1959-04-07

THE LATE DR. ARTHUR BEAUCHESNE

Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, while ordinarily no reference is made in the House of Commons to those who in the past have been associated with the house, I trust that I may be permitted to make reference to the passing of one who had a signal honour conferred upon him on September 15, 1949 by a motion of the then prime minister, Right Hon. Louis St. Laurent. I refer, of course to Dr. Arthur Beauchesne. At that time he retired as Clerk of the House of Commons and had conferred upon him an appointment as honorary officer of the house and a seat at the table on occasions of ceremony.
Dr. Beauchesne passed away today in his eighty-third year. He made his mark in life as clerk assistant, to which post he was appointed in 1916, and as clerk of the house from 1925 to 1949. Those of us who were in the House of Commons during the days when he served as clerk of this house recognized him as a great scholar, a student and authority on parliamentary procedure. In his person, and through the instrumentality of his book on the rules of procedure in parliament he gave to parliament a singular distinction. I know that members on all sides of the house would want to pay their tribute to this honorary officer of the House of Commons who, though he retired some 10 years ago, retained a position by virtue of the motion to which I referred. This was not the first time in Canada's history, I believe, but the second occasion upon which an outstanding clerk had been so honoured. I wish to extend the sympathy of the House of Commons to the family of Dr. Beauchesne.


Hon. L. B. Pearson (Leader of ihe Opposition):: Mr. Speaker, I think it is
entirely appropriate that the Prime Minister should have expressed, on behalf of the house, our very great regret and sorrow at the news of Dr. Beauchesne's passing. Dr. Beauchesne, of course, has made a great and permanent contribution to parliamentary government and parliamentary institutions in Canada. He has become over the years as the Prime Minister has indicated, the acknowledged master of parliamentary procedure,
and his published works on this subject have become, of course, a bible for us all. As long as we are preoccupied in this house with points of order, rules and procedure, and that will be as long as there is parliamentary government in Canada, Dr. Beauchesne's name will perhaps appear in the columns of Hansard more often than that of any member.
His public service to Canada in this and in other capacities extended over many years, indeed until the very last days of his life. I am quite sure, Mr. Speaker, that service will not be forgotten by the country which has benefited so greatly from his work. We on this side of the house should like to join with the Prime Minister in this expression of regret and sympathy to the surviving members of Dr. Beauchesne's family.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, we in the C.C.F. group wish to be associated with the expression of sympathy of the Prime Minister and the Leader of the Opposition. It was my good fortune to serve in the House of Commons from 1945 to 1949 while Dr. Beauchesne was still the clerk. All of us who knew him personally recognized his great knowledge of parliamentary procedure. I think it was fitting that he was interested in parliamentary procedure almost to his very last breath. The fourth edition of Beauchesne's Parliamentary Rules and Forms was published only last year. Dr. Beauchesne has a permanent place in the life of parliamentary government, having served Canada so well and having established himself as Canada's eminent authority on parliamentary rules and forms.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I should like to ask the Prime Minister a question. Perhaps I should have asked it of the Minister of National Defence, who was Canada's representative on the occasion in question, but he is not present this afternoon. In the absence of the Minister of National Defence I should like to ask whether the Prime Minister can make a report today on the recent meeting of the NATO council in Washington.

Inquiries of the Ministry


John George Diefenbaker: Mr. Speaker, as hon. members are aware, Canada was represented at the NATO ministerial meeting by the Minister of National Defence who will not be returning to Ottawa until tomorrow, and who no doubt will add to some general observations that I make on this occasion in answer to the Leader of the Opposition in giving to the house a brief account of the position taken by Canada on the principal questions discussed at the meeting.
As a result of the Soviet union's declared intentions concerning Berlin and Germany, the discussions of the council were largely devoted to the consideration of the German problem in its various aspects. The ministerial council received a report from the four powers with special responsibilities for the German question, on the present state of their thinking in respect to those matters which will be the subject of discussion during the forthcoming talks with the Soviet union.
The Berlin issue is undoubtedly one of the most serious challenges that the alliance has yet had to face. Canada considers it imperative that it should not be interpreted primarily as a challenge to our military capability, as a challenge to seek a solution by force. We believe with President Eisenhower, in the words he used some years ago, "there is no alternative to peace". Believing that, the west must therefore try to settle its differences with the Soviet union by negotiation. But if these negotiations are to be successful there is a clear need to clarify western thinking with respect to the grave issues confronting the alliance. This was one of the purposes of the meeting in Washington.
By way of contributing to this process of clarification Canada offered a few suggestions concerning the problem of Berlin. In the Canadian view no agreement can be acceptable to the west which places in jeopardy the security of West Berlin or the freedom of its citizens. It is also the Canadian view that the NATO countries could not accept a solution which might endanger the ties between the Federal Republic of Germany and the other countries of western Europe. Moreover, we could not accept arrangements which might have the effect of foreclosing the prospect of the reunification of Germany.
Hon. members will recall that I made a statement in this house on March 19 in which I expressed the belief that-
-the United Nations might play some significant role in the solution of the Berlin problem, and that this phase deserves further and more careful study.
In the development of this idea the Canadian delegation suggested that the permanent council of NATO study the possibility

of a role for the United Nations in the application of a solution for the Berlin problem. I believe the United Nations might play a useful role provided, of course, that a four-power agreement is reached first. The basic role of the United Nations might be to verify that all parties were abiding by the terms of the agreement. An essential part of the agreement might be a Soviet pledge binding itself and its associates to full freedom of access to West Berlin and the acceptance of a "United Nations presence" on the lines of communication to that city. Canada, in advancing these suggestions as a basis for discussion, emphasized that United Nations responsibility for West Berlin would be complementary to the rights and obligations of the four occupying powers.
With regard to the problem of a German settlement, the Canadian delegation expressed the hope that there would be increasing cooperation at the technical level between the federal republic and the East German regime. It would, in the Canadian view, be fruitful to give further study to a proposal originally made by the federal German republic to institute a continuing commission for Germany which would be charged with the responsibility for supervising and promoting progress toward reunification. The Canadian delegation further suggested that the western powers might usefully explore the possibility of some measure of arms limitation which, together with an adequate system of inspection and control, might have a wholesome and calming effect in the European area.
I think we can say with some satisfaction that the four members of the alliance with special responsibility in Berlin not only received with careful attention the suggestion made by the Canadian delegation and other members of the council, but they have agreed to take into account in their preparatory work the views and observations put forward during the ministerial meeting for the difficult negotiations which lie ahead. I submit this is another important development in effective political consultation in NATO matters which will be of great importance to each and to all members of the alliance.
If there are further matters that the minister of defence can bring before the house amplifying what I have stated today, the opportunity will come upon his return to the house.


