1959-03-03

[Stage Direction]
Second report of standing committee on miscellaneous private bills-Mr. McCleave.


[Stage Direction]
Mr. Alan Macnaughlon (Mount Royal) presented the first report of the standing committee on public accounts and moved that the report be concurred in.
Motion agreed to.


Hon. Sidney E. Smith (Secretary of State for External Affairs):: Mr. Speaker, the hon. member for Ottawa West yesterday directed a question to the Minister of Trade and Commerce concerning United States mandatory oil import restrictions, and asked whether the Canadian government had made any representations to the United States government opposing mandatory restrictions or regulations.
My colleague the Minister of Trade and Commerce indicated that the Canadian government's position on this matter had been stated very clearly at the meeting of the Canada-United States joint committee on trade and economic affairs in Ottawa early in January, that its position remained unchanged, and that this had been so indicated to the authorities in Washington. The method used to reiterate the Canadian government's point of view was a note from the Canadian charge d'affaires in Washington to the acting secretary of state delivered on February 19, 1959, a copy of which I am now tabling.
The note made it clear that the Canadian government continues to believe that there is no justification on grounds of security, or for that matter on any other grounds, for United States restrictions on oil imports from Canada, pointing out that such restrictions were incompatible with the need of the two countries to pool their oil resources in time of common emergency. The note further
pointed out that a system of mandatory controls on imports from Canada would be even more disturbing to the Canadian government than a system of voluntary controls, to which the Canadian government had already expressed its opposition.
The purpose of sending the note at that time was to request the United States department of state to bring the Canadian government's views to the attention of those concerned with the review then in progress of United States oil import regulations. We were subsequently informally notified that the action requested was duly taken by the state department.
By leave of the house, Mr. Speaker, I ask that the text of the Canadian note of February 19, 1959 be printed as an appendix to the House of Commons debates of today.


Hon. Paul Martin (Essex East):: Since the note is dated February 19, I wonder if the Secretary of State for External Affairs, in view of the request of the President of the United States that there should be an extension before the final decision on March 10, could say whether or not there are now negotiations under way or about to begin between Canada and her opposite numbers in the United States.


Sidney Earle Smith: Mr. Speaker, through our embassy we are in constant negotiations in this regard with the United States.


Mr. Speaker:: Has the minister leave of the house to have the note which he has tabled printed as an appendix to Hansard today?


Some hon. Members:: Agreed.
[For text of documents referred to above, see appendix, page 1591.]


Paul Joseph James Martin: In view of the reply the Secretary of State for External Affairs gave me on the order for motions regarding negotiations which he says are continuing in connection with the matter of the curbing of Canadian oil imports, and in view of the fact that a delay has been granted by the request of the President of the United States that he be given an opportunity to review this matter further, can the Secretary of State for External Affairs say whether

Inquiries of the Ministry those negotiations to which he made reference a few minutes ago include direct representations by Canada to the White House?


Sidney Earle Smith: Mr. Speaker, I am unable to say that such is the case. I am not aware of the lines of communication in Washington.


Paul Joseph James Martin: May I ask the
Secretary of State for External Affairs if, in view of the great importance of this matter, he will look into this question and perhaps be prepared to give a reply tomorrow?


Sidney Earle Smith: I am not
in a position to undertake to give a reply tomorrow. I remind the house that the note was delivered by our charge d'affaires, and he requested that this protest be brought to the attention of those who were reviewing the regulations relating to the import of Canadian oil. That no doubt would include the President, because I understand that he is seized of the matter.



URANIUM-STATEMENT ON AGREEMENT WITH JAPAN

[Stage Direction]
On the orders of the day:
Sidney Earle Smith: Mr. Speaker, yesterday the Leader of the Opposition addressed a question to me in which he inquired what progress had been made with regard to negotiations with the government of Japan for a bilateral agreement on the peaceful uses of atomic energy. He also inquired, Mr. Speaker, when those negotiations began.
First I would draw the attention of the Leader of the Opposition to the reply I gave on February 26 to question No. 163, which is relevant to the second part of his question.
This is the present situation. Last year we informed the Japanese government of our desire to negotiate an agreement with them with respect to the peaceful uses of atomic energy. During recent months our embassy in Tokyo has carried forward discussions with officials of the Japanese foreign ministry on this subject. The point has now been reached where the way appears to be open for formal negotiations to begin. We have invited the Japanese authorities to send a delegation to Ottawa at their earliest convenience and we are confident that they will soon come to Canada. As I informed the house on February 2, the formal negotiations, we hope, can be concluded in the spring of this year.
There is one other point relevant to this subject which is worth recalling to the attention of hon. members, and that is that last December 12 the government offered three


metric tons of natural uranium to the international atomic energy agency, free of charge, which the agency will supply to Japan this year for use in their atomic energy program. The then acting minister of trade and commerce made an announcement to that effect on December 12. I may add that since then the Canadian offer has been accepted and the final details of the arrangements for transferring the uranium to Japan are now being worked out with the agency in Vienna.
This will be the first step in what we hope will be a long and mutually beneficial association between Canada and Japan in the field of co-operation for the peaceful use of atomic energy.


Hon. L. B. Pearson (Leader of ihe Opposiiion):: I should like to ask a supplementary question. In view of the fact that the minister said in the house last July that the way was open for negotiations to begin, can he explain the long delay in this matter?


Sidney Earle Smith: All I can
say is that we have pressed for it, and the Japanese authorities at that time were not as prompt as we expected they would be.



URANIUM


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I would like to ask the Secretary of State for External Affairs whether any representations have been made to, or discussions held with, the United States authorities in regard to the renewal of the agreement between our two countries for the supply of uranium, which has been of such great importance to our export trade in the last year.


Sidney Earle Smith: Mr. Speaker, there has been some discussion, but I will look into the matter and take the question as notice.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I should like to ask a question of the Prime Minister. In view of the increasing urgency of settling the dispute between the Canadian Broadcasting Corporation and the producers in Montreal, underlined by yesterday's incidents, and in view of the refusal of the Minister of Labour to intervene in the dispute and of the government to set up immediately a parliamentary committee on broadcasting, will the

Prime Minister himself intervene immediately in an effort to bring about a satisfactory settlement to this dispute?


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I must say that the attitude betrayed in this question, that the Prime Minister should intervene in a matter in respect of which the C.B.C. is in negotiation, would be most contrary to the philosophy that my hon. friend has placed before this house on so many occasions with respect to myself.


Hon. Lionel Chevrier (Laurier):: Mr. Speaker, may I ask a supplementary question. If the Prime Minister will not intervene in the manner in which he has said, will he suggest to the Minister of Labour that he offer the good offices of the Minister of Labour or his officers in order to bring about a settlement of this unfortunate dispute?


John George Diefenbaker: Mr. Speaker, this suggestion is a continuation of the earlier question, namely that the government in so far as an appendage of the crown is concerned should be permitted or allowed to intervene, which is the direct antithesis of the arguments advanced by hon. members opposite in the past, the last occasion being not very long ago.


Lester Bowles Pearson: A supplementary question, Mr. Speaker. In view of the attitude taken by the Prime Minister in regard to the undesirability of anything that might be interpreted as government interference in this matter, would the Prime Minister authorize the Minister of Labour to meet the representatives of the C.B.C. and the producers with hon. members of this house representing all parties, so there could be no suspicion of interference with the operations of the C.B.C. by the government?


John George Diefenbaker: Mr. Speaker, in other words the hon. gentleman would extend the field of interference to cover all hon. members of this house.



MONTREAL


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, yesterday the Minister of National Revenue said he would give the house a report on certain incidents that took place in Montreal. Is he in a position to do so now?


Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, I have no report to make other than what appeared in the press. In other words, my information from the corporation substantially corroborates, though not in detail, the reports that
Inquiries of the Ministry appeared in the press. There was a march or parade after a meeting yesterday morning down the street, approaching the C.B.C. building. Apparently the Montreal police, some of whom were stationed there at the time, asked the group to disperse. An argument ensued as to who should disperse first, whether the police should be withdrawn or whether the marchers should retire, and as a result of the discussion that took place apparently a fracas developed, tempers were lost and the police finally, as the papers say, effected the arrest of a substantial number of people and took them away. That is substantially the situation.


Mr. Azelius Denis (Si. Denis):: May I ask
the Minister of National Revenue a question. In view of the fact that almost half of the operations of the C.B.C. in Montreal are under his department, does he not think it is his duty to interfere and find some way to stop this?


Mr. Speaker:: Order. The hon. member has heard a similar question asked of the leader of the government, and it seems to me that he is not advancing the giving of information by continuing to ask the question of other members of the government.


Azellus Denis: I tried the Minister of Labour, not the Minister of National Revenue.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: Mr. Speaker, I should like to direct a question to the Prime Minister. In view of the world-wide interest in a summit conference and the report that Prime Minister Macmillan may urge western leaders to participate in such a conference, would the Prime Minister say whether Canada has been approached in this regard, and can he tell the house what the attitude of the Canadian government is toward such a conference?


John George Diefenbaker: Mr. Speaker, there has been no approach to Canada to provide representations of the nature indicated by the hon. gentleman.


Hazen Robert Argue: Mr. Speaker, I wonder if the Prime Minister would care to give Canada's view on this very important question. I believe it is one that is of great interest to the Canadian nation.


Mr. Speaker:: I think the hon. member in a question as broad as this is going beyond what he could expect to have answered by an

Inquiries of the Ministry
oral question without notice, and it seems to me it would be more appropriate for another time.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, regardless of being under the eagle eye of the Minister of Justice, I have summoned up courage enough to ask the Minister of Labour a question. I may say that my question is prompted by correspondence I have received from a number of people indicating the inability of some members of the armed forces to obtain employment since they were discharged last fall. My question is, in view of the fact that some members of the armed forces, discharged in recent months, have been unable to secure employment, has consideration been given to an amendment to the Unemployment Insurance Act to include members of the armed forces?


Hon. Michael Starr (Minister of Labour):: wish to thank the hon. member for giving me notice of his intention to ask this question. Since receiving this notice I have endeavoured to gain some information on what has happened in the past in this regard. Since I have assumed office, Mr. Speaker, I have had no representations on this matter; consequently I have not given it any consideration.



PROVISION FOR MOVEMENT OF TOUGH AND DAMP GRAIN

[Stage Direction]
On the orders of the day:
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. In view of the large amount of tough and damp grain still on farms, particularly in the northeastern part of Saskatchewan, can the minister inform the house whether quotas will be raised and priority on box cars will be given to have this grain shipped out before the mild weather sets in, and thus avoid spoilage?


Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Speaker, the hon.
member for Mackenzie, as well as other hon. members from northern Saskatchewan, drew this matter to my attention the other day. I discussed the situation with the wheat board last fall, and over the intervening months considerable effort has been made to move from that area of Saskatchewan some of the tough and damp grain stored there. The report of the wheat board on the present position is as follows:

The Canadian wheat board has been watching the delivery position in northeastern Saskatchewan very carefully and is taking every action possible to ensure that damp grain in particular may be moved off farms prior to the advent of warm weather.
In this connection quotas are being increased automatically to the full extent of the elevator space available in the area. In an endeavour tc maximize the quotas as early as possible in the areas affected, priority in box car supply has been given for the movement of tough and damp grain. On February 18 last the board issued instructions to the railways to discontinue placing cars on an out-of-order basis to the lakehead except for the movement of tough and damp grain.
The effect of this order is to restrict the movement of all wheat to the lakehead to tough and damp grades in view of the storage congestion in terminal elevators. The only other grain which may be moved, on the basis of specific orders from the board, is No. 1 feed and lower grades of barley and extra No. 1 feed and higher grades of oats. The lakehead terminal operators have given assurance that they will give Immediate unload to all car lots of tough and damp grain received.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. W. L. Houck (Niagara Falls):: I should like to direct a question to the Minister of Labour. Premier Frost made the statement in the Ontario legislature yesterday afternoon, which statement was reported in the Globe and Mail this morning, that his government is pressing Ottawa for an extension of the federal-provincial winter employment program. I should like to ask the minister if he intends to acquiesce in this request.


Michael Starr: Mr. Speaker, I wish to thank the hon. member for giving me notice of this question. I have been in communication with Premier Frost, and we have discussed this matter and his suggestion for the extension of the plan. However, the hon. member will realize that this is a matter of government policy and that consideration will have to be given to the suggestion on that level.


Paul Joseph James Martin: Will it be done before winter is over?



REQUEST FOR FIGURES OF EMPLOYMENT UNDER MUNICIPAL INCENTIVE PROGRAM

[Stage Direction]
On the orders of the day:
Mr. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I would like to direct a question to the Minister of Labour with respect to the winter work campaign. Would the Minister of Labour advise the house how many jobs have been created, and if there are still applications coming in, in connection with the program, and what is the total cost of the projects to date?


Mr. Speaker:: I think that apart from the middle question the other two questions might more properly go on the order paper, as they are asking for statistical information.


Michael Starr: Mr. Speaker, in answer to the hon. member's question, so far 1,703 applications have been accepted. The total cost of the projects undertaken by municipalities is $70 million, and there are 30,091 people to be engaged on these projects.


Hon. J. W. Pickersgill (Bonavista-Twillin-gate):: A supplementary question. Could the minister say how many of those jobs are in the four Atlantic provinces?


Michael Starr: Yes, Mr. Speaker. In New Brunswick there are 2,044; in Nova Scotia, 5,336. In Prince Edward Island there are none because no projects have been sent in. In Newfoundland 17 projects have been sent in and 248 men will be employed on these projects.


Mr. Erhart Regier (Burnaby-Coquitlam):: supplementary question of the Minister of Labour. How many of these 30,091 jobs that he has indicated have been provided under the winter works program are for periods of three months or more and how many of them are for periods of one week or two weeks?


Michael Starr: We have not got that breakdown, Mr. Speaker, but the figures I have given to the house are the figures which are supplied by the municipalities. The projects are selected by the municipalities, and their duration is guided by whatever work is to be done.


Azellus Denis: Would the Minister of Labour give the figures relating to the province of Quebec and the city of Montreal?


Michael Starr: Yes. I cannot give the figures for the city of Montreal separately, but for the province of Quebec there have now been 169 projects submitted, giving employment to 3,798 persons.


Mr. E. J. Broome (Vancouver South):: supplementary question. Would the minister give the figures for British Columbia as well?


Michael Starr: Yes, Mr. Speaker. For British Columbia there have been 218 projects accepted, giving employment to 2,305 persons.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. J. A. McGrath (St. John's East):: Mr. Speaker, I have a question for the Minister
Inquiries of the Ministry of Transport. Can the minister tell the house when the contract for the construction of the Bell island ferry will be awarded?


Hon. George H. Hees (Minister of Transport):: Yes, Mr. Speaker. Treasury board has approved the awarding of the contract for the building of this vessel to Ferguson Industries of Pictou, Nova Scotia. It is expected that work on the vessel will start very soon.



WATER RESOURCES


[Stage Direction]
Canada's position
On the orders of the day:
Lionel Chevrier: May I
direct a question to the Secretary of State for External Affairs. It is based on a report from Washington of Knowlton Nash who is reported to have stated that a letter was introduced into the record a few days ago from the state department saying that Canada had no objection to the diversion of an additional 1,000 cubic feet per second from lake Michigan out of the great lakes-St. Lawrence basin.


Sidney Earle Smith: I have no knowledge of the existence of such a letter, and I refer the hon. member for Laurier and the house to the latest word uttered on behalf of the government in this regard, the note of protest sent to the state department some days ago.



PUBLIC BUILDINGS


[Stage Direction]
On the orders of the day:
Mr. J. R. Taylor (Vancouver-Burrard):: I
should like to direct a question to the Minister of Agriculture. As there is no certainty that the snow burden on ice rink roofs will be materially reduced before the end of the month, and in view of the fact that the federal government has made substantial contributions to many communities and societies under agricultural acts, would the minister inform the house whether, in order to protect its investment, the government can oblige the operators to report regularly on the state of such buildings?


Mr. Speaker:: It strikes me that the hon.
member is ranging beyond the jurisdiction of the federal Minister of Agriculture, even though he attempts to bring his question within the minister's jurisdiction by a reference to investment of federal funds. I believe this question is more in the field of property and civil rights, but I do not wish to prevent the minister dealing with it if he so desires.
1542	HOUSE OF
Inquiries of the Ministry


Hon. D. S. Harkness (Minister of Agriculture):: The Department of Agriculture
does not make grants to ice hockey arenas or things of that sort. The only grants we make are to agricultural fairs and buildings which are used primarily for agricultural purposes, such as the housing and showing of livestock. It sometimes happens that a building which we have subsidized for this purpose does have ice put in it and is used as a hockey rink. However, we have no authority to inspect those buildings, so far as I am aware.


John Russell Taylor: By way of a supplementary
question may I ask, where a building is used as a hockey rink, is the plan of the building approved by the minister's department before a grant is made?


Mr. Speaker:: I think the hon. member
is in the wrong house with his question.



BROADCASTING


[Stage Direction]
On the orders of the day:
Lionel Chevrier: May I
direct a question to the Minister of National Revenue. Yesterday I asked him about the regulations in connection with live programs on television. I should like to ask him this question now in view of his answer yesterday. Has there been a violation of the radio regulations by the French radio network of the C.B.C. in connection with the live content of those programs?


George Clyde Nowlan: I shall have to inquire of
the board of broadcast governors with respect to that before I attempt to answer.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: I should like to ask the Minister of Citizenship and Immigration whether satisfactory arrangements have been made for a good water supply for the Caughnawaga Indian reserve.


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: That is not a question I can answer without inquiring into the matter, but I shall be glad to get a definite reply for the hon. member.



INDUSTRY


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Last Friday, in the absence of the Prime Minister, I referred to a telegram from George Burt, Canadian director of the united automobile workers, which had been sent to the Prime Minister. Will the Prime Minister say whether as a result's of Mr. Burt's request the Canadian government has asked the Canadian automobile industry whether it will be producing small cars in order to protect the jobs of Canadian workers, in the light of possible competition from small cars coming in from the United States?


John George Diefenbaker: I received the telegram indicated by the hon. gentleman, but I would say that any declaration made at this time would not be in keeping with the situation. It is a matter of great interest to me that the hon. member is advocating something which he has always criticized-that is, protection under a tariff.


Hazen Robert Argue: On a question of privilege, I did not advocate protection in any way, shape or form. I asked the Prime Minister whether, as a result of Mr. Burt's telegram, he had asked the Canadian automobile industry whether they would be producing small cars this year in the light of possible United States competition. I think it is a very fair and proper question, and that has nothing to do with the tariff.

The house resumed, from Monday, March 2, consideration of the motion of Mr. Fleming (Eglinton) for committee of supply, and the amendment thereto of Mr. Pearson, and the amendment to the amendment of Mr. Winch.



DEFENCE POLICY, DEFENCE PLANNING, DEFENCE PRODUCTION

Mr. O. J. Godin (Nickel Bell):: Mr. Speaker, I greatly appreciate that you have recognized me at this stage and thus offered me the occasion to bring certain conclusions to the remarks I had occasion to address to the house last evening. I realize that to be fair with everyone I should endeavour to be brief. I know the importance of the subject under debate, and I realize that other hon. members would also appreciate the opportunity to take part.
Last night I had occasion to impart certain information to the government to the effect that throughout Canada it is felt that this

present government, as far as laying down policies on defence and defence production are concerned, has failed not so much because of the merit of the decision taken a week ago but because the facts which have been brought out assure everyone in this country that there were delays and confusion which have made it apparent to the Canadian people that the policy laid down by this government is not the one which they had expected a government with the majority of this one would have brought down.


Mr. Speakman:: Would the hon. member permit a question?


