1959-06-04

THE MINISTRY


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I wish to inform the house of a change in the ministry, in that the hon. member for Vancouver Quadra was sworn in this morning before His Excellency the Governor General as Secretary of State for External Affairs.


Some hon. Members:: Hear, hear.


John George Diefenbaker: I might add, Mr. Speaker, that seldom when I rise does there seem to be this degree of unanimity in the response. I must express my own thanks for the manner in which the house has received the announcement.
I might add something more. I know hon. members in the opposition particularly would not want to be denied the opportunity of questioning the new minister when the public works estimates are before the committee, and until the conclusion of those estimates he will also continue to discharge his responsibilities as Minister of Public Works. I think I should add as well that until the end of this session, in any event, he will remain in his position as house leader.
I say no more than that. I simply wanted to place before the house this change. I merely add in the simplest words, and I know I speak for the members of this house and the people of Canada as a whole, my hope that in the discharge of this new field of responsibilities his achievements of the past will be maintained in the future.


Hon. L. B. Pearson (Leader of fhe Opposition):: Mr. Speaker, my first reaction on hearing this news is the feeling that in due course, because of the heavy responsibilities of his new post as Secretary of State for External Affairs, as well as Minister of Public Works, he will probably have to give up the house leadership.
I want to assure him that if and when that happens we shall miss his kindly advice and his engaging admonitions. He will no doubt reserve them for international assemblies in the future.
We on this side of the house wish him well in a post which, I know from some
experience, is as exacting as it is rewarding. There can, I think, be no greater privilege and perhaps no greater responsibility for a Canadian than that of speaking for his country in the councils of the world and to have what I might call a primary responsibility, under the Prime Minister, for shaping foreign policies at a time when everything we hope for-our destiny, our very existence-depends on the success of those policies in maintaining peace and strengthening security.
The minister, who has the regard, the esteem and perhaps I can say the affection of every member of this house, can be assured of our good will and our good wishes in his new work. He can also, I think, expect to receive-and I am speaking now for the official opposition-our support in every strong and forward-looking Canadian move that he may initiate to keep our country's position high and respected in the world and in pursuing the objectives that we all share, whatever the party to which we may belong, namely good relations among all peoples in a world of peace and freedom.


Mr. H. W. Herridge (Kooienay West):: Mr. Speaker, on behalf of this group and on behalf of the people of British Columbia, as the hon. member for Kootenay West and as the honorary president of the 54th Kootenay battalion association, and as a former comrade in arms-something of which I am always proud-I extend sincere and warm congratulations to the minister on his appointment as Secretary of State for External Affairs.
While all members of this house wish him well and every success with his new responsibilities, the people of Kootenay West, regardless of party, will derive a particular satisfaction and pleasure from his appointment to this high office. The residents of his home town of Kaslo, where he was born, will be proud of this further distinction bestowed on a native son. His old comrades in the 54th Kootenay battalion will rejoice in his opportunity to serve in the front line of international affairs.
Mr. Speaker, the minister faces heavy responsibilities and tremendous issues and problems-and he has our good will in that respect-which include consideration of the abandonment of nuclear tests; proposals for progressive disarmament as the result of negotiation and agreement; the churning problems of the Middle East and the Far East. Those problems will tax his patience and

Ministerial Appointment his ability to the limit. In facing those problems the C.C.F. believe that Canada can best play a positive role and exercise a positive influence for peace by pursuing an independent but co-operative policy in international affairs.
This appointment provides the minister with an opportunity to paint some large brush strokes on the canvas of Canadian history to complement the many finer lines he has drawn during his long service as a member of this house and a member of this government. We sincerely hope, Mr. Speaker, that from this appointment, this opportunity and the essence of the minister's recognized ability and trustworthiness will be distilled solid achievements toward the building of world peace.


Hon. Howard C. Green (Secretary of Stale for External Affairs):: Mr. Speaker, as one who has been in the political wars for nearly a quarter of a century I am really deeply touched and find it almost impossible to express my feelings. I am moved by the kind words spoken this afternoon, first by my old friend the right hon. Prime Minister. We have stood side by side in many a hectic debate in this house since 1940, 19 years ago, and for one very happy term we shared a desk. I believe it was the one now occupied by the hon. member for Bonavista-Twillingate (Mr. Pickersgill) and the hon. member for Kenora-Rainy River (Mr. Benidickson).


Mr. Benidickson:: The wheels will turn, and they will turn again.


Howard Charles Green: Mr. Speaker, I am beginning to think there is something wrong with that desk, because it seems to house troublemakers now just as it did before; or perhaps I should have said "keen critics".
The words of the Prime Minister today will, I am sure, make hon. members realize what an inspiration it is to serve under him in the cabinet. These have been two very happy years, largely because of his inspired leadership.
The Leader of the Opposition, we all agree -though we do not always like to admit it-[DOT] is one of Canada's great statesmen.


Some hon. Members:: Hear, hear.


Howard Charles Green: He is a Canadian who has made a great contribution in world affairs, and I am particularly grateful for the words of encouragement he has given me today after all his years of service in the Department of External Affairs. He has that happy personality and friendly way which have done so much to make this parliament a friendly parliament, the friendliest parliament in which I have had the privilege of serving.


Some hon. Members:: Oh, oh.


Howard Charles Green: Mr. Speaker, that was intended to be serious. As for the hon. member for Kootenay West (Mr. Herridge), I am very touched by his remarks. As he has said, we were comrades in the 54th Kootenay battalion in the first war. About 44 years ago we enlisted in the city of Nelson in the same company, and from those days on there has been a great friendship between us. When he spoke today I think he spoke with a little bias in my favour. However, I shall pay great heed to the sage words he has uttered this afternoon.
I am also very grateful for the response given by the other members of this House of Commons. Sometimes I think we do not fully appreciate the great strength, for our nation, of parliament. It has become a commonplace in a way, and we do not always realize how vitally important it is in the life of a democratic nation. Last night I was thinking of some of the days in parliament since I have been here. About 19 years ago there was a terribly black day when France was falling and Hon. Norman Rogers was killed in an aeroplane crash. Because of that crash Canada lost one of her most promising public men. Everything was black; I have never known such a black day in my life. Yet there was no one in this house or in the Senate who spoke of surrender or defeat. The sitting was postponed for an hour because of the tragedy of Norman Rogers' death, but on that occasion, as on so many other occasions during the war, this house faced the terrible problems of the time and, I think, was a splendid example of what parliament should be.
I should like hon. members to feel that in this new post I shall always look to the house for help and guidance. After all, we have here a gathering of the representatives of Canadians from coast to coast, a great body of representatives who come to this assembly, and moving together I believe we can solve any problem which faces the nation. In these words I should like to include the members of the Senate-I know Your Honour will overlook it if I do not refer to them as members of the other place. They too have made a splendid contribution, and their old friends in the commons have often taken this little walk down to the other end of the building to visit them. In that body there is a wealth of experience and a wealth of common sense. I know that any secretary of state for external affairs will receive help from the members of the Canadian Senate.
It is rather thrilling to be in a position to represent one's nation, . particularly when

that nation happens to be Canada. Those hon. members who served in the first world war will remember the magic of those six letters "Canada" on their shoulder straps, and I am sure there was the same pride in the minds of young Canadians who carried those letters in the second world war. It will be a wonderful thing to be in a position to speak for Canada; but as the Leader of the Opposition and the hon. member for Kootenay West pointed out, in these days it is not sufficient to have great pride in one's nation. We all realize that world events have moved so far in recent years that now the main thing is co-operation among all the nations of the world.
In this new post it will be my endeavour to keep that in mind at all times and to do my part to see to it that Canada maintains the high position in which she has been placed by my predecessors in this office.
I would not like to close without a word about my predecessor, Hon. Sidney Smith. Only those of us who sat with him in cabinet meetings could fully appreciate the sterling character of the man, a great individual. He came here from the presidency of the largest university in Canada with a record of achievement in the university field which I do not think has been excelled at any time in our country, and took on this portfolio. I am convinced that he accepted the portfolio in the belief that he should at least do his part to further the cause of peace in the world. While he was not privileged to carry on for a great length of time I know we will all agree that he did maintain the traditions of that post, that he set a very high standard, and that his service here was not in vain. In the days ahead I shall be trying to keep on the trail which has been blazed by Hon. Sidney Smith. I thank the hon. members very much.



TRANSPORT


John George Diefenbaker: Mr. Speaker, I wish now to reply to a question asked by the hon. member for Mackenzie River and in conjunction with the reply to make an announcement. The hon. gentleman asked me a question with regard to a statement made by the Minister of Northern Affairs and National Resources in an article respecting, as it is stated in the article-
-the federal government's decision that a railway connection is to be extended to the south shore of Great Slave lake.
I would point out that in so far as that announcement was concerned there was nothing 66968-9-274
Transport
unusual in it, in that it had been specifically dealt with in the speech from the throne in 1958. With the leave of the house I should like to refer to one sentence in that speech from the throne preparatory to the statement I wish to make. The speech from the throne is recorded at page 5 of Hansard of May 12, 1958. These words were included in those uttered by His Excellency the Governor General:
In order to promote our national development on the frontier in the north you will be asked to authorize the construction of a railway to Great Slave lake. My ministers regard this as a major step in the establishment of productive industry on an economic basis in the Northwest Territories.
Since that date the fullest consideration has been given to this question and a number of suggestions have been made as to alternative routes. There have been two major suggestions and I understand eight other alternatives. The proponents of each of these several projected routes have advanced their arguments in support of the particular venture or project which they have in mind.
With a view to hearing the representations that have been and can be made, and reviewing them, the governor in council has set up an inquiry under part I of the Inquiries Act to deal with the alternative routes for a railway line from northern Alberta to Great Slave lake. I ask leave to table copies of the order in council, the material section of which sets out the powers in question:
-to inquire into and report upon the respective merits of the alternative routes which might be followed by a railway line to be built from northern Alberta into the southern portion of the district of Mackenzie, Northwest Territories, for the purpose of providing access to and contributing to the development of that portion of the territories tributary to Great Slave lake.
The commission in question will consist of three men, Mr. Marshall Manning, Q.C., of Edmonton, Mr. W. D. Gainer, an agricultural economist from the University of Alberta in Edmonton, and Mr. John Anderson-Thompson of Yellowknife, Mr. Manning being the chairman of the inquiry. I hope this group will be able to start a full inquiry very shortly, and will be able to report at as early a date as is convenient and possible.


Mr. M. A. Hardie (Mackenzie River):: Mr. Speaker, I am sure that upon hearing this announcement the people of the Mackenzie River district will be very sad indeed, when they consider that during the last election campaign there was no talk of which route would be followed. The route was chosen. I am sure this is another means of stalling the building of the railway, and I am certain that the people of Mackenzie district will look upon it in that way.

Proposed Legislation


Mr. Speaker:: Has the Prime Minister leave to table the order in council?


Some hon. Members:: Agreed.



PUBLIC SERVICE


John George Diefenbaker: Mr. Speaker, while not announcing the appointment as of this date I wish to advise that the government has decided to appoint as chairman of the civil service commission Hon. Samuel Harvey Shirecliffe Hughes, now a justice of the high court of justice in the province of Ontario, the appointment to become effective on the termination of the present legal term on June 30. At that time his resignation will become effective and the appointment as chairman will begin on the next day.
Mr. Justice Hughes received his early education at Stoke Clark preparatory school, Guildford, England, and Stowe school, Buckingham, England. In Canada he attended Upper Canada College and the University of Toronto. He then attended Oxford, receiving his master of arts degree and became a Queen's counsel in 1955. In the same year, following a successful law practice, he was appointed chairman of the Ontario highway transport board, a position he held until his appointment as a justice in June of 1958. Mr. Justice Hughes, as I said a moment ago, will continue his services as a justice to the end of the term, when his resignation will become effective, and he will then be in a position to take over this high and responsible post.



INCOME TAX


Hon. Donald M. Fleming (Minister of Finance) moved: for leave to introduce Bill No. C-54, to implement a convention between Canada and the Republic of Finland for the avoidance of double taxation with respect to income tax.
Motion agreed to and bill read the first time.



PUBLIC SERVICE


Donald Methuen Fleming: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That It is expedient to introduce a measure respecting the adjustment of certain public service

pensions to provide for increases, on a continuing basis, in certain pensions being paid to former civil servants, members of the armed forces, members of the Royal Canadian Mounted Police or their dependents; and to provide that the said increases shall be paid out of the consolidated revenue fund.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: Mr. Speaker, I should like to direct a question to the new and distinguished Secretary of State for External Affairs arising out of a newspaper report in the Montreal Star of May 30, in which it is stated that permission has been granted by the United States treasury department for the passage through the St. Lawrence seaway of the Soviet freighter Ivan Moskvin, bound for Sarnia, Ontario, to pick up a cargo of carbon black, and that the Canadian and Soviet embassies have been informed of this decision. Would the minister care to comment on this report? Can he assure the house that the passage through the St. Lawrence seaway of a foreign vessel bound for a Canadian port will not depend upon any decision of the United States government?


Howard Charles Green: Mr. Speaker, I thank the hon. member for having given me written notice of this question. I have seen the report in the Montreal Star to which the question refers, and it is not entirely accurate. My understanding of the situation is that Soviet representatives asked the United States authorities whether a Soviet vessel would be allowed to use the United States locks in the St. Lawrence seaway. In due course they were told that if an application were made to the seaway administration for the use of the United States facilities by this particular vessel, there would be no objection. The hon. member will, I am sure, appreciate that neither Canada nor the United States has treaty obligations with respect to shipping and commercial arrangements with the Soviet union.
It is, of course, correct that United States permission is required for any vessel to pass through United States waters and facilities, just as Canadian permission is required for any vessel to pass through Canadian waters and facilities.
I would prefer, Mr. Speaker, not to comment on this matter further at the present time.

Inquiries of the Ministry



FINANCE


[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: Mr. Speaker, can the Minister of Finance inform the house as to the percentage of the issue of one year treasury bills, which the minister announced in this house on Tuesday evening had been heavily oversubscribed, has been tendered for by the Bank of Canada and allotted to that bank?


Donald Methuen Fleming: Mr. Speaker, it has never been the practice to disclose the purchases by the Bank of Canada or by any other subscriber to any federal obligations of any kind.


Hédard-J. Robichaud: Is it correct to say that $50 million or over 25 per cent of the $200 million has been allotted to that bank?


Donald Methuen Fleming: The same answer, Mr. Speaker.



INQUIRIES FOR RETURNS


[Stage Direction]
On the orders of the day:
Hon. Paul Hellyer (Trinity):: Is the Minister of Citizenship and Immigration now in a position to table the contract with Dimensional Investments Limited respecting the Chippewa Indian reserve?


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: I shall look
into the matter. I have not yet acquired the information.


Paul Theodore Hellyer: Can the minister tell the house why it is taking so long to duplicate a single contract, something which could be done by anyone in half an hour?



FEDERAL CONTRIBUTIONS TO PROVINCES- CONDITIONAL PAYMENTS

[Stage Direction]
On the orders of the day:
Mr. Azellus Denis (St. Denis):: I should like to direct a question to the Secretary of State. A few weeks ago he made one of my questions an order for return. May I inquire of the Secretary of State if I am going to get a return this year?
(Translation):


Hon. Henri Couriemanche (Secretary of Slate):: Mr. Speaker, I have so many requests on matters of all kinds that if the hon. member would at least give me the number of his question, I might be in a position to make the necessary inquiry.


Azellus Denis: It is question No. 398, Mr. Speaker.
66908-9-2741
(Text):



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Paul Theodore Hellyer: I should like to direct another question to the Minister of Citizenship and Immigration. Did the minister receive an application from Ontario hydro for permission from the governor in council to institute expropriation proceedings on the Chippewa Indian reserve at Sarnia?


Ellen Louks Fairclough: No, Mr. Speaker.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. G. J. Mcllraith (Ottawa West):: should like to direct a question to the Minister of Trade and Commerce concerning the business of the house, and arising out of the announced intention of the government to bring forward a bill to amend the export credits insurance legislation. The minister will recall that under section 21 of that act provision is made for the tabling in the house of the orders in council required to be passed in connection with a certain class of insurance contract.
According to sessional paper No. 122N of February 17, 1959, there were two such orders in council passed concerning the sale of grain to Israel and to Poland. So far as I am able to ascertain these orders in council have not been tabled; I can And no record of them. Would the minister see that these orders in council are tabled, and any other orders in council that the act may require to be tabled, before the legislation comes forward for consideration in the house?


Hon. Gordon Churchill (Minister of Trade and Commerce):: Yes, Mr. Speaker, the matter will be looked into immediately.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. Augustin Brassard (Lapointe):: I have
a non-political question which calls for a non-political answer from the Minister of Agriculture. I must apologize for not having given him notice of my intention to ask this question. I should like to ask my question in French, so I wonder if he would use his hearing aid.
4318	HOUSE OF
Inquiries of the Ministry (Translation):
Mr. Speaker, in view of the representations made to the minister by the Catholic Farmers' Union of the Saguenay-Lake St. John area concerning the substantial losses incurred by the producers of that area; in view of the minister's statement about the support prices paid on cheese f.o.b. Montreal, and in view of the fact that in Ontario support prices on cheese are paid at the receiving centre for those products, would the minister consider-and I ask him with due respect- looking into the possibility of granting to producers in the Saguenay-Lake St. John area the same privileges as are granted to Ontario producers?
(Text):


Hon. D. S. Harkness (Minister of Agriculture):: Mr. Speaker, I think you and the hon. members realize that all my answers are agricultural and not political. I do not believe the phrasing of the first part of this question falls within that category. There have been no enormous losses, as mentioned by the hon. member, suffered by the cheese producers in any area in Canada as a result of the recent changes in the stabilization program. On the contrary, the cheese producers are getting nearly a cent a pound more than they were getting before. In other words they have gained rather than lost as a result of the changes which were made effective May 1 of this year.
So far as the price paid for cheese in Ontario and in Quebec is concerned, traditionally there has been a difference of half a cent a pound, and that difference remains. It has existed for many, many years. The price paid is at warehouses in both cases and not, as I believe the hon. member stated or implied, at different types of establishments.


Herbert Wilfred Herridge: May
I ask a supplementary question. Would the minister admit that on some occasions his answers are somewhat floricultural?


Douglas Scott Harkness: The hon. member knows much more than I do about floriculture and horticulture, so I shall leave him to make his own deduction.


Augustin Brassard: May I ask a
supplementary question of the Minister of Agriculture. In view of the fact that he agrees that the producers in my region are losing half a cent a pound, I wonder if he would at least assure me that he will have the matter investigated and give a report in due course.


Douglas Scott Harkness: I did not agree that the
producers in the area are losing half a cent a pound. As I indicated, they are getting about 8/10 of a cent more per pound now
[Mr. Brassard (Lapointe).J

than they were last year. This differential of half a cent a pound has existed traditionally for many years and results from what the people are willing to pay in the market for cheese in these various areas.



RESEARCH


[Stage Direction]
On the orders of the day:
Mervyn Arthur Hardie: I
should like to direct a question to the minister of northern affairs in regard to an article appearing in today's Ottawa Journal to the effect that it is the intention of his department to send groups to study research in northern Russia and to have a Russian team visit the Canadian Arctic. I wonder if the minister could tell the house if this Russian team will get permission to do this from his department or from the United States government?


Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: I think the
hon. member has been in the house long enough to know the answer.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Paul Theodore Hellyer: Will the Minister of National Defence comment on a Washington dispatch to the effect that the cut in the appropriation for the Bomarc program was in the appropriation for the Bomarc "B" ground to air missile?


Mr. Speaker:: I take it the hon. member is referring to appropriations of the United States congress?


Paul Theodore Hellyer: That is correct.


Mr. Speaker:: That scarcely seems to be a matter under the jurisdiction of the Minister of National Defence.
ILater:!


Paul Theodore Hellyer: Mr. Speaker, I should like to direct a question to the Minister of National Defence. Has the minister in mind a satisfactory alternative to the Bomarc missile in case that missile should, under any circumstances, not become available?
Hon. G. R. Pearkes (Minister of National
Defence): Mr. Speaker, the Minister of National Defence has many alternative plans in his mind to meet the various changing situations that may develop.