Lester Bowles Pearson: Mr. Speaker, in view of the fact that the Minister of National Defence, as the Prime Minister has said, will be making perhaps a more detailed statement on an appropriate occasion on his return to the house, I need not comment at any length on what the Prime Minister has just said; but I think

the house will welcome his statement, especially as the NATO communique from Washington was not very comprehensive or informative in regard to the questions which are very much in our minds, particularly the question of Germany and Berlin.
There is no doubt, as the Prime Minister has said, that the west is entitled, and indeed has a duty, to display firmness in regard to the protection of western rights in Berlin, though firmness itself is not necessarily a policy so much as a posture. There are western rights in Berlin which have to be protected, but there are also eastern interests in Berlin and, indeed, in Germany; and the problem is, of course, to reconcile western rights with eastern interests. I think we in this house all agree that this must be done by negotiation and cannot be done by force. It has therefore become a matter for negotiation.
So far as we on this side of the house are concerned, we support the principles which the Prime Minister has in a general and brief way indicated as the basis for such negotiations. We think the Canadian proposal put forward at the NATO council for the introduction of the United Nations into this Berlin situation in some appropriate way was a constructive and imaginative one. We hope this proposal can be followed up by the NATO council.


Hazen Robert Argue: We welcome the stand taken by the Canadian government in advancing the possibility of the United Nations playing a useful role in the Berlin crisis. Nothing the west does should imperil either the security or the freedom of the people of West Berlin, but there is a growing feeling, I believe, in the NATO nations that this is a time for negotiation, a time for discussion. Perhaps, working with the United Nations, agreement might be reached which would maintain the security and the freedom of West Berlin while at the same time showing the Soviet union that the western world is prepared to take into consideration its natural fear of a rearmed and reunited Germany.
It is no secret that there are great strains at this time within the NATO organization. We hope that cool heads will prevail. We hope that the stand taken by the Canadian government, the position outlined by the Prime Minister and the position taken by the Prime Minister of the United Kingdom, will prevail to the end that negotiation and settlement may be achieved. We are hopeful that a summit meeting will take place, and that at that time a lasting solution to this problem will be reached.
7. 1959	2295
Inquiries of the Ministry IMMIGRATION


INQUIRY AS TO RECENT CHANGES IN REGULATIONS
[Stage Direction]
On the orders of the day:
Mr.  M. D. Morion@Davenpori: I should like to inquire of the Prime Minister whether he has any observations to make concerning recent changes in the immigration regulations.


John George Diefenbaker: Mr. Speaker, the Minister of
Citizenship and Immigration will be in a position to make a statement on this question on her return to the house tomorrow or the next day. In the meantime I think I should make some reference to this matter, particularly in view of certain representations which would appear to have been made for the purpose of leaving an impression that some discriminatory change has taken place under the order in council which was passed on March 19.
I should point out that on May 24, 1956 an order in council was passed, P.C. 784, of which the order in council passed on March 19 was an amendment. That order in council of May 24, 1956, reads as follows, in so far as the pertinent sections are concerned:
20. Landing in Canada of any person is prohibited except where the person falls within one of the following classes of persons who may be landed in Canada if such person meets the requirements of the act and of these regulations:
(a)	a person who is a British subject by birth or by naturalization in the United Kingdom, Australia, New Zealand, or the Union of South Africa, a citizen of Ireland, a citizen of France born or naturalized in France or in St. Pierre and Miquelon islands, or a citizen of the United States of America if such person has sufficient means to maintain himself in Canada until he has secured employment therein;
(b)	a person who is a citizen by birth or by naturalization of Austria, Belgium, Denmark, the Federal Republic of Germany, Finland, Greece, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden or Switzerland or who is a refugee from a country of Europe, if such person undertakes to come to Canada for placement under the auspices of the department or, if the department has given its approval thereto, for establishment in a business, trade or profession or in agriculture;
(c)	a person who is a citizen by birth or by naturalization of Egypt, Israel, Lebanon, Turkey, or of any country of Europe or of a country of North America, Central America or South America if such person is the husband, wife, son, daughter, brother, sister, as well as the husband or wife and the unmarried children under 21 years of age of any such son, daughter, brother or sister, as the case may be-
And so forth.
Subsection (c) was amended in only two particulars, one by deleting Egypt as one of the countries, and by altering son and daughter to unmarried son and daughter, and

Inquiries of the Ministry by the removal of the previous provision covering brother and sister. I point this out because there has been a suggestion that the order in council passed in March was a discriminatory one. I want to say subject to the alterations to which I made reference it is the same as the law has been since 1956 under order in council. I wish to make clear to my hon. friend that anything in the nature of discrimination has no place in our law. I, for one, intend to have this looked into, because the section indicates that the one passed in 1956 had whatever objections can be raised against the present amendment.


Hon. Lionel Chevrier (Laurier):: Mr. Speaker, I rise on a question of privilege at this time. I did not want to do it a moment ago while the Prime Minister was discussing a matter in answer to a question raised by an hon. member. I say to you with all respect that I do not think this is regular on the part of the Prime Minister. The reason I make that statement is this. It is the purpose of questions in this house, as Your Honour has brought to the attention of hon. members repeatedly, to seek information and to obtain information. What the Prime Minister has done on this occasion is to take an order in council and read certain pertinent parts of it. We do not know the order in council and we do not have it before us. We are not in a position to reply to what has been said.
It is my contention that this is a matter which should be discussed either on the estimates or on some other occasion when a bill is before the house. I do not think it is fair to hon. members on this side of the house to have an hon. member ask a question and then have the Prime Minister by the statement he has made in Hansard reply in this manner.


Mr. Speaker:: The hon. member has raised a question about our practice, and I think perhaps I should make a preliminary comment on it. I have had some concern about the practice which has grown up of making rather lengthy statements in reply to questions rather than making such statements under the heading of motions, which has been the customary practice.
Today we have had two examples. The Leader of the Opposition asked a question, in reply to which the Prime Minister made a rather extensive statement on a matter of public interest which could have been made as a statement under the heading of motions. Then in response to a question from the hon. member for Davenport we have had another answer which is perhaps more in the nature of a statement, in that it deals with a matter


at greater length than has been the practice in answering questions. There is perhaps confusion as between the two procedures which are available at this stage of the proceedings of the house; first, statements by ministers followed by comment by one speaker from the official opposition and one from the other group and, second, the usual oral question and answer practice.
Without giving any settled opinion or ruling I do say this is a problem the house must bear in mind, because it becomes confusing if we do not keep separate the procedure respecting ministerial statements and comment thereon and the procedure as to oral questions and answers.


Hon. Gordon Churchill (Minister of Trade and Commerce):: On a point of order, Mr. Speaker, when you are considering this matter I wonder whether you would also take into account the fact that today an additional point of confusion was brought into the picture because the Leader of the Opposition asked a question of the Prime Minister to which an answer was given, and that answer was then followed by a statement by the Leader of the Opposition.


Mr. Speaker:: I think hon. members on both sides of the house might perhaps give thought to this matter, because it is important that we know what are the limits of discussion at this time of the day when there is no motion or other matter before the house.


Hon. J. W. Pickersgill (Bonavisla-Twillin-gaie):: I should like to address a supplementary question to the Prime Minister. Does the Prime Minister not think it was rather contemptuous of the rights of parliament to wait to pass this order in council until immediately after the house had concluded consideration of the estimates of that department?