Osias.-J. Godin: Yes.


James Stanley Speakman: Has the hon. member been asking for this information from members of the armed services by any chance?


Osias.-J. Godin: Defence Policy, Planning and Production


Mr. Speaker:: Order. I am afraid the hon. member is straying from the subject under discussion.


Osias.-J. Godin: I wish to refer to the stamp which was approved by the Postmaster General.


Some hon. Members:: Order.


Osias.-J. Godin: Well, I feel that any congratulations which were offered to the defence policies of the department and to the aircraft industry-and I suggest this was the main purpose of issuing the stamp-were misplaced. We all recall that the stamp which came out showed the Arrow surging upward. Yet the Postmaster General is a member of the cabinet which only last week shot down the Avro Arrow.


An hon. Member:: Good shot.


Osias.-J. Godin: That is not exactly my opinion of any industry we have in Canada. It is not a good shot if we see it disappear down the sink. It may be a good shot, but it is not the type of shot that any member of this house should appreciate when he realizes that an industry is just about on its way out.
As I said, it may be asked at this point, what have you to suggest? Well, I may have some suggestions to make, and with the permission of the house I shall refer to a few of them. I am fully prepared to adopt and support the suggestion made on many occasions by the Leader of the Opposition that the time has come when we should revise our defence policy, and when machinery should be set up to study every angle of this policy. This is one suggestion that I am not alone in making.
I appreciated the humility with which the Minister of Defence Production began his speech last night. I realize that it is a big task for any man to become minister of defence production in Canada. However, notwithstanding that admission-and excuses are not good enough for the Canadian people -I suggest to the Minister of Defence Production that he should look into the files of his department and direct his attention to the work of his predecessor, Mr. C. D. Howe, during the post-war years. I make this suggestion to the government, also. The files relating to this period of transition between the war years and the post-war years must be full of examples of how this was successfully accomplished.
I may say before I close that I have never read in any newspaper since 1945, during the period of Liberal administration, of a case where an industry had to make the step from war production to something else, and where
[Mr. Godin.l
there was a lay-off of 14,000 men. This situation is the responsibility of the government. I am very pleased to support the motion of non-confidence which was submitted by the Leader of the Opposition, and may I add that in my opinion this government has failed in its duty in this important phase of Canadian life.


John George Diefenbaker: Mr. Speaker, I intend to direct my attention particularly to the subamendment, and to this end I shall read the amendment to which the subamendment is appended. It was moved by the Leader of the Opposition and seconded by the hon. member for Laurier that:
This house regrets that the prolonged delay of the government in determining air defence policy and planning in co-operation with our allies is preventing the effective use of Canada's defence production facilities and manpower.
To which was added the subamendment:
-and is contributing to the erosion of Canadian sovereignty."
May I say to begin with that we welcome the opportunity of hearing the views of the opposition and of members supporting the government on this problem, which is one which transcends all other considerations. We welcome the opportunity of having the views of the hon. members on a matter that is exercising the minds of free men everywhere. Here in this house in a spirit of reasoned criticism it is proper that we should discuss this matter, which is being discussed everywhere in the free nations and in the assemblies of the free world.
I intend to refer to some recent debates that have taken place and in particular I shall refer to those that occurred in the United Kingdom. The question of defence was dealt with at great length in May of 1958; and only a few days ago, on February 25, 1959 there was a lengthy and complete discussion. It is appropriate that this question should be discussed, because since 1945 Canada has spent on its defences the sum of $15,700 million, exceeded only by the United States, the United Kingdom, France and West Germany. In other words during this period of time, following the experience at the United Nations meeting in San Francisco, the nations of the free world having concluded that the hopes there expressed would not be achieved because of the intransigent attitude of the U.S.S.R., the free world decided that its defences had to be maintained.
That view has been generally accepted. The Leader of the Opposition speaking on August 8 last admitted on that occasion that we- and I take it he meant Canada and the free

world-are now entering a new era in defence. That era of defence had been referred to by the Minister of National Defence, who preceded the Leader of the Opposition in the debate, as an era when the threat of the manned bomber is being supplemented by the threat of the missile. New methods and new plans are required to meet this problem.
In all the planning that has been done and in all the expenditures for defence that have been made since 1945 the unknown factor has been that we have not known the plans and intentions of the U.S.S.R. On the one hand the U.S.S.R. claims that it desires peace. In the last few days the Prime Minister of the United Kingdom during his stay in the U.S.S.R. has been met by the inconsistency of two attitudes, one the welcome attitude displayed from time to time and the other the attitude expressed in the truculent speech delivered by Khrushchev in which he banished any suggestion of the possibility of a foreign ministers' summit conference. Yesterday, however, in one of those kaleidoscopic changes that are characteristic of him Mr. Khrushchev agreed to the convening of such a conference which he himself only a few days before had ridiculed as something that under no circumstances he would accept.
It is difficult to understand in the light of these changing views what is the attitude of the U.S.S.R. The formal reply of the Soviet union following the harsh-sounding speech of Mr. Khrushchev on February 24 gives some new hope. It will be undergoing careful scrutiny in the NATO council tomorrow. All of us, I am sure, express the hope that the combination of the fair-minded approach of the western powers in their notes of February 16, together with what from preliminary press reports indicates may be a more reasonable response from the U.S.S.R. than we have encountered in recent months, may lead to a situation in which there could be a real lessening of tension and the dangers of the Berlin problem will be decreased.
We have had these intervals since 1945. On each occasion when there has been a softening of the attitude on the part of the Soviet union the free world has taken it to mean a change. Having regard to the terrible potentialities inherent in the fixing of May 27 as the date when the U.S.S.R. intends to set aside its pledged word, with all the awful consequences that may follow, all of us trust that there is realism in the hope that something may be achieved on this occasion that will bring about a lessening of tension.
In the finest traditions of British statesmanship the Prime Minister of the United Kingdom, without regard to the coldness of the response he received following Mr. Khrushchev's speech, stayed there believing that it
Defence Policy, Planning and Production is of the essence that the statesmen of the free world continue to do everything that is reasonable, in an endeavour through discussion and negotiation, to settle those issues that have separated us since 1945 or 1946. The unexpected and expected vagaries and changes in the attitude of the U.S.S.R. place the free world in the position of having to accept one of two alternatives. At all times we have to maintain the latest defences only to find out when there is no war that the weapons and defences have become obsolete. That has been the insurance we have continued to pay. On the other hand the course that some suggest is that we should spend a too-diminished amount or at too late a time.
In either case the course of statesmen in the free world is one of preparation in doubt, endeavouring to arrive at that course which is the best but at the same time realizing that in large measure the expenditures being made for defence may prove to have been expended on weapons that have become obsolete during the intervening years. While trying to anticipate the terrible instruments of the future we must at the same time maintain the closest vigilance in our endeavour to ascertain whether or not there is something that will bridge the chasm between the free world and the communist world.
In the intervening years the changes in the instruments of destruction have placed the instruments of offence far ahead of those of defence. In an age of atomic and hydrogen bombs, thermonuclear missiles and intercontinental ballistic missiles, mankind asks what the morrow will bring and what the future will be. Only last year the deputy chief of staff of the United States air force in charge of development said:
We should not regard control of the moon as the ultimate means of insuring peace among the earth nations. But the moon appears to be of such significance that we should not let another nation establish a military capability there ahead of us.
In other words, the limitless potentialities of the future which have come about through the intervening years with frightening change make the defence of today almost the weakness of tomorrow. In the last few days Rear Admiral John S. Thach, commander of the antisubmarine defence group in the United States, made this statement, again showing the terrible danger under which the free world finds itself:
A dozen Russian submarines packing Polaris (missiles) could wipe out 70 per cent of our economy in one surprise blow.
He was referring to the economy of the United States. To those who say that our defences are obsolete the answer of the free world is always this. It has been the answer in Britain; it has been the answer in the
1546	HOUSE OF
Defence Policy, Planning and Production United States, in France and in West Germany. What are the measures that we must take? Against what manner of attack are we to be prepared to defend ourselves? Because the great danger of today is that the theories and plans of defence today, in the light of the potentialities of tomorrow, become useless or innocuous.
On the other hand, we have to take into consideration the tremendous expenditures. The amount spent per year for defence of the world amounts to about $100 billion. We in Canada, a small country comparatively speaking as far as population is concerned, are in this position: we are situated between the U.S.S.R. and the United States of America. The question that we must ask ourselves is, what shall our future be? Shall we be rendered vulnerable to the instruments of mass destruction, against many of which there is no defence or, on the other hand, shall we find ourselves in the position that through overexpenditure, or through expending for those things which are not necessary, and in the light of experience cannot be justified to be continued-shall we by going on in that way face that which the U.S.S.R. and its leadership have said through the years will be the ultimate fate of the free world, economic bankruptcy?
It is in this spirit that I am going to discuss one or two matters today and in particular, as I said, the subamendment. I suggest that we leave aside the natural attitudes of political partisanship. I think that is the attitude of the house. Let us discuss in general some of the matters upon which we are agreed, and then endeavour to determine the course we should take.
All of us are agreed that an adequate defence is necessary. We are not agreed as to how it is to be obtained, for we do not know what is in the mind of the Kremlin. Some say it is to be a cold war of ideas. That is the point of view that is held in various countries in Asia; that the major responsibility of the free world is to assure that in the battlefield of ideas the idealism of free men and of democracy is of paramount importance.
On the other hand there are those who agree that the question of ideas and idealism has a large place, and I am of those who hold that opinion in part. I believe that we must convey a message to those uncomitted parts of the world which are today determining the course they shall follow. We must not lose sight of the necessity of placing before the peoples of those countries the idealism that is ours, the philosophy that we support and the general concept of the free world. It was in that spirit, following my trip to Asia, that I expressed the view that the time had come
[Mr. Dlefenbaker.l

for a declaration of the purposes of the democratic free world which are today to a considerable degree left for definition to the whims of its enemies. We need an understanding in this vital field of philosophy that is ours, and there is a compelling need for the free world to define its purposes, its principles and its ideals so they can fully be understood in every part of the world.
While material assistance to underdeveloped countries is most beneficial and Canada's contribution to that end has been a worthy one, material aid of itself is not sufficient. The time has come for us to explain what is our concept of freedom; for, after all, in the uncommitted countries of the world, the communist world is able to put forward its point of view and has successfully done so in many ways, while we in the free world have not been able to achieve the same degree of success. In other words, I suggest that there is no better way to explain freedom than in the spirit in which the Atlantic charter was declared during the darkest days of the war, and for the free world to reach a common basis for a declaration of freedom's creed. Then, having done so, let us give to the uncommitted world a solemn pledge of willingness to work with them for better economic conditions in which human dignity, equality and tolerance will be recognized and to which the personal freedoms-freedom of thought, expression, association and religion-will be dedicated in the struggle for man's hearts and minds.
During the last two days the Toronto Star in an article has come out in favour of action in that regard, action to assist the peoples of the uncommitted world. Indeed, it goes so far as to suggest that defence expenditures cannot defend the peoples of the free world. With that view I am not in accord, but I believe we must have the spiritual things properly brought to the attention of the uncommitted world. On the other hand we must preserve and maintain our defences so far as within us lies and in accordance with the needs and necessities of the present day.
I am not going into the detail which the Minister of National Defence and the Minister of Defence Production gave yesterday. I think both those contributions were outstanding. They placed before the people of Canada the picture of defence and also the action taken by this government to assure that we shall not be a silent and passive partner with the United States in defence on the North American continent.
I mentioned the discussions in the British House of Commons. Well, the last debate took place on February 25. There the opposition's attitude was the same as the opposition

here has evinced in the amendment. There the government was charged with failure to produce a coherent and effective defence policy, a charge almost identical in purport with the amendment moved here. But it is interesting to note that in the course of that debate the question as to the extent to which the United States of America was contributing and would have to contribute was referred to by the minister of defence, Right Hon. Mr. Sandys, in these words:
We believe that the Americans, who could afford it, were right in developing alternative deterrent weapons, in addition to the intercontinental land-based missiles into which they were putting their main effort.
He points out that the United States, being able to afford it, is taking certain stands. One of the most striking aspects of the trip I took was to see everywhere in the world the extent to which the United States, in the countries of the free world and in the uncommitted world, is taking over responsibilities that were formerly discharged for so long by Great Britain and the British Empire. It is taking them over because of the changing conditions and the economic results that have followed in the United States since 1914.
As far as Liberal policy in the United Kingdom is concerned, it was declared by Mr. Grimond, who said that Britain should not manufacture or maintain her own deterrent. The Liberal party believed that the deterrent should be held by the west and on behalf of the west as a whole, not by individual countries. The United States was at present so much the most powerful nuclear power that the nuclear deterrent must rest largely with it. Liberals were perfectly willing that Britain should make a contribution if it was wanted. They were not impressed by the arguments for mounting nuclear rockets on British soil, and shared the view that these might be distributed around the world.
In other words, disagreement takes place over there as it takes place here. What is the proper course to take? What are the instruments of today that will defend us tomorrow? Is there any missile defence? As far back as May 13, 1958 the Prime Minister of the United Kingdom warned that there is no known defence against ballistic missiles, and there is no sign of such a defence being developed. Authoritative sources have summarized British government policy on air defence along these lines. Britain does not have the financial or economic resources to develop planes that will be superseded in a few years by ballistic missiles, or may be obsolete by the time they go into production.
That is the attitude of this government. There is no purpose in manufacturing horse
Defence Policy, Planning and Production collars when horses no longer exist. Whatever the results may be, there can be no justification for defence procurement being used for any other purpose than the assurance of defence. Britain is concentrating her resources on building medium range rockets capable of carrying hydrogen warheads. No planes more advanced that the P-1 fighter or Victor and Vulcan will be designed. Production of all three planes is being pushed forward to tide Britain over the period until her air defences are taken over entirely by rockets.
What is our position in Canada? Some seem to have the view that we could be neutral in any war that may take place, neutral in the event that the United States was involved-or Britain, or France, or West Germany. There is no neutrality of that kind today. Our responsibilities under NATO, under the agreement entered into with the full cognizance and support of all members of parliament, will not allow any choice to be made in the future. There can be no academic debates in parliament or out of parliament on the question of whether or not we are automatically at war in the event that any of the nations in NATO are at war.
That is our position. There can be no other today in view of the international changes and the agreements entered into since 1948 and 1949. The defence of Canadian land, air and sea is a major if not the major strategic consideration on the North American continent and the most vital single item in the broad NATO strategy of early containment of the attack to protect the manoeuvrability of the main NATO weapon, the United States strategic air force. It was admitted quite fairly by the Leader of the Opposition that for Canada to have endeavoured to contribute a strategic air force would have been beyond the financial resources of the Canadian people.
Those are considerations to which we must have regard. Canada's part, as the Minister of National Defence has stated, is to protect Canada, to give warning to the United States air force, to the strategic air command. After all, whatever dialectical discussions there may be respecting the nature of NORAD, NORAD is indeed a part of NATO. NATO was advised of its formation. The NATO chart shows the Canada-United States planning group as reporting to the standing group. They act as a committee carrying out similar functions to those which would be carried out by the supreme commander, to use the words of the Minister of National Defence when giving evidence before the standing committee on estimates on June 10 last.
In other words, we here in Canada are in a position where our numbers do not permit

Defence Policy, Planning and Production us to provide for our defence by ourselves alone. I want to emphasize that very simple fact, a fact which seems to have been lost sight of during the course of this debate and on other occasions. I do so because the argument being used today is that we in Canada find ourselves as a satellite of the United States. Sir, there is co-operation. There must be co-operation. Without co-operation there is no survival for the people of either Canada or the United States.
Just a year ago the Leader of the Opposition said that a country of 17 million people cannot take over full responsibility for its own defence and that there were some things we cannot and should not do, that we could not afford the strategic bomber which is the principal deterrent. On the occasion when he spoke last year he also went on to point out some of the things which Canada should do, and I now wish to make reference to them. As found on page 3229 of Hansard for August 8, 1958, he said, and I remind him of this in view of his speech yesterday:
-Canada must have new and more powerful radar detection lines. It means new ground controls. It means participation in . . . semi-automatic ground environment. Surely it must also mean the introduction into our air defence forces of ground to air guided missiles such as the Bomarc, which we do not yet have but which in the future will perhaps become a major weapon in our air defence-
That was the suggestion of the Leader of the Opposition last August, and he pointed out at that time the difficulty of being able to predict the course of the U.S.S.R. and the needs for the future. He also went on to say that while the Bomarc missiles may not take the place of the manned interceptors at least for some time- I point out that he said this on August 8 last-they will certainly be supplementary to the manned interceptors.
Then he went on to say-almost in a prophetic way, because everyone was saying it at that time-that perhaps it would not be too long before the manned interceptor would be as obsolete as the old BE2C of the R.F.C. in which my hon. friend learned to fly. Then he said:	.
Are we going to go into the production and planning of these new planes and missiles, or should we not leave the production of this kind of weapon under the concept of division of tasks in a balanced collective defence strategy to the United States and concentrate our efforts in Canada, not exclusively but mostly, to ground environmental control and early warning systems against missile attack?
That is on page 3231 of Hansard for August 8, 1958. When they talk of the dangers of co-operation with the United States, this is what the hon. gentleman said, speaking in August last; that this is a situation in which

Canada is vitally and directly concerned, and with which we cannot deal except in the closest possible association with the United States.


Lester Bowles Pearson: I said that yesterday, too.


John George Diefenbaker: Oh yes, there has been no change in that regard. Again, at page 3231 of Hansard to which I have referred, I find that my hon. friend said that Canada may have to wait before entering into the field of rocket and missile construction. Then he said, and now I quote:
Perhaps we will also have to adopt a system of priorities of a different kind from that which we have adopted in the past with regard to defence by confining our defence efforts, or at least devoting the major part of our defence efforts, to matters particularly concerned with questions of immediate interest to us such as radar defence, integration of ground equipment and ground control-
That was the statement of the hon. gentleman only a few short months ago and, I point out, prior to the time this government made its declaration with regard to the CF-105. In other words, following that debate in this house this government acted, apparently with unanimity in the light of the words of the Leader of the Opposition in determining that steps should be taken which would go in the direction which he himself had surveyed and indicated. Yet today, at a time when the people of North America and in every part of the free world are concerned as they have not been for a long time, if at any time since 1945, there are those who would create in the hearts and minds of Canadians a frenzied fear that co-operation with the United States means subordination.
It means nothing of the kind. When I hear hon. gentlemen opposite talk about subservience to the United States I ask them to look at the pages of history. What party was it that stood at all times for a Canada independent and within the commonwealth, or within the British empire as it was? During the years we took that stand, and that was our stand at all times; the necessity for Canadian sovereignty within Canada, and particularly maintaining a sense of international responsibility. The hon. member for Dufferin-Simcoe (Mr. Rowe) was in this house and the hon. member for York East (Mr. McGregor) was in this house in the days when the party opposite sat over here and said, do not take any stand against the United States; do not do anything that might annoy them. Now they have suddenly become the champions of Canadian sovereignty. What about the stand taken for years and years that you should not at any time stand up for an assurance of equality?