INQUIRY AS TO FRENCH EDITION OF "TRADE AND commerce"
On the orders of the day:


Mr. Alexis Caron (Hull):: Mr. Speaker, last Monday, June 1, I asked the Minister of Trade and Commerce if he could give me a reason why Commerce Exterieur is not an exact translation of Trade and Commerce, and why it is published monthly when the other one is published bimonthly?


Gordon Minto Churchill: Mr. Speaker, Foreign Trade and its French language counterpart, Commerce Exterieur, is a publication of the Department of Trade and Commerce devoted almost exclusively to the promotion of Canadian export trade. The circulation of Commerce Exterieur has always been small, despite repeated efforts to increase it with the co-operation of the chambres de commerce in the province of Quebec and the Quebec department of trade and commerce. The paid circulation during the fiscal year 1958-59 was 183 subscriptions. On this basis, with printing costs amounting to nearly $10,000, average cost per subscriber was just over $54 per year.
In the light of these circumstances the department came to the conclusion that it was not justified in producing Commerce Exterieur as frequently as the English language counterpart. Therefore in February 1954-and I ask hon. members to note the date-when Foreign Trade was changed from weekly to once every two weeks, the publication of Commerce Exterieur was altered to once a month. Its content differs from that of Foreign Trade only in that certain material of secondary importance is omitted.


Alexis Pierre Caron: I have a supplementary question. Why is it that the subscription price is the same for both?


Gordon Minto Churchill: Mr. Speaker, I will have to investigate that matter and find out the answer.



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Hédard-J. Robichaud: I wish to direct a question to the Minister of Northern Affairs and National Resources. Is the minister aware that a European film company is producing a film in the Canadian Arctic? If so, will the minister tell us whether this company received permission to go to the Arctic from his department or from United States authorities.
Dominion-Provincial Relations


Francis Alvin George Hamilton: Mr. Speaker, I will take this question as notice and give it all the attention it deserves.



PUBLIC BUILDINGS


[Stage Direction]
On the orders of the day:
Howard Charles Green: Mr. Speaker, yesterday the hon. member for Vancouver East (Mr. Winch) asked whether the old Free Press building was being demolished to make way for a parking area for the Bank of Canada.
My answer is that the property in question is owned by the Bank of Canada and does not come under the jurisdiction of the Department of Public Works.



FEDERAL-PROVINCIAL TAX-SHARING ARRANGEMENTS ACT FURTHER EXTENSION OF INCOME TAX RATE

[Stage Direction]
The house resumed from Wednesday, June 3, consideration of the motion of Mr. Fleming (Eglinton) for the second reading of Bill No. C-41, to amend the Federal-Provincial Tax-Sharing Arrangements Act.
Donald Methuen Fleming: Mr. Speaker, no one can suggest that the subject of dominion-provincial fiscal relations has not received plenty of debate in the course of the present session. On February 9 and 10 the house debated an opposition amendment to a supply motion on this subject. On March 11 I introduced the resolution preceding the present measure. It was debated that day and again on April 30, when the present bill was given first reading. The debate on second reading was continued on May 6, June 2, 3 and 4. The result of this protracted debate over a quite simple and clear measure has been that since March 31 the provinces, which are anxiously waiting to receive the benefit of the present measure, have been deprived of the benefit of the increased payments which it would provide.
It is perhaps not amiss at this point in the debate to recall what is the principle of this measure. It is to provide an increase in the payments out of the federal treasury to the provinces. It is to provide a division of the yield from the standard taxes which will be more generous to the provinces. Notwithstanding our own federal budget problems we believe, and show in this measure that we believe, more generous provision should be made for the provinces than was made under the Liberal regime that preceded us. We said so during the debate on the

Dominion-Provincial Relations Federal-Provincial Tax-Sharing Arrangements Act in the session of 1956. In proceeding as we are in this present measure we are carrying into statutory fulfilment the statements we made at that time.


Mr. Chevrier:: Will the minister allow a question?


Donald Methuen Fleming: I am afraid, Mr. Speaker, that I shall be obliged to ask the hon. member to defer his question. I am working under a time limit. There will be a committee stage after this debate is concluded, and I shall be glad to deal with the question then.
When we came into office in 1957 we found nine agreements entered into between the dominion and the provinces in pursuance of this legislation. However unsatisfactory that legislation may have been, however unwillingly many of these provinces entered into those agreements, nevertheless those agreements were a fact and there could be no suggestion of any repudiation thereof. Those agreements in all cases run for the five-year period that the legislation is in effect, to March 31, 1962. That fact, namely the fact of the existence of the nine agreements, is something that must be taken into account by anyone who approaches fairly this present situation in the light of the statements made in the debates in this house in 1956 when the legislation was before the house.
It is a strange scene that we have witnessed in this house, Mr. Speaker, in the course of this debate. Those opposite, who in the days when they were in power were unyielding and unbending in the face of the pleas of the provinces and the municipalities, those same hon. gentlemen who took a highhanded, take it or leave it attitude in dominion-provincial conferences-


Lester Bowles Pearson: Send them a telegram.


Donald Methuen Fleming: -now seek somehow to cajole this house and the Canadian people into thinking they have become the champions of the rights of the provinces. Mr. Speaker, it will take a better effort than they have been able to put up in this debate to make that pretence stick. They will need a better disguise than the one they have donned in the course of this debate. The clothes they have attempted to wear in this debate do not fit them at all. AJfter their record they will never be able to appear in this house as champions of the rights of the provinces. They pretend now that more should be done for the provinces. Our answer must be put very simply in the form of a now famous question, Mr. Speaker, and I direct it to them: "Why didn't you do it?"


Mr. Pickersgill:: We did.


Donald Methuen Fleming: You did not.


John Whitney Pickersgill: We did in 1956, as the minister knows.


Donald Methuen Fleming: This measure which is before us today would not now be before the house at all if hon. gentlemen opposite had done what they should have done in 1956. How it galls them to be reminded of these simple facts, Mr. Speaker. Their whole attitude in this debate has been one of pretence.
The hon. member for Essex East yesterday made his great plea for the municipalities of this country. I say to that hon. gentleman, when he was a member of the government why did he not do it? Why did not his government do it? And I put these same questions to such hon. members as the hon. member for Laurier (Mr. Chevrier) and the hon. member for Bonavista-Twillingate (Mr. Pickersgill) who have spoken in this debate about the provinces. The fact that Newfoundland is so much better off today than it was in the days when the hon. member for Bonavista-Twillingate and his friends constituted the government obliges one to ask why, in the face of this hypocritical pretence that they have been making in this debate, they did not do something to help out Newfoundland when they were in office.


Lionel Chevrier: The hypocrites are over there.


Donald Methuen Fleming: They had a majority. They had surpluses. They had easier conditions to deal with. They could have done much more, but they did not do so. They did not do more because of a deliberate decision on their part. Now they pretend to be the big-hearted friends of the provinces. No province is going to be taken in or fooled or misled by this empty pretence and hypocrisy.
But for the change of government in this country in 1957 the provinces would have received nothing more than what was given to them in the legislation of 1956, namely the Federal-Provincial Tax-Sharing Arrangements Act; not another cent.
Let me remind the house of the benefits which have accrued to the provinces, and through them to the municipalities, since this present government took office in June, 1957. In the first place-


John Whitney Pickersgill: Mr. Speaker, I rise on a point of order. Your Honour will recall that when those of us on this side of the house were attempting to debate this matter the minister said the principle in the measure was an increase from 10 to 13 per cent. The minister is now attempting to debate all sorts of matters of history which in our view do not have anything to do with the bill, and on which we were not allowed to talk.


Donald Methuen Fleming: Ever since this debate began, Mr. Speaker, hon. members opposite have strayed widely all over creation in the course of debate and have gone further and further astray as the debate has proceeded. We have now reached the eighth day and they are proposing something which, if It had any relevance at all in their mouths, should have been proposed and acknowledged by them some months ago.


Mr. Speaker:: I am not sure exactly what subject the hon. member was objecting to, but it is true that this has been a broad debate not limited strictly to the 3 per cent increase. Hon. members have taken the opportunity of presenting the amendment in its setting in the whole field of federal-provincial fiscal relations. As I say, I am not sure just what the objection is at the moment, but I do not see any error of debate.


Lionel Chevrier: Mr. Speaker, on the point of order, if I may; the measure before the house is the amendment to clause 12. While I am not arguing that the Minister of Finance should not be allowed to go beyond that clause, I think the point which my colleague the member for Bonavista-Twillingate is making is this, that while the minister should be allowed some latitude in dealing with clause 12, he should not be allowed to discuss the whole field of federal-provincial relations. If Your Honour rules he should, it is all right with us; but there will be another opportunity, I take it, and I presume the same treatment will be meted out to us.


Mr. Speaker:: As long as the minister keeps within the matters which have been discussed so far in this debate I am sure no objection will be taken by the hon. member who has just spoken. I have not yet noticed the minister going beyond them.


John Whitney Pickersgill: Mr. Speaker, on the point of order may I draw Your Honour's attention to what the minister said on May 6, as reported on page 3394 of Hansard, the first column. He said:
The other provisions of the Federal-Provincial Tax-Sharing Arrangements Act continue without change.
I might say this was when he was taking one of the seven points of order which he took when I was speaking. He continued:
There is no change made in the agreements which have been entered Into between the federal government and the provincial governments in pursuance of the act. All this does Is to enable the federal government to pay to the provinces this additional 3 per cent yield from the personal Income taxes for the present fiscal year. That is its complete effect, no more, no less.
Dominion-Provincial Relations
I am suggesting that the minister, having taken a point of order, should abide by what he himself said was the point of order.


Lionel Chevrier: Hear, hear.


Mr. Speaker:: I think the hon. member would agree that in a speech in reply the minister is entitled to refer to the matters which have been raised by the other side of the house.


John Whitney Pickersgill: Would Your Honour agree that we are entitled to harass the minister to the same extent that he has harassed us?


Donald Methuen Fleming: I had thought, Mr. Speaker, that there was no question of "harris-ing" in connection with this subject any more in this house.


John Whitney Pickersgill: That is a very poor pun.


Donald Methuen Fleming: It sounds strange in the mouth of the hon. member for Laurier (Mr. Chevrier), who strayed widely into the subject of provincial politics in his intervention in this debate two days ago, to hear him take a point of order when I am dealing with a subject which is strictly relevant to the bill before the house.


Lionel Chevrier: On a point of order, Mr. Speaker, I know the Minister of Finance is a student of the French language, but I am sure he must not have been listening to what I said, because I dealt with the federal aspect and did not deal with provincial politics at all.


Some hon. Members:: Oh, oh!


Mr. Speaker:: I think that is not a point of order but more a matter of correction. If the hon. member finds that there is any error which needs explanation, then he might raise that matter at the conclusion of the speech of the minister.


Lionel Chevrier: I hope my hon. friend will be a little more accurate in his statements concerning my speech than he is at the moment.


Donald Methuen Fleming: I can summon to this house more witnesses to the accuracy of my observation than the hon. member can to his.
Now, Mr. Speaker, I was turning to what this government has done. I would refer to the fact that it has introduced the adjustment grant to the Atlantic provinces-


John Whitney Pickersgill: Mr. Speaker, I am rising again on a point of order. Surely Your Honour is not now going to permit the minister to discuss the Atlantic provinces adjustment grant, which we were precluded from discussing.

Dominion-Pt ovincial Relations


Donald Methuen Fleming: It is not a fact that the hon. member was precluded. That is not a statement of fact, because he referred to this subject in his remarks.


Lionel Chevrier: The minister must not lose his temper.


Donald Methuen Fleming: There is no danger of my losing my temper, but there is great danger of the hon. member for Laurier losing all connection with facts and truth. Mr. Speaker, I said as well that we had provided this additional 3 per cent yield to the provinces from personal income taxes. What has that meant to the provinces? This is the measure of what the provinces have received which they would not have received had there not been a change of government.


Lester Bowles Pearson: How does the minister know that?


Donald Methuen Fleming: The gross benefit to the provinces including the tax abatement was $73 million. Or if you take the direct cash payments, the benefit which accrued to the provinces as a result of the change in government last year, and last year alone, was $62 million not including the tax abatement.


Paul Theodore Hellyer: What about the loss of interest charges?


Donald Methuen Fleming: If there is any loss of interest it is because of the way the opposition have been delaying the passage of this bill.
But for the change of government in 1957 many of the other sums paid out by this government in the form of other assistance to the provinces would never have been paid for the benefit of the provinces or for provincial institutions. I will not delay matters by referring to the subject of conditional payments and other payments made for the benefit of the provinces and provincial institutions. They are tremendous amounts and very much larger than they would have been if there had not been a change in government.
I point out to you, Mr. Speaker, that the former government had all the opportunities to do something additional for the benefit of the provinces and the municipalities, but they deliberately and firmly refused to do anything more than was provided in the Federal-Provincial Tax-Sharing Arrangements Act. They were asked to go further but they stoutly refused. These are the members who now pretend that they are the friends of the provinces.

Here, Mr. Speaker, let me remind the house of what was said in official and authoritative terms on behalf of that former government. This is what Mr. St. Laurent wrote to all the provincial premiers on February 18, 1956:
In view of the suggestion that we should meet again in committee to discuss these fiscal arrangements, I feel it would not be fair to the provincial governments if I failed to indicate at this time that the federal government believes its own situation in the next few years would not justify adding any substantial further financial commitments beyond those already proposed.
And they talk about harassing people in the house. Here is Mr. Harris saying to the federal-provincial conference on March 9, 1956:
These proposals-
They are the proposals which-


John Whitney Pickersgill: Mr. Speaker, I rise again on a point of order. The minister on three different occasions objected to my making reference to federal-provincial conferences. Surely the minister is not going to start debating the federal-provincial conferences of 1956 at this time.


Mr. Speaker:: I think the hon. member is referring to an objection which was taken to the discussion of the holding of future conferences, but many members have necessarily referred to federal-provincial conferences in this debate. I do not see how an incidental reference can be avoided. It has not been avoided by that side of the house and I do not think it is proper to ask that of the minister.


John Whitney Pickersgill: I would point out that I was prevented from referring to the conference of 1957. I was actually stopped by the Chair.


Mr. Speaker:: If the hon. member would look over the debate since that time I think he will realize-


Lionel Chevrier: Would the minister allow me to put one question?


Donald Methuen Fleming: I am sorry, but my time is limited. 1 have already said there will be opportunities to ask questions in committee, and I would be glad to answer questions then. I hope, Mr. Speaker, that no deduction is to be made from my time because of these senseless interruptions by the hon. member for Bonavista-Twillingate.


Lionel Chevrier: In view of what has just been said-


Donald Methuen Fleming: My time is limited. This is Mr. Harris speaking to the federal-provincial conference on May 9, 1956:
These proposals (10-9-50) go just as far as we can go at this time in providing fiscal need grants and in reducing the extent to which we are occupying certain tax fields.
And another quotation from him on that occasion:
We believe that revenues of these magnitudes from these tax fields are consistent with the actual responsibilities at this time and what seems likely to develop in the next five years.
Here again is Mr. Harris speaking in the budget debate on March 20, 1956, as reported at page 2328 of Hansard:
Having regard to our national responsibilities and commitments, we cannot see how we can go further. Under all the circumstances we believe our offer is eminently fair and that it is reasonable and realistic in the light of federal and provincial responsibilities
And let me refer again to the remarks of Mr. Harris, my predecessor, in the debate on this bill on July 16, 1956. Here are his words as reported at page 5988 of Hansard:
It is our view that in the limits decided upon both questions have been met in so far as it is possible to reconcile the needs of our expanding expenditures with restricted if buoyant revenues.
And at page 5990 he said:
I think it becomes quite clear that there is a very practical limit to our ability to dispose of our revenue sources and it is our view that this limit has been reached under present circumstances with these proposals at this time.
In those days the budgetary position was lush; the government had a surplus; yet those who were responsible for declaring the policy of the government at that time on this subject said "We cannot give the provinces another cent; we can go no further".
The last reference I wish to cite at this time appears on page 5996 of Hansard where Mr. Drew, referring to this subject, drew attention to another statement made by the then minister of finance, as follows:
We cannot at this time make any further material concessions that would adversely affect our revenues.
So you see, Mr. Speaker, these hon. members who now come forward and try to pretend that they are the friends of the provinces and say something more should be done for the provinces are the very members who said, in 1956 when they were in the government, "Not another cent for the provinces". It will be clearly realized that that government, and those hon. members who have been the spokesmen for the opposition in the house during this debate, in those lays banged, barred and bolted the door to the provinces in the face of their pleas for further assistance.
66968-9-275
Dominion-Provincial Relations
Thus today we ask parliamentary approval to increase the payments to the provinces, and point out that we are doing this at a time when budgetary conditions are much less favourable than they were in 1955 and 1956. The Liberal government of that day had a large surplus then, and its action at that time in refusing to do any more for the provinces can be compared with that of the Conservative government of today which has a deficit, but which is yet prepared to increase that deficit in order to increase payments to the provinces. There is the difference.
We have heard a great deal about unilateral action on the part of the government in this respect. Let us examine that empty assertion. A year ago we asked the house, and the house agreed, to provide this additional 3 per cent to the provinces for a year. We are asking now for an extension of those provisions for another year. We say that the extension will be worth $52 million to those provinces, on the basis of existing estimates. This is excluding the Atlantic provinces adjustment grant and the adjustment to the province of Quebec in terms of its right to collect certain corporation taxes. Or it is worth an estimated $66 million this year if one includes the additional taxes which the province of Quebec is in a position to collect under the terms of the act.
To listen to the speeches made by hon. gentlemen opposite one would think we were imposing some hard bargain on the provinces, inflicting some burden on them. The facts are the very opposite. I wish the hon. members on that side of the house would not depart so far from the facts when they speak on this subject. Here are the facts. The provinces want this additional 3 per cent; they are urgently asking for it; they are unanimous in asking for it. This is the situation, yet all the Liberal members in this house talk about a one-sided deal.


Lionel Chevrier: What about Mr. Frost?


Donald Methuen Fleming: The federal government is taking nothing in return. There are no strings attached to this additional payment. It is unconditional. We ask nothing from the provinces; the provinces can lose nothing in accepting it. Indeed, we need no further proof of the fact that the provinces are waiting urgently for their cheques in respect of this 3 per cent-


Lionel Chevrier: What about Mr. Frost?


Donald Methuen Fleming: And what about the member for Laurier and all the mistakes he has been making in this debate?
I have this to say, and I must be brief. There is a great temptation to go over all

Dominion-Provincial Relations the mistakes which the opposition have been making in this debate, but there is not time. We have rarely seen a debate in which the opposition was so completely befuddled as in this debate on this subject, but let me mention two or three examples. The hon. member for Burnaby-Coquitlam (Mr. Regier) was quite confused in what he had to say about these percentages and the relation of these percentages to the taxes collected, and there was an echo of the same misunderstanding in the speech made by the hon. member for Laurier the other evening. He referred to the increase in the federal tax rates and seemed to be under the impression that as a result the provinces were going to receive a smaller share of the yield. The standard corporation tax is, of course, directly related to corporation profits and thus the provincial share is constant, regardless of any change in the level of federal taxation up or down. The individual tax rate is related to the federal level, but is adjusted to the 1956 tax rates, so that there will be no effect on the provincial share from unilateral federal changes.
Thus, in 1958-59 we paid not 13 per cent but at the rate of 14.48 per cent in terms of the yield of that year, and in this year 1959-60 we shall be paying at the rate of 14.18 per cent in terms of the tax yield of this year. This stabilized provincial share was at the request of the provinces which did not wish their proportion of these tax fields to vary with federal tax changes. So, in effect, under this government, it has not been, as was the case under the Liberal government, a formula of 10-9-50; it has not even been a formula of 13-9-50. Last year, it was a formula of 14.48-9-50, and this year it will be 14.18-9-50.
Then we were told by the hon. member for Laurier that the federal government is collecting a larger share of the tax dollar. The fact is that as a result of the larger transfer payments we are making for the benefit of other governments the amount remaining to the federal government is relatively smaller than it was under the Liberal government.


