motor Carrier for February, 1959, which is a trade publication for truck and bus operators in Alberta, British Columbia, Manitoba and Saskatchewan. It has a very interesting paragraph on page 6 which is headed "Secret Sessions" and reads as follows:
Behind closed cabinet doors in the east block Diefenbakermen-
Not Conservatives, note; "Diefenbakermen"-
-Gordon Churchill (Manitoba) and Alvin Hamilton (Saskatchewan), had been fighting for the same remedy but opposed by finance minister Donald Fleming, generally regarded as the mouthpiece of the powerful Tory "eastern group" of finance and investment houses.
There was a tremendous skirmish in the cabinet last fall, according to this report.
Churchill, supported in spirit at least by Manitoba Prime Minister Duff Roblin-
That is about all the support you would get, I guess, from a Tory colleague, "in spirit"-
-threatened to resign and then, as all good politicians and party stalwarts must do, subsequently denied such action.
Out of the stormy sessions came the decision to set up a special cabinet study committee under the chairmanship of Hon, A. J. Brooks.
We would like to know if this special cabinet committee has been established. We would appreciate any comments from the Minister of Trade and Commerce as to the important role he played in pressuring his colleagues to act at least in this meager way. But in the light of those statements, I think the statement made by the hon. Minister of Transport last night takes on a great significance when he seemed to fence in his own Prime Minister by announcing to the house the statement which the Prime Minister would make at a later date. People of Canada who are bearing these tremendous burdens of freight rates are fed up to the teeth with royal commissions. We have had royal commissions into freight rates time and time again. We have had royal commissions in other fields. This is becoming a government by royal commission.


Gordon Minto Churchill: What about your provincial government in Saskatchewan?


Hazen Robert Argue: The provincial government in Saskatchewan is doing very well.


Gordon Minto Churchill: You have had royal commissions, though.

Freight Rates


Hazen Robert Argue: We have had royal commissions, as the hon. minister of northern affairs has said, in fields where no other provincial government has acted; so that Saskatchewan has the distinction of having the first reports in this field. But this government says, following the other administration: Me too. This is a hot potato. We are obviously not fulfilling our election promises; we are repudiating them, so we will set up a royal commission. We can hide behind a royal commission for a year or so. When the royal commission brings in its report, we can say it supersedes our definite election promises to the people of this country.
Those Canadians who live in the maritimes and in western Canada, the remote areas of Ontario and Quebec, say that this government has failed to fulfil its election promise to the people of Canada to prevent further increases in discriminatory freight rates. All this legislation does at best is to reduce the very serious effect of this last increase in freight rates. What this government is doing by this legislation is saying, "We shall allow freight rates in this country to be a somewhat greater burden on freight users than the very high freight rates allowed by the previous administration, about which we complained so bitterly." This is a bits-and-pieces government. This government has no policy in this field except to follow the pattern of the previous administration in hiding behind royal commissions, adding discriminatory freight rates to discriminatory freight rates, and failing to enunciate a national transportation policy that would provide equitable freight rates to all parts of this nation.


Hédard-J. Robichaud: Mr. Chairman, the resolution moved last evening by the Minister of Transport concerns very seriously every province of Canada and particularly the Atlantic provinces. This resolution deals with a measure which will result in a reduction of certain class and commodity freight rates other than competitive rates. It also provides for payments to reimburse carriers for the resulting reduction of their revenues up to an aggregate amount of $20 million. The passing of such a measure will undoubtedly reduce substantially the 17 per cent increase which was authorized by the board of transport commissioners' order of November 17, 1958. In fact, it is calculated that the 17 per cent increase authorized by that order will be reduced to approximately 11 per cent, and even to 10 per cent, according to the minister's figures of last evening following the application of the measure now to be introduced.
I would like to deal at this time with the freight rate structure as it applies particularly to the Atlantic provinces. Increases in our