I have always been very strongly Canadian, and I say this, sir. If anyone endeavours to suggest to me and give the Canadian people the idea that joining together for our salvation and survival, whereby each recognizes that the other is a partner-which is the only sensible way to survive-means that we are turning over this country to the United States and allowing it to be dominated by the United States, then I say that suggestion is not in keeping with the seriousness of the situation with which we are faced. I say it is the best way that we can look forward to tomorrow with a reasonable degree of hope.
Yes, they appear to fear the erosion of Canadian sovereignty. Is there any loss of sovereignty by reason of the fact that we fail to continue to produce an aircraft whose outermost range at subsonic speed is not more than 500 miles and at supersonic speed is about three-quarters of that distance? Let us face the situation as we see it. Let me assure the house and the country that this government has been solicitous for and outspoken against anything in the nature of an invasion of Canadian rights since we took power.
As a matter of fact we have been pictured as being anti-American, at least I have. However, that is not true, because I am pro-Canadian. We believe that Canadian sovereignty must be maintained; that is of the essence. Is there any loss of sovereignty in the United Kingdom? Have they ever talked such nonsense over there, even with United States troops on their soil from time to time, and with United States defence establishments there? Have the other NATO countries ever talked in this way? Is there any subordination of sovereignty there? This is the only course. It would be very wonderful for Canada to say, all alone, "Here we are, sovereign in our own domaine alone". There is no sovereignty, Mr. Speaker, without survival; that is the essence of the course we have taken. There is assurance that our northern areas shall be preserved.
My hon. friends opposite talk about sovereignty and express in lachrymose terms their feelings over the loss of sovereignty. What government was it that brought back to Canada sovereignty over the D.E.W. line? It was the government of today. My hon. friends opposite; did they ever talk about the loss of sovereignty when they allowed the United States to build these vast establishments in Canada, on Canadian soil? Were they shocked, as they pretend to be now, by the division of responsibility and the division of cost as between Canada and 66968-9-99
Defence Policy, Planning and Production the United States when the mid-Canada line and the Pinetree line were built? Let us view this matter with objectivity and without emotional inaccuracies such as the hon. gentleman and those associated with him opposite have shown in the last few days. I believe that the United States must be made to realize, and I welcome the fact that hon. gentlemen opposite have joined with us in this regard, that Canada and the United States are partners. We demand as of right the exercise of those things which are incidental to the fair and proper discharge of a partnership.
That brings me to this question. How often have gentlemen opposite laughed when we talked of plans for northern development to secure the northern areas for Canada so that they would not be lost. In the last few weeks something of that development plan which was scoffed at, the design of which was to improve the economic future of Canada and also preserve those areas for our defence, has been shown to be achieving fruition in the events which have taken place in connection with those vast mineral and oil areas which are today being taken up. Having said that, may I now say I believe most strongly that we intend to continue to assert unswervingly that we shall have for Canada a fair, full and equal participation in all decisions which go to our common defence. We want the assurance, too, that defence dollars will be spent in Canada in a fair and proper division. Those assurances we have asked for. Those assurances we have not achieved as yet in their entirety; but certainly the events of the last year indicate that as a result of the stand we took a committee has been set up by the United States congress, as well as a committee of ministers. Meetings of those committees are designed to assure that degree of consideration which each partner has the right to demand from the other.
Then we are accused of having contributed to the erosion of Canadian sovereignty. That sovereignty, as I see it, has two aspects: The maintenance of the sovereignty within the framework of our NATO defence, and offensively it consists of seizing the opportunities to maintain and assure our de facto sovereignty over the whole northern area. Do United States bases in Canada derogate from Canada? Is Newfoundland a subject province because it has one or more United States bases there? Those bases are of essence of survival and today maintain the bulwark of our eastern and Atlantic defences. Surely we should not endeavour to fan the fires of fear in the hearts of Canadians when co-operation such as is taking place is of the essence for our survival. The people who say that we

Defence Policy, Planning and Production raise these fears today only a few years ago said "Do not provoke the United States. Do not raise any objections." From the time this government assumed power we have pressed, we have contended, and in many cases we have secured what we were asking for, not always in whole but certainly in part; and I am going to come in a minute to what the hon. gentleman himself said in this regard.
As far as NATO and our continental defences are concerned, we take the stand-we have no reason to take other-that our actions within the continental context of North America are all within the contemplation of NATO. All of them have the approval of the NATO organization. I think one of the better editorials on this question of sovereignty was that in the Toronto Telegram of February 24, when it said this:
The charge that cancellation of the production contract for Arrow aircraft involves any degree of surrender of Canadian sovereignty is wholly wrong. It is farfetched beyond the limits of common sense, for the Arrow decision is, in fact, an exercise of independence by Canada without precedent in the history of our military alliance with the United States, which dates from 1940.
Then it goes on to say, however:
Canadian security demands co-operation with the United States, and Canada co-operates in continental defence for its own benefit, and it is wise to recognize that the same motives apply in Washington.
I underline the next portion of it because this represents the facts as they are:
The only pressure upon the Canadian government in deciding to abandon the Arrow was to serve the best interests of Canada and its defence needs. There is no suggestion of outside pressure, no reason to argue that Canadian sovereignty has been in any way prejudiced.
Then it went on to deal with the question to which I now want to refer, the question of production. That was dealt with at length by both hon. gentlemen, and there are only one or two matters I will refer to in that connection. However, we have been speaking of the economic co-operation agreement between Canada and the United States, which is dated October 26, 1950. This document, which all hon. members have, sets forth the principles for economic co-operation. The arrangements worked out under the Hyde Park agreement proved so successful that when international conditions again appeared threatening the joint United States-Canada industrial mobilization planning committee was established on April 12, 1949, to make plans in case joint action should again become necessary. The document goes on to say:
It is agreed, therefore, that our two governments shall co-operate in all respects practicable, and to the extent of their respective executive powers, to the end that the economic efforts of the two countries be co-ordinated for the common
[Mr. Diefenbaker.l
defence and that the production and resources of both countries be used for the best combined results.
Then it sets out the principles which are established for the purpose of facilitating these objectives:
-the two countries shall develop a co-ordinated program of requirements, production, and procurement.
What else have we done but carry out in that particular-I will deal with this later -the agreement entered into by the government of which the hon. Leader of the Opposition (Mr. Pearson) was a member? Then, secondly:
To this end, the two countries shall, as it becomes necessary, institute co-ordinated controls over the distribution of scarce war materials and supplies ... To the extent possible, there shall be consultation to this end prior to the institution of any system of controls in either country which affects the other.
In order to facilitate essential production, the technical knowledge and productive skills involved in such production within both countries shall, where feasible, be freely exchanged.
Barriers which impede the flow between Canada and the United States of goods essential for the common defence effort should be removed as far as possible.
I point out that oil was mentioned today, as was the protest that we made. When the hon. gentleman opposite was among those formerly in power that particular provision was evaded, or avoided in operation, by the United States. We have taken the stand that joined together in defence, the economic strength of each of us must be maintained, and by-


Lester Bowles Pearson: Mr. Speaker, may I ask a question. In dealing with oil, the Prime Minister (Mr. Diefenbaker) said that this particular provision was evaded by the United States when we were in office.


John George Diefenbaker: Avoided in operation.


Lester Bowles Pearson: Avoided. Would he point to any occasion when these restrictions were in operation while the previous government was in power?


John George Diefenbaker: I did not say that. I mentioned that oil was one of the materials; but under the former government there were other minerals and materials and protest was made to the United States.


Lester Bowles Pearson: Would the Prime Minister mention any of the other materials?


John George Diefenbaker: At the moment I am unable to indicate the exact ones, but I have a list of them available. It covers agricultural products and other commodities, and I will give it to the hon. gentleman. And when we

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asked Mr. Howe in the last Liberal government whether any protest had been made, we were told: we sent them two protests.


Lester Bowles Pearson: Protests against what?


John George Diefenbaker: Against the United States closing out certain commodities.


Lester Bowles Pearson: What commodities?


John George Diefenbaker: Well, as I said a moment ago, I can look this up, and I will place them on the record since the hon. gentleman has probably forgotten. We asked what protests had been made, and Mr. Howe said two protests had been sent. And when we asked what replies had been received, he said: there were no replies, the protests were not couched in a language which demanded a reply.


Lester Bowles Pearson: I think I can help the Prime Minister. The protest he is talking about was against the export of barley that went into rye whisky in the United States.


John George Diefenbaker: Oh, it was more than barley going into rye whisky. I will give the hon. gentleman the list.
Now we come to the question of United States-Canadian co-operation in cost sharing, and how well the hon. gentleman did when he and his friends were in office. I mentioned a moment ago that when the United States was closing its markets to Canada the protests which were made were ineffectual. In addition to that, in connection with co-operation in cost sharing, what did the hon. gentleman say on August 8, 1958:
I think we may have great difficulty in getting the United States to participate in all of these Canadian developments-


Lester Bowles Pearson: What page?


John George Diefenbaker: From Hansard.


Lester Bowles Pearson: What is the hon. gentleman reading from?


John George Diefenbaker: Page 3229.
-in view of the fact that we will be reminded that they are spending $40 billion on defence this year.
Then he went on to say as reported at page 3230:
It does .raise the question whether Canada can afford this kind of participation in collective defence-I know also from my own experience in the past that when we tried to get the United States interested in the CF-100 some years ago at a time when the CF-100 was admitted in Washington to be certainly the best all-weather fighter on this continent, we made no progress at all.
Yet the hon. gentleman says there is something wrong with us. He says: you should learn from us how to succeed. And only yesterday, it will be remembered, the hon. gentleman was telling us what we should have done about the CF-105. The Minister 66968-9-99J
of National Defence and the Minister of Defence Production showed that we endeavoured. We tried. But the hon. gentleman would lead the Canadian people to believe that had he been in our position he would have succeeded. But what did he say on August 8? He said this:
I believe the minister will be having the same trouble with the CF-105.
So much for the kind of speech the hon. gentleman made yesterday. In order to follow that speech and appreciate it fully I ask all hon. members to read the unrevised edition of Hansard of August 8, 1958 in which they will find most of the answers to most of the questions the Leader of the Opposition raised in this debate.
The Leader of the Opposition complained that we are co-operating on a continental basis. And yet he said on that same day in August:
We should try to get the United States to recognize the importance of co-operation by encouraging this kind of development in Canada, not on a national but on a continental basis.
I ask the hon. gentleman this: when he and his colleagues were entering into the NATO agreement what arrangement did they make? Yesterday the hon. gentleman led us to believe that when we entered into the NORAD agreement we should have secured certain promises from the United States and an undertaking that there would be a sharing of defence production. I ask the Leader of the Opposition this: was anything like that done when Canada entered into NATO? We have made it clear to the United States that sharing in production is mandatory, and that Canada will not be satisfied with promises. We shall insist on our fair share of production and cost sharing in production, because in so far as cost sharing is concerned it has its place in co-operative defence, and as well do we insist that production sharing shall in no way be reduced but allowed very materially to increase to the end that fairness and consideration may be given to Canada, because a partnership will not work if one has the loaf and the other has the crumb. Yet that is the situation which apparently has existed for some years if regard is had to the speech delivered by the hon. gentleman on August 8 last. Since we have been in power we have pressed unceasingly for the assurance of a fair and reasonable share in arms production.


Lionel Chevrier: May I ask the Prime Minister a question? Does he think that the cost sharing ideas laid down in the document which was read by the Minister of Defence Production will work to the end which the Prime Minister has just mentioned?
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John George Diefenbaker: That is its purpose. That is what we intend. That represents our desire and determination to assure the achievement of that object. But the hon. gentleman knows, having been connected for so long with government as well as with the St. Lawrence waterway, that some of the objectives in written form are not always completely achieved when the time comes for concrete results.


Lionel Chevrier: May I tell the Prime Minister that Canada got all it asked for with reference to the St. Lawrence seaway.


John George Diefenbaker: That is not what the hon. gentleman said the other day when he was defending himself.
To proceed further, the Leader of the Opposition indicates that it is his belief- and it is shared on this side of the house- that there should be no subordination of Canada to the United States in the field of defence production and planning. That is what we believe, and that is what we are working for. That is the purpose of the arrangements we have entered into, and I am glad to be able to quote for the benefit of the Leader of the Opposition that what we did in connection with the Bomarc and Sage had his blessing in theory though it was condemned once implementation took place.


Lester Bowles Pearson: It was the way it was done.


John George Diefenbaker: The hon. gentleman says: you did what I wanted but you did not do it in the way I wanted it done. Now we have the answer officially-you were right in what you did but you did not do it in the way we would have done it. Now we have at least removed some of the underbrush.
May I go on further? The hon. gentleman would have us believe that the defence policy for Canada has collapsed under this government, that it is uncertain. I should like the hon. gentleman to look at what some of the major critics have had to say about this; the ones members of the opposition used to quote but do not quote nowadays. General Macklin said: "I condemn the Conservative party for following the defence program of their Liberal predecessors." That is what he said the other day. He says we are wrong because we have the same objectives as the Leader of the Opposition and his colleagues had.
I should like to refer to this because occasionally what one has said on a previous occasion provides interesting reading and that is why I want the hon. gentleman to recall what he said on August 8. My hon. friend said today that when his government was in power Canada stood strongly. But what did General Simonds say? I refer to the article in Maclean's magazine, issue of June 23,


1956, written by General Simonds at a time when he had only recently been appointed chief of staff as excerpts from it appeared in the Financial Post of June 15, 1957. General Simonds said:
There is no facet of our national affairs in which the stamp of colonial mentality remains so deeply imbedded as in that of our national defence.
That may have been true in 1956 but it is not true today.


John Whitney Pickersgill: Mr. Speaker, would the Prime Minister permit a question?


John George Diefenbaker: Yes.


John Whitney Pickersgill: Will the Prime Minister read what General Simonds said over the weekend about the defence policy of the present government?


John George Diefenbaker: I was going back to the days when hon. gentlemen opposite formed the government because we were told yesterday how different things were then and how the former government stood for Canada's rights. May I point out that it stood in the manner that Mr. Mackenzie King enunciated as the battle -cry of the Liberal party, "Do not provoke; we do not believe in provocation, we believe in co-operation based on proper sharing."
The statistics that have been placed on the record indicate that since the present government has been in office, while it has not achieved everything by any means it will never be satisfied until it obtains for Canada a much larger share than Canada has today. The record indicates that Canadian expenditures in the United States have decreased since this government came into office. On the other hand the United States expenditures in Canada have increased. In 1957 and 1958 United States expenditures in Canada exceeded Canadian expenditures in that country by $20.6 million and $16.8 million respectively.


Lester Bowles Pearson: Mr. Speaker, would the Prime Minister put on the record the expenditures made by the United States in Canada during the six years before his government came into office? I refer, of course, to defence expenditures made in Canada by the United States in the six years before his government came into office compared with the expenditures placed in Canada during the year 1958?


John George Diefenbaker: I am glad that the hon. gentleman is looking for information of a dependable character.


Lester Bowles Pearson: Five hundred million dollars as against $40 million.


John George Diefenbaker: I should be pleased to give him the exact figures year by year but

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they have already been placed on the record and I suggest therefore that the hon. gentleman read the record and examine the information placed on Hansard yesterday by the Minister of National Defence (Mr. Pearkes) and the Minister of Defence Production (Mr. O'Hurley).
I shall say no more at this time except to express the purpose of this government. Our purpose is to ensure that in no partisan way Canada will have that defence which her financial situation will permit, her international responsibilities demand and which co-operation and partnership should ensure. I suggest to my hon. friends opposite that it is really nonsense to endeavour to lead the Canadian people to believe that in following his suggestions with respect to the Sage and the Bomarc we would be following a proper course for Canada. Having regard to the seriousness of the awful potentialities inherent in the defence policy of a nation this government will follow a course of national survival -and I emphasize national survival-that will assure our national sovereignty and the attainment of our national destiny.
That is the course we have taken. I will not say we shall always be right because since 1945 no government, no minister of national defence and no prime minister in any of the countries of the free world that I know of has been able to look ahead and say, "this will be the course." The munitions planned in 1947, 1948, 1949 and 1950 have had to be discarded. The aircraft of that day which were regarded as the ultimate in all perfections have become obsolete. What we have tried to do and what our plan remains is to take the role of full partnership and responsibility here in Canada and to work with the United States whose strategic air command represents the only hope we have of a deterrent. We intend to work with the United States without in any way surrendering our sovereignty. We will work with the United States in the same way as the United States and Canada work with all the other countries of NATO on the continent of Europe to the end that in a spirit of unity and a common dedication of purpose we shall be able to assure to this and future generations that freedom which we inherited.


Hon. Paul Hellyer (Trinity):: Mr. Speaker, we heard this afternoon a very learned discourse on external affairs. One might have thought that we were back in the debate of Thursday last and that the Prime Minister (Mr. Diefenbaker) was participating in that debate. The subject we are supposed to be discussing this afternoon is that the prolonged delay of the government in determining air defence policy and planning in co-operation
with our allies is preventing the effective use of Canada's defence production facilities and manpower.
The Prime Minister seems to have learned one thing very well from the Russians, however, and that is: blufE as long as you can and when the heat is on adopt a diversionary tactic, fly off on a tangent, take off in some other direction of emotional inaccuracy.


John Whitney Pickersgill: The Prime Minister's own phrase.


Some hon. Members:: Who wrote this
speech?	*


Paul Theodore Hellyer: The Prime Minister spoke about the terrible situation in which the world finds itself and that is indeed true. All of us, he said, are agreed that an adequate defence is necessary. He went on to say that any disagreement was as to the course we should take to maintain that defence without causing national bankruptcy. Mr. Speaker, the national bankruptcy of this government came before its decision to discontinue the Arrow not because of it.


Mr. Fraser:: I thought there was a rule against reading speeches.


Paul Theodore Hellyer: Later on in his speech this afternoon the Prime Minister spoke about production. The best production we have seen since his government took office, unfortunately, is the one he put on in the house this afternoon. One thing the Prime Minister has not learned from the Russians is that you cannot bargain with them unless you are as strong as they are. In this framework I should like to discuss the amendment before us. Our amendment condemns the government for its lack of a defence policy. Nothing that has been said in this debate has been the least bit reassuring to us. On the contrary, the government has by its very contradictory statements affirmed our belief that it does not know in which direction it is headed.
The government has found difficulty in making decisions and in formulating a defence policy. It has made some decisions since it took office however and a brief review of those may be in order. One of the first was to cut out many of the building projects in the summer of 1957, hangars, runway extensions, and so on, particularly affecting the Atlantic provinces. Those were cancelled abruptly. That decision was not made by the chiefs of staff but by the Minister of Finance (Mr. Fleming). The chiefs of staff were not given a chance on that one. Later in the year, when the government realized how badly it had miscalculated the Canadian economy and the bread lines started growing, many of the same projects were reinstated as a crash program in November;
1554	HOUSE OF
Defence Policy, Planning and Production reinstated, I might add, with considerable pomp and ceremony as a part of the great billion dollar vision.
Another early decision was the cancellation of the CF-100 Mark VI, which was an improved version of the Canuck, a more powerful aircraft, to be equipped with an air-to-air missile capable of dealing with some of the more recent Russian bombers. We do not know who made that decision. Probably whoever it was had some help from the Minister of Finance. In any event, the decision not to proceed might have been rationalized at the time on the basis that the Mark VI was soon to be superseded by the Avro Arrow.
Another decision that was made was a very major one, namely to integrate Canadian air defence squadrons with NORAD under NORAD command. From a military standpoint there is no doubt that this decision was the right one. From the standpoint of the supremacy of parliament and of the sovereignty of Canada it was a fateful day. As the Leader of the Opposition (Mr. Pearson) said yesterday, that was the time to sit down with the United States and iron out in advance all of the many implications and to determine from them what role Canada could play in the partnership and particularly what our share of mutual defence production requirements should be. We are told that that decision was taken by the Prime Minister and the Minister of National Defence (Mr. Pearkes). We also understand that they did not even refer the matter to cabinet.


Mr. Pearkes:: You know that has been denied in the house.


Paul Theodore Hellyer: I did not know but I will
accept the minister's correction.