Lionel Chevrier: The statement I made was
not in accordance with the statement attributed to me by the minister.


Some hon. Members:: Oh.


Lionel Chevrier: This is a point of order. The minister has complained about the inaccuracy of my statements, and I think we should stick to the facts. The statement I made yesterday-


Mr. Speaker:: I will give the hon. member an opportunity to make any corrections which he feels are necessary at the end-


Lionel Chevrier: I have a right, in accordance with the rules of the house as I understand them, to rise and challenge the accuracy of the statement made by the minister. What I was dealing with was the percentage allotted to the provinces, and in the statement which the minister has just made-


Donald Methuen Fleming: Mr. Speaker, the next error on the part of the opposition was on the part of the hon. member for Robi-chaud-


John Whitney Pickersgill: Another error.


Donald Methuen Fleming: -the hon. member for Gloucester (Mr. Robichaud) who said at page 3406 of Hansard that the provinces will receive less in the year 1959-60 than they did last year, 1958-59. Of course he is wrong in that respect.


John Whitney Pickersgill: The budget papers suggested that.


Donald Methuen Fleming: The picture as disclosed in the budget calculations has been brightening. It was much brighter than at the time the estimates were prepared. On the basis of the 13-9-50 formula the cash payments last year, 1958-59, including the Atlantic provinces adjustment grant, were $423 million. This year they will be $473 million, an increase of $50 million. With the tax abatement the amounts will be larger. So much for the hon. member for Gloucester.
Now, sir, I come to the subject of the conference-


John Whitney Pickersgill: The conference?


Donald Methuen Fleming: -not to go back to the discussion of February 9 and 10 but to deal with the conference that is to be held on July 6, which has been discussed at very great length by hon. members opposite in their remarks. In their comments in relation to the subject of this conference we have listened to the crowning Liberal misrepresentation and calumny. I suppose it should be expected from hon. members who when they were in the government took this steadfast, stiff-necked, take it or leave it attitude toward these conferences, hon. members who did so much when they were in power to embitter relations between the dominion and the provinces.


Lionel Chevrier: What about Premier Du-plessis?


Donald Methuen Fleming: If the hon. gentleman who interrupts is not any better informed on that subject than he is on the subject
under debate today I am afraid he has a long way to go before he will ever approach accuracy.


Lionel Chevrier: The premier is not very happy about the treatment accorded him.


Donald Methuen Fleming: In the past under hon. members opposite federal-provincial conferences were called in order for the provinces to receive an announcement, the dictates of the federal government, what the federal government had decided beforehand it was prepared to do.


John Whitney Pickersgill: That statement is not true.


Donald Methuen Fleming: The attitude of hon. gentlemen opposite in relation to these conferences when they were the government was always, "This much and no more; thus far and no farther." What is badly needed today, indeed the great need of the situation today, in this realm of dominion-provincial fiscal relations is-


Lester Bowles Pearson: Another telegram.


Donald Methuen Fleming: -a deep, searching,
comprehensive study-


Lester Bowles Pearson: Another study.


Donald Methuen Fleming: -of joint common fiscal problems, joint or common to the two levels of government. This ought to be a study undertaken jointly on a co-operative basis between the two principal levels of government. Questions are arising constantly in relation to-


Lionel Chevrier: Reductions.


Donald Methuen Fleming: -the administration, application and interpretation of the existing agreements, but there are many more questions in regard to other aspects which concern federal-provincial fiscal relations. We have in mind a broad, thorough study because we are seeking long term solutions to these problems based upon joint study of them.
I appreciate that it is difficult for hon. members opposite to understand this kind of co-operative approach. The proposed study to be carried on through the committee of ministers, finance ministers and provincial treasurers, is the first full scale co-operative attempt to reach a solution of these problems in many years. In fact the last two comprehensive studies, that of the reconstruction conference of 1945-46 and the Rowell-Sirois commission of 1937-40, were basically federal exercises. Here we hope on a continuing basis to examine our problems co-operatively in an attempt to reach mutually satisfactory solutions. The approach has often been proposed in the past, but this is the first time anyone has ever done anything about it. It is no wonder that hon. members opposite do not understand a co-operative approach.
This conference of ministers will meet in Ottawa on July 6. It is to be attended by the 66968-9-2754
Dominion-Provincial Relations provincial treasurers or ministers of finance representing all of the provinces. We have acceptances from all of them. As hon. members are aware, the provincial treasurers include three provincial premiers. They will speak for the governments of their provinces. It is this meeting-


John Whitney Pickersgill: Study group.


Donald Methuen Fleming: -that the hon. member for Bonavista-Twillingate (Mr. Pickersgill) as recorded at page 3389 of Hansard, denounced in these words:
-this pale imitation conference of bureaucrats-
-a quotation echoed by Mr. Wintermeyer in the Ontario election campaign two days later, when on May 7 he said:
X suggest this conference is no conference of premiers at all but of bureaucrats and civil servants.


Lester Bowles Pearson: Why did you not call it a year ago?


Donald Methuen Fleming: Having regard to the fact that it is to be attended by the provincial treasurers of Newfoundland and Prince Edward Island, to mention only two of the provinces, I wonder how those hon. gentlemen will like being referred to as bureaucrats by so distinguished a member of this house as the hon. member for Bonavista-Twillingate.


John Whitney Pickersgill: I will take my chances on that.


Donald Methuen Fleming: I turn now to the
second aspect of this conference. After what is expected to be a two-day meeting of ministers-


Lester Bowles Pearson: Two years.


Donald Methuen Fleming: -there is to follow, for as long as may be required, a meeting of the federal-provincial continuing committee on fiscal and economic matters. In view of the aspersions that have been cast on this committee by hon. members opposite, particularly the hon. member for Bonavista-Twillingate, let me point out that this important continuing committee was one in the creation of which they participated. This committee grew out of a proposal made by the province of Ontario at the agenda conference of April, 1955 which preceded the federal-provincial conference of October of that year.


John Whitney Pickersgill: Mr. Speaker, I rise on a point of order. Has the minister unlimited time?


Mr. Speaker:: No; the minister is limited according to the rules.

Dominion-Provincial Relations


Donald Methuen Fleming: Mr. Speaker, it is quite clear that the hon. member for Bona-vista-Twillingate will not be content until he trespasses on my time by his senseless and deliberate interruptions, these delaying tactics designed to consume my limited time.


John Whitney Pickersgill: Mr. Speaker, I rise on a point of order. This hon. member has a long way to go before equalling the record established by the Minister of Finance in interrupting me during the course of my remarks on second reading of this bill.


Mr. Speaker:: In view of what has been said the house should understand the situation. The minister's time apart from interruptions expires at 4.03. There have been four minutes of interruption, and I will allow him four minutes more to complete his speech.


Donald Methuen Fleming: Every province welcomed this idea and the committee was set up. In his opening remarks at the October, 1955 conference Mr. St. Laurent placed the question of establishing such a committee before the conference and the committee was set up. This idea commended itself at that time. I will not go into the subject in greater detail, because I recounted the history of this important committee on February 9, at page 846 of Hansard.
I say this committee had never been adequately used under the Liberal government. The Liberal government neglected it and kept it under wraps. Now hon. gentlemen opposite deride our attempt to make effective use of the talents of this committee. The provinces, on the other hand, have welcomed the use of this committee for this important study.


John Whitney Pickersgill: How many times has it met in the last two years.


Donald Methuen Fleming: Not only have the provinces welcomed it, but all have extended to us the fullest co-operation. That is perhaps what irks hon. members opposite. The fact is, however, that all the provinces have given us the fullest co-operation in the plans we are making for the conference on July 6 and the days that follow. This is the evidence of the determination and desire of the provinces to use the opportunity now being created in order to achieve constructive results of lasting value.
I believe, Mr. Speaker, that the provincial governments are much better judges of provincial rights and interests in this country than hon. members of the opposition in this house. The value of the meetings I am sure will be perfectly clear, because there are so many of these difficult and complex problems

facing both the federal and provincial governments. That is why a much more extensive investigation and study has been called for in order to seek mutually satisfactory solutions. A plenary conference over two or three days can generally solve very little.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: The experience of the previous government would indicate that it would likely result in an arbitrary position being assumed. If this federal government were to come to the table as did the previous Liberal government, with its mind all made up, little would be accomplished. Therefore the purpose of these conferences is to prepare the ground for subsequent negotiations although in the process they may be able to resolve some of the detailed technical and procedural problems. The value of this proposed conference is fully recognized by the provinces and the scope of its inquiries will be as unlimited as the provinces may desire.
Let me make it quite clear that as we see it this is the first step in a genuine co-operative effort to develop some mutually satisfactory long term solution. It is not a substitute for a plenary conference of prime minister and premiers but it is a necessary antecedent to the success of any such conference. So I say of the agenda that the agenda is being compiled in consultation with the provinces. We have invited their proposals on the widest scale. This is in no sense going to be an agenda dictated or compiled simply by the federal government. It is going to be an agenda compiled by co-operative effort on the part of the federal and provincial governments.
The meeting of the federal-provincial continuing committee which will follow will undoubtedly result in intensive studies being made not merely by federal officials but, we trust, by officials of all governments, and further exchanges and meetings, if they prove necessary, will be had because this committee will be reporting back to the conference of finance ministers and provincial treasurers and further meetings of the ministers will be invited to be held as may be necessary.
As to the municipalities, Mr. Speaker, there are many subjects in the proposed agenda now being prepared which will be of direct interest to the municipalities, and I am sure their interests in this conference will be effectively represented by the provincial governments.
My time has almost expired, but let me say in conclusion that the estimated value of this measure to the provinces on the basis of the federal estimate is $52 million in terms of cash payments and if you take account as

well of the abatement of tax in the province of Quebec on income tax the benefit to the provinces is $66 million under this measure, and that does not include one cent of the Atlantic provinces adjustment grant. The provinces are going to share and share substantially in these benefits. Here are the figures of benefit with respect to the $66 million:	Newfoundland, $1,820,000; Prince
Edward Island, $11,000; Nova Scotia, $2,905,000; New Brunswick, $2,381,000; Quebec, $20,271,000; Ontario, $24,374,000; Manitoba, $3,559,000; Saskatchewan, $3,624,000; Alberta, $5,009,000; British Columbia, $1,895,000. These are the benefits that this measure will bring to these provinces. They are the benefits that this government is seeking to bring to these provinces today and we trust that the house will support us in our effort.


John Whitney Pickersgill: Will the minister permit a question for clarification? I should like to ask the minister if these are guarantees or estimates.


Donald Methuen Fleming: I said estimates, Mr. Speaker.


John Whitney Pickersgill: You also said they were benefits to the provinces.


Donald Methuen Fleming: They are based on the best estimate at this date.


Mr. Speaker:: The hon. member for Laurier wished to make some explanation of some misinterpretation of what he said. Did he complete his explanation?


Lionel Chevrier: I wanted to ask some questions of the minister and I should like to ask them now.


Donald Methuen Fleming: Is the committee not the best place?


Lionel Chevrier: However, if the minister prefers to have them asked in the committee I will defer them until then.


Lester Bowles Pearson: I have a few questions I should like to ask in connection with this clause which modifies the formula, as has been pointed out by the minister from the 15-9-50 of income tax and federal succession duties. As my first question I should like to ask if this modification of the formula was discussed at any time at any conference with the provinces.


Donald Methuen Fleming: Not specifically in any general conference.


Lester Bowles Pearson: Was the modification mentioned in this clause taken up, before the government agreed on it, by the minister in any way with any province?


Donald Methuen Fleming: Before it was introduced and the house was asked to take action on it the provinces were communicated with, as was fully made known in the debates in this house over a year ago.


Lester Bowles Pearson: May I ask the minister to confirm the view taken from his statement that before the government agreed on this modification it had taken it up in some form with all the provinces?


Donald Methuen Fleming: We had received representations from many of the provincial treasurers asking for some further federal assistance in respect of this measure and for an enlargement of the provincial share of the yield from the standard taxes.


Lester Bowles Pearson: It is now quite clear, I think -and perhaps the minister would confirm my statement-that the modification as such was not discussed with any province before the government agreed on it. The minister previously stated that they had received representations from some provinces asking for further assistance in some form. But the minister has not answered my question, and by his not answering it I assume the answer really should be a negative one. My question was whether this particular modification of the formula was taken up with the provinces in any way before it was agreed on by the government. In other words, were the provinces consulted in advance about this particular modification of the formula?


Donald Methuen Fleming: In the way I have
mentioned, yes. I have referred to the communication with the provinces. I have referred to what preceded that communication, namely the request of provinces for an enlarged provincial share of the yield from these particular standard taxes.


Lester Bowles Pearson: Then it is clear that the minister had communicated to the provinces the agreement reached within the government for the modification of this formula only after that agreement had been reached. The provinces were then communicated with, I understand by telegram. This was the only form of consultation-and of course it was not a form of consultation at all-though some of the provinces had already communicated to the government that they would like more fiscal assistance from the federal government. May I now ask the minister if this particular modification of the formula was discussed at any meeting of provincial federal officials before official agreement was reached within the federal government.


Donald Methuen Fleming: No. There was discussion at a meeting of officials in Halifax of the proposed Atlantic provinces adjustment grant. At that meeting the four Atlantic provinces were represented by their officials; but this particular modification or increase in the provincial share of the yield from personal income taxes was not discussed at that Atlantic conference.


Lester Bowles Pearson: May I now ask the minister whether the government will, at the forthcoming July conference, consider favourably the provinces' request or the request of some provinces that this formula should be further modified to a 15-15-50 basis?


Donald Methuen Fleming: The Leader of the Opposition is asking me to commit myself or to commit the government to some specific increase. Obviously, while the conference will have the widest scope to discuss all questions, I could not possibly be expected to make a statement of the nature asked of me by the Leader of the Opposition at this point.


Lionel Chevrier: May I ask the minister what is the position of the minister with reference to the concrete proposal which was put forward at the November conference of 1957 by the premier of Ontario to the effect that the division should be 15-15-50 rather than the present 13-9-50?


Donald Methuen Fleming: My position is this. The representatives of any government at this forthcoming conference will be perfectly at liberty to suggest for inclusion in the agenda the discussion of any matter relating to the subject of federal-provincial fiscal relations that commends itself to the conference.


Lionel Chevrier: I am sure that is the case, and I am sure that no one on this side of the house or on the other side of it would want to preclude the discussion of any proposal.

But that was not my question. My question to the minister was this. What is the position of the minister with reference to the proposal which was made by the premier of Ontario and supported by several other premiers?


Donald Methuen Fleming: I have stated my position on that subject.


Lionel Chevrier: May I proceed a bit further? Am I right in assuming that the position put forward by the premier of Ontario and other premiers was to the effect that the rate should be increased to 15-15-50?


Donald Methuen Fleming: I think that position was taken by the premier of Ontario. As I recall it, I do not think he was the only premier who took that position. I know Premier Roblin of Manitoba has taken it.


John Whitney Pickersgill: Mr. Campbell took it.


Donald Methuen Fleming: And others took
it at the conference of November, 1957.


Lionel Chevrier: Has the minister given any consideration to the amount which would be required to meet that proposal?


Donald Methuen Fleming: Yes, from time
to time. But first, Mr. Chairman, we have to make calculations. This is a field in which calculations are being constantly made, because the payments to the provinces undergo change in the light of the yield from period to period from these particular taxes. We have to make an estimate at the beginning of the fiscal year as to what we think the yield is likely to be. That is modified from time to time, and consequently in this field we are making calculations very frequently. It would not be difficult, I suppose, to calculate what the amount would be on any given percentage or any formula, the one mentioned by the hon. gentleman which, I take it, he advocates, or any other formula as applied to a division between the dominion and provincial governments of the yields from these three taxes.


Lionel Chevrier: Could the minister give the
house the amount of increase in taxation which will be required to bring this payment about and what it would mean in the way of dollars and cents to the province of Ontario.


Donald Methuen Fleming: I have not worked this out myself, Mr. Chairman, but I am informed that on a 15-15-50 formula the additional yield to Ontario over and above what will be provided by the present measure would be roughly in the neighbourhood of $100 million. The over-all cost in respect of all provinces-that is, the cost to the federal treasury-would be approximately $275 million.
Dominion-Provincial Relations


Lionel Chevrier: Before I ask the other question, would the minister while I am posing the question be good enough to get the analagous figure for the province of Quebec? The other question which I would like to ask now, and I come back to it again, is what is the-


Donald Methuen Fleming: I am sorry, but
I am not in a position to give what the figure would be for Quebec. That would raise questions as to the tax abatement, and the situation is not as simple to calculate in the case of the province of Quebec.


Lionel Chevrier: Yes, I realize that. Could I get it at a later date?


Donald Methuen Fleming: I am afraid I could not obtain it for my hon. friend today but I will be glad to send it to my hon. friend later.


Lionel Chevrier: I understand it is in the old
tables and perhaps could be obtained.


Donald Methuen Fleming: The figure may have changed from the old tables, depending on the changes in the yields since.


Lionel Chevrier: Then I come back to the question again: What is the position of the minister with reference to this proposal, which means in effect an increase to Ontario of $100 million, and I am sure an increase to the province of Quebec of a substantial amount as well, with the other provinces' shares being increased in proportion? Will the hon. minister not tell the house what his attitude or opinion is vis-a-vis that proposal?


Donald Methuen Fleming: I think this is the third time my hon. friend has asked me the same question. I must refer him to my previous answer.


Lionel Chevrier: Mr. Chairman, I think notwithstanding what the minister has replied that the committee is entitled to an answer to that question. After all, it has been discussed not only here but elsewhere, and I think the least the minister can do is to tell the house what his attitude or that of the government is with reference to that proposal.


Lester Bowles Pearson: While the minister is thinking or rethinking about that question, may I ask him if the impression which I got from his statement this afternoon about the July conference with the provinces is correct, that it is expected to last for two days only, and that its purpose is to initiate a broad-based examination of federal-provincial fiscal relationships by a joint committee of the provincial governments and the federal government? Is that the purpose of the forthcoming conference?

Dominion-Provincial Relations


Donald Methuen Fleming: I think the Leader of the Opposition has stated it rather more narrowly than I stated it in my remarks this afternoon, Mr. Chairman. The conference of ministers will open on Monday morning, July 6, at 10.00 o'clock. It will last as long as it is necessary to reach the decisions that the ministers may care to take at that meeting. It is expected in any event that the meeting will go two days. It may go longer, I do not know.
Immediately following that meeting it is expected that the meeting of the continuing committee will follow, and that meeting will proceed as long as may be required. The agenda has not yet been fully determined. There have been confidential communications between the dominion and provincial ministers in regard to it and, as I say, it is now in process of being decided upon between them. I may say that thus far the course of discussion and the response of the provinces indicate that the agenda will be a very wide one and the ministers will be called upon to decide what particular subjects they propose to take up, in what order, what priorities they intend to assign to different subjects, and what subjects they wish the continuing committee of officials, very competent officials indeed, to undertake.
Then at the meeting of the federal-provincial continuing committee the assignment which will come to them from the meeting of ministers will be undertaken and the tasks allotted, as that committee may choose.


Lester Bowles Pearson: Mr. Chairman, if the representatives of any provincial government at the forthcoming conference should initiate or introduce a proposal for a further modification of this formula to, say, 15-15-50, would that proposal be discussed at this conference and would there be an opportunity afforded of coming to a decision in regard to it at this conference?


Donald Methuen Fleming: I am quite sure, Mr. Chairman, that there will be discussion of formulae. I cannot imagine this meeting proceeding very far without the question of the formulae being discussed and how formulae can best be made up, having regard to the interest of all parties. Whether any decision can be expected to be taken at that conference I doubt. I do not say decisions cannot be taken. If there were unanimity on some particular subject, I presume the conference, or those who represent the governments at the conference, can obtain instructions; but failing that situation where there is unanimity on such a subject, I presume these subjects would be embraced within the discussions and the studies to follow.


