1959-05-19

REQUEST FOR PRICE SUPPORT IN ONTARIO

[Stage Direction]
On the orders of the day:
Hon. Paul Martin (Essex East):: Mr. Speaker, I wonder if the Minister of Agriculture could say to the house whether or not he has yet had an opportunity of reading the submission made by the Ontario wheat producers, and if he can also say whether or not the government is now in a position to announce a price support for Ontario wheat on the basis, as requested, of a deficiency payment?


Hon. D. S. Harkness (Minister of Agriculture):: The answer is no, Mr. Speaker.


Paul Joseph James Martin: Will the minister be in a position to do so before too long?


Douglas Scott Harkness: I think that will be the situation. I know the wheat people have made their submission to the stabilization board, but I have not yet had a recommendation from that board.



REQUEST FOR STATEMENT RESPECTING


[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: Mr. Speaker, I would like to direct a question to the Minister of Trade and Commerce. I wonder if the minister has anything further to report on the state of the negotiations with Russia for a trade agreement, following the minister's statement of April 7 when he said that negotiations were proceeding satisfactorily? Would he comment on the report that negotiations are bogged down and the trade agreement does not seem as probable as it once did?


Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Speaker, I think it is incorrect to say that negotiations have bogged down. They are proceeding in a satisfactory manner and we have every hope they will be concluded to the general satisfaction of the house.


Hazen Robert Argue: Mr. Speaker, as it is more than a month since the time the minister made his statement that negotiations were proceeding
satisfactorily, is he in a position to give the house some idea of when a new agreement may be made?


Gordon Minto Churchill: Just as soon as I am in that position the statement will be given to the house.


Hazen Robert Argue: Next year?



HOUSING


[Stage Direction]
On the orders of the day:
Mr. J. R. Garland (Nipissing):: Mr. Speaker, I would like to direct a question to the Minister of Public Works. In view of the fact that total N.H.A. loans during the calendar year to date are down over 50 per cent from last year, and with interest on conventional loans now running as high as 8 per cent, will the minister say what action the government is taking to ensure a greater flow of mortgage funds for house building for the balance of 1959?


Hon. Howard C. Green (Minister of Public Works):: Mr. Speaker, in the first place I would say that I think the percentage given by the hon. member is quite a long way off the actual fact. The government is watching this situation very carefully, and when it is necessary to adopt a policy, such policy will be announced in the house.


John Richard Garland: May I ask a supplementary question. Would the minister say what portion of the $250 million approved by parliament earlier this year has been used to date to relieve the scarcity of mortgage funds for house construction?


Mr. Speaker:: Order. The question appears to ask for statistical information, and perhaps the hon. member would give notice or put it on the order paper.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. Hayden Stanton (Leeds):: Mr. Speaker, I would like to direct a question to the Minister of Agriculture. Is the minister aware of the fact that concentrated milk manufacturers in their negotiations with producers have quoted from the minister's

Inquiries of the Ministry statement on price stabilization for dairy products, reported in Hansard of April 23, to the effect that "the net result will be to reduce producers' returns by 15 cents per 100 pounds of milk used for manufacturing purposes" as a reason for reducing prices of milk used for manufacturing concentrated products? Can the minister clarify this statement?


Douglas Scott Harkness: Yes, I would be glad to do so. As a matter of fact I have been informed by several people that one sentence in my statement has been lifted from its context in the paragraph dealing with support prices for butter and skim milk powder and has been quoted as if it also applied to milk used for concentrated products. It was never my intention that such an interpretation should be placed on my statement. In support of this I would point out that I announced support prices for butter, cheese and skim milk powder, but not for any other dairy products.
In the statement I recognized that the subsidy of 25 cents per 100 pounds of milk would not offset the 5 cent reduction in the price for skim milk powder, and that the difference would amount to approximately 15 cents per 100 pounds of milk used for the manufacture of butter and powder. However, my statement was not meant to include other manufactured dairy products such as whole milk powder, concentrated and evaporated milk, which are not under support, since it was assumed that prices paid for milk used in the manufacture of these concentrated products would be determined by negotiation as usual.
Since the statement of April 23 became public knowledge before negotiations were undertaken in Ontario, it is clear that both parties should have had full knowledge of the fact that the government proposed to pay a subsidy of 25 cents per 100 pounds on all milk used in manufacturing.
I need hardly assure the house that I am sorry to learn that my statement has been used in the way indicated by the question which was asked by the hon. member. Consequently I am glad to make this clarification in order that further negotiation or arbitration procedures may be conducted with full knowledge that it was not my intention to deal with the prices of product for which we have no support program.



REQUEST FOR INCREASE IN PROTECTIVE STAFF

[Stage Direction]
On the orders of the day:
Mr. J. R. Tucker (Trinity-Conception):: should like to direct a question to the Minister


of Public Works. In view of the anxiety of the house to encourage the tourist trade, and because of the very large number of weekend visitors, would the Minister of Public Works consider increasing the protective staff, as I understand that five members of that staff tried to look after approximately 24,000 visitors to the house last Sunday? I should also like to ask whether consideration might be given to extending the hour of closing.


Howard Charles Green: Fortunately this is not the responsibility of the Minister of Public Works. I suggest that the hon. member refer his question to you, Mr. Speaker.


Mr. Pickersgill:: That is against the rules.


James Roy Tucker: I have much pleasure in doing so.



FISHERIES


[Stage Direction]
On the orders of the day:
Hon. J. A. MacLean (Minister of Fisheries):: Yesterday, Mr. Speaker, the hon. member for Trinity-Conception asked what steps my department is taking to cope with the shortage of bait for lobster fishermen in Newfoundland.
The hon. member is of course aware that last year the squid catch in Newfoundland failed almost completely and this, despite the efforts of the government to relieve the situation by importing bait even from Norway, placed an abnormal demand on herring used for bait. This situation has been aggravated by the fact that there has been a very light catch of herring over the past few months particularly in Newfoundland. However, we were successful in obtaining 250,000 pounds of herring for bait from Nova Scotia and this was distributed to depots last week. We are continuing to obtain supplies of bait whenever possible from every source that is feasible.



INQUIRIES FOR RETURNS


[Stage Direction]
On the orders of the day:
Mr. M. A. Hardie (Mackenzie River):: Mr. Speaker, on April 15 two questions standing in my name, Nos. 52 and 53, were passed as orders for returns. I wonder if the Secretary of State could advise me when I may receive those papers.


Hon. Henri Courlemanche (Secretary of State):: As soon as possible, Mr. Speaker.

(Translation):



RETAINING WALLS, QUEBEC PROVINCE

[Stage Direction]
On the orders of the day:
Mr. Yvon Dupuis (SI. Jean-Iberville-Napierville):: Mr. Speaker, may I ask the
Secretary of State whether he intends to answer my question that dates back to February, about retaining walls? I have been waiting for the answer with a great deal of patience.


An hon. Member:: As soon as possible.


Henri Courtemanche: Mr. Speaker, I admire the tenacity of the hon. member for St. Jean-lberville-Napierville, and I can tell him that progress is being reported every day.
(Text):



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Mervyn Arthur Hardie: Mr. Speaker, I wonder if the Secretary of State could answer the question I asked him yesterday in regard to government employees in Hay River, Northwest Territories?


Henri Courtemanche: Mr. Speaker, as it does not come under my jurisdiction I shall ask the hon. member to direct his question to the Minister of Finance.


Mervyn Arthur Hardie: Mr. Speaker, may I direct my question to the Minister of Finance?


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, as I advised the hon. member some time ago, this matter is under consideration by the treasury board.



SHIPPING


[Stage Direction]
On the orders of the day:
Hon. George H. Hees (Minister of Transport):: Last Thursday, Mr. Speaker, the hon. member for Montmagny-L'Islet asked if I could give him any information on the possible move of the pilotage station from Father Point. The recommendations of the pilots' committee at present in office are being given full consideration, together with those of the previous committee, which are at variance one with the other. It is agreed that a move of the pilotage station from Father Point to a location farther up the river is desirable; however, the choice of the new site has not yet been made. Considerable expenditures of
Inquiries of the Ministry public funds are involved in the decision, as well as navigational factors on which there are differences of opinion. A thorough study is being made of the sites suggested, and it is hoped that a decision will be reached in the near future when these studies are completed.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I wish to direct a question to the Minister of Citizenship and Immigration. Since approximately four weeks have elapsed since the minister made a statement about immigration, and since the summer immigration season is upon us, can the hon. lady indicate how the department is progressing in achieving a reduction in the backlog of applications from eligible immigrants in certain European countries?


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: No, Mr. Speaker, I am afraid I could not report on that at the moment.


Douglas Mason Fisher: A supplementary question, Mr. Speaker. Could the minister indicate when we might anticipate a report?


Ellen Louks Fairclough: Mr. Speaker, I do not
think there will be any appreciable improvement in the situation until possibly the summer season has gone by. We may then have a better idea what the situation is.


Douglas Mason Fisher: A further supplementary question, Mr. Speaker. When will the changes in the act be made? When will the whole new approach about which the minister spoke be undertaken? Will amendments be introduced this year or next year?


Ellen Louks Fairclough: Mr. Speaker, I do not think I understand what the hon. member is talking about.


Douglas Mason Fisher: Mr. Speaker, in the minister's speech on April 22 she outlined the steps her department hoped to take. I wondered when she would be in a position to introduce those steps formally in the house.


Ellen Louks Fairclough: Mr. Speaker, all I can say is that I am not in a position to make a statement at the moment.



PRIVILEGE


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, may I be permitted to

Inquiries of the Ministry make two corrections in Hansard of Friday, May 15. In line 32 at page 3706 I am reported as having said, "which we put forward at that time and which was supported by all the members from Newfoundland". It should read "Liberal members".
In lines 15 and 16 at page 3727 I am quoted as having said, "these lectures about the rights of parliament are getting very repetitious". What I said was, "These lectures to members of parliament are getting very repetitive".


Mr. Fulion:: That is not what the hon. gentleman said.
[Later:1


Howard Charles Green: On a question of privilege, Mr. Speaker, I do not think any hon. member has any right to get up and ask for a change in Hansard where there has been an interchange between members across the floor of the house. In the case of the changes asked for by the hon. member for Bonavista-Twillingate, I was here and I heard what he said and what he said is reported in Hansard, and he should not be allowed to change it.


Some hon. Members:: Hear, hear.


Hon. Lionel Chevrier (Laurier):: I agree with what the house leader has said, but it should apply as well to those who sit on that side of the house as to those who sit here. I have reference to an exchange which took place the other day during consideration-


Mr. Bell (Saint John-Albert):: Order.


Lionel Chevrier: I am discussing the point of order.


Mr. Speaker:: The hon. member is addressing himself to the question of privilege raised by the minister and not to another instance. I would prefer that he wait until the first one is disposed of.


Lionel Chevrier: I want to say on this occasion that if there is to be a ruling by Your Honour in connection with this matter the ruling should apply equally to both sides of the house.


John Whitney Pickersgill: Since my word was called into question, it seems to me-


Mr. Speaker:: That would be a further matter of privilege. I think it might be well to dispose of one at a time. As I understand the practice, where a member has been misquoted-


Edmund Davie Fulton: He was not.


Mr. Speaker:: -he is entitled to ask that a correction be made in Hansard; and I believe

it has been the practice of the house to accept the statement of a member as to what he did say, for the purpose of making the correction. It is not in order, as I understand it-and I would be glad to have the views of the house on this matter-to change what was said for the purpose of clarifying the ideas the member intended to express. I think the correction suggested by the hon. member for Bonavista-Twillingate is in both classes. In the first one he added a word to clarify the meaning; in the second place he corrected Hansard, and the second one would be permissible.


Howard Charles Green: Mr. Speaker, this is very important, because the Hansard reporter will not make any change where there is a cross-play across the floor of the house. The record stands as the reporter takes it down. On this occasion there was a cross-play, and my hon. friend would not be able to change it in Hansard, but he comes here and asks for a change on the floor of the house. I suggest that it should not be allowed.


John Whitney Pickersgill: Mr. Speaker, that is precisely why I asked for this second correction. In the first one, though I think I did say "Liberal members" and it was inadvertently omitted by the reporter, I am not making any point of that, since the minister has raised the matter. However, in the second instance, I looked at what was in Hansard and it was not my recollection of what I had said. It was sufficiently different from my recollection that I thought it would be quite improper to try to make the correction anywhere except in public, here in the house. That is what I believe I said, and that is certainly what I intended to say.


Mr. Speaker:: Before leaving this matter, may I say to hon. members that when they rise to indicate that the Hansard reporters have incorrectly reported them, they do so on their own responsibility. They should do so only when they are sure that is the situation, and I feel that the house should then accept the correction. It is not a change in what Hansard has reported, because that stays and is in the record. It is an explanation of an error which the hon. member feels the Hansard reporter has made.



CIVIL DEFENCE


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: In view of the fact that some weeks now have passed since the provinces were communicated with, following the meeting on civil defence, may I ask the Minister of National Health and

Welfare whether the government is in a position to state its policy on evacuation?


Hon. J. W. Monleith (Minister of National Health and Welfare):: Following the conference at which the provincial ministers and several federal ministers were present, the hon. member asked me a similar question and the answer which I gave on that occasion still holds. The matter is getting prior consideration.


Paul Joseph James Martin: Am I correct in saying to the Minister of National Health and Welfare that from now on all questions on civil defence should be addressed to him, or should they be addressed to two others of his colleagues as well?


Jay Waldo Monteith: I think, Mr. Speaker, if the hon. member continues to address questions on civil defence to myself as Minister of National Health and Welfare, for the time being that will be satisfactory.



NATIONAL ENERGY BOARD


[Stage Direction]
The house resumed, from Monday, May 18, consideration in committee of the following resolution-Mr. Churchill-Mr. Rea in the chair:
That it is expedient to introduce a measure to provide for the establishment and operation of a national energy board and the appointment of its members and staff, to define its duties, to authorize it to exercise certain powers and to provide for other related and incidental matters.
Hazen Robert Argue: Mr. Chairman, in his statement last night the minister outlined in some detail the powers that would be exercised by the national energy board and to some extent the type of policy that the government would wish it to follow. The minister stated, as found on page 3767 of Hansard:
We recognize the need for and welcome capital whether domestic or foreign for investment in the energy and associated industries, and we believe such capital, wisely invested, should enjoy a fair and reasonable rate of return. As to what is a fair return, it is not our intention to incorporate any fixed formula in the statute. Rather, our first premise is that returns on successful investment must be sufficient to attract capital for replacement and expansion, and our second premise is that the public interest requires that no pipe line company should exploit its monopoly or quasimonopoly position to secure returns higher than are fair and reasonable.
I suggest, Mr. Chairman, that the stated policy of the government is far removed from what was once the policy of the Conservative party when it formed the opposition. We in the C.C.F. believe that natural monopolies such as gas pipe lines or oil pipe lines crossing interprovincial boundaries should in
National Energy Board the national interest be publicly owned. We support that position not because of any theoretical belief that public ownership in every field is the right way to proceed but because we believe this is a particular example of the kind of utility, the kind of industrial facility, that should be publicly owned. If our natural gas pipe lines were publicly owned, if the trans-Canada gas pipe line were publicly owned, we feel that this would assist in providing energy sources for Canadian industry at the lowest possible price. At a time when the house is giving serious consideration to the whole question of inflation, to the whole question of our high cost economy-


The Deputy Chairman:: Would hon. members please talk a little more quietly. It is rather difficult for the Chair to hear the member who has the floor.


Hazen Robert Argue: Thank you, Mr. Chairman. I was saying that at a time when inflation is very much in the minds of members of the House of Commons, when the government has said that its policy is to prevent a further increase in price levels in this country, with all the warnings that Canada is becoming a high cost economy which is endangering our export trade, I feel the government should consider public ownership of interprovincial pipe lines as a means of securing for Canadian industry energy sources at the lowest possible prices. If energy is brought to Canadian industries at an inflated cost or at an unnecessarily high, cost, then this in turn means that the high cost of energy is passed on in higher and higher prices for finished products. This has a detrimental effect upon the development of the Canadian economy, both from the standpoint of Canadians and also from the standpoint of the development of a healthy export trade.
The government's announced policy is not only a great departure, a complete departure, from the position it has taken in the past, but is in fact very far removed from some of the recommendations made by the royal commission on energy. The report of the commission on energy contains the following recommendation on page 28. This concerns the prices, tolls and rates which should be set by the board of transport commissioners. The recommendation reads as follows:
That the prices, tolls, rates or tariffs of a company owning or operating an oil or gas pipe line as regulated by the board of transport commissioners for Canada, should be just and reasonable, nondiscriminatory and calculated to yield a fair rate of return on the shareholders' equity, after making due allowance for reasonable and proper operating expenses, depreciation, interest, income and other taxes.

National Energy Board
The important part of this recommendation, I submit, is that in the opinion of the royal commission tolls, rates and prices than can be charged should be set at levels to yield a fair rate of return on the shareholders' equity. Instead of that the government has said they will have the board follow a general policy of setting rates that will provide a fair and reasonable rate of return. These two things are far removed, because the assets of a company very often are so much larger than the shareholders' equity. A company which finances largely by bonds or by debentures is very often able to show a very high rate of return on shareholders' equity; and the announced policy of the government means the continuation, in all probability, of fabulous returns, fabulous profits that have been made from the oil and gas pipe lines of this country.
On page 33 of the energy commission report we find a table showing the percentage return on shareholders' equity in the Trans Mountain pipe-line company. In 1955 the percentage return on shareholders' equity was 27 per cent; in 1956, 43.5 per cent; in 1957, 38 per cent. There were tremendous profits and tremendous returns on the shareholders' equity. The profit of Interprovincial Pipe-line Company, based on a percentage return on shareholders' equity, was in 1953, 18.3 per cent; in 1954, 11.3 per cent; in 1955, 11.5 per cent; in 1956, 18.1 per cent; in 1957, 15 per cent. The percentage return on shareholders' equity in the Montreal Pipe-line Company, and of the Portland Pipe-line Corporation was as follows: 1953, 15.6 per cent; 1954, 9.94 per cent; 1955, 20.45 per cent; 1956, 19.51 per cent; 1957, 14.76 per cent.
These fabulous returns and fabulous profits on pipe lines have made millionaires almost overnight. These profits have accrued not only to Canadians but to United States citizens. These profits have accrued to the Texas buccaneers about whom we heard so much from hon. members opposite when they were in opposition. How they complained about the government's policy with regard to Trans-Canada pipe line company. How they complained that the government was allowing foreign capital to come into this country and make fabulous profits in the development of Canadian natural resources, fabulous profits which were made in a way that was endangering the very sovereignty of this nation, the very control of Canadian industry.
The Prime Minister himself, when he spoke on this subject in the past, has waxed very eloquent. The Prime Minister made many statements on this subject, and on page 4032 of Hansard lor May 17, 1956 he had this to say:

The perquisites here are that the Prime Minister (Mr. St. Laurent) should abdicate his belief in democratic principles and deny those in opposition the right to advance their arguments and to educate public opinion or to find out why there is such solicitude on the part of the members of this government. For five long years this pampered pet, Trans-Canada Pipe-lines, by deviation, by change of direction, by protestation, by alteration in course, has postponed that estimable end of securing a market for Alberta gas and the making available to other parts of Canada of that necessary form of energy. I ask the Prime Minister today to tell this house why he is so fearful of the facts; why he was afraid to allow the true facts of this nefarious scheme to be elucidated? I ask why he found it necessary, and the members of his government found it necessary, to muzzle the representatives of the people in advance of anything in the nature of a filibuster or an interference on the part of the opposition with the policy and program of the government. I ask him to explain that today, for certainly the day of silence is past. Are they afraid of the truth over there? Is that why they hide behind the caricature of parliament which they have substituted by the adoption of the parliamentary form of closure in a way that it has never been adopted before?
A few years ago, Mr. Chairman, the Trans-Canada pipe line scheme was a nefarious scheme in the words of the Prime Minister. The present Minister of Public Works, speaking in the same debate on May 15, 1956, as reported at page 3955 of Hansard said:
I conclude my remarks by this statement, and I make it after careful consideration. I believe that this measure now proposed by the government is the greatest betrayal of the Canadian people since confederation.
This resolution before us assures the continuation of this greatest betrayal of the Canadian people since confederation. The government, instead of going as far as the recommendation of the royal commission on energy to hold down profits to a fair return on shareholders' equity, has left the door wide open for the continuation of these fat and fabulous rates of profit that are accruing from the pipe lines of this country.
This is a complete reversal of the position the government has taken in days gone by. Not only is it a reversal of the position which was taken as far as the Trans-Canada pipe line is concerned; it would appear from the statement of the Minister of Trade and Commerce last night to be even much more than that, because the government has shifted its ground from the position it took in parliament in 1956. In those days it was to be Canadian capital developing these resources, but last night the Minister of Trade and Commerce had this to say, as reported at page 3767 of Hansard:
We recognize the need for and welcome capital whether domestic or foreign for investment in the energy and associated industries, and we believe such capital, wisely invested, should enjoy a fair and a reasonable rate of return.