Paul Joseph James Martin: No cabinet minute was produced.


Lester Bowles Pearson: There is no cabinet minute on it.


Paul Theodore Hellyer: They did not discuss the matter with parliament, as they should have on such an important question as placing Canadian squadrons under a United States air force general. That gives us some clue to the manner in which decisions are made by this government.


Mr. Aiken:: Mr. Speaker, on a point of order-


The Acting Speaker (Mr. Rea):: Order. I
understand the hon. member for Parry Sound-Muskoka is rising on a point of order.


Gordon Harvey Aiken: It has been mentioned several times since the hon. member for Trinity has


risen that he is reading his speech. I think you should ask him, sir, not to read his speech verbatim.


Paul Joseph James Martin: Mr. Speaker, I am sure that on reflection the hon. gentleman will realize that the Prime Minister has just made a very important statement, in many parts of which, as the house knows, the Prime Minister followed a text very closely.


Some hon. Members:: No, he did not.


Paul Joseph James Martin: Now the hon.
member for Trinity is speaking on behalf of the opposition immediately after the Prime Minister. He is following his notes with great care, as under the circumstances he should. I am sure that in the light of the fact that he is now following the Prime Minister no one would want to disturb the method used by the hon. member for Trinity in making his reply.
Mr. Pallet!: Who wrote the speech?


Paul Theodore Hellyer: Mr. Speaker, I can assure you of one thing. If you would care to read my notes after I have finished you would find that what Hansard is recording is not nearly as close to what I have in those notes as what Hansard recorded yesterday of the statement of the Minister of Defence Production (Mr. O'Hurley) was to his.


Lester Bowles Pearson: Every word of which was read.


The Acting Speaker (Mr. Rea):: Order. Just to clear this matter up, as hon. members know the Chair only interprets the rules; it does not make them. The hon. member for Trinity has referred to the fact that he is referring to notes. The Chair will assume that he is not reading his speech.


Paul Theodore Hellyer: Mr. Speaker, last Friday the Prime Minister announced another very important decision. He stood in his place in the house and announced that the contract with Avro had been cancelled forthwith. He did not, as he told us last September he would, wait until March 31 to make his decision.


Douglas Scott Harkness: He never said that.


Mr. Green:: That is not correct.


Paul Theodore Hellyer: He said in his announcement last September that on March 31 there would be a reappraisal. The minister can rise in his place afterwards and read into the record the statement of the Prime Minister. It has already been put on the record in part several times.


Lester Bowles Pearson: He was still trying to sell it in February.


Paul Theodore Hellyer: Many Avro workers took him at his word and made plans and personal commitments on that basis because they felt

that they could rely on their jobs and their security at least until March 31, but they were wrong; they had been let down. To paraphrase many of the speeches made on the other side of the house during an earlier debate some years ago, they were sold down the river.
Well, sir, the Prime Minister did not anticipate the extent of the consequences of the short-circuit which he caused by pulling the switch on Friday morning. He seemed to be hurt as well as surprised by the fact that the company laid off all of its hourly and weekly paid employees forthwith. He should not have been surprised and he had no reason to feel hurt because the company just did as ordered by his own defence production department, and I quote:
You shall cease all work immediately, terminate subcontracts and orders, place no further subcontracts or orders and instruct all your subcontractors and suppliers to take similar action.
"Immediately", the telegram says, at once, without delay. Last Monday afternoon we criticized the government for the way in which it had handled this whole affair. We considered it clumsy, inept and incompetent. We are now convinced that we were correct in that judgment.
The Prime Minister entered the debate and made his speech which was described by several newspaper people as one of his finest. He had made his case, with the assistance of innumerable newspaper clippings that the company should have known last September what the fate of the Arrow was and that the contract would inevitably be cancelled. He rose to new heights of oratory, and one member of the press gallery said that he should be given a clean bill of health. Before agreeing with this, Mr. Speaker, it is necessary to consider his responsibility in this matter.
Let us assume that the Prime Minister was correct in his opinion and that he had made the case that the company should have known since last September that the contract was to be cancelled. If he was correct and the company should have known, then the Prime Minister must have known. Surely that much logic is not unreasonable. If the Prime Minister had his mind made up last September and the decision was a military one as he asserted, he should have cancelled the project then and saved Canadian taxpayers $100 million. The only possible excuse under the circumstances for delaying the decision to February, 1959 would be the use of the intervening five months to find some alternative to keep the scientific, engineering and manpower potential of the plant usefully employed. That was not done.
Defence Policy, Planning and Production
So the decision was announced abruptly and without any apparent solution being put forward by the government. Actually the search for an alternative plan should have started long before last September. In the light of what the Prime Minister and the Minister of National Defence have told us during this debate and a week ago yesterday, they knew of these great, far-reaching world events. They knew they might have to change their course of procedure. They knew that great things were in the offing and they should at that time have considered the possibility that they might later cancel the Arrow contract and what that would mean to Canadian defence, what it would mean to Canadians as individuals and what they would do in the event that the contract was cancelled. But apparently nothing was considered before last September.
It was not enough to send teams to the United States and to the United Kingdom to visit plants and to explore the possibility of getting some part of the production of these plants for Canadian factories. Surely, Mr. Speaker, it could not be reasonably expected that plants in the United Kingdom and the United States would give up some portion of their contracts when there is already considerable unemployment in those countries. Surely this is a matter which has to be settled at the ministerial level or even at the prime ministerial level. It is not a matter which can be settled by teams visiting plants in other countries, necessary though that may have been for purposes of reconnaissance. Production sharing is something which can only be determined at the highest governmental level and it is something to which the government should have applied itself.
In his speech last Monday the Prime Minister mentioned his world tour. We had no objection to his making that trip. As a matter of fact, we were pleased that he should travel around the world, visit various countries and find out at first hand how highly Canada is regarded in all the countries of the world, a condition that came about under the previous administration and largely through the good offices of the present Leader of the Opposition. We had no objection, as I said, to the Prime Minister taking that trip. What we did and do object to is the fact that before the Prime Minister went on the trip he did not make some of the important decisions facing the country at that time, decisions which would have such a great influence on the future of Canadians generally and which were left in abeyance while he was away. The people left in charge either were not competent or not able to deal with
1556	HOUSE OF
Defence Policy, Planning and Production them in the interim. Surely such grave decisions should not have been left in abeyance for so long.
One place the Prime Minister did not visit was Washington, and that is one place where we think he should have gone. We think he should have gone to Washington and stayed there until he had come to some satisfactory agreement with the government of the United States. He should not have taken any fast brush-off. He should have sat down with his counterpart in the United States and the officials there and worked out some satisfactory system for the mutual defence of the North American continent and for production sharing between our two countries, including sufficient developmental work for Canadian scientists, engineers and our creative capacity here. He did not take advantage of the five intervening months.
Contracts for Bomarc wings and other things were mentioned by the Minister of Defence Production. Incidentally, when he made his statement to the house I thought I heard him refer to some sports equipment that was to be Canada's share of production in respect of the Bomarc installations. I notice it is not in Hansard. I do not know whether it was in the minister's original text.


Mr. O'Hurley:: Mr. Speaker, there was no allusion whatsoever to any sports articles in the statement.


Paul Theodore Hellyer: I am glad to hear that because it seemed rather symbolic that our share of defence production was to be hockey sticks and footballs.


Gordon Minto Churchill: On a point of order, Mr. Speaker, under these circumstances and having regard to the explanation made I think the hon. member should withdraw his remark.


Paul Theodore Hellyer: I accepted the minister's statement. I was not the only one who heard it.


Gordon Minto Churchill: On a point of order, the minister has made his explanation. He stated that these remarks were not made in his speech and the hon. member is now trying to insert them into Hansard: as if they had been. He must accept the minister's explanation.


Paul Theodore Hellyer: I said that I accepted it.


The Acting Speaker (Mr. Rea):: Order. As the hon. member for Trinity knows very well from his long experience in the house, he must accept the statement of another member and not question it after it has been accepted.


Paul Theodore Hellyer: I did not question it at all. As a matter of fact, hon. gentlemen opposite


were making so much noise at the time that the hon. member for Bonavista-Twillingate and myself could not hear properly what was being said on the other side of the house.
The Prime Minister did not cancel last September and has no results to show for the $100 million which have been spent in the intervening five months. He did make it clear, however, that the decision was a military one. Yet the Minister of National Defence tells us that last fall he was still trying to sell the Arrow to the United States and that several attempts were made in this regard. As he said in the house and on television, he did not get the final word from the United States air force through the defence secretary until the NATO meeting in December. That was the first time he got a categorical no.
Similarly, the Minister of National Defence told us last Monday and again yesterday that additional attempts had been made to sell the aircraft to the British and that the final answer from them that they had no requirement for it and would not be able to purchase it was received only a few days ago. Surely the government would not have had the temerity during these intervening months to try to sell to the Americans and the British a plane which was not satisfactory or which was useless. It is just unreasonable to assume that they would.
Another question mark caused by the statement of the Minister of National Defence arises from the fact that he said in the house that preparation of the white paper could not be started until last week when the decision respecting the Arrow was made. If the Prime Minister knew, last September, that the contract was going to be cancelled, then the Minister of National Defence must have known and there is no reason whatsoever why the white paper could not have been ready and presented in the house at the same time as the Prime Minister's statement. Furthermore, we would have expected that the theory of national defence as the government sees it would have been laid down in the white paper and that the decision to cancel the Arrow would have been made in the light of that theory, not that the decision to cancel the Arrow would be made first with the theory of the white paper then having to be rehashed and made to fit the decision which the government had taken.
We think that the white paper must be almost ready now. We hope it is because it certainly sounded yesterday as though the Minister of National Defence was paraphrasing some of it as he spoke to the house.


Paul Joseph James Martin: I hope it is going to be simpler than that.


George Randolph Pearkes: 
Paul Joseph James Martin: We want it to be simpler than that.


Paul Theodore Hellyer: This evidence would lead us to wonder whether the decision was a military one or whether in fact it was an economic one. The government's repeated efforts to sell the plane during those intervening five months since last September inferred that had substantial orders been obtained from Britain, the United States or some other source production would have been proceeded with rather than cancelled. However, that is a horse of a different colour or, as the Prime Minister said this afternoon, it is not the horse's colour but a different part of his anatomy.
It is possible, too, that as a result of the
mnnr mir nnnnnrv-iir* o1VJ? dZTC ^CinmdndeTCCl
we are not able to spend as much money on our defence as formerly. The blunt refusal of the Minister of Finance to provide sufficient funds for both a manned interceptor and other defence requirements left the chiefs of staff with no alternative but to advise as we are told they did. The statement of the Minister of National Defence yesterday afternoon was not very reassuring. In every debate there seems to be some ludicrous inference. In this debate the most incredible inference is the suggestion that whereas the CF-100 interceptor is not obsolete, the CF-105 is and that is the reason it is not being put into squadron service.
The minister told us the CF-100 would not be obsolete so long as Russian bombers existed. This statement is in Hansard for yesterday in case the Prime Minister wishes to find it. So long as there is a Russian bomber capable of coming here and back, the minister said, or even capable of coming one way we must keep our CF-lOO's and Bomarcs. This suggestion should not be allowed to mislead the Canadian people. The CF-100 Mark V is not now capable of dealing with the latest Russian bombers. In not too many months, if the Russian bombers carry air-to-air guided missiles, the CF-100 will be nothing but a sitting duck. At such a time the whole fleet, with its present armaments, might just as well be put in moth balls. We will then be completely defenceless against both manned bombers and missiles. Two weeks ago we were well on the road to having at least some defence against the former, but now we have decided to ignore both.
If, as the minister said, there is a continuing threat against the United Kingdom from the manned bomber we might expect there would be a similar threat against the North American continent. Indeed, the minister
Defence Policy, Planning and Production reinforced this view with a statement yesterday when he said that the reason we are introducing Bomarcs, just as the United States is, and are keeping our interceptor squadrons in service is that if we are attacked the Russians would use, in addition to the missiles that they have available, such aircraft as they could reasonably divert from other targets, and which might be used against secondary targets. Surely, some of our Canadian targets would qualify as secondary targets.
The United States Bomarc line, which includes two stations to be built in Canada, is not designed for the defence of Canada. It is designed for the defence of the United States and that, as the minister well knows, is the reason it is intended to stretch across the northernmost part of the United States. The only reason we have two stations is that the southern parts of Ontario and Quebec jut down below the 49th parallel, and the line cuts right through. There was a discussion earlier, before this government took office, of the possibility of moving the whole line 300 or 400 miles farther north in order that it might play some part in the protection of Canada. Surely that would have been something the government might have considered and might have pressed on the United States so that we would have, in fact, some defence for our western Canadian cities. Then, too, there would have been some defence against bombers before they got close enough to float guided missiles into our Canadian targets, and any planes knocked down by the United States Bomarc squadrons would fall in less populated areas rather than over our southern towns and cities.


Gordon Minto Churchill: Did I understand the hon.
member to say that prior to his government leaving office they were considering establishing Bomarc launching sites in Canada?


Paul Theodore Hellyer: That is correct. If we had
truly co-operative continental defence a point further north would have been the place to put the Bomarc line, and that was being actively considered and is something for which I think we might have pressed.


Gordon Minto Churchill: You were going to place
reliance on the Bomarc?


Paul Theodore Hellyer: That is not what I said. All
I said was that the matter had come to the attention of the Canadian authorities through the regular channels before our government left office.


Lester Bowles Pearson: It was being considered.


Paul Theodore Hellyer: The minister told us yesterday very gravely that if we let our armour down, and then he paused before continuing as if to say that the government would be held

Defence Policy, Planning and Production responsible, but instead he said that there might not be many left to blame. That is precisely what we are doing. We are letting our armour down. We have decided, for the moment at least, to pursue a course of no defence at all. The United States Bomarc stations below the 49th parallel will not protect our western cities from air-to-ground missiles, notwithstanding the minister's assurance. The minister concluded by saying that in respect of national defence policy, there was no confusion. Well, certainly not, Mr. Speaker, because there is no policy and it is axiomatic if there is no policy there is no confusion. However, the Canadian people may be forgiven for being somewhat confused.
The Prime Minister, during a visit to Toronto in 1957, condemned as unjust and untrue propaganda a story that the Conservatives, if elected, would reduce military power. He went on to say that this report was false in every particular and had no basis in fact.


John George Diefenbaker: From what is the hon. gentleman quoting?


Paul Theodore Hellyer: It is from the report in the Toronto Star of May, 1957, following a meeting in Toronto. The Prime Minister seemed to be more aware of the need then than he is now or than he has been since he took office. The defence estimates for 1959-60, including mutual aid, are reduced by some $182.4 million. Our share of the burden of defence, already less than some of our allies are called upon to bear, is being reduced. We are, apparently, going to be content to ride on the back of the United States people, and lose our right to a strong voice on the problems of joint concern.
This is a very grave situation. One thing that has resulted from the debates of last week is that the government has given us much more information than previously, and I think that is good. It gives the public and members of parliament a chance to consider defence in the light of this additional information which was very much needed.
Now, important as the Avro decision is, it is but a part of the greater picture, both of military defence and defence against encroaching ideologies. There are hundreds of thousands of Canadians from coast to coast who have been out of work for weeks and months. They, too, have an urgent requirement, the requirement of useful employment to provide themselves with a living and a chance to contribute their share to the collective strength of the Canadian nation.
To sum up, Mr. Speaker, I should like to come back to our original contention. We turn to the central tragedy of the whole situation. First, we are to have no defence
[Mr. Hellyer.1
except that which the United States chooses to give us. We should have obtained their co-operation instead of just leaving it to them. Incidentally, the Prime Minister said that without co-operation there cannot be survival either for Canada or the United States. Fair, full and equal decisions in all matters concerning common defence, he said, must be ours. We must join together for common survival. Well, that is right, Mr. Speaker. We must join together, but joining together with the United States for survival should not place this country in the position in which we find ourselves under the present government. We do not have the joining together of a marriage as partners but rather a joining together in a similar way to that in which Jonah joined the whale.
Secondly, we have more unemployment to add to that already very vexatious problem. Thirdly, we have dissipated much of the potential of providing ourselves with any future defence. This is not Canada's destiny as outlined to us by the Prime Minister. In the statement of the Prime Minister last Monday he blamed the military decision on the chiefs of staff and the mass lay-offs on the company. This is getting to be a habit. He blames the deficit on the Liberals, the unemployment on the international situation, the military decision to cancel the Arrow on the chiefs of staff, and the mass lay-offs on the company. One might be forgiven for wondering if it is always true-


George Randolph Pearkes: Mr. Speaker, on a point of order, the Prime Minister never blamed the chiefs of staff at any time.


Paul Theodore Hellyer: -that the blame lies elsewhere.


Mr. A. R. Smith (Calgary South):: Mr. Speaker, I propose to take just a few minutes of the time of the house to deal with an area which has been, to some extent, covered, but after the third day of debate on this subject it is difficult not to be repetitious. I do not propose to comment on the hon. gentleman's remarks or his address, but he does speak of confusion. If ever we listened to a confused contribution, it was indeed his.
This attempt by the opposition, who live in two worlds, to offer a series of contradictions one after another was clearly nailed to the cross by the Prime Minister (Mr. Diefenbaker) when he read back the remarks of the Leader of the Opposition (Mr. Pearson). The people of Canada can judge fairly whether the opposition desire to make a constructive contribution to this defence debate or rather are merely taking the position of someone who has been struck down in a motor accident and, looking through the bandages in his bed, just argues that he really did have the right of way after all. I suggest, that the several