Canadian freight rate structure have been numerous and quite substantial, particularly in the postwar period. Every Canadian citizen will recognize the handicap which the Atlantic provinces have to contend with due to difficulties of transportation, partially accounted for by our geographical position with regard to the more heavily populated sections of Canada. In fact, owing to economic, geographic and other disadvantages, the Atlantic provinces are adversely affected by transportation difficulties and are liable to suffer more from any increases which affect tariffs of tolls and rates than any other area of the country. The distance from and the cost of transportation to the great continental market centres has always been a serious handicap to maritime producers. Freight subventions extended under the Maritime Freight Rates Act have tended to offset in part only the disadvantages which affected development of our industries in the maritimes. This transportation problem has in fact been a basic part of the plan for confederation. The railway rate structure determines the distribution of railway costs between several regions and also determines to what degree different industrial and regional groups contribute to the payment of such costs.
The advantage of the Maritime Freight Rates Act enacted in 1927 by a Liberal administration, partially offsetting the disadvantage of maritime producers in relation to the central Canada market, were gradually nullified by further reductions in freight rates made by the railways themselves in central Canada to meet truck competition. It is true that a great deal has been done in recent years to offset the higher cost of marketing the products of the producers of the Atlantic region caused by the long distances between that region and markets in central Canada. This was followed by improved means of communication within the Atlantic region itself. It was agreed, as announced in March of 1957, that a thorough and comprehensive examination of the entire transportation situation in the maritime provinces should be undertaken to determine the possibility of introducing changes which could contribute to the economic welfare of this region.
The Minister of Finance then expressed the government's intention to launch an immediate review of the maritime transportation problem in general in order to put forward as soon as possible proposals to improve the transportation system generally. As a temporary measure to meet the special disadvantages offered by horizontal increases in freight rates, increases which we know have fallen more heavily on outbound traffic from the maritimes, an increase in the subventions paid under the Maritime Freight Rates Act

was authorized in 1957, extending such subventions from the level of 20 per cent to the present level of 30 per cent.
When the 1958 estimates for the Department of Transport were discussed in the house the Minister of Transport was asked by the hon. member for Laurier if the study of the interdepartmental committee on maritime transportation had been completed and if a report on the matter could be expected at an early date. The minister's reply will be found on page 4357 of Hansard for August 30, 1958. I quote:
This whole question is under intensive study at the present time, and we expect to have a report on it by the end of the year.
The end of the year has passed and we are still waiting. The freight rate boosts have moved so fast in the last decade, as was mentioned today, that we have had seven increases in the past eight years. They have increased by 154 per cent and a further request for another 12 to 15 per cent increase is now before the board of transport commissioners. The result of these increases has been a reduction in the value of the Maritime Freight Rates Act. We were pleased to hear from the minister his statement that no further increases are contemplated for the next 12 months. The reductions asked for in the measure to be introduced by the government and presently under debate will be of extremely limited advantage to the Atlantic provinces.
The terms of confederation clearly established that the maritimes should have cheap access to the markets of central Canada. The present Maritime Freight Rates Act as it now applies barely cushions the full impact of the climbing freight rates over the last 10 or 12 years. The present railway charges have a tendency to accentuate the decline of manufacturing in the Atlantic provinces and in other outlying parts of Canada. This policy is clearly reflected by the tendency of our Canadian industries to concentrate their operations right in the middle of the market or at the nearest possible distribution point.
The people of the maritimes have become more and more aware that what is needed today is the bold, comprehensive and coordinated approach to our transportation problem which was so clearly indicated in the Gordon commission report. The narrowing of such differences and disadvantages by effective changes in the horizontal per ton mile policy of rate increases will substantially help the maritimes to improve the present climate for industrial development. The plea of the maritimes is based on a confederation commitment which involves the importance of our access to central Canadian markets
Freight Rates
which access is deteriorating due mainly to the increased cost of transportation together with the contraction of foreign markets particularly as these questions affect our lumber industry.
I should like to quote one paragraph of the report of the Turgeon commission which dealt with transportation. At page 27 in the third paragraph outlining alleged disadvantages, we read:
The maritime provinces state that when compared to central Canada their economy is found to be deteriorating and that this trend is influenced by the increased cost of transportation to central Canada and by the contraction of foreign markets; for example the loss of markets for apples, lumber and pit props in the United Kingdom, and potatoes in the United States.
The case of the maritimes may be summarized: At confederation they were promised access to the central Canadian market. Today, in view of the deterioration in foreign trade, particularly because of monetary and commercial restrictions, access to the central Canadian market has become more important than ever. Isolation of the maritimes from the central Canadian area as a result of distance and of increased freight charges is one of the central themes put forward in their case. A witness for the transportation commission of the maritime board of trade, when asked whether or not the maritimes were willing to accept their disadvantages provided they retained their advantages, replied:
"The national background in connection with our intercolonial railway was to afford persons and industries to get into the markets of central Canada. That is the basic principle."
The Maritime Freight Rates Act is regarded as the instrument intended to facilitate access to the central Canadian markets. It was suggested by the same witness that this instrument is losing its effectiveness:
"The general tenor of the evidence of the maritime approach ... is that the changes which have taken place since the Maritime Freight Rates Act became effective in 1927 are having the effect of enhancing the difficulty of maritime producers in reaching the highly competitive markets of central Canada in competition with industries located closer to the markets."
The report of this royal commission is perhaps the best document ever prepared on the subject of freight rate problems in the maritimes and other sections of Canada affected by transportation difficulties. Maritime shippers claimed, and rightly so, that recent changes have decreased the advantages which the rates established under the act of 1927 intended to confer on the maritimes. I may not want to go as far as to disapprove of the statutory Crowsnest pass agreement but nevertheless the rest of Canada must be made aware-and this applies particularly to the prairie provinces-that the board of transport commissioners are not now in a position to grant rates which are just and reasonable to the lumber industries because of inequities in the rate structure which are beyond the board's power. This matter was dealt with