That is opening the door wide for United States capital to come in and take over even to a larger extent the operation of pipe lines in this country as well as the control of Canada's energy resources. The government has retreated from the position it took when in opposition. It has now adopted the policy of the former government. It has now put its arms around something it once described as a nefarious scheme. It has now accepted as part of its own policy something that was once described as the greatest betrayal of the Canadian people since confederation, and this announced policy of the government leaves the door open for further betrayals of the Canadian people by a repetition in the future of the scandalous schemes of the past.
Pipe lines in this country, not only the Trans-Canada pipe line and interprovincial pipe lines, seem to be industries in which people make fabulous profits overnight. They seem to be industries in which many actions are taken which should not be condoned and which, apart from the law itself, are very questionable. We know of the pipe line scandals in the province of Ontario. We have read about alleged pipe line scandals in the province of Quebec. We know the way the people in the city of Winnipeg and in the province of Manitoba are being held up by exorbitant prices being charged for the use of natural gas by consumers, all because the Conservative party has turned its back on a policy of public development of these resources.
Public development has been used in the past by various governments as an important means of developing Canadian resources. We have a publicly owned railway. We have the Ontario hydro, which is doing a good job. We have the Manitoba hydro that has pioneered in that province the development and distribution of electrical energy. But the Conservative party has now closed its eyes to the great vision of public development which was once that of the Conservative party.
Out in the province of Manitoba the information I have is that consumers in the city of Winnipeg will have to pay 90 cents per thousand cubic feet of natural gas, a price which is at least 16 cents higher than the price paid by consumers in the province of Saskatchewan even after the additional cost of transportation of the gas is taken into account. In the province of Saskatchewan the distribution of natural gas has been undertaken by the Saskatchewan power corporation, a publicly owned company. Consumers in the city of Regina have to pay 70 cents per thousand cubic feet of gas, but in the city of Winnipeg, although it costs just 4 cents to transport a unit of gas from the city of Regina to the city of Winnipeg, the cost is 90 cents. The province of Manitoba and the
Veterans' Land Act
city of Winnipeg are having to pay rates 20 per cent in excess of the rates paid in Saskatchewan even after one takes into account the cost of transporting the gas for the increased distance, and this 20 per cent is the fee the people of Manitoba have to pay for a policy that is against their own interests and is in favour of private capital, whether Canadian or foreign.
If Canada as a nation, Mr. Chairman, is to develop at a maximum rate, and if our industries are to have access to the cheapest possible power, then the policy the government has announced should now be changed. This is not a policy designed to provide low cost energy in Canada; it is a policy that will result inevitably in more scandal, in the lining of the pockets of more Texas buccaneers, in a further encroachment on Canadian sovereignty by United States capital. This policy announced by the government is the capitulation of the Conservative party to the Texas buccaneers and to the gas and oil barons in this country. This is the disappointing conclusion that the government has arrived at after studying the report of the royal commission on energy and after having been in office for almost two years.
Mr. Chairman, in my opinion this policy is uneconomic, it is un-Canadian, and it is a policy that will impose tremendous burdens of additional and unnecessary cost, until checked, on future generations of Canadians. I am surprised and amazed that a government that got to office to a very large extent by exploiting the need to develop Canadian resources by Canadians and by Canadian capital, a party which came to office because it advocated low cost energy sources in this country, should have now made a complete about face and embraced the policy which it once condemned so strongly. By the same token it has condemned Canadians for many years to come to paying exorbitant and excessive rates for energy sources in this country, at the same time turning over larger and larger shares of Canada's energy resources to foreign capital and foreign interests.
Resolution reported and concurred in.
Mr. Churchill thereupon moved for leave to introduce Bill No. C-49, to provide for the establishment of a national energy board.
Motion agreed to and bill read the first time.



VETERANS' LAND ACT


Hon. A. J. Brooks (Minister of Veterans Affairs) moved: that the house go into committee to consider the following resolution:

Veterans' Land Act
That it is expedient to bring in a measure to amend the Veterans' Land Act to provide further financial assistance to veterans for home construction and to veterans presently settled under the act as full-time farmers or who may be so settled in the future and to veterans who may be settled as part-time farmers or commercial fishermen; and to provide further for certain changes in connection with the administration of the act.
Motion agreed to and the house went into committee, Mr. Rea in the chair.


Alfred Johnson Brooks: 
Mr. Carter:: Mr. Chairman, the minister has just intimated that these amendments will go before the standing committee on veterans affairs, and last night the house leader told us it was hoped the committee might be able to work on this during this present week, so it is not our desire to delay the proceedings unduly. I would like to take this opportunity of indicating our support of these amendments, however, and to commend the minister for bringing them in at this time.
The historical background with which the minister opened his remarks was, I am sure, extremely interesting to all hon. members, because his remarks indicated that the rehabilitation of veterans on the land has been a concern of governments over the years, and one of the oldest benefits accorded to veterans. It is my belief that the Veterans' Land Act

Veterans' Land Act
has been the most successful of all the rehabilitation measures that make up the veterans charter. It has been extremely well administered at all levels, and in my opinion the department has been extremely fortunate in recruiting the right type of person to administer this legislation. The officials have always displayed the right attitude. That has been apparent from the beginning and maintained to this day. In all cases the interests of the veterans have been put first, and he has been given good advice even though it was perhaps not in accord with his own wishes.
The success of this phase of veterans legislation is due in large measure, I believe, to the frequent contact there has been between officials and the veterans concerned, and to the follow-up advice and guidance given in solving current problems. The passage of time has brought about changes, however, and many of the provisions in the charter have been rendered out of date. This is particularly true of the financial provisions. Land values have increased and the purchasing power of the dollar has declined, so the financial assistance available under the present legislation is no longer realistic in relation to today's prices.
I am sure the changes the minister indicated will be welcomed by all veterans everywhere, and particularly the changes in the maximum amount of the loan and in the extension of the amortization period from 25 to 30 years. The extension of the purposes for which grants under this legislation will be used will also be warmly welcomed.
Coming from Newfoundland I am particularly interested in that part of the act that provides for grants to commercial fishermen. I am very pleased to note that the minister is proposing to increase the maximum amount from $1,400 to $3,000.
For some reason or other it appears that the benefits available to commercial fishermen have not proved as attractive as those available to veterans who wish to settle on the land. I do not know what the situation is on the west coast, but it is my impression that in the Atlantic provinces we have not taken as much advantage of this legislation as we might. I hope the publicity that will attend this legislation on its passage through this house will induce more veterans to take advantage of this part of the legislation.
In addition to the changes consequent upon changing conditions there will also be other changes borne out of the experience of the department in administering the act. We hope that as far as the commercial fishermen are concerned the changes contemplated will

bring this legislation in line with the changes that are taking place in the commercial fishing industry.
I am sure that all veterans will appreciate the extension of the benefit period, which will enable those who have not yet been able to take advantage of this legislation and whose time may be running out to have another chance.


Mr. Herridge:: Mr. Chairman, on behalf
of this group I want to express our support for the amendments to be introduced after this resolution has received the consideration of the committee. As this bill will be referred to the committee on veterans affairs for further study and consideration I am not going to speak at length, but I do want to take this opportunity of bringing a few points to the attention of the committee.
I am particularly interested in this type of legislation because I am one who firmly believes that if we do not maintain the family farm in Canada, and opportunities for the development of small-scale industry and small business, we will within a few years develop a monolithic state with all the horrors that go with it.


An hon. Member:: Is that not the aim of
the C.C.F. party?


Herbert Wilfred Herridge: What was the interruption
I heard, Mr. Chairman? Apparently an hon. gentleman over there is trying to massage his microscopic ego by interrupting me with rude noises but I can assure him he will not succeed.
I am particularly interested in the maintenance of the family farm because of the role it has played in Canadian society, the role it can play in the development of this country, and in the provision of a type of happiness that is lost to many who do not understand what rural life is and do not appreciate the advantages that attend it, despite the fact that on many occasions the financial returns are not equal to those available to people who take part in other activities.
The institution of the soldier settlement board shortly after the first world war was the first attempt to do something along those lines. It was almost in the nature of an experiment. Consequently many mistakes were made and there were many failures, but also there was a great deal of good done under the old Soldier Settlement Act. I know a number of veterans who benefited as a result of that act.
As a result of the experience gained over the years with the soldier settlement board in all sections of Canada, the government, the veterans affairs committee and the House of

Commons, when it came to consider the Veterans' Land Act, had a background upon which to base legislation. It was that previous experience with the Soldier Settlement Act that made it possible to draft the Veterans' Land Act which, without doubt, has been much more successful generally speaking than the Soldier Settlement Act was in the years prior to the second world war.
During recent years we have noticed increasing admiration-and this is true of the group I represent-for the work of the Veterans' Land Act and what it has accomplished. Why? Well, we have been very fortunate, Mr. Chairman, in having a director of the Veterans' Land Act who comes from a farming family of many generations, whose heart is wrapped up in the problems of the family farm. This has had a lot to do with the success of this act since the second world war, and in addition he has had the loyal support of a very competent staff.
I want to bring to the attention of the committee one or two documents which have been published by the Veterans' Land Act administration. The first one is entitled "A Decade of In-Service Staff Training, 1948-1958. The Story of 'Operation Good Earth' ", compiled by S. O. Robinson. It is well worth any member's time to read this document. It is a history of the experience of the Veterans' Land Act administration.
Then I come to another book issued by the Veterans' Land Act administration, and it is entitled "Production-line Farming". It is a loose leaf handbook by T. J. Rutherford, director of the Veterans' Land Act. I say without hesitation-and I have read a great deal of literature on agriculture throughout the years, as agriculture and forestry are two of my hobbies-that this is the best book of this type that has been published to date in this country to put into the hands of men who wish to be successful farmers and carry on practical farming. This book contains a fund of information which can be readily understood by those persons who are aiming to make a success of the family farm. I recommend that every member of this house get a copy of this book when it is available. I want to compliment the director and the members of his staff. No doubt he must have had a great deal of co-operation not only from the headquarters staff but also from the staff in the field to compile such a worth-while document.
To indicate the success our Veterans' Land Act administration has had in rehabilitating veterans on the land I want to refer to the last copy of the Family Herald, dated May 21, 1959, which was brought to my attention just recently and which contains a most interesting article with respect to the success
Veterans' Land Act
of a settler under the Veterans' Land Act in Alberta. The title is "How We Remade a Ranch". Then there are pictures showing Mr. Peter Elko, who is a supervisor in the district and who won such great respect for the Veterans' Land Act. In brief, it is a story of the value of the Veterans' Land Act administration; it is a story of the success of supervised credit as advocated in the book published by the department to which I have just referred. I suggest that anybody who is interested in finding out what can be done in developing successful farming practices should read the books I have mentioned and this article in the Family Herald.


Douglas Scott Harkness: I have read it; it is an interesting article.


Herbert Wilfred Herridge: Most interesting, and it shows the value of supervised credit and the service that skilled, devoted people can give to farmers.
As further evidence of the success of the administration of the Veterans' Land Act I want to quote from the Legion brief presented to the standing committee on veterans affairs in March, 1959. The Legion presented a resolution to the committee entitled "Supervised Farm Credit". I am going to read only briefly from the brief; it is further evidence of the value of the kind of work the Veterans' Land Act administration has been accomplishing for veteran farmers in Canada. This resolution did not spring from the headquarters of the Canadian Legion. This is not office-inspired. We all know that this country is becoming infested with a multitude of propaganda experts. This springs from resolutions that come from branches across this country. From men and women, members of the Legion, who have had contact with veterans who are farming under the Veterans' Land Act administration. What does it say in part? It says:
Through practical experience of the operation of the Veterans' Land Act it has been shown that carefully supervised government-sponsored credit extended to competent and progressive farmers in adequate amounts and at the right time can and will enable the farmer to enjoy a standard of living more comparable to that of the average Canadian in other industries and to meet his obligations when due. Government-sponsored supervised credit is urgently needed for those presently established V.L.A. settlers and other eligible veterans, as well as for the younger farm civilian and those farmers now in low income brackets.
I am very pleased indeed to see the concern of the Legion for the other young farmers in Canada. It indicates there is a growing number of people who realize the importance of the maintenance of the family farm in Canada. Then the brief goes on to say:
The V.L.A. administration has proved to have adequately trained, experienced and efficient personnel available and capable of administering a

International Labour Conference government-sponsored increased supervised credit plan. Full-time farming veterans still remaining under V.L.A. would be much better served by an expanding and virile organization serving all farmers than by one which must soon run down due to the fact that it will be serving only the rapidly decreasing residue of V.L.A. settlers. We believe that it is essential that a plan be developed which will improve farm management and production, thereby strengthening the entire national economy.
The Canadian Legion therefore recommends to the government:
That a plan of increased long term and short term supervised farm credit assistance under the jurisdiction of the presently well-established veterans' land administration applicable to veterans and civilians alike covering all phases of the Canadian agricultural industry, be undertaken.
I do hope, Mr. Chairman, that the experience of the Veterans' Land Act administration, and the experience of the veterans they have aimed to serve throughout the years, and this legislation will be a guide to later legislation coming from the government to serve the needs of those young people in Canada who wish to become established and practise life as family farmers in the days to come.
I was very pleased to hear the minister's reference to the fact that there will be an increase in the amount of loans available, that the time will be extended to 30 years, that money can be borrowed for livestock and equipment, and the other amendments he mentioned. The bill will go before the committee. No doubt we shall have full opportunity to study it and get further explanation at that time.
However, in conclusion, Mr. Chairman, I do want to say this. I hope that in framing its farm credit legislation, which I understand is being given consideration at this time, the government will give serious consideration to the success of supervised farm credit in Canada under the Veterans' Land Act administration and will then see fit to extend the same opportunity to all young Canadians who want to play their part on the farms of Canada in the days to come.
Resolution reported and concurred in.
Mr. Brooks thereupon moved for leave to introduce Bill No. C-50, to amend the Veterans' Land Act.
Motion agreed to and bill read the first time.



INTERNATIONAL LABOUR CONFERENCE


Hon. Michael Starr (Minister of Labour) moved:: That it is expedient that the houses of parliament do approve of convention No. 105, concerning the abolition of forced labour which was

adopted by the international labour conference at its fortieth session at Geneva on the 25th day of June, 1957, and that this house do approve the same.
He said: Mr. Speaker, the purpose of this resolution is to obtain the approval of parliament to a convention adopted by the general conference of the international labour organization in 1957. This is convention No. 105, designated as the convention concerning the abolition of forced labour. I understand that copies of the text of this convention have been distributed to members of the house.
This convention provides that every member state which ratifies it undertakes to suppress and not to make use of any form of forced or compulsory labour as a means of political coercion or education or as a punishment for holding or expressing political views or views ideologically opposed to the established political, social or economic system, as a method of mobilizing and using labour for purposes of economic development, as a means of labour discipline, as a punishment for having participated in strikes, as a means of racial, social, national or religious discrimination.
We have no systems of forced labour in Canada, and to the best of our knowledge there is no legislation now in effect in Canada which would be inconsistent with or in contravention of the provisions of the convention. The opinion of the Minister of Justice is that in these circumstances no legislation is required to implement the provisions of the convention. It is hardly necessary for me to say that systems of forced labour are entirely repugnant to our social, economic and political institutions in Canada.
The adoption of this convention on the abolition of forced labour by the international labour conference in June, 1957 was the outcome of inquiries and discussions by and within the United Nations and the international labour organizations over the past ten years. In 1951 an ad hoc committee on forced labour was appointed jointly by the secretary general of the United Nations and the director general of the international labour office as a fact finding body to study the problems raised by the existence in the world of forced labour employed as a means of political coercion or in large scale economic plans. The committee's report in 1953 revealed facts that showed the existence of such systems of forced labour, and established that these systems seriously threatened fundamental human rights and jeopardized the freedom and status of workers.
A proposal to adopt a convention outlawing forced labour was placed on the agenda of the international labour conference for 1956 and 1957. Throughout the discussions

the Canadian delegation, representing government, workers and employers, supported the adoption of a convention which would identify and outlaw the kinds of forced labour which the committee's report had revealed. The convention for the abolition of forced labour was adopted by the 1957 international labour conference with no dissenting votes.
We are asking approval of this convention by parliament in order that we may proceed to ratify the convention immediately thereafter. This convention is an effort by the international labour organization to carry out one of its essential aims of abolishing conditions of labour which involve injustice, hardship and privation to large numbers of people by prevailing upon its member states to eliminate such conditions. A convention which receives a large number of ratifications becomes a powerful force. There is no doubt that Canada should ratify this convention to show our serious interest in and support for the universal abolition of forced labour, which is the objective of the convention.
I feel confident that approval of this convention by parliament will have the support of the vast majority of Canadians. Certainly this is so in the case of Canadian management and organized labour, whose representatives participated and played an active part in the formulation and approval of the convention by the international labour conference. Both these groups have also urged upon the government the ratification of this convention.
For the information of the house I might add that the United Kingdom was the first country to ratify this convention and Denmark was the second. The convention came into force 12 months after two ratifications had been registered, which in this case was January 17, 1959. It has now also been ratified by 18 other countries to date, Austria, Cuba, the Dominican Republic, Ghana, Haiti, Honduras, Ireland, Israel, Jordan, Malaya, the Netherlands, Norway, Poland, El Salvador, Sweden, Switzerland, Tunisia and the United Arab Republic. I trust that the house will give full support to this resolution.
(Translation):


Mr. Adrien Meunier (Papineau):: Mr. Speaker, in introducing his resolution to the house, the Minister of Labour (Mr. Starr) is asking us to approve the convention which was adopted in Geneva on June 27, 1957, by the international labour organization. I heartily agree with the minister when he says that we do not have, here in Canada, a system of forced labour which, through racial, social, national or religious discrim-
International Labour Conference ination, would compel a working man to work, as a disciplinary measure, or because he has taken part in strikes.
Mr. Speaker, this resolution shows that today people respect organized labour and are anxious to raise the standard of living of people affected by racial discrimination or by methods other than free and voluntary work.
The hon. minister reminded us that this convention was first ratified by the United Kingdom. On reading the history of England, we realize that she was the first to recognize organized labour and to go out of her way, as it were, to satisfy the demands of labour.
In fact, if I remember rightly, it was under the Pitt administration that child labour was outlawed, that 11 or 12 year-old children were no longer allowed to work in factories, and that later on contractors were compelled to hire people over the statutory age limit.
Yes, England was the first country to recognize organized labour. She showed respect for the freedom of workers and for their labour. I do not think we have in Canada a forced labour system which compels a worker to accept a job, or to work for a disciplinary purpose or otherwise. To my mind, this convention passed by the international labour organization is all to the credit of civilized populations; it shows at the same time that they have respect for the worker's freedom, for his work and that he is allowed to earn a living under decent conditions.
(Text):


Hazen Robert Argue: Mr. Speaker, we in the C.C.F. group are quite pleased that the government has introduced this resolution, and we shall certainly lend it our full support. As the minister has said in introducing the resolution, a number of countries have already approved it. Canada's approval is approval of the principle that forced labour should not exist. As the minister has said, in the terms of the resolution there is no forced labour in Canada and therefore there is no need for legislation. We are not abolishing forced labour because it does not exist in this country. In other words, the government is making a very proper gesture by approving of this convention and is showing its support for the abolition of forced labour wherever that might exist.
I think the government's position so far as the rights of labour are concerned would be greatly strengthened if the government would take action to restore the rights of
3800	HOUSE OF
International Labour Conference labour that have recently been interfered with in this country. It is quite easy for the government to introduce a resolution which, in the words of the minister himself, has no practical significance in Canada because there is no forced labour here, and therefore nothing will happen in Canada subsequent to the passage of this motion. But Canada's position in the councils of the world would be greatly strengthened if we showed, as a parliament or as a government, that we believed in labour having its full rights in all parts of this country.
In addition to the abolition of any infringement that now exists so far as the rights of labour are concerned, the government would also greatly strengthen its own position if we had in this country an amendment to the Canadian constitution that would make it impossible for any government or any organization to interfere with basic human rights and fundamental freedom. If this were the case, then of course Canada's position would be unassailable. However, until the government takes this additional action which is necessary in connection with Canadian human rights and fundamental freedom, and to restore the basic rights of Canadian labour that have been abrogated then, of course, the position of this government will not be completely sound in the eyes of the rest of the world.