speeches we have heard today which combine in an attempt, first of all, to suggest that we should live beyond our means with equipment which is not suitable for our defence, and, secondly, to create animosities with our partner, the United States, are indeed of great disservice to this country and to this country's defence program.
We have heard much of this question of sovereignty as though it were something the opposition had all of a sudden just discovered. The objective of co-operation with the United States in both peace and wartime has been something which we desired and have worked for for many years. Those in this house who served overseas well remember the days when our fighter squadrons accompanied many of the U.S. B-17 squadrons when they took part in actions which were an integral part of defence under a United States general. They will remember the work which our transport command did in carrying services and supplies in their behalf. They will remember the bomber units which together functioned as an integral part of the defence of Europe, and there was never any question of sovereignty at that time. We were operating as partners in defence of a country, and in opposition to a common foe. It will be said today, of course, by those in opposition that that was in wartime. I suggest that that is no argument. It is purely academic, because today, with the emergency of the situation which we see in front of us, we cannot afford to sit down and disagree on what is going to be a Canadian proportion or a United States part of an operation: We must work it out as a joint enterprise as we did in two great wars.
Let us look at past history for just a moment where our co-operation in more recent times has also been well established. It has been said in this house by the Prime Minister -I am sure there will be no opposition to this sentiment-that the United States strategic air command has to a very substantial degree been the one dominant factor which has maintained peace in the world over the last few years. This is a body whose striking force and retaliatory power has made war so terrible that it has maintained the peace. This is the first and foremost defence against war, and on the basis of determining future policy we entered into an agreement with the United States which we know as NORAD. I do not intend to repeat the arguments which have taken place in this house other than to say that there was certainly no reticence on behalf of the opposition as to the need for an agreement, but I would comment on the remarks of the Leader of the Opposition who spoke of the fact that there had been a great deal of co-operation prior to the NORAD agreement. I suggest that that is not the
Defence Policy, Planning and Production whole case. There was a loose arrangement, but it was the NORAD agreement that laid the basis on which this partnership was to be formed. Now we find that we are in a closely knit defence alliance, one which is still providing us with the same measure and degree of efficiency of operation and, perhaps more important, an understanding in the event of an emergency, as to how best we can defend not just Canada but the continent as a whole.
I am going to make a reference to the Avro Arrow program and remind those gentlemen who were members of the estimates committee of a particular recommendation which we made when we were discussing the need, first of all, to determine whether we would be able to sell a particular weapon or ao it alone on any particular weapon program. May I quote from the recommendation on page 590 of the final report of this committee. It says this:
-with respect to further development of this portion of the defence program . . . and in view of the heavy financial burden, the committee does express its concern in the government entering into any subsequent weapon program of this magnitude without first negotiating for some cost-sharing agreement with either NATO member countries or the U.S.A. under the NORAD agreement.
I remind the house that it was in 1952 that this particular undertaking, the Arrow program, was first considered. The Leader of the Opposition suggested that some efforts were made to sell the Arrow, and he quoted from the minister's comments. He asked why it was not possible after this aircraft had reached the pre-production stage to sell it to the United States. Mr. Speaker, there is not that difference between 1951 and 1958 that the Leader of the Opposition would have you believe. First of all, I suggest that if there were any question about who had the first reason to sell this aircraft, it should have been raised in the initial stage when it was designed and we decided to proceed with it. Some four years later we find that the aircraft in its pre-production stage was ready to take its first flight, and we discover it is very limited in the field of defence to which it can make any useful contribution. Of course, the United States at this late date would be expected to say that this does not fit into the defence plans for this continent, and consequently it becomes impossible some four years later to sell it.
To return to this question of whether or not the government should have made its decision six or eight months earlier, I remind hon. members that first of all we made a contribution of $174 million toward the development of this aircraft in the course of the last session. It seems inconceivable to
1560	HOUSE OF
Defence Policy, Planning and Production me that at this stage, having paid for 36 pre-production models we should turn around and cancel this aircraft before we knew what the flight characteristics were. At that point only four had been tested. As I say, it seems inconceivable that having made the basic payment we should cancel the project without knowing what the limitations and capabilities of the aircraft were.
And now I should like to refute suggestions which have been made in some quarters with regard to the morale of the Royal Canadian Air Force. I have heard it said in this house that morale has sunk to a low point because of the cancellation of this one airplane. Like many others in this house, I have been associated for some years with this corps, and I suggest it is an insult to the intelligence of these men to say that because the Arrow does not fit into a defence program the morale of an extremely fine fighting force will be lowered. The impression has been created by some speakers that this is the end of the air force. The suggestion has been made that the force has no further objective. Nothing could be further from the truth. As hon. members know, the R.C.A.F. is maintaining a very extensive maritime command, a very large transport command and an active training command. In addition, an important contribution has been made to the training of air cadets not only within the framework of NATO but within the context of other alliances. Besides all this we are, of course, maintaining 12 squadrons abroad.
I suggest, also, that during the course of this debate on national defence many hon. members have overlooked another factor of great importance, and I refer particularly to one statement made by the Prime Minister as reported on page 122 of Hansard for February 20, which reads:
The Minister of National Defence and the chiefs of staff are now engaged in further studies of the various alternatives for the improvement of our defences.
It is quite obvious that some hon. members have completely lost sight of this area of the subject. It has been suggested that because we have cancelled one aircraft we are completely defenseless. It was suggested by the hon. member who has just resumed his seat that the CF-100 is not competent to continue to perform the task for which it has been well suited for many years.
I would point out that we should not lose sight of the fact that the subject of national defence is one which has more than one aspect and that there are many important areas which should be discussed at the present time. If we are going to take an unrealistic view of our problems and develop


certain sections of our defence arrangements without any recognition of changing circumstances, it would mean that a defence budget of $1,700 million would not pay for even a portion of our requirements. What we must do, and what we have done in the dropping of the Arrow program is recognize that we must spend our money in the direction in which it will produce best results, and cut our coats according to our cloth. We should not involve ourselves in defence measures which would have only a limited application, but must recognize the necessity for integrating our plans with those of the United States.
I hope to have an opportunity at a later date to discuss some of the military aspects of our national defence program, but I should like at this point to read a section of a speech which was made by the chief of the air staff at Montebello on Thursday, February 5. In the course of the speech Air Marshal Hugh Campbell said:
In air defence, for example, we have been given the green light on two half-squadrons of Bomarc, one Sage sector and extended radar coverage. The first two of these programs call for heavy training schedules and will require substantial numbers of men to operate the equipment. The extended radar coverage to be provided by raising the capability of our Pinetree radars and by installing two new heavy radars and several gap fillers in northern Quebec and Ontario will also affect our manpower.
What is much more important, however, is the increased capacity that all three programs will give us to deal with the airborne threat to North America. This threat is real-make no mistake about it-and we must be able to deal with it. The success of Sage and Bomarc installations in the United States is indeed heartening. We know that the Bomarc, operating in its Sage environment will greatly augment our air defences.
Here is a professional soldier, the senior Canadian air officer, clearly stating the advantages to be obtained from the type of defence which this government is setting up. I suggest that when those who have no particular knowledge of this subject disagree with an opinion stated by the chief of the air staff, it then becomes contrary to the views of those who are best able, through experience to speak on this subject.
I would close on the note on which I began by suggesting that this is hardly the time to concern ourselves to the extent we have about questions of sovereignty when our national survival should be our supreme consideration. Canadian sovereignty is being protected, as the Prime Minister has made clear. The present debate gives the house an opportunity to realize that we are in a very precarious position and that we must therefore co-operate with our United States partners in every way in order to provide the best defence possible for Canada, and thus be able to be in a position for many years to

continue to give our co-operative defence with that country. I hope that when this debate is concluded the impression will not be left abroad that we have taken time in this house to argue, to the exclusion of everything else, matters to which the Canadian public has for years given its approval. The public realizes that national defence is something which has to be co-ordinated, and that is the action we have taken.


Hazen Robert Argue: In the course of this debate speakers for the government and speakers on the opposition side as well seem, equally, to have overlooked the effect of the decision which the government has taken upon the workers involved in the aircraft industry. I believe that this question is of importance for the 14,000 people who have been laid off as the result of the government's decision, and that their fate is something which should commend itself to all hon. members of this house.
The Prime Minister (Mr. Diefenbaker) when speaking the other day attacked the company severely for having discharged its employees immediately on receipt of the telegram saying that the CF-105 contract was being terminated. He made a big point of saying that it was not necessary for the company to discharge all its employees on receipt of this telegram. He must have been referring only to the 3,000 who are now back at work, because nothing the Prime Minister has said would suggest that the company should have endeavoured to retain 14,000 men in employment.
The question arises as to what the government's policy shall be as to employment for the men and women in this industry who are now out of work. The Minister of Finance (Mr. Fleming) touched upon this question on Friday, February 27, when he told the house that a co-operative arrangement had been worked out between the government and Avro to provide for the continued employment of a certain technical group but when the minister made this statement he also said it was the hope that the action being taken by the government would bring employment in the industry up to some 3,000. In view of the action of the government and of the company the best the minister was able to say to the house was that 3,000 might be employed in the industry. The head of the machinists' union upon learning of this statement said that in his opinion instead of putting some 1,000 people back to work the probability was that only some 250 would be employed by this means.
The company itself because of the action it has taken must bear some responsibility for the employment of 11,000 persons in this
Defence Policy, Planning and Production industry. But even if the industry had not had a government contract surely it is a part of government responsibility to provide employment opportunities for the people of this country. The government definitely has a responsibility and I believe the company also has a responsibility not only to its employees as such and because its employees have given the company good service for a long period of time but I feel it has a particular obligation because of the huge value of the contracts received from the Canadian government over a good many years. As a matter of fact, this company has been nurtured on government contracts. The information I have is that up to the end of March 1958, A. V. Roe and its subsidiaries had obtained the staggering total of $1,120 million in defence contracts with additional hundreds of millions to come after that date.


Paul Joseph James Martin: What was the total for the Toronto plant?


Hazen Robert Argue: I do not have those figures. These figures are for the company and its subsidiaries but it would be hundreds of millions of dollars, of course, because the value of the CF-105 contract itself was over $300 million. The company has done very well over the years. In the past it has bought all the stock of Canadian Car and Foundry Company with assets of more than $40 million, it has purchased a controlling interest in Dominion Steel and Coal Corporation with assets of more than $150 million and in addition to that it obtained a large interest in Algoma Steel with assets of another $140 million. The company has extended its operations and I submit it has a duty to its employees. The record of this company as far as its employees in its subsidiaries are concerned leaves a great deal to be desired. In Nova Scotia, Dosco has turned out thousands of workers from the coal mines and Canadian Car Company Limited has discharged many of its employees. I believe it is fair to ask if this company has a good labour record. That does not in any way detract from the necessity of this government taking action to see that employment opportunities are provided for these 11,000 workers as well as other workers across the country who require employment.
In this matter I would suggest a committee of this house should be established. Perhaps it should be a small one. The committee could have come before it witnesses from Avro, the Minister of National Defence (Mr. Pearkes), the Minister of Defence Production (Mr. O'Hurley), the Minister of Labour (Mr. Starr) and other ministers who have an interest in this problem. As a parliament let us see whether we can study this problem
1562	HOUSE OF
Defence Policy, Planning and Production and recommend action that will provide jobs and a livelihood for Canadians who are unemployed and out on the streets.


Paul Joseph James Martin: Mr. Frost has done that. He has called all the best brains together.


Hazen Robert Argue: And omitted my hon. friend? The Prime Minister made a long and energetic speech this afternoon. While he seemed to direct almost the whole of his attack at the official opposition I noticed the frequent reference he made to the subject matter of the subamendment in which it is charged that the action of the government contributes to the erosion of Canadian sovereignty. That is the question to which the Prime Minister directed much of his attention and quite properly so. That is a question that is worrying the Prime Minister. There is perhaps nobody in Canada who is better qualified to speak on this subject in view of the Prime Minister's many statements in the past than is that hon. gentleman himself.
What is the record of this government in terms of protecting Canadian sovereignty? Is it any better than the record of the previous administration? We had a case raised before the last election. The Ford Motor Company of Canada lost the opportunity of making sales of automobiles to China because of a law in the United States affecting its parent company and the parent company refused it the opportunity to make such sales. Can that company make that kind of sale today? Perhaps a better question would be this: would that company make that kind of sale today? I do not think there is any certainty that Canada has sufficient sovereignty as far as the automobile industry is concerned to have made available to it markets in China if such markets were available.
Is the China market available for the Canadian rubber belting industry? A case was brought before the house a few weeks ago by the hon. member for Vancouver East (Mr. Winch). Evidence was placed on the record that the Goodrich company in the United States refused to allow the Canadian subsidiary to sell rubber belting to China. I asked the government how its record of protecting Canadian sovereignty compares with the record of the previous government? Oh, I will admit that more statements and more noise have been made on the subject but I suggest the results have not been any more substantial.
When he was in the opposition the Prime Minister used to complain about the United States program for the export of agricultural


products and he asked the Liberal government of that day to take action. What action is this government taking on this important question, I ask, when all commentators say that the United States is embarking on a program to dispose of agricultural surpluses that will be a more far-reaching program than any it has been engaged upon in the past.
What is the attitude of the United States government toward the CF-105? Speaking on this question on February 23, the Minister of National Defence, as reported at page 1279 of Hansard, said:
The United States air force officers . . . are of the opinion that the F-106 fulfils their requirements rather better than the CF-105, and the F-106 would be a great deal cheaper for them than the CF-105. Prior to about 1956 we had not been aware of the fact that the United States government were going into the production of an aircraft similar to our CF-105. So again it was emphasized that the program which was being developed on the CF-105 could be altered, or if necessary abandoned, at any time.
Back in 1956, when Canada had begun the production of the CF-105, the United States, with no consideration for Canada's plants and facilities, had embarked on the production of their own F-106. I would suggest that at that time the United States showed a callous disregard for Canada which w*as then a part of a North American partnership, as she is today. That disregard for Canada's interests, that inability to take Canada as a full partner, has continued since that time. We have other instances in this session already of where Canada's sovereignty has been threatened. We have the instance of the Minister of Justice (Mr. Fulton) making a pilgrimage to Washington to discuss this very question. Was this government able to protect Canadian sovereignty on this trip? I do not think it is at all certain because in reporting to the house on this question, at page 619 of Hansard, the Minister of Justice had this to say:
It should he realized that there was revealed in the course of these discussions, a wide divergence between our two views as to what amounts to an infringement of sovereignty and as to the restraint which one country should exercise in seeking decrees from its own courts when those decrees may have effects within another country. Until there is a satisfactory reconciliation of views on these points there can be no guarantee that causes for complaint will not arise again.
There is the statement of the Minister of Justice after his return from Washington that this whole question of infringement of Canadian sovereignty has not been solved and that there is no assurance whatsoever that the United States will not continue such an infringement of Canadian sovereignty in the future. That is why we in this group have moved the amendment saying that the policy

of this government in relation to the United States and in relation to defence "is contributing to the erosion of Canadian sovereignty".
We believe in adequate defence; we believe that our defence forces should be as effective as possible; we believe that instead of Canada having this bilateral arrangement with the United States, which is called NORAD, we should have placed NORAD under the NATO command, and that the defence of North America should directly have been the responsibility of NATO. If that were done I believe that Canada's sovereignty would have been better protected; because if Canada could sit down with the United States to discuss this matter along with other members of the NATO alliance we feel that the United States, because of our then associated strength, would have to give much greater weight to the representations that we make. We think that the Canadian government surrendered a good deal of Canadian sovereignty when it went into the NORAD agreement, as it did, without making NORAD subject to the NATO command. We say that Canada's sovereignty is being eroded today and I hope that when the vote is taken, in the light of statements that have been made in the past by the members of the official opposition and in the light of their own amendment, they will find it possible to vote for the subamendment that we have moved and express at least to that extent what I believe to be of very great concern to Canadians generally, namely that under this government there has been a continuation of the erosion of Canadian sovereignty.


Lester Bowles Pearson: Mr. Speaker-


Mr. D. J. Walker (Rosedale):: Mr. Speaker, I would not have thought, had it not been for the fact that my hon. friend-


Lester Bowles Pearson: Mr. Speaker-


Mr. Speaker:: I see two members on the floor. I have recognized the hon. member for Rosedale.


Hazen Robert Argue: Mr. Speaker, if I may, I was out when the member for Trinity sat down. I apologize for not being in the house at the time and I want to be completely fair. I talked to the former occupant of the chair and he said, "If you speak first I will recognize the Leader of the Opposition when you sit down".


Gordon Minto Churchill: An agreement, eh!


Some hon. Members:: No.


David James Walker: Mr. Speaker, on a point of order-
Defence Policy, Planning and Production


Mr. Speaker:: I am sorry that there has been any misunderstanding. The debate normally passes back and forth across the house and if the hon. member for Rosedale wishes to speak at this time I have no option but to recognize him.


Lester Bowles Pearson: Of course I agree that you have not, but I think it should be made clear that I am not making my point in any spirit of complaint mind you. When the leader of the C.C.F. party came to me and asked if he could take the place in the debate that I would have taken, which would have been recognized, he said he was going to speak only a few minutes. He then went to see the occupant of the chair and I understand that the occupant of the chair said that that would be perfectly all right and satisfactory. That is the reason I rise at this time.


Mr. Speaker:: Unless the house can arrange matters differently, I consider it my responsibility to recognize the hon. member for Rosedale.


Hazen Robert Argue: Because of the former understanding I appreciate the ruling you have made but I should like to move that the Leader of the Opposition be now heard.


Howard Charles Green: Mr. Speaker, this is a peculiar sort of game we are up against today. Here we have this real combination working again. Now, the debate has gone backwards and forwards-


Mr. Speaker:: I am sorry; this is not a debatable motion. Is there a seconder for the motion? The hon. member for Rosedale.


David James Walker: Mr. Speaker, we have had another exhibition today of the co-operation which exists between the two great opposition parties.


Lester Bowles Pearson: Mr. Speaker, on a point of order, the member has no right to refer in that way to this co-operation. This was an arrangement made with the Speaker at the time. Mr. Speaker, if the Speaker in the chair had said this was irregular and that he could not recognize it, it would not have been proceeded with. It was only on the information that we got from the Speaker that the arrangement was made and the member has no right to talk about that kind of co-operation in that sneering way.


Mr. Speaker:: He was out of order to refer to what had transpired immediately prior to the hon. member taking the floor. That having been settled and decided let us continue.


David James Walker: Mr. Speaker, we have heard a great deal during this debate about the amendment, but not a great deal has been

Defence Policy, Planning and Production directed to the actual wording of the amendment that the government is preventing the effective use of Canada's defence production facilities and manpower. I have been amazed at the hon. member for Assiniboia, (Mr. Argue), in speaking to the amendment, saying that the government was aiding and contributing to the erosion of Canadian sovereignty. It appears that the hon. member for Assiniboia could not have been in the house during the Prime Minister's address because not only did he make one point but 10 points to indicate that not only has there been no erosion but that Canadian sovereignty has been enhanced greatly by the contribution of this government over the past two years.
May I say that for a long time now I have been examining the facilities of the Canadian government for defence production. What is the largest facility? It is A. V. Roe Canada Limited. Yet nobody has outlined, or sought to outline, the background, the experience and the capacities of this organization. The hon. member for Trinity has spoken from day to day as if he were almost one of that organization, so enthusiastic has he been in its support. Nevertheless I decided to do some research into Avro and come up with an answer to its present plight.


Paul Theodore Hellyer: Mr. Speaker, the statement the hon. member has just made is incorrect and unjustified.


David James Walker: The hon. member for Trinity has made an interjection that has not been written for him, and it is the first statement he has made that has not made sense. I suggest to you, Mr. Speaker, that the answer can be found-


Lester Bowles Pearson: Don't change that in Hansard. You said "that has not made sense."


David James Walker: May I suggest, Mr. Speaker, that the answer can be found not in the research I have done but the research of one who is a very great authority and a leading columnist of that paper to which all members of the opposition subscribe, the Toronto Star, known as the Liberals' bible and the C.C.F.'s friend. May I refer to this article, because apparently a lot of research has been done by Mr. Pierre Berton in connection with his column to be found in the Star on Friday last, February 27. In the first place, I asked myself, what was the inception of A. V. Roe Canada Limited?


John Whitney Pickersgill: Mr. Speaker, I rise on a point of order. The hon. member is proceeding to read an article written by someone else and published in a newspaper. I believe it is a rule of the house that when an hon. member does that he has to accept the views set out in the article-


Paul Joseph James Martin: As his own.


John Whitney Pickersgill: -as his own, and I should like to know whether the hon. member for Rosedale accepts these views as his own and supports them.


David James Walker: Mr. Speaker, for the first time in my life I am delighted to accept views set forth in an article in the Toronto Star. As the hon. member no doubt knows, I have read other views expressed in the Star which have not always had my support. In the first place, what was the inception of A. V. Roe Canada Limited? I quote Sir Roy Dobson from Mr. Berton's article:
"I often used to dream of a little empire in Canada"-Dobson's empire has long since become an established fact-a colossal $300 million holding company, the third largest in the land and one of the big 80 in North American industry.
Then one asks himself, and I am sure members of the house would like to know, when did this enterprise get under way?


Mr. Winch:: Will you just read the article so we will know what words are from the article and what words are yours?


Mr. McDonald (Hamilton South):: He can
do what he wants.


David James Walker: In my short experience in the house this is the first time I have ever received any assistance from the hon. member for Vancouver East, who has just interrupted. Perhaps I can please him by reading many of the relevant parts but in view of the fact that I have the floor I am sure he would not mind if I were to say a word or two sometimes. In the past my hon. friend has been known to express his views and I am sure he would not mind me expressing mine.


