1959-02-19

[Stage Direction]
Mr. J. W. Kucherepa (High Park) presented the first report of the standing committee on standing orders, and moved that the report be concurred in.
Motion agreed to.


Hon. Sidney E. Smith (Secretary of State for External Affairs):: Mr. Speaker, on February 10 I informed the house that I would be pleased to table a copy of the recently concluded agreement between the United Kingdom and EURATOM for co-operation in the peaceful uses of atomic energy. I have now received, and desire to table, two official copies of this agreement. Hon. members may also be interested in a broadly similar agreement which was concluded early last summer between the United States of America and EURATOM. I am now tabling two copies of that agreement as well.



FINANCE


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of fhe Opposition):: Mr. Speaker, I would like to ask the Prime Minister a question. I am sorry I did not have an opportunity to give him notice, because it was brought to my attention just before the house opened. Would the Prime Minister comment on a press report that the government has requested a monthly report on the names of people and firms who are substantial borrowers from chartered banks?


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I refer that question to the Minister of Finance.


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, I presume the hon. gentleman has reference to an article which
appears in this week's issue of the Financial Post. The hon. gentleman nods assent. I may say that I saw this article a few minutes ago. There are several errors in it. The government is not asking for any of these returns. The inspector general of banks, pursuant to his duties under the Bank Act, requires certain returns to be made and returns have been made, including names of borrowers, for more than the last 15 years. There is nothing new about this. There are certain modifications which are under consideration at the present time, as I am informed by the inspector general of banks, but the practice which is referred to in this article as something new is something that has persisted, Mr. Speaker, for more than the last 15 years.


Lester Bowles Pearson: Mr. Speaker, would the hon. minister advise the house, as soon as he can, what these modifications are which he has said are under consideration?


Donald Methuen Fleming: Yes, Mr. Speaker, I will be glad to acquaint the house with those. I do emphasize again that this is a matter in which the inspector general proceeds under statutory powers and in the fulfilment of the duties which are laid upon him by statute. This is not a matter in which the government acts; but in due course I shall be very glad to give the house information as to any changes which may be made in the existing practice.



REQUEST FOR STATEMENT ON SHORT TERM BOND ISSUE

[Stage Direction]
On the orders of the day:
Mr. W. H. McMillan (Welland):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Now that the government loan has been substantially oversubscribed, would the minister make a short statement either today or at some early date on the different aspects of the loan, as I requested yesterday in my remarks to be found at page 1140 of Hansard, including information such as commissions paid, cost of issuing, etc.?


Donald Methuen Fleming: Mr. Speaker, as I stated to the house yesterday afternoon the loan was substantially oversubscribed. Naturally that gives the government no little satisfaction, as I am sure it gives satisfaction to all hon. members of the house.


William Hector McMillan: Would the Minister of
Finance say what effect the recent high interest yield of 4.76 per cent and 4.94 per cent on short term government bonds will have on the cost of money to the municipalities and the provinces?


Mr. Speaker:: The hon. member does not expect the minister to answer an argumentative question of that kind. Really what he is asking for is an expression of opinion.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Harold Winch (Vancouver East):: Mr. Speaker, may I ask a question of the Minister of National Defence. Has the minister's attention been drawn to a report in this morning's Montreal Gazette as follows:
General Charles Foulkes, chairman of the Canadian chiefs of staff committee, said today Canada and the United States have neglected to continue to develop joint procurement of defence equipment.
It now is possible that we (Canada) may have to abandon the policy of developing and producing special Canadian equipment for the limited requirements of the Canadian forces and revive the provisions of the agreement of 1950 for economic co-operation with our partners (the U.S.) in joint production of defence requirements.
Can the minister inform the house if this statement, as reported in the press, by the chairman of the chiefs of staff committee, is the policy now established by his department and by the government?


Hon. G. R. Pearkes (Minister of National Defence):: I have not seen the press report referred to. I will take this as notice and look into the question.



HEALTH INSURANCE


[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare, notice of which I sent to his office this morning.


In the application or payment of federal grants to provinces which have agreed to come under the hospital insurance scheme, would the minister inform the house if the plan must apply on a compulsory basis in those provinces which have accepted, and also if it should cover the entire province and not be limited to a portion of the said province?


Hon. J. W. Monleiih (Minister of National Health and Welfare):: I wish to thank the hon. member for having given me notice of this question. The federal legislation requires that the insured services provided must be made available to all residents of the province. This does not mean that insurance must be compulsory for all persons in the province. However, under the agreements concluded to date, all provinces with the exception of the province of Ontario have made their programs compulsory for all residents. Ontario has a compulsory requirement for a large sector of the population, and makes the services available to the remaining residents on a voluntary basis. In concluding any agreement with a province we would, of course, expect some assurance that a large proportion of the population would be covered by the program as was the case in Ontario.
In regard to the question whether the program must cover the entire province, it of course goes without saying that if the program is universally available to all residents it cannot be limited to one sector or region of a province.


Hédard-J. Robichaud: In view of the answer
given, would the minister inform the house whether a province will qualify for its share of the federal grant if a municipality within that province refuses to contribute to the provincial share?


Jay Waldo Monteith: I assume the hon. member is referring to the province of New Brunswick. The federal government and the province of New Brunswick have not as yet signed an agreement. When such an agreement comes to be signed, the factors required to bring the agreement within the context of the over-all act will be taken into consideration.



NATIONAL CAPITAL PLAN


[Stage Direction]
On the orders of the day:
Mr. Alexis Caron (Hull):: I wish to direct a question to the Prime Minister. When Major General Kennedy, chairman of the national capital commission, spoke about the

bridge which is badly needed was he reflecting the policy of the present government?


John George Diefenbaker: I do not know what General
Kennedy has said with respect to the bridge-


Some hon. Members:: No bridge.


John George Diefenbaker: -therefore I am unable to answer the question in any way.


Alexis Pierre Caron: Mr. Speaker, my question is supplementary to the one I asked the Prime Minister earlier. The Prime Minister said a while ago that he had not received a report of Major General Kennedy's speech. Would he look at that report and answer at a later date?


John George Diefenbaker: Yes, Mr. Speaker, I shall be glad to do that.



COLUMBIA RIVER


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs. As the format of my question is identical with that used by the present Minister of Justice when he was a member of the opposition, I trust it will be in order. My question arises out of a government press release in this morning's papers stating that satisfactory progress has been made at Canada-United States talks on downstream benefits in sharing the power potential of the Columbia river.
Would the minister inform the house if this press release is correct; who is responsible for the same, and whether he has any further information he can give to the house at this time on this important matter.


Sidney Earle Smith: I thank the hon. member for having given me notice of his intention to ask this question. With respect to the propriety of asking this question, I have some doubt as to whether I am obliged under the rules of the house to answer a question as to the validity or correctness of a newspaper report. Having registered that doubt, however-


Mr. Speaker:: If the minister raises the point of order, the first part of the question is objectionable and contrary to the rule, but the question goes beyond that and I allowed it to pass on that account.


Herbert Wilfred Herridge: This was the habit of the Minister of Justice in former days.
Inquiries of the Ministry


Mr. Fulton:: It never was. However, the hon. gentleman is accustomed to taking liberties, so perhaps he should be allowed to take this one.


Sidney Earle Smith: Mr. Speaker, with respect to the second part of the question, if that report be true, if the press release came from the international joint commission, I have no further comment.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I should like to direct a question to the minister who answers for the Canadian Broadcasting Corporation. In view of the rejection this morning by the unions of what the C.B.C. described as its ultimate offer, can the minister bring us up to date on the present position of this particular labour situation?


Hon. J. M. Macdonnell (Acting Minister of National Revenue):: Mr. Speaker, as the hon. gentleman is apparently aware, negotiations have been taking place during the past few days in Ottawa between representatives of the unions and the C.B.C. The representatives of the unions left Ottawa early this morning for Montreal to review their position with the union membership in the light of these discussions.
According to last reports the union membership indicated that they would not accept the proposals made by the C.B.C. and it is reported that they plan another meeting within a couple of days.



INQUIRY AS TO WIRE-TAPPING OF UNION HOTEL ROOMS

[Stage Direction]
On the orders of the day:
Douglas Mason Fisher: Mr. Speaker, I should like to direct a question on the same topic to the Minister of Transport. Can the minister indicate if he is going to report on requests made that the C.N.R. check the possibility that rooms in the Chateau Laurier used by the unions negotiating with the C.B.C. had been wire-tapped?


Hon. George H. Hees (Minisier of Transport):: Mr. Speaker, I thank the hon. member for having given me notice of his intention to ask this question. Immediately upon receiving notice I contacted Mr. Mann, the manager of the Chateau Laurier hotel, and he tells me that neither he nor any of the managerial staff has any knowledge of such a procedure having taken place, nor do they think it would be possible.

Inquiries of the Ministry


Mr. Speaker:: May I say about questions of that kind that when hon. members choose to repeat statements which they take from the press as worthy of consideration in the house, they take the responsibility themselves for those statements.


Douglas Mason Fisher: Mr. Speaker, in view of your remarks I think I should explain that I did not take this information from the press. The question was brought to my notice by the people involved, and I took it to the Minister of Transport as I thought he was the appropriate minister.



COMMONWEALTH RELATIONS


[Stage Direction]
On the orders of the day:
Mr. G. J. Mcllrailh (Ottawa West):: Mr. Speaker, I should like to direct a question to the Minister of Finance. The question is based on a press release by the Prime Minister concerning Marlborough House in London being made available to accommodate the staff of the commonwealth economic committee, and as a permanent centre for economic consultations within the commonwealth. My question is this. Is the Canadian government making any contribution to the cost of reconstruction and maintenance of Marlborough House?


Donald Methuen Fleming: No, Mr. Speaker.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I should like to direct a question to the Minister of Mines and Technical Surveys. In view of today's news report appearing in the Globe and Mail that at least 550 men will be out of work on March 31 on Bell island, Newfoundland, when the Dominion Wabana ore division of Dominion Steel and Coal Corporation cuts production, and in view of the same difficulties in Nova Scotia in respect of the same parent company, has the government as yet come to any decision in these matters?


Hon. Paul Comtois (Minister of Mines and Technical Surveys):: Mr. Speaker, I am grateful to the hon. member for having given me notice of his question. I have seen the same report in the Gazette, but my department or the dominion coal board has not received any confirmation of it. As to the last part of the question, the answer is no.
[Mr. Hees.l



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I should like to address a question to the Minister of Labour, of which I sent notice this morning.
Has the minister's attention been drawn to the January newsletter of the John Howard society of British Columbia in which it congratulates the unemployment insurance commission for recommending the required amendment to the Unemployment Insurance Act to make prison inmates eligible for benefits upon their release, and indicating that such an amendment will be introduced at the present session? Can the minister make any comment on this statement in the John Howard society newsletter of British Columbia?


Hon. Michael Starr (Minister of Labour):: Mr. Speaker, I wish to thank the hon. member for giving me notice of his intention to ask this question and for drawing my attention to this newsletter. I feel, Mr. Speaker, that it would be improper for me at this time to make any comments or to indicate in any way the amendments which are expected to be brought in to the Unemployment Insurance Act. However, I wish to assure the hon. member that this particular aspect of unemployment insurance, or the possibility of such an amendment, is being given very serious consideration.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Hon. J. W. Pickersgill (Bonavisia-Twil-lingale):: Mr. Speaker, I should like to direct a question to the Minister of Citizenship and Immigration. Will the hon. lady give an assurance that no deportation proceedings will take place in the Rolling case until there has been an opportunity to review the matter in the house when it is no longer sub judice?


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: Mr. Speaker, I am sure the hon. member knows the matter is before the courts. I do not think I should make any comment on it.


John Whitney Pickersgill: Mr. Speaker, I am rising on a point of order. Similar questions were asked of me by the present Prime Minister and by the Minister of Justice in the Hanna case when I occupied the post the hon. lady

now occupies. I am sure the hon. lady could give the assurance without any impropriety.


Mr. Speaker:: Even if she could, I think it is not within the practice of the house for a member to comment on the willingness or unwillingness of a minister to answer a question.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I should like to direct a question to the Minister of Transport. I hope the notice reached him in sufficient time. Have any representations been made recently by the city of Prince Rupert or any other similarly interested groups protesting the announced action of Canadian Pacific Air Lines not to provide direct flights between Vancouver and Prince Rupert? If so, is any action contemplated to ensure that Prince Rupert receives such a direct air service?


George Harris Hees: I want to thank the hon. member for giving me notice of his intention to ask this question. I received the notice just before coming into the house and did not have an opportunity to check with the air transport board. I will do so and report to the hon. member tomorrow.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I wonder whether the Prime Minister can inform the house when a chairman of the civil service commission is likely to be appointed.


John George Diefenbaker: Mr. Speaker, he is likely to be appointed at any time.



INTERIM PAYMENT ON 1957-58 CROP

[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: I should like to direct a question to the Minister of Trade and Commerce arising out of the urgent need to bolster prairie farm income. Can the minister say when the long overdue interim payment on the 1957-58 wheat crop is likely to be announced?


Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Speaker, it is likely to be announced at any time.
St. Lawrence Seaway Authority Act


Hazen Robert Argue: In view of this most indefinite and unsatisfactory answer, can the minister inform the house whether the wheat board's 1957-58 account has now been closed out?


Gordon Minto Churchill: The accounts with regard to wheat, oats and barley for 1957-58 are all in very good shape. I can assure the hon. member that there will be an interim payment and that it will be made in due course.


Hazen Robert Argue: Would the minister answer my question with respect to whether the account has been closed out so that payment may be made forthwith?


Gordon Minto Churchill: I just informed the hon. membeT that the accounts with regard to wheat, oats and barley are all in good shape. They have not yet been made final, but there will be an interim payment on wheat as in other years. The general wheat picture continues to be good, as it was last year.



ST. LAWRENCE SEAWAY AUTHORITY ACT AMENDMENT TO INCREASE LIMIT ON AMOUNT TO BE BORROWED

[Stage Direction]
The house resumed, from Wednesday, February 18, consideration in committee of the following resolution-Mr. Hees-Mr. Rea in the chair:
That it is expedient to introduce a measure to amend the St. Lawrence Seaway Authority Act to provide that the authority, with the approval of the governor in council, may from time to time borrow money from Her Majesty or otherwise to an aggregate that shall not at any time exceed $335 million in lieu of $300 million which it is already authorized to borrow by section 13 of the act.
Mr. Chevrier:: Mr. Chairman, before I deal with the resolution proper perhaps I might be allowed to digress for a moment to deal with a matter which, while perhaps not strictly germane to the resolution, is none the less related substantially to it. I, of course, should like to refer to the visit which Her Majesty the Queen and the President of the United States are going to make to celebrate the opening of the St. Lawrence seaway on June 26 of this year. I should like to say a word about the origin of that matter and how it came about.
Some time in 1956, or early 1957, I believe, the St. Lawrence seaway authority invited His Excellency the Governor General to make a tour of the navigational facilities and the works of the seaway extending from the Montreal area to the international section. During the course of the tour His Excellency said to me, "What would you think if Her Majesty the Queen were invited to open the facilities of the St. Lawrence seaway?" I of course immediately said that I thought the

St. Lawrence Seaway Authority Act idea was an excellent one. During the course of the day the press were advised of it, and at a luncheon that was given in honour of His Excellency in the city of Cornwall that day a discussion of the matter followed. As I understood from His Excellency that he had already spoken to the then prime minister-


Mr. Fulion:: Mr. Chairman, I rise on a point of order. Although I cannot lay my hand on the rule at the moment, I am quite sure I can do so in a short time. However, I am clear in my recollection that it is not in order to introduce the name of His Excellency into debate. It seems to me that my hon. friend is attempting to do that. He is not merely referring to His Excellency, which would be one matter, but he is referring to His Excellency with respect to a matter of government business. This is a reference which is clearly out of order.


Lionel Chevrier: So that there may be no difficulty about what my intention is, Mr. Chairman, perhaps I could now refer to what the former prime minister did and then I would be in order, if there is any doubt about what I am about to say. It followed thereafter that the former prime minister, I believe, announced in the house that an invitation had been forwarded to Buckingham palace and had later been accepted. I do not know why the Minister of Justice interrupted me when I was making this interjection.


Edmund Davie Fulton: Because the hon. member was out of order.


Lionel Chevrier: I would like now to refer to the statement the Prime Minister made when he announced the visit of the President of the United States to the opening ceremonies in Montreal. I took the occasion at that time to commend the government, and I want to repeat what I said then. I also want to add this. I think it was a gracious gesture on the part of the President of the United States to consent to come to the city of Montreal where, in his presence and that of Her Majesty, the facilities will be opened to navigation.
I also want to say, if I am not interrupted, what I said on a former occasion, namely that we in the seaway authority some two or three years ago had given consideration to this very matter. We had not, of course, discussed the details because we could not have arrived at a decision on them at the time. However, we had hoped that it would be possible to have two official openings, one in the purely Canadian section at Montreal and one in the international section.
I can see now why that would be difficult. I can see now that it is difficult for the

President who, after having presided with Her Majesty at the opening of the facilities at Montreal, would be obliged to travel for almost one day on the royal yacht in order to reach the international section. However, I am pleased to note that it will be possible for Her Majesty the Queen to visit the facilities on the Canadian side in the international section, and perhaps also on the United States side going over to Cornwall, Ingleside, Long Sault, Morrisburg and Iroquois. I have no doubt that the hon. member for Stormont was successful in making representations to the government as, I am sure, was the hon. member for Grenville-Dundas. I am sure the representations of the hon. member for Stormont, to which was added the charm of the hon. member for Grenville-Dundas, had no little to do with this visit in that area.
Before getting back to the resolution, Mr. Chairman, there is one comment I should like to make about the statement the minister gave to the house yesterday, as found at page 1162 of Hansard. Anyone looking at this statement will find that under the title "Date Decision Taken" there are a number of items which are referred to as the dates upon which certain decisions were taken with reference to an increase in expenditure. Most of those dates are in 1955 and 1956, at least prior to the present government being in office. There is one matter, however, with respect to which the minister did not refer to as a decision having been taken during that time, and it was the decision with respect to the royal visit.
There are other matters to which my hon. friend referred and to which I should like to draw his attention as courteously as I can. While the decisions mentioned here were taken earlier and by another administration, none the less the projects that have been put into effect and the opening of the subsequent projects are events that have taken place during the present administration. I do not remember that at any of these official openings-and I have three of them in mind at the moment-the minister made any reference to decisions having been taken by the former government while he was opening these new facilities. However, I bring that matter to his attention so that perhaps in the future, when he is opening other facilities in the international section or elsewhere, he will be reminded that decisions were taken prior to the time the present government came into office.
I now come to the resolution which is before us and which seeks to amend section 13 of the St. Lawrence Seaway Authority Act in order to increase from $300 million to

$335 million the amount of money to be borrowed. In other words the resolution, with the approval of the governor in council, seeks to increase the borrowing by that amount. The first question that comes to mind in a discussion such as this one is obviously the following. How is it that a project which was to have cost $246 million has now reached the point that it will cost at least $335 million and perhaps more? The house is entitled to know the answer to this question. I should like to direct my attention exclusively to this matter, and to deal with the estimates of costs of the seaway and power project as envisaged by Canada.
First I should like to say that the seaway and power project in its present phase has been under investigation now since 1922. At that time it was referred to the international joint commission by both Canada and the United States, and during the 30 years which followed-the reference that I made to 1922 should have been 1920-between 1920 and the final Canada-United States arrangement concluded in August, 1954 this navigation project was studied by economic, international, engineering and other bodies, as well as by special boards in both Canada and the United States. All these bodies, national and international, economic and engineering, during all those years came to the conclusion that the project for the development of power and navigation on the St. Lawrence was not only feasible but practicable.
Then in 1932 Canada and the United States signed the Washington treaty. It provided for a 27-foot waterway from Montreal to the head of the lakes, and was known as a two-stage development. That is to say, there was to be a development of power in the international section in two stages, one at Cornwall and one at Crysler island, with two canals, one on the United States side to circumvent the main dam at Cornwall and the other on the Canadian side to circumvent the other dam at Crysler island. The cost of this project was to be divided equally between Canada and the United States.
Then there came what was known as the 1941 agreement. I should have said that the 1932 agreement was not ratified by the United States Senate and fell by the wayside. The 1941 agreement provided also for the development of water power resources and navigation facilities from Montreal to the head of the lakes, this time with a one-stage power development but with a control dam at Iroquois, and with both canals on the United States side of the line. When Canada decided to attempt to construct the seaway from Montreal to lake Erie as a Canadian project, the project known as the 238-242 single stage
St. Lawrence Seaway Authority Act control scheme was adopted and considered as the basis for the power development in the international section.
The entire navigation and power project as contemplated in the 1941 agreement was described in a brochure published by the Department of Transport in 1949, which I hold in my hand. It is entitled "The Great Lakes-St. Lawrence Deep Waterway". It was prepared by the general engineering branch of the Department of Transport and was signed by Guy A. Lindsay, engineer in charge. It contains a detailed explanation of the seven sections of the St. Lawrence seaway from the connecting channels in the upstream area down to the Lachine section opposite Montreal, together with a detailed statement of the estimate of costs as prepared by that engineer. This document was made public by the Department of Transport and was circulated for many years by the department.
The estimates of cost of the seaway and power project from Montreal to the head of the lakes based upon construction prices as of April 1949, which were made at the time by the general engineering branch of the Department of Transport, were as follows: Works solely for navigation, $67 million; works primarily for power, $166 million; works common to power and navigation, $187 million; total works common to power and navigation, $421 million. These estimates are based upon a navigation depth of 27 feet with locks of the same dimensions as those in the Welland canal, and with the sills designed for a depth of 30 feet.
Here I would like to make two points. First I would like to say that under the 1941 agreement, which I mentioned earlier, the navigation facilities were all on the United States side of the line. Second, provision was made for the continuance of 14-foot navigation in Canada in so far as the Ontario St. Lawrence canals were concerned. I would further like to point out at this stage that the cost for navigation facilities at that time was estimated at $67 million, at 1949 prices, while on the other hand power works and works common to navigation and power which were to be the responsibility of power were fixed at $353,932,000.
In December of 1949 there was prepared by the engineering branch of the Department of Transport an estimate of the cost, at April 1949 prices, of the 238-242 single stage control scheme with 27-foot navigation channel in Canada instead of in the United States, and in this estimate the cost was fixed at $106,288,000. On the other hand, the estimate of the power and common works was fixed at $344,910,000. Then later, in 1951,