Hon. L. B. Pearson (Leader of the Opposition):: I have only a word or two to say about this international labour office convention which is number 105 in a long series of conventions which have emanated from that international organization and which have made their contribution to the betterment of labour conditions throughout the world. Indeed, I recall that Canada has ratified a great many of these conventions in the past. On one occasion the government of the day, under Mr. Bennett, thought that these conventions might be used for the passage of social security legislation in this country without reference to the provinces.
This fact persuades me to ask the minister a question in regard to this convention, the purpose of which we are heartily in accord. In asking the minister this question,
I realize that this convention imposes no legislative responsibility, as I understand it, on Canada because as the hon. member for Assiniboia (Mr. Argue) has just said, none of the obligations in this convention has to be undertaken by us in the sense that the offences covered in the convention do not exist in this country. Nevertheless, the subject matter of this convention is one which, under our construction, falls within the jurisdiction of the provinces. I would ask the


minister, therefore, whether this convention has been considered by or referred to the provinces for their consideration or for any comments they might wish to make concerning it, even though as I understand it no obligation to implement this convention is involved?
I should like also, if I may, to ask the minister-because I have not the information myself-whether, and if so how many, the communist states accepted this convention, and how many middle east Arab states and African states accepted this convention? The minister said when he was introducing the resolution that it had been accepted unanimously at the international labour organization conference called for the purpose of drawing up this convention. This might mean, of course, merely that no country voted against the convention but there might have been a long list of abstentions. Perhaps the minister could give us that information. Article 1 of this convention reads:
Each member of the International Labour Organization-
That includes the Soviet union and other countries now.
-which ratifies this convention undertakes to suppress and not to make use of any form of forced or compulsory labour-
(a)	as a means of political coercion or education or as a punishment for holding or expressing political views or views ideologically opposed to the established political, social or economic system:
(b)	as a method of mobilizing and using labour for purposes of economic development;
(c)	as a means of labour discipline;
(d)	as a punishment for having participated in strikes;
(e)	as a means of racial, social, national or religious discrimination.
In view of the social and economic organization of several communist states, and the attitude taken in those states towards free labour, it would be interesting indeed to know whether any communist state has accepted article 1 of this convention or indeed whether it has ratified it. I think the minister said in his opening statement that Poland had ratified the convention.
It would be interesting also to know whether states have accepted and ratified this convention whose labour legislation is so reactionary-and I think of one or two who used to talk about human rights and fundamental freedoms at the United Nations-and whose labour legislation is so reactionary that it is not an exaggeration to say that slavery is recognized in those states. However, that does not detract, Mr. Speaker, from the value of a convention of this kind. The fact that some states could not, without a change in social and economic organization, sincerely accept and carry out a convention of this kind is

no argument that the provisions of this convention should not be embodied in the law elsewhere so far as that is possible. We do, therefore, support the convention as an indication of the direction in which all countries should be moving, namely the abolition of anything that might approach forced labour.
I recall that when this subject used to be discussed, and it was discussed at every United Nations assembly, there was always an attack made by communist members of the United Nations against forced labour in what they called the colonial territories. These were supposed to be the places where forced labour provisions were most used. It was interesting and a little disillusioning to realize that some of the members who used to make the strongest attacks on forced labour in colonial territories under the guise of protecting human rights and fundamental freedoms were those states who had provisions in their own constitutions and who operated their own social and economic organizations in such a way [DOT]that free labour, in our sense of the word, was not possible.
Nevertheless, as I have said, this convention perhaps will help in the movement toward the abolition of forced labour or anything approaching forced labour in any country. At least it is an ideal, and to put the ideal on paper in this way as an International Labour [DOT]Office convention might do some good in those countries where it is most required, some of which I have ventured to mention.


Mr. Frank Howard (Skeena):: Mr. Speaker, like other hon. members so far I just have a few brief comments to make about the resolution now before us. As the minister indicated, it does not apply in so far as Canada is concerned, and I, and I am sure every other hon. member in the house and citizen in the country, hope we never see the day when such a convention will have to be made applicable to Canada and steps taken to abolish forced labour.
Like the Leader of the Opposition (Mr. Pearson), who naturally has a rather detailed and considerable appreciation of conditions concerning forced labour which exist in other countries in the world, we too abhor very much the attitude and the approach to this retaliatory method of forcing people into certain types of labour because of political or religious beliefs. That has taken place in the Soviet union, and more recently on the mainland of China. Even though this convention does not apply to Canada, we may assist in promoting and setting an example to other countries of the world to follow our lead and allow to the fullest extent possible freedom as we know and understand it. I think that example could not only be
International Labour Conference set for the so-called communist countries but for other countries which are under colonial rule. That situation is changing gradually and I hope will be completely eliminated as the next few years pass by.
As has been indicated, I think the minister could have shown Canada to be much more concerned with the freedom and rights of individuals if he had been able to introduce into the house a motion concerning the en-dorsation or ratification of other I.L.O. conventions, and I have one in particular in mind about which I asked the minister a question some time ago. If we were to endorse and ratify I.L.O. conventions which would be applicable to Canada, and which if they were enforced would have the effect of deterring the actions of one province in particular in removing rights and freedoms of individuals, we would be doing something more concrete so far as Canada is concerned and not just in effect tagging along with other nations and agreeing with them on the ratification of a principle of this nature when, as I say, it does not apply to Canada. How much more acceptable it would have been if the minister had been able to suggest that we endorse or ratify I.L.O. convention No. 87 which deals with the freedom of association and protection of the right to organize, part of which says that workers' organizations-


Mr. Speaker:: Order. I do not suppose that the hon. member who has the floor contends that the convention which is to be ratified today extends to the subject matter he is now proposing to discuss. Unless he does I would appreciate it if he would confine himself to the subject matter under consideration. I did allow the hon. member for Assiniboia (Mr. Argue) to follow that line a little, but I would not like it to be pursued.


Frank Howard: All I was trying to do, Mr. Speaker, was to get as far along the road as my hon. friend from Assiniboia (Mr. Argue), and perhaps maybe a little bit further, but perhaps I have made my point. I merely say that this is acceptable-


Mr. Speaker:: I did ask the hon. member to drop that point.


Frank Howard: Yes, Mr. Speaker. I accept the endorsation of this particular resolution before us, and may I express our regret that the minister has not seen fit to go on and deal with other matters as well.


Mr. Speaker:: Is the house ready for the question?


Lester Bowles Pearson: There were some questions asked, Mr. Speaker.

International Labour Conference


Michael Starr: An hon. member wishes to speak before I answer.


Chesley William Carter: Mr. Speaker, it seems to me that supporting a convention or supporting the abolition of forced labour is almost akin to declaring oneself against sin. It is a sad reflection on the state of our 20th century civilization upon which we pride ourselves so much that such conventions are even necessary.
The purpose of this convention, as with previous conventions, is to spotlight public opinion on this problem of forced labour and to mobilize forces which will tend to eliminate it. This convention which is referred to in the resolution replaces a former one which I think came into existence around 1930. I believe soviet Russia was a signatory to that 1930 convention. One therefore cannot help but wonder what is going to be accomplished by merely declaring ourselves in support of a resolution when countries who are signatories do not even begin to take the matter seriously.
This problem of forced labour is perhaps a bigger one today than it was a generation ago or even two generations ago. We have now forced labour on a massive scale in Red China as a distinct part of government economic policy. We know that forced labour has always existed in Siberia and Russia, and those conditions exist today. If we are going to support a resolution of this kind, surely we should look into it a little further and try to And out exactly what it is we are supporting.
The minister read out different categories of forced labour. There is forced labour for political purposes; forced labour for economic purposes; forced labour for disciplinary or corrective action; and in many countries these are embodied in laws which exist on their own statute books. I think we should ask ourselves where we draw the line in these categories. Does this convention repudiate all forms of forced labour, or does it just repudiate the categories mentioned by the minister? Certainly if we are going to endorse the principle in this debate, as we are by supporting this resolution, we are declaring ourselves against all forms of forced labour which militates against the concept of human rights and the degradation of human beings. Unlike my hon. friends from Assiniboia (Mr. Argue) and Skeena (Mr. Howard), I do not see this as a matter of the rights of organized labour; I think it is a matter of human rights.
As far as labour is concerned, I think it is necessary to distinguish between labour that is forced and labour that is not forced. When whole villages are uprooted and mass transportations to other parts of the world are ordered, we know that that is something to


be condemned. We know, also, that when people are herded together in concentration camps, no matter whether for political purposes or corrective action, that is something which we condemn. We cannot say that all labour is bad, because in the case of prisoners of war a certain amount of labour is both necessary and a good thing. What we are concerned with is where to draw the line. I think we are more concerned with the treatment that these men receive. We heard from the Hong Kong veterans in the committee on veterans affairs some while ago, and they told us how they had been subjected to long hours of labour and to physical strains quite beyond human capacity, while living on insufficient food in conditions which provided inadequate shelter, and subject to a complete lack of sanitation and medical care. They told us that the pay which they should have received by international convention for the kind of work they were doing was either given them in worthless money or stolen from them.
We know that these evils against which we declare ourselves cannot be corrected by education alone, though education is certainly a part of the process. If we intend to support the principle of this resolution and then forget about it I do not think we can be regarded as acting in a sincere way. Surely we can do more than that. If we accept this resolution we are imposing upon ourselves an obligation to seize every opportunity to mobilize public opinion against these evils. If we intend to make an effort in this direction we must recognize that these evils are mainly the result of a materialist ideology, an ideology which has been embraced by a large section of the world's population. If we are to do anything about it, we in the west must ourselves develop a superior ideology which will bring about changes in men's hearts from which all these evils flow.


Michael Starr: The Leader of the Opposition (Mr. Pearson) asked two questions of which I made a note. One was whether we had ascertained the opinions of the provinces. I must say that we did not contact the provinces, but I am quite satisfied that there is no provincial legislation in this field.


Paul Joseph James Martin: I know the point which the Leader of the Opposition had in mind, and since he is not in the house now, may I point out that under the constitution of Canada certain powers are reserved to the provinces and certain powers, as the minister knows, are reserved to the federal government. This gives rise to a difficulty with respect to conventions of this nature which is shared by other federations, such as the United States, but not by unitary states

such as Great Britain, Belgium and France. When the hon. gentleman says he has not consulted the provinces, does he not think- and I say this without in any way abridging our desire to ratify this worthy convention- that we should take into account the powers of the provinces as has been done, I am sure, in the past in the case of all these conventions. When the minister says he has not consulted with them, I am rather surprised.


Michael Starr: There is no need to be surprised, because I have consulted the Department of Justice in order to satisfy myself on this very point. Since the provinces have no legislation of this nature, the federal government is taking no action which might deprive them of anything they have at the present time.


Paul Joseph James Martin: No, but they have the power to pass legislation.


Michael Starr: I think that is a matter which could be dealt with when the time arrives. This is only the ratification of an I.L.O. convention. I realize that only conventions have been ratified in the past-conventions passed by the I.L.O.-and failure to ratify in some cases was due to the fact that there was existing legislation in some of the provinces. In this case, there is none.
Of the 18 countries which have ratified this forced labour convention I can only think of one which is a communist country to my knowledge, and that is Poland.


An hon. Member:: How many communist countries signed it?


Michael Starr: I am sorry, but I do not have that information.


Paul Joseph James Martin: I do not want to hold this up, but would the minister on another occasion let us have a list of the conventions involving powers of the provinces in connection with suggested ratification of I.L.O. conventions and with regard to which the provinces were not consulted? I am sure the minister will find that this is the first occasion when their views were not sought.


Michael Starr: If the hon. member for Essex East would like to have this information, and if he will place his question on the order paper, I will be glad to provide it for him.


[Stage Direction]
Motion agreed to.

Donald Methuen Fleming: the second reading of Bill No. C-47, to amend the Excise Tax Act.


Paul Joseph James Martin: Before this measure is further dealt with, I should like briefly to speak on a matter which, I regret,
Excise Tax Act
is not included in this bill, and that is the provision of relief, as the government promised, to the automobile industry regarding the Excise Tax Act, which in 1957 it felt was needlessly burdensome and calculated to increase the amount of unemployment in the automobile industry.


Donald Methuen Fleming: I think I must rise at once on a point of order, Mr. Speaker. The hon. member for Essex East has indicated he is about to speak on a subject which is completely outside the scope of this bill. There is nothing in this bill which has any bearing on the special excise tax on automobiles. This is simply a bill to amend the Excise Tax Act. We are not on the resolution stage of our discussions, and we are faced with the well-established rule that only those matters which are relevant and which are included in the scope of this amending bill can be the subject of debate.


Paul Joseph James Martin: On the point of order, may I say that the Minister of Finance is again usurping functions which belong, by decision of this house, to you, Mr. Speaker. We are debating the principle of the bill and I am complaining about the fact that this bill does not include relief by way of substantial reduction or elimination of the excise tax on automobiles. There can be no doubt that I am perfectly in order in saying that this bill is deficient in that it does not make provision of a kind which, I am submitting to the house at the present time, it should. I take it that Your Honour agrees with me in recognizing this elementary principle of debate.


Mr. Speaker:: I recall that in an earlier parliament a very similar situation arose as a result of an amendment which was accepted as an amendment declaring a contrary principle to the bill.


Paul Joseph James Martin: Last session.


Mr. Speaker:: Yes, last session. It might be possible that the same situation would arise again but generally speaking the matter before the house is the substance of the bill itself and although to my mind it is quite relevant to indicate the deficiencies of the bill I would think it would create very considerable problems for the house if hon. members were to be free to debate at length the various deficiencies which could be ascribed to any tax bill which covers as broad a tax field as the excise tax.
For example, one might raise discussion of 50 or 100 excise taxes which exist and are not covered by this bill. It does not seem to me that the practice of the house would

Excise Tax Act
extend that far. I am not sure how far the hon. member wants to go in this matter but I would think that it would be in order to call attention in a general way to the deficiencies of the bill without getting into an extensive debate on any particular item that is left out unless it could be asserted as it was last year as a contrary principle to the bill. The peculiar circumstances of that case might not pertain today. I do not know if that assists the hon. member or not, but he may proceed.


Paul Joseph James Martin: Your Honour has helped me up to a point but I would be inclined to say that Your Honour has not been as liberal in interpretation as I would think the situation warrants. I would have thought that under this bill any hon. member, no matter how time-consuming, would be allowed to rise and say that this bill was deficient because it does not provide for something which an hon. member felt it should provide. I think that is essential to the right of debate on the principle of the bill at this particular stage of our proceedings. If such intervention can be regularized by way of amendment as it was last year, perforce it could be done by way of a declaration or criticism such as the one I am now about to make to the minister.
Since Your Honour has recognized my right I shall briefly state my position as I tried to do on two other occasions, as the Minister of Finance will recall when we were entering into a discussion of the items that go to make up automobiles and at which time my hon. friend took strong exception to my right to do so. He objected to my discussing this particular matter then, as he does now.
I acceded to his request and am now taking the only course open in this session to put before the minister, other than in the form of interrogation, my complaint which is this. This government promised in my own city and in other communities in Canada that there would be at least a substantial elimination of the excise tax on automobiles. The Prime Minister said that because of the situation then confronting the country in terms of unemployment he would see to it that the tax would be eliminated or at least substantially removed.


Mr. Benidickson:: He called it a scandalous tax.


Paul Joseph James Martin: 
Donald Methuen Fleming: Two and one-half per cent.


Paul Joseph James Martin: The minister reduced it by 2J per cent after it was generally thought that the government was about to make a substantial reduction in the tax or eliminate it altogether.
The situation is this. The automobile industry has been confronted with very serious unemployment for some 18 months now. While this problem will not be completely relieved by any further substantial reduction in the excise tax, it would be greatly assisted. This would be an encouragement to many people who are now reluctant to purchase automobiles to do so. The automobile companies have been requesting this as indeed has the hon. member for Essex West (Mr. Spencer) who sits behind my hon. friend the Minister of Finance.
We are now discussing in Canada the manufacture of small cars. I note, by the way, that the Minister of Finance has not participated in those discussions. It would seem to me to have been very useful in respect of this particular problem if the Minister of Finance had arranged to be present to have discussions when the heads of these companies met the Prime Minister, one of them today and the three others last Saturday. I ask the Minister of Finance now if he does not think as a means of relieving the serious unemployment problem the elimination of this tax at this time would be very helpful as a contribution in that direction?
If my hon. friend the minister replies he will likely say that when hon. gentlemen opposite came into power the tax was 10 per cent. It is true that the excise tax had been 25 per cent at one time and it was subsequently reduced from 25 per cent to 15 per cent and then to 10 per cent. The head of the previous government in an important statement indicated that if it became evident to the government that the excise tax was a serious obstacle to reducing unemployment his government would not hesitate to take the step which such a situation warranted. That situation now confronts us and indeed it confronted us last year.
As a member of parliament from one of the constituencies heavily involved in this particular problem, a problem that affects thousands of people in an extremely serious way, I would ask the Minister of Finance as one of his last acts in the Department of Finance to accede to this request on the part of one of his dear friends who speaks on behalf of thousands of men who want

me to bring home to the minister at this time their serious plight. The Minister of Finance may shortly have the opportunity of doing something about peace; he now has the opportunity of doing something about giving men employment.


John Whitney Pickersgill: Mr. Speaker, as a native of Norfolk county, I want to reiterate my objection to this bill on the ground that it does the exact opposite of what was promised by the Prime Minister (Mr. Diefenbaker) in the election campaign, even in the second election which the Minister of Finance (Mr. Fleming) still recognizes as having some validity, although he says the promises in the first campaign were all wiped out.


Donald Methuen Fleming: All carried out.


John Whitney Pickersgill: Carried out? As the hon. member for Essex East (Mr. Martin) has pointed out, they were carried out the back door. I should just like to recall to hon. members' minds, in case they have forgotten them since the last time this matter was discussed, some of the promises made by the Prime Minister.
The Prime Minister made a very specific reference to the tobacco tax at Brantford on February 18, 1958, as reported in a Canadian Press release carried in the Ottawa Journal of that date. The reference is in these words:
He also promised a review of taxes on tobacco, which he described as the heaviest on any industry in Canada.
I also have here a report from a reputable and indeed excellent newspaper, the Windsor Star, which after referring to the price of cigarettes and the tax, quotes the Prime Minister directly as having said:
We are having this whole question looked into. A study is being made to ascertain what action should be taken to give the tobacco farmer a fair and reasonable return.
The hon. member for Norfolk (Mr. Knowles) speaking in the early election, it is true, but presumably he was still of the same mind in the second election, as reported in the newspaper of his own county the Simcoe Reformer of June 5, 1957, had this to say:
The promises of John Diefenbaker and the Conservative party are not those from an old hat but have been brought up in the parliament time and time again so I say it is time for a change for the benefit of Norfolk and Canada.
That is a direct quotation attributed to the present hon. member for Norfolk. We have had the change for the benefit of Norfolk and the rest of western Ontario and of Canada to which he referred and in addition to the failure to do anything about the motor car tax, to which my friend the hon. member for Essex East referred, we have had this action
Excise Tax Act
on the tobacco tax which was the exact opposite of what was promised and which I think will not be forgotten in western Ontario.