John George Diefenbaker: Well, Mr. Speaker, I am not sure that the hon. gentleman is strictly right in the lecture on procedure inherent in his question, because I seem to recollect that a similar situation arose when he was minister. Possibly he could clarify that.	.


John Whitney Pickersgill: On a question of privilege, sir, since the Prime Minister has chosen to answer a perfectly proper question by a most improper innuendo, perhaps he would substantiate his recollection by pointing to the regulation that was made immediately after my estimates were before the house; because I think he will find some difficulty in doing so.


Mr. L. D. Creslohl (Cartier):: May I put
another supplementary question to the Prime Minister arising out of the statement he made. Can the Prime Minister inform the

house what the reasons are for reducing the categories of immigrants admissible to Canada?


John George Diefenbaker: Mr. Speaker, that would be a lengthy statement, and having listened to your admonitory words I suggest that this would be a question for the minister to deal with at another time.


Lester Bowles Pearson: May I ask the Prime Minister whether the government has received any complaints with regard to the restrictive character of this order in council?


John George Diefenbaker: I have seen some statements made by certain members of parliament in criticism of it, and that is the reason I say that matter can be fully looked into.


Mr. D. M. Fisher (Port Arthur):: May I ask
a supplementary question, which will require a short answer. What is going to be the position of the people who are now in the backlog so far as applications are concerned?


John George Diefenbaker: Those which have been proceeded with prior to April 1 will continue to be processed in the usual way.


Douglas Mason Fisher: I have another supplementary question. There is a backlog in Italy of approximately 60,000. As a result of this regulation, do new applications take precedence over the approximately 60,000 already in existence?


John George Diefenbaker: Mr. Speaker, the processing operation generally follows the chronological sequence of applications, and that will be continued.


Hon. Paul Martin (Essex East):: Will the Prime Minister give consideration to allowing the house to debate this matter at the earliest opportunity? In view of its importance, in view of the many complaints which have been registered, and in view of the fact that the Prime Minister has had ample opportunity to make a long statement and that an opportunity for debate should be afforded to others, will he make provision for the house to discuss the matter at the earliest opportunity?


Hazen Robert Argue: Make your budget speech on that subject.


John George Diefenbaker: The hon. member for Essex East knows that in the next few days the budget debate will take place, at which time any member can deal with the question as he sees fit.
Inquiries of the Ministry POLYMER CORPORATION


INQUIRY AS TO STRIKE SITUATION
[Stage Direction]
On the orders of the day:
Mr. J. W. Murphy (Lamblon West):: should like to direct a question to the Minister of Labour. Will he bring the house up to date on the strike situation at the Polymer Corporation, Sarnia?


Hon. Michael Starr (Minister of Labour):: Mr. Speaker, in answer to the hon. member's question I regret to advise that there is not much I can report except to say that, in so far as the Department of Labour is concerned, we have communicated with both parties by telegram offering further mediation services of the department. In reply we have received an acceptance from the union but have not yet heard from the Polymer Corporation. We hope we will receive a reply to our telegram in the next few days. That is how the matter now stands as far as we are concerned.


Lionel Chevrier: Mr. Speaker, may I direct a question to the Minister of Labour arising out of the answer he gave to the hon. member for Lambton West a moment ago, in which the minister said that his good offices were being offered in connection with the Polymer strike. Can the minister tell the house what difference there is between this dispute in which a crown corporation is engaged and the dispute which took place earlier between another crown corporation, the C.B.C., and its employees?


Mr. Speaker:: I am not sure whether or not the hon. member for Laurier is in search of information or simply making a point. It seems to me it is an argumentative question, and I do not think there is room for that kind of question at this point.


Lionel Chevrier: May I explain what the purpose of the question is?


Some hon. Members:: Order.


Mr. Speaker:: I shall be glad to hear what the information is that the hon. member wishes.


Lionel Chevrier: I think it is quite in order, sir, to ask a minister why he took a certain action in one case and why he refused to do so in another. That is simply what I was putting to the minister, why he offered his services in one dispute although he refused to do so in another.


Mr. Speaker:: I see the minister is anxious to explain, but I am sorry I do not agree that the question should be allowed. If the hon. member wished to ask the minister why

Inquiries of the Ministry he did a certain thing, that is one thing. This procedure of making comparisons, it seems to me, is going beyond the rules.


Lionel Chevrier: May I ask a supplementary question, then?


An hon. Member:: Supplementary to what?


Lionel Chevrier: It is supplementary to the question asked by the hon. member for Lamb-ton West and arises out of the answer which the minister gave. Has the Minister of Labour not received representations from his colleague, the Minister of Defence Production, with reference to the dispute at Polymer, which is under the jurisdiction of that minister?


Michael Starr: No, I have not, Mr. Speaker.


FISHERIES
[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: I wish to direct a question to the Minister of Fisheries. In view of the increasing cost of construction of fishing vessels, can the minister advise the house if it is his intention to introduce at this session an amendment to the act or a bill to provide assistance in the contraction of vessels of the dragger or long-liner type, with a view to increasing the present subsidy rate and also extending it to larger vessels?


Hon. J. A. MacLean (Minister of Fisheries):: Mr. Speaker, I want to thank the hon. member for giving me notice of his intention to ask this question. I might say that at the present time there is a complete review of the whole subject of subsidization of fishing vessels under way. No conclusions have yet been reached, however.
With regard to legislation, the authority required is included in the Appropriation Act. Parliament in providing an appropriation for assistance in the construction of vessels of the dragger and long-liner type makes the assistance subject to such terms and conditions as may be approved by the governor in council. Therefore changes, if any, may be made under the authority granted by parliament in this way.


FREIGHT RATES
[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I should like to direct a question to the Prime Minister. I assure you, sir, that

it is important or I would not ask it. It is our understanding that a royal commission is to be appointed to investigate the entire situation relative to freight rates. Can the Prime Minister inform the house whether or not in the terms of reference there will be authority to study a national transportation policy and make recommendations with respect thereto?


Mr. Speaker:: Before the Prime Minister deals with that question, may I ask whether that is not a subject matter on the agenda for today?


Harold Edward Winch: My question is based upon a press report that a royal commission is to be appointed.


Mr. Speaker:: It strikes me that the announced business of the house brings up the question of freight rates in committee, and the hon. member will have an opportunity to deal with that matter more effectively there.


Harold Edward Winch: I cannot get an answer.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. Hubert Badanai (Fort William):: I
should like to direct a question to the Minister of Public Works. Do members of a housing authority, charged with the responsibility of administering housing projects, receive their appointment by the provincial government after consultation with the municipal authority? If so, does the federal government intend to change this procedure and make its own appointments?