Freight Rates
thoroughly in the submission of the Canadian lumbermen's association to the cabinet committee on freight rates on January 9 of this year. Without disapproving of the Crowsnest pass agreement, I would suggest however that its application should motivate the government to give further consideration to the added burden which is automatically thrown on other traffic, including lumber.
The Canadian lumbermen's association is rightly concerned about the effect of increased freight rates on lumber which is called upon to bear such a proportion of each mileage rate increase when applied to our eastern Canadian lumber industry.
I am not surprised to see the New Brunswick sawn lumber production decrease from a total of 281 million board feet in 1956 to 244 million in 1957 and to 198 million in 1958, a reduction of approximately 30 per cent in the period of the last three years. I am not surprised also that our lumber dealers are under the impression that the lumber rates are being called upon more and more to subsidize the statutory grain rates. This leads me to remind the government of the events leading to confederation in 1867, and of the responsibilities deriving from this union of the provinces. There must be, however, ways and means of adjusting existing differences without interfering with the present arrangement for the transportation of grain to ports of exit. It must be recognized, however, that lumber provides earnings in excess of the national average, and such finished commodities as veneer and plywood are far beyond the national average rate. Such anomalies should not be allowed in our national transportation system, and adequate measures should be found to correct these irregularities by the application of a long range plan formulated to give equal opportunity and equal justice to all concerned.
In a formal statement issued by the government, following the acceptance of a new freight rate increase in November of last year, it was admitted that there are serious inequities in the present freight rate structure which have both contributed to and been aggravated by the system of horizontal rate increases. The government informed the country that a study was being undertaken at once to work out measures to relieve the inequities in the freight rate structure, including any that may be aggravated by the last increase of 17 per cent. It was made clear that the intention of the government was to provide both an immediate alleviation of discrimination where it exists and a long term solution to the broader problems. Recent events, such as the last increase mentioned, which has been followed by a new demand for a further increase of 14 to 15 
per cent will definitely make it difficult for the government to carry on with its "hold-the-line" policy of fighting the wage-price spiral and inflation which we are facing today. Again I want to tell you, Mr. Chairman, that we were pleased to learn from the minister last evening that it is the intention of the government not to allow any further increase, at least for a limited period.
It is true that the approval of the measure to be followed by the present resolution will reduce by approximately one-third the additional burden of the latest freight rate increase. It is also true that the major share of this increase is being paid by the western and the Atlantic provinces, and such boosts place unfair burdens on Canada's outlying regions. Horizontal increases, when applied on a uniform percentage basis, destroy the advantages which the Maritime Freight Rates Act was designed to give to our area. This measure introduced by the government at the present time will do very little to alleviate this situation.
We all remember that one of the main pledges of the Atlantic resolutions which, as I have stated before in this house, is very familiar to government members, was to bring the maritimes a better transportation deal. It has been made clear that 75 per cent of this increase will fall on classes of rates which provide the railways with only 32 per cent of their revenues. In other words, roughly one-third of the railway traffic is being asked today to pay about three-quarters of the revenue which the railways expect to derive from the last rate boost. We in the Atlantic provinces are on the receiving end of this iniquitous additional burden and the pledge of the Atlantic resolutions must be implemented without delay to protect the vital interests of the Atlantic provinces in this matter of transportation.
It has been stated that the role of the railways was to serve the Atlantic interests without prejudicing particular industries and areas. The application of a similar policy resulted in the implementation of the Maritime Freight Rates Act in 1927, but events of the last 10 or 12 years clearly show that the advantages of such an act are being scuttled under the series of rate increases which have reached over 106 per cent since 1949. We want to make it clear that the outlying regions of the country cannot be expected to bear the heaviest share of the burden in serving the national interest, and this applies also to the fight against the present trend of inflation, which is a serious menace to the economy of the country.
We are asking the government for full compensation for the inequalities imposed upon us, and we insist on legislation which

will provide a formula to protect us from the ill effects of future rate increases which are expected to follow.
While we will support the present legislation we reserve the right, however, to regard it as a temporary measure only, which will alleviate in part the discrimination in Canada's freight rate structure. It is only a half way measure which does not provide the full protection promised in the Atlantic resolutions, and is far from reaching this new deal which would give our products easy access to the markets of Canada.


Mr. Bell (Saint John-Albert):: Mr. Chairman, I should like to take a minute to indicate my own interest in this resolution, as I am sure all maritime members of parliament would. This is a resolution which I am sure it would be desirable to pass today and also second reading of the bill by agreement so that we could begin the hearings of the-


Hazen Robert Argue: No.