Lester Bowles Pearson: May I go one step further and ask the minister if it is accurate to say that at this forthcoming conference there would be an opportunity for a representative of the government of Ontario to advocate a 15-15-50 formula and that there would be at least an opportunity for discussion and decision in regard to that formula?


Donald Methuen Fleming: As I have stressed, the agenda is a matter for decision on the part of all concerned, and with regard to any answer I may offer with relation to the agenda I wish to make it quite clear that the decision as to what shall be included within the agenda rests with the representatives of all the 11 governments concerned. I have indicated that I would be surprised if there were no discussion about formulas and about matters related to formulas.


Lester Bowles Pearson: Has the attention of the minister been drawn to a statement by the premier of Ontario made in Ottawa on May 29 that he is confident that this federal-provincial parley in Ottawa in July will put a further $100 million or $115 million or $150 million into the revenues of Ontario, and does he feel it is realistic to assume that any decision in this regard could be made in July?


Donald Methuen Fleming: I have not seen the newspaper comment which the hon. member has read.


Mr. Broome:: I wonder if the minister
could give an explanation with regard to the figure for British Columbia, which appears to be receiving in extra grants $1,895,000 as compared with a figure of $5 million for Alberta and $24 million for Ontario.


Donald Methuen Fleming: The figures I gave at the conclusion of my remarks this afternoon are the estimated figures as of the present time and take into account all the elements including the stabilization payments, and the reason why the figure in the case of British Columbia, which is $1,895,000, is less than the figure of $5,009,000 for the province of Alberta is that British Columbia is a principal beneficiary from the stabilization provisions of this act. The two provinces which have derived most benefit from the stabilization principle are British Columbia and Prince Edward Island, and this lower payment arises because of that principle of a built-in floor from which British Columbia has derived a good deal of protection of its payments hitherto. That is why the increase in this case does not appear to be as much as in the case of its neighbour province.


Mr. Regier:: I wonder whether I may ask the minister this: has the premier of British

Columbia made any representations regarding the bill now before us in connection with another meeting of premiers with the Prime Minister and, if he has, what was the tenor of those representations?
I should also like to ask the minister to tell us as nearly as he is able what was the payment to British Columbia under the Federal-Provincial Tax-Sharing Arrangements Act for the year ending March 31, 1958 and also for the year ending March 31, 1959. I should also like the minister to indicate the amount of the estimated payments to British Columbia for the fiscal year which will end on March 31, of next year, 1960.


Donald Methuen Fleming: There have been to my knowledge no representations received from Premier Bennett in regard to the present amending bill. As to the payments made to British Columbia, I can give the hon. member these figures: for the fiscal year ending March 31, 1958 the payments under this act amounted to $58.9 million; in the fiscal year ending March 31, 1959, $64.1 million; in the present fiscal year 1959-60 it is estimated that the payments on the basis of the formula proposed in the present bill will amount to $68.4 million.


Erhart Regier: I know the minister has stated that the premier of British Columbia has made no particular representations with regard to the bill now before us, but I wonder whether the hon. gentleman will indicate whether or not the premier of British Columbia has made any representations within the past six or eight months expressing his desire for a new meeting with the Prime Minister of Canada along with the premiers of the various provinces.


Donald Methuen Fleming: I am informed that the purport of the letter from the premier of British Columbia in accepting the invitation to participate in the conference on July 6 indicated that he thought this meeting was a good idea as a useful and necessary preliminary to a plenary conference.


Erhart Regier: I hope the minister realizes that under the benefits of the legislation now before us the estimated payments to British Columbia will amount to $68.4 million. If we add to that all the various other payments being made by the federal government to the treasury of the British Columbian government, especially under the provisions of the national health insurance act it will be seen that contributions by this government to the revenues of the government of British Columbia will exceed one-third of the income of the government of British Columbia. Therefore, any slogan upon which the government of British Columbia may embark in favour of a larger
Dominion-Provincial Relations amount of money from Ottawa will be based on a somewhat weak foundation inasmuch as Ottawa is even now paying in excess of one-third of the income of the government of British Columbia.


Azellus Denis: May I ask the minister if the change in the rate of standard income tax for the purpose of calculating the payment to the provinces is the only change made by the present government since it took office?


Donald Methuen Fleming: There have been a number of changes made in the terms and the amounts of the payments made by the federal to the provincial governments. May
I	mention just a few? There are, of course, the conditional payments-quite a wide range of them. I should be glad to go into them, but I think that would be outside the scope of the present debate and what is properly relevant to this measure. In the second place there are, of course, the Atlantic provinces adjustment grants, and in the third place the provision made for tax abatements and the 3 per cent increase.


Azellus Denis: Do I understand that the substance of the measure is the same and that this is only a question of amounts and rates- it is a question of money?


Donald Methuen Fleming: If the hon. member is confining his question to the unconditional payments made in pursuance of the Federal-Provincial Tax-Sharing Arrangements Act, that is one thing, but to put his question as broadly as he has done takes in a great deal more territory. Unless he restricts it I would have to answer his question by saying that the payments are greatly expanded and there have been many additions and many changes always in favour of the provinces. On the other hand, if he is confining his question to the terms of the present act, the Federal-Provincial Tax-Sharing Arrangements Act, last year's amending act added a new section
II	and a new section 12, and the present bill now before the committee would propose to amend section 12 by extending until March 31, 1960, the increase from 10 per cent to 13 per cent in the provincial share of the yield from the personal income tax.


Lester Bowles Pearson: Mr. Chairman, may I ask the minister whether the government proposes to put forward any plan at the forthcoming conference for a further modification of the existing tax-sharing formula or any new proposal for a tax-sharing formula.


Donald Methuen Fleming: Mr. Chairman, we are prepared to discuss any suggestions that are made with relation to the formula and will co-operate in any study that is sought or desired by the provinces in relation to
4332	HOUSE OF
Dominion-Provincial Relations that subject. We are certainly not going into this conference laying down any hard and fast proposals.


Lester Bowles Pearson: I was not sugesting that, Mr. Chairman; I do not think it could be inferred from my question that I was suggesting any such procedure as that would be adopted. I am merely asking whether the federal government apart from its expressed willingness to consider any proposal made by provincial delegations is itself going to put forward for discussion and consideration any modification of this tax-sharing formula or a new formula to replace the present one? Has the government any plans for that purpose? Is it to be a matter for consideration at the conference?


Donald Methuen Fleming: Mr. Chairman, there are so many hypothetical elements in the hon. gentleman's questions that I do not think I can usefully add to what I have already said to the committee on the subject.


Lester Bowles Pearson: There is nothing hypothetical about the deduction one must draw from the minister's evasion. The deduction I draw is that the federal government is not going to propose any further modification of the present formula or any new formula because surely if the government on the eve of this conference had such a proposal to make it would at least be able to inform the committee of this fact. I am not asking for the details of the proposal but whether in fact the government will make any proposal to the conference along the lines I suggested.


Donald Methuen Fleming: I think we will wish to know what the provinces have to propose in relation to formulas and in relation to all the other types of payments of which they are in receipt today. This conference will have to embrace consideration of the whole realm of payments whether conditional or unconditional.


Lester Bowles Pearson: The government has had two years in which to find that out from the provinces but I will leave that particular matter as it stands. Surely the minister, though he may not have read the statement from Mr. Frost which I mentioned, must be aware that some provinces are expressing views in this matter which if they were carried out would represent an additional contribution from the federal treasury and if these views were accepted by this conference in July it might be possible and indeed necessary to have a further amendment made to this legislation because we will undoubtedly be here at the time this conference is being held.


For instance, in an interview in Toronto with the editors of the Toronto Star just the other day, Mr. Frost had some interesting comments to make. I quote from the interview. He was asked about the federal-provincial fiscal conference called for July 6 and was asked the following question:
Templeton:	Can we go to another subject? On
the matter of the dominion-provincial fiscal conference which has been called for July 6, you have said that you expect to get a further $100 million at this conference-
Frost: That was dramatizing.
Templeton:	When you say you were dramatizing, are you suggesting that you don't mean it?
Frost: I certainly do mean it.
Further along Mr. Frost continued:
Our position is well known. As a major objective we have advanced the much-discussed 15-15-50 formula which means about $100 million to Ontario in new revenue.
We must assume from this that at least one province is going to put forward a formula, if that statement means anything at all. We have the right to assume also that this conference lasting for two days as the minister said, unless something intervenes to make it last longer, will then adjourn and after the two days a study is to be made of the whole question. Now we have the right to assume that the federal government after all these months is not itself putting forward any proposal for modification of this formula or for a new formula, beyond that which is embodied in the bill before us at this time.


John Whitney Pickersgill: Mr. Chairman, I should like to supplement what the Leader of the Opposition has just said and draw to the minister's attention the remarks he made at the close of the conference in 1957 as reported at page 102 of the proceedings:
Now, sir, may I make a brief comment on the suggestions as to the form in which the conference might continue.
I want to found a question on this, Mr. Chairman. I continue:
Suggestions were made yesterday on the part of two provincial premiers, I think, that an attempt should be made at this conference, which means today, to arrive at firm decisions. May I point out, sir-and I think this is in the minds of all of the provincial representatives-that we did call this conference as soon as possible after taking office. The new government has been faced with many burdens, including a number of conferences. This one was called as a two-day conference and the invitations were accepted on that basis.
Perhaps I might interject that two-day conferences seem to be the pattern. I continue:
The proposals which have been submitted-
In other words, in November of 1957, all these provinces made their proposals and now they are going to be asked at a lower level -I say this to justify my reference to the

forthcoming conference as a pale imitation of a conference-to come and repeat them, and still we have nothing from the federal government. I continue:
The proposals which have been submitted all involve the expenditure of large sums of money. All of them require careful study.
This is the Minister of Finance telling us how this thing was going to be done two years ago. It is very different from what he is telling us now. I continue:
Indeed, sir, we would be doing less than justice to them and the important sources from which they come if we did not undertake to give them careful study. Moreover, some of the proposals will necessarily involve extended planning and surveying before precise calculations could be arrived at or decisions based upon them.
That was a year and a half ago; a little more than that in fact. One question I should like to put at this time although I want to read a little more, is this. Would the minister tell us now what the result is of that planning and surveying and those precise calculations and what decisions have been based upon that year and a half of planning and surveying and precise calculating which he promised the premiers in November of 1957 he was going to do? I continue reading the minister's words at that conference: Therefore, in conclusion it seems to me that we are in this position. The provinces, which with one exception and one other exception in part, had entered into agreements with the former government effective on the first of April of this year, have in their statements indicated to us quite a marked difference in approach to the problem than one might have inferred from the signing of those agreements.
I should like to ask the minister, and this is the first time I have ever had the chance to do so, how he squares this statement with the statements he and the Prime Minister made before the election to the effect that this problem could be solved very simply by a single conference with all of the governments sitting down together and the conference reaching the agreements.
My second question to the minister is this. Is it intended that the conference in July should reach any conclusions or does the present government intend to treat this conference in exactly the same way as conferences have been treated by all governments since confederation, namely to listen to representations and then take its own responsibility before this house to this house, or does the minister think there is some other way of doing this? I think it is about time we had a precise answer to that question.
I return to the minister's remarks at the 1957 conference and continue reading:
Having regard to the extent, the number, the Importance and the cost involved In the various
Dominion-Provincial Relations important proposals which have been made, it Is evident, sir, as you said at the outset, that with a purse necessarily limited it is highly important that this conference should not close later today without our having gone as far as may be possible in seeking further information as to the views of the provinces concerning priorities among the various proposals put forward.
I think that after a year and a half the minister could perhaps tell us what those priorities are, what it is proposed to do first and what precise line the government now intends to take in this conference about the various proposals that were put forward at the last conference. I am sure that these ministers of finance are not just coming here for a joy ride. They want answers to these questions they put a year and a half ago. Personally, I know some of them expect answers and it seems to me that the minister could tell us what the general nature of those answers is going to be if, indeed, the government is going to put anything before this conference, or is the government just going to let the provincial governments make another series of requests and after two days send them home again? It seems to me that unless we are given a precise answer that is the inference we would draw.
I would remind the minister, in view of what he said a little earlier this afternoon, that when that series of five conferences which preceded the introduction by Mr. Harris of the present tax-sharing arrangements act was held, while no precise proposals were made by the federal government at the first and second of those meetings the federal government did give a very clear indication to the conference and to the public of the lines along which it was willing to approach this matter. In fact that approach was modified on at least three, and if my memory serves me rightly-I have not checked this carefully-or four occasions before the then prime minister and Mr. Harris made the statement they did. After four modifications, after four discussions with the provinces, where they were listened to and when many of their ideas were accepted, finally the government had to take its responsibility as finally this government perhaps will have to take its responsibility, though this government certainly has a great capacity for putting off until tomorrow those things that other governments used to do when problems were urgent. I ask the minister, does he intend merely to ask the provinces to come here again and make more speeches and then send them home, promising them still more study groups, or is the federal government going to give them any answers?
Before I resume my seat, and so that the minister can answer all my questions at

Dominion-Provincial Relations once, I should like the minister to tell me how much in total the provinces derived-I use the word "derived" because I know they did not receive it all from the federal treasury-because of the existence of the tax rental arrangements and the tax abatements in the fiscal year ended March 31, 1957, March 31, 1958 and March 31, 1959, without including the Atlantic provinces adjustment grant so that the figures will be strictly comparable.


Donald Methuen Fleming: Mr. Chairman, the hon. gentleman began by reading remarks attributed to me in the record of the dominion-provincial conference of November 25 and 26, 1957, and the portion he read appeared to be treated by him as remarks made at the close of the conference with reference to some possible future meeting of the conference and the way in which the conference might continue. He quoted these words:
Now, sir, may I make a brief comment on the suggestions as to the form in which the conference might continue.
These remarks which the hon. gentleman has read from the record were not remarks made at the close of the conference at all. These remarks were made at the close of the public session on the morning of November 26 and were directed to the form in which the conference might proceed in the incamera session which followed upon the adjournment of the public session. My remarks related to the later meeting in camera on that day. They did not relate to some future resumption of a plenary conference.


John Whitney Pickersgill: Would the minister permit me to ask him a question so that we can clear up this point? The minister also remembers that there was a communique issued at the end of that conference and that communique contained these words with respect to taxsharing arrangements:
Possible changes in the tax-sharing arrangements act were discussed but it was understood that no endeavour would be made to reach conclusions on this matter prior to further consideration of the subject by the dominion government in the light of the public statements made by the provincial representatives in open sessions and the discussions which took place in committee.
Does the minister say that the consideration promised then is completed and that this measure is the result of it, or does he intend to deal further at the forthcoming conference with the rather strong demands that all provinces, without exception, made for a larger share of direct taxes?


Donald Methuen Fleming: There is no such thing as closing off demands on the part of any government in this field except to the extent to which the former government closed


them off by the terms of the Federal-Provincial Tax-Sharing Arrangements Act and the agreements that were entered into prior to March 31, 1957, in pursuance of the terms of that act.
The second question that the hon. member asked related to the purpose and scope of the conference, as I followed his remarks. Of course the provincial treasurers or ministers of finance are coming here with a serious purpose. We are going into this conference with a serious purpose and I stated that purpose this afternoon. We are making an earnest effort by means of the proposed co-operative approach and co-operative study to follow to make a thorough review of this field. Many, many questions have been raised from time to time in relation to this field and so far as we are able we intend to try to find long term solutions or settlements of the difficulties. That is the purpose of everyone. I have described in my remarks this afternoon the scope and purpose of the conference. These have been subscribed to by the provinces as evidenced by their acceptance of the invitation and the extent to which they have participated in the steps that have already been taken in preparation for the conference and the agenda for discussion.
The third matter the hon. member raised was as to the gross payments made-


John Whitney Pickersgill: Gross advantage derived by the provinces.


Donald Methuen Fleming: From payments made under this legislation or its predecessor?


John Whitney Pickersgill: No, I should like figures to compare with those that the minister put in his budget papers. In other words, they would include either payments or tax abatements up to the amount because that is the only way you can get them comparable for the different provinces. I should like to have figures comparable with those which Mr. Harris gave when he introduced the measure originally in 1956.


Donald Methuen Fleming: Mr. Chairman, excluding the Atlantic provinces adjustment grants, the figures are as follows: For the fiscal year 1956-57, a total of $523 million; for 1957-58, $633 million; for 1958-59, $661 million, and that figure of course is subject to revision when the final figures are available. Then, for the present fiscal year, 1959-60, the estimate at this time is $753 million.


John Whitney Pickersgill: $753 million-the minister estimates it is $100 million more this year?


Donald Methuen Fleming: No, not $100 million, it is $92 million more, according to the present estimate.


John Whitney Pickersgill: Surely there must be some error in those figures because there is no difference in the formula this year from that for the year ending March 31, 1959.


Donald Methuen Fleming: But there is a substantial difference in the tax returns estimated.


John Whitney Pickersgill: The minister will from those figures agree, I think, whatever may turn out to be the situation in 1960-I am sure he would also agree a large part of the returns from 1959-60 would have arisen under the old formula and that only the 3 per cent will come from the new formula- he will agree with me, I think-


Donald Methuen Fleming: I think the hon. member will agree, before he goes too far on that line, that had it not been for the amendment made last year to increase from 10 per cent to 13 per cent the provincial share of the yield from the personal income tax, the yield to the provinces in 1958-59 would have been lower than the figure for 1957-58 because of the decline in the yield from personal income taxes, which would have brought into effect the wider application of the stabilization principle.


John Whitney Pickersgill: Was it not more a decline in the corporation tax? However, that is not really material. The point I am making here is that from the minister's figures it will be seen that the increase Mr. Harris proposed in 1956, and which came into effect for the fiscal year 1957-58, amounted to $110 million and this much boasted increase of this present government, which was going to be more generous, amounts to $29 million.


Donald Methuen Fleming: No, that is not fair.


John Whitney Pickersgill: The figures are here. The minister has just given them. If the minister will subtract $523 million from $633 million, he will find that leaves $110 million. If he subtracts $633 million from $661 million, he will find that is $29 million. I have only done that mentally. I have not counted it on my fingers, but I think it is right, if the minister's figures are right. I am a little sceptical about the minister's figures because I think he told us in January, 1958, when he came into office and first told us about those telegrams of his in which he made other mistakes, that this was going to yield $62 million to the provinces. Now he tells us it is only $29 million.


Mr. McCleave:: It is $28 million.


John Whitney Pickersgill: The hon. member tells me it is only $28 million, and I think that is correct. I thank the hon. member for Halifax for making the minister's figures look even more absurd. Here is this great generosity
Dominion-Provincial Relations about which we have been told so much, this generosity about which the Minister of Justice went down to Newfoundland to tell the people, when a considerable portion of the total which he gave resulted from the action of Mr. St. Laurent and Mr. Harris. I think it is time these facts were put before the public. This was the so-called take it or leave it attitude about which we heard so much, but the formula was actually the result of several conferences with the provinces in which many of their modifications were accepted and which yielded an additional $110 million. This operation by telegram turns out to have yielded $28 million, and I thank the hon. member for Halifax again for correcting my arithmetic.


Donald Methuen Fleming: The hon. gentleman professes to want facts.


John Whitney Pickersgill: Exactly, and I used only the minister's figures.


Donald Methuen Fleming: He has proceeded from that to draw some very fictional conclusions. I think he had better add to his store of facts and draw the proper conclusions from them. It is true that in the year I have indicated, 1957-58, the payments to the provinces under this present act amounted to $633 million, but had we not introduced a year ago the amendment to increase from 10 per cent to 13 per cent the provincial share of the yield from the personal income tax the provinces in the year 1958-59 would have received only $613 million, whereas they actually received, as a result of the legislation introduced by the present government, $661 million. In other words, they received $48 million more than they would have received under the former government if it had continued in office.


John Whitney Pickersgill: That assumption, of course, is only an assumption; the hon. member does not know.


Donald Methuen Fleming: This does not include the Atlantic adjustment grants. If you add the $25 million given under the Atlantic adjustment grants, it will be seen that the increased benefits to the provinces since this present government came into office, in the fiscal year 1958-59 by way of unconditional payments alone, were $73 million.