William Moore Benidickson: Mr. Speaker, I am rather surprised that members of the large government party are not rising at this time to take advantage of the opportunity, on second reading of this bill, to speak as they did on previous occasions when they were sitting on this side of the house. I agree with your ruling that one would not want to go into any particular omission in an exhaustive way with respect to this bill; but, on the other hand, I simply want to remind this house, and particularly new members of the house, that in past debates when another government was in office, at this stage of the debate we heard from the hon. member for Peel (Mr. Pallett) and we heard from the present Minister of Finance (Mr. Fleming) about the excise tax on automobiles; we heard from the member for Peterborough (Mr. Fraser) about the excise tax on clocks and watches; we heard from a former member of the Bennett government, the hon. member for Dufferin-Simcoe (Mr. Rowe) with respect to the desirability of having no taxes on the purchases by municipalities in the automobile field. We always heard from the Prime Minister (Mr. Diefenbaker) and from the Minister of Finance with respect to the elimination of taxes on what they called the necessities of life and they referred to boots and shoes, clothing and the like. None of these things was either in the legislation that was proposed in 1957 and 1958, or that which is proposed now. We heard from many members who showed no indication of rising at this time with respect to some other matters that are not referred to in the bill we have before us. I think of the hon. member for Lambton West (Mr. Murphy) who referred to municipal purchases. I think of the Minister of Finance who has forgotten some of his views in the past with respect to municipal purchases.
We, of course, always expected on this particular bill to have a very informative and helpful speech from the Minister of Labour (Mr. Starr) with respect to the automobile industry. That has not been forthcoming. I think, too, of the lack of any interest on the part of those in the majority party today because seemingly they do not want to rise to say anything in this debate. I think of what they said in the past with respect to the elimination of sales tax obligations for welfare associations. Nothing has been said today by any of those people in that respect. I think particularly of the hon. member for Oxford (Mr. Nesbitt) who used to make

Excise Tax Act
speeches when he was in opposition about this. I wonder whether he has been making representations to the Minister of Finance and, if so, why they have not been successful?
I think, too, about the over-all rate. The Minister of Veterans Affairs (Mr. Brooks) in past years repeatedly used to assert that the actual percentage rate was unconscionable and should be reduced. I could refer to some speeches of this nature that he made in the past. But, Mr. Speaker, we are not hearing them today and indeed there was no attempt on anybody's part from the government party to rise to say anything on any of these matters that formerly seemed to be of concern to them.
I am not going to amplify what was said about the tobacco tax by the hon. member for Bonavista-Twillingate (Mr. Pickersgill), but we know that there was no bailiwick in Canada from coast to coast where there was an economic problem too insignificant for the Prime Minister to make pronouncements about in the elections of 1957 and 1958 and, as has been referred to, he was particularly vocal when near Norfolk county and speaking in Brantford on this particular subject.
This is the third stage of discussion of changes in our tax system as announced in the budget. Therefore, I do not want to over-emphasize some of those points. I have spoken upon some of them in the past, but I do want to say as briefly as I possibly can that the legislation we are now dealing with, which is one bill out of five resulting from the budget proposals, does in the words of taxpayers represent chickens coming home to roost kind of legislation. It spells out very well the kind of thing that I want to convey to this house. Somebody else has said that with respect to two election campaigns, after the ball is over, why, of course, now we are seeing in tax proposals many hearts broken. That, I think, is very much exemplified in this one of five bills that have been presented to us, all of which involve additional imposts on the Canadian taxpayers. We are dealing now with sales tax on municipal purchases, or the absence of any benefit for them. One of the ironical things that I think most of us noted was that even though all of the Canadian municipalities through their nationl organization called upon this government, we found that no relief was granted when the budget was announced, notwithstanding the many suggestions that had been made in the past by members of the present administration, as I have illustrated.
It is true that in this particular bill the consumer tax is not impressively raised. It was most impressively raised as a result of using the Excise Tax Act statute as a basis

for the over-all 1 per cent increase and the amendment to the Old Age Security Act. I am not going to refer to that except to say that that was a very large increase in taxation upon the Canadian people. The Minister of Finance and I had something in the nature of a difference during the budget debate on this particular point and I said that taxes- and I had reference to corporation taxes- that were likely to be passed on to consumers were a very substantial portion of the overall $352 million annual increase proposed in this budget. The minister said, "Only a quarter".


Donald Methuen Fleming: What page
number?


William Moore Benidickson: I am referring to page 2613 of Hansard. Well, quite irrespective of the extra imposts on corporations which I believe will be passed on to consumers- and in this respect I often find that our friends in the C.C.F. group seem to applaud increases in corporation taxes as a very worthy method of raising funds-I find that in 1953 the then leader of the C.C.F. group, Mr. Coldwell, in a debate with the then minister of finance, Mr. Abbott, admitted that corporations, for the most part, passed on those extra taxes to the consuming public of Canada.


Frank Howard: That is not an admission. It is a straight fact.


William Moore Benidickson: I am saying it is a fact.


Mr. Speaker:: Order. Is the hon. member not rather getting back into the realm of the budget debate when he talks about corporation taxation?


William Moore Benidickson: Mr. Speaker, I do not want to be over-lengthy at this particular stage of the debate in view of the fact that this is the third time we have discussed some of these elements. However, I did say in the past that greatly enlarged costs would be imposed on the consuming public as a result of the amendments to the Excise Tax Act and as a result of the passing on of the increases in the Income Tax Act, and I think this has borne fruit. Many more millions of dollars than this parliament is obliged to raise for fiscal purposes are being extracted from the Canadian people as a result of price increases that were, as I said before, triggered off by the budget.
When the minister is discussing the amendments to the act I hope he will bring the house up to date, as he himself in the past asked the then minister to do, with respect to the over-all revision of the particular statute which we are amending in a very

minor way today. I remind the house that in 1955 the Canadian tax foundation prepared a very worth-while brief with respect to the application of this tax to the Canadian people. After receiving their recommendation the then government acted very promptly and as a result a special sales tax committee was established. Some inquiries were made about this matter in the estimates committee but we were told frequently there that changes of substance depend upon the recommendation of the Minister of Finance. I wonder to what extent the minister is moving along with respect to amending the basic features of the act referred to not only in the sales tax committee report but in the recommendations of the Canadian tax foundation. I hope the minister will say something about that before the debate concludes.


Mr. Hubert Badanai (Fort William):: Mr. Speaker, since Your Honour has ruled out discussion of the excise tax on motor cars-


Paul Joseph James Martin: Oh, no.


Hubert Badanai: -I will confine myself to saying a few words first in support of submissions made to the government by the confectionery industry and the toilet goods manufacturers. We all realize, of course, that taxes in some form, while not desirable, are necessary. But there are items on which taxes represent clear discrimination, especially when they affect food. I have in mind the 11 per cent sales tax on chocolate products as an example. This tax also applies to biscuits if they are coated with chocolate. In the submission made by the chocolate and cocoa industry of Canada it is pointed out that the imposition of a tax on chocolate and confectionery items is a flagrant form of discrimination.
Confectionery items are in direct competition with bakery and ice cream products which are tax free, as are also the ingredients of these basic foods. I say that when a chocolate bar, which delights the spirit of a child, is taxed and caviar enjoys exemption from tax-caviar, if you please, a delicacy indulged in only by people who can really afford to pay taxes-it is not only discrimination but it is an absurd paradox which should be corrected without delay. On page three of their submission to the Minister of Finance (Mr. Fleming)-


Mr. Speaker:: Order. May I say to the hon. member for Fort William that, although I have considered it relevant and have permitted members to indicate the shortcomings of this bill in general terms, what he is saying now would have been perfectly relevant in the debate on the budget where he could go into the particulars and amount of another 66968-9-241
Excise Tax Act
kind of excise tax enactment. If a debate of that kind were to be allowed on a bill of as narrow a scope as this, the house would never, within its rules, be able to conclude if members did not wish to conclude. I would consider that references to the deficiencies of the bill would be appropriate by way of illustration but if the hon. member wishes to repeat the budget debate it seems to me he is going beyond the limits.


Hubert Badanai: Then I shall only quote a paragraph or two from the submission made by the chocolate and confectionery industry.


Mr. Speaker:: Is that not exactly the point concerning which I took the liberty of interrupting the hon. member? I rather hoped that he agreed with me in what I said.


Paul Joseph James Martin: Mr. Speaker, I am a little disturbed about your ruling particularly in the light of what I, as one of the longer term members of the house, know has been the practice over the years. As the hon. member for Kenora-Rainy River (Mr. Benidickson) has just pointed out, the Minister of Finance (Mr. Fleming) used to indulge in this sort of thing at every juncture and particularly at this particular phase of the discussion of the bill.


Donald Methuen Fleming: You cannot back that up by reference to the record.


Paul Joseph James Martin: Well, the hon.
member for Kenora-Rainy River has just done so.


Donald Methuen Fleming: He was quite
wrong.


Paul Joseph James Martin: I say with great respect, Mr. Speaker, that the view Your Honour has expressed is not in conformity with the practice of this house. This is the second reading of a bill and the reason why we have these various stages is so that hon. members will be given the opportunity of stating their position with regard to problems and even repeating their position. That is one of the purposes behind second reading and, particularly in the case of a new member. Having in mind the character of what he has said so far, it seems to me that it would not be interpreting the rules of debate properly to restrict him in the way that Your Honour seems to suggest.


Mr. Speaker:: I shall have a look at previous debates on the second reading of amending taxation bills and see how far the house has permitted discussion to go. I am sure the hon. member for Essex East does not advocate repetition of the budget debate on the bill at this time.


Paul Joseph James Martin: Of course not.

Private Bills


Mr. Speaker:: It is very difficult to draw the line and I find a great deal of difficulty in doing so. I see that the hour of five o'clock has arrived. I shall give some thought to this matter before we resume the debate at eight o'clock.
It being five o'clock the house will now proceed to the consideration of private and public bills, the former having precedence, pursuant to section 3 of standing order 15.



PRIVATE BILLS

Mr. Speaker:: The Clerk calls my attention to the fact that there are a great many bills standing for consideration in committee of the whole. Is it the pleasure of the house that all private bills standing for consideration in committee of the whole be taken in one motion?


Some hon. Members:: Agreed.



THE CANADIAN LEGION OF THE BRITISH EMPIRE SERVICE LEAGUE

[Stage Direction]
The house in committee on Bill No. S-19, respecting the Canadian Legion of the British Empire Service League-Mr. Macdonald (Kings)-Mr. Rea in the chair.
On the clause 1-Change of name.
Mr. Macdonald (Kings):: Mr. Chairman, before this clause carries, I think it might be well if I were to make a few remarks concerning this bill. The Canadian Legion was first organized under the Companies Act by a charter granted by the secretary of state on July 17, 1926. It is rather interesting to note that the present amendments have been submitted to the parliamentary counsel, Dr. Maurice Ollivier, Q.C., who in 1926 drafted the original charter. It was the successor to the great war veterans' association and other original ex-servicemen's bodies which were formed after world war I. The latter half of the title includes the name of the parent organization to which the Canadian Legion belongs, even though it is practically an autonomous body in Canada.
There was no change in the original charter until May 14, 1948, when the Legion was incorporated by a private act of parliament, being chapter 84 of the statutes of Canada. The official title of the Legion remained unchanged, but the various provisions necessary for the proper functioning of the organization as a large nation-wide body, which it had become after the heavy influx of veterans from world war II, were spelled out. This legislation brought it in line with bodies of similar size scope functioning on a dominion-wide basis.

In 1951 a few amendments were made to the act of incorporation, pertaining mostly to minor changes in the by-laws and restrictions on the use of legion insignia. Bill No. S-19 recommends several changes which are required at the present time but which do not change the original purpose or setup of the present organization.
Clause 1 merely changes the legal name of the Canadian Legion of the British Empire Service League to the Canadian Legion. It will be noted from the bill that this change of name does not "in any way impair, alter or affect the rights or liabilities of the legion." The principal reason for this request was the recent change in the name of the parent organization to the British Commonwealth Ex-Services League, and the possibility of another change at a future date. This would naturally be an upsetting factor and create again considerable confusion and expense, so it was decided to adopt the simple title of "The Canadian Legion".
Clause 2 makes identical and necessary alterations to accommodate the ladies auxiliary of the Legion by striking out the words "of the British Empire Service League" in paragraph (r) of section 4 of chapter 84 of the statutes of 1948.
The intention of clause 3 is to enlarge the objects of the Legion. A perusal of the present purposes and objects as given in the explanatory notes of the bill indicates that they are particularly related to the problems and welfare of the veteran and his dependents, perpetuation of the fallen, fostering loyalty and education in the principles of patriotism, duty and unstinted public service, as well as many other matters pertaining to veterans' affairs exclusively. In this field members of the Legion have done a magnificent job. Motivated by the same high purposes and spirit of unselfish sacrifice which prompted them to serve their country in time of emergency, they have carried on a great work of voluntary service on behalf of their fellow veterans all across the nation.
If I were to pay the proper tribute to the Legion, a great deal of time would be required, and I am sure that is not necessary. Members of this house, many of whom are veterans and active members of the Legion, as well as most of our Canadian people, daily witness the great work being carried out by its members. This organization enjoys the standing of being one of the largest and most respected groups in the country, and now numbers almost a quarter of a million members. It has been somewhat confined, however, in its activities and in the use of its name beyond the purposes outlined by the present act.

In order to participate officially and more widely in other affairs, it is requested that its objects be enlarged by adding to section 4 of chapter 84 of the statutes of 1948, the following paragraph (v):
(v) "To encourage, promote, engage in or support all forms of national, provincial, municipal or community service, or any charitable or philanthropic purpose."
Clause 4 would amend section 6 of chapter 84 of the statutes of 1948, as amended by chapter 86 of the statutes of 1951 (first session), and would provide for more flexibility in the internal operation and efficiency of the Legion. Conventions are held only every second year, and it can be readily realized that considerable business must be carried on by the executive council, which is the governing body between conventions. This clause provides for an extension of powers to the executive council from the dominion convention more in line with the 1948 statutes. It should be noted that there is ample safeguard for any action taken by the executive council, as such action must be placed before a subsequent convention and ratified or modified to remain effective, or it can be deleted if the convention so wishes.
Private Bills
necessary for the Canadian Legion to make corresponding changes in the name of the Canadian organization.
The membership of the Canadian Legion, of course, is formed from members of Her Majesty's services and auxiliary services who have served in a theatre of war and who have been honourably discharged. The primary objective of the Canadian Legion has always been to look after the welfare of veterans, their families and dependants. To this end they have raised funds and assisted veterans with advice, and in various ways according to the need. They have also assisted various governments with advice in connection with veterans' legislation. In this connection too they have always made a special point of looking after the burial of deceased veterans and seeing that they are buried with due ceremony and given a funeral service in which their wartime service is commemorated. The Legion has sponsored an annual poppy fund every year and the proceeds of this fund are devoted to the vetcraft industries which have afforded employment to a great many veterans who otherwise would not be able to make a living.
In closing, Mr. Chairman, probably I should point out to the committee that these changes have been requested by the Legion and were passed at its last dominion convention as recommended by the committee on constitution and laws of the Legion.


Chesley William Carter: Mr. Chairman, as the hon.
member for Kings (Mr. Macdonald) has just pointed out, this is a very simple bill which merely proposes to change the name of the Canadian Legion of the British Empire Service League and its related auxiliaries and to enlarge the scope of the activities of their organization.
The Canadian Legion, as everyone knows, is a patriotic, non-sectarian, non-political organization of Canadian service men and service women. Following world war I Canadian veterans banded themselves together into an organization which was known as the great war veterans' association. In 1925, following a visit from Earl Haig to Canada, it at once decided to change its name to the Canadian Legion, and as the hon. member has pointed out, this organization became incorporated under a dominion charter in 1926. The new organization then affiliated itself with the British legion and other similar organizations in various parts of the commonwealth which became known as the British Empire Service League. The British Empire Service League has recently changed its name, and that in turn has made it
66968-9-241J
One of the most important activities of the Canadian Legion during the last war and in the postwar period was the institution of the Canadian Legion educational service. This was a brave experiment in adult education in the armed forces which was eminently successful and which set the pattern which was followed by many countries after the war. The inauguration of this service enabled many veterans to improve their educational standing and even to acquire knowledge of a technical nature during their spare time in the armed services. I think that has paid great dividends to Canada in the development of our human resources, which after all are the most precious resources that any country possesses.
In addition to the welfare of the veterans, the second great objective of the Canadian Legion has been to keep alive the spirit of comradeship and to keep before the nation those traditions and ideals for which our comrades fought and died. We are now approaching a period where the business of looking after the welfare of veterans will perhaps diminish, because already in this session we have revised certain legislation providing benefits to veterans, and only today we passed a resolution concerning the Veterans' Land Act. So it is clear that in the future veterans' welfare will be very well taken care of, and the Legion's efforts in this respect will be confined mainly to those veterans who need assistance and who for some

Private Bills
reason or other are not eligible to receive assistance under the various acts of the veterans' charter.
As the role of welfare diminishes, the role of leadership in the nation will increase. We are living today in a world of ideological conflicts, and we see every day that our values are disappearing before our very eyes, the very values for which so many of our comrades fought and died. We all know that the first world war was fought to end all wars. The big slogan in those days was, "Might is Right". Our comrades fought and died because they believed that might was not right, but that slogan is widely accepted today in many parts of the world, and even in the United Nations we find big countries doing things just because of the sheer weight of their military might and we have to accept and tolerate it because we feel we cannot do much else about it.
One of the big contributions which I feel the Legion can give to this generation of Canadians and to succeeding generations is to revive the emphasis on the moral principles which inspired so many of our comrades and for which so many of them paid the supreme sacrifice. As the hon. member for Kings has pointed out, clause (c) of this bill will enlarge the scope of their community and national activities, and we welcome that. But I think that their main role in the future must be the role of moral leadership, and just as the Legion has been a tremendous force for good in the past so it can become an even greater force for good in the future.


Herbert Wilfred Herridge: Mr. Chairman, I listened with great interest to the explanation of the purpose of this bill given by the hon. member for Kings and his outline of the activities of the Legion and its history. I well remember joining the old great war veterans' association in 1919, and I am a charter member of the Canadian Legion. Naturally I have taken an active part in that organization since its formation and I am fully aware of the excellent work being done and which has been done for veterans and their dependants throughout the years. Since coming to this house I have been more particularly concerned with their representations before the veterans affairs committee.
I should also say that the Legion does keep alive the spirit of comradeship. When you have stood alongside a chap in the face of heavy fire in the field, it promotes a bond between you which is very difficult to dissolve; in fact, it rarely is dissolved, fortunately. The purpose of clause 1 is to change the name, to meet, I assume, changing constitutional circumstances within the commonwealth. I am going to be quite frank
IMr. Carter.]
and say I am very sorry to see that the name is to be Canadian Legion only. I cannot understand why it is not to be the Canadian Legion of the British Commonwealth Ex-servicemen's League, because I think the ex-servicemen's organization is one of the best cementing influences between the various countries of the commonwealth.
I am a firm believer in the value of the commonwealth in the world today, and in the major and continuing role it can play in world affairs.
I presume there is some valid reason for the omission at this time, but as a member of the Canadian Legion I say that I look forward in the near future to the introduction of another amending bill which will complete the name of the Canadian Legion by calling it the Canadian Legion of the British Commonwealth Ex-servicemen's League.
The second major change in this bill, as I see it, is to enlarge the objects of the Legion as outlined in section 3 which reads:
To encourage, promote, engage in or support all forms of national, provincial, municipal or community service, or any charitable or philanthropic purpose.
I think that this is, in fact, merely giving legal status to activities which have been going on in the Legion throughout the years. And why have these activities been in effect? The answer is this: because the membership of the Canadian Legion and its auxiliaries are people who have a sense of responsibility to Canada and to their communities, and on that account for many years past their activities have extended far beyond the primary objectives of the Legion, which are the welfare of veterans and the welfare of their dependants.
I know that our provincial command is engaged in a number of province-wide activities at the present time. One of them is devoted particularly to the welfare and guidance of youth. As far as our branches in Kootenay West are concerned-they are very active branches-donations-and they are not small donations in relation to the size of the branch in question-are made periodically to hospitals. Legion branches have also undertaken activities for the welfare of our aged citizens. They have assisted voluntary fire brigades in small and incorporated communities by undertaking financial drives; they have helped to develop local libraries; they have taken part in local celebrations; and they have interested themselves in the development of recreation grounds and the raising of money for the development of small parks which are of value to the district in which they are situated. They have also assisted in the building of curling rinks.

Quite recently the zone council of the Canadian Legion in Kootenay West has become very interested in promoting sports for young people on a district-wide basis as a valuable contribution to the welfare and development of our young citizens, and to this end in the very near future we are going to have the first Legion-sponsored sports in the West Kootenay district. The ladies' auxiliaries have also been singularly active. In most cases they have co-operated with the local Legion branches in efforts such as I have just described. All through the years, this kind of activity has gone on. There seems to be a greater activity in the smaller communities than in the larger towns, because there is not the same number of smaller organizations and less tendency for a person's activities and energies to be divided into so many diverse channels.
I say once again that in my opinion this part of the bill simply gives legal status to a situation which has existed in the Canadian Legion and its branches for many years. In conclusion, I wish to repeat that I trust the hon. member will soon introduce a further amending bill which will complete the name of the Canadian Legion as the Canadian Legion of the British Commonwealth Exservicemen's League, as one of the major organizations in the commonwealth today.