St. Lawrence Seaway Authority Act these estimates were revised to the December 31, 1950 cost level. In this case the estimated cost of the navigation works was increased to $119,575,000, and that of the power and common works was increased to $389,025,000. In September of 1952 a comparative estimate was prepared of three alternative canals based on December, 1950 price levels, and the canal selected for all practical purposes, providing for twinning of locks at Cornwall, was estimated to cost $119,515,000.
In 1951 Canada negotiated an agreement with Ontario, which agreement contemplated the development of power in the international section of the river. By article 2 of this agreement Canada said it would do all in its power to obtain the approval of the international joint commission of an application to be made by Ontario, in a form to be approved by Canada for works to develop the power resources in the international section of the St. Lawrence river in accordance with the plan known as the single stage control scheme 238-242. The agreement was approved by parliament and the application duly launched by both countries.
I would like to refer at this stage to the application which was made by Canada dated Ottawa, June 30, 1952, signed by the then secretary of state for external affairs, Right Hon. Louis St. Laurent, and ask the house to look at paragraphs 1, 2, 3 and 4. I have not time to deal with them, but reference should be made particularly to that part of paragraph 8 which deals with the manner in which the work shall be done in the international section. What I want to bring to the attention of the house is that this application made by the government of Canada in June of 1952, in so far as section 8 is concerned, compares almost identically with the manner in which the 238-242 single stage control project was described by Mr. Lindsay in his brochure, referred to earlier, entitled "The Great Lakes-St. Lawrence Deep Waterway".
In August of 1952 there was prepared, again by Mr. Lindsay, an estimate of the 238-242 single stage control project for power alone and the navigation works, this time on the Canadian side but to be done at a later date. This estimate totalled $402,677,000 excluding interest during construction. In 1952 the United States corps of engineers, the body responsible for the construction of the seaway on the United States side and the body also responsible for the operation of the Panama canal, submitted estimates to the international joint commission of the cost of power development in the international section. At United States
prices as at December, 1950 this estimate was in the order of $493,620,000 excluding interest during construction.
On August 10, 1954, the power authority of the state of New York issued a brochure containing the estimate made by the consulting engineers engaged by them, Messrs Sanderson and Porter of New York city and Messrs Uhl, Hall and Rich of Boston. These estimates indicated a total construction cost of $561,730,000 divided as follows between the power authority of the state of New York and the Hydro-Electric Power Commission of Ontario: the power authority, $310 million and Ontario hydro, $251 million.
Appendix C of the international joint commission order of approval dated 1932-the order of approval of the power contract in the international section-provides that the cost of power works is to be divided equally between Ontario Hydro and the power authority of the state of New York; and while at the moment there are no final figures available it would appear that the final cost excluding interest during construction will exceed $650 million. Thus in so far as this aspect of the project is concerned I say that as the actual construction of the power project will not be completed until 1960, it would appear that the construction costs exclusive of interest and financing will be at least $600 million as compared with the estimate made by Mr. Lindsay, to which I referred earlier, of $402,677,000.
Now I should like to deal with the purely navigational aspect of the St. Lawrence seaway. The act to establish the St. Lawrence seaway authority was assented to on December 21,	1951 and it provided for the
financing of an all-Canadian seaway from Montreal to lake Erie up to, but not exceeding, $300 million. At the time the act was passed it was hoped that an all-Canadian seaway could be built, but provision was made for United States participation. As it was not known at the time whether or not the United States would participate, the $300 million figure could only be approximate. The latest estimate of cost available at that time indicated that the figure would be $260,328,000 to which should be added, of course, the $15 million which Canada agreed to contribute toward channel enlargement in the upper regions of the St. Lawrence in accordance with the exchange of notes dated June 30, 1952, which brings the cost at that time up to $275,328,000.
On December 11, 1951 I stated in the House of Commons-and this will be found at page 1787 of Hansard-
It is estimated that the navigation features of the project will cost $245,993,000, which is broken

down as follows: In the Lachine section for navigation alone, $98,229,000; in the Soulanges section, $37,116,000; in the lake St. Francis section, $2,513,000; in the international section, $106,833,000, and in the Welland ship canal, $1,302,000, making a total of $245,993,000.


Mr. Walker:: Would the hon. gentleman permit a question which I think is appropriate at this time? Would he be good enough to explain why his original estimate for the Welland canal should have been $1,302,000 when the final cost under his administration proved to be more than $27 million?


Lionel Chevrier: If the hon. gentleman will allow me, I should like to deal with that question at the end of my remarks because I have a portion which deals with that matter. However, I would remind him now, when he says that this was a matter which was dealt with during my administration, that a portion of the work on the Welland canal was done under the administration of which I was a member, and a portion was done under a later administration. I thank the hon. member for his intervention, but perhaps I might be allowed to deal with it at the end of my remarks.
St. Lawrence Seaway Authority Act
As I pointed out, I have put on record on Hansard the estimate I gave to the house in 1952. This estimate was made by Mr. Lindsay, who furnished the figures to me, and it represented the cost of the seaway from Montreal to lake Erie in terms of the agreement with the province of Ontario. 1 should like to table this estimate. It is entitled "Extract from a report entitled 'Great Lakes-St. Lawrence Deep Waterway-a brief description', by Guy A. Lindsay, director, special projects branch, Department of Transport, Ottawa, December 22, 1951." It places the cost of the Canadian seaway on the basis of the 1951 agreement with Ontario at $245,993,000. With the agreement of the committee I should like to table this estimate.


The Deputy Chairman:: Does the hon. member wish this to be printed in Hansard?


Lionel Chevrier: I do.


Charles Edward Rea: Has the hon. member the permission of the committee to put this document on record in Hansard?
'


Some hon. Members:: Agreed.


Lionel Chevrier: The statement is as follows:



SCHEDULE X


[Stage Direction]
of
2,200,000 H.P. IN THE INTERNATIONAL RAPIDS SECTION (December 1950 Cost Level)

[Stage Direction]
Upper lakes channels	
Deepening Welland ship canal St. Lawrence river Thousand islands section ....
Int. rapids section	
Lake St. Francis section _
Soulanges section	
Lachine section	
Project with United States 1941 Agreement.
United States	Total
Joint
Canada

[Stage Direction]
$483,915,000	$704,142,000
All Canadian Waterway to Lake Erie

[Stage Direction]
Case (a) assuming total cost of "works common to navigation and power"
chargeable to power	 $ 20,632,000
Case (b) assuming total cost of "works common to navigation and power" chargeable to navigation $126,609,000 Case (c) "all-Canadian waterway" on basis of 1951 agreement with Ontario	
$284,320,000	$304,952,000
$390,296,000	$516,905,000
[Stage Direction]
Special projects branch,
Department of Transport,
Ottawa, December 20th, 1951.
Guy A. Lindsay,
Director.
Extract from report entitled "great lakes-St. Lawrence deep waterway-A brief description", by Guy A. Lindsay, director, special projects branch. Department of Transport, Ottawa, December 22, 1951.
[Stage Direction]
St. Lawrence Seaway Authority Act
It should be noted that this amount does not include (a) $1,593,000 for the Thousand islands section; (b) interest during construction; and (c) that Mr. Lindsay assumed that Ontario would pay about $13,500,000 toward the cost of the seaway in lieu of the construction of the 14-foot navigation canal. It should also be noted that the estimated cost of the Lachine section, $98,229,000, was based upon a canal for navigation alone on the Montreal side of the river and included vertical lift bridges at the C.P.R. crossing at Lachine rapids and at the Montreal end of the Victoria bridge, but did not include the cost of the vertical lift bridge to be built at the Mercier bridge crossing of the seaway, as it was assumed that this was to be done by the province of Quebec.
As a result of the exchange of notes between Canada and the United States the estimates for both power and navigation required modifications in two important aspects. First, power costs were reduced by $15 million by reason of Canada's contribution; and second, Canada agreed that power, at least as far as the United States was concerned, should not bear the equivalent cost of providing 14-foot navigation, which was $13,500,000.
In October, 1952, Mr. Lindsay prepared another estimate of the cost of the seaway from Montreal to lake Erie based on the December, 1950, construction price level. Here is the summary:
Lachine section, navigation
alone, north side	 $ 98,229,000
Soulanges section	 37,116,000
Lake St. Francis	 2,513,000
International rapids	 119,575,000
Thousand islands	 1,593,000
Welland ship canal	 1,302,000
[Stage Direction]
To this must be added the amount Canada agreed to pay for power, $15 million, making a grand total of $275,328,000.
The international joint commission order of approval dated October 29, 1952, contained a provision in appendix A, subsection (a), in respect to channel enlargements which was ultimately, by reason of a compromise that had been made with the United States, to reduce the cost of power but to increase the cost navigation. I quote in part from appendix A, subsection (a), which reads as follows:
Downstream from the power houses channel enlargements will be carried out for the purpose of reducing the tailrace water level at the power houses.
Although the United States during the 1952 negotiations endeavoured to persuade Canada to agree to assume a large portion of the

cost of the so-called common works as navigation charges, Canada agreed to the payment of $15 million.
The Chairman:: Order. I regret to interrupt the hon. member, but his time has expired. Is it the pleasure of the committee to permit the hon. member to carry on?


Some hon. Members:: Agreed.


Lionel Chevrier: I thank the committee for this courtesy. I shall endeavour not to abuse it, but I have some further remarks to make and I should like to deal with the question raised by the hon. member for Rosedale.
I had stated that although the United States during the 1952 negotiations endeavoured to persuade Canada to agree to assume a large portion of the cost of the so-called common works as a navigation charge, when the Wiley-Dondero Act was passed that legislation specifically limited the work which the United States corporation was to do as a works solely for navigation. The result was that the United States not only declined to assume one-half the amount of $15 million which Canada had agreed to pay the power entities, but also endeavoured to argue that notwithstanding the precise language of the international joint commission order of approval from which I have just read respecting tailrace excavation the power entities should be called upon to undertake extensive dredging operations north and south of Cornwall island, which were required for navigation or for the maintenance of the natural distribution of flow between the north and south channels around Cornwall island.
The matter was the subject of prolonged discussions between Canada and the United States, between the St. Lawrence seaway authority and the St. Lawrence development corporation, the United States entity, between the New York state power authority and Ontario hydro; and in the course of these discussions it became clear that the United States desired to place Canada in the position of being forced to make an application to the international joint commission in the event that Canada desired at a later date to construct locks and a canal in Canada in the vicinity of Cornwall, and thereby to complete a 27-foot canal in Canada from Montreal to Lake Erie.
The result of these discussions I should like to summarize and put on Hansard, if I may. The summary is as follows. (1) an arrangement that the St. Lawrence seaway authority and the St. Lawrence development corporation would assume responsibility for the channel enlargements north and south of Cornwall island; (2) the two seaway authorities would undertake as nearly as possible

responsibility for and the cost of construction of the enlargements in their respective countries; (3) it was essential that Canada protect at this time her future position and provide also at this time for construction of a 27-foot channel to the proposed entrance of the future canal in Canada between lake St. Francis and the pool above the power dam and the carrying on of such channel enlargements north and south of Cornwall island as to maintain the distribution of flow between the north and south channels as well as to reduce the velocity of flow at the entrance of the 27-foot canal in Canada; (4) each of the power entities would contribute $6 million or a total of $12 million to the cost of such enlargements, and an improvement of about one foot in the head was to be anticipated when the enlargements had been completed; (5) these channel enlargements north and south of Cornwall island were extensive in character and had the effect not only of reducing the cost of the power development that was originally anticipated when Canada made the agreement with Ontario in December of 1951, but also materially increased the cost of the seaway both to the United States and to Canada.
The result of these discussions was that the increased cost amounted to $35,874,000 less the $12 million paid by the power entities which, roughly speaking, left a balance of $24 million; and both the St. Lawrence seaway authority and the St. Lawrence seaway development corporation, the United States entity, agreed to share this balance of $24 million by each paying one half. The estimated cost of the seaway was therefore increased by $12 million.
At this point, I pose the following question. How was it that this was not anticipated in either the 1932 or 1941 agreements? It was. This matter of downstream dredging is clearly contained in the estimates prepared by Mr. Lindsay, but it is contained there as a work common to power and navigation rather than as a work which would be the responsibility of navigation alone.
In so far as the 1951 discussions were concerned, it was not anticipated at the time that this work should be done in the south channel opposite Cornwall island, because the canal was entirely in Canadian territory. Now I should like to go a step farther, though I hesitate to trespass further on the time of the committee.


Some hon. Members:: Go ahead.


Lionel Chevrier: 
Mr. Palleii:: It is taking quite a while.


Lionel Chevrier: Well, I am sorry it is taking quite a while and I am grateful to the committee for having allowed me to take quite a while, but I should like to explain at some length what actually took place.
1182	HOUSE OF
St. Lawrence Seaway Authority Act


George Harris Hees: Go ahead.


Lionel Chevrier: While the international joint commission hearings were taking place during the summer of 1952, the Canadian National Railways had become alarmed at the effect which construction of the seaway on the Montreal side of the river, and particularly at the effect which a vertical lift bridge at the Montreal end of Victoria bridge, would have on their Point St. Charles yard and the traffic interchange with Montreal harbour. In this respect the railway officials had somewhat changed from the position taken by them when the Lachine section was being investigated for power and navigation, in a report prepared by several engineers and tabled in this house, dated October 15, 1948, to which I made reference several times in the house in earlier debate and which deals substantially with the development of power and navigation in the Lachine section.
I say that the C.N.R. officials had become alarmed at that time, and on January 15, 1953 the president of Canadian National Railways wrote the then minister of transport and indicated the estimated cost of adjusting the C.N.R. railway facilities to meet seaway conditions on the Montreal and St. Lambert sides, respectively, to be in the case of the St. Lambert side $6 million and in the case of the Montreal side $18 million.
As the committee know, we placed the canal on the St. Lambert side. The subsequent ideas of Canadian National Railways on Victoria bridge were changed materially from those indicated in the letter dated January 15, 1953. And in the press recently, in fact in an issue of the Montreal Gazette dated January 24, 1959, there appeared a statement dealing with some meetings which had taken place on the south shore in which the engineer of Canadian National Railways admitted, according to this press statement, that the over-all cost of the bridge may be closer to $30 million. I thought this matter should be brought to the attention of the committee.
Yesterday when the minister spoke he placed on record the budgets which are required to be tabled by the St. Lawrence seaway authority, in accordance with the Financial Administration Act, schedule D I think it is, of that act under which the St. Lawrence seaway authority falls. The minister pointed to the fact that the St. Lawrence seaway authority has no right to award contracts for any sum greater than $50,000, but that under the Financial Administration Act and under the St. Lawrence Seaway Authority Act all these contracts


must be approved by the governor in council and by treasury board. Pursuant to the responsibilities provided by parliament, the St. Lawrence seaway authority filed each year the budget required for the over-all expenditures, and they can be found at page 1161 in the statement made by the minister. Two of those budgets, I believe, were filed while I was still the chairman of the seaway authority, and two others after I had left the seaway authority. The fifth has not yet been filed, although the minister did give the amount as $329 million. Therefore, from the first budget which was tabled in the house and the estimates which were passed in the house, the house has had an opportunity of knowing, seeing and examining in detail the expenditures of the seaway authority which went from $205 million in 1955 to $329 million this year.
May I say one word about the United States legislation. It authorized the St. Lawrence seaway development corporation to build navigation facilities on the United States side in the international section to the extent of $105 million. This, as the committee knows, included two locks and a canal, the Long Sault canal and the Eisenhower lock and later the Wiley-Dondero lock. It also authorized a canal and lock opposite Iroquois, Ontario, at Point Rockway on the United States side. This canal at Point Rockway was to cost $21,259,000. As the committee know. Canada later decided to do this work. It was my colleague the then secretary of state for external affairs, the Leader of the Opposition, who made the announcement in August of 1954 that Canada had decided to build the Iroquois canal and lock in Canadian territory.
The United States army engineers estimated the work on the United States side to cost $96 million-and that estimate was contained in the report of the committee on foreign relations dated June 16, 1953-including interest during construction. The United States development corporation has gone to congress and obtained authority to spend up to $140 million. Whether this amount will be sufficient to enable the United States to complete its work on its side of the line I am unable to say, but I am informed that it will.
If I may turn to just one other matter I shall try to conclude. The dominion bureau of statistics construction cost index estimates the increase in the cost of construction from December, 1950, which it places at 100, to December, 1957 at 136.50, which would indicate that during that period of time the increase in the cost of construction rose 36.50 points. I would like to add this. Although the dominion bureau of statistics

construction price index, which I have mentioned, refers to that, it does not deal specifically with another item which is of extreme importance here, namely the purchase, fabrication and erection of steel which was substantially higher, as the table which I have before me would indicate. In fact, in 1949 the estimated unit price for truss spans of steel, viaducts erected, was 18 cents a pound; as represented by the cost index 100, in 1949 it rose to the index of 158 and the price was .285 per pound in 1958.
So I think it can be said in fairness that roughly speaking, in order to make a fair comparison between the estimates of December, 1950 to which I referred earlier, and those of December, 1957 the 1950 prices should be increased by at least 35 per cent. Accordingly the navigation estimate of $260 million which was made should be increased to about $350 million and the $402 million power estimate to approximately $543 million; provided, of course, that no substantial changes have been made in either the navigation or power works contemplated in 1950. I add this final word, that these figures do not include interest during construction.
1 come now to Welland. The cost estimate provided by Mr. Lindsay for the Welland development was $1,302,000 and the amount which I believe the minister mentioned in his statement, to be found in yesterday's Hansard, was-


George Harris Hees: 


Lionel Chevrier: -$23 million roughly speaking. Here I should like to say that this was an estimate which obviously was substantially in error. It was an estimate which was not made by the then minister of transport, who announced it in the house, but was made by the engineer who prepared it, and I tabled it. The authority engineers did not discover the error until 1956 when they came to give out contracts and prepare plans and specifications for the work on the Welland canal. However, if one examines the estimate referred to in the brochure prepared by the Department of Transport and the actual work done there is a substantial difference, because the width of the channel was extended from 200 feet to 300 feet and the depth was lowered several feet more than was required.
I am told by the engineers that a depth of 27 feet means an additional two feet for safety, but that when one encounters rock one must go down three feet more in the rock. I am informed that in a stretch of the Welland canal a substantial amount of rock was discovered, being about 7 miles in extent; and as the house knows, the cost for dredging rock is substantially higher than for
St. Lawrence Seaway Authority Act dredging ordinary earth. The cost of dredging rock, I am informed, to a four foot depth is $17 per cubic yard, to a one foot depth $24 per cubic yard and to a depth of six inches $30 per cubic yard while the cost is but $2 per cubic yard for common earth dredging.
Why was it decided to go to this depth in rock? The engineers of the St. Lawrence seaway authority, in consultation with the United States corps of engineers, came to the conclusion that it would not be safe for a ship having a beam of 72 feet to be allowed to travel in a channel 200 feet wide and navigate over rock unless the depth was at least five feet lower than the 27 feet. I was not there when the work was completed. I was there when the majority of the contracts were let but, as the house knows, I left in April of 1957. But it is common knowledge, to those who are ship engineers I am told that because of safety one has to go down to this extra depth when rock is encountered. In that stretch alone an amount of almost $12 million is involved to deal with the rock.
So far as the difference between the $12 million and the amount the minister gave is concerned, I can only say there was an error in the first estimate. I accepted the estimate as it was given to me and gave it to the house. I had no way of checking it. I was not expected to go and make a de visu inspection of the canal. That was the responsibility of others who had been working on the Welland canal for years, and certainly the responsibility of those who had to do with the granting and awarding of the contracts.