John Whitney Pickersgill: It is still substantially less, even with that arithmetic by the minister, than Mr. Harris provided in 1956. I quite agree with the minister, and I never said anything to the contrary, that he did not do as well because the country did not do as well when he was in office as it did when Mr. Harris was in office; that is self-evident. The minister told the house in January, 1958,

Dominion-Provincial Relations that his best estimate was that this new arrangement would yield $62 million. He now says it yielded $48 million.


Donald Methuen Fleming: Yes, that was according to the estimates at that time.


John Whitney Pickersgill: In other words, we have a pretty substantial shrinkage, even of the minister's $62 million. I wonder if the minister could tell us what the difference was between what Ontario actually got in 1958-59 under this arrangement and what Ontario would have obtained if this arrangement had not been made.


Donald Methuen Fleming: The payment in 1958-59 which Ontario would have received under the 10-9-50 formula would have been $71,786,000. The payment which it has received under the 13-9-50 formula was $93,322,000, an increase of $21,536,000 as a result of the amendment introduced a year ago.


John Whitney Pickersgill: It was about 10 per cent less than the minister estimated. I think his first estimate was about $23 million.


Donald Methuen Fleming: The figures I gave a year ago, I remind the hon. member, were given as illustrations based upon the figures for the previous year and such figures as were available at that time. We had not then arrived at the end or within several months of the end of the fiscal year 1957-58.


John Whitney Pickersgill: The minister also forgets he made a speech in the Montmagny byelection in which he gave solid figures that the people could count upon.


Donald Methuen Fleming: The figures I gave there, I think the hon. member will agree, according to the estimate made, were fair and proper.


John Whitney Pickersgill: The minister gave, in the by-election in October or September, whichever it was, the figures which he had given to the house in January, not a new estimate, which would have been lower.


Lester Bowles Pearson: Now that the minister's estimates have been checked against the facts, may I return to another aspect of this matter which we were discussing a few minutes ago? The minister has said something about the desirability of reaching long term solutions. I think we can all agree with that, in principle, though this bill is not a long term solution any more than was the bill last year. He also indicated that the conference to be called in July has a serious purpose. I am sure it has. The conference called on September 16, 1957, when he invited the provincial premiers to Ottawa in November, was meant to have a serious purpose. The

letter of invitation which can be read in Hansard at page 589 of that session, began as follows:
My colleagues and I believe it would be useful and desirable to arrange a dominion-provincial conference-
This was in September, 1957.
-to review the present pattern of tax-sharing arrangements.
That is a long time ago. At least it was one and a half years ago. At that meeting in November, as has been pointed out by my colleague the hon. member for Bonavista-Twillingate, at that two-day conference the federal government made some proposals and the provincial governments presumably made some proposals and the conference adjourned so that those proposals could be considered. It was understood that the conference would resume and deal with those proposals and presumably come to some long-term solution.
Now, a year and a half later, the minister says, "We are going to have another conference at which we are not making any proposals"-or at least he would not indicate to us on this side of the chamber that they had any proposals to make-"but at which we will consider once again the proposals which may be made by the provinces." That is what he told the provinces a year and a half ago, namely that they would consider the provincial proposals. Is this conference in July 1959 called for exactly the same purpose, namely to consider provincial proposals which were made a year and a half ago?
We know what some of those proposals were. It is an open secret. We know that some of the provinces want a 15-15-50 formula. Mr. Frost is going around the country saying that is what they are going to get in July. He did not say very much about it a year and a half ago and he did not say very much about it in the intervening period. But he has said a great deal about it in the last little while. Perhaps he has some basis for what he is saying. If he has, perhaps the minister might let us know. Perhaps his basis for it is the attitude of the Prime Minister in 1957 during the election when he campaigned with Mr. Frost and applauded Mr. Frost's demand at that time for a 15-15-50 formula. I do not think we should blame Mr. Frost too much if, in June, 1959, he feels he may be able to have this formula accepted.
But I ask the minister this question. Is that all that is going to happen in July, namely that the provinces are going to produce the old formula, or the old modifications and the government is going to have another look at it for another two days and set up a committee to have a further look at it during the next two years?


Lionel Chevrier: When the minister was making his remarks a few minutes ago I intervened to ask a question but the minister thought it might be better dealt with at this time. The question I was going to ask had to do with the attitude taken by the minister with respect to the formula which was originally adopted by the former administration. The minister in his speech was extremely critical of that formula; that is, of course, the formula 10-9-50 which the present administration increased to 10-13-50 and is now seeking to extend for a further term.
But the point I wish to make at this stage is that while the minister was highly critical of our position and the attitude that was taken on this side of the house, I wonder whether he listened carefully to the speech made last evening by the hon. member for Bellechasse. The hon. member for Bellechasse was not nearly as critical of that attitude or that position as was the minister. I should like to refer him to what was said by the hon. member for Bellechasse as reported at pages 4304 and 4305 of Hansard. Of course, I am now paraphrasing his language but there he speaks of the conciliatory attitude of Mr. St. Laurent in dealing with this whole problem. He says that the formula and the principles laid down in the law known as 4-5 Eliz. II, chapter 29, to use his own expression: (Translation):
-reducing to silence the small politicians surrounding him, putting aside all narrow, mean and political considerations, became the instigator of "that law"-
(Text):
In other words, he commends the former prime minister for the attitude adopted in that formula. Later on, in another part of the speech he went on to defend that conciliatory attitude. I am therefore somewhat surprised at the fact that there seems to be a divergence of opinion. Perhaps I should not be surprised because that is something that often happens on the other side of the house, namely that the government is divided.


Some hon. Members:: Oh, oh.


Lionel Chevrier: My hon. friends shout "Oh, oh". We saw what happened with reference to the strike of the C.B.C. producers in Montreal. A portion of the government felt that the strike was legal and another portion felt that it was illegal.


Some hon. Members:: Oh, oh.


Lionel Chevrier: I realize, Mr. Chairman, that I am out of order; but I am out of order simply because I have been interrupted. I will now get back to what I intended to say and it is this. The attitude adopted by the minister and that adopted by the hon. mem-
Dominion-Provincial Relations ber for Bellechasse seem to be at variance and that is indicated from the language, as I see it, in Hansard. That leads me to this question. Has the minister received any representations since the 1957 conference from the premier of the province of Quebec or made representations with respect to this measure. What are his representations with respect to this agreement which is now before us? Is the premier satisfied with the division as it is found in this formula? I am sure the minister will want me to remind him that following the conference of 1957 the premier of the province of Quebec left the conference and said to everyone who wanted to listen how happy he was with the manner in which the proposals had been submitted and with the treatment that had been meted out to various groups; and he went on to repeat that for a period of some months. In fact, when he was chastised about his reversal of form, I think his words were something like this, "We must be patient; we must wait because it will take a long, long time for the present government to correct the many mistakes that were made by the former administration over a period of 22 years."
You can see, Mr. Chairman, how well that statement of the premier of the province of Quebec was received by those who applaud on the other side of the chamber. But have they seen or read or heard of the statement that he made only several months later on at least three occasions condemning, not in the most violent language-I do not think that is his attitude generally-but in the most vigorous language the conduct of the present government, and going so far as to say that it is even worse than was the conduct of the former administration.


An hon. Member:: How could it be?


Lionel Chevrier: I believe that he used the words-


Donald Methuen Fleming: Mr. Chairman, is this relevant to the bill that is now before the committee?


Lionel Chevrier: Mr. Chairman, the minister was allowed to roam all around section 12. Surely I may be allowed, as a preface to the questions that I intend to ask, to point this out. Surely I am entitled to point out a difference of opinion by one of the premiers of the provinces having to do with this kind of arrangement, an attitude which was entirely sympathetic in 1957 or shortly thereafter, and an attitude now which has been completely reversed and is in vigorous condemnation of the present attitude of the government. Before I proceed further, I ask the minister if he has received representations from the premier of the province of Quebec with reference to the formula which is now under discussion?

Dominion-Provincial Relations


Donald Methuen Fleming: Mr. Chairman, may I take up the remarks made and questions put by the hon. member for Laurier before coming to the matters raised by the Leader of the Opposition. It is quite true the premier of Quebec expressed himself, I think it is fair to say, in laudatory terms of the atmosphere of the dominion-provincial conference of 1957. I know a great many of the delegates from the provinces expressed themselves to the same effect. They expressed the feeling that there was an entirely new atmosphere there quite different from the atmosphere which had prevailed in dominion-provincial conferences for some years prior to that time in view of the fact that there was no suggestion on the part of the federal government of any take it or leave it attitude, which marked a very strong change in the attitude of the federal government in 1957 as compared with the attitude of the federal government which had confronted them in previous conferences.


John Whitney Pickersgill: That is not what Mr. Frost said.


Donald Methuen Fleming: The hon. member for Laurier goes on from there to make statements about the attitude of the premier of the province of Quebec. I am not aware of any expressions of opinion on the part of the premier of the province of Quebec that jibe with those attributed to him by the hon. member for Laurier.


Lionel Chevrier: The hon. minister had better read the newspapers.


Donald Methuen Fleming: It may be the
hon. member is better informed on the subject than I, but I have not seen remarks which tally with those attributed to the premier of Quebec by the hon. member for Laurier.


Lionel Chevrier: The hon. minister is not up on the reading of his press clippings.


Donald Methuen Fleming: However, so far as his question is concerned I am not aware of any representations which have been made to us by the premier of Quebec with respect to the Federal-Provincial Tax-Sharing Arrangements Act or the division of yields between the dominion and provincial governments thereby provided.
So far as the remarks of the Leader of the Opposition are concerned, I think they left a quite unfair impression. He seemed to suggest that the dominion-provincial conference of November, 1957 had not been a fruitful conference. The fact is that it was a highly fruitful conference. It was from that conference that the efforts to work out a satisfactory formula for an Atlantic provinces adjustment grant ensued, which reached a happy conclusion in the voting by parliament
[Mr. Chevrier.!
of the sum of $100 million for the four Atlantic provinces over the period of four fiscal years.
In addition to that, Mr. Chairman, it was out of or in the course of that meeting when the provinces stated their needs, and in the light of those statements and the further representations which were made to us by the provincial treasurers in the ensuing weeks, particularly urgent in the light of their need to prepare their budgets for presentation to their legislatures early in 1958, that we asked the house to increase the provincial share of the yield from the personal income taxes from 10 to 13 per cent. That amendment of last year, as I have indicated already this afternoon, has brought very substantial benefits to the provinces. They are asking for a continuation of those benefits, and this measure which we are asking the house to endorse now is one which I think I can assure the house is being urgently and anxiously awaited by all provincial treasurers.


John Whitney Pickersgill: Mr. Chairman, I think the minister's memory has failed him a little when he talked about the view taken at the conference in 1957 about a different attitude. I would like to read a little of what Mr. Frost said at this conference about Mr. St. Laurent. He said:
As I say I would like today again to voice my appreciation for his ability as chairman of several conferences and meetings and my thanks for the infinite patience-
I underline those words to the minister, and also the words "several conferences". It was not just a two-day shotgun affair, Mr. Frost continued:
-for the infinite patience he has invariably shown, for his unfailing courtesy which I think sprang from Mr. St. Laurent himself and from the fact that he is, basically, a Canadian gentleman and comes from that great race, two of the attributes of which are courtesy and understanding.
That is what the premier of the senior province said about Mr. St. Laurent and the way he conducted conferences when he was prime minister.
(Translation):


Azellus Denis: Mr. Chairman, I realize that the hon. Minister of Finance (Mr. Fleming) cannot answer for the premier of the province of Quebec, but everybody knows that the attitude of the province of Quebec is utterly negative and that, far from helping in anyway to settle this matter, the Quebec premier has always given a negative answer. At no time did he offer any serious alternative.
I have a question to ask and I should like to refresh the memory of the Minister of Finance. I shall even refer to the 50 Conservative members of this house who sup-

ported the attitude of the Quebec premier. Can the minister tell me if they have made any representations to him for a change in the principle of the act as passed by the former government. I shall get a bit closer still to the minister and ask him: Did the Solicitor General (Mr. Balcer), his colleague, make any representations requesting that this act which he said was unconstitutional, be made constitutional.
Moreover, in order to prove what I am saying, Mr. Chairman, I shall refer to a question and answer which appear on page 134 of the French edition of the official record of this house for 1957-58.
The member for Joliette-L'Assomption-Montcalm, Mr. Maurice Breton, who was a good representative, said at that time:
Mr. Speaker, may I ask the hon. Solicitor General a question?
When sitting in the opposition the hon. Solicitor General has, on various occasions, given expression to the well-known thought that federal subsidies are unconstitutional. The opinion which he voiced then was shared in every way by the government of the province of Quebec. In view of the proposed federal-provincial meeting on fiscal matters, could he tell us now if he will oppose the subsidies which his government seems to be preparing at this time?
That was October 18, 1957, and Mr. Balcer answered as follows:
Mr. Speaker, I would like to tell my hon. friend that I am still opposed to subsidies such as were proposed by the former government. As to his question, it seems to be a hypothetical one, but I am-


An hon. Member:: A political one-


Mr. Balcer:: -and a political one, yes. I want to tell him that the proposals of the federal government are not yet known, but I am convinced that they will be made on a very different basis from those of the former government.
According to the answer given me by the hon. Minister of Finance a moment ago, I must say that the only change that was made in this legislation is the amount of money given to the various provinces. It is not a question of dollars and cents that will make a legislation constitutional or unconstitutional. If the act was unconstitutional before the amount was raised, it is still so after any increase. Now because the Solicitor General had promised his voters that there would be a change-for in his view the wording of this legislation made it unconstitutional and a violation of provincial rights-he should have made representations to the Minister of Finance, as should also all Quebec members, urging him to change the principles and the basis of a legislation which, he alleged, was unconstitutional.
I see that the hon. Minister of Mines and Technical Surveys (Mr. Comtois) is smiling, but he has been more cautious than his
Dominion-Provincial Relations colleague the Solicitor General, because when asked the same question at that time, he refused to answer and preferred to wait until the government legislation was before the house. He did not wish to commit himself, because he knew very well that whatever reason he would give, he would have to follow the instructions of the head of the government.
Therefore, I ask the hon. Minister of Finance whether Quebec members, including the hon. Solicitor General, have made any representations to him? If so, why were not those representations favourably considered and why does the government come up with that selfsame act which had been adopted under the Liberal regime? In fact, only the amount has changed.
To say that granting 13 per cent instead of 10 per cent brings more money to each province is self-evident, and that is what was argued this afternoon. However, I should like to know whether the hon. minister has received any representations from the Solicitor General or from the Quebec members, and, if so, why those representations were ignored.
Mr. Chairman, I demand an answer. Yesterday, I was told that I kept silent on the matter. I find that if anyone should not remain silent, it is the Minister of Finance, considering that his own legislation is under review.
It is true I have not spoken every day for 22 years, but at least, I did not tell lies and I never tried to mislead people. When I spoke, I spoke the truth, and when I supported certain policies in election campaigns, I supported them in the house too. There have been times when I spoke and voted against my own party since, having promised my electors I would take a certain stand, I behaved accordingly. Therefore I am not like those people who rebuke me and who say in their constituencies that something is white and then say here in the house that it is black. Mr. Chairman, I should like to get a reply from the Minister of Finance before he is accused of being speechless as I was accused recently. It seems to me it should be easy to know, Mr. Chairman, whether the minister has received any representations from Quebec members for a change in the principles of this legislation.
(Text):


Donald Methuen Fleming: Mr. Chairman, the hon. member does not seriously expect an answer to questions of that kind. He is asking me about discussions with my colleagues both in the cabinet and in the house. He knows perfectly well that these things cannot be disclosed.

Dominion-Provincial Relations (Translation):


Azellus Denis: Mr. Chairman, whether representations were made or not, we realize that the minister did not take heed of the advice given him, and that this legislation which, according to hon. friends opposite, was unconstitutional two years ago, is still so today. Therefore, those who vote in favour of this legislation, and declare it constitutional because of a 3 per cent increase are, in my opinion, hardly logical. Those are the people who, during election campaigns, condemned that legislation which they now approve in the house.
(Text):


Lionel Chevrier: I should like to ask the minister one or two additional questions. Last year, if I understand this matter properly, the provinces received 13 per cent of the personal income tax. But the 13 per cent was based on the amount fixed in 1956, the 1956 rate, if you prefer.


Donald Methuen Fleming: The rate in effect in January, 1956.


Lionel Chevrier: Yes. Thank you. This year the government announced an increase in the rate of the tax on personal income and, if I understand the position properly, the provinces will on that account receive somewhere in the neighbourhood of $130 million. The share of the provinces remains unchanged. The point with which I am concerned at the moment is this: is it not a fact that the federal government gets a larger share of the personal income tax revenue because of the increase in the rate this year and that as a consequence the provinces will receive a lesser share in that field than last year.


Donald Methuen Fleming: They may be getting a smaller percentage of the total tax levied on personal income, but their receipts in aggregate will be increased substantially, as I have indicated.


Lionel Chevrier: That is in part what I said in my statement yesterday and if the minister will look at it carefully he will find that although he took exception to it in his remarks, that is the effect of the statement I made.
Now, if I may, I shall pursue that further. Under the formula as it was first enacted, 9 per cent of corporation profits go to the provinces, while 38 per cent of these profits are assigned to the federal government. It follows from that that the proportion received by the provinces is 24 per cent of that received by the federal government. That is under the old system. This year, however, the government has increased taxes on corporation profits and I take it that this means that the proportion going to the provinces is 9 per cent of the corporation profits while


the federal government's proportion will be 41 per cent. The consequence of this is that the proportion a province receives will be 22 per cent, so the relationship is now smaller. In other words, is it not a fact that because of the increase in the corporation taxes this year the provinces will be receiving less in that field?


Donald Methuen Fleming: There is nothing
in the present measure which has any bearing upon the yield from taxes on corporations.


John Whitney Pickersgill: Yesterday afternoon the
hon. member for Bellechasse in his contribution to this debate made certain references to statements which were made on April 14, 1954 by the Hon. Jean Lesage, who was then a member of the government of that day. Those references gave an impression of what Mr. Lesage has said in the debate which, I thought, did not represent at all accurately the position which he, as a member of that government, took. It seems to me, as a member of that government at that time, that since the hon. member for Bellechasse was allowed to make this reference I should also be allowed to refer to the remarks which Mr. Lesage made in order to indicate clearly what position he did, in fact, take.
I am reading from the French Hansard at page 4319:
(Translation):
I would be the last one to suggest that the Quebec legislature had no right to impose such a tax. The constitution gives it the right to impose direct taxes within the province for provincial purposes. The problem is not whether the province has the right to tax personal income, for such a right is recognized.
(Text):
And a little later, he said:
(Translation):
In either case, Mr. Speaker, is there anything but the recognition of a parallel and concurrent right: in both cases, the Canadian government makes an honest effort to help the provinces, while eliminating the inconvenience of double taxation for the taxpayers, and the cost thereof for the governments.
(Text):
Now I have a question I should like to put to the minister. It concerns the question which was put by my hon. friend from Burin-Burgeo at the resolution stage.



THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the house that I have received the following communication:
June 4, 1959
Sir:
I have the honour to inform you that the Honourable Patrick Kerwin, Chief Justice of Canada, acting as Deputy of His Excellency the Governor

General, will proceed to the Senate chamber today at 5.45 p.m. lor the purpose of giving the royal assent to certain bills.
I have the honour to be, sir.
Your obedient servant,
Lionel Massey
Secretary to the Governor General
A message was delivered by Major C. R. Lamoureux, Gentleman Usher ot the Black Rod, as follows:
Mr. Speaker, the Honourable the Deputy Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
And being returned:
Mr. Speaker informed the house that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills:
An act for the relief of Audrey Isabella Wanda Patterson Gray.
An	act	for	the	relief	of	Raymonde Gagnon
Tremblay.
An act for the relief of Aline Brunette Farago.
An act for the relief of Martina Bernice Patterson Baker.
An	act	for	the	relief	of	Nelly Hugentobler
Larsen.
An	act	for	the	relief	of	Jean Trachtenberg
Levy.
An act for the relief of Louise Martel Abel.
An act for the relief of Marie Louise Fauteux Roy.
An	act	for	the	relief	of	Helen Lyon Bain
Gardeler.
An act for the relief of Joan Brazer Brazier.
An act for the relief of Maria Luise Ahnhudt Sandberg.
An act for the relief of Susan Gilda Levin Klein.
An act for the relief of James Alvin Bradley.
An act for the relief of Emily Mary Kredl Keller.
An act for the relief of Raymond Winston Farren.
An act for the relief of Marie Lucille Pauline St. Jacques Parent.
An act for the relief of Mario Baldo.
An act for the relief of Frank William Staples.
An act for the relief of Zdenek Nosek.
An act for the relief of Margaret Viola McCullough Morrow.
An act for the relief of Sheila Carole Neidik Schwartz.
An act for the relief of Gordon Clarence Hunting.
An act for the relief of Ida Shlafman Zimend-stark.
An act for the relief of Audrey Elsie Asbury Ross.
An act for the relief of Patricia Anne McKenna Coombes.
An act for the relief of William Lawrence Hughes.
An act for the relief of Armand Lacombe.
An act for the relief of Rita Steinbach Gruia.
An act for the relief of George Meredith Scott Burton.
An act for the relief of Helen Borer Marcovitch.
An act for the relief of Emilia Mildora Kavalas Chesna.
Royal Assent
An act for the relief of Clarice-Mae Barraclough King.
An act for the relief of Margherita Elaina Milano Di Pietro.
An act for the relief of Lucille Gagne Labonte.
An act for the relief of Jean Louis Mathieu.
An act for the relief of Llui-Amoy Wheatley Fraser.
An act for the relief of Phyllis Pamela Allen Ashburner-Collins.
An act for the relief of Albert Reginald Bis-sonnette.
An act for the relief of Alexander Abraham Hendy.
An act for the relief of Winifred Martin Collier.
An act for the relief of Jeannine Aimie Alice Mercier Mahaut.
An act for the relief of Claude Desroches.
An act for the relief of Mildred May Eunice Charron Roblee.
An act for the relief of Pierre Joseph Gabriel Sorba.
An act for the relief of Gaston Vadnais.
An act for the relief of Theodora Cornell Moore Martin.
An act for the relief of Rose Ange Lorange Gadoury.
An act for the relief of Brenda May Newbury Sherwood.
An act for the relief of Lilliane Reed Volchuk.
An act for the relief of Fernand Filiatreault.
An act for the relief of Elisa Gislena Maria Blankaerts Juneau.
An act for the relief of Louis Gustave Rey.
An act for the relief of Gertrude Mary Prosser Hortig.
An act for the relief of Mary Barbara Jex Light.
An act for the relief of Joan Elizabeth Healy Watson.
An act for the relief of Franz Prader.
An act for the relief of Emilienne Celestine Mallard Grossin.
An act for the relief of Gertrud Maria Meta Wauer Macovetsky.
An act for the relief of Mohammed Dijiro.
An act for the relief of Aurore Giguere Gourd.
An act for the relief of Lucinda Marguerite Vaughan Flood.
An act for the relief of Joan Turvey Fields.
An act for the relief of Patricia Elizabeth Tobias Garber.
An act for the relief of Marian Ida Rex Ross.
An act for the relief of Mary Ann David Arial.
An act for the relief of Marjorie Barbara Hawthorn Morrison.
An act for the relief of Sarah Friberg Lazare.
An act for the relief of Marie Adrienne Maryse Dagenais Garlick.
An act for the relief of Alexandre Pare.
An act for the relief of Norman Grover, otherwise known as Norman Bernard Grover.
An act for the relief of Marjorie Winifred Joyce White Young.
An act for the relief of Helga Fischer Dollard.
An act for the relief of Marguerite Louise Agathe Piche Chartrand.
An act for the relief of Marcelle Flore Terrault Wright.
An act for the relief of Daisy Naydia Pretula Link.
An act for the relief of Alexander Hill Forbes.
An act for the relief of Barbara Ann Mary Curran Albrechtson.
An act for the relief of Dorothy Vera Doyle Trudel.
An act for the relief of Mary May Helen McCormick Moran.

Royal Assent
An act for the relief of Ethel Marguerite Nimick Hemmings.
An act for the relief of James Donald McAllister.
An act for the relief of Heather Joan Maxwell Firth.
An act for the relief of Suzanne Mary Florence Peyton Young.
An act for the relief of Elizabeth Ann Nelson Bissett.
An act for the relief of Moira Elizabeth Latham Bruce.
An act for the relief of Audrey Edwardeen Scanlan Grayburn.
An act for the relief of Oscar Roy.
An act for the relief of Rosy Fish Tatelman.
An act for the relief of John Andrew Buzzell.
An act for the relief of Barbara Lucy Bain Forbes Logan.
An act for the relief of Ghitta Caiserman Pinsky.
An act for the relief of Florida Seyer Girard.
An act for the relief of Maria Adriana Sluis Metcalfe.
An act for the relief of Irene Kramer Segal.
An act for the relief of Lois Genevieve Good Mulcahy.
An act for the relief of Frances Lerner Rotman.
An act for the relief of Mose Takacs.
An act for the relief of Catherine Mary Rita Durning Dossett.
An	act	for	the	relief	of	Dorothy Elizabeth
Fremantle Fleming.
An act for the relief of Donald Edward Cook.
An act for the relief of Maria Carmella Gentile Hammill.
An	act	for	the	relief	of	Ivy Mildred Patch
MacDonald.
An act for the relief of Mary Friend Bond.
An act for the relief of Eleanor Patricia Henderson Cosh.
An	act	for	the	relief	of	Patricia McDonald
Bouthillette.
An act for the relief of Louis Marcel Blondin.
An act for the relief of Janet Marianne Louise Kippen Coulombe.
An act for the relief of Demetra Paul Garini Liogas.
An act for the relief of Paul Alexander Cross.
An act for the relief of Elisabeth Marguerite Le Febvre Walker.
An act for the relief of Joseph Roger Wilfrid Girard Frigon.
An act for the relief of Jean Paul Frechette.
An act for the relief of Ben Plotkin.
An act for the relief of Tibor Matthias Miletics.
An act to amend the Representation Act.
An act to incorporate Lutheran Church-Canada.
An act to amend the Veterans Rehabilitation Act.
An act to amend the War Service Grants Act.
An act respecting The Canadian Legion of the British Empire Service League.
An act to incorporate Export Finance Corporation of Canada, Ltd.
An act to amend the Excise Act.
An act to amend the Customs Tariff and The New Zealand Trade Agreement Act, 1932.
An act to amend the Old Age Security Act.
An act to provide for the Appointment of Parliamentary Secretaries to Ministers.
An act for granting to Her Majesty certain sums of money for the public service of the financial year ending the 31st March, 1960.


Mr. Speaker:: The house will resume the business which was interrupted upon the arrival of the Gentleman Usher of the Black Rod.



FEDERAL-PROVINCIAL TAX-SHARING ARRANGEMENTS ACT FURTHER EXTENSION OF INCOME TAX RATE

[Stage Direction]
The house resumed consideration in committee of Bill C-41, to amend the Federal-Provincial Tax-Sharing Arrangements Act- Mr. Fleming (Eglinton)-Mr. Rea in the chair.
On clause 1-Alteration of act in its application to fiscal year ending March 31, 1960.
At six o'clock the committee took recess.

AFTER RECESS

The committee resumed at 8 p.m.
John Whitney Pickersgill: Mr. Chairman, when we were interrupted by the arrival of Black Rod I was just at the beginning of a question to the minister and I think I had gone so far as pointing out that the question was asked at the resolution stage by the hon. member for Burin-Burgeo. The minister will recall that on April 20 the Prime Minister, on the television network program "The Nation's Business", made a statement in which he said:
In the very careful study which I have been giving to this whole matter, I find that since confederation Newfoundland has received a total of $300 million from the federal government, including the amounts for the current year.
Then he went on to show how this $300 million was made up. My hon. friend asked that comparable totals be given for all the provinces. The minister will recall also that a starred question was asked by the hon. member for Trinity-Conception requesting not merely the total but also breakdowns for the other three Atlantic provinces and for Manitoba and Saskatchewan, and that question was made an order for return before this debate began. I do believe, in view of the fact that these figures have been given and that the Prime Minister claimed on TV he had made a careful study of the matter, that comparable figures should be given. Obviously, the Prime Minister would not have said he had made a careful study of this matter if he had not compared the Newfoundland figures with the other figures. I would not suggest for a moment that the Prime Minister would have obtained the figures for Newfoundland and, without relating them in any way to the other provinces, put them forward as though they were something startling.


Donald Methuen Fleming: It should be noted, Mr. Chairman, that the hon. gentleman takes his starting point, not from anything said

in the course of the debate on this measure at its various stages but rather from what the Prime Minister said during a television broadcast. What was referred to there embraced a great deal more ground, of course, than the bill now before the committee. It embraced not only the unconditional payments provided for under the Federal-Provincial Tax-Sharing Arrangements Act, but all manner of conditional payments that the federal treasury contributes to the assistance of the provinces.
It is quite obvious that the type of material now sought is quite outside the scope of this measure and outside the scope of the present debate. This does not mean that the hon. gentleman cannot possibly obtain the information he wishes. As a matter of fact, there was an order of this house passed some days ago which, in its scope, embraced as I understand it the information now sought by the hon. gentleman.


John Whitney Pickersgill: Some of it.


Donald Methuen Fleming: The information the hon. gentleman is seeking could be had at any time in the proper way. It is not relevant to this measure now before the committee. The hon. gentleman can certainly have the information. When it was requested I indicated it was not available then. The information, so far as it was within the possession of the finance department, was compiled in response to the order for return passed by the house, and that will be forthcoming in the ordinary course. It includes much that is quite outside the scope of the present measure.


John Whitney Pickersgill: I must say, Mr. Chairman, there certainly seems to be in the opinion of the minister, one rule for one side of the house and one for the other, because in his speech closing the debate on second reading he made very considerable reference, without giving precise figures, to this very subject. It seems to be all right for the minister to traverse all kinds of ground but when anyone on this side of the house attempts to obtain information, then he is told it is outside the scope of the bill.
The purpose of this legislation is to increase the amounts the provinces will receive under the tax-sharing arrangements. It is hard to conceive of anything that could be more relevant, if we are to give proper consideration as to whether this is the right amount or the adequate amount, than knowing what the total amount is that the provinces have received.
There is another reason for asking for this information. The Prime Minister said he had given very careful study to this
Dominion-Provincial Relations matter. The Minister of Justice went down to Newfoundland and gave figures on the same subject which turned out to be hopelessly incorrect, and which he said he obtained from the Department of Finance. This whole information relating to Newfoundland has, in our opinion, been used to create an entirely illusory impression on the public. We do believe, when we consider this problem of federal-provincial financial relations, that we are entitled to the information for all the provinces.
The minister says we can get this. My hon. friend from Trinity-Conception put a starred question on the order paper a week after this broadcast was delivered, that is to say late in April, and it is now June 4 but we have not received this information yet. It is all very well for the minister to say that we can get this information. It is true that we can put motions on the order paper; it is true we can put questions on the order paper which are then made orders for returns and are buried in the department of the Secretary of State, which seems literally to have become a burial ground for these returns. If the rules permitted me, I would say that I do know the department has this information. I know it would not take the minister two minutes, if he has brought them with him from the department, to produce the figures giving the comparable totals for all the provinces. I know this because I used to be a member of the government and, from time to time, I used to get this information. It did not take two months to get it, either. I cannot believe that the machinery of government has broken down quite to that extent in the two short years the hon. gentleman has been presiding over the Department of Finance, although we know there has been a very sad deterioration. I do suggest the minister would facilitate the passage of this legislation by giving this information here and now.


The Deputy Chairman:: Shall clause 1 carry?


John Whitney Pickersgill: I have another point that I want to take up, since I take it we are going to be denied this information. We are told we can get it, but it seems to be impossible to get it when you ask for it. The minister also talked about the beautiful harmony that had been established between the federal government and the provinces since this government came into office. When the hon. member for Laurier suggested that perhaps this harmony, in so far as the government of Quebec was concerned, is not as great as it seemed to be two years ago, the minister said he had not read anything to indicate the contrary.

Dominion-Provincial Relations
I happen to have right here in my hand a clipping from one of the minister's favourite newspapers, Le Devoir, for April 2 of this year-I shall not quote this because it is not directly on the point-in which the premier of Quebec took the most violent exception to action taken by this government. This is only one of many that we could furnish.
But it is not only with the government of Quebec that we have this new harmony. Last week in another debate we witnessed-and I am not going to traverse it-the Prime Minister making attacks on the governments of two provinces in a single speech. That is something that did not use to happen when we were in office. I never, during the time that Mr. St. Laurent was in office, heard him make any attack on any provincial government, whatever the provocation.
If the hon. gentleman thinks his government has good relations with the province from which I happen to be elected, I think perhaps he is unique in holding that view. The fact of the matter is that since this government came into office there has been a most shocking deterioration in the relations between the federal government and the governments of the provinces. Part of the reason for that deterioration is that the provinces and the public were told in 1957 that a Conservative government would solve this problem at a single conference. Instead of that, we have this one year at a time business.
I ask you, Mr. Chairman, why do we have this bill brought back every year? The Leader of the Opposition pointed out quite clearly this afternoon that this government has not any intention of doing anything more than this for the currency of these agreements. Why does not the minister ask right here and now to amend this bill in committee and at least spare us this annual agony until 1962? He is not ever going to do any more and he knows it perfectly well. Mr. Frost is not going to get one nickel-and let the minister remember that phrase; he is not going to get five cents-of his hundred million dollars from this government; not five cents of it. This camouflage about this pale imitation conference, for which this government-as the minister admitted this afternoon -has no program at all, no agenda, no proposals, is all we have.


Donald Methuen Fleming: That is untrue.


John Whitney Pickersgill: Let the minister show them to us.


Mr. Marlin (Essex East):: Tell us of them.


John Whitney Pickersgill: I remember the minister standing in his place here and condemning Mr. St. Laurent when he was prime minister for not producing an agenda in advance for

a Commonwealth prime ministers' conference in London. But here is a conference of Canadian governments about the business of the people of Canada and not one word can we get out of the minister as to what is going to be discussed there except the vague kind of generalities that the Prime Minister gave the mayors up in North Bay. I say that this legislation is simply an insult to parliament and an insult to the government of the provinces.


Lionel Chevrier: I should simply like to remind my hon. friend of something of which he was not aware before six o'clock when I brought to his attention the strong protests that had been made by the premier of the province of Quebec in connection with this whole taxation field and more particularly with this measure. The minister said that he was not aware of these statements. I should like to put a short quotation on the record.


Donald Methuen Fleming: I think my hon. friend will agree that what I said was that I was not aware of statements that tallied with those he was ascribing to the premier of Quebec.


Lionel Chevrier: I stand corrected, Mr. Chairman. Let us see how the statement I am about to read tallies with what I said. I will leave it with my hon. friend to make the comparison when Hansard appears tomorrow. This statement was made by the premier of the province of Quebec and is to be found in Le Devoir of April 2, 1959. It reads as follows: (Translation):
"Ottawa has no right to Impose taxes In a province for provincial motives", declared the premier. "Only a province may levy taxes within the limits of its territory for provincial ends. When Ottawa imposes taxes in a province, for provincial objects, Ottawa is encroaching. Indeed, that is theft. For any encroachment with regard to those rights is both a violation and a theft."
(Text):
I did not go nearly that far. I tried to be moderate in my language and I would appreciate it if the minister followed that example sometimes when he makes his rather violent speeches in this house. But here the premier of the province of Quebec goes much further than I went. He says it is outright theft and constitutes a violation of the constitution of this country. I am not going any further than saying what I did say. I simply wanted to put this on the record so that there would be no doubt as to the words of the premier of the province of Quebec. I still believe that my hon. friend must have had some idea- general, special or otherwise-of this statement made by the premier of the province of Quebec.


Mr. Bourget:: Can the Minister of Finance tell us whether, after the meeting of pro-

vincial treasurers at the beginning of July, there will be a formal conference of all the premiers of the provinces this year?


Donald Methuen Fleming: I cannot pinpoint any particular date for a plenary conference. That will depend upon a number of circumstances. However, I am sure that the steps which will be taken, both in the course of the ministerial conference in July and the meeting of the continuing committee to follow and the studies that will follow that again, will contribute greatly to making effective the work of any plenary conference when it may be deemed appropriate to call it.


John Whitney Pickersgill: There is one more question I should like to ask the minister. He did not say anything in reply to my suggestion that he amend this legislation in order to make it apply until March 31, 1962. Since it extends only until March 31, 1960, if we pass this legislation in its present form, we are likely to be faced with the same situation again. As I said a year ago-I will not weary the house by repeating my words-when another year is up we will be faced again in another session with exactly the same kind of demand for urgent action at the last minute as we have this year. That is what is going to happen in 1960 if we pass this legislation in this form. What I say is this. Does the minister have any serious expectation of making any different arrangements between now and March 31, 1960? Has the government any plans to make any different arrangement?


Donald Methuen Fleming: The government has plans to discuss this and allied subjects with the provinces in the manner indicated and we look for fruitful results.


John Whitney Pickersgill: I would just point out that the government not only had these plans but had promised in November, 1957 that it would discuss these matters with the provinces in the first month of 1958.


Paul Joseph James Martin: In May of 1957.


John Whitney Pickersgill: No, in November at the conference, when the conference closed, it had made a promise. Oh, the hon. member for Essex East refers to the promise they had made in May of 1957. I am glad my hon. friend reminded me of those promises which were to the effect that the Conservatives were going to settle it all in one conference right after the election; they were going to sit down and settle the whole problem once and for all. But of course, as the minister so eloquently said that was the election before the last one; that has already been washed out.
Dominion-Provincial Relations


Paul Joseph James Martin: That was a promise made to the people.


John Whitney Pickersgill: Promises made to the electors do not count. The Minister of National Revenue told us that. But then we had a formal promise made to the provincial governments in November 1957-that is here in the proceedings-that they woud meet with the provinces before any further action was taken. That promise, of course, was not kept. The form the meeting took was telegrams, two of which were not received and all of which were filled with mistaken arithmetic which we understand was prepared in Queen's park rather than in Ottawa. We remember all these rather sorry episodes. That was two. years ago, or practically two years ago. That was a precise promise. Now we have this pale shadow of a shadow of a shadow of a promise, the pale hope that maybe something will be done at this conference. They are not even going to call the premiers this time. They are just going to call the provincial treasurers and the bureaucrats to sit down to study without an agenda, without any terms of reference, apparently looking for inspiration.


Mervyn Arthur Hardie: With no money.


John Whitney Pickersgill: And as my friend the hon. member for MacKenzie River so eloquently points out, with no money. I think we can draw one of two conclusions. One is that this is going to be like the $40 million to the western wheat farmers; it is going to be a one-shot affair. Next year they will go back to the 10-9-50 formula. Maybe that is what is going to be done after the Ontario election. Maybe it is not going to be renewed at all in 1960.
I doubt if the government would go quite that far, but what do we know? It is only for one year in its present form. I suggest the minister come clean and admit he does not intend to let them have more than the 13 per cent for the rest of the currency of these agreements and ask us to amend the resolution so that we will not go through this painful debate again next year.


Maurice Bourget: If I may follow up the
answer given me by the Minister of Finance, am I right in saying that we cannot expect any practical results from the conference which will be held here in Ottawa at the beginning of July and that there will be no formal conference of the prime ministers of the provinces this year?


Donald Methuen Fleming: The version now coming from the hon. gentleman does not bear very much resemblance to the statement on my part which he now purports to. be summarizing.

Dominion-Provincial Relations


Lionel Chevrier: Perhaps he is following the example of the minister.