[Stage Direction]
Clause agreed to.
Clauses 2 to 4 inclusive agreed to.
Preamble agreed to.
Title agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
Bill SD-161, for the relief of Audrey Isabella Wanda Patterson Gray.-Mr. McCleave.
Bill SD-162, for the relief of Raymonde Gagnon Tremblay.-Mr. McCleave.
Bill SD-163, for the relief of Aline Brunette Farago.-Mr. McCleave.
Bill SD-164, for the relief of Martina Bernice Patterson Baker.-Mr. McCleave.
Bill SD-165, for the relief of Nelly Hugen-tobler Larsen.-Mr. McCleave.
Bill SD-166, for the relief of Jean Trachtenberg Levy.-Mr. McCleave.
Bill SD-167, for the relief of Louise Martel Abel.-Mr. McCleave.
Bill SD-168, for the relief of Marie Louise Fauteux Roy.-Mr. McCleave.
Bill SD-169, for the relief of Helen Lyon Bain Gardeler.-Mr. McCleave.
Bill SD-170, for the relief of Joan Brazer Brazier.-Mr. McCleave.
Private Bills-Divorce
Bill SD-171, for the relief of Marie Luise Ahnhudt Sandberg.-Mr. McCleave.
Bill SD-172, for the relief of Susan Gilda Levin Klein.-Mr. McCleave.
Bill SD-173, for the relief of James Alvin Bradley.-Mr. McCleave.
Bill SD-174, for the relief of Emily Mary Kredl Keller.-Mr. McCleave.
Bill SD-175, for the relief of Raymond Winston Farren.-Mr. McCleave.
Bill SD-176, for the relief of Marie Lucille Pauline St. Jacques Parent.-Mr. McCleave.
Bill SD-177, for the relief of Mario Baldo.- Mr. McCleave.
Bill SD-178, for the relief of Frank William Staples.-Mr. McCleave.
Bill SD-179, for the relief of Zdenek Nosek. -Mr. McCleave.
Bill SD-180, for the relief of Margaret Viola McCullough Morrow.-Mr. McCleave.
Bill SD-181, for the relief of Sheila Carole Neidik Schwartz.-Mr. McCleave.
Bill SD-182, for the relief of Gordon Clarence Hunting.-Mr. McCleave.
Bill SD-183, for the relief of Ida Shlafman Zimendstark.-Mr. McCleave.
Bill SD-184, for the relief of Audrey Elsie Asbury Ross.-Mr. McCleave.
Bill SD-185, for the relief of Patricia Anne McKenna Coombes.-Mr. McCleave.
Bill SD-186, for the relief of William Lawrence Hughes.-Mr. McCleave.
Bill SD-187, for the relief of Armand La-combe.-Mr. McCleave.
Bill SD-188, for the relief of Rita Steinbach Gruia.-Mr. McCleave.
Bill SD-189, for the relief of George Meredith Scott Burton.-Mr. McCleave.
Bill SD-190, for the relief of Helen Borer Marcovitch.-Mr. McCleave.
Bill SD-191, for the relief of Emilia Mildora Kavalas Chesna.-Mr. McCleave.
Bill SD-192, for the relief of Clarice-Mae Barraclough King.-Mr. McCleave.
Bill SD-193, for the relief of Margherita Elaina Milano Di Pietro.-Mr. McCleave.
Bill SD-194, for the relief of Lucille Gagne Labonte.-Mr. McCleave.
Bill SD-195, for the relief of Jean Louis Mathieu.-Mr. McCleave.
Bill SD-196, for the relief of Llui-Amoy Wheatley Fraser.-Mr. McCleave.
Bill SD-197, for the relief of Phyllis Pamela Allen Ashburner-Collins.-Mr. McCleave.
Bill SD-198, for the relief of Albert Reginald Bissonnette.-Mr. McCleave.
[Stage Direction]
Private Bills-Divorce
Bill SD-199, for the relief of Alexander Abraham Hendy.-Mr. McCleave.
Bill SD-200, for the relief of Winifred Martin Collier.-Mr. McCleave.
Bill SD-201, for the relief of Jeannine Aimie Alice Mercier Mahaut.-Mr. McCleave.
Bill SD-202, for the relief of Claude Desro-ches.-Mr. McCleave.
Bill SD-203, for the relief of Mildred May Eunice Charron Roblee.-Mr. McCleave.
Bill SD-204, for the relief of Pierre Joseph Gabriel Sorba.-Mr. McCleave.
Bill SD-205, for the relief of Gaston Vad-nais.-Mr. McCleave.
Bill SD-206, for the relief of Theodora Cornell Moore Martin.-Mr. McCleave.
Bill SD-207, for the relief of Rose Ange Lorange Gadoury.-Mr. McCleave.
Bill SD-208, for the relief of Brenda May Newbury Sherwood.-Mr. McCleave.
Bill SD-209, for the relief of Lillianne Reed Volchuk.-Mr. McCleave.
Bill SD-210, for the relief of Fernand Filiatrault.-Mr. McCleave.
Bill SD-211, for the relief of Elisa Gislena Maria Blankaerts Juneau.-Mr. McCleave.
Bill SD-212, for the relief of Louis Gustave Rey.-Mr. McCleave.
Bill SD-213, for the relief of Gertrude Mary Prosser Hortig.-Mr. McCleave.
Bill SD-214, for the relief of Mary Barbara Jex Light.-Mr. McCleave.
Bill SD-215, for the relief of Joan Elizabeth Healy Watson.-Mr. McCleave.
Bill SD-216, for the relief of Franz Prader. -Mr. McCleave.
Bill SD-217, for the relief of Emilienne Celestine Mallard Grossin.-Mr. McCleave.
Bill SD-218, for the relief of Gertrud Maria Meta Wauer Macovetsky.-Mr. McCleave.
Bill SD-219, for the relief of Mohammed Dijiro.-Mr. McCleave.
Bill SD-220, for the relief of Aurore Gi-guere Gourd.-Mr. McCleave.
Bill SD-221, for the relief of Lucinda Marguerite Vaughan Flood.-Mr. McCleave.
Bill SD-222, for the relief of Joan Purvey Fields.-Mr. McCleave.
Bill SD-223, for the relief of Patricia Elizabeth Tobias Garber.-Mr. McCleave.
Bill SD-224, for the relief of Marian Ida Rex Ross.-Mr. McCleave.
Bill SD-225, for the relief of Mary Ann David Arial.-Mr. McCleave.
Bill SD-226, for the relief of Marjorie Barbara Hawthorn Morrison.-Mr. McCleave.
Bill SD-227, for the relief of Sarah Friberg Lazare.-Mr. McCleave.
Bill SD-228, for the relief of Marie Adrienne Maryse Dagenais Garlick.-Mr. McCleave.
Bill SD-229, for the relief of Alexandre Pare.-Mr. McCleave.
Bill SD-230, for the relief of Norman Grover, otherwise known as Norman Bernard Grover.-Mr. McCleave.
Bill SD-231, for the relief of Marjorie Winifred Joyce White Young.-Mr. McCleave.
Bill SD-232, for the relief of Helga Fischer Dollard.-Mr. McCleave.
Bill SD-233, for the relief of Marguerite Louise Agathe Piche Chartrand.-Mr. McCleave.


Frank Howard: the second reading of Bill No. C-15 to amend the Indian Act.
He said: I have but few comments to make in speaking to the second reading of this particular bill. As the title indicates its purpose is to amend the Indian Act. Inasmuch as we have established a joint committee of the House of Commons and the Senate which will be holding its first meeting tomorrow morning it would seem appropriate that either the bill itself or the subject matter should be referred to that committee for consideration. However, if this course does not meet the wishes of the house I am sure that some of the members present would like to take this opportunity of expressing their views with regard to the particular amendments which are now proposed, and this in itself may be of some guidance to the joint committee on Indian affairs when it begins consideration of these particular sections of the Indian Act.
While the amendment itself relates to the question of income tax exemptions for Indians in certain circumstances its main purpose is to implement a proposal which I have made in three successive sessions regarding the right of native Indians to vote in federal elections.
Subsection (2) of section 86 of the Indian Act allows for one arrangement by which Indians may have the opportunity of voting in federal elections. It is my purpose to repeal this subsection so that an Indian desiring the right to vote would not have to sign away his statutory right to income tax exemption in respect of the use of reserve land. Perhaps I should read the pertinent portions of section 86. Section 86, subsection 1, reads in part:
Notwithstanding any other act of the parliament of Canada or any act of the legislature of a province,

but subject to subsection (2) and to section 82, the following property is exempt from taxation, namely,
(a)	the interest of an Indian or a band in reserve or surrendered lands, and
(b)	the personal property of an Indian or band situated on a reserve,-
The section then goes on to make reference to succession duty, inheritance tax, and so on.
An extensive study was given to the Indian Act by a committee of this house in 1951. When some hon. members of the present government were in opposition they clearly expressed their opinion as being that the subsection to which I have referred should be deleted from the act. The present Minister of Justice (Mr. Fulton) was a member of the committee in 1951 as was the hon. member for Brant-Haldimand (Mr. Charlton). The Prime Minister (Mr. Diefenbaker) and the Minister of Public Works (Mr. Green) also made comments about this section and expressed their desire to have it repealed or deleted. I am sure they are of the same opinion today and that they were not making a purely political speech expressing an attitude that may change depending on which side of the chamber one finds oneself occupying. I am convinced that the attitude they expressed in 1951 was sincere.
I submit that subsection (2) of section 86 applies to very few native Indian people. The great majority of Indians earn their livelihood from fishing, logging or other occupations not confined to the reserve. If an Indian earns his income from commercial fishing for instance, he is in the same position as any other fisherman and must pay tax on the income he receives. The same is true of logging or any other occupation. The exemption applies only to the use of reserve land or income received for its use. In order to have the right to vote an Indian must waive his right to that exemption.
The most significant point about this question is the psychological attitude of the Indian. An Indian does not like to sign away, give up, or have taken away any right he may have. It is not important to an Indian whether or not those rights are applicable in an individual case. An Indian looks upon the signing of the waiver form as an example of the white man asking him to give away some of his hereditary, aboriginal or treaty rights. We know that it is a statutory question having no relationship to treaty rights. This is a justifiable attitude based on the experience of Indians with white people over the years. It is immaterial to the Indian whether or not he will earn any money on the reserve and in all probability only a few would be affected by these provisions. The Indian considers it an attempt on the part of white men to take from him a part of his hereditary, aboriginal or treaty rights.
Indian Act
Indians are suspicious of the attitude of non-Indians with respect to their rights and this, I submit, is justifiable because we have a record of shameful exploitation of Indians, their resources and their rights. If we were to remove this section from the act the Indians would consider it an act of good faith on our part as non-Indians indicating that we do not want to interfere with their hereditary, aboriginal or treaty rights. It would indicate that we would want to go half way toward meeting him, and seek to achieve an understanding of his background, history and culture as we insist he understand and accept ours. This action in my opinion would be an act of good faith such as should have been demonstrated by our forefathers in their dealings with the native Indian people. These are the only remarks I have to make at this stage.


Mr. G. C. Fairfield (Porlage-Neepawa):: Mr. Speaker, as I understood the remarks of the hon. member for Skeena (Mr. Howard) this bill represents one step toward giving the franchise to the original inhabitants of Canada in that it will protect them from surrendering certain rights when they wish to vote in federal elections. In examining the speech made by the hon. member last year as reported at page 1009 of Hansard of June 10, 1958, I have reached the conclusion that the premise on which the hon. member seeks to obtain the vote for Indians is wrong. On that occasion the hon. member stated:
In my view this matter is important to the welfare of our Indian people. It would be a first step toward assisting them and our people to appreciate and understand each other's ideas and cultures to a greater degree than we have in the past.


Frank Howard: Can the hon. member tell us what was under consideration at that time?


George Clark Fairfield: At that time the house was discussing Bill No. C-8 to amend the Canada Elections Act which was moved by the hon. member for Skeena. The hon. member made a statement about the psychological attitude of the Indians. In my constituency I have two rather large reservations, and I have practised amongst them for many years and on other reservations as well. Having seen many Indians I can understand the psychological attitude. The Indian still has a very defensive attitude toward the white man. Any time that you give the Indians anything they begin to look for the joker or the nigger in the woodpile. In this instance I would like to know more fully than the hon. member has been able to explain to us what the general attitude of the Indian is toward this modification or amendment to give him the franchise in the future.

Indian Act
As he well knows, in Manitoba we enfranchised the Indians in 1954. Any observations that I have to make along this line will be personal, of course. I find that the Indian has not taken great advantage of that enfranchisement other than the fact that he may now enter the white man's pub. I feel that that is no advancement in so far as culture is concerned, at least. I find that he is not too impressed with the political field provincially.
In the past few months we have had practically a revolution in the Six Nations down near Brantford who would, I am sure, rather abdicate or secede from the dominion than accept any further kindnesses from the great white chief. I should like to say this. Since a committee is being set up, I would rather see this question gone into more fully, to have witnesses brought from all parts of Canada particularly, as the hon. member for Skeena has said, in view of this psychological attitude of the Indian.
No doubt in his own case he has known many Indians and has had some dealings with them. In my own case I do know it is very difficult to approach the Indian and to get his real feelings on anything about which you may want to deal with him or to treat him in a different way. He has this defensive attitude and I am sure that after deliberation in committee we shall have to be sure that they will understand exactly what we are giving them before we ever try to give them the vote federally. Too often, as he has said, in the past what we have given with our left hand we have taken away with our right. Therefore, rather than see this bill debated and voted on today, I would like to see it given a great deal more examination and a great deal more thought.


Mr. D. R. Gundlock (Lethbridge):: Mr. Speaker, may I say that I am heartily in agreement actually with the comments made by the hon. member for Skeena (Mr. Howard) for I, too, feel that the privilege of voting in federal elections particularly should be extended to the Indians who are, after all, our first Canadians. For too long the Indian population of Canada has been sheltered and protected as wards of the crown, until their desire to make decisions of their own has almost gone. However, with better educational facilities being provided for their children by the government and religious organizations and the resultant higher level of education being attained by each succeeding generation, our Indian populations in Canada have begun to wish to do their own thinking and to make their own decisions in more and more matters pertaining to themselves and to their affairs.

I would like also to put on record here the expression of my sincere appreciation for the work of the priests and the sisters of the Oblate Order in the education of the Indian children and people in my constituency more particularly. As is well known to hon. members, various provinces have in varying degrees in the past few years been extending to the Indians the privilege of full citizenship and in some of these provinces these Indians are allowed to vote in provincial elections. That is not so, however, in Alberta.
Most of the Indian problems are of a social nature. In the past they have been particularly educational problems. We as a government in Canada have a responsibility to the Indians in this matter. If I may, I should like to say to the hon. member for Skeena, as I did when I began my remarks, that I am in particular agreement with this problem. To me it is probably a little more serious than it is to him.	I think
there are many things that come before the problem of the franchise, particularly that of education. Indians have not only the problem of assimilating Canadian education but also the terrific problem, as the hon. member who spoke before me mentioned, of retaining their own particular Indian culture. This culture is not only valuable to themselves but it is a valuable addition to Canadian culture, and it is certainly one to be retained if for no other reason than a purely historical one.
In talking to members of the Blood band of Indians from Cardston, which is in my constituency-naturally it is the only one with which I am particularly familiar-I found that they almost unanimously endorse the thought of the franchise for Canadian Indians. But before you much more than commence to talk about the subject you are suddenly brought face to face with the many other problems that the Indians have, everything indeed from the liquor laws to the desperate attempt to retain their own culture.
I would like to submit to hon. members that in my humble opinion, and from my experience with the Blood band of Indians in Alberta, we must consider those other problems. In other words, first problems must come first. I can well imagine Indians being given the franchise. In fact, you might compare it to a young bird or a young child being turned loose in the world without being properly prepared to fend for itself. There are a few Indian people who I understand have attained Canadian citizenship on their own initiative. They have been enabled to do this by a sort of sponsorship. When I mention the word I mean simply this. It is very hard for an Indian person to go out into the everyday life of Canada and educate

himself to the point where he can convince the proper authorities that he is ready for full Canadian citizenship.
If I may, Mr. Speaker, I should like to dwell for a moment on the Blood Indians and their particular problems with respect to education. Certainly if we as members of the House of Commons are to enable them to continue or improve their education we must as well take a look at our own methods and standards. The Blood Indian reserve has a population of some 2,500 of our first citizens of the highest order and also, I might add, with problems of the first magnitude. The Indians on the Blood reserve are a very fine and proud people, particularly proud of one of their own who was appointed not long ago to the Senate. This appointment did a great deal for the Indians of Canada. It gave them a renewed interest in the government of Canada and a new zeal to become more useful, better informed and respected members of the Canadian family.
The Indians of the Blood reserve have many problems, as I mentioned before, and I should like to take a moment to point out some of the troubles of this band. I feel this is very closely integrated with the problem of citizenship. Incidentally, I do not mean to criticize our Canadian Indians in any way in this house. Rather, the criticism is of the Canadian government and when I say "Canadian government" I assure hon. members that I am speaking generally.
With these Indians, as with most of us, the chief social interest, of course, is the education of their young people and the need of increased facilities for improvement and refinement in the manner in which this is carried out. May I point out something that is now and has been for some time of great concern to our friends on the reservations in Canada, namely that educational standards are almost completely and entirely those of the white man, neglecting to consider the fact that these people on the reservations have a certain culture and way of life which it is very important to them to retain, and for us to enable them to do so would be most welcome.
Perhaps I might take a moment to refer to Canadian education, and I think this is relevant to the matter under debate. It would be desirable for Canada that a uniform standard of education prevail regardless of whether different regions are economically favoured, and certainly our reservations must be considered in this light. I would hope that educational opportunity for Canada's future citizens will soon be on an equal basis in all parts of the country. I would hope that before long the federal government would find a way to provide support and 66968-9-242
Indian Act
leadership throughout Canada for the purpose of establishing a basic standard of education in all provinces through some financial support and by providing leadership that will equalize every province's ability to provide this basic standard. Certainly this must carry down to the reservations to fill the great need of our Canadian Indians today.
The need for such assistance has been proven beyond doubt to all those in Canada at present interested in education by the very great percentage of high school students entering universities who are having so much trouble with reading, writing and arithmetic. There should be a way for the federal government to provide leadership to all Canadians to solve this national problem which is rapidly becoming one of great concern to the people of the nation for, as some have said, our very survival is at stake and the days of grace are few. Some have also said, and I can see no reason to question their judgment, that our very way of life cannot be expected to survive longer than a period of from 25 to 50 years unless important steps are soon taken to remedy this situation.


Mr. Speaker:: Order. I have not interrupted the hon. member up to this point because he related the question of education of Indians to their exercise of the franchise but it seems to me that education in general is a little remote from the bill.


Lionel Chevrier: Does Your Honour not think that there is another point of order involved as well?


Deane Roscoe Gundlock: If I may continue, Mr. Speaker, I have very little left to say. If the question of education must be confined to the Indians and not discussed generally, I rather hesitate to suggest something for the Indians of the nation that Canadians as a whole could not partake of, but in conclusion I should like to point out the basic need of the Indian which does pertain to obtaining full rights of citizenship in order to be able to vote in federal elections in particular.
There is one very important point having to do with local government. The Indians have had no training whatsoever in the municipal field which includes health and welfare, justice, education and all the other aspects of local government. I think it is most needed that the government give leadership to the Indians to help them to assimilate these things so that they will have become proper Canadian citizens by the time they are ready for the vote. May I call it six o'clock, Mr. Speaker?
At six o'clock the house took recess.

Excise Tax Act AFTER RECESS
The house resumed at 8 p.m.



EXCISE TAX ACT

[Stage Direction]
The house resumed consideration of the motion of Mr. Fleming (Eglinton) for the second reading of Bill C-47 to amend the Excise Tax Act.
Hubert Badanai: Mr. Speaker, if I may continue, I wish to point out that taxes are not levied on confectionery items in the United States or in the United Kingdom. They are taxed here because of an unwarranted assumption that a chocolate bar or cocoa is a luxury, even though the principal consumers of these products are children.


Mr. Speaker:: Does the hon. member intend to pursue the argument in favour of the removal of the tax on chocolate bars and confectionery? That is where there seems to be a difference of opinion as to what is relevant. If he is citing that instance by way of an example of deficiencies of this bill, I would allow him to go that far. But if he wants to make out a complete case with respect to a tax that is not in the bill, it seems to me that he is going beyond the precedents which I have had an opportunity to look at over the dinner recess.


Lionel Chevrier: May I remind Your Honour that you did not rule the general discussion out of order, if I understood your statement in dealing with the point raised by the hon. member for Essex East (Mr. Martin). I think Your Honour said that while a member should not go into details about the automobile tax, but that if he dealt with it in a general way you thought perhaps that procedure would be within the rules.


Mr. Speaker:: Yes, I think that is where one should draw the line. The hon. member has spent some time on this matter and has quoted from a brief in support of the view that the confectionery tax which is not covered by the bill should be removed. I think if it is used by way of illustration it would be sufficient to meet his point; but if he wishes to elaborate the argument, it seems to me that we are going back into the budget debate. In the opportunities I had to review the debates in former years on bills to amend the Excise Tax Act I could not find that former Speakers permitted an excursion into taxes which were left out of the bill, except by way of illustration of deficiencies of the bill. If he keeps within that scope, I shall permit the hon. member to continue.