Thomas Miller Bell: -committee as suggested by the minister last night, on Tuesday following our Easter recess. I do want to say-and perhaps I disagree to some extent with the hon. member for Assiniboia in this regard-that we in the maritimes welcome the comprehensive survey which is promised, whether it is a royal commission or not, because our main difficulty, the unsolved problem, is the movement of our industry into the competitive area of central Canada. While we do know that problem, we are not-I think this is agreed to by all- in a position at this time to say what is the actual remedy.
Everyone knows the situation. The hon. member who has just taken his seat has given us the complete story. We all have files and speeches of our own in similar vein. We do know the difficulty. It is one of the problems which looms very great in our eyes, particularly when one considers the optimistic outlook which now exists in the maritimes. Our power situation is much better. Many of our other minor difficulties are being solved but this is our unsolved problem.
We look forward to considering this legislation in committee, which will perhaps be a beginning, and we further welcome the comprehensive survey which has been promised by the Prime Minister and which will be announced shortly.


Mr. Woolliams:: Mr. Chairman, in rising to say a few words on this resolution I wish to congratulate the Minister of Transport upon bringing this resolution forward. Speaking as a representative from a rural constituency in Alberta, I can safely say I think
Freight Rates
I speak for the rest of the farmers from the province of Alberta when I say this resolution will be welcomed because when we listen to the hon. member for Assiniboia speak about the cost-price squeeze it always seems to me and to members on this side that he overlooks one thing. The cost-price squeeze is a matter of labour costs and other costs.
Let us take an example for a few moments some of the things that the farmers in Alberta have to buy. Let us take a 14-foot ordinary combine. In 1953, a combine cost $5,750 while in 1959 the cost is $9,800, an increase of $4,000. Much of the increase reflects increased labour costs as well as increased freight costs. That is just one example and I am going to give a few more. That is why this legislation will be welcomed by the farmers of the province of Alberta.
There is one thing that is overlooked by the hon. member for Assiniboia when he talks about freight rates and this matter is sometimes misunderstood in western Canada. The Crowsnest pass rates have been in existence since 1897 and apply to the shipment of various grains. We have been assured by the Prime Minister and the government that they will remain in existence. I am certain that the farmers of my constituency and elsewhere in the province of Alberta welcome that.
I should like to give a few more examples of increased costs, and increased costs are the reason why if some western farmer were here this afternoon and could speak instead of myself he would support the resolution. Over a period of five years the price of a self-propelled swather, for example, has increased by $200. Tractor prices have increased by $1,700. Prices of disc hauls have gone up $710, and so on. I could give a whole list of farm machinery to show that costs have doubled since 1953.
Much of the increase has been due to increased labour costs. When I listen to the hon. member for Assiniboia, who comes from the same province in which I was raised, I often wonder why he does not tell the full story. We in western Canada know that the 17 per cent increase in freight rates came about because the men of the railways asked for an increase in wages. Now the government is acting to cut the increase to 10 per cent with the result that the men on the railways have got their increase and the farmers of western Canada have the advantage of the $20 million provided in the resolution. That seems to be the whole story.
When the members of the C.C.F. speak either in the province of Saskatchewan or

Freight Rates
in this house I always feel that they only tell half the story and leave the other half untold. That is what prompted me to say a few words on behalf of the province of Alberta. I think that the member for Assiniboia, who leads his party in the house, should remember that when his friend Stanley Knowles brings about the marriage of the labour group with his group the farmers are going to take heed and will take into account that the increased freight rate costs were brought about by the demands of labour for more money. When that marriage comes about I am quite certain the C.C.F. will lose their influence in the rural communities of Saskatchewan as well as whatever influence they have in the province of Alberta.