Hon. Howard C. Green (Minister of Public Works):: I wish to thank the hon. member for giving me notice of this question. I also have a question from the hon. member for St. John's East which I shall answer at the same time, and which reads as follows:
Would the minister comment on the accuracy of a statement made in the Newfoundland legislature, Friday, April 3, by Premier Smallwood, and as reported by the Canadian Press, to the effect "that C.M.H.C. had taken from the St. John's housing authority the possession and administration of 192 rental units, contrary to a 1956 agreement"?
The general practice in setting up authorities to administer dominion-provincial housing projects is for representatives of the two governments, that is federal and provincial and in most cases also the municipal authority concerned, to agree upon the personnel to be appointed to the authority in question. Appointments are then made by provincial order

in council. This plan has been followed successfully in the provinces of Ontario, Quebec, Nova Scotia, New Brunswick, Manitoba, British Columbia and Saskatchewan, and there has been the closest co-operation among the three levels of government. In the provinces of Alberta and Prince Edward Island there are no dominion-provincial housing projects.
This course was not followed in Newfoundland, where a St. John's housing authority was set up by the provincial government in 1951. The administration of dominion-provincial projects by this authority eventually proved to be unsatisfactory, and early in 1958 it was understood that inactive members would be removed and that new appointments would be made pursuant to consultation between representatives of the two governments. However, the provincial government failed to carry out such consultations and filled the authority with its own appointees, in spite of the fact that 75 per cent of the cost of these projects, including the cost of rental subsidies, is paid from the federal treasury.
On August 25, 1958 I wrote to Premier Smallwood-I shall table these letters-suggesting a method of co-operating in the administration of the housing projects in St. John's, but have received no reply. I wrote again on October 2, 1958. No reply having been received from the premier to either of these letters, I wrote again on February 10, 1959, as there were two new dominion-provincial housing projects nearing completion, but as yet no reply to the third letter has been received.
In the light of these circumstances Central Mortgage and Housing Corporation, which has been building these two further projects, is administering any units in the two new projects which are available for occupation, and tenants are being chosen entirely on the basis of need, which I am afraid was not the case when the provincial government was administering them. I am hopeful that it will be possible to work out a satisfactory method of co-operation between the two governments, just as has been done in the other provinces.
May I add that press reports indicate that we have been accused of playing politics in the allotment of housing for poor people, but all the evidence I have been able to get is to the effect that the shoe is on the other foot. Hitherto, in some cases, people have had to apply to the provincial government in order to get accommodation. I should like to table these three letters.


John Whitney Pickersgill: I wonder if I might ask the minister-


An hon. Member:: Joe, junior.
Inquiries of the Ministry


John Whitney Pickersgill: Mr. Speaker, I wonder if I might ask the minister if he could accept the motion that I put on the order paper last night and table at the same time, so we may have the full story, the agreement or agreements to which the premier made reference in the house of assembly, so they will appear in the record today?


Howard Charles Green: I am not surprised that the hon. member is seeking some information about what went on in Newfoundland, because the information he has been getting from his friends down there has not been very accurate. One very good example of this-


Mr. Speaker:: Order. I hope the Minister of Public Works is not going to enter into a debate at this stage. His beginning seemed to turn that way.


Howard Charles Green: Mr. Speaker, I was just answering a question asked by the hon. member, and pointing out that one very good example of his lack of accurate information-


An hon. Member:: Answer the question.


Howard Charles Green: -is the fact that there is no such agreement as the one to which he refers in Votes and Proceedings.


John Whitney Pickersgill: May I ask the minister another question. I listened very carefully to his statement, and I might add that I listened politely to his statement, and the minister used the passive voice by saying that it was understood that something or other was going to happen. Would the minister table the understanding?


Howard Charles Green: Well, Mr. Speaker, I am afraid that the understanding in this case is not of such a type that it can be tabled, because we thought we would be able to co-operate with the government of Newfoundland on exactly the same basis as we have co-operated with all the other provincial governments in Canada. However, this has turned out not to be the case.


John Whitney Pickersgill: Does the minister assert that there are no agreements between Central Mortgage and Housing Corporation or between the minister and the St. John's housing authority; that there have been no agreements since confederation between these two organizations? Is that the assertion the minister is making?


Howard Charles Green: There were agreements with the provincial government.


John Whitney Pickersgill: Would the minister table them, and table them today?


Howard Charles Green: I cannot table them at the moment.

Inquiries of the Ministry


John Whitney Pickersgill: Exactly; suppressing evidence, as usual.


Howard Charles Green: No, no; don't get so clever.



THE MINISTRY


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I should like to direct a question to the Prime Minister. In view of the great importance of the portfolio of external affairs and the necessity of having a full-time minister at the earliest possible date, has the Prime Minister anything to report as to when such an appointment will be made?


John George Diefenbaker: Mr. Speaker, the curiosity of the hon. gentleman will have to remain unsatisfied for the time being.


Hazen Robert Argue: Could the Prime Minister not say when the government will make the announcement, particularly in view of his statement to the house on March 25 that such a statement would be available when parliament reassembled?


An hon. Member:: He did not say that.


Hazen Robert Argue: Mr. Speaker, in view of the Prime Minister's statement, I wonder whether he would be prepared to comment on a radio report that the appointment of a minister of external affairs will be made after the budget speech?


John George Diefenbaker: Mr. Speaker, I can only give the same answer that I gave a while ago. The curiosity of the hon. gentleman will have to remain unsatisfied until then or possibly later.


[Stage Direction]
On the orders of the day:
Hédard-J. Robichaud: Mr. Speaker, I wish to direct a question to the Minister of Northern Affairs and National Resources. As contractors are at present being invited by the New Brunswick Electric Power Commission to submit bids for substructure excavation and site grading for the proposed East Saint John thermal plant, is the minister now in a position to advise the house if a specific agreement has been signed between the government of Canada and the government of the province of New Brunswick in connection with the construction of the said plant? If not, what are the reasons for such an undue delay in the signing of this specific agreement?
[Mr. Green.)


Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: Mr. Speaker, there is no agreement signed between the province of New Brunswick and the government of Canada concerning the East Saint John plant. When I have information that I am able to give to the house, I will give it.


Hédard-J. Robichaud: I have a supplementary question. Is the minister aware that invitations to bids are now advertised by the New Brunswick Electric Power Commission for this project?


Francis Alvin George Hamilton: No, Mr. Speaker.



WATER RESOURCES


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I wish to direct to the Minister of Northern Affairs and National Resources a question of which notice has been given. Can the minister advise the house whether the Fraser river board has been re-established, and if so what is the present life of the board and its terms of reference?


Francis Alvin George Hamilton: Mr. Speaker, the Fraser river board has not been reestablished. When and if it is re-established I will make an announcement in the house.



COARSE GRAINS


[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 Trade and Commerce of which I have sent him notice. The dominion bureau of statistics publication of April 3 states that the export of coarse grains fell by 6 per cent in the first half of the current crop year and by 40 per cent from the 1953-57 five-year average. Would the minister say what the prospects are for future exports of coarse grains from Canada?


Mr. Speaker:: Order. I believe the question was dealt with by the minister a few days ago, but I have no objection to him bringing the answer up to date.