Hubert Badanai: With your permission, Mr. Speaker, I will move into another class of 
goods which I trust will come under this bill which is under discussion, namely an act to amend the Excise Tax Act. It is a class which could not, by the wildest stretch of the imagination, be considered as a luxury. I am now referring specifically to toothpaste. Surely this is one commodity that could be exempted from any tax and, indeed, other toilet preparations intended for use in connection with sanitation, the care of the human body-including besides teeth, hair, eyes, nails -such as shaving soaps and shaving creams. Perhaps the latter may be considered as a luxury. Maybe we should quit shaving and let our beards grow. It might give us a look of superiority or of the intellectual, however mistaken the notion may be. I notice that some of our distinguished members of the press gallery have given up shaving or at least they are getting away with only a partial job. Perhaps some of our members may start a fad which could mean a loss to the treasury.
The tax on toilet goods was imposed as an emergency measure in 1933 in the era of the great depression. Subsequently it was reduced and then it was raised again. But now, 26 years later, it is about time that it should be abolished once and for all.
The hon. member for York-Humber (Miss Aitken), speaking in the throne speech debate on January 22 last, made a valiant plea for the elimination of the tax on cosmetics in general and lipstick in particular, a tax which she described as incongruous and discriminatory, a situation which she said should be corrected. I fully endorse the sentiments expressed by the hon. lady with respect to toilet goods. These are more or less in the nature of nuisance taxes, but in the aggregate they form a distinct barrier to the expansion of manufacturing facilities because of a low return on investment, when one considers the need for continuous research development and the replacement of machinery required in this particular industry. But the real sufferer here is the consumer who pays a tax on tax. I have here a short quotation which I wish to have on the record. It is from a brief which was prepared by the manufacturers of toilet goods last February and submitted to the Minister of Finance (Mr. Fleming).


Mr. Speaker:: I wonder whether the hon. member would consider dealing with cosmetics and toilet preparations when we come to the details of the bill. Mention is made of these items in the bill and I would think he could properly discuss the details in committee.


Hubert Badanai: In this particular, Mr. Speaker, if I may say so, the quotations are brief and it seems to me that they apply to the principle of the bill. They are only short quotations.


Mr. Speaker:: I do not follow the hon. member when he says that they apply to the principle of the bill. If he could indicate in what way they apply I might feel more disposed to permit him to continue with this detailed line of discussion.


William Moore Benidickson: Mr. Speaker, in this
amending bill there is reference to the commercial articles of toilet wares and so on. I would therefore think it was most appropriate for the hon. member to discuss these matters on a second reading debate.


Mr. Speaker:: Perhaps the hon. member had better proceed and let us see how closely he can keep to the bill.


Hubert Badanai: I promise that I shall be brief, Mr. Speaker. From this submission I merely wish to quote two paragraphs which are, I believe, pertinent to the discussion:
Both medical and dental professions will attest that toothpastes, mouth washes, baby oils, skin care creams and like items, are necessities for physical health, as will psychiatrists that shaving creams, deodorants, lipstick, dandruff and hair products etc., are necessary for mental health.
Mounting costs are accentuated by the special tax. Our general costs have risen with staggering rapidity. During 1958 over 200 items were increased in price-but we have not increased prices commensurate with the rise in prices of other products. The future indicates continued price increases- unless tax relief is forthcoming.
Then it goes on with a survey of the cost of various items which I will omit for the sake of brevity. In any event, I merely wish to conclude by saying in the present set-up both the retailer and the wholesaler make a profit on the tax and it pyramids with each retail price increase. I therefore submit that this special tax imposed in the early thirties as an emergency measure should be removed.


Mr. Speaker:: Is the house ready for the question?


Donald Methuen Fleming: Mr. Speaker-


Mr. Speaker:: I must inform the house that if the hon. minister speaks now he will close the debate.


Donald Methuen Fleming: Mr. Speaker, I shall be very brief in my comments upon the remarks made by hon. members opposite in the course of this debate on second reading. I do think that in general it may be said of their speeches that they were speeches which might well have been made, indeed I think 66968-9-242J
Excise Tax Act
should have been made in the debate on the budget. However, as reference has been made to several of these subjects with your permission, Mr. Speaker, perhaps I should comment very briefly upon them.
First is the matter of the excise tax on motor cars. I am not going into that because we had a debate on that matter a year ago, and we had another debate on it in the session previous to that. The hon. member for Essex East (Mr. Martin) is wrong in ascribing to the Prime Minister (Mr. Diefenbaker) the statement that that tax would be removed. What the Prime Minister said, and this was made very clear in previous references to this subject in debate in this house, was that consideration would be given to this subject, and hon. members will recall that in the fall session of 1957 in December that tax was reduced from 10 per cent to per cent. Hon. members are aware that there has been in recent months a very great improvement in the automotive industry both in Canada and the United States.
Another subject which was mentioned was cigarettes. We will be coming to that in the committee of the whole on the clause in the bill, so I spend no time on that other than to say that we did discuss this subject at some length in the resolution stage. Nothing new has been introduced, and that earlier discussion is to be found at pages 3308 to 3313 of Hansard.
Reference was made to the application of the sales tax to certain purchases by municipalities. I would remind the house that at the 1958 session in the budget proposals we removed the tax on a wide range of purchases by municipalities.
The fourth and last matter to which I shall make brief reference is the subject introduced by the hon. member for Kenora-Rainy River (Mr. Benidickson) when he asked about the over-all revision of the Excise Tax Act and alluded to the report of the Carter committee. I think this was a proper matter to be introduced in the debate on second reading, because it is a matter of a general nature applicable to any amending bill which has any relationship at all to those matters which were embraced within the scope of the reference to the Carter committee. I would say that in general many of the provisions of the present bill are in line with the recommendations of the so-called Carter committee which submitted its report to my predecessor, Mr. Harris, on January 12, 1956. Indeed, in the budget speech at page 2422 of Hansard I made reference specifically to one of the important provisions in this bill which stems directly from the report of the Carter committee in reference No. 3 in its report; that is the reference having to do with the tax

Excise Tax Act
on packaging. One could point to a number of other provisions in this bill which are in line with or have been inspired by the report of the Carter committee.


William Moore Benidickson: Mr. Speaker, would the minister permit a question. When he says specific changes in this bill, would he relate them to the sections, or perhaps later in the debate do so?


Donald Methuen Fleming: Mr. Speaker, I think it would be quite out of order at this point. We are not at this moment dealing with the clauses of the bill.
I leave the matter with this repetition, that a number of the provisions of this bill stem from or are in line with the report of the Carter committee. I may say that the recommendations of that committee have not been overlooked and it is not the intention of the government to overlook them where they can be usefully implemented. The former government did not fully adopt or subscribe to the recommendations contained in that report. There is one finding in the report or one of the references on which the committee was not unanimous, but these recommendations are before us and as opportunity arises, Mr. Speaker, certainly regard is had to these recommendations as far as they do commend themselves to the government.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Rea in the chair.
Charles Edward Rea: Shall clause 1 carry?


William Moore Benidickson: Mr. Chairman, as a matter of procedure would you call subclause (1), subclause (2), subclause (3) and so on?


Charles Edward Rea: Is it the wish of the committee that I call the clauses by the subclauses, and are these subclauses to be discussed only or voted on? Shall I call each subclause for consideration separately?


Some hon. Members:: Agreed.
On clause 1.
On subclause 1-Cosmetics.


Mr. McMillan:: Mr. Chairman, I would like to ask the Minister of Finance if he has had any representations from any pharmaceutical companies in connection with these preparations?


Donald Methuen Fleming: The first subclause, of course, is a matter of definition only. So far as some of the later clauses containing provisions pertaining to pharmaceutical products are concerned, I must say that there have been some communications from pharmaceutical

companies and I am informed that they have expressed approbation of the contents of the bill.


William Moore Benidickson: Mr. Chairman, on this point I would like to ask if there is a possibility of revising the act in a way that certain of these articles would not be subject to the extra 10 per cent tax? I am thinking of toothpaste and things of that kind which are very practical for all of us and which I do not think should in any sense of the word be subject to what is called a luxury tax.


Donald Methuen Fleming: The hon. member is referring to two taxes. There is, of course, the sales tax imposed by this statute and there are also the special excise taxes. I can only refer him to the remarks of one of my predecessors who imposed the special excise taxes on a number of products. He at one time referred to these as luxuries and later, I think, regretted having referred to them in that way because obviously some of them are not to be regarded as luxuries by modern standards. Nevertheless the special excise tax was continued in effect as applied to them.


William Moore Benidickson: That is perfectly true, but I am sure the minister is sufficiently ingenious to devise a phraseology in the statute which would exempt some of the things such as I spoke of from this extra 10 per cent tax. I think the minister will be familiar with the fact that the Canadian tax foundation made a survey among its correspondents, and one of the prominent results of that survey was the feeling that toothpicks, for example, should not be subject to an extra 10 per cent tax by the government.


[Stage Direction]
Subclause agreed to.
On subclause 2.
Mr. Mitchell:: I notice that in this particular paragraph pharmaceuticals are again mentioned. Speaking at the resolution stage I asked the minister to make it quite clear that there is no discrimination in the field of repackaging as far as pharmaceuticals, and I might even include toiletries, are concerned. With these remarks in mind I should like to have a definite assurance from the minister that there will be no discrimination as far as the actual packaging of pharmaceuticals by different types of retail organizations is concerned, and I include cosmetics in this. In other words, if the packaging is done by a central warehouse which is the distributing warehouse of a company owned and controlled by the same company it would fall into the category of a packager or wholesaler who does not have a retail connection with his outlets. In other words,

they would be treated as packagers and be liable to pay the extra tax at that level which is over and above the manufacturers' level. I should like to have a definite assurance from the minister that this is the intention of this bill, otherwise there would be some discrimination as I see it.


Donald Methuen Fleming: The hon. member
spoke on this subject on April 22 when the resolution was under discussion, and his remarks will be found at page 2950 of Hansard. There he expressed the view that this provision created discrimination between retailers. I hope I can set his mind at rest on that point.
First, I should like to point out that care has been taken in this provision to make certain that retailers who package in their own retail stores and sell directly to consumers through such stores are not affected by these proposed changes. In other words, retailers do not become manufacturers if the packaging is done by them in such conditions. However, any retailer who packages with a view to selling other than directly to consumers becomes a manufacturer. This means that anyone, including a retailer, who does packaging at a central point, say in his warehouse, with a view to selling or transferring the packaged goods to his own retail stores or to other retail stores becomes the manufacturer of such goods. Therefore, when retailers buy either from packagers or directly from a person who fully manufactured cosmetics or pharmaceuticals, the tax will be applied at the same level in the distribution process.
These resolutions are in fact aimed at a discrimination which has been occurring at a different level than that of retailers-one that occurs between the manufacturer who carries out the complete process of manufacturing, including packaging, and one who divides the manufacturing process between himself and others. The latter in this way has been paying the tax and at a much lower level than the person who fully manufactures. This tax inequality was pointed out by the Carter sales tax committee, and these resolutions are based on the recommendations of that committee for the removal of this discrimination. The purpose is to provide a more uniform base for the tax.
Since the cost of packaging and advertising these products represents such a large proportion of the final selling price, a tax levied on these products manufactured for sale in bulk or imported in bulk is considerably less than a tax levied on the sale price of a Canadian manufacturer of similar products who also packages and advertises these products. This means that the Canadian
Excise Tax Act
manufacturer is put at a disadvantage in competing with products imported in bulk for packaging and distribution in Canada. He is also at a disadvantage in competing with a distributor in Canada who has products made up in bulk for him to package and distribute under his own brand name or trademark.
Accordingly the definition of manufacturer is now extended to include any person who packages toilet preparations, cosmetics or pharmaceuticals for sale, except where this is done in a retail store for sale directly to consumers. The definition of manufacturer will also be amended to include any person who markets toilet preparations, cosmetics or pharmaceuticals made up for him to be sold under his own private brand, except a retailer who sells directly and exclusively to consumers or users.
I might point out that this principle of regarding packagers as manufacturers has been in the law for years in applying the special excise tax on cosmetics, and the same principle has also been in the law with respect to sales tax on candy.
I recall the remarks made by the hon. member on April 22. I think, if I may say so, that he did not appreciate then that once a packager becomes a manufacturer under the proposed amendments, he becomes a licensed manufacturer. This means that he may buy his supplies, either bulk or partly manufactured goods, under his licence, without any payment of tax at that time. The tax will then apply on his sales of the packaged or finished article in the same way as it applies to the sale of goods of a manufacturer who carries out all the manufacturing processes himself.


David Rodger Mitchell: I wish to thank the minister for that explanation. My conclusion is that a sales tax is not paid to the manufacturer but that it is paid to the government at packaging level. That is correct, I believe. Then, in turn, the tax is passed on. In other words the department is collecting a larger amount of money because the goods are marketed at a higher level. Am I correct in saying that?


Donald Methuen Fleming: Mr. Chairman, if the hon. gentleman is referring to the case of a retailer who is buying from a packager then he will pay the tax once at that level.


David Rodger Mitchell: Mr. Chairman, the tax goes on at the manufacturer's level and he in turn packages in the back of his drug store. The tax is at the manufacturer's level and not at the packaging level, is that not so?


Donald Methuen Fleming: The packager in the case we are dealing with becomes a

Excise Tax Act
manufacturer; and the tax is levied then, as always, at the manufacturer's level, in this case the packager being the manufacturer for this purpose.


David Rodger Mitchell: That would include the packager's extra cost and naturally his profit and therefore it would be a higher tax at the packaging level than at the manufacturing level, is that not right?


Donald Methuen Fleming: Yes, Mr. Chairman.


David Rodger Mitchell: Therefore it would have to be passed on to his retail outlet which is not his own immediate retail outlet? Could you assure me, Mr. Minister, that the person in between who has his own retail outlet would be classified in the same manner? That is what I am trying to establish.


Donald Methuen Fleming: I think my hon. friend means an outlet to retailers?


David Rodger Mitchell: To his own retail store?


Donald Methuen Fleming: Yes, if he has several of them.


William Moore Benidickson: On this point, Mr. Chairman, I think perhaps we have to look at section 4, is that not correct? To get the status of a retailer you would have to assume that the packaging was done in each retail unit where a customer bought at the retail unit, is that so?


Donald Methuen Fleming: Yes.


William Moore Benidickson: In consequence, the fears we expressed before that chain stores and others who might do central packaging are not likely to compete to better advantage as a result of this legislation than before have been borne out?


Donald Methuen Fleming: Mr. Chairman, I shall give my hon. friend again a sentence from the statement I made earlier:
This means that anyone, including a retailer, who does packaging at a central point, say in his warehouse, with a view to selling or transferring the packaged goods to his own retail stores or to other retail stores becomes the manufacturer of such goods-
For this purpose.


Lionel Chevrier: Mr. Chairman, I should like to address myself to part II concerning the export of duty on electricity. I should like to ask the minister if this is just transferring to his department-


Charles Edward Rea: We are on subclause 2 of clause 1 and I think perhaps the hon. member is dealing with another. Shall subclause 2 of clause 1 carry?
Subclause carried.

Subclause 3 agreed to.


[Stage Direction]
Clause agreed to.
On clause 2.
William Moore Benidickson: Mr. Chairman, I think the hon. member for Laurier is going to speak on clause 3.


Donald Methuen Fleming: I thought the observation of the hon. member for Laurier was on clause 2 of the bill. I may give him assurance at once that the purpose and effect of clause 2 is to transfer out of the Exportation of Powers and Fluids and Importation of Gas Act the existing tax on the export of electric power and to lift it and insert it in this act unchanged. There is no change in the tax, and that is the reason there was no resolution introduced with respect to it. It abolishes the provision in the Exportation of Power and Fluids and Importation of Gas Act which provides for the tax.


Lionel Chevrier: I take it there is nothing new in clauses 8, 9 and 10 of part 2?


Donald Methuen Fleming: Only that there is this improvement on that section of the act. This act with the long title, the Exportation of Power and Fluids and Importation of Gas Act, contains a feature which I must say I cannot approve and I hope my hon. friends will join with me in that respect. Section 4 of this act of 1955 which will now be repealed if this clause is adopted by the committee gave the governor in council the power to make regulations imposing export duties. This is the language of the clause:
4. The governor in council may make regulations imposing export duties, not exceeding ten dollars per horsepower per annum, upon power exported from Canada and respecting the manner in which such duties, shall be calculated and paid.
The feature of that existing law, which I must say I could not approve, is that it gives power to the governor in council subject to a ceiling to establish the rate of the tax. It happens that the rate of tax on the export of power is 3/100 of 1 per cent kilowatt hour. What we are doing is to make that a statutory tax and to remove any power to establish the tax by order in council. I hope that change will commend itself to the committee. There is no change in the rate of tax. We are proposing that this clause which I have read from the Exportation of Power and Fluids and Importation of Gas Act shall be repealed, and the tax imposed by order in council under that power is now being inscribed in statutory form in this present measure.


Lionel Chevrier: But under clause 9 you are giving the governor in council the power to make certain regulations?


Donald Methuen Fleming: Yes, Mr. Chairman. That is just the general power to make regulations respecting the time and manner in which it shall be paid, but there will be no power to fix the rate. The rate will now be established by this act.


William Moore Benidickson: Hithertofore had the Department of Trade and Commerce been the recipient of any revenue of this nature?


Donald Methuen Fleming: Yes, Mr. Chairman, the standards division of that department.


[Stage Direction]
Clause agreed to.
On clause 3.
William Moore Benidickson: On this point, Mr. Chairman, would the minister assure those hon. members of the committee who were on the estimates committee that this is probably just implementing a recommendation contained in paragraph 40 of the report of the Auditor General?


Donald Methuen Fleming: Yes, Mr. Chairman.


[Stage Direction]
Clause agreed to.
Clause 4 agreed to.
On clause 5.
William Moore Benidickson: Mr. Chairman, on (d) of clause 5, is this related entirely to budget resolution number 6?


Donald Methuen Fleming: Yes, Mr. Chairman.


William Moore Benidickson: Has this any relationship to the remarks of the minister on second reading about the recommendations of the Carter sales tax committee?


Donald Methuen Fleming: No, not this one, Mr. Chairman.


[Stage Direction]
Clause agreed to.
Clause 6 agreed to.
On clause 7-Cancellation of bond.
William Moore Benidickson: It seems reasonable to ask what difficulties have been experienced by the department and to what extent the department has advised the insurance companies about this kind of thing?


Donald Methuen Fleming: Yes. I am speaking now of clause 7, Mr. Chairman. Bonds provided for the department now have a clause in them stating that the bonds shall remain in force in relation to all goods in possession of the licensed wholesaler in case the bond should be cancelled. Legal opinion has been given that when a bond is cancelled the provision to which I have referred is cancelled with it. Therefore, the law is now being amended, if the committee approves, so as to provide for the continuation of the clause
Excise Tax Act
that I have mentioned in the cancelled guarantee bond because it relates to the goods on hand at the time of the cancellation.


[Stage Direction]
Clause agreed to.
On clause 8-Cancellation of licences.
William Moore Benidickson: This is a matter for your attention, Mr. Chairman. Since it has reference to amending certain basic sections of the whole act which refer to such things as playing cards, wines, beverages and cigars, I think that you, as a definite chairman, should consider this item, as to whether or not it should not provide members on second reading an opportunity to discuss matters that might relate to this section. I have no point to make at this time, but it is referred to here. I found that the act was being amended with respect to a part; therefore, I think this is a very important question for the legal authorities of this house.


[Stage Direction]
Clause agreed to.
Clauses 9 and 10 agreed to.
On clause 11-Schedule II amended.
William Moore Benidickson: Again, Mr. Chairman, I am not going to repeat myself, but the hon. member for Bonavista-Twillingate and some others at other stages of this debate put on record the feelings expressed by the Minister of Finance in past days and by the present Prime Minister in past days, that there was a likelihood of diminishing returns with respect to this particular proposal of taxation. I know the minister gave some information to the committee at the resolution stage. I am not going to ask him to repeat it, but I must say that I rather share the feeling that this is a heavily taxed product, and I question very much whether the returns will be in accordance with the forecast in the budget as a result of this legislation. I repeat, it must be very embarrassing for many members from Norfolk and from areas in Quebec where tobacco is grown who support the government to have this particular proposal. We have heard from them that they were encouraged by this government in the current season to grow more tobacco; but the feeling among the industry is that there will be a curtailment of consumption along this line. Consequently, the industry has indicated that it is not going to take the advice of the federal Department of Agriculture and it is worried about the result of this particular clause.


Mr. McPhillips:: Who are these people you are talking about?


Mr. Nesbitt:: Will the hon. member permit a question? If the tobacco industry, that is the manufacturers, Imperial Tobacco and others, are so concerned about the law of

Excise Tax Act
diminishing returns, perhaps the hon. member will give some explanation of why they raised the price of cigarettes one cent more than was necessary because of the addition of the tax?