David James Walker: May I ask a question. Would it be true, then, that the estimate received from the engineers was made without first making test borings? If so, it is very similar to the experience with the printing bureau.


Lionel Chevrier: I am unable to say whether the engineer who made this estimate actually made test borings, because I have never discussed that with him. I do not believe I have seen him since the day I tabled it in the house. I have some reservations as to that; I may have seen him once or twice, but certainly not to discuss this matter.
To come back to the question, I presume the responsibility for test borings lay with the engineers of the Welland canal. It may well have been the responsibility of those who prepared the cost estimates in the 1932 and 1941 agreements. I do not know. I was not there. But the error was certainly discovered when our engineers prepared the plans and specifications for the Welland canal.
My hon. friend asks whether this does not compare with the investigation of the printing

St. Lawrence Seaway Authority Act bureau made in the public accounts committee. That is the reason I have spent so much time in showing what happens to estimates. Estimates are prepared, estimates are revised, estimates are re-revised, estimates are still further revised by other governments. If you take this history of these estimates you will find that they are normal. If you take them at the time they were made, with the exception, of course, of the Welland canal one, I believe you will find that there is a gradual increase as they have been revised from time to time; provided, of course, that you do not add large projects that have to be carried out because of public demand. I have not dealt with those and I am not going to impose that discussion on the committee, but I hope at a later date to be able to give the reasons why, beginning with upstream and going right down to Montreal, it was necessary to add many of the things that were done at the time.
I would like to make some remarks on the contractors' claims but I am not going to impose on the committee any longer. The hon. member for Vancouver East has been waiting to speak and, if the committee will permit me, perhaps I might be allowed to listen to what he has to say and to others and then at a later time, before the resolution is finally approved, give my opinion of these claims that have been filed by the contractors. If that meets with the wishes of the committee, I would appreciate it a great deal if I could be given the opportunity to intervene in the debate at a later time.


Harold Edward Winch: Mr. Chairman, I listened very carefully to the remarks made yesterday afternoon by the hon. member who has just taken his seat. As I say, I listened very carefully, because this is a most important subject.
I cannot help commenting from my own point of view that I wish that on such an important subject with all its complexities it were possible to present the entire picture with all its complexities in terminology that would make it a little more understandable to the average layman. I will admit, that neither inside nor outside of this chamber have I ever previously spoken about the St. Lawrence seaway. However, I became exceedingly interested in the matter because of reports and comments in the press of this country, certain documents that were placed in my possession and meetings with several persons of engineering status.
I want to say right at the outset that I became most interested because of certain documents which were placed in my possession and which engineers informed me were correct. However, I have not used them and do not intend to use them because they are


not authenticated by signature. Having regard to my responsibility as a member of this house I feel that I cannot, in speaking now or at any other time, use documents which I have not had officially authenticated as to their source. However, in view of the statement made yesterday afternoon by the Minister of Transport in moving this motion, and the complete answers that were given by the minister to a series of questions placed upon the order paper, I feel that there are questions of serious import that should be asked of the minister at this time before this motion is finally proceeded with.
May I at this time say, how much I appreciate the speed with which the Minister of Transport replied to the questions placed on the order paper. He has set a wonderful precedent and example. We hope that the other cabinet ministers will take note and will follow in his footsteps.
The hon. member who preceded me had a good deal to say-and I tried to follow his remarks as far as I could-about the increased costs of the St. Lawrence seaway. But irrespective of what he said I feel that, when we have the Minister of Transport informing the house, as he did yesterday, that the cost to Canada of the seaway was estimated in 1955 in the capital budget as $205,500,000 as compared with the present total estimated expenditure of $329 million, it can be taken almost as axiomatic that, it is the responsibility of hon. members, when he asks for an additional $35 million, to find out as precisely as we possibly can the reason for the increase from $205 million to $329 million, how the money was spent, whether it was efficiently spent and what is the purpose of the additional $35 million that is being asked for on this occasion.
I think one point we should like to be clear upon is whether this $35 million has any connection with the 28 claims that have been put forward by the contractors up until January 27 of this year. The minister informed us that 28 claims had been received totalling $36,329,000, that six of those claims had been dealt with and that the remainder are being examined at the present time. He also informed the house that the six claims that have been dealt with thus far totalling $8,636,000; and that of that amount claims totalling $768,000 have been accepted and $7,868,000 have been rejected.
It is, of course, of interest-because the members of the house want to be absolutely fair in all their dealings-as to whether or not there was any justification for the claims that have been put in by the 28 companies. On that basis I should like to ask in passing whether the Minister of Transport has had

brought to his attention in any way whatsoever a reputed meeting of contractors-I believe it was about February of last year- in which, I understand from speaking with an engineer, the view was expressed by some of the contractors at least that the design and the construction of the seaway were undertaken by the federal government on what might be called a crash program and that the work of investigation, design and preparation of the tender documents was done in a great many cases in haste and under heavy pressure which resulted in an inadequate assumption as to the conditions that existed and under which the construction work had to be done, resulting in a number of radical changes in plans and in specifications. The reason why I ask whether there is any knowledge of this is the statement made yesterday by the minister in speaking on this matter of the companies' claims. At page 1163 of Hansard we find these words of the minister:
While the claims cover numerous items of work, and as such are to be treated as individual in character, many of them fall into one or more of the following general categories: Claims due to a rising wage level; claims based upon alleged undisclosed ground and water conditions; claims based upon alleged interferences with scheduling of work for various causes, including changes in plans and delays in providing plans by engineers of the authority; claims due to quantities being greater than estimated in tender documents . . . claims based upon the contention that procedures for the disposal of excavating materials differ in actuality from that assumed at the time of tendering.
In view of the fact that that was the statement made by the Minister of Transport yesterday as to the alleged reasons for claims on the St. Lawrence seaway authority and therefore upon the government for an additional $36 million, it is of vital importance for this committee to have a clear understanding of that matter from the minister because, if I may be allowed to say so with all due respect to the hon. member who preceded me, those were the identical reasons that were given for the situation examined by the public accounts committee in respect of the queen's printer's building. The public accounts committee was asked by this house to investigate the reasons for increased costs. I think I missed only one meeting out of all those that were held. The very reasons that are outlined here as being perhaps the basis for the claims of the contractors are the very things that were proved in the public accounts committee in their investigation last year with respect to another building. Mr. Chairman, I think the minister wants to ask a question.


George Harris Hees: Mr. Chairman, I should like to answer these questions as we go along. First 66968-9-75
St. Lawrence Seaway Authority Act of all, the hon. member for Vancouver East asked whether I was aware of a meeting of contractors. I do not know of any such meeting and there is no reason why I should. I have been visited on, I suppose, two or three occasions by contractors or groups of contractors who have come to see me, mainly with the idea of putting up to me the proposition that their claims should be dealt with as quickly as possible. The reasons for the claims just mentioned by the hon. member for Vancouver East were those put forward in the written claims submitted by the contractors or groups of contractors and were not the reasons put forward to me verbally or in letter form by any contractors that came to see me.
When I saw these contractors who came to see me on two or three occasions, I simply told them that their claims would be examined as quickly as possible. I outlined to them the procedure we proposed to follow, that in order to speed up the work we had taken on two experienced engineers to assist in this work, and that they and our own engineering staff would be examining these claims as rapidly as possible and in a very thorough manner. I told them that when their examination had been completed the results would be examined by the St. Lawrence seaway authority and then submitted to treasury board. The outline of this procedure seemed to those to whom I spoke eminently satisfactory. They had come to see me mainly to urge that their claims be dealt with as rapidly as possible. I assured them that they would be. I hope that that will answer the hon. member's question.


Harold Edward Winch: I am glad the minister
has taken the opportunity-by the way, I do not want to lose that time?


George Harris Hees: Oh no.


Harold Edward Winch: -to elucidate further what he said yesterday, but I am afraid I had not made the point which I was coming to. My point was, in view of the fact that additional claims have been put in in the sum of some $36 million, and in view of the allegations made as to why they thought they were entitled to their claims, which are being studied by the minister and will be doubtless dealt with, this house should be informed, owing to the experience we had last year with another contract, as to what extent on the engineering, planning, test borings and all phases of construction similar mistakes were made on what is now something over a $300 million project as were made apparently with regard to the queen's printer's building.
Would the minister make a note of my points as I go along and then he can answer them all at the same time.

St. Lawrence Seaway Authority Act


George Harris Hees: I think it would be much simpler if the hon. member had the extra time, because he is asking a lot of important questions and it would be easier if 1 answered them as he went along. I am sure the hon. member is asking these questions in an endeavour to seek information.


Harold Edward Winch: Yes, I am. The only thing is that I want to keep my continuity, if I can.


George Harris Hees: It depends on whether the hon. member wants to make a speech or is asking for information. I am willing to give him the information, as best I can, as he goes along.


Harold Edward Winch: I would like to do both, but go ahead and answer.


George Harris Hees: Mr. Chairman, the basis upon which these claims are being examined is this. This was explained very carefully to the contractors, and they have all agreed it is a fair basis for examination. If it can be shown by them to those examining these claims in the St. Lawrence seaway that they lost money due to change of plans which the seaway authority imposed upon them, or to any hold-ups imposed upon them in time by the St. Lawrence seaway engineers, or if in any way losses which they incurred were due to action of the seaway authority and their engineers, then those losses would be given very serious consideration with regard to compensation. We would compensate to the degree, and to the exact degree, to which we estimate our actions, or lack of action, or wrong action, have contributed to that loss. If, however, losses have been incurred due to mistakes made by the contractors themselves, and which we do not consider we are responsible for, then those losses must be borne by the contractors. That basis of examination has been considered by all the contractors I have come into contact with to be eminently fair. They are satisfied with that basis of examination, and they have told me they are satisfied with those who are doing the examining, and I believe that they feel they are being given a square deal.


Harold Edward Winch: Mr. Chairman, that is admittedly fair; I am not criticizing that at all. What I am saying is that the members of this house and the people of Canada should know if we find we have to go ahead and pay out additional millions-you have already agreed to over $700,000-why this is so. Is it because, as it must be, of mistakes made in planning and engineering? If so, is that not money which has been wasted because of something wrong in the planning and engineering in some phase or other? That is what we are asking. Just why did that situation occur, and can we know whether, when we are asked
fMr. Winch.]
to spend an additional $35 million, that situation will be corrected and will not happen again?


George Harris Hees: If I might answer that question as we go along, as I am sure the hon. member noted yesterday-


Hazen Robert Argue: Mr. Chairman, I rise on a point of order.


George Harris Hees: Mr. Chairman, I am glad to give the information to the hon. member as we go along.


Hazen Robert Argue: Mr. Chairman, on a point of order I think it is clear to the minister and the members of the committee that the speech of any member can be interrupted only with the member's consent. I would suggest to the minister that if he wishes to interrupt the speech being made by the hon. member for Vancouver East, he should first of all ask his permission. If he receives his permission the minister can proceed; but it is clear under the rules that the minister has no right to interrupt any member who is speaking.


George Harris Hees: Mr. Chairman, may I just say this. I have no intention of interrupting anybody's speech, but the hon. member is putting to me very serious questions. I understand that he is not putting them forward for propaganda or political purposes, but to elicit information, and I want to give him that information if I can, because I am sure that is the only reason he is asking these questions. Now, does the hon. member want an answer to his questions, or does he simply want to carry on and make charges?


Harold Edward Winch: I was just going to make the remark that the hon. minister and I get along very well, but now I do not know that I can say that, because he said that unless I proceed in the way he suggests I am merely being political. I am glad the hon. minister accepts the sincerity and integrity with which I am trying to put up these questions, but it is very difficult for me to carry on on a question and answer basis at this stage. It is customary in the majority of cases, the minister believing in the integrity and sincerity of the person speaking, for the minister to make note of the points raised and the questions asked, and then when the speaker is through and the minister gets up he deals with each speaker, his questions and points of view. I would ask that that procedure be followed from now on, if the minister does not mind.
Having, I hope, made the point I was trying to make, I would like to go to the next one, which I think follows in a natural sequence. It is something which I admit I have found somewhat difficult to understand. Here we have a project which is now going to cost

$329 million, for which the taxpayers will have to put up the money at any rate to start construction. Therefore that means inspection. I find, according to the answers given by the minister yesterday to a series of questions I placed on the order paper, that an inspection section was established on December 1, 1955. A chief inspector, Mr. J. Buchanan Stirling, was appointed in December 1955. Over a period of time he had a staff of 20, and according to the answer they had the responsibility of inspection on behalf of the St. Lawrence seaway authority. That work has not been completed. As a matter of fact, it has not only been going on over this past year, but if my memory serves me correctly there is to be somewhere in the neighbourhood of $50 million worth of construction done in 1959. That is a very large capital expenditure. Yet we find that the St. Lawrence seaway authority inspection branch was let go in 1958. We find that the chief inspector did not resign but was laid off in November 1958.
Yet with all the work which has to be carried on this year, amounting to some $50 million, with the exception of three people the entire staff has been disbanded, and of the three that are left, only one I understand is an engineer; the other two are instrument men. Before becoming an elected member of parliament I spent all my life in the construction industry and I can tell the committee that it is a most unusual procedure to lay off the chief inspector and the majority of the men during the course of construction, keeping only three who had been employed rather late, and then providing for inspection on a contract basis with an inspection firm. I want to repeat that this is a most unusual procedure which has been followed, and I think the minister should explain why this was done. A statement by him would be the only way to quiet some of the rumours which have appeared in various places with regard to inspection and the type of construction undertaken.
I should like, also, to deal with some of the answers which have been given to questions put to the minister, and request the minister to let us have more detailed information. On February 2, for example, I asked the Minister of Transport some questions about certain matters affecting the Cornwall island south channel high level bridge, and in his reply the minister stated that $1,601,100 had not yet been paid to the contractor. I think the minister might now inform the house why that money is being withheld, in order that a decision may be reached as to whether the engineer or the contractor concerned can be held responsible for the remedial measures which had to be
St. Lawrence Seaway Authority Act taken to repair the main pier at an estimated cost of $262,000, the cable-bent pier 13 at a cost of $2,000 and the north abutment at a cost of $10,000. When the minister comments on this I should also like to know whether it is usual for a bridge the size of the Cornwall island bridge to be founded on dense glacial till and not on bedrock. I am very interested in this in view of the remarks made by the hon. member for Laurier when he was telling us about the necessity of finding bedrock, even if it meant going down five or six feet. But here we have an answer by the minister to the effect that it has been necessary to spend $274,000 on remedial repairs, and that the structure was not driven down to bedrock but was founded on dense glacial till. While he is dealing with this question perhaps the minister would also tell us whether there was not another bridge in this immediate area which was built on dense glacial till and which collapsed.
I think these are the sort of questions which should be answered before we can vote on this motion. I note that the Minister of Transport said yesterday that an additional $11 million was required as the further cost of converting the Mercier bridge into a high level bridge. This is another matter which interests me, and I hope the minister will not mind enlarging on the necessity for spending this additional $11 million. I hope the minister will tell the committee the name of the company responsible for designing this changed bridge, and its engineering qualifications. I should like to know, also, whether this same company has been given the job of inspecting its own bridge. I was asked personally to direct these questions to the minister, and I am doing so at this time.
As I said, I began by trying to deal with the statement made yesterday by the Minister of Transport and to raise, I hope in a constructive way, some of the questions which should be answered in order that there might be a clear picture before the members of this committee both with regard to why there should be this great increase in cost compared to the original estimate and also why the need for spending this extra money has arisen, whether something has gone wrong with the engineering plans or for any other reason. In particular, with so many millions being spent at the present time, why was the inspection branch fired in 1958? The question I am raising is this: is it good construction policy to fire your own inspection branch and use the services of an inspection company, the same company which had to report to the chief inspector of the seaway authority when the authority had its own inspection branch. There may be reasonable and logical answers to these queries. I am

St. Lawrence Seaway Authority Act trying to ask logical questions so that I will get a reasonable answer; or I am asking reasonable questions hoping to get logical answers.
I just want to conclude in this way. We are being asked for an additional $35 million. I think that in view of all the talk of inflation and in view of all the criticism which has come from some sources-banks, corporations, trust companies and newspapers- urging efficiency and economy in government spending, this is the time and place when we should be asking questions such as I have been asking and when the government should give us a very clear picture of the situation. I do not know whether it is possible in such a committee as this to discuss a matter of this kind back and forth. I do not think it is. I want to tell the minister, through you, Mr. Chairman, that from what little knowledge I have acquired through reading the newspapers and from the answers given here it is my personal opinion that it may be advisable to have at least a preliminary examination of this matter by the public accounts committee. Let that committee, on the basis of an investigation at which it is able to talk directly to the people in charge, decide whether or not there should be a recommendation to the government for any further action or inquiry. I submit this is a suggestion which is worthy of serious consideration. Now that I am about to sit down I look forward to hearing the minister take the opportunity to answer all the questions he has said he is so anxious to answer for us.


Mr. Bell (Carleton):: Mr. Chairman, this resolution grants authority to loan an additional $35 million to the St. Lawrence seaway authority to bring the total expenditure of that authority to $335 million as opposed to the 1955 estimate of $205 million. The aspect of that upon which I wish to dwell this afternoon is the extent to which this House of Commons has been kept informed about the changes in the estimates and the changes in the specifications which have occurred from time to time and the extent to which this house has had the opportunity to exercise parliamentary control over this great enterprise.
My theme this afternoon will be a very simple but a very fundamental one. Basic to parliamentary control over public expenditure I submit is accuracy in estimating the cost of projects for which parliament is asked to vote money. Without reasonable accuracy of estimating and without immediate and full disclosure of unavoidable mistakes which inevitably will occur, this house can exercise no real or effective control upon the public purse.

Especially is this true when parliament is asked to vote large capital sums en bloc which sums may be diverted from one aspect of the project to another without returning to the house for approval. This has been the situation with respect to the St. Lawrence seaway authority from the very outset.
In some detail I wish to examine and analyse the issue as to whether the St. Lawrence seaway authority and the department of transport under previous ministers have presented to parliament that accuracy of estimate and that complete disclosure of essential facts which form the bedrock of control by parliament over the expenditures of the executive and over the agencies of the executive.
For that purpose I wish to examine especially the situation with respect to the Welland ship canal. I preface my comments by saying that everyone, of course, wishes to assure that this great waterway-one of the great canals of the world-has the most up to date construction and the most modern facilities possible to ensure its efficient operation as an integral part of the seaway and, as well, its complete safety. On that point let us have no misunderstanding. But what of the estimates of the cost of deepening this canal as compared to actual expenditures to date?
The hon. member for Laurier this afternoon endeavoured to excuse the fabulous discrepancies by unloading the blame on the engineers. His words, as I took them down were to the effect that "obviously there was substantial error". That is the understatement of the year. The hon. gentleman went on to say that these errors were made by the engineer who prepared the estimate. That is not our constitutional system of doing things. The hon. member cannot avoid the responsibility by investing it in the engineers who were at all times responsible to him either in his capacity as minister or in his capacity as president of the seaway authority. I say to the hon. gentleman that the committee would have admired him more if he had stood up to his responsibility and not sought to evade it. He said the errors were discovered in 1956. At that date he had been minister of transport for six or seven years and president of the seaway authority for at least two years. How long did it take him to learn the facts of life? It took the award of contracts amounting to over $19 million to awaken the hon. member for Laurier to the egregious errors which he now seeks to invest in his subordinates. But let us examine the whole sordid story consecutively.
The first estimate of the cost of which I have been able to find record appears in a congressional document. I refer to the hearings of the committee on public works of the