Harold Edward Winch: I want to be clear when you are quoting the article and when you are expressing your own views.


David James Walker: Quite right. I quote:
In the light of recent events, I think it's worth while to review this old tale once more. Dobson's dream of a Canadian empire began in 1945 when he came here on behalf of the Hawker-Siddeley group to form a subsidiary company. Hawker-Siddeley has thrived on government contracts, the kind that are procured on a non-competitive basis and wholly subsidized. It's a nice way to do business because there's no risk involved. You're sure of the money and the profit comes off the top.
Then, Mr. Speaker, the next question I asked myself was this: Where did the Hawker-Siddeley group get their capital to operate? How did they begin operations in Canada originally? For my hon. friend, I quote:
Dobson started out in Canada by acquiring an aircraft plant in Malton without putting up a nickel. He borrowed $1,079 from the late Canadian financier, J. P. Bickell, a director of Victory Aircraft. This paid the legal fees. Then, through
[Mr. Walker.)

C. D. Howe, he got Victory Aircraft, into which the Canadian taxpayer had poured more than $7 million. Price to Dobson: $2 million. But he didn't give Howe any money. He simply promised that he'd pay for the plant with 50 per cent of the new company's profits. No profits, no pay.


Harold Edward Winch: I love the quotation. That is the reason I asked.


David James Walker: This is now myself speaking, for the benefit of the hon. member. Where did they get their capital? I appreciate the good nature of my hon. friend in his interruptions.


Harold Edward Winch: Out of the Canadian taxpayers.


David James Walker: Very well put. My friend anticipates the Star.	Where did they get
their capital to operate? I quote:
He then got $2| million working capital from a bank, through Bickell, and in gratitude made Bickell chairman of the board of the new company. He promised to pay this loan back with the other half of the company's profits. This is nice work if you can get it but I hardly think it comes under the heading of a gamble. It certainly has none of the uncertainty of a poker game or a slot machine or even the uncertainty involved in launching a normal business enterprise in this country.


Paul Joseph James Martin: Would my hon. friend permit a question?


David James Walker: The end of this quotation is as follows:
Nor would I use the word "courageous" to describe Dobson's bargain basement deal here. ''Bold'', yes. But this hardly makes him the Sir Lancelot of Canadian business.


Paul Joseph James Martin: Would my hon. friend permit a question?


David James Walker: That is the end of the quotation.


Paul Joseph James Martin: He mentioned a man called "Bickell". Has he this gentleman's initials and is he the Mr. Bickell who is closely identified with the Conservative party?


Some hon. Members:: No.


Mr. Hodgson:: He is just as closely identified with the Liberals.


David James Walker: My friend, of course, is just
interjecting his own particular brand of humour. He knows full well because he is a friend of Mr. Ed Bickell who is identified with the Conservative party while the one I am referring to is the late J. P. Bickell.


Paul Joseph James Martin: I just wanted
to make sure.


David James Walker: I am amazed to hear that
because I thought my friend's new testament every morning was the Toronto Star from the night before.
Defence Policy, Planning and Production


Paul Joseph James Martin: I read the Globe in the morning and the Star at noon.


David James Walker: The next question we ask
as members of the house is this, and this is all very relevant to the debate. What stage of development had the company reached by 1952, for example, or 1954. Again for the benefit of the hon. member for Vancouver East I say "I quote":
One has to admit he had vision, though. And he had faith in Canada. By July, 1952, the people of Canada poured $121 million into A. V, Roe. The Hawker-Siddeley group, which was the sole owner of the company, invested during the same period $10 million. By the end of 1954, more than $480 million in public money had been pumped into A. V. Roe. The total Hawker-Siddeley investment at that point stood at just $16 million.


Harold Edward Winch: Isn't private enterprise wonderful?


David James Walker: I continue:
By this time, Sir Roy's dreams were coming true, his foresight was paying off. The company was spawning other companies and buying into more. It owns eight outright today, has controlling interests in two others, and 250,000 shares in a third, Algoma Steel. It has no funded debt of any kind.
Then, the next question I asked myself as I did this research, from which I was finally saved by this illuminating article was this-I excuse the hon. member for Essex East (Mr. Martin) and I do not blame him for leaving the house. Come back in the evening, I will be here at eight o'clock- did anybody else benefit except A. V. Roe Canada Limited? Again I quote from the Toronto Star:
When A. V. Roe became a public company in 1956, some of its directors and executives were allowed to share in the fruits of Sir Roy Dobson's gamble. They were given the option of buying 84,000 shares at $12.50 a share. The following year the stock soared to $25 and so, for those who converted their shares at that time, this was a profitable venture.
Until about a year ago, when the news of sputnik made obvious the fact that the Russians had an intercontinental ballistic missile, Sir Roy Dobson's vision seemed to be working pretty well. From that borrowed thousand he had built an industrial empire which was to receive a total of $1,500 millions from the Canadian taxpayer.
My next question to myself was this: Who sparked the operations in Canada of these various companies? Then, my answer is this, and I quote:
Mr. Crawford Gordon, once C. D. Howe's right-hand man, had been installed as president and general manager. The company had grown to be the biggest member of the parent Hawker-Siddeley group. Many of the subsidiary companies subsisted nicely on government work (Avro Aircraft, Orenda Engines, Canadian Steel Improvements). Others, such as Canadian Car, had government contracts. Dominion Coal and Steel was also subsidized publicly.


Harold Edward Winch: And still are.

Defence Policy, Planning and Production


David James Walker: My next question, and I am sure that of the hon. member for Vancouver East (Mr. Winch), was; did Avro know that the Arrow would be cancelled? I do not know that that is so pertinent today because the hon. member for Trinity (Mr. Hellyer) said, let us assume that the company must have known last September that the Arrow contract was going to be cancelled. In any event, just to keep the record straight, may I answer from the Toronto Star editorial, and I quote:
But something seems to have gone wrong with Sir Roy's vision at this point for, if we are to believe the statements issued this week, he never at any time had any inkling that a cloud no smaller than an Arrow was in the sky. It was becoming increasingly obvious that the plane was fast becoming obsolete. By fall the government let out the strong hint that the Arrow program was doomed and in a few weeks, newspapermen, military experts, scientists, politicians and the general public were pretty sure it was doomed. In November, indeed, a Toronto financial magazine set to work on an article which assumed that fact. But Sir Roy did not know, he says, because nobody told him.
The next question is: what has Avro done in the last six months to prepare itself for the cancellation of the Arrow contract? We have heard the explanation of the hon. member for Trinity, but he naturally is prejudiced. Whoever it is who writes his speeches is also prejudiced. I want to say this, that I do not profess to be thinking up these answers myself. I admit I am quoting from the Toronto Star. I quote:
The company had six months to do something, after the government's strong hint last fall and it did do something. It started a propaganda campaign to save the Arrow through public opinion and political pressure. The lobby at Ottawa was high level. The campaign, handled by Cockfield-Brown advertising agency, was at all levels. It included a piece by Crawford Gordon himself in Maclean's magazine (the Arrow, said Gordon, was not dead) and a high priced film which was intended to show, subtly, that the Arrow was going strong. Ostensibly the film was supposed to mark the 50th anniversary of flight in Canada but it was mostly about the Arrow. It was offered free to TV stations across the land which might have been expected to run it last Sunday. But Mr. Diefen-baker made his announcement on Friday and that made the film out of date-obsolete.
I inserted the word "obsolete".
There are rumours that Mr. Diefenbalcer had got wind of the film and was furious about it.
Then I asked this question: What did Avro do when the contract was cancelled? I quote:
And Sir Roy-the man of vision? Why, he couldn't have been more surprised! And so he had to fire 13,800 employees all at once, instantly, because, with all that time and all that money and all that vision his company hadn't been able to come up with an alternate plan for putting A. V. Roe into the competitive, non-subsidized aircraft business.


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


David James Walker: Yes, indeed, but may I just finish the quotation first?
There were some nasty people who said that Sir Roy and his boys were gambling again and that last week's mass dismissals were an attempt to embarrass the government but Sir Roy has denied that. For as you can see, Sir Roy has never really gambled at all.


John Whitney Pickersgill: The hon. gentleman said he would now permit my question. What has the government got for the 11,000 men that are out of work because of the action taken by the Prime Minister, regardless of who started Avro or what Avro may have done?


David James Walker: My friend obviously has not been in the house this past week or he would not have asked that question. We have had that answered fully by the Prime Minister, the Minister of Defence Production (Mr. O'Hurley) and by the Minister of National Defence (Mr. Pearkes) himself. They have gone into that subject with such thoroughness that I am amazed the hon. member did not at least read of it in the newspapers.


John Whitney Pickersgill: The 11,000 are still out of work.


David James Walker: May I call it six o'clock?
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
David James Walker: Mr. Speaker, I think that we had about finished with the Star, but before sitting down may I quote from the Telegram of Saturday, February 28, page 4. There is an article headed, "The Arrow is the Main Reason I quit-Simonds". Then I quote:
I.t-Gen. Guy Simonds said last night the Avro Arrow was destined to be obsolete before it was started.
Then this is a quote from Lieutenant-General Simonds:
The Liberal government's decision to go ahead with it was a principal reason for my resignation.
Mr. Speaker, so that we can get a clear insight, in answer to my hon. friend from Bonavista-Twillingate (Mr. Pickersgill) as to what was done with the local people in and around the plant, might I quote from the Brampton Conservator of Thursday, February 26, wherein it sets out a report received from the hon. member for Peel (Mr. Pallett). It is headed, "Pallett's Message to Avro Workers", and it states:
"Jobs for 1,500 people in a new Peel county industry are hinted for the near future," states John Pallet, local member of parliament, in a special delivery letter to the editor of the Conservator. Arriving at press time, the letter follows.

"Dear Bill:
I am enclosing herewith a copy of Hansard of February 23rd, which I believe sets out clearly the basis for the government decision to discontinue the Arrow, and I would refer you to Mr. Pearkes' statement on page 1279 and particularly to the statements on pages 1280, 1281-"


Mr. Speaker:: Order. I trust the hon. member will not read from newspapers something dealing with what has gone on in this house this session, because that would not be in order.


David James Walker: Thank you very much. Suffice it to say that he referred in detail not only to the speech of the Prime Minister (Mr. Diefenbaker) but also to the speech of the Minister of National Defence. Then he goes on to say:
I personally have been meeting with both union officials and-


Osias.-J. Godin: This relates to what a member of the house said outside the house. As I understand it, it was said by a member of the house to the Avro workers.


Mr. Speaker:: I think the limitation relates to what is said in the house, not to what is said by members of the house outside the house.


David James Walker: The hon. member for Peel was not recounting to newspapers what happened in the house, and I ask hon. members to note that he spoke to company officials many times over the past few months. He goes on:
At all times in my discussions with them I was quite clear that it was my belief that the program was to be terminated. This decision, affecting as it does so many of my constituents, is one of grave concern to me. However, the steps having been taken, we must deal with the situation as it is.
First of all, most of the employees should be entitled to three weeks' pay at the present time, which would indicate the one week severance pay plus the two weeks' accrued holiday pay.
Secondly, the national employment service have detailed extra people to assist, in the first place to ensure that there will be prompt payments of unemployment insurance claims, and subsequently to assist in finding other jobs. In this they should be successful. The national employment service places about 25 per cent of all the positions filled. Last year in the Toronto metropolitan area-
I ask the hon. members of the house, Mr. Speaker, through you, to note this-
-including Brampton and Oakville, they located 93,000 persons and indicated that in the year 1958 there were in that area a total of 372,000 positions available.
Thirdly, there have been meetings between company officials and government with a view of assessing the capabilities of the plants in the immediate future. Those meetings are going on and it is felt that something may be worked out in this regard.
Mr. Speaker, there is the message of the hon. member for Peel, who for months now,
Defence Policy, Planning and Production since September of last year, has been warning not only the company, which knew it well, but the members of the unions as well. I think we should take that into consideration. May I also get on record, because this is the opportunity, and the last opportunity, to do so, some of the comments of the members in the press gallery. May I first refer to an article by Charles Lynch of the Southam News Service in the Ottawa Citizen of February 25. I quote:
Intentionally or otherwise, they-
Meaning Avro-
-convinced the government that they were trying to go over their heads with a gigantic squeeze play related to the unemployment crisis. Lay-offs in Port Arthur and in Cape Breton by A.V. Roe subsidiaries were made to appear as pressure moves to save the Arrow-a numbers game with jobs as the stakes.
Might I quote too Frank Swanson, the associate editor of the Ottawa Citizen, in an article of February 24:
It seems quite clear, as suspected then, that the decision to abandon the Arrow was actually taken last September. There is reason to feel that Avro was fully aware of the decision, if not then, shortly thereafter.
Might I also refer to an article in the Gazette by that distinguished columnist Arthur Blakely, dated February 26:
From the moment that the government's inclination to discontinue the Arrow first began to be evident, Mr. Gordon mustered all of the resources of his large company to force the government to change its mind. Every means was employed to appeal directly to the public over the government's head. The possible fate of skilled Canadian technicians-the possibility of a substantial addition to unemployment as a result of a single stroke of government policy-these were tossed into the field of public controversy. Canadian pride in an aircraft designed an manufactured in Canada was exploited to the full. As was the spectre of a possible loss of Canadian sovereignty.
These statements, Mr. Speaker, by responsible members of the press gallery would lead one to conclude that the lack of an alternative program to provide employment for the Avro workers and the workers of Orenda, which is the key issue in this whole question, was brought about in large measure by the Avro company devoting their time and the government's money in an attempt to force the government to change its decision rather than using that valuable time and experience, and that great deal of money and effort, in working out some diversification program, some alternative program, or anything at all which would keep those workers employed and still aid the defence production of our country.
As far as the attendant issue of sovereignty is concerned, I think any fair minded person who examined the defence arrangements with
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Defence Policy, Planning and Production
any of the other NATO countries must conclude that this aspect of the argument has been grossly exaggerated. The simple fact remains, as one editorial writer has so well expressed it, that we simply have to "stop spending money which we could not afford for a weapon we did not need".
In conclusion, in citing these editorials might I commend to the house the reading of an editorial by that grand old man of journalism, the proprietor of the Ottawa Journal, Grattan O'Leary, in the issue of February 24, a leading editorial, which really places this matter where it belongs.
Might I say this before the vote is taken that it did not appear to matter to this colossus-because Avro was a colossus-that all parties in this house agreed that the Arrow contract should be terminated. It did not appear to matter to this great colossus that the Arrow had become obsolete before coming into production. It did not appear to matter to them that the Arrow was four years behind in production. It did not appear to matter if hundreds of millions of dollars more had been spent on its production than was anticipated or promised. Nothing mattered to that company which had been spoiled during the years from 1945 onward. It began to feel just as the sacred cow does in India -that the Avro company could do no wrong; that Avro could do what it liked. And it dared the government of Canada to discontinue or sever a contract for a project which had long become obsolete.


Lester Bowles Pearson: Would the hon. member permit a question?


David James Walker: I should be very glad to, but after I have finished my remarks, because I was interrupted so often before the dinner recess. If the hon. gentleman would allow me to a carry on for three minutes I will be glad to give him an opportunity.
My final word is this. How fortunate we are, how fortunate are hon. members of the party opposite, and hon. members of all parties in this house, that we should have among the heads of our government at this time a minister of defence who is not only brave in battle but, what is equally important, brave in the battle of keeping the peace.


Mr. Mclraiih:: You are trying hard for that job as parliamentary secretary.


David James Walker: And I would say this, despite the intervention of the hon. member for Ottawa East, who like the ass, brays at the wrong time: how fortunate we are that we have as Prime Minister of this country one who cannot be bluffed, one who cannot be scared, one who cannot be flattered, one who cannot be cajoled and one who has the vision
not only of our great north but of Canada as an integrated part of the NATO program. I appreciate the applause, but I have only 30 seconds left. Our defence policy, despite the criticisms made by some hon. members is to attain security-


Mr. Speaker:: Order.


John Whitney Pickersgill: This will not put anyone back to work.


Mr. Speaker:: It being 8.15 it is my duty to interrupt these proceedings in order to put the question on any matter now before the house.


Mr. Speaker:: I declare the amendment to the amendment lost.
The question is on the amendment to the main motion. Is the house ready for the question?



REQUEST FOR ACTION ON LAY-OFFS AND REDUCED MARKETS

Mr. H. J. Robichaud (Gloucester):: Mr. Speaker, the grievance I intend to introduce at this time is based on the failure of the government to take adequate action to meet the demands of the coal industry by introducing adequate measures to take care of the existing crisis causing extensive lay-offs in the industry created by unusual stockpiles and declining markets. The coal situation today offers a major problem, a problem so serious that it can be described as a crisis.


Mr. Speaker:: Would the hon. member give the house a minute to settle down so that we can hear.


Hédard-J. Robichaud: I was just saying that the coal situation today offers a major problem, a problem so serious that it can be described as a crisis, a crisis which has been most prominent over the last 18 months. Before dealing with the specific point of lay-offs and declining markets, I should like first to introduce my remarks by bringing to the attention of the house remarks made by the former prime minister, Right Hon. Louis St.