Mr. Regier:: Mr. Chairman, I am very pleased to learn that the C.C.F. has influence in rural Alberta. That is the finest news I have heard in the house for some days. I assure the minister that I will not take my allotted time and will leave him enough time to reply, as I know he wishes to do. I wish to endorse the plea that a national transportation policy be established. We are being asked today to provide the railroads of Canada with an amount of $20 million. There are many Canadians who look a bit askance each time the parliament of Canada is asked for what amounts to a handout or subsidy to any one enterprise. Therefore when we are asked to vote $20 million to the railroads of Canada it causes us to consider the terms under which the subsidy will be paid.
I notice that the resolution contains one term, namely that the subsidy will be paid if there is a reduction in certain rates. All the speeches thus far have tended to deal only with the condition of rates. I can defend the policy of the government in handing to the railway companies a fixed sum of money if the railways are offering services to the Canadian public that are not in themselves of a profit-making nature, and I believe that is the main argument underlying the resolution. The people of the far eastern and western provinces are to be given some relief and the taxpayers generally are being asked to share with them the heavy burden of moving goods to and from central Canada.
I think that the resolution will receive the unanimous support of members of the house. However, I should like to see the terms imposed on the railroads take in a few other factors as well. I believe that all Canadians, so far as is reasonably possible, should have available to them the services of Canadian railways. What I have in mind at this time may involve something that would not mean
[Mr. Woolliams.l
a great net return to the railroad companies. However, in travelling to Toronto from western Ontario recently on the C.P.R. line I was rather impressed by something I observed. The train came to a stop and we were informed that we had arrived at West Toronto. Some miles beyond the train again came to a stop and we were told we had arrived at the suburb station of Parkdale. I looked out the window and saw the C.P.R. station. Then I looked out another window and saw the C.N.R. station. In other words, Parkdale a suburb of Toronto, has two railway stations. Several miles farther on the train finally arrived at the union station.
The point I want to make is that if the people of Canada are going to be asked to subsidize the railroads then as many of them as possible should be given service by the railroad. In metropolitan Toronto there is a reasonable number of railroad stations to serve the suburban areas and the same situation prevails in the suburbs of Montreal. However, hitherto the railroad companies have refused to extend the same service to the suburbs of other metropolitan areas of Canada. I fail to understand why, for example, the municipality of Burnaby from which I come, with a population of 100,000, should continually be denied the service of a railway station. Possibly one reason why the people of Burnaby do not use the railways more than they do is that they always have to go to the heart of the city of Vancouver if they want to do any business with the railways. If the people of Burnaby are going to be taxed in order to provide this subsidy, then I believe that the railway companies should give some consideration to providing our people with as many railway facilities as can be reasonably provided.
I have noted that we are being asked for a subsidy for the operation of railroads and I assume that most of the major railway companies in Canada will be involved. We have the Canadian National railways, Canadian Pacific railway, the Pacific Great Eastern railway, the Northern Alberta railway, and I do not know exactly how many other companies that are going to be involved in this subsidy.
If we are speaking of subsidies, then the people of British Columbia have a claim against the federal treasury. We hope that before the government goes too far in subsidizing the operations of railroads they will remember that they have not yet paid us the customary railroad building subsidy for the extension of the Pacific Great Eastern from Prince George into the Peace river block. If we are speaking of subsidies, let us put first things first, and let us pay off this obligation

which is owing to British Columbia for the building of that railroad extension.
One of the services that we expect the railroad companies to supply to the Canadian people, and for which we are willing to allow subsidies, is what we often call the unprofitable branch line services. We contend, and I think parliament has accepted over the years, that many areas of Canada must be served by railroads, whether or not such service means a net return to the company. It is for that purpose that in the past much money has been voted to the railroads by this house and likely will again in the years to come.
I am not making particular reference at this time to the fairly well populated sections of Alberta that are going to be asked to share in the cost of this subsidy. However, there is a section of Alberta in which the people have been waiting for the services of a railroad for 40 years or more. I regretted very much the other evening that the members from northern Alberta could not seem to make up their minds as to where the proposed new railroad ought to be built. I have no hesitation at all in advocating that this railroad be built up in a northwesterly direction to connect with the Pacific Great Eastern. This would supply much needed rail service to the thousands of people living in the farm communities north of Grimshaw, Alberta.
I do not want to become involved in the argument as to whether the extension should go from Pine Point to Grimshaw or Pine Point to Dawson. This is a matter for others to decide. However, if the farmers around Fort Vermilion, who will have to pay for this subsidy, had this railroad extension they would receive over 30 cents more for each bushel of wheat they had to sell. I do not see why the government should even contemplate the building of a railroad in a southeasterly direction, mostly over rock, when there is southwest of the Great Slave lake, old, settled communities that have waited for so very long for the fulfilment of an obligation assumed by those who encouraged them to settle there many years ago.
I know the minister is anxious to reply, and I have only one other non-profitable service to list. I am going to be very brief. I think all members of this committee would much more gladly allow this subsidy to be paid to the railroad companies of Canada if these companies gave a fair deal to the older, retired pensioners. In this connection, I would specifically refer to the Canadian Pacific railway which, since 1947, has allowed a 45 per cent increase in the pensions of those of its employees who worked and are retired in the United States. However, those
Freight Rates
who were retired prior to 1953, and who had worked and lived in Canada, have never received any increase at all. It is shameful that so many of these people have to eke out their last days on pensions of $35 and $40 a month.
I have attempted, Mr. Chairman, to list a few of the unprofitable operations that we would like to see the railroads of Canada undertake. If these services were undertaken, that would help to obtain the endorsement of the Canadian taxpayer for the intent of this resolution being implemented. The unprofitable services to which I referred were the suburban areas where newer metropolitan regions are not receiving the services they should be receiving; the retired pensioners of both major railroad companies who are not getting the deal they should, and certainly the people in northwestern Alberta should be told at this time that they are going to be given the blessing of railway service in the not too far distant future.