House of Representatives, 81st Congress, second session on house joint resolution No. 271. At page 129 there appears a letter from Lieutenant-General R. A. Wheeler, chief of engineers, to Senator Alexander Wiley, dated December 7, 1948, to which is appended the estimate of costs as provided by the Canadian Department of Transport. The cost there set forth for a 27-foot project channel is $1,157,000. In order that there may be no misunderstanding about the depth let me quote a note at page 134 which states:
For channels of 27 and 30-foot depth-
I draw attention to those words: 30-foot depth-
-in the Welland Canal only normal dredging operations would be necessary, as a controlling depth of 30 feet is provided over the sills of the existing locks.
Thus the first estimate of the cost of providing for deepening of the Welland canal adequate to the needs of the seaway was $1,157,000, a figure which I hope the committee will bear in mind as I go along.
The next estimate of which I am aware also comes from a United States source and I refer to the hearings of the committee on public works of the House of Representatives, 82nd congress, 1st session, meeting on various house joint resolutions. At page 214 of the evidence of Major-General Lewis Pick, chief of engineers, United States army, given on February 26, 1951, the estimate of the cost as prepared by the Canadian Department of Transport is shown as $1,302,000. That estimate is stated to be at December 1950 cost levels and that fact may indicate the change from the earlier estimate.
In any event it was this estimate which was used in this house on December 11, 1951, in the committee stage of the bill to create the St. Lawrence seaway authority. I quote from Hansard of that date at page 1787, the words of the then minister of transport, now the hon. member for Laurier:
-and in the Welland ship canal, $1,302,000.
I am unable to find any change in this estimate until February 15, 1955. On that date the then president of the St. Lawrence seaway authority, now the hon. member for Laurier, spoke to a luncheon of the annual convention of the Canadian lumbermen's association in Montreal. May I say that I am quoting his words from a secondary source. I have not been able to find the actual original. If the hon. member takes any exception at all to the quotation, I must, of course, immediately withdraw. This is the quotation as I have taken it from a secondary source:
The only work-
St. Lawrence Seaway Authority Act
I want to emphasize that phrase.
The only work required to complete the deep waterway through the Welland ship canal is the deepening of certain parts to 27 feet. The total estimated cost to provide this depth of 27 feet throughout the Welland ship canal is $2 million.
That estimate was confirmed in the committee of supply in the estimates of the Department of Transport on July 22, 1955. At page 6610 of Hansard of that date the then minister of transport, the Hon. George C. Marler, is reported as having said:
-deepening of Welland canal, $2 million.
To the extent I have been able to conduct research that is the complete record of estimates and disclosures to parliament. I pause only to mention that it is a revelation to a Canadian parliamentarian to observe the detail which appears in congressional documents. There is no comparison whatever between the amount of information provided to the congress of the United States and that provided to parliament. This applies at all stages of the seaway planning and construction. Our seaway authority and our Department of Transport could take many lessons from their United States counterparts in the matter of reporting to their legislative authorities. In any event that is the record of the estimates and disclosures made to this house and to this country. That is the basis upon which plans for the seaway were undertaken.
What of the records of the contracts which were let? In public documents I have been able to find a record of eight contracts let. I think those contracts ought to be put upon the record. On December 3, 1955, a contract for the enlargement of the channel between lock No. 1 and lock No. 2 was awarded to McNamara Construction Company Limited for $359,755. On the same date, a contract for the enlargement of the channel between lock No. 2 and lock 3 was awarded to the Swansea Construction Company Limited for $698,260. On the same date also a contract for the enlargement of the channel between lock No. 3 and lock No. 4 was awarded to Aiken and MacLachlan for $104,000. Consequently, on December 3, 1955, three contracts for a very small part of the work were let, totalling $1,161,000, or already in excess of the original estimate for the complete work. Therefore, already as far back as December, 1955 the seaway authority and the minister of transport had reason to be put on the alert with respect to the ultimate cost. I am unable to find a whisper of this problem having been communicated to parliament.
The fourth contract was awarded on July 13, 1956, jointly to Canadian Dredge and
1190	HOUSE OF
St. Lawrence Seaway Authority Act Dock Company Limited and McNamara Construction Company Limited. It was for dredging from station 1231 to station 1460 and was for the total sum of $11,623,000. My understanding is that this covers from the guard lock at Port Colborne to lake Erie, a distance of about 2J miles, and on the summit level from the guard lock a distance of about 11 miles.
Then, on November 15, 1956, a contract was awarded to Russell Construction Limited for dredging from the guard gate to station 710 + 00. I understand this is a distance of about four miles. The amount was $7,280,575.
The sixth contract was awarded on December 28, 1956, to J. P. Porter Company Limited for suction dredging at the lake Ontario entrance to lock No. 1 for $642,600. Thus, in 1956 alone, contracts were awarded totalling $19,546,375, and this for a project originally estimated at $1,157,000. Was this pointed up to parliament? Not so far as I can discover. But this is not the end. The contract for suction dredging at the lake Ontario entrance was supplemented by one for rock dredging to J. P. Porter Company Limited on September 26, 1957, for $1,283,900. And an eighth contract was awarded to the same company for supply and operation of a dredging plant totalling $351,000.
These eight contracts of which I have record total $22,343,290, or a mere 19 times the original estimate of $1,157,000, or a mere 17 times the estimate when the seaway was approved, or a mere 111 times the latest estimate made on February 15, 1955, by the hon. member for Laurier. But, this is not the end. These eight contracts do not, as I understand the geography of the area, provide for the completion of the work of dredging the summit level. In any event, my information is that the latest budget of the authority shows an estimated total cost of $25,655,775.
Then, if one turns to the report of the tolls committee, which is dated June 12, 1958, at page 3, he finds a further estimate:
Welland canal, lake Ontario to lake Erie, cost of deepening and other improvements, $27,500,000; interest during construction $1,500,000.
Or a total of $29 million and, this is the figure upon which the tolls will be based. This is the amount which must be amortized by those who pay the tolls on the ship canal. For any statistically minded members of the house may I say that the figure is 25 times the original estimate, 22 times the estimate when the seaway was approved and 14J times the estimate made by the hon. member for Laurier and confirmed by his successor as minister of transport, the Hon. George C. Marler.
In the minister's statement of yesterday, at page 1162 of Hansard, the increase in the


Welland canal is shown as $23 million. The reason given is the increase involved in deepening to specifications determined in the autumn of 1956.
I have searched the annual report of the St. Lawrence seaway authority for the fiscal year ended December 31, 1956, signed by Lionel Chevrier, and I fail to find a single sentence to draw to the attention of parliament that there was any change in specifications. It is true there is mention of two dredging contracts, each exceeding the original estimate, but not a whisper to suggest that they involve any change in the specifications. And I have examined the seven volumes of Hansard of 1956 and I have been unable to find that the then minister of transport ever communicated to parliament in that very lengthy session any changes in specifications which are now said to involve $23,600,000.
The hon. gentleman said this afternoon, and I have heard it said before, that the reason for additional cost was that rock was encountered and that safety precautions required additional depth. But, surely, it did not require engineers, let alone a former cabinet minister, to discover that the Niagara escarpment was composed of rock. Surely, any pre-school child would have known that the Niagara escarpment was not made of sand. The Welland canal is only 25 years old. The records must surely be available. But if that is the case, that it was because of rock, my problem is this. When was parliament informed? At what stage were these mistakes, these fantastic miscalculations, disclosed by the previous government? I believe that on their part there was a conspiracy of silence, a desire to let sleeping dogs lie. After a contract for over $11 million was awarded in July, 1956, did Mr. Marler come to this house and point out the unbelievable discrepancy between estimate and performance? Did he or the president of the seaway authority breathe any hint of a change in plans? The fact is that these bare, blunt facts reveal the most outrageous miscalculations in the annals of parliament, and that is all I have spoken of this afternoon.
Were these expenditures necessary? Were they wise? Who can say now? Parliament was kept in the dark at the time when an effective decision could be taken by the people's representatives. Parliament was expected to abdicate its control of the public purse; parliament was expected to surrender docilely to an apparition of an agency of government expending 14, 22, 25 times what

had been originally estimated and this without being advised of any change in specifications. I say for parliament now to ignore these facts would be an open invitation, indeed almost an injunction for parliaments in the future to say, "Go thou and do likewise".
The present minister and the present government, who have no responsibility for this matter, nonetheless do have an obligation to the house to assure the house that precautions have been and are being taken to prevent a repetition of these incidents. Before the house and before the public the two former ministers of transport must accept the responsibility. That is our constitutional system. They cannot evade responsibility by suggesting that it is to be invested in the engineers. True, back of them there are engineers, and I do not like to see these engineers escape responsibility. Indeed, I have heard it suggested that the engineers miscalculated the minimum water level of lake Erie. If that was the degree of study given to this great enterprise, if that was the efficiency displayed, then we must watch to stave off a repetition of these problems of which I have spoken.
What interests me is just that, to stave off this type of thing in the future. That is why I have put the record before the house in detail, for I believe there is at stake a great principle of parliamentary government. I repeat what I said at the outset, that without accuracy in estimating costs of projects parliamentary control of capital and other expenditures is no more than a snare and a delusion. Canadians everywhere are proud of this great enterprise, this great inland waterway, but if it is built at the expense of a relaxation of the control by the people's representatives over the public purse, then it will have been but an incident on the road to tyranny.


Lionel Chevrier: May I ask the hon. member a question?


Richard Albert Bell: Surely.


Lionel Chevrier: Does he give his consent?


Richard Albert Bell: Surely.


Lionel Chevrier: The question I should like to ask is this. Is he aware that the 1957 budget showed an expenditure for the Welland canal of $23 million and that the 1958 budget showed an expenditure for the Welland canal of slightly more than that amount? For the latter part of 1957 as well as for all of 1958 his friends were in office, and I ask this question. Did they question these amounts which were placed before the house?
66968-9-761
St. Lawrence Seaway Authority Act


Mr. McGregor:: Who let the contracts?


Mr. Bell (Carleion):: What the government may have done is not something of which I may speak but this I do know, that when my hon. friend left the seaway authority he left it without the summit reaches of the Welland ship canal being excavated to a level that it was possible for ships to travel and this government had no option, if any part of that canal was to be made use of, but to go ahead and make the eventual expenditures. The responsibility rests entirely with the hon. gentleman as minister of transport at that time and then president of the seaway authority.


Lionel Chevrier: My hon. friend has made a charge and he questioned these two items which were in the budget-


Some hon. Members:: Order.


Lionel Chevrier: Have I the hon. member's permission to ask a supplementary question? If I have, then I say to the hon. gentleman that he questioned these two amounts. I say to him now that they were in the budgets for 1957 and 1958. Did my hon. friend question them when he sat in the house?


Richard Albert Bell: I think I have answered that fully. The situation is clear that there was no option on the part of the government other than to proceed to excavation on the summit levels. If the hon. gentleman had come to the house at the time as he should have and made a frank confession, as I would have expected him to do, of the errors of which he was guilty, then we would not have found ourselves faced with the problem confronting us today. The hon. gentleman is the most voluble member of the House of Commons but certainly he was something less than voluble when it came to confession on this score.


Lester Bowles Pearson: Why don't you answer the question? You were silent for two years.


Mr. Campbell (Stormont):: Mr. Chairman, I should like to bring to the attention of the house the assassination of a city by the St. Lawrence seaway authority and its betrayal by the then head of that authority. For over 100 years in my home city of Cornwall ships have sailed by our doors through the Cornwall canal. Today that canal is blocked. Three miles east of the city ships turn and pass by on the United States side. Today the city of Cornwall, where I was born and where the hon. member for Laurier was born, is stranded high and dry and is one of the most depressed areas in Canada.
I want to ask who was responsible for the seaway being on the United States side. The people of Cornwall want to ask that question.
1192	HOUSE OF
St. Lawrence Seaway Authority Act In fact, people all the way from Montreal to Toronto, at least from Montreal to Kingston, want to know the answer. Who was responsible for the seaway being on the United States side? I believe there is only one man who is capable of giving that answer.
For 50 years the people in the area along the St. Lawrence, the oldest settled part of Canada west of Quebec had dreamed and hoped for the St. Lawrence seaway which would bring a new era of prosperity to that area. By fortuitous circumstance, when the time became propitious for the construction of the seaway Cornwall's most illustrious son happened to be in a position where he could do the most for his own area. At that particular time this native son of Cornwall, who had reached heights of distinction that put him in a position where he was largely instrumental for the carrying on of the international negotiations prior to the construction of the seaway, was in a position to influence the course of events. I would be most reluctant to say anything derogatory about this hon. gentleman.


Lester Bowles Pearson: You are doing so now.


Grant Campbell: He is a most able and charming man, a man of consummate charm, and I have been exposed to both his charm and ability. In fact, I owe a great deal to him. I owe my presence here today to him. I must acknowledge a great debt to the Prime Minister who, prior to occupying that office, came to our area. I must also acknowledge a great debt to a small group of devoted workers in the last two elections.


Charles Edward Rea: Order. I must ask the hon. member to come back to the resolution.


Grant Campbell: But the greatest debt I owe to anyone so far as being elected is concerned is the debt I owe to the hon. member for Laurier, my predecessor, because of the disillusionment of the people in that area over the fact that they lost the canal to the United States side when he, more than anyone else, was in a position to see that Cornwall and Canada derived the maximum benefit from the construction of the seaway. As I said before, I would be reluctant to bring up this matter were it not for the fact that time and again I have been charged by people of the area with being delinquent in my duty in not bringing this matter before the house and getting some sort of satisfactory answer to the question, why is the seaway on the United States side, why are the locks not in the Cornwall area?
I do not wish to go into detail with regard to the stupendous, almost fantastic, increase
[Mr. Campbell (Stormont) .1

of over 60 per cent from the cost originally estimated to the actual cost. That matter has been dealt with only too adequately by the previous speaker. But one thing that is of great concern to us is the fact that because of this tremendous increase the whole success of the seaway system may be jeopardized. Originally the project was predicated on the assumption that it would be self-liquidating over a period of 50 years but now in order to pay for the increased cost it seems likely that even if the amortization period were extended to 75 years or 100 years the seaway tolls would have to be raised to such a level as to be prohibitive.
This, of course, is of vital importance to our whole area. It would appear that there are only two ways in which to rectify the situation as far as our area is concerned. There are only two ways in which Cornwall can be restored to its former position on the great St. Lawrence waterway or so that it may benefit by it. First, of course, would be the construction of an all-Canadian seaway. The only alternative in order, to restore traffic to our area would be the construction of harbour facilities either to the east or to the west of the present city so that then we could have access once more to the shipping lanes. I have nothing further to say at this time except this. 'Our people want to know why the man who was in a position to do the most for that area did not do so and why the canals are at present located on the United States side rather than where the Cornwall canal had been for over 100 years, in the Canadian channel.


Lester Bowles Pearson: I had not intended to take part in this discussion this afternoon, Mr. Chairman, until I heard the remarks of the hon. member who has just taken his seat. He addressed some questions to my friend the hon. member for Laurier which effected what he calls the assassination of a city and he wants to know why that took place. As the hon. member for Laurier has already spoken-indeed the committee was very courteous in giving him ample time in which to speak-perhaps I should take advantage of the first opportunity to try to answer the serious question asked by the hon. member.


Thomas Miller Bell: We are in
committee. The hon. member can speak for himself.


Lester Bowles Pearson: Anyway, I am talking now. If my friend the hon. member for Laurier gets the floor later he can also speak on the matter. But whether we are in committee or not, I am talking now.
As to the other aspect of the discussion, namely the increased cost, the committee

has already been informed by my hon. friend that this increase in the estimates over the years has applied, not only to navigation on the Canadian side which is primarily a federal responsibility but it has applied in equal measure to hydroelectric developments which are the responsibility of the Ontario government. It has applied to action on the United States side both with regard to electricity and navigation, a responsibility of the United States government. Hence any increase in that sense in cost over estimate is a matter which has been brought about, not only in respect of these works which are the responsibility of this government and this parliament, but also of those which affect the Ontario government and the United States government.
My friend the hon. member for Carleton, who spoke a few moments ago talked particularly about the increase in cost of the Welland canal and drew far-reaching deductions about the supremacy of parliament and the flouting of parliament's rights because, he said, there was no opportunity to discuss this increase in earlier sessions. Perhaps he has forgotten that the increased estimates for the deepening of the Welland canal were tabled in this house. The figures are here. They were tabled. He had an opportunity last year to raise questions about this increase. It is not a question of responsibility of the government. He tried to turn the discussion to that point. The question we ask him was this. Why did he not rise last year when these figures were available? Why did he not rise the year previously, when the increased figures were tabled and were known, and say something in the House of Commons? Why did he not get indignant at that time at what he considers now to be gross extravagance and constitutional impropriety?
The hon. member for Stormont wants to know why the canal or the seaway is not on the Canadian side and who has responsibility for this being an international waterway and not a Canadian waterway. I can answer that question. It is a simple one. As the hon. member must know, as do other hon. members of the house, for years and years the Canadian government under both parties tried to bring about with the United States government an arrangement by which an international seaway could be constructed for power and for navigation. This attempt goes back over many years. In those earlier years it was a matter on which there was agreement in parliament between all parties as to the desirability of the construction of this great development, and there was also agreement that it should be done as an international activity or as an international construction. All the earlier negotiations over
St. Lawrence Seaway Authority Act the years with the United States were in order to try to persuade the United States to co-operate with regard to that development.
In those early days it was considered first that it would be unwise and extravagant- indeed that it would be almost impossible- to try to separate the power and the navigation features of that development. In those early days it was also considered that it was not within the economic and industrial capacity of this country to do the job alone. I am now talking about the situation 15 years, 20 years or 25 years ago. However, as all hon. members know, the United States was extremely reluctant to co-operate with regard to this international activity; and although agreements were reached and discussions were held, congress never reached the point of authorizing United States participation. Then because of the industrial and economic development of Canada the time came a few years ago, during world war II, when we in this country began to realize that we could do this job ourselves, that Canada was strong enough economically and industrially to do the job itself.
We let the United States know, while the previous government was in power, that as they had not seen fit to accept the invitation -and more than one had been extended- given to them to participate in this project as an international activity, we in Canada now desired to go ahead and make this a great Canadian seaway development. As soon as it was realized in Washington that this was not bluff but was a serious statement of Canadian government intention, the United States at once became intensely interested in the international aspect, and as hon. members know the United States government then decided to participate after they had been informed that we desired to go ahead alone.
Why did we take this matter up with the United States at all? Having come to the conclusion that Canada could bear the expense and was capable of constructing this seaway on the Canadian side for power and navigation, why did we not go ahead and do it without bothering to attempt to bring the United States in and without bothering to consult them at all? The answer to that question is surely quite obvious to anybody who knows anything about the facts and the law of the situation.
Any work constructed by the Canadian government which affects the level of, or affects in any way an international waterway, can be done only with the approval of the other country. That principle would apply if the United States were taking action which affected Canada, even if the activity undertaken were on the United States side.

St. Lawrence Seaway Authority Act If the work affects the level of an international waterway or affects an international waterway in any material way, then the permission of the other country must be obtained. That principle goes back to the treaty of 1909, 1 think. Therefore, once the United States expressed its intention of participating in this work, the only way in which we could have proceeded with it as a Canadian project would have been to make it a navigation project exclusively on the Canadian side, with all the canals on the Canadian side, and to ignore the power development completely. Indeed, Mr. Chairman, I am not sure whether it would have been possible even to have constructed navigation canals on the Canadian side without interfering with boundary waters in a way which would have brought the treaty of 1909 into play.
But whatever may be the legal situation there is a practical situation also. Once the Canadian government wished to proceed with this project as a power and navigation project it was inevitable that the United States should be brought in if it so desired, because you cannot construct a power dam on an international waterway half way to the international boundary and stop there. So the power project had to be international. Because the power project had to be international, the navigation part of it had to be international too.
I am not apologizing for one minute for the decision made at that time to proceed to co-operate with the United States in this great development as an international project. At that time we who were responsible in government for the project would have been very happy indeed if the United States had said to us: "Go ahead with the navigation on the Canadian side and we will co-operate in the production of power". But that was not the position they took. They insisted it should be an international project for navigation and power, and in view of that position we, of course, went ahead and made the agreement with the United States which is now being implemented in the construction, internationally, of this great power and navigation development.
Having made this arrangement, the United States decided that perhaps one canal should be built on their side, I think at Barnhart island. Indeed, they wished to construct a second canal further up the river. They hoped that we would take certain responsibilities on our side and they would take the responsibility for these two navigational canals on the United States side. We said, in the negotiations which took place at that time, that that was not good enough, that we were going to build one of the navigation canals on the Canadian side at Iroquis,

whatever they did. They agreed to that. Also, we went further than that-and this caused a good deal of argument with the United States-and said that we were going to construct this whole project in a form which would make it possible to have a second Canadian canal in the future on the Cornwall side, so that when navigation requirements made it desirable we could then proceed to build the second Canadian canal. Then there would be a Canadian navigation system from Montreal right through to the Welland canal. At that time the United States took strong exception to this, because they felt that if we now made preparation for this canal, as we did, we would be under pressure in the future irrespective of the amount of shipping going through the canal. We would be under great pressure in starting to build that second Canadian canal at once. As soon as the power part was completed and the dams were in operation, then the United States, having given its prior approval to this international waterway, could not stop us from going ahead with the second Canadian canal. I think we reassured them, and I think we were wise in trying to reassure them, by giving them an undertaking or understanding that the second canal would not be constructed until the requirements of navigation and traffic seemed to make that desirable.
My hon. friend said that this was selling out. He did not use that expression, but I think that was the purport of his remarks, that we had sold out to the United States in the arrangement we made, and we had destroyed the possibility of a Canadian seaway. I suggest to him that in order to have this great power and navigation construction at all, in order to begin and then complete it we had to work with the United States once they made their own decision to take part in it. But under the treaty of 1909 there was no alternative if we wished to develop power with navigation. Having accepted that necessity

indeed, you can argue that was the best way to do it-we then made plans from the very beginning to ensure that when traffic conditions warranted it we would be ready to go ahead with the second Canadian canal. So we have not, I suggest to the hon. member, made such construction impossible. We have not even made it difficult eventually, with the co-operation of the United States, to have a wholly Canadian navigation system when traffic conditions make that desirable.
Perhaps my hon. friend, if he speaks again in this debate, or some other hon. member who may feel as he does that we should have done this from the beginning as a Canadian

venture for power and navigation, will explain to the house how that could be done against the wishes of the United States under the 1909 treaty and how we could have a Canadian canal of that kind for power and navigation which affected boundary waters and was an international project. That was the difficulty. If it had not been a boundary waters affair it would have been quite simple for Canada to have constructed both a power and a navigation project from Montreal right through to the head of the lakes; but once the treaty of 1909 became involved and it became a matter of affecting the level of boundary waters, and the United States invoked the provisions of that treaty, it was bound to be an international development unless we wished to go ahead and ignore the power features and build canals on the Canadian side for navigation only, which would have been a very extravagant and expensive construction indeed. I am sure the minister must realize this.
In the circumstances, therefore, Mr. Chairman, I suggest that the policy adopted by the government at that time, and the policy which has been carried out by the present government, of working out this arrangement with the United States and preserving all the rights of Canada, so that eventually we can, if it is desirable, have a Canadian navigation system in conjunction with a power system, was the wisest and best policy for our own country, and for good relations between the United States and Canada at that time and the present time.