Gordon Minto Churchill: No, Mr. Speaker, not this one. The hon. member gave me notice of this question, for which I thank him. His information was drawn, I believe, from the Coarse Grain Quarterly published in February by the dominion bureau of statistics, and his

figures are in accordance with that document. On the face of it the picture looks gloomy, but there is a bright silver lining if you read a little further in the booklet, something which my hon. friend did not do.
The coarse grains are divided chiefly into barley and oats. The barley export, which normally runs at about 75 million bushels in a crop year, I think will be attained this year. Our barley exports are a little above what they were a year ago. The barley goes to the United Kingdom in large part and to the United States, Germany and Japan. If you separate the barley from the oats, it is the oats that give the poorer picture because the exports there are down a bit; and that is largely because the export market for oats, running to about 20 million bushels a year, has been largely the United States, and the supply of feed in the United States is 12 per cent greater than it was a year ago. Of course when you put the two together you get an average which gives a poorer picture than is actually the case, because our substantial barley exports will be maintained and the oats picture may be improved.



RUSSIA'-REQUEST FOR STATEMENT RESPECTING EXTENSION OF AGREEMENT

[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I have a supplementary question in this general field. Can the minister say what progress is being made in the renewal of the Russian-Canadian trade agreement as a method of restoring our wheat exports, which are also down?


Gordon Minto Churchill: Mr. Speaker, our wheat exports are running at just about the same level as last year, and will reach the 300 million bushel target this year. The negotiations with Russia are proceeding satisfactorily.



CANADIAN NATIONAL STEAMSHIPS


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, I should like to direct a question to the Minister of Transport. The Toronto Star of April 6, 1959 carries a story to the effect that Cuba plans to put into operation eight ships bought by the Batista government from Canadian National Steamships, according to David Salvador, president of the Cuban labour federation. Can the minister tell the house whether this statement is accurate and the ships have in fact been sold to the Batista
Inquiries of the Ministry government, and what has happened to the previous sale to Banco Cubano del Com-mercio Exterior?


Hon. George H. Hees (Minister of Transport):: Mr. Speaker, I wish to thank the hon. member for giving me notice of his intention to ask this question. As I replied on February 17, as recorded at page 1129 of Hansard, in reply to a written question by the hon. member, the sale was made by Canadian National (West Indies) Steamships to Banco Cubano del Commercio Exterior, and in reply to a request by the hon. member I tabled the record of that sale. As I understand it, Banco Cubano del Commercio Exterior is the national bank of Cuba; and as the Castro government is the government of the country, I think it reasonable to suppose that the Castro government would see to it that the ships were operated.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. W. M. Benidickson (Kenora-Rainy River):: Mr. Speaker, I should like to direct a question to the Minister of Finance. I wonder whether, being under the special stress that we know he is under at the moment, he has noted that the monthly statement of government revenues and expenses has not been provided to the country on the usual due date. In the past it has usually been available on the 24th, the 25th or the 26th day of the month following that report. We have not had the report for February.


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, may I assure my hon. friend that I am not operating under any stress, let alone distress.


Lionel Chevrier: That will come.


Donald Methuen Fleming: With respect to this statement that my hon. friend seeks to have, I can assure him that I am well aware that it has not been issued publicly within these recent days. But when I bring down the white paper tomorrow, as I hope to do, my hon. friend will have there the answer for the full year.


William Moore Benidickson: Would the minister assure us that there will also be outlined the monthly figures for February?


Donald Methuen Fleming: No, Mr. Speaker. There will be no occasion for that in view of the annual figure which will be given. We will give the complete figure, not part of it. I may say, Mr. Speaker, that in this respect I am simply following the course set

Inquiries of the Ministry by my predecessors, including the time when my hon. triend was parliamentary assistant to the minister of finance.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. W. H. A. Thomas (Middlesex West):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Has the minister any information which would confirm or deny rumours that the curtailment of operations at Canadian Can-ners' vegetable canning plant at Strathroy is part of a company plan to replace Canadian production with imported unlabelled canned goods?


Gordon Minto Churchill: Mr. Speaker, the information I have is that the Canadian Canners' operation at Strathroy, Ontario, will be discontinued for this year. I have not been told whether or not the discontinuance is to be permanent, but certainly for this year it will be discontinued because of a surplus supply of canned goods at the factory. The second part of the question I cannot answer, because I do not know what plans may be in the mind of the company.


Mr. John Smiih (Lincoln):: I would like to bring to the attention of the Minister of Trade and Commerce the fact that in the Niagara peninsula Canadian Canners operated some eight canning plants, but since this new United States company has taken over six plants have been closed. I would like the minister to take that matter under consideration.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. Azellus Denis (St. Denis):: May I ask a
question of the Postmaster General. Has the Postmaster General any comment to make about the American scooters purchased from the United States during the Easter recess by the Post Office Department?


Hon. W. M. Hamilton (Postmaster General):: Only, Mr. Speaker, that they represent something which I recommended to the previous administration, about which they did nothing, and which I am delighted to be able to commence working on at the present time.


Paul Joseph James Martin: Mr. Speaker, may I ask a supplementary question. Are these American scooters made in the United States?


William McLean Hamilton: The
company has an assembly plant in Peterborough, Ontario, Mr. Speaker.


Paul Joseph James Martin: Would my hon. friend give consideration to using his great influence in seeing that the scooters are made in the Canadian automobile plants, where there is so much unemployment?


Azellus Denis: A supplementary question, Mr. Speaker. Does the Postmaster General think these scooters will cause the number of employed personnel to be reduced?


William McLean Hamilton: The
primary purpose of these mailmobiles, to use the proper term, Mr. Speaker, is to enable us to extend letter carrier delivery into suburban areas where the houses are more widely separated than in the centre of cities, and not in any sense to reduce the letter carrier staff.


Azellus Denis: A supplementary question, Mr. Speaker. Does the minister not think an ordinary bicycle would-


Some hon. Members:: Oh, oh.


William McLean Hamilton: Mr. Speaker, we have passed now from a bicycle type of government to a motorized and more efficient modern government.
(Translation):



BEAUCE, QUE.-REPORTED STATEMENT RESPECTING USE OF ARMY PERSONNEL  FEDERAL HELP IN CASE OF DISASTER

[Stage Direction]
On the orders of the day:
Mr. Jean-Paul Racine (Beauce):: Mr. Speaker, the Minister of National Defence (Mr. Pearkes) being absent, I would like to ask the Minister of Defence Production (Mr. O'Hurley) a question with regard to an urgent problem quite familiar to him, regarding Chaudiere river which started to act up yesterday, I would like to know whether the people living along its banks can count on help from the army in case of disaster and emergency.
Has the minister read an article published in Quebec's paper he Soleil on Monday, April 6, mentioning a statement by the premier of that province to the effect that the army would hasten to the rescue at the first emergency call for help in case of any threat of an ice-jam or flood on the Chaudiere river?
I would also like the minister to tell us whether he is aware of such a statement by the premier of Quebec and, if so, whether the Minister of National Defence has authorized the premier of Quebec to speak on his behalf with regard to the activities of the army in his province, or whether, on the

other hand, provincial authorities took the necessary steps to obtain some help from the federal government in case of a probable disaster on the Chaudiere river?