Laurent, remarks which have been quoted in the house and have been strongly criticized by members on the government side, particularly during the last two election campaigns. Addressing a political meeting in Fredericton, the then prime minister said:
Now, will maritime coal continue to be the cheapest fuel for the production of power for all time? I do not think it will. I think that coal is going to become more valuable for chemical and synthetical processes than it will be as a fuel. In the meantime, of course, we want these coal mines kept in operation because we do not want the coal mining towns to become ghost towns. But so far as I am concerned, so far as my opinions may carry weight in the decisions that are taken, we are not going to encourage substantial increase in the production of coal because I do not think that that would be fair to future generations of Canadians.
And the then prime minister could have added-"to the present generation". There, Mr. Speaker, was a prime minister who, notwithstanding the critical significance of and possible reaction to his remarks, would rather tell the truth than adopt the position of his opponents by making promises which he knew then he would never be able to fulfil.
The members on the government side of this house, and especially those from Nova Scotia, are familiar with the election ads of their party which appeared in the Halifax Mail Star of June 8, 1957, which were entitled, "Action Today or Regret Tomorrow". Last June, when the temporary lay-offs in the Nova Scotia coal mines were not avoided by definite action by this government, we of the official opposition introduced a motion of non-confidence expressing our regret that the government had failed to avert a five-week lay-off in the Nova Scotia coal mines, and that the government had walked away from its promises to promote the development of industry in the Atlantic provinces. In the course of that debate, which took place only eight months ago, we were told by the Minister of National Revenue (Mr. Nowlan) that we in the opposition were not serious when we said that the surplus stockpile of 1,400,000 tons might not be sold during the coming year.
The minister clearly stated that the truth of the matter was that the company was selling more coal than was sold before. The minister further stated, and he repeated, that the truth of the matter was that there were orders for over 4,600,000 tons of coal. He further claimed that with the leadership and aggressive management of the company, and the co-operation of the government, 350,000 tons of coal had been sold to new customers and that new markets had been developed in the province of Ontario. He strongly affirmed that with orders on hand for 4,600,000 tons

of coal, and orders still coming in, the whole stockpile would be liquidated.
Farther along in the course of his remarks he said that one of the reasons that the layoff was not averted was because the government was not consulted about a lay-off of five weeks. I want the minister's exact words to go on the record. They appear on page 1801 of Hansard for July 1, 1958. These are the words of the Minister of National Revenue:
What was the situation? We were told that we did not avert a lay-off of five weeks. We did not have an opportunity to avert a lay-off of five weeks. We were not consulted about a lay-off of five weeks. The company told us that a lay-off of five weeks was necessary for the efficient and economical management of the company's properties.
What is taking place today in the coal industry? Do we find action today on the promises of the Conservative candidates in the last election or will there be regrets tomorrow? Where are those promises of the Conservative party candidates made on June 8, 1957? In New Brunswick, for example, the statistics will show that in 1957 the total production of coal was 976,597 tons; in 1958, the production is down to 768,465, or a decrease of 207,692 tons. What is coal production in Nova Scotia? In 1957 the statistics will show that the total production was 5,685,770 tons, and in 1958 it is down to 5,254,736, a decrease of 431,034 tons. What will be the results for the year 1959? Well, Mr. Speaker, after the Conservative "Lent" started 10 days before the actual opening of Lent 4,100 coal miners were laid off, so we can expect that production in 1959 will again be much lower than it was in 1958. Where is this definite action being taken by the government as promised to increase the production of coal or even to avert a decrease in production and lay-offs?
I know that a week or so ago the hon. member for Inverness-Richmond (Mr. Mac-Lellan), for example, gave a rosy picture of the situation to this house in so far as his constituency was concerned. He reminded us then that in the maritimes the people were saying, "Beware of Grits bearing gifts." But, Mr. Speaker, I am just back from the maritimes and I can inform this house that what we are hearing in the maritimes today is, "Beware of the Tories and their promises."
I should like to expose to this house the present attitude of the government toward a crisis which is their responsibility. On page 522 of Hansard for January 30, 1959, I asked the Minister of Mines and Technical Surveys (Mr. Comtois) the following question:
In view of the statement made by the minister that he has asked for definite recommendations from the chairman of the dominion coal board, will the minister make inquires to determine
Requested Action in Coal Industry whether A. V. Roe made specific proposals to the dominion coal board respecting methods to prevent such a lay-off, and if such proposals were made will the minister tell us on what date and also if the proposals have been dealt with by the coal board?
It is very important that the reply of the minister be inserted at this point. I received from the Minister of Mines and Technical Surveys the following reply:
In reply to the last part of the question asked by the hon. member for Gloucester (Mr. Robi-chaud), I should say that around November 19, 1958 the dominion coal board received representations from Dosco and from the miners union. That meeting dealt solely with the coal marketing situation in Nova Scotia. It is only later that the dominion coal board met several times, between December 8 and December 11, with the parties concerned, to go into this matter. There was no question at the time of cuts in either the payroll or the production. It is only on December 19 that we had a meeting, as I have already said, with Dosco representatives and Premier Stanfield. At that time, the matter of increased assistance to coal producers was discussed and we were told, as we had been in any case in a letter dated December 17-which was produced on the 19th at that meeting-that even if the government decided to boost subsidies, there would probably be a cut in personnel for 40 days, that is to say there would be 40 days' unemployment in the next few months. No decision has yet been taken about the proposals submitted in connection with coal production or its shipping, and even if a decision had been taken, it would concern only the opening of the forthcoming season of navigation.
Mr. Speaker, I have here an article which appeared in the Financial Post under date December 13, 1958, a month and a half before the Minister of Mines and Technical Surveys gave me his reply in the house. This article in the Financial Post is entitled, "No Markets, Close Mines: View if Subsidies Denied". I want to read two or three paragraphs of the said article.
Canada's east coast coal industry is on the verge of important decisions-government and private. Increased subventions on maritime coal to permit deeper penetration into vast central Canadian industrial markets are being sought this week in Ottawa.
With huge stockpiles posing problems in Nova Scotia and New Brunswick, delegates representing producers, mine unions and provincial governments are pressing their case before the dominion coal board.
They are requesting subsidy increases ranging as
high as $2 a ton. Maximum subvention is now $5.25 a ton.
If increases are not granted, there could be some drastic revisions in mining and marketing policy by big operators.
Mr. Speaker, we have a right to know what was the nature of the request placed before the dominion coal board by the Dominion Steel and Coal Corporation. Is the Minister of National Revenue (Mr. Nowlan) or the Minister of Mines and Technical Surveys in a position to state that at this time they were not consulted before the lay-off took place, as

Requested Action in Coal Industry the Minister of National Revenue indicated in this house on July 1 of last year? What is the present government doing about the present crisis? What has it done to avert the present lay-off, or to avert further lay-offs? Further meetings have taken place. Requests have been presented before the dominion coal board and before the government by the miners union, by municipal councils, by the provincial government of Nova Scotia, by the minister of mines for Nova Scotia, and by the premier of Nova Scotia, and even at this late date we are still unable to get any word from the government, from the Prime Minister (Mr. Diefenbaker) or from the Minister of Mines and Technical Surveys as to their decision following these requests. As far back as November 19 last the dominion coal board had been receiving representations from Dosco and from the miners' union and also from the other sources which I have stated.
Between December 8 and December 11 further representations were again made on this subject. On December 19 another meeting took place, this time with Dosco representatives, and they were accompanied by Premier Stanfield of Nova Scotia. On February 2 a third meeting was held, when a Nova Scotian delegation headed for the second time by Premier Stanfield conferred with the Prime Minister and other federal ministers. What were the results of this meeting? We learned in the Montreal Gazette of February 3 that a statement was made by Premier Stanfield, but not by the Prime Minister or the Minister of Mines and Technical Surveys. In this statement the premier of Nova Scotia stated, as reported in the Montreal Gazette for February 3:
Maritime coal industry may seek federal assistance.
I want just to quote a few paragraphs of this article:
The premier told reporters later he urged increased subventions on an emergency basis as the best means of staving off further lay-offs.
He had supported, he said, proposals made by Dosco earlier to the dominion coal board.
While the premier would make no guess as to how much additional federal money this might involve, informants said it would be around $4,000,000 a year.
Over a month has gone by since this delegation met in Ottawa, and still we are unable to get any decision or reply from the government. Mr. Speaker, this is nothing else but another example of the confusion, indecision, and this time not only of delayed action but of relayed action by the present government.
It is true that on February 6 the hon. Leader of the Opposition (Mr. Pearson) addressed a question to the Prime Minister,

and on this occasion he received the following reply, which is reported on page 754 of Hansard of that date:
Mr. Speaker, a few days ago a delegation from Nova Scotia consisting of the premier of that province and other representatives, met with me and other ministers in connection with the situation resulting from the glut in coal and the stockpiling of some 1,200,000 tons or more.
A general discussion took place. The views of the people present were listened to, and consideration is being given to whatever action may be taken to the end that the situation may be met. In saying this I am not indicating at the moment what if any action will be taken. Certainly the representations were of such a nature and were so reasonably and fully made that they deserve the fullest consideration, and this they are receiving.
Again I repeat that so far the poor miners in the coal industry have to be satisfied with nothing else but consideration, and consideration in due course.
We of the opposition are being accused of criticizing the government and of offering no suggestion, or no constructive suggestion, which could take care of a situation such as the one we are discussing tonight. Since the opening of this session we have had thrown at us time after time by members on the government side the very same question: What would you do? A similar situation existed in West Germany a few months ago, and what action was taken by the West German government? In the first place, a government embargo was placed on the issuance of new coal import licences. Second, tax exemptions were granted to the coal mining industry, trying to make coal competitive with fuel oil. Third, the government of West Germany promised grants for 500 million marks, which represents $120 million, to increase coal consumption.
A similar situation existed in the United Kingdom, and there again definite action and planning took place. A report originating from London, as produced in the Halifax Chronicle Herald for Saturday, February 28, reads as follows:
Britain's coal miners Friday adopted a four-point policy aimed at fighting a current slump in the industry and a drift away from coal to other fuels. Union leaders representing the 700,000 workers in the nationalized industry agreed on the program at a three-hour session Friday. The main points are:
1.	The government should re-examine present plans for developing nuclear energy as a power source.
2.	Oil policy should be revised, reducing imports and switching electricity power stations from oil back to coal. Fuel oil taxes should be increased.
3.	The system of distributing coal to consumers, left in the hands of private enterprise when the state took over the coal mines in 1947, also should be nationalized.
4.	More research should be carried out on finding additional uses for coal.

I am not proposing to the government that all these suggestions made in the United Kingdom should be adopted, but the fact remains that the Canadian government is today facing a crisis which requires straightforward action. It affects 10,000 coal miners. It affects a basic industry in an area which has a population of over 100,000 people. It affects the entire area of a province where practically no other industry exists. It is true that the situation in New Brunswick may not be as bad as it is at the present time, in Nova Scotia, but nevertheless in the last three or four months of 1958 the coal miners in the Minto area were able to work for only two or three days a week. Fortunately, in the mid-winter months, the entire supply of coal could be taken by the New Brunswick power commission. However, in view of the statements being made in the province about the possibility that the thermal plants to be built in future will use oil instead of coal, notwithstanding the statements which have been made in this house the future of the New Brunswick coal industry is not bright.
It is true that Canada is importing close to 20 million tons of coal annually from the United States and that if less than 10 per cent of this demand could be diverted to Nova Scotia the problem would be practically solved. Where is that market in Ontario for maritime coal which was promised last June? I should like to ask the members of the government whether we can have an assurance that the market which was promised in Ontario last year still exists. I feel that the action taken by the government with regard to the coal industry is too limited. I have here a press clipping from the Financial Times dated July 11, 1958. It bears the heading "Coal Mining should be in Borden^ Commission Field". According to this report it seems that the government has not taken the interest in coal that the question deserves. The last paragraph of this article reads as follows:
It would indeed be a pity if coal mining were now removed from the context of the studies which Canadians had every right to expect would cover all forms of energy. Coal mining needs such a study; probably more than any of the other branches of the energy industries group.
What has been done by the government to bring new industries to the maritimes? What has been done by the company and by the government to increase sales of coal? It is true it is a surplus of industrial coal which is creating the main difficulty at the moment, but it is difficult to understand why, when there is such a surplus, there should be in the maritimes today an evident shortage of domestic coal. I have in my hand two letters which have been written by a Mr. J. W.
66968-9-100
Requested Action in Coal Industry Patterson of Charlottetown. The first letter is dated February 3, 1959, and reads in part as follows:
Orders accepted in September, 1958, were received only late in December.
The second letter dated February 5, 1959 is also signed by the same Mr. Patterson and reads in part as follows:
There is a shortage of Nova Scotia coal here. Small dealers will be forced out of business if something is not done.
This situation exists in my own constituency of Gloucester. We read of two or three different occasions in the month of January on which the city of Moncton had to import United States coal because it could not get a supply from the Nova Scotia coal mines. It seems that the company is not making the effort which it should to dispose of its surplus coal production. We all recognize that coal is one of our great natural resources. Coal mining, as Premier Stanfield reminded officials of the A. V. Roe company last year, is more than an industry in Nova Scotia. As he said, it is the staff of life for many communities in the province, something much more than just a matter of dollars and cents.
As a representative of a constituency in the Atlantic provinces I have a strong feeling that no distinction should be made between the ways of protecting certain particular industries-however important these industries may be to the economy of central Canada-and the coal industry which is vital to the economy of Nova Scotia and to one section of New Brunswick.
If effective government action is required for an area of Canada which enjoys a diversified industrial economy, why should the same principle not apply to a less favoured area which depends almost entirely upon one industry? The government may be acting wisely in granting subsidies or even additional subsidies in order to favour the transportation of coal to Ontario in competition with substantial imports of United States coal. The people of the maritime provinces and the coal miners of my area are just as concerned with the lay-offs which have taken place in their industry, and the further layoffs which are contemplated, as the A. V. Roe workers are concerned about the lay-offs to which they were subjected last week in the Toronto area.
It is my feeling-and here again I am in complete agreement with the statement made by the former prime minister, the Right Hon. Louis St. Laurent-that it is the duty of the government to see to it that the coal miners of Nova Scotia are kept at work and that the mining towns of Nova Scotia do not become ghost towns. I feel that action should be
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Requested Action in Coal Industry taken in the present situation, even if it means substantial tax concessions or other forms of assistance in this particular area of Nova Scotia, to provide a new industry with coal as its basis which would at least restore the economy of the industry to its 1957 level and alleviate this atmosphere of uncertainty, this fear and gloom which prevail in Cape Breton today.
If, for example, 1,000 or even 2,000 coal miners could be retired from the mines and provided with work at industrial plants located at the pit heads the problem would be solved for years to come. I therefore strongly urge the government to give this matter very serious consideration. It is true that fewer miners would mean less production, but it would also mean that the problem of the surplus would not be so great and that the stockpile would not be so formidable. The policy now being followed by the government makes it evident that the present stockpiles cannot be disposed of. If a coal surplus is to be a continuing problem, then we ask the government, in the name of the miners concerned, to tell us the truth. Let the government come out and give us the facts. If they made a mistake with regard to the promises they made during the last two elections, let the government come out today and explain the situation as it now exists.
The Avro company should have been influenced to establish in Cape Breton and not near Montreal their proposed steel rolling plant. The government should have intervened and provided the company with every argument and if need be even financial assistance in order to influence it to open this new mill in the Atlantic provinces in the vicinity of the coal mining area.
I have here the famous document known as the seven Atlantic resolutions. If some of these statements were put into practice today the problem would be practically solved. Let the government in the face of the present crisis take the action it promised. Let it take this action today because if it does not do so it will regret it tomorrow. We are asking the government to put into force at this very moment the second of the Atlantic resolutions, either by placing a more equitable share of defence contract expenditures within the Atlantic provinces or, if no such contract exists today as we can see by the policy of the present government, it should consider the establishment there of crown corporations. Another way of implementing the second Atlantic resolution would be-and this particular sentence of that resolution applies directly to the present situation:
[Mr. Roblchaud.l
-by encouraging local enterprises to locate in the area and to encourage the processing in the area of our natural resources as a result of special fiscal considerations.
Another means of implementing these resolutions would be through the government giving serious consideration to the request of the unions to establish a marketing board to take care of the disposal of surplus coal production.
If we look at what is happening to our coal mines in Nova Scotia and our base metal mines in New Brunswick we have good reason to ask the present government to divert a part of its northern vision to the maritime provinces. The government has an opportunity to act now. If it does not act today it will regret not doing so tomorrow. There may be a limit to government subventions but the seriousness of the situation must be an important factor in influencing the decision of the government. This government as well as the previous administration has not hesitated when it came to the question of grants and subsidies for the grain producers of the prairie provinces. It did not hesitate to offer assistance to some displaced technical employees at the Avro plant. The government should not hesitate to take action with respect to the coal industry.
Further research into the use of coal is now a matter of urgent importance and a full investigation in the field of research should be undertaken at once. A delegation of Canadian scientists should be sent to Europe and particularly to West Germany and the United Kingdom to study the possibilities of chemical uses of coal.
Special concessions or even subventions should be granted to the establishment of industries in the Cape Breton area, industries which will use coal as the basis of operation and operate in conjunction with the existing steel mill already established in that area. It is evident that the people of the maritimes are not satisfied with the attitude of Avro but at least in the last few days the president of Dosco, a subsidiary of Avro, gave to the miners and the people concerned a true picture of the situation as he sees it. The coal miners are paying their share in supporting industries in central Canada and it is the duty of the central government to protect the economy of an area with a per capita income substantially below the national average.
In closing I wish to repeat that the Gordon commission concluded that the main market for coal should remain in the maritimes, and there it should remain for the good of the maritimes and for the good of Canada. It is the responsibility of the government to take definite and effective action to solve

the present coal problem and again I remind the government that we want action now. We want a decision to be announced tomorrow not later than the period before orders of the day are called because if action is not taken at this time the government will soon regret it's failure to act as it has promised to do in this particular case.


Mr. H. Russell MacEwan (Pictou):: Mr. Speaker, may I ask a brief question of the hon. member for Gloucester? The hon. gentleman made reference to the Atlantic resolutions and I take it for granted from his remarks that he will support the resolution on the order paper standing in my name regarding the decentralization of industry in the Atlantic provinces. May I ask the hon. gentleman if I may count on him to speak on my behalf in supporting my resolution?


Hédard-J. Robichaud: Mr. Speaker, nothing
would please me more than to support any resolution having to do with the decentralization of industry or the establishment of new industry in the Atlantic provinces where they are so badly needed today.


Mr. Donald Maclnnis (Cape Breton South):: Mr. Speaker, as I said the other day in the house when the hon. member for Gloucester (Mr. Robichaud) introduced a motion which he understood at the time was out of order I did not think on that occasion a debate on the coal issue was necessary and I reiterate that this evening. While this situation is being handled at the top level of government it does the miners of Cape Breton, the union officials and the company no good whatever to have it batted around here in an effort, as is insinuated by certain political opponents at home, to make a political football out of it which is exactly what this issue has become during the last few weeks.
The hon. member for Gloucester referred to lack of action on the part of the Conservative government and the Leader of the Opposition (Mr. Pearson) on several occasions referred to recent developments in the coal industry as something that has occurred since the Conservative government took office. I remind my hon. friends that this is a situation that has confronted the miners in Cape Breton for the last 30 years.
The Leader of the Opposition also said that there were no cut-backs in the postwar period and I will go along with that. Up until last year there were no cut-backs but there certainly were closures. In my home town three collieries closed down and nothing was done by the former administration with respect to this matter. Several collieries on the mainland closed down and nothing was done about this by the previous Liberal administration.


Hédard-J. Robichaud: What is happening today?
66968-9-100J
Requested Action in Coal Industry


Malcolm MacInnis: You had your turn. Let me return to the remarks of the hon. member for Gloucester and the solution he offered to the coal problem. I was glad to see that he stood behind the former prime minister, Mr. St. Laurent, in his statements regarding the coal situation in Cape Breton. I refer to the remarks made by the hon. member for Gloucester as reported at page 1118 of Hansard of February 17, 1959. The hon. member said:
Before dealing with the specific item in the supplementary estimates 1 should like to bring to the attention of the committee remarks made by the former prime minister, the Right Hon. Louis St. Laurent, remarks which have been quoted before in this house and which have been strongly criticized by hon. members who now sit on the government side, particularly during the last two election campaigns. These remarks deal specifically with the surplus production of coal in the maritime provinces.
I am very happy that the hon. member this evening cleared up his position and the stand of the Liberal party with respect to the coal situation. Apparently it is the same as it was prior to the last two elections and we all know what that attitude toward the miners of Cape Breton accomplished in that district. But let us now deal with the hon. member's solution. His solution is fewer miners, less production, no surplus.


Hédard-J. Robichaud: But work for them.


Malcolm MacInnis: But what about the miners who are displaced? What will they do? Do you want to see implemented the recommendations of the Gordon commission established by the Liberal government that they be given train fare out of the country? You recommend less miners with a resultant decreased surplus. You apparently want to see the miners have a shorter work week. The miners of Cape Breton do not want that. They want a five-day week and I believe we can depend on this government to evolve more effective solutions to the problem.


Hédard-J. Robichaud: But what-


Malcolm MacInnis: You might as well remain in your seat because I have only a few minutes left and I intend to use all the time myself.


Hédard-J. Robichaud: You will regret what you have said.


Mr. Speaker:: I would remind both of the members from the maritimes that the Speaker is here and they should address their remarks to him.