Grant Campbell: May I ask a
question of the Leader of the Opposition? I have never intimated or even insinuated that there was any effort made to destroy the all-Canadian seaway. What I did say was that it was the city of Cornwall that was destroyed and sold down the river to the United States. The question I want to ask again which has not been satisfactorily answered is this. Why was the Cornwall canal put at Massena where it required an 11-mile channel, rather than approximately a 3-mile channel on the Canadian side which would have been quite adequate? Also why was no provision made for this city which was thereby stranded?


Lionel Chevrier: May I be permitted to answer that question, Mr. Chairman? I would be delighted to answer the question by the hon. member for Stormont. The Cornwall canal was not put on the United States side, as he knows. As I indicated earlier, the 238-242 single stage control scheme provided for a canal to circumvent the power dam at Cornwall on the United States side, and for a
St. Lawrence Seaway Authority Act canal to circumvent the control dam at Iroquois on the Canadian side. That was the project which was approved by the engineers in Canada and the United States, and that is what was approved of by the international joint commission.
If I may deal with the second part of his question. He has complained that Cornwall has been detrimentally affected. Apparently the hon. member is not properly informed as to what is happening in so far as Cornwall is concerned, because if he will look at the map and see what is happening opposite Cornwall, he will see a 27-foot depth canal extending from the eastern boundary of the city of Cornwall servicing all the industries along that eastern boundary and to the centre of Cornwall, almost up to the Howard Smith paper mill. What more can be expected under the circumstances? There was a 14-foot canal before, and there is now, or will be with the opening of navigation in early spring of this year, 27-foot facilities to service any industry located on the front of the city of Cornwall.


Grant Campbell: Is this a through channel or something which the ships have to go into and then back out again?


Lionel Chevrier: The former government
made provision to have it become a through channel in the event of duplicate facilities in the future, and in the event of additional traffic, as provided in the exchange of notes between Canada and the United States. As the situation is now, there is a turning basin which will allow ships to move in and out of the industrial areas at Cornwall.


George Harris Hees: The hon. member for Vancouver East asked two or three questions and I should like to take this opportunity to answer them now. He asked some questions about the inspection staff. The duties of the inspection staff to which he referred related specifically to the inspection of steel, machinery, equipment, etc. and precision work in connection with the installation of such equipment, practically the whole of which work was completed by the end of November last, when the chief inspector and a number of other members of his staff were laid off. This action was taken on the report and recommendation of the chief engineer.
I should like to read this report, which is dated October 21, 1958 and signed by Mr. A. G. Murphy, chief engineer:
In the interest of curtailing costs and in view of the stage to which the design and erection of steel structures has progressed, it is deemed expedient to transfer the direction of the inspection section to Mr. R. W. Willis, structural engineer. With such a change, the immediate supervision of
1196	HOUSE OF
St. Lawrence Seaway Authority Act field parties could be handled by Mr. K. L. Cold-well, assistant engineer, who has proven himself to be competent, dependable and familiar with inspection requirements; while the review of reports from inspection companies, employed by the authority, could be made by those engineers who have been particularly concerned with the design and preparation of shop drawings of the various steel structures.
The hon. member also asked who would inspect the additional work which is to be done. The inspection of such work as dredging, channel excavation, and construction of locks was the function of the divisional engineering staffs, organized altogether separately from the inspection staff referred to. Such work of this category as remains will continue to be the responsibility of the divisional engineers.
The hon. member also asked questions regarding the Cornwall island south channel bridge. He asked who were the consulting engineers. The consulting engineers were Mr. D. B. Steinman, consulting engineer, New York, under contract with the corps of engineers, United States army, acting in its capacity as contracting agent for the St. Lawrence seaway development corporation, and P. L. Pratley, deceased, consulting engineer, Montreal, retained by the St. Lawrence seaway authority as Canadian associate consultant, both as agreed to by the St. Lawrence seaway development corporation and the St. Lawrence seaway authority.
The hon. member further asked whether it is good engineering practice to found the piers on dense glacial till instead of on rock. I am informed that such is the case. In any event the construction of the piers founded in this manner was the design approved by the consulting engineers retained by the corps of engineers of the United States army whose standing one should not question lightly. I might also add that the trouble we ran into regarding these piers had nothing to do with the piers being founded on till instead of on rock.
The trouble was that the placing of the concrete required the glacial till to be certified as clean before the concrete was poured. Our consulting engineer, Mr. P. L. Pratley, who was, I believe, considered to be about the best bridge engineer in the country, certified that the surface of the glacial till was clean and in satisfactory condition. When the concrete had set we found that the surface of the till had not been properly cleaned, which was the reason for the poor adhesion and the trouble that occurred. We hired a firm of consulting engineers, the best we could possibly obtain in this country, in our estimation-the Foundation of Canada Engineering Corporation -to investigate


the mistake and try to find out on whom the blame could be placed, and the report made by this firm was to the effect that as the consulting engineer employed by the St. Lawrence seaway authority, Dr. Pratley, had certified that the surface of the glacial till was sufficiently clean, the St. Lawrence seaway authority would have to assume responsibility for the mistake, and that has been done.
I believe the last question which was asked by the hon. member for Vancouver East was whether it was considered good engineering practice for consulting engineers to carry out the inspection work on projects they had themselves designed. I am informed that this is the case, because the consulting engineers who designed the work are in the best position to examine the work done by the contractors and determine whether it has been carried out as specified by them. That is why this practice was followed.


Mr. Allmark:: Mr. Chairman, I have listened very carefully this afternoon for the answer to a question which has bothered me since I came to this house. I listened to the former minister of transport, the hon. member for Laurier, because I felt that surely today I would be told the answer to this question. The question is: why did not the St. Lawrence seaway follow the same channel through to lake Ontario as has been followed by shipping since the beginning of time?
Kingston has been a thriving port since shipping began. Perhaps I should describe to the committee the western 25 miles of the St. Lawrence before it enters lake Ontario. About 25 miles east of Kingston the St. Lawrence river is divided by Wolfe island; on the south side of Wolfe island is the United States channel and on the north side is the Canadian channel. During past years about 90 per cent of the shipping travelling through the St. Lawrence river into lake Ontario passed through the Canadian channel. When the St. Lawrence seaway was begun, there was one small section about three-quarters of a mile in length at the east end of Wolfe island which required to be dredged from its present 16 feet to the new depth of 27 feet. The cost of this work would have been about $1 million. Had it been done that one section alone would have permitted shipping to travel up through the Canadian channel for the last 25 miles of the seaway into lake Ontario. However, the decision of the previous government was that this $1 million could not be spent on the dredging operation -and this after spending $300 million-with the result that traffic on the seaway is to be diverted from the Canadian side away from the thriving port of Kingston. I say Kingston is a thriving port because last year

shipments out of Kingston amounted to approximately a million and a half tons. One million and a half tons going through the seaway represents between $600,000 and $700,000 to the seaway authority under the proposed rates. Yet the former minister of transport and the seaway authority decided, for the sake of a million dollars, that this Canadian channel should be excluded from the seaway.
I believe we have something like 500 ships from Kingston which proceed down through the St. Lawrence seaway. It is necessary now to take the United States channel, go into lake Ontario and steam 18 miles back into the port of Kingston. I might say that 18 miles for 500 ships represents about $100,000 a year in unnecessary operating costs. For the sake of $1 million we are going to involve the shipping companies in an unnecessary expenditure of $100,000. I claim that this has been a piece of bad planning on the part of the previous administration and it demonstrates a lack of foresight on the part of the previous minister of transport. The western end of the St. Lawrence river has been blocked off and the channel must now go through on the United States side. This has the effect of making the port of Kingston a backwater port.
We have heard some answers today and this is a question to which I should like to have an answer. Why, for the sake of $1 million when we were spending $300 million, did the previous administration see fit to block out the thriving Canadian port of Kingston?


William Hector McMillan: Mr. Chairman, I am interested in this resolution under which we are making available to the seaway authority additional money to complete the project. I was also interested in hearing what was said today about the Welland ship canal. I happen to live along that canal and I can assure hon. members of the committee that there is much rock in that area. I personally could not understand the early estimates of the cost of deepening that canal. I inquired about it at that time and was informed that the engineers reported that it would cost something under $2 million as I recall it. The former minister of transport in the Liberal administration, the hon. member for Laurier, who was also the president of the St. Lawrence seaway authority certainly could not have known about the rock that happens to be under the water for miles in that area both winter and summer. He is a lawyer by profession. The hon. member for Carleton today in his remarks enunciated the principle that a minister must be responsible for those who give information in his department. I recalled that the other day when the Minister 66968-9-77
St. Lawrence Seaway Authority Act of Finance had made an understatement of $10 million with respect to the increased interest on the conversion loan he blamed the deputies in his own department. I believe it is much the same thing. The Minister of Finance is supposed to be a mathematician and the hon. member for Laurier is a lawyer.
I have one or two questions to direct to the Minister of Transport. Since the tolls are supposed to amortize the cost over a period of 50 years I was wondering what effect the increase we are voting here today might have on the tolls. On January 18, 1959, as reported at page 1383 of Hansard, the minister gave us the main features of the proposed toll structure. I wonder if the proposed tolls will be increased on all or any part of the St. Lawrence seaway because of the sum of $335 million referred to in this resolution?


Mr. Small:: Mr. Chairman, I have taken a keen interest in the subject of the St. Lawrence seaway for longer than I would care to mention and I have spoken on the subject in this chamber on previous occasions. In my comments this afternoon I shall probably refer to some of the remarks made by the hon. member for Laurier and the Leader of the Opposition.
It was related today that the seaway became a reality only after a period of many years in which many difficulties were encountered. The concept of the seaway developed about a third of a century ago, as accurately as I can place it. The idea evolved in the mind of Sir Adam Beck who conjured up a picture of power needs in Canada. He made an assessment and learned that the only way further power could be secured was through the development of the St. Lawrence seaway. He was cognizant of the fact that power could not be secured unless it were related to what was referred to as a deep waterway development through which commerce and transportation by water from the sea could go through. Efforts were made to secure agreement between the various levels of government concerned and these efforts met with varying success encountering difficulties created by the interests of the port of Montreal and the electrical power barons of the day. When a degree of accord had been reached additional difficulties were encountered from vast lobbies in the transportation and electrical fields in the United States. It began to appear unlikely that agreement could be reached. All efforts to secure accord appeared futile.
Eventually the time came when the resources of the United States became depleted. It was known that natural resources abounded


Lionel Chevrier: I said no such thing.


Robert Hardy Small: The hon. member implied that.


Lionel Chevrier: I said no such thing in the course of my remarks, as the hon. member for Danforth would have known had be been listening to me.


Robert Hardy Small: I was.


Lionel Chevrier: If he had been listening to me he would not have made the statement he did. On the contrary, I said that if the minister were opening future facilities he- as he did in his remarks yesterday-should 66968-9-77J
St. Lawrence Seaway Authority Act make some reference to the previous administration. I did not refer to myself at all. The "previous administration" means the previous government.


Robert Hardy Small: I will accept that explanation, Mr. Chairman.


Lionel Chevrier: Thank you.


Robert Hardy Small: I could tell a story about an individual whose name I must not mention. I could tell what he did and what he had to say about the canal and just exactly what he meant. The hon. member for Laurier has not been very reluctant to take credit for what he did, and I am not disputing his right to do so. I think he has been given a good deal of credit for the work he did as minister of transport and also as chairman of the seaway authority; but at the same time if people are taking credit for the good things they did, then they must also take the blame for the mistakes that have been made by their agency. If they are going to take the credit, then they must take the blame also for miscalculations. On the whole, it has been a good job. Some of the engineering feats have been outstanding. There have been some gross faults and there have been serious miscalculations. Since the hon. member was the head of the organization he is responsible for every man under him and it was his duty to see that the job was done well.
We had some outstanding men on that project. One of the men who was very prominent in so far as the operation of the seaway and power development was concerned was Mr. R. A. C. Henry. They had his advice and experience at their disposal. We were to look to him for the solution of the difficulties that were encountered but we now find ourselves in a position where there have been miscalculations, mismanagement, and a lack of proper engineering.
I should like to come back to what I started to say about the trip that we took last year. We visited all of the installations and saw what had been accomplished and it certainly was to the credit of the engineers. When we got down to Beauharnois project we found that it was in the building process and the gentleman who was giving us information as we went along said that this was the part that was holding them up. He said it would not be finished until next year because of certain conditions. He said it was the intention to open up the seaway this year but whether that was the permanent target date or the hoped-for target date in the estimates it would not be properly finished until this year because the target date was set at too short a time. Nonetheless, what happened

St. Lawrence Seaway Authority Act at Beauharnois was that they ran into unforeseen difficulties. Probably I had better give the story the way the minister explained the situation yesterday. As found at page 1163 of Hansard, the minister said:
On general grounds they contend that favourable consideration should be given because a creditable job was done, essentially in time, but that in order to do so unanticipated and increased costs were involved and severe losses incurred. The authority points out that to complete in time was a primary obligation under the contracts and that each individual claim-
And so on. The minister went on to say:
The authority is of the view that, in some cases, additional costs would have been avoided had the work been effectively and efficiently executed throughout the period.
As to the Beauharnois canal we were told by the gentleman directing the party that there was exceptionally hard, abrasive sandstone there. It was so hard that it wore out a drill every ten feet. It wore out the teeth in a day on the shovels that were excavating. Tires on the trucks that were operating there wore out in 100 hours which meant a cost of $600 every 100 hours. All these things had delayed construction of that particular section, so much so that it could not be opened until this year and even now I understand it is not entirely complete. Where were the engineers of the department? Were contractors asked to figure and estimate without information on soundings or borings being provided by the department?
The same applies to what was said by the hon. member for Carleton. Everybody knows that the escarpment running from Hamilton all the way over to Niagara Falls, in which region the Welland canal is situated, is all limestone. Everybody knows that. The limestone has always been there. Limestone was encountered when the great hydro installations were made at Queenston and Niagara Falls. It was nothing new that there was limestone there, but nevertheless difficulties were encountered. Why were borings not made? Why was there not proper exploratory work to find out what the terrain was like. Where was this great engineer who was supposed to be the best man in the country? Where were the other departments? Surely there are geologists in the country who could have provided the information without trouble so that the contractors would have had an opportunity to do their work right. That is what was inefficient and it is the responsibility of the then minister and the department.
The former minister has tried to reflect glory on the previous government for what it did but the fact is that there is all this added expense which the people of Canada

are going to have to pay in the years ahead. If there were any justification for the added expense I would have nothing to say but the fact is that there was gross inefficiency somewhere in the department in not getting the necessary information. I have never heard tell of a contractor not being given full information as to what he was up against or being asked to get it himself. Therefore I think there has got to be a lot more explaining done.
I am not going to enter into the matter of the division of work between the United States and Canada. That was done under agreement. There has also been wonderful accord between the Department of Transport, the seaway authority and the Ontario hydroelectric. They have worked together very well and everything seems to be all right. We are going to get power that this country needs.
But now we have these figures presented to us and a request for an increase in the borrowing power of the authority. I will grant that there is a genuine reason for some of the many deficiencies, but now that the whole thing has been exposed we see that the builders of this wonderful seaway authority which was supposed to be doing such a good job did not get the required information that would have saved the country all this added expense. The ex-minister of transport and former chairman of the St. Lawrence seaway authority can talk all he likes and make all the explanations he likes but the culpability is on his shoulders because it was his responsibility to see that the engineers and other people in his department carried out their duties properly.
Probably the best thing that ever happened the country was the change of government because we can now bring to light the gross inefficiency that has been going on for years and about which we told the people before the election. Having said that, Mr. Chairman, I hope that the hon. member for Laurier will be given the opportunity of replying.


George James McIlraith: Oh no, he will be ruled out of order.


Robert Hardy Small: The fact is that the committee was interested enough in the matter to give him permission to speak a second time. We want to try to get it cleared up so that this will not happen in the future. Be that as it may, Mr. Chairman, in what I have said I do not want to detract in any way, shape or form from the valuable work of the various officials, engineers and tradesmen who discharged the work efficiently. They had to go by the plans they were given. At times plans

were not ready for them. In his statement yesterday the minister had this to say with respect to claims:
-claims based upon alleged undisclosed ground and water conditions: claims based upon alleged interferences with scheduling work for various causes, including changes in plans and delays in providing plans by engineers of the authority.
That again relates to the department of which the hon. member was in charge. Therefore he will have to do a lot more explaining about the wonderful job they did together. We will have to pin him down. What happened to his engineering department that they did not make the proper investigations and explorations? He will have a terrific job to explain these things. He has the ability to get out of things if he can but the figures are there and the present minister's statement is there and the former minister is just as culpable as the engineers of his department. If he did not have qualified engineers then he could have secured them because we have them in this country. He could have got the rubber companies and others to bring their products up to date. With all the wonderful scientific achievement in this country the situation would have been improved if he had been on the job.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8.00 p.m.
Robert Hardy Small: Mr. Chairman, in the few moments that I have at my disposal, I will try to sum up briefly one or two of the items that I have mentioned. I should like to refer particularly to something that was said by the hon. member for Welland. I was surprised to hear him say that the difficulty they ran into on this venture which caused a great deal of trouble was the fact that they found water and stone in the canal. It just ran through my mind what he expected to find there. Certainly he would expect to find water anyway. Stone was also there. If they had taken proper precautions and taken proper soundings and conducted the proper tests they would have found out about these things.
Since 1903 the Welland canal has been free of tolls. In fact, great lakes shipping since that time has been free of them by agreement with the United States that there was to be no charges or tolls on lake traffic of any kind, and that principle had been accepted down through the years. Now we find what is taking place, and it relates very much to the extra costs of the Welland canal. Some
St. Lawrence Seaway Authority Act think it is going to run about $29 million. That is the reason why tolls are going to be imposed.
Great difficulty is going to be caused to shipping and the economy of the province of Ontario particularly because its raw supplies are tied so greatly to shipping, and the difficulty spreads out to all the rest of Canada. There will be serious repercussions later on in connection with shipping of wheat from the west. But on top of all that, instead of being charged against the country as it was in the United States, where they have absorbed the cost for dredging the Detroit river and the St. Mary river, which is not added to the cost, as we are being saddled on the Welland canal. The same thing in the St. Lawrence river before entering the seaway. They dredged that river at considerable cost and I think it would be similar to the deepening of the Welland canal. But on top of that, the United States marine department subsidized certain classes of shipping to the extent of $750 per day. Then there is also the further subsidizing of the building of ships up to 40 per cent, particularly those that are ocean-going. That will have an adverse competitive effect on shipping in Canada. It is going to add another burden to it. Those things have not been taken care of in the consideration of lake shipping.
One thing I missed tonight when I was summing up was the gross neglect in the things that took place at the international rapids section where they ran into difficulty because they found granite which made the work that much harder and took that much longer. All these things added together result in what we have pointed out. As I pointed out previously, the extra cost entailed in what took place at Beauharnois and also in the international rapids, with the granite they found there, piled up the costs. It has delayed the opening of the St. Lawrence seaway for practically a year. That spells out only one thing, that added cost, that is also incorporated into the general cost of the whole project and it will be reflected also in the tolls being charged on the seaway itself.
Then on top of that, as I mentioned previously, is the effect of the Wiley-Dondero legislation in the United States that slants everything in their favour and they are able to cause us considerable trouble in the future with the effect that it will have on the operation of the seaway. These things all piled up lie at the door of the previous government. I think that the responsibility to a certain extent rests on the hon. member for Laurier because of what has happened. But you cannot saddle it completely on him-

St. Lawrence Seaway Authority Act


Lionel Chevrier: That is something.