Mr. Batten:: I know the minister is anxious to reply, so I shall not take up very much time in making my few remarks. Earlier in this session, I did make some remarks concerning freight rates in my own province of Newfoundland. Once again I want to indicate our interest in this subject during the discussion of this particular resolution. I think the Canadian people have to face the fact that we do have a problem so far as rail transportation is concerned. We not only have the problem of providing efficient rail service for the Canadian people, but also we have the problem of paying the cost and equating the one to the other.
Over the past few years we have had a number of rather substantial freight rate increases. When these increases are applied horizontally across the board, I think it is easy to understand that those provinces which are to the west and to the east are likely to bear the bigger burden. In my province of Newfoundland, of course, the matter of freight rates is of particular interest. Our main line across the island is operated by the Canadian National and carries a large percentage of the freight which travels from east to west or west to east. Then, too, we have some 1,300 communities situated around the coast of Newfoundland which are serviced by the Canadian National boats, in the main. The result is that any increase in freight rates affects not only those people in Newfoundland who are served by the Canadian National trains but also those who are served by the C.N.R. boats.
If I may digress here for a moment, I should like to say that during the last three or four months we have been fortunate in having the services of the William Carson on the Port

Freight Rates
aux Basques-North Sydney line. I should like to tell the minister now that, in my view, this operation has been comparatively satisfactory even in one of the worst winters we have had for many years. During the years that I have been a member of the House of Commons I have always received a good deal of correspondence during the early part of December and the latter part of February concerning the backlog of freight for Newfoundland that has piled up at North Sydney. Since the William Carson went into service last October, I have not had one letter concerning freight that has not reached Newfoundland at the proper time. I believe that the William Carson, even during this very hard winter, has given satisfactory service. Later on in the year, when the regular routine is observed again, the William Carson will give us good service not only in so far as freight is concerned but also in the transportation of passengers and this will build up our tourist trade.
I do feel that there are many questions in connection with this proposal which need to be answered. I should like to know particularly how this particular subsidy is going to be applied. What will be the formula and how will it affect those provinces which are west of central Canada as well as those which are east of central Canada, particularly my own province which is the farthest east. However, while I do support this resolution, I am going to withhold my questions until the minister presents his bill and we have a better opportunity of understanding what his intentions are in this regard.


George Harris Hees: When the hon. member for Laurier was speaking, he asked three questions that I should like to answer now. First of all he asked how the formula will be applied. Before I say anything on that matter I should like to tell him and the other members of the committee that this plan for alleviating the burden of freight rates, as we are doing, was not worked out in a casual manner whatsoever. A great deal of time and thought were put on it. It is an extremely difficult problem. It was worked on during many meetings by a committee composed of cabinet ministers and officials.
The plan which has been arrived at has the full concurrence of and was worked out by the chief commissioner of the board of transport commissioners and his experts. I have great pleasure in assuring the hon. member for Laurier that I have been assured and the committee was assured that this is a workable plan. Also one of the reasons for referring this bill to the standing committee on railways, canals and telegraph lines is this. If there are technical questions having to do with freight rates and their operation,

that committee will afford to all hon. members an ideal opportunity to question officials on the more technical aspects of this bill and how it will operate. However, I think I can generally answer the questions put to me by the hon. member for Laurier by going back over a few of the things I said in my opening statement. With regard to how this formula will be applied, which was the question asked by the hon. member, 1 said this as reported at page 2207 of Hansard:
As an interim measure designed to alleviate the burden of the authorized increase in rates, the proposed legislation provides for a subsidy of $20 million over a 12-month period, to be paid to the companies that are subject to the board's order No. 96300 as reimbursement for such reductions in rates as they may be directed to make pursuant to this legislation. The companies that are subject to order No. 96300, and thereby come within the scope of this legislation, are principally the Canadian National Railways, the Canadian Pacific Railway Company and its leased lines, and a number of smaller railway companies which are member lines of the railway association of Canada; and the water carriers who participate in joint water-rail, and rail-water-rail routes, that is the Canada Steamship Lines, Northwest Steamship Company and Canadian Pacific Great Lakes Steamships-
The legislation provides that the board shall require the companies to reduce their class and commodity rates by such amounts as to effect a reduction in their revenues obtained from this traffic by $20 million during a 12-month period. The exact reduction in rates which will thereby result is a matter which will depend upon traffic volume and not one which the government, by legislation, could fix in advance. I may say, however, that on the basis of the present volume and pattern of traffic it has been estimated that the application of the $20 million subsidy on the basis which I have outlined will permit a reduction of some seven percentage points, thereby making the authorized increase approximately 10 per cent in lieu of 17 per cent.
That is the general pattern of how the reduction will be made. As far as the technical details are concerned, the chief commissioner of the board of transport commissioners has assured me that there will be no problem arising there, and that it could be done with relative ease. If there are other technical questions which the hon. member for Laurier would like to ask with regard to how this will be done, I would suggest that those questions will most easily be answered when the committee meets.