Malcolm MacInnis: I am sorry, Mr. Speaker. Reference has been made to submissions made by the company and unions to the dominion coal board prior to the cut-back. I would like to clear up something. During the last
1576	HOUSE OF
Requested Action in Coal Industry coal conference held last year here in Ottawa it was clearly understood that further assistance would be required this year. The company was invited back by members of the government to go over the situation up to and including December, 1959. Apparently there has been some misconception as to whether they were notified of those cut-backs or not. I am fully aware of the fact that the submissions were made by both the company and the unions, but let us keep in mind the promise of the company to come back before announcing their cut-backs. When the Minister of Mines and Technical Surveys (Mr. Comtois) toured Nova Scotia in October he made the statement, and it has not been denied by the company, that before further cut-backs there would be further negotiations.
At the moment we know all about the submissions made by the unions and Dosco in December, but let us get back to the announcement of the cut-backs. They were supposed to come before the government before announcing those cut-backs. It is definitely established, and was established before Mr. Gordon at the Halifax coal conference, that when he announced those cut-backs on the 15th he mailed the letter to the Minister of Mines and Technical Surveys who received it on the 19th. So that there will be no question whatsoever about it, the letter was dated from the general manager's office on the 17th of the month, which shows that the company itself did not live up to the agreement it made to come back to the government before announcing such cut-backs.
There is no doubt whatsoever about when they were notified of the cut-backs. It is granted that submissions were made by both the company and the unions. I feel, and it is the feeling of all the Nova Scotia members here, that since this is in the hands of the committee we are very hopeful that the report will be finalized very shortly and the results of that report will be advantageous to the Nova Scotia coal miners.
Once again I would remind the hon. member for Gloucester (Mr. Robichaud) that in belabouring this point of what the former prime minister said about the coal industry of Nova Scotia he should remember that he said that the Nova Scotia coal was too valuable a product to burn and should be left in the ground for the manufacture of gas.


Hédard-J. Robichaud: That is not so.


Malcolm MacInnis: Mr. Speaker, once again I would confirm what the hon. member for Bonavista-Twillingate saw fit-


John Whitney Pickersgill: That is not true, and the hon. member knows it is not true.


Malcolm MacInnis: What the hon. member for Bonavista-Twillingate did not take the opportunity to deny was the two-column frontpage editorial which asked him to make an apology in the interests of journalism in Canada and this editorial appeared on the front page of the Moncton Gleaner.


John Whitney Pickersgill: The Fredericton Gleaner.


Malcolm MacInnis: The hon. member for Bonavista-Twillingate did not take exception to that editorial.


John Whitney Pickersgill: Mr. Speaker, since the hon. member has brought my name into it, I should like to clear up that point. I was in Fredericton about a month ago and I repeated right in Fredericton precisely what I said in the house about that matter.


Malcolm MacInnis: The fact remains that after the editorial came out it was passed over quietly.
This idea of leaving the coal in the ground and cutting back production is not what the Cape Breton miners are looking for. They are looking for the advantage of working a five-day week and earning their salaries, and not, as the hon. member for Gloucester suggested, fewer miners, less surplus, less trouble.


Hédard-J. Robichaud: On a point of order, Mr. Speaker, again the hon. member is misquoting me. What I said was that 1,000 miners or 2,000 miners could be taken out of the coal mines and established in industries at the pithead.


Malcolm MacInnis: Mr. Speaker, we all hear things but it still adds up to the same thing, fewer miners. This suggestion was put forward by the Gordon commission report and hon. members know what kind of reception it received. It did not receive any kind of reception.
Before resuming my seat, once again I say I put my faith in the government and this committee that is set up to solve this problem and I look forward not to, as was suggested, a decrease in the number of miners and a lessening of production, but to an increase in production
Let me get back once again to the attitude of the former prime minister who did not believe in making ghost towns out of Nova Scotia towns. At that time he did not believe in a marked increase in production. It certainly adds up, Mr. Speaker, when you consider the fact that this was the very government, the very prime minister that advanced the money to the coal company for increased mechanization with the purpose in mind of increasing production. In one moment he says he does not believe in increased

production but at the same time his government lends $7,500,000 for mechanization purposes with the sole object in view of increasing production.
Time does not permit me, Mr. Speaker, to go on; there are other members from Nova Scotia who would like to say a word on this and I leave it at that.


Mr. R. S. MacLellan (Inverness-Richmond):: Mr. Speaker, in his remarks the hon. member for Gloucester (Mr. Robichaud) referred to a speech I made in the house a few weeks ago dealing with the economic situation in Nova Scotia. My remarks at that time did not relate to the coal industry, which is in a bad situation as everyone admits. They related to the extra help which has been given to the maritime provinces by the government in terms of grants to the provinces and specifically to the important added support and help we received under federal-provincial cost sharing programs.
As far as the coal situation is concerned, we are very worried about it I assure you, Mr. Speaker, much more so than the hon. member for Gloucester who, as the hon. member for Cape Breton South (Mr. Mac-Innis) has just said, seems to me to be more interested in making a political game out of this question than anything else.
Before going any further, I should say that the problem we have now in the coal industry in Nova Scotia and in Cape Breton island is not news. It is not something that has developed overnight. It developed during the last 10 years when the Liberal party was in power, when something should have been done and when nothing was done to assist our coal industry. The problem we are facing today could have been averted by planned action five or six years ago; it could have been averted after the war by some assistance to regain the 900,000 ton market for coal in Ontario which we lost during the war and while that government was in power. When the Liberals were in power they gave some assistance to the coal industry in Nova Scotia; but it consisted only of loans to help mechanize the mines. I would think that anyone with a particle of a brain would know that lending to assist mechanization to increase production in itself could never be enough. In the very fact that they did not help us to find a larger market for this increased production and to give us a stable market in normal times lies the great tragedy of our coal situation in Nova Scotia; and therein is the great default of the Liberal party to Nova Scotia.
Since this government came into power it has given substantial, tangible help to our
Requested Action in Coal Industry Nova Scotian coal industry. I am not going to list all these new aids tonight. Briefly, since the Conservative administration came into power we have had subventions that helped us to sell 500,000 tons of coal in Ontario last year and to regain some of the market that was lost during the time that the previous administration was in office. We have acquired substantial preference for Nova Scotia coal in government buildings across this country. We saw coal subventions approved, even finally agreed to by the Liberals at the last moment before an election, to move coal to thermal-power plants in the maritime provinces. This was the first real help in these provinces in 10 years to our vital Nova Scotian industry. The tragedy is that the change in government took place after it was too late to avert the terrible problem we now have in Cape Breton and other parts of Nova Scotia.
Just what is the situation with regard to the coal industry? It is not a Nova Scotian situation; it is an all-Canadian situation, a national situation. Since 1948 there has been a decrease of 17J million tons in the consumption of coal in Canada. In 1948 there was a market in Canada for 47J million tons of coal. By 1958 that market had gone down to 30 million tons. What is the reason for that? First of all, the railways were dieselized which meant the loss of a market for 7J million tons of coal. This of course, was done during the Liberal administration without any attempt at all to find a new market for the coal that was replaced. At the same time advancements in natural gas and in the development of oil distribution have meant that we have a domestic market for 10 million tons less coal now than in 1948.
This is a fact that has to be faced. Over the last 18 months the government moved to help this situation in every way it could. Actually the extra subventions granted last year and the other help made available to the Nova Scotia coal industry in a normal year could have averted the lay-offs we have now in Cape Breton. The new subventions would have been sufficient in a normal year.
But last year the coal industry was faced with a special situation. For one thing a market we had for approximately 300,000 tons of coal in pulp mills and hydro plants in the province of Quebec was lost to us in 1958 because of high water and the availability of electricity as a source of power. In addition, there was increased production of coal in 1958 in the Cape Breton mines. Along with these things there has been a certain industrial decline in the nation which meant that there was not quite the market for coal last year that there was the year before.

Requested Action in Coal Industry
What this means in actual figures is that there is now a stockpile of 1,200,000 tons of coal for which there is no purchaser available. This has happened despite the subvention help provided last year. But I say to you, Mr. Speaker, that without that aid the problem in the Cape Breton mines today would be very much greater than it is.
Every Nova Scotia member, as all hon. members well know, has been pressing the government to give us the additional aid which we need, particularly over the next few years, to help us to maintain our coal industry. We feel that we do not need this aid indefinitely. We believe that it will only be a stopgap until the natural expansion of the country will reinstate a market for our coal. For example, we will be using a greater amount of coal between 1970 and 1980 simply because oil and gas will have become more expensive, and coal will be in a better position to compete. It is expected that our coal will not only have a substantial market but will be necessary for turning the wheels of industry within the next 20 years and, as a matter of fact, if we do not have that coal we will be very badly off within a very few years.
The present situation, as Mr. A. L. Fairley president of Dosco said in Glace Bay the other day, is that the short term outlook for our coal industry is not good. Even if the increase which the company is seeking were provided it could not avert the present layoff which was required to offset the surplus stockpile of coal as a result of the unusual economic circumstances last year. But in the future Canada will need the coal of Nova Scotia. In the future the only source of coal available to Ontario and Quebec particularly for the production of hydro power will be found in Nova Scotia. The only other deposits of coal in Canada are in Alberta much too far from the central industrial provinces to provide a source of energy and fuel.
I say then that we base our argument for subventions, not only on the fact that Nova Scotia miners need help and work must be provided in the mines today but also on the fact that in the years to come Canada is going to need the large resources of coal that are available in Nova Scotia. As far as Nova Scotia is concerned, coal mining is our first industry. It accounts for 75 per cent to 80 per cent of our mineral wealth and is worth about $68 million a year to the people of the province. There is no other single mechanical industry employing as many people. We must have assistance now to keep the industry going and to keep our miners there. Some Canadians may think that if Nova Scotia coal cannot now find a market in Canada, although

it will in later years, the mines should be shut down as was suggested by the former prime minister in order to save the coal until 1980 when it will be needed. The last prime minister in a speech in New Brunswick recognized that there would be a big demand for our coal in the years to come. His suggestion was that the coal should be preserved for future generations.
The fallacy of that argument and the reason that subventions are needed now to protect our coal industry is that our mines in Nova Scotia are submarine mines. Unless the pumps continue to operate and unless the mines are maintained there will be no mines in the years to come. Furthermore, the miners of Cape Breton are highly technical personnel. They are men who know how to extract coal and extract it efficiently, so efficiently that over a period of 10 years they have raised their production per man day from 1.6 tons to 2.6 tons, a phenomenal achievement but still not enough to produce coal at a price that will make it competitive with oil and gas. We must keep our miners available to the industry.
We need subventions. We need help to preserve our industry not only for the present but for the future. It is on this basis that we have all joined to impress upon the Prime Minister (Mr. Diefenbaker) and the cabinet the urgent need for subventions for our coal. I should like to thank the Prime Minister and the cabinet most heartily for the consideration they have given to this urgent problem at a time when they are faced with many other demands from other parts of the nation.


Hédard-J. Robichaud: No action though.


Robert Simpson MacLellan: A special committee has been set up to study the coal industry, to examine its present and future problems and to meet those problems systematically, not with a stopgap, crisis program but with a plan which over the years will give us a stable mining industry in Cape Breton and Nova Scotia. I say again, Mr. Speaker, that if the attempt now being made by the government to examine the long range possibilities of our industry had been made five years ago we would not have the situation we have today in the coal industry. Again I say that the only answer for the time being is subventions to keep our mines open, not only to provide the work needed at the moment but also to protect a very valuable Canadian resource over the years ahead.


John Whitney Pickersgill: Mr. Speaker, I do not intend to take any part in the debate except to disagree, and I hope in as non-contentious a way as I can, with the hon. member for Inverness-Richmond

<Mr. MacLellan). I thought he spoke very moderately and I do not think he intended to be unfair. But it is inaccurate to say that Mr. St. Laurent ever suggested in his speech at Fredericton that the production of coal should he cut back. What he said was that he would not advocate the expansion of production. Those were the precise words. He said he did not want to see ghost towns and he was in favour of maintaining what there was. I think that is exactly what the hon. member himself was arguing for.


Robert Simpson MacLellan: Will you permit a question'


John Whitney Pickersgill: Certainly.


Robert Simpson MacLellan: I should like to ask the hon. member if it is true that Mr. St. Laurent said at that time that our coal should be preserved for future generations?


John Whitney Pickersgill: What Mr. St. Laurent said at that time was that he believed that the coal would be much more valuable in the future because of its chemical properties than it would be if it were burned as fuel, and that is why he was opposed to expanding production. But he did say that he did not want ghost towns and that the existing production should be maintained.


George Clyde Nowlan: Mr. Speaker, we have had an interesting contribution to the discussion of this problem tonight and certainly in the six or seven minutes left to me under the rules of the house I cannot develop the over-all problem in any way whatsoever. I should like to congratulate the hon. member for Cape Breton South (Mr. Maclnnis) and the hon. member for Inverness-Richmond (Mr. MacLellan) upon the contribution which they have made to this problem. After all, this is essentially a Nova Scotia problem and all the Nova Scotia members are vitally interested in it and are working in every way possible to achieve a solution. As was pointed out by both hon. members, this problem is not new. It is not something which arose the day before yesterday, nor is it something which arose under this government. I can remember in my early days in Halifax when I was the youngest member of the legislature there were strikes in the mines in Cape Breton and labour difficulties which arose there and the mounted police had to be brought in to deal with them.
We have had a long series of problems in connection with Nova Scotia coal, as is true, of course, of coal mines all over the world. The hon. member for Inverness-Richmond put on the record certain figures concerning the diminution in the consumption of coal. I think hon. members of this house should
Requested Action in Coal Industry look at them and consider just what has happened to this great industry in the last few years. He pointed out that there has been a reduction of over 17 million tons in the use of coal. Why has this occurred? There are three essential reasons. The first one is the dieselization of Canadian National Railways, followed by the Canadian Pacific, so that you have Canadian National locomotives going into Cape Breton coal mines burning oil and hauling coal out to Ontario. This was one of the policies established by the preceding government. I am not saying that these decisions were wrong, I am simply pointing out the economic developments that have taken place. This decision, as the hon. member for Inverness-Richmond pointed out, has cost the Nova Scotia coal mines more that a million tons per year.
Another factor is the gas pipe line about which we heard something in the not too distant past in this chamber. It may be economically justified, and I am not debating that for the moment. However, when you have surplus quantities of gas being brought down to the end of the pipe line, as is now the case, with no established market for it and having it dumped on the market at any price it may bring, that in itself results in a tremendous loss in the consumption of coal.
The third matter is connected with the burning of oil instead of coal. In that connection it is rather significant, and I point this out, that when the dominion coal board was organized after the Carroll commission not too many years ago, 76.5 per cent of all energy used in Canada was derived from coal. In 1957 only 25 per cent of that energy was derived from coal. Petroleum, which accounted for very little of the energy supplied at the time the coal board was formed, was supplying 56.4 per cent of all the energy consumed in Canada in 1957. These are some of the factors which have entered into this situation with which we are confronted tonight, and with which the coal miners of Nova Scotia are confronted.
I should like to point this out, Mr. Speaker, that in 1958, despite this acceleration in competition, despite oil, despite the dieselization, despite gas, despite the high water level to which the hon. member for Inverness-Richmond referred and which resulted in the loss of the equivalent of 250,000 tons of coal and the substitution therefor of electrical energy fed into industrial furnaces; despite all that, last year Nova Scotia had the highest record of employment for miners of any other coal field in North America or in Europe. The reason for that is the subvention policy of this government which provided increased

Requested Action in Coal Industry markets for that coal. There is no question about that, and I have the comparative figures here.
I am not going to take the time of the house to put all these figures on the record. Last year the average days worked by miners in all mines in the United States was 203. It had been much higher and had fallen consistently until last year. In Pennsylvania, it was 208 days and in West Virginia, 219 days. However, in Nova Scotia, removed, as it is from the economic centre of this country and facing these various competitions to which I have referred, the average employment of the miners was 238 days per year. As I say, this was higher than anywhere else in North America and higher than any place in Europe.
This problem that we are facing, of course, is common all over the western world. There are riots in Great Britain, troubles in Germany and in the United States because of unemployment in coal fields. It is a problem that requires a tremendous amount of study, the exercise of judgment and courage in trying to achieve a solution. I agree entirely with the hon. members who have spoken here before that given a period of a few years there is an expanding and continuing market for coal in Canada, and particularly for that produced in Nova Scotia. But at the moment, all I can say is that this present Canadian government is expending more money on subventions than has ever been spent by any government heretofore. We have done more to maintain employment and develop the production of coal in Nova Scotia than any government has done in the past.
This policy, Mr. Speaker, will be continued. As has been suggested here, there are studies going on at the moment. What the ultimate solution will be is not for me to say. I cannot say; it is a matter of study and determination. The people of Nova Scotia, hon. members in this house and the people generally, can rest assured that every possible attention is being paid to this problem and a solution will be worked out. It may not be an entirely satisfactory one because there is no solution which can be entirely satisfactory. However, a solution will be worked out whereby the industry will be protected, will
be maintained in the best way possible in the economic circumstances with which we are faced at the moment.


Mr. Speaker:: Order; it being 10 o'clock, it is my duty pursuant to section (4) (f) of standing order 56 to interrupt these proceedings and put forthwith the motion now before the house.


[Stage Direction]
Motion agreed to, and the house went into committee, Mr. Rea in the chair.
The estimates of the following departments were first taken up and entered for consideration:

[Stage Direction]
127. Departmental administration, $398,000.

[Stage Direction]
149. Departmental administration, including annual contribution of $200 to the conference of commissioners on uniformity of legislation in Canada, $741,825.

[Stage Direction]
392. Departmental administration, $2,587,500.
Proceedings reported.

Azellus Denis: Would the leader of the house tell us what the business is for tomorrow?


Howard Charles Green: Tomorrow, we shall commence with the second reading of the bill to amend the Trans-Canada Highway Act; then, continue with second reading of the bill to amend the Veterans Rehabilitation Act and also second reading of the bill to amend the War Services Grants Act. These two last mentioned bills are to be referred to the standing committee on veterans affairs. Then, we shall take resolution No. 10 on today's order paper preceding a bill to provide for parliamentary secretaries; then, item No. 8 on today's order paper, the resolution preceding the bill to amend the Federal-Provincial Tax-Sharing Arrangements Act; then, the estimates of the Department of Citizenship and Immigration.
At 10 p.m. the house adjourned, without question put, pursuant to standing order.



ANSWER TO QUESTION

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

Mr. Howard: 

APPENDIX


[Stage Direction]
Canadian Embassy

[Stage Direction]
The Canadian charge d'affaires a.i. presents his compliments to the acting secretary of state and has the honour to refer to the Canadian embassy's Note No. 624 of October 20, 1958, which set out the views of the Canadian government and the importance it attaches to unrestricted access for Canadian oil to United States markets.
It is understood that the government of the United States is giving consideration to replacing the present voluntary oil import program, which has been extended to February 28, 1959, with a system of mandatory restrictions. The Canadian charge d'affaires wishes to draw to the attention of the acting secretary of state that the views of the Canadian government, as set out in the note referred to above, and as put before representatives of the United States in the meetings of the joint United States-Canadian committee on trade and economic affairs in Ottawa on January 5 and 6, have not changed.
The Canadian government continues to believe that there is no justification on grounds of security (or, for that matter, on the other grounds) for United States restrictions on oil imports from Canada. United States government restrictions on oil imports from Canada, imposed in peacetime for security reasons, are not reconcilable with the need of Canada and the United States to pool their oil resources in time of common emergency. Any system of import restrictions applied against Canadian oil must have an adverse effect on Canadian-United States relations; a system of mandatory controls on imports from Canada, related to security considerations, would be even more disturbing to Canada than would a system of voluntary controls of similar effect.
The Canadian charge d'affaires would request that the views of the Canadian government set forth above be brought to the attention of those concerned with the current review of the United States oil import program.
A. E. Ritchie.
Washington, D.C.
February 19, 1959.
[Stage Direction]
Wednesday, March 4, 1959


[Stage Direction]
Second report of standing committee on miscellaneous private bills-Mr. McCleave.


[Stage Direction]
Mr. Alan Macnaughlon (Mount Royal) presented the first report of the standing committee on public accounts and moved that the report be concurred in.
Motion agreed to.