Hon. Raymond O'Hurley (Minister of Defence Production):: Mr. Speaker, I have not read the report published by Le Soleil, but I would like to thank the hon. member for advising me by telephone of his intention to ask this question.
I am quite familiar with the problem, and I daresay, on behalf of the government, that we share the anguish and anxiety of people who live along the river Chaudiere at this critical moment. And if the government of the province of Quebec, which is certainly watching any flood menace on the Chaudiere river with the keenest attention, decided to call upon the federal government for help, I would be very happy to speak to my colleagues in the cabinet for the riparians of the Chaudiere and the people of Beauce riding.
(Text):



CANADIAN PACIFIC RAILWAY


[Stage Direction]
On the orders of the day:
Frank Howard: I would like to direct a question to the Minister of Transport, of which I have given him notice. I wonder if the minister is able to give the house any information regarding the proposal of the Canadian Pacific Railway Company to discontinue the operation of its passenger trains Nos. 41 and 42, which run between Winnipeg and Edmonton via Yorkton and Saskatoon?


George Harris Hees: I thank the hon. member for giving me notice of his intention to ask this question. I am advised by the board of transport commissioners that they have just received an application from the Canadian Pacific Railway Company for an order approving the discontinuance of passenger trains Nos. 41 and 42 operating daily except Saturday between Winnipeg and Edmonton. Some opposition to this proposal has already been registered, and the usual investigation will be conducted by the board in order to determine the effect of this proposal on the railway patrons in the area concerned.



SHIPPING


[Stage Direction]
On the orders of the day:
Douglas Mason Fisher: I would like to direct a question to the Minister of
Inquiries of the Ministry Transport which stems from the advertisements in the press in the last few days for great lakes pilots. Do these advertisements indicate that a firm decision has been made that pilots and pilotage will come directly under the Department of Transport, and if so does that mean there is now an agreement with the United States coastguard to this effect?


George Harris Hees: Mr. Speaker, I would think this question could more properly be asked when the bill dealing with amendments to the Canada Shipping Act comes up. The bill will probably be up today or tomorrow, just depending on when the resolution dealing with the freight rates subsidy passes. The advertisements to which the hon. member refers were published in order to speed up as much as possible the process of having adequate pilots available for the shipping season on the St. Lawrence seaway.


Douglas Mason Fisher: May I ask a supplementary question. Is the minister aware that the salary advertised is $300 or more below that which was paid last year?


George Harris Hees: No, Mr. Speaker.



DOMINION-PROVINCIAL RELATIONS NEWFOUNDLAND    REPORTED STATEMENT BY MEMBER FOR ST. JOHN'S WEST

[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, I would like to ask the minister from Newfoundland whether he has any comment to make on the report which appeared in the Daily News of March 31 to the effect that he was going to Ottawa that day "to tell the Prime Minister of the strong feelings here about his term 29 decision", and would the minister tell us what response he got?


Mr. Speaker:: I have my doubts about the propriety of that question, on the basis that it really relates to the hon. member's responsibility as a member and not to any ministerial or administrative responsibility which is a proper subject for a question. The rules permit only questions of members in their private capacity relating to bills which they have introduced in the house. It is perhaps a novel point, but that is my view of the question.


John Whitney Pickersgill: I would like to raise a point of order, sir. Are we to understand that it is therefore not competent to question members of the administration unless they have specific departmental functions?


Mr. Speaker:: I hope I said nothing to give that impression. The question as framed by

Inquiries of the Ministry the hon. member related, it seemed to me, to the representative capacity of the hon. member.


Lester Bowles Pearson: On the point of order, Mr. Speaker, I understand that the minister himself has made certain statements regarding his responsibility for government policy in this matter, and that is why my hon. friend asked the question.


Mr. Speaker:: I have no objection to him asking questions of the minister within the responsibility of the government of which he is a member, but I do object to the question the hon. member put.


John Whitney Pickersgill: I would like to put a supplementary question. I would like to ask the hon. member, the minister from Newfoundland, if since his return from Newfoundland he has made representations to the Prime Minister about the decision respecting the terms of union.


John George Diefenbaker: Mr. Speaker, that is just a repetition of the last question in more unrefined words. I think you will find support for the decision which you purported to give in citation 171 of the fourth edition of Beau-chesne.


Mr. Speaker:: It seems to me that the hon. member has not yet related his question to a matter of the administrative responsibility of the government.


John Whitney Pickersgill: Then I should like to put the question in another way. Are we to assume, then, that the reason the minister left St. John's so precipitately was that he did not wish to defend his leader?


Mr. Speaker:: The hon. member is not improving his position.



INQUIRY AS TO FINAL PAYMENT FOR

[Stage Direction]
1957-58 crop
On the orders of the day:
Hazen Robert Argue: I should like to direct a question to the Minister of Trade and Commerce. In view of the approach of the spring seeding season on the prairies and the great need for cash at this time to pay seeding expenses, can the minister say when the long-awaited announcement of the final payment for the 1957-58 crop will be made? Will the announcement be made before seeding?


Gordon Minto Churchill: I know the hon. member for Assiniboia is a strong supporter of the

wheat board. I am also a strong supporter of the wheat board, and will take advice from them as to when this final payment, which comes normally just before seeding time, shall be made.


Hazen Robert Argue: Is the minister in a position now to tell the house when the payment is to be made? Has he yet received advice from the wheat board with regard to the date?


Gordon Minto Churchill: An announcement will be made as soon as the information is available.



LABOUR CONDITIONS

[Stage Direction]
INQUIRY as to extension of federal winter Works program
On the orders of the day:
Hon. Paul Hellyer (Triniiy):: I should like to direct a question to the Minister of Labour. I wonder whether the minister will extend the winter works program for a further month in order to help the hard-pressed municipalities to repair all the potholes across the country-the little ones, the medium sized ones and the big ones-in order that the Post Office Department's new scooters will not all drop out of sight on their first round.


Michael Starr: Evidently the hon. member for Trinity is not aware of the scope of the terms under which this municipal plan was launched by the federal government, or he would not be asking ridiculous questions.


Paul Theodore Hellyer: Perhaps the minister would consider broadening the scope of this scheme.



FREIGHT RATES

[Stage Direction]
measure respecting reduction of class and

[Stage Direction]
The house resumed from Tuesday, March 24, consideration in committee of the following resolution-Mr. Hees-Mr. Sevigny in the chair:
That It is expedient to introduce a measure to direct the board of transport commissioners to require by order the reduction of class and commodity freight rates (other than competitive rates) charged by carriers subject to the order of the board dated November 17, 1958, and to authorize payments to reimburse carriers for the resulting reduction of their revenues up to an aggregate amount of twenty million dollars.
Lionel Chevrier: Mr. Chairman, I have one or two questions which I should like to ask arising out of the discussion which took place the other evening. The committee will remember that the minister, in his statement which can be found at page 2207 of Hansard for March 24, 1959, told us that this was a subsidy of $20 million in order to give assistance to those who were affected by the

judgment of the board of conciliation. It was, he said, a subsidy which would last for a period of 12 months.
I have become interested in a number of matters, not only since the minister made his statement but also since I had the opportunity of reading the minister's reply. There are one or two questions which I raised and to which inadvertently, I am sure, he did not reply.