Lionel Chevrier: May I interrupt the minister at this point?


George Harris Hees: Yes.


Lionel Chevrier: The minister said that the reduction would be in the neighbourhood of seven per cent. My question then is this. Will the 17 per cent increase in freight rates be reduced en bloc by seven per cent by the board of transport commissioners?


George Harris Hees: This reduction will apply only to non-competitive class and commodity rates.


Lionel Chevrier: To the extent of seven per cent?


George Harris Hees: To the extent of seven per cent; yes.


Lionel Chevrier: May I ask the minister another question.


George Harris Hees: I should not like to say exactly seven per cent. As I outlined earlier, it will be something in the neighbourhood of seven per cent.


Lionel Chevrier: I am not holding the minister to that answer because I know the matter is a technical one. I also know that it is going to be a little bit more difficult than the minister anticipates, but I do not want to discuss that matter now. The other question I wanted to ask is this. The minister indicated that the board was requiring the companies to reduce their rates. He read from the statement he had made originally. What I should like to know is this. How is the board going to direct the companies to do this? There must be a formula of some kind.


George Harris Hees: The chief commissioner of the board of transport commissioners assured the committee that this would be feasible, that he saw no problem whatsoever. I cannot answer further than that, not being a rate expert myself. However, I am sure that the questions of the hon. member for Laurier will be answered by the chief commissioner when the committee meets; and I hope it will meet soon after the Easter recess.
The second question the hon. member for Laurier asked was to what will this reduction apply? Again I should like to refer to what I said in my opening statement as follows:
The government has decided that the most effective relief is to be afforded by confining the subsidy to a reduction in the non-competitive class and commodity rates, including the joint rail-water rates which are differentially related to the rail rates. These rates are generally known as "normal" rates, and are the ones which have taken the full percentage increases authorized by the board over many years.
This manner of alleviation concentrates the benefits on the long haul traffic where rates have not been kept down by competition. The subsidy will not apply toward a reduction in the other rate categories which I have referred to, whether or not they were authorized to be increased under the board's order.
The third question was this. What will happen at the end of the year? Again I should like to refer to my statement in which I said as follows:
As hon. members know, the government has indicated its intention of proceeding with a comprehensive inquiry into matters affecting the railways. The proposed legislation therefore limits the assistance to a 12-month period, when it is hoped
Freight Rates
a report will be available to the government. Consideration will then be given to means of further relieving the unfair discriminatory burden of the freight rate structure ... In the meantime the government does not propose to permit any further general increases in railway freight rates.
I think that is the fullest answer I can give.


Lionel Chevrier: If I may, I should like to follow that matter up with one or two questions. Suppose the inquiry to which the minister has referred-the over-all survey that is to be made of the freight rate structure-lasts for more than a year or more than 12 months. What will happen in that eventuality?


George Harris Hees: That is a problem which we shall have to face in the months ahead. That will be the responsibility of the government. I can assure the hon. member for Laurier that we accept that responsibility.


Lionel Chevrier: That is not a very satisfactory answer. I am not pressing unduly but I think the experience of the house is that if this is the kind of survey or inquiry which the minister and the acting minister indicated it would be, it cannot be finished in 12 months. I therefore think the house is entitled to know what happens.


George Harris Hees: Mr. Chairman, as I indicated, we hope to have a report by that time. If we do not have a report by that time, then it will be up to the government to decide what course of action it will take. When the freight rate increase went into effect last December we had a number of cabinet meetings and we decided what course of action we would take. We decided that we would take the action outlined in this bill, and as we stated at that time there would be a further long term study made. That is the decision which the cabinet made late last November or December. After the passage of perhaps eight, nine or ten months, as it becomes more apparent what progress the long term inquiry will be making, then the government will have to consider the matter again, and in the light of what has taken place we will make further decisions. Those decisions are our responsibility, and as I told the hon. member we will not shirk that responsibility and I feel sure the government will take the right action.


Lionel Chevrier: The minister said that the reduction would be in the neighbourhood of further applications to the board. There is now one pending in the amount of 15 per cent, if I am correct. If that matter were disposed of before the 12-month period, what would the position be?


George Harris Hees: Mr. Chairman, this bill deals with the next 12 months, and the matter the

Freight Rates
hon. member has brought up will be considered and dealt with, just as I stated a few moments ago, after probably eight, nine or ten months have passed and we see what has happened in the meantime and what the circumstances are then. In light of the circumstances existing at that time we will decide once again for the future.