William Moore Benidickson: Mr. Chairman, on that point, of course, I took the earliest opportunity to warn this house that that was the inevitable result of an increase in taxes; namely that the consumer would pay more than the amount of the tax. The hon. member comes from Oxford county. I just ask him whether or not in subsequent speeches to his electorate in that area he can defend this tax and still defend what he said on previous occasions at this stage of budget debates about the inequity of a high level of taxation on tobacco products.


Wallace Bickford (Wally) Nesbitt: The hon. member has not answered my question. He has said he thought there was concern about the law of diminishing returns because of the increase in price. Apparently, Mr. Chairman, the tobacco companies are not concerned about the law of diminishing returns in this respect. They raised the price of cigarettes an extra cent more than was necessary.


William Moore Benidickson: I am not speaking for the tobacco companies; I am speaking for the consumer. The consumer has had triggered an unjust excess cost to him as a result of this particular clause.


John Whitney Pickersgill: Before the clause carries I should like to ask the hon. member for Oxford whether he is not concerned about going back and explaining to the people who elected him the Prime Minister's promise in Brantford to reduce this tax as compared with what is happening here tonight?


Wallace Bickford (Wally) Nesbitt: The Prime Minister never made any such promise. Unlike the hon. member for Bonavista-Twillingate, I happened to be at that meeting.


Charles Edward Rea: Shall clause 11 carry?


William Moore Benidickson: No. For the benefit of the hon. member for Oxford,-and I think he has the same respect for the Globe and Mail that I have-on February 17, 1958, his leader, in Brantford, near the tobacco-raising counties, had this to say:
Prime Minister Diefenbaker last night dropped a clear hint that the taxes on cigarettes, cigars and tobacco soon may be cut.
I leave it at that. There is much more in the quotation, but I leave that to the thinking of the hon. member for Oxford.


[Stage Direction]
Clause agreed to.
Clauses 12 and 13 agreed to.

Title agreed to.
Bill reported, read the third time and passed.

Donald Methuen Fleming: the second reading of Bill No. C-48, to amend the Income Tax Act.


William Moore Benidickson: Mr. Speaker, we are now discussing a bill very similar to the previous bill, one of five related to the budget. I was amazed that on the introduction of this bill there was not the same enthusiasm and applause on the part of the overwhelming majority that we have heard in this house for the minister's suggestion. I think this results from the fact that after reflection they realized that the budget speech involved the kind of thing upon which we are now asked to legislate. We have 10,000 more civil servants to pay for.


Donald Methuen Fleming: No, that is not true.


William Moore Benidickson: Yes, Mr. Speaker, I can support that. There is great inconsistency on the part of the minister in his desire to keep down costs. I pointed out on budget night that all these elements of taxation would enter into the cost of products and would perhaps reduce our opportunity to sell in competitive markets abroad. I think that the bill we have before us is very consistent with that fact.
I also said in the past and I repeat that we are not only concerned with the fact that this particular bill and the other four we have dealt with involve an over-all tax load on the Canadian people for the current year of $245 million but we are concerned with the fact that the minister's own statements indicate that the take from the Canadian people in the current fiscal year is $640 million more than in the past year and the highest of any year of which we have any recollection. I am not projecting these figures for a full year with respect to the taxes involved in this amending bill.
I also want to remind the minister and all my colleagues in the house that when I say that in the current year Canadian taxpayers in aggregate are being asked to find another $640 million for the government this has no relation whatsoever to the legislation we dealt with last week respecting unemployment insurance which involved another $75 million for the taxpayers of this country.


Donald Methuen Fleming: Mr. Speaker, I do not know whether my friend has concluded this part of his remarks or whether he proposes to go on developing this theme, but obviously this is a budget speech he is making.

He is talking about the over-all balance of ways and means and questions of that kind and here we are dealing with a bill to amend the Income Tax Act.


Mr. Speaker:: Perhaps the minister would indicate for the guidance of the Chair what is the principle of the bill. It is a bill to increase certain income taxes and to make various detailed amendments to the act, as I understand it.


Donald Methuen Fleming: Exactly so, Mr. Speaker.


William Moore Benidickson: Mr. Speaker, I am one who, as I have said before, does not want to take undue time to repeat what has been said at an earlier stage, but we are being asked to consider a bill which increases the taxes on persons and corporations and I say that the reason for it is that the government has had no idea of economy. I think that is a very legitimate criticism. In other words, we are getting in this bill the harvest of the election promises that were seeded by the Minister of Finance (Mr. Fleming) and his colleagues in recent times.
Having in mind Your Honour's ruling, and I approve of it, we cannot complain too much except by way of illustration about things which are not in the amending bill that has been presented to us. But there are so many things that are not here that I think we have every reason to examine the bill closely. I think the house will recognize that this is just one of five bills and therefore we cannot be limited too much with regard to the overall extra tax take that is contemplated.
I suggest to the house that we are on very dangerous ground even if we accept what the minister says that, granted no inflation, granted no war, granted several other things, the gross national product may increase in the next year by $2,200 million. The minister is proposing, as a result of this bill and the other four we have been discussing, to take out of that increased productivity $640 million plus $75 million for the unemployment insurance fund, and I pose the question to all hon. members who have to vote upon this legislation whether or not that is an undue proportion of the possible increase in the gross national product for the forthcoming year.
When we come to the clauses of the bill I am going to deal with some other features of the legislation now before us. I think one of the most unnecessary and silliest features of the bill is the amendment advocated by the minister that we should no longer include in medical expenses the amount that is paid by the duly authorized agent of the taxpayer. This is another prime example of the somersault on the part of the minister. He always
Income Tax Act
advocated the elimination of the 3 per cent floor. I have said before and I repeat that surely the basic cost to start with in the case of any taxpayer is the hospital account. The right to claim that for purposes of exemption is being removed and therefore I say that any other adjustments to the Income Tax Act are straight camouflage and are not treating the taxpayer in a fair and square manner. The minister is removing the base upon which the taxpayer has been able to make a claim for exemption and I suggest to the minister that when he takes away the opportunity to claim for purposes of exemption the hospital bill paid in the past by a duly authorized agent, government or insurance company or otherwise, the other amendments he is proposing are completely meaningless and, to extend my term, I think they are a fraud.


Mr. M. W. Marlin (Timmins):: Mr. Speaker, I should just like to say a few words at this time on this particular bill. It appears to me that this bill follows very closely in line with most of the legislation that has been introduced by this government. It is a modern Tory variety of the old army stew consisting of equal parts of horse and rabbit-one horse and one rabbit. We have in this legislation rabbit that is good and horse that is bad. Sometimes we have a bigger horse and sometimes we have a smaller rabbit but it is always in equal proportions.
One thing that I think is driven home to the people is this. No matter how much you try to dress it up, there is one cold hard fact which stands out, namely that taxes are up along with interest rates and along with many other things that are rising day by day. It is true, of course, that wages are rising in certain cases, but it is also equally true that in many other cases they are not rising. One thing that seems to be ignored as completely by this government as it was by the last one is that in conjunction with these rising costs and rising taxes there should be a rise in the exemptions. If the cost of living is higher, surely the basic tax exemption should also be higher in order to correspond with the cost of living. This factor, of course, has been ignored again and I think it is most unfortunate that such is the case.
Another thing that disturbs me, Mr, Speaker, is the change that we have with regard to the exemption for medical expenses. I think everybody in this country was agreed that some changes were due. The hon. member for Kenora-Rainy River (Mr. Benidickson) mentioned one. I certainly think that the people of this country were not looking for the changes that were made. I am a bit concerned as to just what effect this

Income Tax Act
change is going to have. To a great many people it appears to be a bit discriminatory against the very hospitalization plan that has been advocated and, in fact, finally implemented by this present government, although it was put in the process of implementation by the previous government.
I understand the deductions will remain the same as they were in the past, with medical insurance through private companies but that as to the hospital insurance through the federal and the provincial hospital insurance plan the basic exemption will no longer be under the same formula. I sometimes wonder whether it might not be much easier for the wage earners of this country if they could just deduct the premiums paid to the hospital insurance plan or to a private insurance company from their actual costs of hospital and medical insurance. I am sure it would simplify the tax form considerably. It might save many people a great deal of money by not having to go and get a lawyer or a chartered accountant or someone else to make out their income tax forms. There would be a saving in two or three ways. But in the main I should like to sum up my few remarks by saying that regardless of how well it may be dressed up this bill is just a little bit more bad news to the people of this country.


William Hector McMillan: Mr. Speaker, the increase in the personal income tax is quite considerable. It amounts to two percentage points on everything over $3,000. I was a little bit surprised at this increase because the Prime Minister (Mr. Diefenbaker) is reported to have said that every family in Canada was overtaxed by $120. I think I saw some references to the Minister of Finance (Mr. Fleming) also having said that taxes were too high and should be reduced. I can say that in my part of the country he has in effect been right because a good many of these people have been unemployed practically ever since and have not had to pay any income taxes at all. When a person fills out his income tax form and makes out his cheque to the Receiver General of Canada, he finds that he also must pay an increase in tax for the old age pension fund. There are other taxes also such as sales tax which I will just mention in passing, and the increase in excise taxes. But when we take all of these taxes together, and take into consideration the 7 per cent increase in the gross national product, we do not go halfway in covering our deficit. I think the taxpayers of this country look to the future with foreboding. I think they feel that a better way in which to increase income taxes 
is to have a fiscal policy that would provide more people and more corporations paying these taxes.
I was looking over the corporation tax and I think this year it is up to the highest point in any peacetime year. In Ontario and in Quebec they are paying combined taxes-I mean by that the income tax plus the contributions to old age pensions-of 52 per cent. The other corporation taxes are very high, particularly when you add other provincial taxes and municipal taxes. Every tax adds to the cost of production. We know that our cost of production here in Canada is extremely high. We are having a hard time now to maintain our position in the highly competitive markets of the world. Representations have been made to Ottawa by manufacturers who say that they cannot compete in our own domestic market with foreign producers.
I have said before-and I will just refer to it here again-that the climate in Canada has not been good for United States capital to come in. It is really not good for our own corporations because of this increase in income tax. Our corporations in this country have already been heavily taxed and we are in the process of adding another $80 million a year to their costs by the fact that they are obliged to pay, along with their employees, for seasonal unemployment. I should think that the minister ought to know that the more industry we get in this country and the more people we get working, the more income taxes we shall collect. He should realize that the unemployment will then be taken up, more people will be working and we shall be able to tax more people instead of the fewer that we are taxing at the present time.


Hon. Paul Hellyer (Trinity):: Mr. Speaker, there is just one aspect of this bill about which I should like to speak briefly, namely the change in the provision for deduction of hospital expenses. This is a principle with which many of us, I know, cannot agree. In the province of Ontario we are still obliged to pay the premiums which we paid before the new hospitalization plan came into effect. These premiums are not deductible from taxable income. They are paid out of net income but still the hospital bills are not going to be deductible from taxable income as they have been in the past.
This principle of allowing expenses in excess of a certain percentage of income is well established and has worked well because it alleviates much of the hardship which accrues when people undergo extensive illness personally or in their families. I know of many cases where the financial circumstances in the family have been such that without

the taxation relief granted they would have had to undergo severe and serious financial dislocation. As you know, we reduced the ceiling once or twice. There was considerable pressure in this house in years gone by to reduce it even further.
It was always stated that certain medical expenses were incidental to all people and that it would be administratively difficult to allow deductions for all medical expenses, and I think most people will agree with that. The expenses over and above a certain percentage of income are extraordinary expenses and certainly an exception can and should be made in those circumstances. Now this change has been made, part of the exemption which previously existed has been taken away and it is in fact, Mr. Speaker, just another form of taxation.
Surely the government did not have to squeeze the last drop out of the suffering of people who undergo lengthy and serious illness in order to increase its tax revenues. The minister in his budget speech indicated that in a full year some $9 million would be recovered by the federal treasury. This is a considerable amount of money, but I am positive that that amount of money in the hands of people who have suffered because of serious illness would do far more for Canadians generally than it would in the consolidated revenue fund.
It is therefore with regret, Mr. Speaker, that we have to consider a bill which contains this provision. I hope that the minister will give this matter some consideration between now and the time the next budget is brought down, and if he still occupies his present position at that time I hope that he will see fit to reverse himself.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Sevigny in the chair.
On clause 1.
William Moore Benidickson: Will the minister explain this clause? I confess I have not got my copy of the bill before me.


Donald Methuen Fleming: Mr. Chairman, clause 1 simply adds the words "life, sickness or accident" to the terms of section 5 (1) (a) of the Income Tax Act. This addition is necessary because of the detailed amendment which follows in clause 2 with respect to group life insurance. Without these qualifying words, the words "group insurance" could cover any kind of insurance purchased by a group. This provision which will follow in clause 2 of the bill is confined to group life insurance.


William Moore Benidickson: Sickness and accident.


[Stage Direction]
Clause agreed to.
Income Tax Act
On clause 2-Portion of 'premium under certain group insurance policies.
Mr. Cresiohl:: Mr. Chairman, I address myself to clause 2 only because I find it extremely difficult to understand this complicated formula which by statute law is to me a little unique. There are set up five sections which do not state law but which state mathematics. You have for instance:
(i)	dividing that proportion of the total premium-
(ii)	multiplying the quotient obtained-
(iii)	subtracting from the product obtained-
And so on and so forth. I confess, Mr. Chairman, and I also confess to the minister too, that as a lawyer I find it most unusual to make statute law in the form of pure mathematical calculation. I do not think the average person could follow it easily, and I certainly would not relish having to argue before a court if I had to deal with this lengthy section on page 2. I ask the minister purely as a lawyer, would he explain how one could argue before a court a mathematical formula, because if there is something wrong mathematically with this formula there will be some difficulty because it is the law. Even though the mathematics may be wrong they would have to be considered as right because it is statute law. I do find that extremely difficult and unusual.


Donald Methuen Fleming: Mr. Chairman, I think the hon. gentleman is much too modest in disclaiming ability to understand this section. There are lots of provisions in the Income Tax Act which are much more lengthy and involved than this one.
So far as the mathematical formula is concerned, it is not part of the statute. It is here as one of the notes on the bill to give an illustration of the way in which the subclauses which are part of clause 2 of the bill will operate.
I think the hon. member is aware of the situation out of which this section has emerged. Group insurance policies which are provided, let us say, by an employer for an employee are exempt from income tax. In making use of that exemption we have found that a number of persons, let us say senior executives, have had very substantial policies written on their lives, and these enjoy an exemption which I am sure parliament did not intend in such large amounts. For instance, just because an executive happens to control a corporation, is it any good reason why he should enjoy the benefit of payment of premiums on a policy of, let us say, $100,000 on his life, tax free?


William Moore Benidickson: May I ask the minister if this is beyond the other sections of the bill

Income Tax Act
with respect to group policies? This is a possibility with a controlled company; is that right?


Donald Methuen Fleming: No, Mr. Chairman, I am speaking about group policies. These are commonly known, I believe, as jumbo policies, and they exist in many cases where there is no general provision assuring equality of treatment or even proportionate treatment on the part of employees of the company concerned. Therefore it seemed to us that there should be some limitation placed upon the exemption now enjoyed. That is why we brought forward the proposal that premiums paid on these policies should be exempt in the case of any person up to $25,000 of life insurance, but as to the excess of the insurance over $25,000, whatever premium is paid on behalf of the individual should be regarded as income received by him and he should be taxable upon it. Otherwise, it would be relatively simple for a senior executive to take a substantial portion of his remuneration not in the form of salary but in the form of an extraordinarily large insurance policy upon which premiums would be paid on his behalf. That is the background out of which this proposal has come to the committee.
This clause deals-and deals in a straight forward way, I think-with the person who has been enjoying the benefit of a policy of more than $25,000, or who will in future be enjoying the benefit of such a policy under one of the group insurance plans. How are you going to tax such a person in respect of the premium on the excess over $25,000? That is the situation with which this clause deals. One could go about it in two ways, broadly speaking. One could say: we will regard as income in the hands of such a man the premium which he would pay at his age on that particular policy according to its amount and its provisions. But that might not be fair, because the man might be advanced in age; he might, indeed, have reached a point where insurance premiums are very heavy. He might even have passed the point where he can obtain insurance on an individual policy. What we have done, therefore, is, in effect, to work out an average so that what such a man will have to pay is the average premium on the whole group under the group plan. That is the essence, briefly, of this clause. It is well understood, I can assure the hon. gentleman, by the insurance companies. They understand what this means, and the way in which the plan works out.


Leon David Crestohl: May I ask whether an
estimate has been made as to the additional revenue which is expected to flow to the government from this source?
[Hr. Benidickson.]


Donald Methuen Fleming: No, Mr. Chairman. It was not possible to work out any such calculation at all precisely. This proposal is put forward in the interests of the fair and equal treatment of taxpayers and to put an end to a situation in which some taxpayers were enjoying what was regarded as an unfair advantage under an existing exemption.


[Stage Direction]
Clause agreed to.
Clauses 3 to 7 inclusive agreed to.
On clause 8.
William Hector McMillan: I realize the difficulty experienced in such legislation as this, but it seems to me that there is discrimination not only between people in different provinces but also between people in the same province. For instance, in Ontario it is optional whether people contribute to hospital insurance or not. I think the person who takes the insurance is penalized because his hospital bill is not deductible for income tax purposes. But if a person takes out an insurance policy which pays for hospitalization, those payments are deductible. Then, in connection with the provinces, if a person resides in a participating province there will be practically no hospital bills eligible for deduction, whereas in a province which does not participate every bill will be eligible for deduction. Thus I think there is a good deal of discrimination in this particicular clause between, as I said before, individuals in a province such as Ontario and persons in non-participating provinces.


William Moore Benidickson: I think with regard to this particular proposed change the minister has made a very grave mistake. Reference has been made to the increased amount of revenue, but in the minds of the people-[DOT] their imaginations in this respect stimulated very largely by some of the good speeches made by the hon. gentleman on this subject when he was sitting in the opposition to the effect that this was a proper tax deduction -the government's present intentions are causing great consternation. I just want to read a short excerpt from a letter I received on this point which, I think, will impress the minister. The letter comes from the international association of machinists and it says:
We protest the noncontinuance of hospitalization payments as paid by the provincial hospitalization plan as an income tax deduction.
I raised this matter on two or three other occasions in the debate which was open to all of us. Someone said-I think it was tonight-that the tax saving would amount to $9 million. That may be so, but I think the principle which existed in the past is

still valid. I was impressed, also, by a letter I have received from a doctor practising in Ontario who after hearing the proposal of the Minister of Finance in this respect pointed out that the actual cost to the taxpayer for Blue Cross insurance in Ontario under the former scheme was not much less than a person is now required to pay under the new set-up in Ontario. He also points out that inasmuch as the important province of Quebec is not participating in this hospitalization scheme the taxpayer had an opportunity of having a recognized insurance agency, the Blue Cross or whatever it may be, as his authorized agent for the purpose of presenting accounts to the Minister of National Revenue when income tax time comes around as a proper deduction if the over-all expenditure is more than 3 per cent of taxable income. I repeat that if we eliminate hospital expenses, as the minister is proposing, everything else in this bill is completely meaningless as long as you have this so-called 3 per cent restriction or floor with respect to untoward expenses resulting from illness.


William Hector McMillan: Would the minister comment on the discriminatory aspects of this clause?


Donald Methuen Fleming: They were commented on fully in the discussion which took place in this house on May 4. I can refer the hon. member to pages 3290-3297 of Hansard where this matter was threshed over thoroughly. There is no discrimination here. The method we have chosen is the only one that does prevent discrimination.


John Whitney Pickersgill: The minister just repeats and repeats that there is no discrimination. He never attempts to meet the argument that a person who pays a private premium and has a hospital bill can deduct it and a person who pays a public premium and has a hospital bill cannot, and if that is not discrimination it is very difficult for anyone to say what discrimination could be.


Donald Methuen Fleming: Premiums were never deductible, Mr. Chairman.


John Whitney Pickersgill: I never said that. I referred to hospital bills. The minister should listen to others occasionally.


Donald Methuen Fleming: I have outlined the basis of deduction under this law. Any other basis would mean creating discriminations because of the fact that there is the widest variety across this country in the methods by which provinces collect the provincial share of the cost of the hospital and diagnostic services provisions. We had also to take account, as I pointed out in the budget speech, of any province which does not enter into this scheme at all.
Income Tax Act
I put the fundamental question, as I have on previous occasions. Here it is costing the federal treasury something like $160 million this year to provide the federal share of this hospital insurance cost. When that federal share of the cost of this scheme is being completely underwritten by the treasury, surely in order to avoid the discrimination which would otherwise result we ought to proceed as we are doing here to make provision that the bills that are paid pursuant to the provisions of this Hospital Insurance and Diagnostic Services Act should not themselves be deductible. They will have been paid out of the treasury. As against the $160 million which is being provided out of the treasury this year, what this means in terms of reduction of exemptions to individual taxpayers, as I pointed out before, is $3 million in the course of the present fiscal year or $9 million in a full year.