The Chairman:: Order. I regret to interrupt the hon. member for Laurier, but it would be appreciated by the Chair if members carried on their conversations outside the chamber. There is far too much noise at the present time.


Lionel Chevrier: Thank you, Mr. Chairman. The question which is uppermost in my mind now has to do with the form of the proposed subsidy. As the minister knows, this is a lump sum payment to the railways designed to alleviate the burden of the authorized increase in rates and, as the minister also knows, the only reason for increasing the rates in this case was because of the decision of a conciliation board in a matter concerning an increase in wages for the railway workers.
My question, then, is this. Does this mean that if a further increase in wages takes place and is reflected in a second increase in freight rates, the government would follow the same pattern and increase the $20 million subsidy to meet the position brought about by the further increase in the rates?


George Harris Hees: That is a hypothetical question and one which I should not care to answer now.


Lionel Chevrier: May I put it this way, then. Is it the intention of the government to tie this subsidy to increases in wage rates?


George Harris Hees: No, Mr. Chairman.


Lionel Chevrier: May I ask just two questions, and then I will sit down. Is it the intention of the minister or of the government to tie the subsidy to the low level of railway earnings from export grain traffic under the Crowsnest pass rates agreement?


George Harris Hees: It is not the wish of the government to tie the subsidy to anything. This subsidy is a specific subsidy designed to meet a certain specific situation. Railway costs went up, justifying, in the opinion of the board of transport commissioners, an increase in the rates. It was the opinion of the government that it would be a fair thing to do to alleviate the burden imposed on the people affected, particularly those who have to pay the cost of the long haul across Canada, and
Freight Rates
it was for this reason that the subsidy is being introduced at the present time.


Lionel Chevrier: Perhaps I may proceed from here. The minister says it is not the intention of the government to tie this up either to the wage rate increase or to the grain rates. May I then ask the minister what this subsidy is associated with? I am getting away from the word "tied", now, so as not to embarrass the minister. What is the $20 million subsidy associated with?


George Harris Hees: I think I have already explained that as clearly as I can. The board of transport commissioners authorized the railways to increase their class and commodity rates by 17 per cent. It was felt by the government that this imposed an undue burden on those who would have to pay the increased freight rates, and the people who do that are the consumers of Canada. It was for this reason, and in order to alleviate the burden borne by these people, that we have introduced this subsidy. I do not think I can explain it more clearly than that.


Lionel Chevrier: The minister has already told us that, and I appreciate what he has said, but what I am trying to find out is this. What is the formula which is to be adopted in order to provide this assistance which he says the government wants to give to those who are affected by the increase in the rates? He did not say that in the statement. I would like to have some clarification of that. What is the formula that will be applied?


George Harris Hees: Mr. Chairman, perhaps it would be simplest if I read my statement once again to the hon. member, because the whole explanation is in the statement.


Douglas Mason Fisher: The statement is not clear.


George Harris Hees: The statement is perfectly clear, I believe.


Lionel Chevrier: The statement is on the record. If the minister wants to repeat it I am not going to stop him, because that is his privilege; but as the hon. member who has just interrupted said, the statement is not clear and demands some clarification. That is why I put the additional question. What is the formula? What is the basis or method the government or the board of transport commissioners or the Department of Transport will use to distribute the $20 million subsidy?


George Harris Hees: Mr. Chairman, I would suggest that the time when that question could most easily be asked in detail would be, as I have stated, when this bill comes before the committee on railways, canals and telegraph lines. That is the purpose of bringing a bill before

Freight Rates
that committee, so that in great detail questions may be asked and answered.
I have told the hon. member generally what is the principle to be employed, and I am afraid I cannot explain it any more clearly than I already have. I feel that the hon. member understands it more clearly than he is letting on.


Harold Edward Winch: Mr. Chairman, I want to add my words to what has been said by the previous speaker. With all due deference to the minister there are a number of things that are not clear even in the wording of the resolution itself or the purport as given to the committee in the statement made by the minister just prior to the Easter recess. I believe the committee has the right, in view of the importance of this matter, to ask the minister for a lucid explanation and exposition before the bill goes to the committee on railways, canals and telegraph lines.
One point the minister has made clear is that this represents only a temporary alleviation of the freight rate situation. The minister is asking for authority to pay up to an aggregate amount of $20 million in order to reduce the effect of the freight rate increase of recent date by some 7 per cent. But this entire question goes much deeper than that. I sincerely hope that while we are at the resolution stage the minister will take us more fully into his confidence.
This afternoon on orders of the day I endeavoured to ask a question, and I wish now to repeat it in view of the statement made by the Speaker of this house. The question I asked was as follows:
It is our understanding that a royal commission is to be appointed to investigate the entire situation relative to freight rates. Can the Prime Minister inform the house whether or not in the terms of reference there will be authority to study a national transportation policy and make recommendations with respect thereto?
When I asked that question on the orders of the day the Speaker immediately rose and with the endorsation of the Prime Minister said that I was asking a question dealing with a matter of business that would come before us this afternoon. I am sure all hon. members would be interested in having the minister answer this question. We would like to know what he and the government have in mind with respect to transportation and freight rates, not just for the next 12 months under temporary alleviation in the form of subsidies but in the long term view.
If we can accept what we have heard on the radio and seen in the newspapers it is the intention of the government to appoint a royal commission. Surely it is the responsibility of the minister at this time, when
[Mr. Hees.l
he is asking for a subsidy of $20 million, to tell us what the government has in mind when the 12 month period is over. What has it in mind about the appointment of a royal commission? What personnel will serve on the royal commission? Perhaps of even greater importance, what will be the terms of reference of that commission? Surely this is the time, at the resolution stage of this legislation, when this information should be given to the committee. We sincerely hope the minister and the government do not have in mind simply allowing this matter to drift from year to year in the future as it has in the past.
If the government has in mind the appointment of a royal commission, what will be the terms of reference? Will it deal only with the question of freight rates? Does the government intend to follow a policy of allowing this question to drift from year to year, bringing in temporary measures in the form of subsidies? What we should have now and indeed what we should have had years ago is a thorough study into the transportation system in Canada, out of which would flow recommendations concerning a national transportation policy.
The time is long past when this country should have had a national transportation policy. Naturally there are great difficulties relating to this question. We have in Canada two great transportation systems, one publicly and one privately owned. Irrespective of this we must recognize that Canada is a large country, 3,500 miles in breadth, with a greater land area than the United States and a population of only 17,300,000, according to the latest figures. We require an efficient transportation system. I presume the intention of the royal commission would be to make recommendations in this regard, but as yet we have heard nothing from the minister with respect to this matter. We urge the minister to give us some information on this question this afternoon. We are interested in knowing the terms of reference of any royal commission that may be appointed. In particular we wish to be advised if one of those terms of reference will be a complete study of a national transportation system and recommendations for a national transportation policy. There is certainly a need for it.
I remember that years ago I had the privilege of being a member of the British Columbia legislature, at which time I met a most extraordinary individual. I did not like his politics nor did I like him personally, but I hasten to admit that he was a most unusual man. His name was G. G. McGeer. He was mayor of the city of Vancouver at one time, a member of the