Lionel Chevrier: I hope the hon. minister will not think I am being a nuisance-


George Harris Hees: Not at all.


Lionel Chevrier: -but I would like to get a little more clarification. An application before the board normally does not last 12 months but is disposed of as a rule, in my experience, before that time. Say the application were disposed of in three months from now, what would the position of the government then be on an application which was allowed, say, for a portion of the 15 per cent?


George Harris Hees: Mr. Chairman, I think that is a hypothetical question. I will again remind the hon. member of what I have said regarding this. The proposed legislation limits the assistance to a 12-month period. At the end of the statement I made last night I said that in the meantime the government does not propose to permit any further general increases in railway freight rates. I cannot make that any clearer.


Lionel Chevrier: Will the hon. minister elaborate a bit on what the nature of this proposed long term investigation will be? If I may ask, will it be a royal commission or will it be an investigation? Can the minister give some indication of what its terms of reference will be?


George Harris Hees: As I indicated last night, Mr. Chairman, all of that will be dealt with very fully by the Prime Minister in the near future.


Lionel Chevrier: Can the hon. minister give any indication of when the Prime Minister will make his statement?


George Harris Hees: No, Mr. Chairman, I cannot.


Harold Edward Winch: Mr. Chairman, there has been some confusion about this matter and I would like to ask the hon. minister if he would give a clearer explanation of the position of an individual province under the terms of the resolution which is now before us. I have in mind, of course, my own province of British Columbia. As the hon. minister knows, over the years now British Columbia has had to spend hundreds of thousands of dollars in research and in presentations before the board because of the position of that province in relation to the freight rate situation. I am sorry, but I am not yet clear what will be

the position of British Columbia as far as the present proposition is concerned. Quite honestly, I do not think it will help us any in British Columbia, and I would like to hear from the hon. minister what the position of British Columbia is in relation to the present situation. Also, in this plan of investigation and inquiry, what is the situation as far as representation is concerned by a province from a short range and a long range point of view? But my main question is, what will be the position of British Columbia under the present plan?


George Harris Hees: Mr. Chairman, there is no differentiation in this bill between one province and another. This deals with non-competitive class and commodity rates on freight hauls in no matter which province they happen to be. I cannot tell the hon. member exactly what percentage of the $20 million will go to British Columbia or any other province. Naturally it is impossible for me to tell him that. As far as British Columbia is concerned, British Columbia will be treated equally fairly with all other provinces. There is no inclination to discriminate against any province. This act, as I said in my original statement, is to help those who pay freight rates on the long haul, because they are the ones who suffer most. It is our intention to alleviate the burden of those who suffer most by these freight rates.


Harold Edward Winch: As far as British Columbia is concerned, I say that the freight rates in British Columbia make that province suffer the most. I remember-


George Harris Hees: Could I say this, Mr. Chairman? If British Columbia is suffering the most, then British Columbia will get the most.


Harold Edward Winch: I will be very happy to accept what the minister has said, if he would just explain how British Columbia will benefit most under the proposition now before us. I remember very well only a few years ago a former member sitting on the same side of the house, a Liberal, by the name of McGeer, put up a fight on behalf of freight rates as far as British Columbia was concerned. He was the first man who found out that on rail travel from Calgary to Vancouver it was downhill. There was then a change of freight rates. But British Columbia is in a spot. That province spends more money, and it always has, on trying to work out a decent-the Minister of Transport has asked me to call it six o'clock.


George Harris Hees: No, Mr. Chairman, I have not. 1 was trying to ask in an informal way, it being close to six o'clock if the hon. member

would not let me get the resolution through? If he does not wish me to, then it will go over.


Harold Edward Winch: Mr. Chairman, freight rates are important to British Columbia. May I call it six o'clock.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: Mr. Speaker, may I have some indication from the hon. member who is leading the house as to what the business will be on Monday, April 6, when we reconvene? I hope the minister will be in a position to give us as much of the business for the succeeding days as possible.


Gordon Minto Churchill: Mr. Speaker, when the house reassembles on Monday, April 6, it will be
Business of the House
engaged in private members' bills. On Tuesday, April 7, we will proceed with the resolution standing in the name of the Minister of Transport. The second item of business will be second reading of the act to amend the Canada Shipping Act also standing in the name of the Minister of Transport. The third item will be the resolution standing in the name of the Minister of Finance dealing with amendments to the Federal-Provincial Tax-Sharing Arrangements Act. That is as far as we can forecast the business of the house. I regret I cannot inform the hon. member with regard to the following days.


[Stage Direction]
It being three minutes after six o'clock the house adjourned, without question put, until Monday, April 6, 1959, pursuant to the order of the house passed on March 9, 1959.
66968-9-142
[Stage Direction]
Questions