Robert Hardy Small: -after having done a good job. However, I think there should be a searching examination in the department of the government or in the seaway authority to find out who is responsible. I suppose you might properly term it an abortion as far as the Welland canal is concerned. I think we should find out who is responsible for advising the administration at that time. Then we should look them over and, if we find who were responsible for advising the St. Lawrence seaway authority we should then get rid of the whole caboodle of them and employ a new lot who will do a better job. Under these conditions, Mr. Chairman, I would suggest that this whole matter, after this resolution has been passed, be sent to a committee. I go along with the hon. member for Vancouver East that this matter be sent to the public accounts committee in order to give us a chance to see if we can ferret out the responsible party.


Lionel Chevrier: Mr. Chairman, I have listened with great care to the arguments that have been advanced by certain hon. gentlemen in the committee this afternoon and really I am amazed by some of those statements. I am amazed

and I say this respectfully-[DOT] at the lack of knowledge displayed by certain hon. members of the statute itself and of other public documents having to do with this project. Notwithstanding the fact that I had dealt at great length during the course of the afternoon with the manner in which costs had been increased, it never occurred to any hon. gentlemen on the other side of the house to see where the responsibility, if any, lay other than to direct it toward the hon. member for Laurier.


Mr. McPhillips:: You sat on it for years.


Lionel Chevrier: All right. I am willing to deal with my responsibilities and I am willing to accept them, but I am not willing to sit in the house and listen to some of the inaccurate charges that have been made during the course of the afternoon and I expect to be able to establish the fact that they are inaccurate in the course of the next few minutes. Notwithstanding that hon. members have pointed in this direction, nobody has said a word about the fact that power costs have increased from almost $400 million to $600 million. Notwithstanding that Canada was responsible in its application to the international joint commission for that aspect of the project as well as for the navigational aspect. I refer again to the application which was made by Canada jointly with the United States to the international joint commission and which deals with an application, not for navigation but for power development in the


international section and which in section 8 sets out the manner in which that power development shall be built and shall be produced. It follows almost word for word this public document which was circulated for years by the Department of Transport. How is it that from the time-and I am going to come back to 1922 in a moment-this document dated 1949 was published until this date, and from the time the application was made to the international joint commission in 1952, no one has said anything in connection with the estimate of costs prepared by Canada, prepared by the engineering branch of the Department of Transport and which at that time indicated that the power costs would be somewhere in the neighbourhood of $400 million to $420 million. While we do not know what they will be now, they will probably be in the neighbourhood of $600 million without having any regard to interest during construction. Are you going to direct your finger at me because of these increases of close to $200 million? Are you going to direct your indignation at the hon. member for Laurier or at the federal government? If you are I have no objection, because the persons and the division responsible for the preparation of those costs are the same as those responsible for the preparation of the seaway costs.
I want to deal with the hon. member for Carleton, who, to say the least, has made very strange charges in this house. I can hardly believe that a man of his integrity would rise in this house and during the course of the afternoon, for almost 30 minutes, make the charges which he did. I say to him with all respect that no hon. member conscious of his responsibilities as a member of parliament would have made the charges which he made this afternoon.


Richard Albert Bell: How ridiculous can you be?


Lionel Chevrier: My hon. friend says, how ridiculous can I be? Let him listen.


An hon. Member:: You deserve it.


Lionel Chevrier: My hon. friend started off by saying that his theme would be very simple, and his theme was this, the control of parliament over public expenditure. That without immediate and full disclosure of unavoidable mistakes which should be accounted for to the house, it can exercise, unless it gets all the facts, no real or effective control over the public purse. Let us see how this business operates. If my hon. friend had gone to the trouble of consulting the St. Lawrence Seaway Authority Act, which apparently he did not, he would have seen that under the authority of that act there are three members appointed to act together

and in consultation with each other. It is not only one, but three. He would have seen further that the decisions of the St. Lawrence seaway authority are taken after consultation by the members with each other. Those decisions can be found in the minutes of the St. Lawrence seaway authority from day to day, from week to week, and often meetings were held twice a week. Also, if he had consulted the St. Lawrence Seaway Authority Act he would have seen how the method of borrowing by the St. Lawrence seaway authority is established and proceeded with.
Since he does not know it, I will have to tell him how it is done. It is done pursuant to section 80 of the Financial Administration Act, which says that each corporation under schedule D

and the St. Lawrence seaway authority is a corporation under that schedule *-shall submit a capital budget for the next financial year, a budget which must be approved of by order in council before it is tabled in the house. So that every budget of the St. Lawrence seaway authority which was produced in the house and tabled here, either by the previous administration or by this administration, has had to obtain the approval of the governor in council, has had to obtain the approval of the government, and has had to obtain the approval of the former government. As I shall show in a moment, the details of this may astound my hon. friend.


Mr. Tremblay:: Pas de colere.


Lionel Chevrier: My hon. friend says "pas de colere". I shall do my best not to lose my temper, because I could lose it in the face of some of these ridiculous accusations which we have heard of today. I go on. Section 85 of the Financial Administration Act says that the corporation must file a balance sheet, and must furthermore file an annual report within three months after the termination of the year, containing a statement of account of the balance sheet which must be submitted to parliament. As I said earlier, the St. Lawrence seaway authority, acting under the authority of the Minister of Finance, must lay before parliament a report on every loan made to the authority in order to allow it to pay for the expenditures which are from time to time made by that authority.


Richard Albert Bell: Who let these major contracts?


Lionel Chevrier: Let me go on and you will
see who let them.


Richard Albert Bell: To the extent of $19 million.


Lionel Chevrier: I am dealing now with some of the charges of my hon. friend, and if he
St. Lawrence Seaway Authority Act will allow me to pursue them I think I can show of just what material those charges are made.


Richard Albert Bell: They are not charges; they are the truth.


Lionel Chevrier: Let me stick to the facts. The first budget which was tabled in this house was tabled when I was president of the St. Lawrence seaway authority by the former government and is for the year 1955. It provides, as the Minister of Transport has already stated, for a capital expenditure for the year 1955 of $205,535,000, detailed in three pages. That was tabled in parliament, and dealing with the Welland ship canal there is an item of $2,025,000.
Then the following year, 1956, there was again tabled the budget of the St. Lawrence seaway authority, again in three pages and in great detail. It divided the sections of the seaway into their various amounts and the total expenditure for the year 1956 was $213 million; for the Welland canal section it was, $3,510,000 in 1956. Parliament therefore had an opportunity in 1956 and in 1957 of seeing not only these two estimates which I mentioned, but also of voting them.
Then came the year 1957. I cannot remember, of course, if I was still president when this was tabled because I do not remember the date on which it was tabled. I retired as president of the St. Lawrence seaway authority in April 1957.


Richard Albert Bell: They were tabled while your government was still in power.


Lionel Chevrier: Be that as it may, your government was in office from the month of June 1957 until the end of the year and had the opportunity of considering these estimates. Now, what were they? Let the house see what they were. They amounted to $284 million, and when you come to the detail for the Welland canal section it had reached $23,925,000. That was voted by the hon. gentleman's friends when they were in office, and when he was there did he criticize this estimate for the Welland canal? Not a word. Not a whimper.
Then came the year 1958, when again the budget of the St. Lawrence seaway authority was tabled by the present government, under the direction of the present Minister of Transport. And what have we got? We have estimates this time amounting to $322 million, and for the Welland canal section, $25,973,000. That was last year. Did the hon. member for Carleton say a word about this?


An hon. Member:: Not a word.


Lionel Chevrier: Did the hon. member for Carleton discover last year that there was

St. Lawrence Seaway Authority Act anything the matter with the amount of money which was being expended for the Welland canal, or did he just discover it when he made his speech a while ago? Furthermore he was the parliamentary assistant to the Minister of Finance, with whose approval this report and this budget must be tabled in the house. Now, I ask how ridiculous is it-


Thomas Miller Bell: Should we have repudiated the contracts?


Joseph Pierre Albert Sévigny: Order.


Thomas Miller Bell: May I ask the hon. gentleman if this present government should have repudiated the contracts which his government made?


Joseph Pierre Albert Sévigny: I must ask hon. members to respect the authority of the chair. It is not permitted to interrupt the hon. member who is speaking, and I will therefore ask hon. members please to permit the member for Laurier to finish his remarks.


Lionel Chevrier: Thank you, Mr. Chairman. Hon. members who have taken part in this debate have complained that there has been no publicity, no knowledge, no news. Let us take a look at the record. In 1956, when I was still there, there was produced by the St. Lawrence seaway authority a progress report dealing with each contract in each section, and on the last page but one is contained the list of all the contracts awarded until that time by the seaway authority. Then in June of 1957, when I was no longer there and when the present Minister of Transport and his government formed the government, there was produced another progress report giving the position of the seaway authority contracts as they stood at that time. There were four contracts awarded in respect of the Welland ship canal-McNamara Construction Company Limited, Canadian Dredge and Dock Limited, J. P. Porter Company Limited, and Russell Construction. These are the four major contracts about which the hon. gentleman complained and they were contained in this report made by the administration of which the hon. gentleman was a member.
Then came the month of December, 1957. A similar report was issued in detail, publishing all the contracts, and again there appeared a list of the contracts up to date concerning the Welland ship canal. I am told that another of these progress reports was published in the month of June, 1958. I have not seen it. I presume it was far more up to date than this one, but there is, I am sure, a detailed statement of the contracts that were given. More than that, there was never a contract given by the St. Lawrence seaway authority


which was not fully publicized; publicized by the signing of the contract with the participants and those who were to effect the contract, made publicly in the presence of the members in the headquarters office of the St. Lawrence seaway authority in Montreal. Then a press release followed each and every contract containing the details and the amount of money to be expended.
I ask the committee: was this not the proper way in which to proceed? Apparently hon. members opposite think not. Then the hon. member for Carleton said I proceeded to place the blame upon others. I did no such thing. I did not attempt to place the blame on anyone. I simply placed on the record the estimate which was prepared by the director of the engineering staff of the Department of Transport and furnished to me when I was minister of transport. I do not know of any other way of doing it. How else could I estimate the cost? Does the hon. gentleman expect me to have gone to the Welland canal and gone down into 25 feet of water to ascertain what was there? Engineering reports have been made by Canada and the United States over the years which indicated what the position was.
The hon. gentleman spent at least 15 minutes to say that I had given the estimate for the Welland as being $1,300,000. Of course I did. I make no apology for that. He went on also to quote my remarks to the lumbermen's association. I do not remember what was said on that occasion, but if the hon. gentleman says I said $2 million I accept it because I probably did say it. There was no other estimate at the time. How else was I to proceed?


Richard Albert Bell: That is all I said.


Lionel Chevrier: Yes, but you took 15 minutes to say that. If you had listened to what I said earlier you would have realized that I put that on the record almost an hour before you got to your feet.
Now the hon. gentleman says there is no comparison between the amount of information given to congress in the United States and that provided to parliament here. Mr. Chairman, that is not only true of the seaway but it is true of a number of problems having to do with both Canada and the United States. I need not remind this committee, surely, of what facilities a congressman or a senator has compared with a member of parliament or a senator in this country. They enjoy tremendous facilities compared with those available to us. The United States, being a large country, is able to spend far greater sums of money in order to make such information available.

What better proof of that could the committee want than the example of the interparliamentary United States-Canada group which went down to the United States to consider certain problems affecting our two countries. Here are two reports which we were given dealing with the problems concerning Canada and the United States, each prepared by two United States congressmen -Hon. Brooks Hays of Arkansas and Hon. Frank Coffin of Maine-one of them a general report and the other a special study of questions affecting Canada.
Why is it that we went to the United States with no detailed study prepared by Canada of the problems with which we had to deal, and why did we have to rely on information given to us by the United States? I do not make any apologies for this. It is because the facilities provided for members of the congress of the United States are far greater than they are in Canada. That is the answer to the hon. gentleman when he states that there is far more information available in the United States concerning this project than there is in Canada.
Then the hon. gentleman said that contracts awarded up to 1956 on the Welland ship canal amounted to $19,546,000.


Thomas Miller Bell: In 1956, not up to 1956.


Lionel Chevrier: I accept the amendment which has been made and I say that the contracts awarded in 1956 for the Welland ship canal, amounted, therefore, to $19,546,000. Why was this not pointed out to parliament, he stated? I have referred to the budgets tabled in the house. I have referred to the progress reports made by the seaway authority. I have referred to the press releases made by that authority. But the hon. gentleman goes on to say that in so far as he could discover no information was ever given. If the hon. gentleman wants to continue making statements of that kind when the information is right before him in parliament and when he did not even take the trouble to go and consult the files, I cannot of course, prevent him.
Having said this he went on to state that a contract went to J. P. Porter on the Welland canal on September 26, 1957, for $1,283,900. The hon. gentleman's friends were in office when this took place and the amount of that contract is almost the same as the $1,300,000 which I announced as the estimate in 1951 and which he is complaining about. Why did he not investigate when he saw that one contract alone amounted to $1,283,000? This sole contract, this one contract given while the present administration was
St. Lawrence Seaway Authority Act in office, amounted to as much as the estimate. The eighth contract, he stated later, went to a dredging firm for $351,000. Did the hon. gentleman seek at that time to find out why it was that there was this difference between the estimate of $1,300,000 and the amount which the minister has expended?
The hon. gentleman went on to say in a trembling voice: I have searched the annual reports of the seaway for the year ending December 31, 1956 and have failed to find a single sentence to indicate anything about these contracts. In the face of what I have put on the record, surely he is not in possession of the facts, and surely he cannot be serious in making this kind of statement. Now then, I come to the crowning achievement of the hon. member for Carleton. Here is what he said: "Any school boy should have known that the Welland escarpment was made of rock".


Thomas Miller Bell: Pre-school boy, I said.


Mr. Habel:: That is what you look like now.


Lionel Chevrier: I will accept my hon. friend's correction. Let me tell the hon. gentleman and those who sit with him on the government side of the house that the government of the Right Hon. R. B. Bennett in 1932 apparently did not know it. Let us see what happened with respect to a treaty that was signed between Canada and the United States, the deep waterway agreement of 1932. If my hon. friend will take the trouble to look at this treaty he will find that the report that is incorporated in the treaty is the one dealing with the St. Lawrence waterway, the report of the joint board of engineers made in 1926. At page 24 of the report of the joint board he will find a statement to the effect that the cost of a 27-foot channel for the new Welland ship canal in addition to the present project would cost $1,100,000. That information was incorporated in the treaty signed by the Hon. R. B. Bennett and the then secretary of state for the United States which indicates that at that time the estimate was taken to be $1,100,000. That is the estimate that was carried forward from 1926 to 1932 and again to 1941 when the great lakes waterway agreement was signed. It was carried still further and incorporated in the application which was made by Canada to the international joint commission in 1951.


Thomas Miller Bell: How many years ago is that?


Lionel Chevrier: My hon. friend has been pointing his finger in this direction instead of pointing it in the other direction. Let me
1206	HOUSE OF
St. Lawrence Seaway Authority Act point out to him that the fault, if it lies anywhere, does not lie so much in this direction as it does in the other direction because he failed to ascertain what the facts were before he made his speech.
I say to you, Mr. Chairman, that if the responsibility lies entirely with the former minister of transport we must consider the responsibility of the present Minister of Transport. The responsibility of the present minister with reference to the contracts which have been given since is equal to that of the former minister of transport.


Richard Albert Bell: Oh, nonsense.


Lionel Chevrier: I say that because there can be no doubt that if an error of this kind existed surely it should have been discovered when the present administration came into office. Surely some responsibility must be laid at the doorstep of the other officers of the government. I am not directing my attack at the Minister of Transport alone. There .are other officers who advise the Minister of Transport and he in his everyday responsibility must accept that advice. Otherwise, how could he get along or administer the affairs of a department? That is exactly what happened in this case.
Then it was said by the hon. member for [DOT]Carleton "Oh, so far as we were concerned there was no option on the part of the government other than to proceed and excavate to the summit level." In so far as the contracts awarded prior to the present government coming into office were concerned surely the moment this error was discovered the government should have investigated, gone to the source and made sure that an error such as has been complained of had been corrected. And later when the government gave a number of contracts, did the government investigate to ascertain what the present position was? Of course not. Members of the government discovered it when they investigated last night on the occasion when they decided to make speeches on this matter.
The hon. member for Carleton then went on to say if the hon. gentleman-referring to the hon. member for Laurier-had come to the house at the time as he should have and made a frank confession of the errors of which he was guilty then the present government would not be faced with the problem that confronts it today. Let me tell him at once that I could not have come before the house at that time because I was not then a member of the house. At that time I was a member of the St. Lawrence seaway authority.


Richard Albert Bell: But you were when
you complained of this.
[Mr. Chevrier.l


Lionel Chevrier: I did take certain steps, however. Following the responsibilities that were charged to the St. Lawrence seaway authority under the various pieces of legislation that obtained, I tabled the information which the house has had over a period of four years during which time it has had an opportunity to consider and discuss.
My hon. friend said that if I had done that and confessed my errors the government would not have been faced with the problems confronting it today. In reply I say this: You have been faced with those problems for two years now, what have you done about them? Have you investigated? Have you attempted to do anything about them? At any time did you rise in your place and bring these matters to the attention of parliament? No, but you and others have risen in your places today and charged, not the St. Lawrence seaway authority or the government or the Minister of Transport but the poor hon. member for Laurier-


Some hon. Members:: Oh, oh.


Lionel Chevrier: -and if you think he is
going to sit here and take it you are badly mistaken.


Joseph Pierre Albert Sévigny: Order, please. I regret
to interrupt the hon. gentleman but I am obliged to advise him that his time has expired.


Lionel Chevrier: Would the committee give
me an opportunity of continuing?


Some hon. Members:: Go ahead.


Richard Albert Bell: Let us give the hon.
gentleman enough rope.


Joseph Pierre Albert Sévigny: Does the committee give
unanimous consent to the hon. member for Laurier to continue his remarks?


Some hon. Members:: Agreed.


Lionel Chevrier: I thank the committee for
this courtesy. I have finished with the hon. member for Carleton.


Richard Albert Bell: Mr. Chairman, may
I interrupt to say that the hon. gentleman may think that is true but I am afraid he is sadly mistaken.


Lionel Chevrier: I should like to deal now with that gem of prose which was uttered in this chamber this afternoon by the hon. member for Stormont. I enjoyed part of his speech but I cannot say I enjoyed other parts and if the committee will allow me to do so I should like to say how illogical and inconsequential his speech was. He accused me of having been responsible for the assassination of the city of Cornwall and for having betrayed that city. Mr. Chairman, I have been in parliament for

almost 21 years now and I have never betrayed anyone let alone the city of Cornwall or the county of Stormont. My friend the hon. member for Stormont has never understood the project-the 238-242 single stage control scheme-that is taking place in his constituency or else he would never have made the speech he did.


Mr. Graffley:: But he never headed the St. Lawrence seaway authority.


Lionel Chevrier: If the hon. gentleman had understood the project then at least he would have said that here we have at our very door right in the city of Cornwall a power project which has cost no less than $300 million and perhaps more. There were other sums of money spent in that area arising out of the project such as, for the relocation of highway and railway routes, for the reestablishment of communities all along the water front, for the establishment of the new St. Lawrence seaway authority building and for the construction of the future 27-foot facilities. I say to the hon. gentleman who suddenly has complained about what has happened to the city of Cornwall that he has been delinquent in his duty to parliament in not rising in this chamber during the last session to cry out against the situation because, after all, we now know that it did not happen over night but has been in existence for several years. Why, then, did the hon. member not rise and tell the committee what had happened?
I will tell the hon. gentleman from Stormont what is required in the city of Cornwall for industrial development, and you must have it to progress, sir, and that is power. Instead of the hon. member for Stormont going about the constituency and elsewhere condemning the Ontario hydro power commission for the manner in which it did things, he should be commending the Ontario hydro power commission for the manner in which it has developed power facilities in Cornwall. If he did that it would be far better for him because then he might be able to get some power for the city of Cornwall.
Here is what has happened. Right across the way from the city of Cornwall on the United States side two large industries have been established, one a motor car industry and the other an aluminum industry and both of these will employ somewhere in the neighbourhood of 5,000 people. Why is it that two of those industries have gone across the line? The reason is that the New York state power authority have seen to it that power was assigned to that area. I say that the city of Cornwall has everything with which to develop and if my hon. friend, rather than condemning the hydro electric
St. Lawrence Seaway Authority Act power commission, were to direct his attention to the problems that are imminent in the city of Cornwall he would perhaps advance the cause of Stormont far better than he does at the present time.
The hon. member for Kingston raised the question of why navigational facilities were not provided for the port of Kingston. The hon. member is a new member and I will not take him to task but I will refer him simply to the St. Lawrence Seaway Authority Act which sets out in detail the power of the authority. It is not to provide port facilities for any city but it is to dredge a channel 27 feet in depth. In the area of the Thousand islands section most of the channel is on the United States side. Therefore, the vast majority of the work assigned in the international section was given to the St. Lawrence seaway development corporation to perform in waters which the channel follows and which have from time immemorial, I am informed, been on the United States side of the line.
The hon. member for Danforth had something to say about increased costs. Then, he said that that is the reason why there are going to be such high tolls. Let me tell him at once that that is not the reason. The reason why there are going to be tolls is that an agreement was made between Canada and the United States long before I introduced legislation in the house. Prior to 1951 the then secretary of state for external affairs rose in his place and made a statement, followed by correspondence-I have forgotten whether it was an exchange of notes or not-in which the United States and Canada both stated that the facilities for the navigational aspect of the seaway would be amortized by the imposition of tolls, would be self-liquidating and would be paid by shippers and shipping companies using the seaway. That was the understanding long before the legislation was introduced and it is in the legislation. Surely the hon. member for Danforth should have read the legislation before he made that statement.