Maurice Bourget: Might I tell the minister that we are not far from the truth, because in 1957 a federal-provincial conference was held here in Ottawa and we were told then there would be a federal-provincial conference at the beginning of 1958. We are now into June of 1959, a year and a half after, and that conference has not taken place. That is the reason I am asking the Minister of Finance, because all the premiers of the provinces are asking the same question: Are we going to have this year another federal-provincial conference which will give results; and not the kind of results we were given to understand by the Minister of Finance or the hon. member for Bellechasse last night when they were denying all the promises they had made in the last federal election, in the province of Quebec particularly, and I hope we will have an answer from the Minister of Finance on that very important question.


Lionel Chevrier: The silent minister. (Translation):


Azellus Denis: Mr. Chairman, the hon.
member for Bellechasse (Mr. Dorion) could perhaps say the Minister of Finance (Mr. Fleming) is speechless, for he has repeatedly failed to answer our questions.
While we are on the subject, and as the hon. members from Quebec have suddenly decided that the act has become constitutional, because the amount has been increased, I must say that those were rather funny principles which they put forward during the election campaign, since they are supporting that legislation, except those who do not come out to vote and who are probably expecting to be among the appointees. Besides, I believe it is about time the parliamentary secretaries were appointed before strife breaks out in the Conservative ranks. So I take the liberty of quoting the statement made by the hon. member for Bellechasse in a speech at Honfleur, as recorded in the VAction Catholique of March 29, 1958 I quote:
The vengeance of Canada's present Prime Minister, Mr. Dorion predicted, will consist in handing back to the province of Quebec the autonomy it had been deprived of by the Liberal administration, and to restore to that province, which he has described as the very foundation of Confederation, all the sources of taxation and all the rights to which it is entitled under the constitution.
Mr. Chairman, it is doubtful whether the hon. member for Bellechasse would be able to answer this question, but since it primarily concerns the Minister of Finance, perhaps the minister would tell the house what sources of taxation have been

handed back to the province of Quebec and to other provinces, by the hon. member for Bellechasse and the present government, who have been representing themselves as great champions of autonomy.
(Text):


[Stage Direction]
Clause agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall the said bill be read the third time?


Some hon. Members:: Now.


Lionel Chevrier: Next sitting of the house.


Mr. Speaker:: Next sitting of the house.

House in committee of supply-Mr. Rea in the chair.



DEPARTMENT OP PUBLIC WORKS

[Stage Direction]
318. General administration, $9,335,045. (Translation):
Maurice Bourget: Mr. Chairman-
(Text):


Some hon. Members:: Oh, no!


Maurice Bourget: Supply-Public Works
I would not like, Mr. Chairman, to irk the minister, especially today when he has just been appointed Secretary of State for External Affairs, but just the same, I hope, he will harbour no hard feelings against me if I use the very phrases he used with regard to us last year. In my opinion, it would be wise to remark here that the minister became quickly out of breath since within a single year the percentage of efficiency suffered a substantial decline. We can also infer that if in 1957-58, 97 per cent of the appropriations had been spent, this was undoubtedly due to the fact that most of the projects implemented during that year had been prepared by the former Liberal administration.
I have drawn up a table which gives us a rather good idea of the degree of efficiency in the Department of Public Works during the fiscal year 1958-59. After adding up the appropriations in the main and in the supplementary estimates, I compared them with the expenditures which were made during the year which are shown in table 26, on page 65 of the budget papers tabled in the house by the Minister of Finance (Mr. Fleming) on the occasion of his budget speech.
Under the heading "Public Buildings- construction and services-Acquisition, construction and improvements of public buildings", we find that an amount of $25.1 million was voted while $19.8 million were spent, that is a percentage of 78.9 per cent.
For other centres in Canada, outside of Ottawa, $43.4 million were voted, while $34.1 million were spent, that is a percentage of 78.6 per cent.
Under the item "Harbours and Rivers Engineering Services-Acquisition, construction and improvements of harbour and river works", we notice that $37.2 million was voted while $27.3 million was spent, that is, a proportion of 73.4 per cent.
And now, under the item "Development Engineering Services,-Trans-Canada Highway-Construction through National parks", which comes directly under the jurisdiction of the department of the federal government, $12.5 million were voted, while $10 million were spent. The proportion there is 80 per cent.
So we can realize that the degree of efficiency with regard to those various items, which concern construction more particularly, varies from 67.3 per cent to 80 per cent.

It is indeed strange, under the circumstances which existed in 1958-1959, having in mind the record number of unemployed at the time, that the Department of Public Works spent $22.8 million less than provided for in the estimates. It might be worth noting that, in fact, the expenses of the department for the year ending March 31, 1959, increased by only $14 million as compared with 1957-58.
Mr. Chairman, we found that we were very far from the glittering promises made by the Prime Minister (Mr. Diefenbaker) in February 1958, when he was talking of his great special public works program to the amount of $1,185,000,000. Canadians, during the last fiscal year, have fully realized that that program was nothing but window dressing and represented only the normal expenditures of the government departments and agencies, plus some investments by the Central Mortgage and Housing Corporation.


Some hon. Members:: Hear! Hear!


Maurice Bourget: Now let us take this year's estimates, the estimates for 1959-60. It would be a good thing to point out that the estimates for the current year, as listed in the blue book, show a decrease of $18,665,715 in construction of public buildings and of $5,692,300 for harbours and rivers, thus bringing the total decrease to more than $24 million.
The supplementary estimates are not all known as yet but, judging from past experience, the supplementary estimates for the Department of Public Works usually amount to $14 or $16 million. We would then have, under these two important headings, a decrease of $8 to $10 million, including the supplementary estimates that will come later.
In fact, Thursday, May 21, the minister said that the estimated amount required for the year 1959-60 was $173.6 million, or $17.8 million less than the previous year. The minister indicated at that time that he was hoping that no one would criticize him for having reduced the expenditure. However I hope he does not expect us to congratulate him. Indeed, Mr. Chairman, this substantial decrease seems very strange to me, and I wonder what causes it. Would it be that the projects that the Minister of Public Works mentioned last year, when he introduced his budget last May 21st, are not ready? Yet he told us at that time, as found in Hansard of June 6, 1958, page 907, and I quote:

We intend to build up a proper shelf of public works which can be called on immediately.
Or is it that the treasury board, under the leadership of the hon. Minister of Finance, is too strict? However that is not what he said-I am referring to the Minister of Finance-that is not what he implied when he said the following, which can be found in Hansard of January 21, 1958, page 3569, and I quote:
Let me make it abundantly clear to every member of the house-I made this clear in the financial statement I made in the house on December 6

that the instructions that have been given by the government are to the effect that while we are seeking to reduce expenditure where expenditure is needless we have said that there shall be no reduction in expenditure where it means jobs, and we are seeking to increase construction in useful public works down the line. While next year we would unquestionably like to have a balanced budget, let me make it abundantly clear that we are not going to put a balanced budget above our firm determination to provide, through the agency of public works, jobs for unemployed Canadians.
Well, Mr. Chairman, committee members must certainly find it rather strange that the estimates of the Department of Public Works should be reduced in a year, when, as late as last April, according to statistics, there were more than 445,000 unemployed while, according to statistics supplied by the national employment service, there are 733,000 registered applicants looking for a job.
It seems that the government has been so dazzled by the "vision" it had before the election that it is unable to realize exactly the prevailing situation.
I feel that, instead of reducing estimates assigned to job-making construction projects, the Department of Public Works should have increased them. Thus, the minister would have been consistent, especially in view of the statements he made last year. But again we note that the government does not seem to be taking any action that would make unemployment less severe next winter than it was last winter.
Again, like last year, municipalities will no doubt be saddled with the responsibility of finding work for hundreds of thousands of unemployed. In my opinion, we would be justified in saying that we have heard a lot of empty talk from the government but we have not seen much action, that we have heard many promises, but that few have been fulfilled.
66968-9-276J
Supply-Public Works
Before concluding my remarks, I want to say a few words about the trans-Canada highway. I do not want to speak lengthily on this subject, because I already had the opportunity to deal with the matter last February. However, I would like the minister to recall that, according to existing agreements, the construction of the trans-Canada highway should be finished by the end of December 1960.
Well, Mr. Chairman, I think it would be interesting for members of this committee, and also particularly for the provinces, to know in advance what the government proposes to do once the highway is completed.
I should like to ask the minister whether he intends this year to call a conference that would be attended by the ministers of highways of the various provinces, and I suggest to him or to his successor to avail himself of this opportunity to send a very special invitation to the hon. minister of highways of the province of Quebec.
Those are the short remarks I had to make, Mr. Chairman, and the minister can be assured that they have been made in good faith.
Before I resume my seat, I want once again to offer my congratulations to the minister and to wish him well in the discharge of his new responsibilities.
(Text):


Herbert Wilfred Herridge: Mr. Chairman, the Department of Public Works inherits a tradition that finds its genesis in the mist of antiquity. I find on reading that throughout the ages it has been primarily concerned with mortar and water in its various forms. I think it is safe to say that the first well known public work was Noah's ark which was used to rescue mankind from the flood. The second best known public work was the tower of Babel which caused the confusion of mankind in a flood of languages. And so on down through the ages until we come to Canada's best known edifice, the printing bureau, built on a flood as the result of a freshet of errors and a cataract of public expenditure. History abounds with similar errors caused by ignorance and in some cases by cupidity. Fortunately, however, it is replete with illustrations that some person always came forward to take corrective measures to remedy these situations.
Some years ago Mr. Blair Fraser, Ottawa editor of Macleans magazine said in his column, which incidentally is read by thousands of people across Canada, "the public works department is the last patronage swamp to be drained". I am of the opinion that Mr. Fraser was a little too optimistic at that time. I think there are a few stagnant

Supply-Public Works
pools in the post office and transport departments, but even those pools are being drained to a certain extent and are in a much better condition in recent years.
A great many people in Canada agreed with Mr. Fraser's statement and a great number of people within the party that was in power at that time felt a general dissatisfaction with the public works department. I am told it was overloaded in the postwar years and that the organization was inefficient and insufficient. A great many people looked for action to remedy the situation.
You know, Mr. Chairman it is remarkable how history repeats itself-even in public works. It is known that the Assyrians and Nebuchadnezzar relied on the astrologers, astronomers and the generals, I find from a reading of history, for the planning of buildings, the building of canals and the building of gardens in the valley of the Euphrates. The Pharaohs, I find on reading history, used their generals to organize the labour required to build the pyramids. Napoleon consulted with his engineers and generals when drawing plans for a new and more beautiful Paris that could be easily defended against invaders.
In 1952 the Canadian government realized that the public works department required some reorganization and improvement. I think because of that realization the Hon. Robert Winters, an engineer, was appointed as the minister. I think all hon. members will agree he was a most capable minister. It was not long before he made history repeat itself. He began to look around the Canadian landscape and appointed a former quartermaster general of the Canadian army as his deputy. They both commenced a reorganization of the department with vigour and dispatch.
We were very pleased with this reorganization. The effect of the appointment of the former minister, the Hon. Robert Winters, and of the present deputy minister was soon noticed in the department and by the results obtained. We were extremely pleased because for years we in this group have been advocating planning in all government activities and in the economic organization of our country. We have taken a strong stand against patronage.
To be quite fair it is much easier to take a strong stand against patronage when you are not in power than when you are in power but we have always taken this stand throughout the years. I can see a certain sympathetic smile in response to that remark on the lips of the minister at this time.
[Mr. Herridge.l
As a result of the efforts of the two gentlemen to whom I referred the draining of the patronage swamp mentioned by Mr. Fraser was nearly completed. I think there are a few odds and ends to be cleared up yet mostly found among lower paid employees and casuals. I am not blaming the senior officials for that nor am I blaming the minister. It is very difficult to have your finger on every little thing that is happening in a department that carries on such large scale operations as does the Department of Public Works.
In 1957 the present minister was appointed and gave the "Green" light-large capital and small letters-for continued efforts to improve the efficiency and planning procedures of the department. This was no easy task, with his party out of office for 22 years. We are all human and, without a doubt, the minister was faced with the long time habits of certain persons who had been used to giving first consideration to Liberal members or defeated Liberal candidates and other persons influential with the party in power. That is a situation that takes some time to correct in fairness and properly. And then, there is always a minority when a party has been out of office that long that wants to feed from the nose bag of patronage.
I want to say right here that I have had something to do with the federal Department of Public Works throughout the years, on one occasion as a conscript employee, and on another as a close observer of a great deal of their work in my constituency, and as a friend of a great many of the officials going back over 50 years. The minister deserves great credit for his demonstration of his consistency, integrity and industry in the administration of his department and his unfailing courtesy to all members, regardless of party.
There is a tradition of public works in the minister's family. I remember the minister's uncle when he was a member of the provincial legislature of British Columbia. He was the first member responsible for getting a few miles of road built in that part of the constituency in which we live. He was responsible for getting the Sandon flume built after the big fire of 1900. He was interested in that. I know that in the early days he was active in public works which were of great concern to everyone in a country lacking roads, communications and so on.
This improvement in departmental organizations would be impossible without the cooperation, professional and administrative ability of the deputy minister, of the senior officials in Ottawa and the district officials and staff throughout the country. I think we should give credit to those who are in quite

minor positions across Canada and who carry-on their valuable work from year to year. I know that in the past some have received little sympathy or understanding from headquarters in Ottawa about the problems they have to face from day to day.
We in this group appreciated the minister's statement as to policy, planning and with respect to expenditures. He gave quite an adequate and informative synopsis of the proposals and activities of his department. We were interested in hearing about the proposals with respect to the trans-Canada highway. I was particularly interested in hearing about the program for the building of small, standard post offices throughout the country, which I think will receive unanimous approval. I found an excellent response in my own constituency to this planning ahead for the placement of these small post offices in villages and other locations. This brings the people of the smaller places in closer touch with the activities of the federal government, and I think it gives them a certain esprit de corps.
I happen to know that there is to be a building of that type built in a little village near where I live, in Nakusp. It is the first public building of its kind in that village, and it is very much appreciated. It will be a beautiful building and is situated in a pretty village. The erection of these small buildings in these smaller places, which serve the needs of the people in the smaller places which I think have been somewhat overlooked in the past, is excellent. I think it is an excellent program and is well planned ahead. I like the minister's idea of obtaining the sites upon which buildings can be erected at a time when that will be of the greatest advantage in aiding local unemployment.
I was interested also, in the minister's statement with respect to the co-operation of the research council, and the very sensible use of models to study all the considerations connected with large projects, particularly when the effect of water has to be considered. I think that is a very worth-while step indeed. I was interested in his statement with respect to the maintenance and repair of public buildings in the winter months, as I said before to the best advantage in meeting any local unemployment situation.
The C.C.F. believes that sound planning is required to secure the best value from the expenditure of public funds. It is obvious that the senior officials of this department have brought a great deal of order out of the former chaos as a result of planning since 1952. For instance, if you read the
Supply-Public Works
departmental report for 1952 you will find that it provides for reports from the deputy minister, the chief architect, the chief engineer, the treasury officer and the chief of legal services. I am not criticizing the organization of years ago which, before expenditures were so large, possibly was adequate.
We are very glad now, however, to note that under the supervision of the former minister and the present minister, and under the guiding hand of the deputy minister and his senior officials, the reorganization of the Department of Public Works has produced results. I have noticed that in this year's report, instead of reports from the few people I have mentioned in the 1952 report, we now have reports on departmental activities broken down into the harbours and rivers engineering branch, the development engineering branch, building construction branch and property and building management branch. In my opinion it was a very wise move to establish the property and building management branch. Then, we have the purchasing and stores branch, the administrative services and secretary, the economic studies branch, which is a very important thing particularly when expenditures are proposed for wharves or public buildings.
It is then necessary that the department have some idea of the future possibilities with respect to the development of the area in which the money is going to be expended. There have been occasions in the past when considerable sums of money were spent because the department lacked the economic studies branch and the economic activity of the community in which the expenditure was made declined very shortly after the building, wharf or public project was constructed.
Then we have the report of the financial services, information services, legal services, the personnel branch and so on. The reading of this report, and the breakdown into the various departments, gives one a clear indication that the department is well planned, well organized and in a position to undertake the large responsibilities that it has to accept at this time and the increasing responsibilities that will come throughout the years.
I should like to make a few suggestions before concluding, and I am only making a few general remarks on the administration item. We in this group believe that planning should be some years ahead, so far as possible, concerning prospective needs. We believe that the economic studies branch should be supplying the deputy minister and the minister with information that will allow them to get a very clear picture of the likely developments in any area, say, for the coming

Supply-Public Works
10 years. I believe that this is necessary in order to plan properly and to have projects, as it were, on the shelf to be undertaken at any time to meet a local unemployment situation.
I should like to say a word or two about public relations. In my opinion public relations are a very important part of any federal government department's activities. Naturally, the ministers travel around the country and make occasional speeches at certain centres. The more they do of that, the better. But I am suggesting that even the deputy minister and some of the senior officials should have the opportunity of meeting and addressing representative public bodies such as chambers of commerce or, on occasion, ladies' organizations or trade unions, so that more and more people will get some idea of the organization and activities of the public works department of Canada for which they pay.
In addition to that, I think there should be developed as much communication as possible between district officials, local officials and local organizations. I say that even the local organizations in the smallest places should be given an opportunity to be informed of the department's plans, as to whether they are going to demolish a wharf, erect a building or where they are going to do some particular work. From my experience I have found that when the public, particularly in the smaller places, are consulted or matters are discussed-mind you, I know the department is responsible for making the final decisions-you build up a spirit of good will and you get the co-operation of the local people. I have this slight criticism, that I think on some occasions the department, possibly through lack of complete knowledge of changed conditions and circumstances, has decided to do something at the district office level without complete understanding of the local situation. I do urge that the minister's district officers and his local officials do everything possible to get the co-operation of and to consult representative local organizations.
Then I suggest it would be a good idea for the department to issue releases to the local press concerning any particular work. I think this would avoid a lot of rumours and misunderstanding about such things as the site, the date when construction is expected to commence, and so on. That is news to people, especially in the smaller places. Possibly it is not news to people in the larger places because their minds are occupied with all forms of gaiety and other activities, but in the country where people are generally more serious, somewhat more stable, they are interested in local business or local public

buildings or a local wharf, and so on. I suggest there could be an extension of the practice of issuing press releases in the area so that people are kept well informed on the activities of the department, what it intends to do and when it intends to do it. In my opinion an informed public with respect to any department of government is a cooperative public. When it comes to administration all departments of government in a democratic society must seek to promote, in my opinion, the understanding and the cooperation of the people they aim to serve.
I have one other suggestion and it is this. Because of the vast areas that district engineers must serve I believe that senior officials, particularly in the district offices, should not be moved too frequently. It takes two or three years for a district engineer, for example, who serves the British Columbia and Yukon district to get to know the district he serves. He cannot be travelling all the time. He has a great deal of administrative responsibility. I suggest that senior officials should not be moved too frequently, that is at the district office level. I also hope that the minister's department is undertaking plenty of planning and that its economic studies branch is feeding the senior officials with information that will provide them with the opportunity to plan for the department to play its full role and part in meeting any unemployment situation that should occur in the winter ahead.
I have made a few general remarks with regard to general administration. I have some other matters to raise with regard to public buildings, construction and services, harbours and rivers engineering service branch and trans-Canada highway. At that time I shall leave the general and move to the particular. What I have to say will also include a few pleas on behalf of the constituents whom I have the honour to represent.


Mr. McGee:: Before I commence my remarks I should like to assure the hon. member for Levis, who seemed to have misunderstood the reaction on this side of the chamber at the beginning of his remarks, that if there was any apparent disappointment expressed on this side, it was perhaps that we heard the rumour that in order to allow the Minister of Public Works to carry on with his new duties the estimates would be passed almost immediately this evening.


Maurice Bourget: Will the hon. member permit a question?


Frank Charles McGee: Yes.


Maurice Bourget: Will he tell me what the hon. members meant when they said "Oh, oh" at the beginning of my speech?