Paul Theodore Hellyer: Mr. Chairman, I wonder if the minister would consider making that part of the hospital bill which is paid by private premium deductible?


Donald Methuen Fleming: Mr. Chairman, again we were over this ground on May 4. Whatever is payable by premium under a private insurance scheme will as heretofore be deductible to the extent to which hospital costs are paid. In that way we are not taking anything away from anyone in that respect. We are simply saying that where hospital costs are being paid under this scheme-this Hospital Insurance and Diagnostic Services Act to which the federal treasury has contributed-hospital bills paid in that way are not eligible to be treated as medical expenses under the act.


Paul Theodore Hellyer: Mr. Chairman, the minister is not thinking as clearly tonight as he sometimes does. He just said he is not taking anything away and yet that is precisely what he is doing. He is allowing private premiums, he says, and yet in Ontario part of the ward care hospitalization is being paid for by private premium and he is allowing no deductions in respect of that private premium. How does he reconcile that with what he has just said?


Donald Methuen Fleming: Mr. Chairman, I am afraid the hon. member has not put the proper interpretation on the word "private" in this instance.


Paul Theodore Hellyer: I was using the minister's interpretation.


Donald Methuen Fleming: No, you were not.


William Moore Benidickson: Mr. Chairman, my point was that the expense to the taxpayer in the province to which I belong seemingly is no

Income Tax Act
different under Blue Cross according to a medical doctor in a letter to the Kingston Whig-Standard. I was not a subscriber to Blue Cross. He indicates that the cost was $4.20 monthly for family service before the governments entered the picture. He says that the present expense is just the equivalent of that.
As a result of what the minister now proposes to do if the taxpayer sustains an emergency health problem-hospitalization and all the antecedents-the hospital cost cannot be used as a base in order to calculate his entitlement for income tax deduction.


William Hector McMillan: Mr. Chairman, page 5 of Bill No. C-48 in line 38 indicates that a taxpayer or his representative shall be entitled to be reimbursed hereunder. Suppose that a person had hospital insurance and allowed his premium to lapse through forgetting to pay his premium. If he received a hospital bill for treatment in that period would it be deductible?


Donald Methuen Fleming: If the bill were not paid under the provision of the Hospital Insurance and Diagnostic Services Act to which the federal government contributes.


Mr. Robichaud:: Mr. Chairman, since the province of Quebec does not come under the scheme may I ask the minister would the hospital costs paid on the eve of an election by a member of the Union National be deductible for income tax purposes?


Murdo William Martin: Mr. Chairman, I was interested in the points raised by the hon. members for Welland and Kenora-Rainy River. It is fine to say that you have a choice but many people in the province of Ontario do not have a choice. If they employ over 15 they must belong to the plan. They cannot claim hospital bills as they could under Blue Cross or any private plan. Certainly this seems to weigh heavily against the plan brought into being by this government and very much in favour of private insurance plans. Why was not some compensation given under the plan to subscribers to replace what they lost?


Donald Methuen Fleming: Mr. Chairman, I thought the hon. member supported the idea of providing these hospital services. If you accept the fact that we support the idea of providing these hospital services then surely it is not to be contended that some hardship has been inflicted on someone who is brought under this plan of hospital insurance. The hon. member speaks as though some hardship had been inflicted upon those in the group of which he spoke who were brought within the provisions of this act. I do not take that
[Mr. Benidickson.)
view at all. I think that those who have been brought under the provisions of this Hospital Insurance and Diagnostic Services Act and under the Ontario scheme to which he referred have every reason to congratulate themselves, because it is a good scheme.


Murdo William Martin: I agree wholeheartedly with the minister in that respect, Mr. Chairman, but the fact remains that it costs the same now as it did before and subscribers are losing the privileges they had previously and those enjoyed by their neighbours who belong to a private insurance plan and probably pay the same rate.


Donald Methuen Fleming: Mr. Chairman, if the neighbour is carrying insurance with a private insurance company then he is carrying it because he is not under the public plan or he is carrying private insurance in addition to the plan in order to give himself some better hospital accommodation. It is only in that case to the extent to which the hospital bill is paid by some means outside this government scheme that any right to a deduction is retained in respect of the hospital bill so paid.
The provision is quite clear. The hospital bill which can no longer be included in the definition of medical expenses in that case is the hospital bill that is paid under the provisions of the Hospital Insurance and Diagnostic Services Act.


Paul Theodore Hellyer: Mr. Chairman, in the days before the minister's generosity we used to get exactly the same thing; but in those days the hospital bills were deductible from income if the bills were part of the medical expenses exceeding 3 per cent of the person's taxable income. Now, since the days of the minister's generosity, we pay the same amount but it is not deductible and that is the difference. What kind of giving is this?


William Moore Benidickson: We pay a higher tax.


Donald Methuen Fleming: The hon. gentleman is not paying the same amount. He is putting forth the extraordinary proposition that he was paying just as much before for hospital insurance as he is paying under the Ontario plan approved under the Hospital Insurance and Diagnostic Services Act, if he is under it.


Paul Theodore Hellyer: Does the minister deny that?


Donald Methuen Fleming: I say that for the vast majority of people it is not true.


Paul Theodore Hellyer: Would you say for the vast majority of people in the province of Ontario?


Donald Methuen Fleming: Yes; I would say that this plan has brought more substantial benefits to the great majority of the people in this province.


Paul Theodore Hellyer: Does the minister know that the vast majority of people in Ontario had a plan, namely the Blue Cross plan, before this and they were getting the same benefits then as they are getting now?


Donald Methuen Fleming: A substantial
number of people were members of the Blue Cross plan, Mr. Chairman, and they can continue to be members of that plan as to hospital services which are not covered by the act.


Hédard-J. Robichaud: Does the minister agree that in the province of New Brunswick, under the plan that is to come into effect on July 1, the residents of that province will have to pay-that is, those who want semi-private room service-$8 more under the hospital insurance plan which will be introduced than they were paying under the Blue Cross, so that they are having an extra tax of $8 imposed on them? Besides that, they are not allowed to deduct the medical expenses over and above 3 per cent of their taxable income. I want to repeat what I said on May 4 when this bill was introduced. If the minister wants to be logical, the residents of New Brunswick should be allowed to deduct at least 50 per cent of their medical expenses over and above 3 per cent of their taxable income.


William Moore Benidickson: I want to ask the minister a forthright question on section 8. I compliment him on introducing this amendment to the bill. But in view of the other things that he is taking away, can he tell this committee that the underlined words are really going to help any taxpayers and, if so, to what extent? I know that the minister is always advised by the tax collecting officials before these recommendations appear in statute form, and they give him an estimate as to what the costs to the treasury might be of things like this. The underlined words relate to beds for poliomyelitis victims, and so on. Actually, if the minister is taking away the right in most provinces to include the cost of hospitalization, what is the estimate of the tax loss as a result of the amendment we are asked to make here with respect to the underlined words?


Donald Methuen Fleming: There is no estimate, Mr. Chairman. It was not possible to make an estimate of the tax loss in extending these exemptions.


Hédard-J. Robichaud: I want to come back to the argument I just made. Fifty per cent of the cost is not being paid by the federal government; 50 per cent of the cost is being paid by the residents of the province of New Brunswick. Can the minister explain why we are not allowed to deduct this 50 per cent of our medical expenses?
Income Tax Act


Donald Methuen Fleming: I say to my hon. friend that he is getting a great deal more than he got before in this respect. The federal government is paying half of the cost of all hospitalization and diagnostic services provided by this act. It is costing the federal treasury this year $160 million in those provinces which have subscribed.


Hédard-J. Robichaud: Fifty per cent of the cost?


Donald Methuen Fleming: It averages 50 per cent across the dominion. In some provinces the federal share is more than 50 per cent.


[Stage Direction]
Clause agreed to.
Clauses 9, 10 and 11 agreed to.
On clause 12-Transferred pension fund contributions to be subtracted.
William Moore Benidickson: Mr. Chairman, I want to do what I do not often do, namely compliment the minister on this change. I think it does make it possible for a little greater freedom in transferring from one employment to another. The minister explained this on the resolution stage.


Donald Methuen Fleming: I thank the hon. gentleman.


[Stage Direction]
Clause agreed to.
On clause 13-Associated corporations.
Donald Methuen Fleming: I think I would like to make a comment on clause 13, as it may be of interest. This provision which we are making by way of continuing the benefits enjoyed by the corporation which has an income of less than $25,000 is, of course, subject to certain terms in the act. I draw attention particularly to the provisions of section 39, subsection 4 of the act. I may say that my attention has been drawn to certain problems connected with this provision. It sets forth rules which are followed in determining whether or not corporations are associated with one another through ownership of shares. In particular, a corporation is not regarded as being associated with another corporation unless 70 per cent of its shares are owned by the other. This latter percentage was inserted in the act several years ago by an amendment. It was intended to relieve corporate taxpayers of certain difficulties with which they were being confronted. As a result, however, there are indications that it may be becoming too easy under this provision to divide a corporation into a number of smaller components, each of which qualifies for the lower rate of tax on its first $25,000 of income.
Although no conclusion has been reached as yet on this matter, I should like to inform the committee that consideration is being

Income Tax Act
given to the possible necessity of introducing in the future some further change in this respect.


[Stage Direction]
Clause agreed to.
Clauses 14 to 18, inclusive, agreed to.
On clause 19-Application of section.
Donald Methuen Fleming: There is an amendment to clause 19, notice of which was given, which is to be found in yesterday's Votes and Proceedings on page i of the appendix. I would ask my colleague, the Minister of Public Works to move this amendment.


Howard Charles Green: I move:
That Bill C-48, An act to amend the Income Tax Act, be amended by striking out lines 25 to 34 on page 11 thereof and substituting therefor the following:
'unless,
(a)	in the case of a corporation that had a taxation year ending before 1959, the corporation was during its last taxation year ending before 1959 and each subsequent taxation year, if any, previous to the particular taxation year a foreign business corporation,
(b)	in the case of a corporation incorporated on or before April 9, 1959 that did not have a taxation year ending before 1959, the corporation was during its first taxation year ending after 1958 and each subsequent year, if any previous to the particular taxation year a foreign business corporation, or
(c)	in the case of a corporation that had a taxation year ending on or before April 9. 1959, the corporation was during its taxation year in which that date occurred and each subsequent taxation year, if any, previous to the particular taxation year a foreign business corporation, and had during that part of its taxation year in which that date occurred that was before April 10, 1959 business operations that complied with one of the conditions contained in paragraph (c) of subsection (2).'


Donald Methuen Fleming: I may say, Mr. Chairman, that the purpose of the amendment is to enlarge the conditions under which corporations can qualify as foreign business corporations under this provision.


William Moore Benidickson: Mr. Chairman, the minister will recollect the debate we had at the resolution stage. It was only because of a little better assistance from the hon. member for Bonavista-Twillingate that we got from the minister some indication of why the administration felt that a change was necessary here. I am not going to deal further with it. I realize in effect we have a pause. The administration indicates that in the meantime they are giving consideration to all the aspects connected with this. I just want to say, because this seems to be the best opportunity of saying it-and I am not scolding-that in every possible way I think the minister should, in introducing a bill of this kind which imposes a tax upon people, see to it that it is presented to the house at a time when it will get the widest possible publicity
[Mr. Fleming (Eglinton).1
among the trade and financial papers and people who are expert in these matters. I mentioned this to the minister before, I think. As it happens, there was a delay in presenting this bill. I think it only came before the house for first reading on Wednesday last, and the bill amending the Excise Tax Act on the same day. A humble member was not able to get a copy of the bill until Thursday. I simply want to say to the minister that to my mind it is important in a democracy that the widest possible advance notice be given of amendments such as he is now proposing, resulting from presentations that have been made to him.
The minister and the administration should seek to have their views in this respect put in bill form at a time sufficiently in advance of debate in the house to ensure that people from coast to coast in our widespread country will have the opportunity to know the implications. I must also confess that it is a great advantage to humble people in the opposition to receive comments from these people.
But this was not possible in one or two respects and irrespective of whether or not the minister is moving on I suggest to him but more particularly to the officials that they should always see to it that amendments involving changes that are not in the resolutions and the bills are announced to the public before the House of Commons is asked to deal with them.


Donald Methuen Fleming: I think we have tried to do that. This is a shorter bill than usual in the case of the amendments to the Income Tax Act. The bill follows the provisions of the resolutions which were before the house and the country for three and a half weeks prior to being adopted in committee of ways and means, and six days have now passed since the bill was introduced and given first reading. I think the bill has had wide publicity. We had the benefit of the usual discussion between officials of the department and the representatives of the Canadian tax foundation. They were here last week for detailed discussion which, as the hon. member knows, is customary, and following that detailed discussion Mr. Perry, the director of the tax foundation, intimated to me that they had no submissions to make on the bill.
So far as the amendment now introduced is concerned, it is one which widens the provisions of the bill and to that extent it can be regarded as a relieving section.


William Moore Benidickson: I simply want to say that the minister and his officials should be well aware that our financial papers usually come out on Wednesday or Thursday. They have

a wide circulation and if a bill is presented to the house on Thursday, prior to the time that these national papers can give it some comment, there is a possibility, particularly when there are amendments and changes not announced at budget time, that the public as a whole have not had a proper opportunity to present their views to their members of parliament.
I should like to ask the minister my usual question with respect to this amendment. No amendment was indicated at the resolution stage or when the bill was presented a little late, as I say, last Wednesday. Have there been any protests by anybody in the industry who has seen the purport of the amendment?


Donald Methuen Fleming: Several submissions were received with respect to the extent and terms of the original proposal.


William Moore Benidickson: And this is the result.


Donald Methuen Fleming: The amendment which I introduced in the committee was commended by those who had made the original submissions and this further amendment was suggested by one of them.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
On clause 20-Amount of premium deductible.
Herbert Wilfred Herridge: I should like to ask the
minister a question largely prompted by a combination of my dullwittedness and suspicious nature. In subclause 2 of clause 20 the amending words are:
-or in the case of a taxpayer who is an employee of a life insurance corporation and is a beneficiary, contingently or otherwise, under a registered pension plan instituted or established by the corporation.
The explanation of the amendment on the opposite page reads as follows:
This amendment adds the underlined words to make it clear that employees of life insurance corporations, who are members of a registered pension plan established by such corporation for their employees, are subject to the limitations on the amount they may deduct as premiums under a registered retirement savings plan in the same manner as other taxpayers who are members of employee pension plans. The present wording of the paragraph being amended does not cover employees of life Insurance corporations because these corporations have special rules for computing their taxable income.
Was this amendment found necessary because of some discovery as to the method of computing income tax of life insurance companies on the part of the minister's officials, and can he explain what is meant by the words "these corporations have special rules for computing their taxable income?"
Business of the House


Donald Methuen Fleming: Questions were
asked as to whether the persons here referred to were in fact so bound. That is what gave rise to a consideration of this question. I might say broadly in reply to the hon. gentleman that taxpayers who are members of registered pension plans may also deduct premiums paid under registered retirement savings plans but the combined total of the contributions into the two kinds of plans may not exceed 10 per cent of income or $1,500 per year. Taxpayers who are not members of registered pension plans may deduct premiums not exceeding 10 per cent of income up to a maximum $2,500 per year.
This amendment makes it clear that life insurance employees who are members of registered pension plans are subject to the $1,500 maximum the same as other employees who are members of such plans. The purpose of the bill is to achieve equality of treatment. The limit on the amount deductible is lower for those who are members of registered pension plans because, in addition to deducting their own contributions, they also exclude from income during their working years amounts paid into the registered pension plan on their behalf by their employer.


Herbert Wilfred Herridge: Was the amendment occasioned by a misunderstanding on the part of some people filing income tax returns or some irregularities on the part of employees of these companies?


Donald Methuen Fleming: There was no discovery in that sense. No irregularity was discovered. It was a matter of a normal review and an attempt to assure equality.


[Stage Direction]
Clause agreed to.
Clause 21 agreed to.
Clauses 22 to 28 inclusive agreed to.
Title agreed to.
Bill as amended agreed to.
Bill reported.
Mr. Speaker:: When shall said bill be read
a third time?


Donald Methuen Fleming: By leave, now.


William Moore Benidickson: Now, by leave.


Hazen Robert Argue: Next sitting of the house.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I inquire what the house leader intends to do tomorrow? Perhaps he might also give us the program for the rest of the week.


Howard Charles Green: Tomorrow we shall commence with third reading of this bill. Then we shall take item No. 13 on today's order paper,
3832	HOUSE OF
Business of the House
a resolution concerning Austria; then second reading of amendments to the Veterans' Land Act, the intention being to refer that act to the standing committee on veterans affairs.


Lionel Chevrier: Would the minister give us the number of the item?


Howard Charles Green: That resolution appears on today's order paper as item No. 17. Then we shall take item No. 14, a resolution concerning the Bretton Woods Agreements Act; then item No. 10, a resolution concerning the Royal Canadian Mounted Police Act; item No. 9, a resolution dealing with the Defence Services Pension Act; and item No. 8, which concerns the convention on the nationality of married women. If we finish this business we would then go into the estimates of the Department of Labour.
On Thursday we intend to take second reading of the National Energy Board Act and to continue with that business until it is concluded. If we should finish it by Friday night, then there would be a supply motion on Monday.


Lionel Chevrier: May I indicate to the house leader that Bill No. C-49 which he intends to take on Thursday was just handed to us a few moments ago; as a matter of fact it was handed to us when the evening session had begun. This is an extremely important bill. We have co-operated with the government in getting the resolution through in excellent time, I believe. But here we are handed a bill which has 101 clauses extending over 28 pages. I do not think it is equitable on the part of the government to ask the opposition, on this short notice, to be ready to discuss second reading of a bill of this importance. I wonder whether the house leader would not give consideration to putting this bill over, as surely must have been the intention of all the members of the house, for discussion on Monday.


Howard Charles Green: Mr. Speaker, I always try to meet the wishes of the opposition but in this case I am afraid I cannot do so. There is a great urgency to get this measure through on the part of the people of western Canada. There comes times when we just cannot give the extra time that is requested. As the hon. member has mentioned, we arranged to distribute the bill this afternoon. There will be a day tomorrow and until 3.30 p.m. approximately on Thursday. I am sorry but I cannot accede to the wishes of the hon. member.


Lionel Chevrier: My submission is that on 24 hours' notice we cannot possibly give to this bill the attention that it requires and that I am sure parliament should give. The point

I am making is this. While it might be urgent to get this measure through, surely it was just as urgent to bring it on earlier. If we had had it brought on earlier I am sure we would have had the requisite amount of time in which to consider it. It seems to me that this is taking an unfair advantage of the members of the opposition in asking them to deal with a matter of this importance, with the time that is being given at the moment.


William Moore Benidickson: It was mentioned in the speech from the throne.


John Whitney Pickersgill: It seems to me, Mr. Speaker, that this is really an outrageous way in which to treat the House of Commons. Hon. gentlemen opposite used to talk about a deadline.


Mr. Speaker:: Order. Unless the minister is prepared to change his position, there is no point in pursuing the matter further. It being ten o'clock-


Lionel Chevrier: Mr. Speaker, I rise on a point of order. I think we have been rather fair on this side of the house tonight. We have allowed the excise tax bill and the income tax bill to go through. We have sat after ten o'clock. It seems to me that this matter is one of extreme importance. I repeat that we are going to consider carefully the attitude which we shall have to take on this bill in view of the position taken by the leader of the house. I repeat that the position he has taken is not fair to us on this side of the house. This is the first time that I have made this protest on any of the matters that have been brought to the attention of the house for the next day's business. I am sure the leader of the house will bear me out when I say this. This is the first time in my recollection that I have risen, on an occasion such as this, to protest the inadequacy of the time given us for consideration of a bill of this importance. I gave the information which concerns this matter to the leader of our party and he thinks it just unconscionable that we should be asked, with barely 24 hours' notice, to deal with this bill. I ask the leader of the house whether in fairness he will not reconsider his position and allow us to deal with it over the week end so that we can discuss it intelligently on Monday.


Howard Charles Green: The hon. member has been extremely co-operative and I appreciate his actions throughout. However, in this case I regret that I cannot accede to his suggestion.
I would point out, Mr. Speaker, that I think he is under-rating his intelligence.


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

Questions