Mr. McDonald (Hamilton South):: Will the hon. member permit a question. Would that agreement also include the Welland canal?


Lionel Chevrier: The agreement to which I have reference included no section. It dealt with the St. Lawrence seaway and since the St. Lawrence Seaway Authority Act describes the seaway as beginning at Montreal and ending at lake Erie, then I take it it includes the Welland canal.
I wanted to say something about contractor's claims, but the committee has been more than generous. It is almost a quarter

St. Lawrence Seaway Authority Act to nine and unless I am given the permission of the committee to continue I shall resume my seat.


Some hon. Members:: Carry on.


Lionel Chevrier: A great deal has been said about these claims by the contractors. The minister has made the position clear. I certainly have no fault to find with what he had to say. Perhaps I may be allowed to say something more on these claims.
When I left the St. Lawrence seaway authority, no contractors' claims had been filed. I had been advised that some were coming. Indeed, I would not be truthful if I were not to say that some contractors had already become anxious about what was happening and had spoken to me about the problem. However, I state unequivocally to this committee that there is nothing abnormal about contractors' claims. On the contrary, I think it is a normal thing for contractors to be claiming, particularly when prices are low. If the costs and the prices had been high the authority probably would not have had contractors' claims. It is because the contractors said that the prices were low- and they were low, because the bids were very competitive-that we have claims.
The contractors formed ventures of three or four companies and went into a corporation and those ventures were composed of the best experts of their kind in their respective fields and they went on to do this work. I say that many of those contractors were anxious to get the glamour of a seaway contract and because they were anxious to get the glamour of a seaway contract they bid low. They bid low, too, because they were in those joint ventures to guard against this competition which was heavy. I cannot remember of any of the major contracts which were not bid by the larger corporations and here I have no hesitation in saying that the major part of the work on the St. Lawrence seaway was well done. It was done by the best contractors in this country at fairly low prices.
It is true that some of the work was not well done. That is likely to happen in any great project and certainly it happened in a project of this magnitude which involved the expenditure, as the committee well knows, of over $300 million. It is therefore no surprise to me that there are claims. There are claims against the power authority of the state of New York, large claims. There are claims against the United States seaway development corporation; there are claims against the Ontario hydro power commission. Why should there not be claims against the St. Lawrence seaway authority?

The contract entered into with the St. Lawrence seaway authority was a pretty tough contract. It was a contract which had been prepared by our solicitors and contained very stringent clauses, clauses which would justify us when we saw a claim coming in taking the position that in so far as we, the St. Lawrence seaway authority, were concerned, the contractors must abide by the terms of the contract and we would not recommend changes in the terms unless there was a legal claim, and as far we could see there were few if any substantial legal claims. There may be-and I have learned since that there appear to be-some valid legal claims. I can think of one or two at the moment.
I can think of a contractor who had built a coffer dam and who, because of the ice in the Montreal area-and the members from Montreal know full well that in the Laprairie basin the ice is apt to shove and rise-found that the top of his coffer dam had been cut off and he had to rebuild it. Is that a legal claim or not? I am not in a position to say, now, nor was I in a position to say at that time. That, I said, was a matter of law. Surely the question of contractors' claims is not one for the seaway authority to determine but rather one of government policy. It is up to the government to determine whether or not there is a valid claim. I conclude that part of my remarks by saying that so far as the terms of the contract were concerned there was little in it whereby the contractor could obtain, in my opinion, the amounts which I have heard about.
However, there is another aspect to this matter, the equitable or moral aspect. I have heard it said, and I know this to be the case, that contractors claim that they encountered very difficult soil conditions. For instance, I know of two contractors in the United States who went into bankruptcy because of glacial till. One hon. member called it granite this afternoon. It is glacial till. I am informed that glacial till is as hard as concrete and that it is not easy to remove. Many of the contractors claimed that they had some of this to remove and that they should be paid higher amounts.
So I say that the contracts entered into by the seaway authority and the contractors, who in my opinion were among the best in the country, were on the whole properly carried out in a workmanlike manner with but few exceptions. The basic clauses of the contract were pretty stringent. There had to be, as I have said, some delays. There were delays. Look at the report of the 1947 board of engineers for the Lachine section. It is stated in that report and in other reports

that it will take six years to build the St. Lawrence seaway. It took twenty years to build Panama; it took more than ten years to build Welland. Yet here we were asked to build the St. Lawrence seaway in four years. That limit was fixed by a major consideration over which we had no control, namely that by agreement between Canada and the United States power had to be ready for development by July 1, 1958. As a result there remained only four full construction seasons in which to do the work.
How then could it be otherwise than that there was some haste? There were probably some delays and it may well be that there were other considerations with which I am not conversant. On the whole I repeat that in my opinion the work was executed in an efficient and workmanlike manner, and Canada was fortunate to have the kind of contractors it did to do the work.
Are the contractors entitled to their claims? That is a different thing altogether. That is a matter concerning which I am not competent to pass an opinion other than the one I expressed a moment ago when I said that in effect we in the seaway authority were bound by the contract and being bound by that contract had to determine claims in the terms of the contract. However, we took the position then as the minister is taking today, on the advice I am sure of the St. Lawrence seaway authority as it has been recomposed in the years since I left, that the determination of this matter was one of government policy and not something for the St. Lawrence seaway authority.
I think the minister has adopted the right course in bringing into the picture two independent engineers who have had experience with the hydro electric power commission of Ontario, and who certainly cannot be accused of being sympathetic to those who live in the downstream areas, in order to ascertain whether or not these claims are valid. After these two men have reported on these claims seriatim it will then be up to the seaway authority to decide whether in effect some of these claims can be accepted and whether some must be rejected. Then, finally, the governor in council, the present government, will have to decide in its wisdom whether or not these claims are valid. I thought I should place these facts on the record in so far as I personally was concerned.
I should like to conclude by again thanking the committee for its consideration of what I have had to say. I say that the seaway as it will emerge in 1959 will be a different seaway from that envisaged in 1951. In the first place, it was not built on Canadian territory as envisaged when the estimate was tabled in
St. Lawrence Seaway Authority Act 1951. It was built partly in United States territory and partly in Canadian territory in the international section. In the next place, it was not put on the Montreal side of the St. Lawrence river as envisaged in 1951 but rather on the south shore on the St. Lambert side of the river. Placing the seaway on the south shore in that section necessitated modifications to three bridges which cross from the south shore to the island of Montreal, and let me tell hon. members that 75,000 cars per day cross these three bridges.
How could you instal lift spans in these bridges with 60 lockages going through the canal per day? You would tie up motor cars for miles and miles. There would be a public outcry to the situation. Nothing else could be done under the circumstances than to treat the people of Montreal fairly in the manner in which we did and modify the approaches to the Jacques Cartier bridge, which cost in the neighbourhood of $10 million, the approaches to the Victoria bridge which, as I stated earlier, could go well beyond the anticipated amount of $6 million, and the approaches to the Mercier bridge which will cost in the neighbourhood of $10 million. Neither the seaway authority nor the government of Canada could decently have provided anything less in the way of transportation facilities for the city of Montreal than was provided. If the present government had been in office it would, in my estimation, have done exactly as we did because if their members had said to them as our members said to us, you cannot for one moment interrupt highway traffic on these three bridges because there will be chaos in the metropolitan area of Montreal, they would have come to no other conclusion than to do as we did. I submit with deference to the committee that the increased expenses were warranted and that they will enure to the benefit of Canada.


Thomas Miller Bell: Mr. Chairman, the fury we have witnessed in the committee for the last 55 minutes reminds me of one thing only and Shakespeare said it best in Hamlet: "Me-thinks the lady doth protest too much". For, sir, not all the fury, not all the glibness, not all the skilful eloquence of my hon. and learned friend, the counsel for the defence from Laurier, not all these things can obscure the essential facts which were presented to the committee today. The cost of the Welland ship canal was estimated by the former government, estimated by the hon. member for Laurier, first at $1,157,000, then $1,302,000 and then $2 million. What did it cost? It is costing between $25 million and $29 million. Did the hon. gentleman in anything he said tonight try to justify that? No, he tried simply to obscure the issue.

St. Lawrence Seaway Authority Act
He tried to use all his skill as a counsel in order to obscure what is the essential tact; and the essential fact is this. That increase in the cost of the Welland ship canal will be paid for by the users of that canal; the farmers of western Canada, the manufacturers of western Ontario and the consumers of Canada west and east. Those are the people who will pay for the outrageous miscalculations for which the hon. gentleman is primarily responsible. I know that he has sought tonight to conceal the fact that over $21 million of contracts were let by him in his capacity as president of the St. Lawrence seaway authority for a project for which the department of which he was head-he was the responsible minister-estimated the cost to be $1,157,000. The hon. gentleman says to us tonight, "What ought the present government to have done?" They accepted it, he says. They accepted the figures that were put forward he claims. Well, what does he suggest? Does he suggest that the expenditures or that the amount of $21 million and more put into this project ought to have been abandoned by the present government? Ought they to have repudiated the contracts which my hon. friend entered into, the very contracts which bore his signature? What would he have said in the House of Commons tonight if this government had repudiated the contracts which bore his signature?
There is one thing that I neglected to mention earlier. The hon. gentleman says that he did not know there was rock there. Did they think that Niagara Falls is made of sand or green cheese or what? Really, Mr. Chairman, how nonsensical can the hon. gentleman be in his approach to this issue? All the previous government intended to do at the outset was to dredge silt. Apparently the nasty old rock got in the way. The last time I heard that story, it was the reverse. The story then was that they intended only to excavate rock but it was the nasty old water that got in the way that time. I refer to the subterranean passages in the printing bureau. How desperate and unfortunate can the hon. gentleman be? First he has a surplus of water and then he has a surplus of rock. If he could only achieve a balance between them, how happy would he be.
The hon. gentleman draws the attention of this committee to the budget of the St. Lawrence seaway authority and he suggests to this committee that this was produced before the house in a manner to assure parliamentary control over the expenditures of the authority of which he was head. All right. I have in my hand the estimated capital expenditures during the fiscal period January 1 to January

31, 1956, and under the heading "Total Estimated Expenditures" we find under the Welland section $9,620,000 as the total estimated expenditure for that section and the amount to be expended during the year 1956 is $3,510,000. It was revealed to the committee this afternoon that during that same period of 1956 the hon. gentleman put his signature to contracts worth $19,500,000. That is the type of estimating the hon. gentleman does. The hon. gentleman in his fury tonight assured us that at all times he disclosed to the house the full facts. In his estimate in his budget he discloses $9,620,000 as the total and $3,510,000 for that year, and he puts his own signature to $19,500,000 worth of contracts. Mr. Chairman, I do not rest my case on that. What I submit to the committee and to the country in putting before them the facts is this, and I do not need to do it with the fury which the hon. gentleman developed this evening.


Joseph-Alphonse-Anaclet Habel: The hon. gentleman is doing worse.


Thomas Miller Bell: Let me deal directly, honestly and honourably with the charge that the member for Carleton has been something less than assiduous in the discharge of his duty in not raising this matter in the year 1957 or 1958 rather than 1959.


John Whitney Pickersgill: When the hon. gentleman was parliamentary assistant to the Minister of Finance.


Richard Albert Bell: Oh, the hon. member for Bonavista-Twillingate is raising the suggestion that I was parliamentary assistant to the Minister of Finance. Yes, Mr. Chairman, I was parliamentary assistant to the Minister of Finance.


John Whitney Pickersgill: Or is the hon. gentleman overlooking that?


Richard Albert Bell: I include that in exactly what I am going to say. I say to the hon. member for Laurier that the best way to beg an issue is to ask, as he did tonight, "why didn't you do it before?"


John Whitney Pickersgill: Oh, oh.


Richard Albert Bell: I am not the one who is begging the issue. As far as I am concerned, 1 have never desired to score debating points in respect of this issue. The straightforward reason why the member for Carleton did not enter into this issue previously was just this. He was a new member in the house, 20 years the junior of the hon. member for Laurier, and was trying to learn many things in this house in a short period of time. That is the honourable answer to my hon. friend. It was only when I had the opportunity in recent

times, with the assistance of constituents of mine who have made a study of this matter and who feel keenly about what is happening, that I was able to understand the full extent of the egregious errors for which the hon. member for Laurier is primarily responsible. That, Mr. Chairman, is the straightforward reason. Although I am one of the new members of this house I will stand up before my hon. friend who is 20 years my senior in all respects, and will debate with him this issue, the integrity of parliamentary control of capital expenditure. That is where I fear that my hon. friend has fallen down. I only say to him as I conclude that if the member for Carleton had known these facts earlier he would have shared them with the House of Commons, as he has done today.


Lester Bowles Pearson: Mr. Chairman, the committee will have an opportunity to ponder over, analyse and judge the words of the hon. member who has just taken his seat-the new member of the house, as he himself confessed-and the words he used this afternoon. I do not propose to enter into that part of the discussion at all.
However, I should like to ask the Minister of Transport-who should, I think, be taking a little bit more active part in this discussion as the minister responsible now-just two or three simple questions. The first question is this. Does the minister agree with the very serious charge which was levelled at my friend the hon. member for Laurier a few moments ago by the hon. member for Carle-ton, namely that he was guilty of making illegal expenditures while he was head of the St. Lawrence seaway authority, expenditures beyond the authorization given by parliament?


Richard Albert Bell: That statement was never made. The word "illegal" was never used at any time.


Lester Bowles Pearson: Mr. Chairman, I will put the question in a different way in order to satisfy my friend the hon. member for Carleton. Does the Minister of Transport agree that the hon. member for Laurier when president of the St. Lawrence seaway authority made or sanctioned expenditures beyond those authorized to the authority by parliament? That was the charge that was made and it was an extremely serious one indeed. That is the first question.


George Harris Hees: Would you like me to answer it?


Lester Bowles Pearson: No, not yet; I will give you three questions. The second question is this. I know that the hon. member for Carleton was a new member and did not wish to enter into an examination of these matters earlier. But was the Minister of Transport
St. Lawrence Seaway Authority Act aware, when he was in the opposition, of the detailed budgets presented annually as explained by my hon. friend a few moments ago, which gave the details with regard to expenditures on the Welland canal as they occurred? Was the minister aware of those expenditures at that time and when those matters were before parliament did he object to those expenditures or did any other member on the other side of the house object to them at that time in any way, shape or form or has the objection been discovered by the hon. member for Carleton this afternoon? Then the third question is this. Does the minister agree with the charge of the hon. member for Carleton that the increased expenditures on the Welland canal have no justification? Does he agree that this amount which is now being expended had been wasted, and does he agree that there was no reason why this project should have been changed to bring about this extra expenditure? Perhaps he will answer those three questions.


George Harris Hees: I will be very glad to, Mr. Chairman. First of all, as the hon. member for Carleton has explained and pointed out to the hon. Leader of the Opposition, he did not say, as he just now said, that the hon. member for Laurier, when he was either seaway president or minister of transport, authorized any illegal payments.


Lester Bowles Pearson: I did not use the word
"illegal".


George Harris Hees: He did not say that, and I do not for a moment think the hon. member for Laurier did authorize any illegal payments. I think the payments he authorized were ones which were passed by the seaway authority and authorized by parliament.


Lester Bowles Pearson: That is not what he said.


George Harris Hees: Of course, anybody who is familiar with these matters knows that that is the only way expenditures can be made by the St. Lawrence seaway authority. Second, the Leader of the Opposition asked me if I was aware, while a member of the opposition, of the Welland canal expenditures. The answer is no, I did not, for a very good reason, which is this. When we were in the opposition, like the hon. members at the present time, we were few in number and we split up the responsibilities, and at that particular time transport was not one of the departments with which I concerned myself. I concerned myself with about seven or eight, but transport was not one of them. The hon. member for Vancouver Quadra and other members were specialists in transport. I tried to do my job in other fields, and that is the straight answer to that.

St. Lawrence Seaway Authority Act
With regard to expenditures on the Welland canal, and the question whether they were or were not justified, I will answer that in this way. There can be no question in the mind of the hon. member for Laurier-he agreed very clearly this afternoon, as I think we would all agree-that for one reason or another there was sloppy estimating on the part of the Department of Transport and whoever was concerned at that time. I do not think the hon. member for Laurier would disagree with that statement; as I said, he said so himself this afternoon. There was a serious miscalculation, and I think he would agree that it is obvious there was a miscalculation. There is no question about it: the facts are there. However, to bring the Welland canal to the specifications which are necessary to make it a successful operating part of the St. Lawrence seaway, I believe that the expenditures which have now been authorized and have been made, and are being made, are necessary.


Lester Bowles Pearson: Mr. Chairman, I would like to thank the hon. minister for his very fair and frank answers.


Joseph Pierre Albert Sévigny: Shall the resolution carry?


George Harris Hees: Mr. Chairman, before the resolution passes could I answer a question asked me this afternoon by the hon. member for Welland? He asked me if the present announced estimated expenditure of $335 million would have any effect on seaway tolls. My answer to him is simply that the provisional toll structure which I announced last June was based on a total cost approximating the present estimated cost.


Hazen Robert Argue: Mr. Chairman, I do not wish to enter into the controversy which has been raging here today, but in light of the accusations that have been hurled from the government side of the house toward the hon. member for Laurier, and in light of the very large expenditure which may yet have to be made, I wonder if the Minister of Transport would answer the question put to him by the hon. member for Vancouver East as to whether this whole question will be referred at this session to the public accounts committee for thorough examination, in the interests of the taxpayers of Canada?


George Harris Hees: Mr. Chairman, that question is very easy to answer. As the hon. member knows, having been a member of this house for quite some time, the matters which are brought before the public accounts committee are decided by the members of the public accounts committee.


Hazen Robert Argue: Mr. Chairman, can I take it from the minister's answer that the government has no objection to having a thorough inquiry into the whole question of seaway expenditures by the public accounts committee? Before the hon. minister answers my question, what he said is technically correct. He has been here long enough to know what the rest of us know, that the committees of this house usually examine those things which the government wish them to examine.


George Harris Hees: I do not know how the hon. member and his followers would run things, if they ever happened to form a government, if they were to dictate to committees what they were to examine and study and what they were not. I assume that if the hon. member and his party ever did form a government they would tell the committees what they are to do and what they are not to do. That is not our idea of how to run the business of this house.
I would say to the hon. member that the hon. member for Vancouver East very kindly complimented me and my department and the seaway authority on the rapidity with which we have answered order paper questions, a great many of which have been placed on the order paper this session. There have been some very lengthy and complicated questions, and we have answered them very rapidly, and he was very kind to say that he appreciated it. That is an example of our attitude toward this whole matter. If there is any question which any member of this house wants to ask about any of the dealings, past or present, that have been carried out by the St. Lawrence seaway authority, all he has to do is place a question on the order paper and that question will be answered quickly and to the best of our ability. I have answered every question which has been put to me this afternoon in a free and wide open debate. I will try at all times to answer questions which are put to me. We have nothing to hide whatsoever regarding the operations of the St. Lawrence seaway. If the hon. member knows of some nefarious dealings, if he knows of some crookedness, if he knows of some skulduggery going on behind the scenes, I would appreciate it if he would bring it immediately to my attention and I will have it investigated. If the wants to make a speech about it I will welcome it. As I say, we have nothing to hide. The operations of the St. Lawrence seaway authority are open to inspection by him or any other member of this house.


Hazen Robert Argue: Mr. Chairman, the statement of the hon. minister that questions can be

placed on the order paper and answers will be given is scarcely a reply to the suggestion that there should be a full inquiry by a committee of this house. If that was the general attitude of the government, then of course that is what could have been done with the printing bureau last year. As far as the government referring things to committees of this house is concerned, it is a very common practice for reports to be referred to committees of this house. It has been the practice for many years for the Minister of Trade and Commerce to refer to the agricultural committee the annual report of the Canadian wheat board. It is just as desirable, in fact it is more than desirable, that the whole question of the reports and the conduct of the seaway authority, particularly in light of the accusations made by members on the government side of the house, should be referred at this session to the public accounts committee.


George Harris Hees: Mr. Chairman, I will simply answer once again that if the public accounts committee should decide they would like to examine the St. Lawrence seaway authority they will receive every co-operation from me as the minister responsible.


John Whitney Pickersgill: Mr. Chairman, before the resolution passes there is one question I would like to ask the minister. I was absent most of the day and if it was asked in my absence and answered I apologize to the minister. The minister has been responsible for the St. Lawrence seaway authority for pretty close to 20 months now, which is the best part of two years; for some of us, two rather long years. I have just one simple question to ask, and it is this. After the hon. minister's period of association with the seaway authority is he satisfied in his own mind, before we give authority to borrow this huge additional sum, with the efficiency of the seaway authority?