Frank Charles McGee: That is precisely what I was going to explain. If I had been in a mood to echo that particular remark, it had as its intention an indication of disappointment perhaps that there would not be an expression from the house leader, that these estimates would now be passed in order to allow the new minister to go on to his new duties. My own reaction was disappointment. I have always looked forward to hearing the remarks of the hon. member for Levis. As remarkable as are the simultaneous translators here tonight, something is always lost in the translation.
If ever a man's head might be turned in my brief experience in this house, it certainly would be the head of the Minister of Public Works and now Secretary of State for External Affairs by the glowing tributes paid to him by the two opposition parties today on two separate counts. Those of us on the government back benches by our applause expressed our opinion concerning the events that took place at the beginning of the proceedings today. I think it would be remiss indeed if some expression of our opinion were not given concerning the former Minister of Public Works, although I am not just quite sure whether I am correct in that designation. He has left his imprint-and I am sure it will be a lasting one-on the job he is leaving. I would agree with the hon. member for Kootenay West in putting at the head of a list his courageous and tenacious attitude concerning the matter of patronage. This is something that has certainly required tenacity, stick-to-it-iveness and other similar qualities.
We have heard of the tremendous team spirit developed in the department. While most of us backbenchers have not been too familiar with the workings of that department, we can certainly understand how that team spirit should develop under the leadership of the minister. The extension of the tender system is part of the reflection of his attitude and his philosophy in connection with patronage which are well known. The imprint of which I spoke a few moments ago can be seen in the extension and expansion of public works and the co-operation of the department. But mostly, Mr. Chairman, I would think it would be the greatest source of satisfaction when leaving this portfolio to realize the tremendous number of young persons, young family people in this country who own their own homes, a situation attributable in no small number to the efforts of the Minister of Public Works.
This applies through the field of housing and one in particular in which I am interested and which I know a great many members share this view, namely that of limited
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dividend housing. Thousands and thousands of extra units are now available on a low rental basis to people who desperately need that accommodation. This will not be quickly forgotten by those people or those of us in whose ridings these developments have taken place. As I say, it must be a great source of satisfaction to the minister to leave that kind of an imprint on his department as he leaves.
But mostly, Mr. Chairman, and again I speak for the younger members in the house -I speak of the example that he has set for us in the performance of his duties in this house and in our caucus, his reform instincts, his integrity and his availability- and that has been mentioned by both opposition parties-not only to those on the government benches but to each and every member of the House of Commons. I have no wish to prolong the discussion on the estimates. I simply felt that this expression should be made not only on behalf of the G.F.A.- which, I may say, for the benefit of the group in the corner is a group of nine members in this area. We in this group should like to congratulate the minister and wish him the very best in the future.


Mr. Carter:: Mr. Chairman, I should like to join with all those who have congratulated the minister on his new portfolio and to wish him well in his new sphere of activities. I am sure most of us today heard the Prime Minister's announcement with mixed feelings. While we rejoice with the minister at this broader scope for his undoubted talents and ability, nevertheless I think most of us felt a little bit sad-perhaps it was a selfish sadness -on losing from the portfolio of minister of public works a man who has won our utmost admiration, not only for his integrity but for the outstanding non-partisan manner and approach which he has always displayed in dealing with all our problems.
Personally, I want to thank him most sincerely for the sympathetic and kind consideration which he has always given to the problems which I have brought before him. In that I should like to include a tribute to his staff, not only here in the head office at Ottawa but also those who serve in the district office in Newfoundland. The minister is fortunate in having a most competent staff who are always anxious to do everything possible to help out with the problems of our province, and the only remark I should like to make about them is that I think they are perhaps the most overworked staff in the whole civil service of Canada, and possibly the most underpaid as well.

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It is nice, of course, to have a minister who is kind and sympathetic to our problems, but we know that with all the goodwill in the world he must still get his expenditures authorized by the treasury board. The minister does not have the last say as to what expenditures will be made. Last year the Minister of Finance who presides over the treasury board allayed our fears when he stated, as reported on page 3569 of Hansard for January 21, 1958:
Let me make it abundantly clear to every member of the house-I made this clear in the financial statement I made in the House on December 6- that the instructions that have been given by the government are to the effect that while we are seeking to reduce expenditure where expenditure is needless we have said that there shall be no reduction in expenditure where it means jobs, and we are seeking to increase construction in useful public works down the line. While next year we would unquestionably like to have a balanced budget, let me make it abundantly clear that we are not going to put a balanced budget above our firm determination to provide, through the agency of public works, jobs for unemployed Canadians.
Since then the Minister of Finance seems to have undergone a change of heart, because on April 21 he made another statement in this house which was quite different from the one which I have just quoted. This is what the Minister of Finance said on that occasion, as reported on page 2889 of Hansard:
The treasury board this year has been tighter and closer in its scrutiny of estimates than ever before. A lot of these things are not talked about in detail everywhere, but let there be no doubt about it; the treasury board today is doing an effective piece of work.
Then the minister ended the paragraph with these words:
There is a tightening of the rein on expenditures.
As long as the present Minister of Public Works held his portfolio these words did not chill our hearts quite as much, because we had confidence that the benign influence which we know the minister exercises over his colleagues would have an effect in softening the hard hearts of the Minister of Finance and his colleagues on the treasury board. But now that the minister is leaving this portfolio I think our fears have been renewed that his successor might not have that benign influence and that we may perhaps not receive as sympathetic consideration as we have in the past. We hope the Prime Minister will take these qualities into account when he appoints the new minister of public works.
The tightening up which the Minister of Finance referred to on April 21 is shown in the main estimates for this year. On page 67 we notice that there is an over-all decrease in expenditures of $14,900,293. Even when

we subtract from that the $4 million in the supplementary estimates, we still have an over-all decrease of over $10 million. But the tightening up of expenditures is most marked when we consider the items of public buildings, construction and services and the items under the heading of harbours and rivers engineering services. There is a decrease in expenditure of over $19 million for public buildings and a further $5 million nearly under the heading harbours and rivers, making a total decrease of around $24 million. Even when we deduct the $3 million plus under these two headings in the supplementary estimates, we still have a decrease in expenditure of over $20 million.
I think it is unfortunate that these decreases have occurred under these particular headings, because they happen to be the very headings which provide jobs. We already have on our hands a substantial amount of unemployment, and I think it is reasonable to expect that the unemployment problem will be with us again next year, and a reduction under these headings is certainly going to aggravate that problem instead of alleviate it.
In my own province in Newfoundland we feel this very acutely, because under these two headings of harbours and rivers and public buildings, construction and services, there is an over-all reduction of nearly $2.8 million, which in a province that depends on public works for supplementary earnings is quite substantial. 1 know that part of this reduction has been brought about because many of the large projects in our province have now been taken care of. We also know that it is impossible to counteract this amount of expenditure under the housing program. Therefore, I should like to sound this warning to the Minister of Public Works and to his successor in office, that they keep this in mind when they are preparing the estimates for next year, because very drastic reductions under these two headings are going to cause some degree of hardship in my province.
Mr. Chairman, there are one or two other aspects of the estimates about which I would like to comment. First of all, I would like to commend the minister for the increase in the miscellaneous grants. This grant has been increased by $750,000 and that is particularly welcome in my province because, as I have said, most of the heavy works have now been completed and in the future there is going to be a larger and larger number of small works costing less than $25,000 which by law will have to be financed out of this miscellaneous grant. I thank the minister for this increase and I hope that next year's estimates will show a further increase.

I wish also to thank the minister for the increase shown under the heading "dredging, construction and acquisition of plants and equipment." One of our most urgent needs in Newfoundland is dredging. As we know, private dredging companies are still very busy and it is most difficult to get the kind of plant that we need. The minister may remember that last year I pointed out to him that we have a special need for shallow dredging equipment for the dredging of shallow harbours. We have none of that equipment being operated by the department in Newfoundland at the present time, and I hope that part of this vote will be used to acquire this type of dredging equipment.
Before I sit down, I wish to draw the attention of the minister to one very small problem. When small works are undertaken in small fishing settlements in my province-[DOT] works such as the building of a wharf or breakwater-the common practice is to acquire the rocks required for the ballast by contract. That is possibly a very businesslike way of handling this requirement but it has one serious drawback for my people, because when the fishermen pick up these rocks and sell them under contract they do not receive unemployment stamps. Had they been able to get these stamps last year many of them would have qualified, taking into account the stamps they receive while fishing, for seasonal benefits. I would ask the minister to take this into consideration and perhaps give a direction so that the department may acquire this material by day labour instead of by contract.
Like everyone else here I wish the minister the very best of success in his new undertaking.


Erhart Regier: I do not mean to delay the committee with many remarks I should like to make at this time with regard to the announcement which was made in the early afternoon. I know that the people of Canada will have heard the news with great happiness and satisfaction, and I know that particularly the people in the minister's home area in British Columbia will take a special delight in the announcement. I know that with elections coming hard and heavy for a number of years in Canada, Canada's position throughout the world has not continued recently to grow as we had been led to believe it might, and I know the minister will at an early date do much to enhance Canadian prestige abroad in the interest not only of world peace but of our economic interest as well.
All of us are deeply concerned about who the new minister of public works may be. We hope and trust he will be some one who 66968-9-277
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will have an integrity equal to that possessed by the hon. gentleman who now holds that office.
I should like to make an appeal to the minister with regard to a number of issues, because I believe the hon. gentleman has a number of headaches which have still to be cleared up and I should like to see him make an effort to handle these difficult matters before he leaves his present office. The main question to which I should like the minister to give some attention is the problem facing us with regard to interest rates on loans for homes which are now being built and which will be built during the months and years ahead under the National Housing Act.
The minister realizes very well that interest rates under the National Housing Act are determined in the long run by the rates which the government has to pay on long term government issues of bonds, and as I understand it the yield on long term government issues or bonds at the present time is practically as high as the maximum interest rate allowed under the National Housing Act. The minister indicates that this is not the case. But even a one year issue yesterday returned a yield to the investors of 5.49 per cent. If a one year issue is able to produce a yield of 5.49 per cent, we must remember that it has always hitherto been assumed that long term issues return a higher yield and therefore any money which the government will have to borrow in the months ahead to lend to the Central Mortgage and Housing Corporation will have to be supplied to this crown corporation at a very high rate indeed, and the margin between even 5J per cent and 6 per cent is a very narrow one. The act allows for a margin up to 2 per cent.
The minister has let us know that the government has no intention of raising the allowable interest under the National Housing Act, and we were happy to hear that announcement. However, the minister announced in no uncertain terms some months ago that the government had no intention whatsoever of allowing the Central Mortgage and Housing Corporation to operate at a loss, and we are unable to reconcile the two statements. If the government intends to maintain the maximum allowable rate of interest at 6 per cent, then we believe the government will have to look things squarely in the face and admit that it may well be necessary in the public interest to agree to subsidize the operations of the Central Mortgage and Housing Corporation. There simply is no other way out of this predicament. I believe the minister would agree that the situation is a difficult one. I know he does not like having to advise any branch of the government that it

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will be allowed to operate at a deficit. However, here I believe is a situation where an understanding of that kind will have to be reached, otherwise I am afraid that that organization, belonging to the pepole, will be unable to discharge its responsibilities adequately.
The other headache which must concern the minister and about which I hope some action can be taken is the amount of money which is available for housing or which it appears will be available for the purpose of housing. The returns from many other enterprises are so much higher now that there is a little less interest or, I should say, there is a lot less interest on the part of those who have investment money available to make such money available for housing at the 6 per cent gross level.
I believe that action will have to be taken and it may have to be rather strong action compared with any action that has been taken hitherto. I agree wholeheartedly that maximum interest rates should not be raised. However, it is equally vital that sufficient money for housing be made available and I am wondering whether consideration of amendments to the Bank Act and insurance and allied legislation may not be necessary whereby those with investment capital will be obligated, in certain years to be designated by the minister, to devote a fixed proportion to housing. That may be the only way in which enough money for housing can be found at the 6 per cent interest rate.
I have also assured a number of organizations at home that I would present a plea to the minister on his estimates, and even though he may be leaving the department I feel I must make the plea at this time. It has to do with the many low-cost homes that have been built in the past year. It may not have reached the minister's ears but there are a growing number of complaints that the quality of the buildings is not what it should be. Part of the reason seems to lie in the growing development of prefabricated sections of houses and in the growing tendency on the part of fly-by-night operators building N.H.A. homes not to hire union workers but to make use of moonlight labour and people who will work on week ends. When the taxpayers' money is being invested in housing I hope that their long term interest will be protected by suitable regulations or amendments to the National Housing Act whereby the quality of construction will be of a desirable standard.
The minister has performed wonders within the past 12 to 18 months with respect to the number of housing units that have been built. I believe that even the minister would now

agree that perhaps the time has come to devote greater attention to the problem of slum clearance and the supplying of low rental housing. I know that a little headway has been made over the past years. However, for so many long years we did practically nothing in Canada with regard to slum clearance or the building of low rental housing units. I believe we have probably reached the time when a much larger share of the money being invested in housing should be directed toward slum clearance and the supplying of adequate low rental housing for those people who have no hope of ever owning a home of their own.
I think the minister also had something to do with another proposed project with respect to which I have not heard of much progress being made. It has to do with expenditures in connection with harbours and rivers in the lower mainland of British Columbia. For the past several years there has been a move afoot, a wise one I believe, toward the development of an enlarged public authority to deal with matters concerning the Fraser river. For some years the ex-mayor of New Westminster has called for the enlargement of the New Westminster harbour board. I do not think that is exactly what is wanted by the areas concerned or even by some people in New Westminster. I believe the minister has been partly responsible for helping the idea along that there should be what I like to think of as a river authority with representation from the interested organizations and municipalities all the way from Mission to the mouth of the river. I hope that can be expedited a little before the new minister is appointed. Heaven only knows from what area of Canada he may come and how much or how little he may know about the need for an over-all authority on the Fraser river. Before the minister leaves the department I should very much like to see him take a hand in the matter and get together with the Minister of Transport. I know he has all kinds of advisers from the lower mainland on his side of the house and I should like him to try to see whether some progress cannot be made in this regard.
Like those who have spoken before me I too wish the minister well in his new department. Some of those who spoke sounded as if they thought the minister was leaving Canada but I look forward to seeing him in Canada almost as much as he has been hitherto.


Mr. Smith (Lincoln):: Mr. Chairman, my remarks at this time will, as usual, be brief, but I should like to draw to the attention of the minister one or two projects that I think the Department of Public Works should take

into consideration in the very near future. The hon. member for York-Scarborough has expressed the opinion of this group with respect to the appointment of the minister to the Department of External Affairs. However, I must say that while I regret to see him leaving the Department of Public Works nevertheless I extend to him my most sincere and best wishes. I know he will do a good job in his new department and I think that the twinkle in his eye will be one of his greatest assets as Secretary of State for External Affairs.
One project that I feel the department should consider in the near future is the provision of a building for Canada's national war museum. I find it is one of the places most favoured by visitors to Ottawa and the present building is very inadequate from the point of view of providing suitable accommodation for the exhibits. I believe that consideration should be given to providing a new building. I understand there are quite a number of other exhibits that could be put on display and this would be quite an asset from the point of view of the visitors who come to the museum. As I have already said, it is a most interesting place, especially to young people. This is one project that I think should be considered.
The second involves a group rather than one project. In Ottawa today we still have a large number of the old wartime buildings constructed during the war. While I realize that the department is eliminating them as quickly as possible, nevertheless some of them are getting into a very poor state of repair and they do not do justice to the civil servants who have to perform their duties in some of these buildings.
I feel that is something we should consider very seriously at the present time. While Canada is importing such a quantity of manufactured goods from other countries and taking away jobs from people who are in industry, I think we should do everything in our power to speed up our national works projects.
I believe it was last year that the steps over on the east side of the building were replaced which meant a great improvement. I feel that consideration should soon be given to providing new steps in front of the building. In my opinion the present ones are barely in keeping with the dignity of the House of Commons of the dominion of Canada. I am not saying they are dangerous but they are not as good as they should be and I understand they have been there for a long time.
I recall that when the minister spoke on his estimates some days ago he mentioned 66968-9-2771
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that his department was much concerned about the building of small post offices throughout the country. I could easily ask for several in the various villages and towns in my riding but I am not going to be so vain as that. Nothing creates more pride on the part of people in a small town or village than a public building on which they can display a flag several times a year. These buildings are wanted by the people and are respected by them. They are a source of pride and satisfaction to the people in the community. I hope the minister will take all these things into consideration and build as many public buildings as possible.
A great deal has been said about what has been done in the building of homes under the National Housing Act and I shall not repeat what has been said. There is no question but that during the months in which employment has not been too good in Canada the building of houses has been of considerable assistance in providing jobs for the working force. While it may be true that the saturation point is being reached in some areas there are many places that require additional homes and I trust there will be no slow-down in providing money for the construction of these homes under the act.
This concludes my remarks at this time. I am particularly interested in the construction of the national war museum building and I trust the project will be undertaken as expeditiously as possible.
(Translation):


Alexis Pierre Caron: Mr. Chairman, on this happy day for the Minister of Public Works (Mr. Green), may I join with those who have spoken before me to wish him much success in the diplomatic career he is undertaking. That appointment did not surprise me. There had been so much speculation on the matter. In fact, some were saying that this one or that one would be chosen, but I was convinced, and I do not want to belittle the other ministers, that the superior intelligence of the present minister, his remarkable energy, his devotion to work, the smile that he has kept since he became a member of the cabinet, and his consumate skill to have his estimates passed without too much difficulty, were already the indication of a first class diplomat. I am happy to join with my colleagues to congratulate him and to wish him great success in his new career.
Mr. Chairman, I rise not to test the diplomatic skill of the new Secretary of State for External Affairs, but merely to submit for his consideration a few projects which are very important for our area. I tell him right now that I shall be very brief.

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A problem which has been with us for many years and still is, is the matter of the national capital. Every Canadian would like to regard the national capital as a model. It was Sir Wilfrid Laurier who, many years ago, said that everyone hopes to see Canada's capital develop into a Washington of the north.
Well, Mr. Chairman, the national capital plan will be quite incomplete unless adequate bridges are built to connect both sides of the Ottawa river. That is a matter of particular concern to the Minister of Public Works, since it comes under his department's responsibility.
New bridges across the Ottawa river are absolutely necessary if we want the numerous tourists visiting the national capital to take advantage of their stay among us to see the enchanting sites of the Gatineau, in those marvelous mountains that the national capital commission has adorned with beautiful roads and magnificent parks. We must at least give them the means to cross over.
At the present time, it is almost impossible to cross from one side to the other, at certain hours of the day. Furthermore, there are on the Quebec side more than 6,000 federal civil servants who must cross over three or four times a day, at least, to get to and back from work. In view of this, it takes them an hour or an hour and a quarter to cross over, while it should take them only fifteen minutes.
Such a situation cannot last indefinitely. Moreover, several residents of the city of Ottawa are employed on the Hull side and also have to cross the river to go to their work. It is almost inhuman to ask those people to get up at 6 o'clock in the morning in order to be in time for work at 8 o'clock on the other side of the river. Such is the situation! As a matter of fact, the present bridge is a disgrace for a national capital we are intent to beautify.
To my mind, the Minister of Public Works could instigate some movement to improve that state of affairs. I do not go as far as to say that the responsibility rests upon the federal government alone. This is an interprovincial bridge-
(Text):
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: Mr. Speaker, I take it that tomorrow we will continue with these estimates and if they are completed we will take the estimates of the Department of Fisheries as announced last night?


Howard Charles Green: Yes, Mr. Speaker, that is the intention. On Monday there will be a supply motion. On Tuesday we shall commence with item No. 7 on today's order paper, second reading of the act to amend the Bretton Woods Agreements Act; then item 15, which provides for additional judges in certain of the provinces. This is quite an urgent matter and consideration might be given to letting it go through all stages on Tuesday unless the opposition parties have some objection.


Lionel Chevrier: If it were the minister, I am sure there would be no objection. It being otherwise, I have some doubt.


Howard Charles Green: I am overwhelmed. We then propose taking item No. 12, the resolution preceding a bill to amend the Royal Canadian Mounted Police Act; item No. 5, second reading of an act respecting the Royal Canadian Mounted Police; item No. 11, the resolution concerning the Defence Services Pension Act.
The plan for estimates next week is to take those of the Department of Transport. I am not sure whether we would commence estimates on Wednesday or Thursday, but in either event we would take transport first.


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