George Harris Hees: Yes, Mr. Chairman.
Resolution reported and concurred in.
Mr. Hees thereupon moved for leave to introduce Bill C-25 to amend the St. Lawrence Seaway Authority Act.
Motion agreed to and bill read the first time.



NORTHWEST TERRITORIES ACT


Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources) moved: that the house go into committee to consider the following resolutions:
Northwest Territories Act
That it is expedient to introduce a measure to amend the Northwest Territories Act to provide for the appointment by the governor in council of judicial as well as of administrative officers; 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.


Some hon. Members:: Explain.


Francis Alvin George Hamilton: Mr. Chairman, the resolution before the committee at this time is very similar to the resolution put forward last session dealing with the Yukon Act. In this particular resolution we are taking the first steps to amend the Northwest Territories Act in line with our policy of moving step by step to keep the judicial system in the Northwest Territories moving forward to meet the changing conditions in the north. This is particularly true with regard to the progress being made toward the more and more democratic carrying out of local government activities in the territories.
This particular series of amendments-there are five in all-deals mainly with administrative matters. There is one which deals with the appointment of legislative administrative and judicial officials, as was the case in the amendment to the Yukon Act last year. The balance of the amendments may seem to be very minor in character but, as hon. members know, such matters often mean a great deal to the councillors in the north and to the people of the territory. Of the five amendments two deal with the meetings of the council and the change in the stature of tenure of members of the council. One deals with judicial offices, another with the importation of liquor and the fifth with archeological sites. I believe that is sufficient to explain the purpose of the resolution before the committee tonight.


Mr. Hardie:: Mr. Chairman, I do not believe we know much more now than we did a few moments ago before the minister rose to explain this resolution. Nevertheless I would say that we on this side of the house naturally welcome any changes in the act which would provide more effectively for the welfare of the people of the north. The minister said something was going to be done with regard to meetings of the council and I suppose-or at least I hope-that the amendments will cover the possibility of holding by-elections in the Northwest Territories in the event that a member of the council should die while in office or resign for some other reason. If this is the case, I wish to commend the minister for having taken a step forward. As hon. members of the committee know, I was one of the first elected representatives to sit on the Northwest Territories council and

Northwest Territories Act after I came here in 1953 I made representations in this house asking that provision be made for by-elections to be held to fill vacancies such as the one I had created by my resignation. At that time the well-meaning officials of the Department of Northern Affairs and National Resources contended that it was very difficult to hold by-elections in the Northwest Territories during the winter, but if there was one thing proven by the election of last March it was that elections can be held successfully in the north in the winter time.
Since there are to be some changes in the judicial portion of the act I should like to deal with the section of the act which concerns the set-up of the territorial court of the Northwest Territories. At the present time this court consists of a judge, one magistrate in Yellowknife and justices of the peace resident in various communities of the north. I am not a lawyer and if I am wrong I hope the minister will correct me in what I have now to say. We find in the act sections dealing with the concurrent civil jurisdiction of provincial courts. The interpretation I place upon these sections may be different from the minister's own interpretation, but I should like to read section 29 concerning this concurrent civil jurisdiction:
29(1) Any superior court in the provinces of Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland may, within the province in which its ordinary jurisdiction is exercised, exercise, in civil matters respecting persons and property in the territories east of the 102nd meridian of west longitude-
That is the meridian which follows the provincial boundaries between Saskatchewan and Manitoba to the Arctic. West of that is the MacKenzie district and to the east Kee-watin. The section continues:
-and actions, suits or proceedings affecting them, the like jurisdiction that such court has in civil matters respecting persons and property within the territorial limits of its ordinary jurisdiction and actions, suits or proceedings affecting them.
(2) Any court having surrogate powers in a province of Canada may, within the province in which its ordinary jurisdiction is exercised, exercise, respecting the granting or revoking of probate of wills and letters of administration of the property of deceased persons in the territories and all matters arising out of or connected therewith, the like jurisdiction that such court has respecting the granting or revoking or probate and letters of administration of the property of deceased persons within the territorial limits of its ordinary jurisdiction and all matters arising out of or connected therewith.
Section 30 deals with practice and procedure and service outside the jurisdiction.
As I interpret those sections, an action can be proceeded with in any one of the provinces of Canada from Alberta through to Newfoundland with regard to persons or
[Mr. Hardie.l
the assets of persons resident in the Northwest Territories. These courts have jurisdiction over the territorial courts. If I am correct in my interpretation of what might be desirable, I feel that before a court in any one of the provinces of Canada can proceed with an action, the court of the province should make application to the territorial courts. Of course, if the territorial courts have given consent to having the case heard in the province it should proceed in that manner. Under the existing legislation the provincial courts have primary jurisdiction and the territorial courts have no jurisdiction.
With respect to civil jurisdiction I notice that section 31 of the Northwest Territories Act leaves appeals in the hands of the provincial courts. I refer, of course, to appeals from any actions started in a province such as New Brunswick. With respect to the portions of this act that refer to the judiciary I believe the minister should follow up the democratic tendency he has established and increase the jurisdiction of the territorial courts giving them more autonomy and independence.
I also observe that under the act as it presently stands all appeals from the territorial courts are sent to the courts of the provinces extending from Alberta to Newfoundland. I feel that these cases should be dealt with by a court that understands the conditions that exist in the territories. I feel that a provincial court would not be competent to give reasonable treatment to a case appealed to it from the territories and that an appeal court for the northwest territories and the Yukon should be established. The membership of this court could comprise the judge of the Yukon and the judge of the territorial court together with deputy judges who could be chosen from among the magistrates in those areas. If that were not feasible an additional judge could be appointed in both the Yukon and the Northwest Territories. The Yukon Act provides for the appointment of another judge. I do not think my friend the hon. member for the Yukon would disagree with this. I do not expect he would turn down an appointment to this high office. We could have two judges in the Yukon and two in the Northwest Territories who could serve on our appeal court.


Mr. Nielsen:: You do not get rid of me that easily.


Mervyn Arthur Hardie: As my hon. friend knows I am not a lawyer and it is very difficult for me to explain my position clearly.
I wish to return to the subject of what is happening in the territories at this time. We have one magistrate in Yellowknife whose

jurisdiction covers an area of approximately one million square miles. The justices of the peace in various outposts deal with many cases I do not feel they are really qualified to handle. I suggest that we increase the number of magistrates in the territories. Instead of having just one located in Yellowknife whose jurisdiction covers the vast area I mentioned I suggest we should have one at Inuvik whose jurisdiction would cover an area extending from Tuktoyaktuk south along the Mackenzie to Fort Norman, then east across to Franklin on Great Bear lake and then east again to Radium and north to Coppermine and west back along the coast to Tuktoyaktuk. Another magistrate could be appointed for the Frobisher Bay area whose jurisdiction would embrace the Arctic and Hudson bay judicial districts. The three magistrates could make periodic trips around the area to try their cases. If there were not sufficient work for them to do they could also act as clerks of the court, process issuers, sheriffs and even public administrators. These magistrates could perhaps be made deputy judges to serve on the territorial court of appeal which I suggest should be established.
I am fully in agreement with the present provision in the act which requires that a magistrate be resident in the area. Anyone serving on a territorial court should be a resident and know the conditions in that part of the country. An Eskimo may commit an act which in this part of the country would seem to be criminal and extremely serious but a person living in the territories and knowing the philosophy and the way of life and thinking of an Eskimo would view it in a different light.
I again commend the minister on what is being done in terms of increasing the autonomy of the Northwest Territories and providing a more independent and democratic way of handling its affairs both politically and judicially. I urge him to give serious consideration to the suggestions I have made with respect to the establishment of a territorial appeal court and increasing generally the independence and autonomy of the territorial courts.
I do not know if at this stage of the proceedings I would be in order if I were to deal with the administrative aspects of the department so I shall refrain from doing so. If it is possible to do so on second reading of the bill I shall then deal with these questions.


Herbert Wilfred Herridge: Mr. Chairman, I wish to say a few words at this time simply to express the support of this group for the principle of this resolution because it appears to be representative of another forward step in the evolution of democratic procedures in the administration of the Northwest Territories.
Northwest Territories Act
Before going on I would like to say that I always listen with great interest to the man whom we are pleased to call the advocate of the Arctic, namely the hon. member for Mackenzie River. He shows good knowledge of the circumstances of the people whom he represents and on occasions, as hon. members will realize, he presents his case in rather colourful language and in colourful actions.
However, we will wait for the bill to see the details before we say anything further. I would like to ask the minister one or two questions. Are these proposed amendments the result of recommendations from organizations or individuals from the Northwest Territories. If so, how long have those organizations and individuals been urging the amendments which are proposed in this resolution?


Francis Alvin George Hamilton: Mr. Chairman, I am sorry the hon. member for Mackenzie River has walked out because I would like to say a word or two in answer to what he just said. I will answer the hon. member for Kootenay West first.
As regards those amendments, I said in my opening remarks they were very close to the amendments to the Yukon Act of last year and even though they may seem minor to some of us here, to the people in the north and to the council they are something of a major achievement. Who makes those representations? Usually they come from the council of the Northwest Territories or the Yukon. We try to act on them as quickly as we can, and I think that is the attitude on nearly everything in those amendments at the present time.
The hon. member for Mackenzie River is having just as difficult a time describing the system of justice in the north as I would if I had to describe it. For his peace of mind I will tell him that arrangements have been made, owing to representations made during this last year to me, to have an examination into the judicial system in the north, not with the idea of revolutionary changes but just looking at it from a practical point of view, as the hon. member suggests, and also keeping in mind the long range transition program of moving step by step to greater autonomy in the political, administrative and judicial fields. I believe the Minister of Justice and one other will be meeting with people from the north and dealing with this matter this summer and I think I can reassure the hon. member that this is in our minds. It may seem to some in the committee that we are going rather slowly in this matter but on the question of justice the people in the north cannot help us too

Northwest Territories Act much because they have not had the experience of myself and the hon. member for Mackenzie River of how this is handled in other places. Therefore, we have to move perhaps a little slower than they are asking for, but an examination of the matter is going on at the present time. As the hon. member will appreciate, it will not move with great rapidity because one does not go up there today and come back tomorrow. One has to wait for the occasion. I hope these remarks will put the hon. member for Mackenzie River at ease.


Mervyn Arthur Hardie: I thank the minister for his statement. I am sure we all know that he has the good will of the people of the country. Certainly, he is trying to do something to provide those steps toward greater autonomy and I want to thank him for his reassurance.


Mr. Godin:: I rise to speak for a few moments on this resolution. I do so now because if we do not make proper suggestions at this stage we find that when the government presents a bill it is usually prepared to adopt it in the form in which it is presented. As I listened to the remarks made by the Minister of Northern Affairs and National Resources I had the fear that possibly the bill which will follow this resolution will not contain proper amendments which undoubtedly should be made to the Northwest Territories Act. The minister indicated that there will be problems in the new procedure for the appointment of judicial officers. Therefore, I fear it may take away certain provisions which definitely should remain in the act. If I do speak now and if I have read the act to some extent it was for the purpose of trying to assist the house in these matters, since we know that in the house we have only one worthy representative of the territory, namely the hon. member for Mackenzie River.
No doubt the general purpose of the amendments is to bring about greater autonomy in the administration of justice in that great territory. I should like to refer to one problem which was not mentioned by the minister in the explanation which he gave of the proposed amendments to the Northwest Territories Act. It is a problem which was discussed to some extent by the hon. member for Mackenzie River. I refer to the concurrent jurisdiction which is permitted in civil and criminal matters in the Northwest Territories.
Perhaps I should explain for the enlightenment of hon. members that the procedure in the Northwest Territories, contrary to the

laws laid down in the provinces permits trials to be held outside of the Northwest Territories in any province of Canada east of the Saskatchewan west border, namely the 102nd parallel of longitude. This means that a legal problem of a fishing company having to do with something which took place in Chesterfield Inlet on the west boundary of Hudson bay could be tried in Newfoundland if the company came from Newfoundland. As the act reads now, a judge in Newfoundland would decide whether the action should be tried in Newfoundland. The judge in Newfoundland would decide upon the applicant in Newfoundland presenting certain evidence of merit as to why the trial should be held there. Of course, as explained by the hon. member for Mackenzie River, there is no doubt that a judge in the Northwest Territories could possibly much better ascertain the merits of the demand for the trial to be held in Newfoundland. Therefore, I respectfully submit to the minister that an amendment should permit a decision to be made on the merits of the case presented by such an applicant, not by a judge of a court in Newfoundland, Ontario, Quebec or Manitoba but by a judge of the Northwest Territories, who would have before him an affidavit of the merits of the trial to be held in Ontario or in any of those other provinces. The same thing would apply necessarily to cases west of the 102nd parallel of longitude which under the act can also be tried concurrently in the province of Alberta. This would, I believe, enable the judge of the Northwest Territories more properly to decide if the merits of the case presented were such that the case should be heard outside. I believe this is the very thing that the minister wishes to do by his amendments, namely bring about more autonomy to the Northwest Territories.
I have indicated that these are the problems which may be involved in granting this concurrent jurisdiction which, no doubt, there are good reasons for. Then there is a second matter. The minister has suggested that the purpose of the bill will be to enlarge the possibilities of appointing more judicial officers. If that is to be done I trust that section 32 (1) will be retained in the act. In order to enlighten hon. members, I will read the section. It reads as follows:
The governor in council may appoint one or more persons who are barristers or advocates of at least three years standing at the bar of any of the provinces of Canada to be police magistrates in and for the territories and may fix their salaries and allowances.
There is no doubt that possibly in an effort to make provision for further appointments this clause may be amended. I must tell

hon. members that such a proper provision is not found in many of the statutes of the provinces of Canada. In Ontario, for instance, such a provision is not made, and I know very well that many people in my riding are disappointed because provision with regard to the knowledge of the person to be appointed is not made. At times we have seen hotel operators appointed as magistrates in Ontario. I would respectfully submit to the minister that this provision regarding appointments should definitely be kept in the act.
I am also pleased to know that the purpose of the minister in bringing in these amendments is to help the people living in this remote part of Canada to obtain a more autonomous type of judicial operations.
Resolution reported and concurred in.
Mr. Hamilton (Qu'Appelle) thereupon moved for leave to introduce Bill C-26, to amend the Northwest Territories Act.
Motion agreed to and bill read the first time.



NATIONAL DEFENCE ACT


George Randolph Pearkes: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the National Defence Act by providing for the court martial appeal board to be reconstituted as a superior court of record, to authorize the payment of travelling allowances to its members and to provide also for the appointment of, and the payment of fees to and the travelling expenses of military advisers to the court; 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.


Mr. Hellyer:: Does the minister have an explanation?


George Randolph Pearkes: Mr. Chairman, the bill that will be introduced if the resolution is adopted will be a relatively short one dealing with several unrelated matters. The first matter to be dealt with in the proposed bill is an amendment to the National Defence Act to facilitate the integration or unification of certain of the operations of the Canadian forces. It is the view of the government that this integration or unification, where practical, would result in both economy and efficiency of operation. As you know, in recent months steps have been taken to integrate the medical and chaplain services. The possibility of integration of other operations is under careful study.
National Defence Act
The second subject dealt with in the bill is the question of rules of evidence at trials by court martial. A codification of the Canadian law of evidence applicable to courts martial has been prepared and authority will be sought to introduce this code.
The next subject is a proposal to introduce additional safeguards on the imposition of the penalty of death by courts martial. These safeguards wil be similar to those in effect under civil law.
Perhaps the most important provision of the bill is the proposed amendment to replace the court martial appeal board by court martial appeal courts. If the proposal is adopted members of the services will have the right to have their appeals heard by a tribunal comparable to the provincial courts of appeal which hear appeals of persons convicted under the Criminal Code. Furthermore, the right of appeal to the Supreme Court of Canada would be enlarged so that service offenders would have the same right of appeal to that court as persons convicted in the criminal courts whose appeals have been disallowed by provincial courts appeal. The crown would be given the same right of appeal to the Supreme Court of Canada as it has in ordinary criminal cases.
The bill would also change the French version of the name of the Royal Canadian Air Force.
These amendments, Mr. Chairman, are designed to provide for a more equitable application of service discipline and to improve the administration of the Canadian forces. I therefore recommend the resolution to the committee for its favourable consideration.


Paul Theodore Hellyer: Mr. Chairman, it is now ten o'clock.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: I have great pleasure in welcoming the Minister of Public Works back to the house and I tell him that, notwithstanding the fact that the Minister of Trade and Commerce has done a very creditable job in his absence we are delighted to see him return. Perhaps he will tell us what the business is for tomorrow and also for next week while he is on his feet.


Mr. Green:: I thank the hon. member for Laurier for his very kind remarks. I must say that I was a little reluctant to leave the sunshine and the crocuses on the west coast. However, it is very nice to be back with so many friends.
Tomorrow we shall start with the resolution which was under debate at ten o'clock.

Business of the House
Then we will take item No. 6 on today's order paper, the resolution concerning the National Housing Act; then item No. 3, the resolution concerning the Trans-Canada Highway Act; then item No. 2, the resolution having to do with the Fisheries Improvement Loans Act; then item No. 7 on today's order paper, the resolution concerning the Federal-Provincial Tax-Sharing Arrangements Act; and then item No. 9, the resolution preceding
a measure to provide for the appointment of parliamentary secretaries to ministers. Monday will be private members' day. I am afraid I cannot give any further information about next week at the moment. We may be able to arrange for an external affairs debate.


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

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

Mr. Argue: 1.	What was the amount of the payment to be made to each province under the tax rental agreement as estimated by the federal government in January, 1958?
2.	What is the federal government's estimated payment to each province to be as of the present?
3.	What is the difference in these two estimates for each province?
Answer by: Hon. Donald M. Fleming (Minister
of Finance):
1.	On January 27, 1958 there was tabled in the house an illustrative table of the effect on the then current payments to the provinces of the increase in the standard individual income tax rate. This table was based on the latest estimates available for 1957-58 individual income tax collections, 1957 corporation profits, and the average of succession duties 1955-56 to 1957-58. It did not purport to be an estimate of payments for the 1958-59 fiscal year.
The illustrative table indicated that the provinces would have received the following payments in 1957-58 if the standard individual income tax rate had been 13 per cent and Atlantic provinces adjustment grants
had been made:
(In thousands of dollars)
Newfoundland	 $ 25,214
Prince Edward Island ....	6,636
Nova Scotia	 36,691
New Brunswick	 30,990
Quebec	 197,861
Ontario	 238,326
Manitoba	 35,755
Saskatchewan	 36,552
Alberta	 48,231
British Columbia	 61,825
2.	The estimated benefits to the provinces under the Federal-Provincial Tax-Sharing Arrangements Act (including the Atlantic provinces adjustment grant) for the fiscal year 1958-59 were as of February, 1959:
(In thousands of dollars)
Newfoundland	 $ 24,213
Prince Edward Island		6,719
Nova Scotia	 34,595
New Brunswick	 29,518
Quebec	 186,390
Ontario	 227,850
Manitoba	 33,202
Saskatchewan	 33,885
Alberta	 45,836
British Columbia	 64,090
Questions
3.	The above two sets of figures are not strictly comparable as the same standard tax rates are applied to different base years. The former indicates what the provinces might have received if the increased standard individual income tax rate and the Atlantic provinces adjustment grants had applied to the fiscal year 1957-58, and the latter indicates what the provinces are now eligible to receive under the same formula in the 1958-59 fiscal year.


FERRY SERVICE, PORTUGAL COVE-BELL ISLAND NEWFOUNDLAND
Mr. Argue: 1.	Has the contract for the construction of a ferry to operate between Portugal Cove and Bell island, Newfoundland, provided for the 1958-59 estimates, been yet offered for tender?
2.	If so, on what date?
3.	Has the contract been awarded?
4.	H so, (a) to what company and on what date; (b) what was the amount of its tender?
5.	What other companies tendered for this contract, and what was the amount of each tender?
6.	Is the vessel now under construction?
7.	If not, when is construction to commence?
Answer by: Hon. George H. Hees (Minister
of Transport):
1 and 2. Tenders were invited, the closing date being January 22, 1959.
3.	No.
4.	Answered by 3.
5.	Tenders received and amounts shown hereunder:
Ferguson Industries Ltd., Pictou, N.S.

Halifax shipyards

Saint John Dry Dock Co. Ltd.,
Saint John, N.B.

6.	No.
7.	As soon as the contract is awarded.



END OF VOLUME I


[Stage Direction]
House of Commons deflates
[Stage Direction]
Speaker: The Honourable Roland Michener
Thursday, January 15, 1959

[Stage Direction]
The parliament which had been prorogued on the sixth day of September, 1958, met this day at Ottawa for the dispatch of business.


[Stage Direction]
Mr. J. W. Kucherepa (High Park) presented the first report of the standing committee on standing orders, and moved that the report be concurred in.
Motion agreed to.