British Columbia legislature, and a member of the House of Commons and the Senate. His was a rather outstanding experience. He was also one of the most outstanding lawyers in the province of British Columbia. Years ago a Liberal government appointed him as its counsel in a hassle on freight rates. I can still recall G. G. McGeer telling me with a chuckle how in five minutes he had won the case for British Columbia by producing a relief map that showed that in the main the territory from Calgary to Vancouver was downhill.
British Columbia won its case immediately but it has not won another case since or none of any importance so far as the transportation system and freight rates are concerned. Anyone who knows our country and particularly the western provinces can see the need for a national transportation policy. If you are a tourist travelling by train there is no question whatsoever but that you should travel on the C.P.R. through the Canadian Rockies and British Columbia's four mountain ranges. The trip is wonderful and the scenery is beautiful but the route is a very expensive one as far as the C.P.R. is concerned.
Yet about 200 miles north you have the C.N.R. line with practically no grades whatsoever. There is the route of freight whereas the C.P.R. line is the route of passengers. However, there has never been any co-ordination or correlation so far as passenger and freight traffic are concerned. Apparently the C.P.R. can set freight rates indirectly one way or another on the basis of their high cost route through the mountains of British Columbia instead of freight rates being set on the basis of the low cost route of the C.N.R.
It would be very interesting if the minister would tell us how fast a train can travel from Vancouver to Montreal. There is no difference in travel time between Vancouver and Montreal in the case of the C.P.R. and the C.N.R. even though the C.N.R. can undoubtedly make the trip in less time. All you have to do is to talk to the engineers, superintendents and firemen. There is no question at all that the C.N.R. could provide a faster trip but for some reason or other it is not allowed to do so. I do not know what the reasons are, but surely there is firm foundation for a real study to be made of a national transportation policy that will give the greatest efficiency at the lowest possible cost in the movement of both passengers and freight.
The fact that this afternoon the minister is asking the house for authority to subsidize both railways, one publicly owned and the other privately owned, to the extent of $20 million in one year provides ample reason for members of the house and taxpayers generally who have to pay the $20 million to ask
Freight Rates
the Minister of Transport to give the house this afternoon a clearer indication and a better understanding of what he has in mind from a long range point of view, what he intends to do to take care of the situation when the year is over and the $20 million is expended.
We understand, as I said before, that there is going to be a royal commission. We hope the minister will tell us who are going to be on the commission. If he cannot do that, at least he must know now what the terms of reference are. We ask the minister to take us into his confidence, to give us a picture of the terms of reference which will reveal the extent of the study and what authority is going to be given to the commission. We ask the minister to explain, if he does nothing else, whether or not under his direction as Minister of Transport there is going to be in the not too distant future a national transportation policy for the Dominion of Canada.


Mr. Browne (Vancouver-Kingsway):: Mr. Chairman, I should like to take this opportunity to make a few comments on the resolution and the whole principle involved in the subsidizing of railroads. Generally speaking I cannot say I am very favourable to the principle of subsidizing railroads because for one reason I do not think it is any solution at all to the freight rate problem. However, I believe it is justified in this case because it is going to help those parts of the country which suffer from discrimination in freight rates and I hope that the royal commission to be established will come up with a more permanent solution.
One thing that has surprised me is that in the course of the debate there has been no mention of what impact the subsidizing of railroads will have on other forms of transport. Surely one of the things that has kept freight rates down throughout the country is other forms of transport, water transport and truck transport. So far as the principle of subsidizing railroads is concerned, I think it would be very dangerous as a long term policy and I was pleased to hear the minister say that this provision is definitely only for one year and that a royal commission is to be appointed to consider the whole question.
There are some things that it will be hard for a royal commission to deal with; in fact, I do not see how a royal commission can deal with them under the terms of reference of the last royal commission. There has been some suggestion that if we have a thorough investigation it will solve the problem forever but no previous royal commission has ever solved it forever and if we have a commission now I do not expect it will solve it forever. However, the commission will probably be

Freight Rates
able to make suggestions that will help the situation for a few years. Because the situation changes from time to time I do not think we can expect a permanent solution, no matter what study we undertake now, that will solve the problem forever.
One of the things a royal commission is up against in investigating the whole matter is the difficulty of investigating the trucking industry. I am going to deal with the trucking industry particularly because I happen to know something about it. It is one of the main competing forms of transport so far as the railroads are concerned, and perhaps the real solution to freight rate discrimination would be to have more competition by truck transport in those areas where it is deficient at the present time. Obviously rates have been brought down in those areas where there is considerable truck transport and I do not see why rates would not be brought down if truck competition were expanded in those areas where there is discrimination. It seems to me that would be the logical way to achieve equalization of freight rates.
If we were to adopt a long term policy of subsidizing the railroads in those areas where there is discrimination surely the only thing we would do would be to prevent any competition arising because such subsidization would make it impossible for truck competition to develop. If we were to adopt such a long term policy we would be spending money in this manner which I think could be much better spent to promote the building of highways with the object of bringing down freight rates in that way.
I should like to deal for a moment with two or three aspects of the trucking industry. The last royal commission, the Turgeon commission, was very much aware of the impact of trucking on railways. However, under its terms of reference that commission was unable to go too far in investigating the trucking industry because it did not come within the jurisdiction of the federal parliament. You will recall that the Turgeon report was made before the privy council decided that certain aspects of the trucking industry did in fact come within the scope of the federal parliament.
I should like to bring to the attention of hon. members the various groups that are engaged in the trucking industry and what their effect has been on rail rates. We first of all have the group known as for-hire operators who perform exactly the same service as the railroads do. They maintain their trucks for hire by the general public and they charge a fee for moving freight. The second group involved in truck transport is the private owners. This is a group of businessmen who maintain trucks for the purpose

of moving their own goods from place to place. I do not think any real assessment has been made up to the present time of their impact on the field of transportation because nobody on the federal level has had the authority to investigate this question. Since the last royal commission was set up to inquire into freight rates there has been one new segment added to the trucking industry and that is the U-drive trucks. These trucks are leased and a man can hire the truck for a day, a week or a month, to move his own goods.
Now, each one of these segments of the trucking industry has an effect on freight rates. The main point is that there is some regulation, in fact there is a growing body of regulation over the for-hire truckers. However, there is practically no regulation of the private operators, nor do I believe that they pay a fair share of the taxes. I am not familiar with the situation across Canada, but I can speak for the province of British Columbia.
I cannot quote figures which are up to date because the situation has been changed. A department of transport has been set up under the provincial government and some radical changes have been made in the taxation structure. The field of taxation with relation to trucking is quite broad, but one aspect of it is the highway licence which is required. A few years ago I recall that this licence cost in the neighbourhood of $180 for a truck operated by a for-hire operator, whereas the operator using his own truck paid somewhere in the neighbourhood of $5. There are many other fields in which I believe this tax discrimination exists. I feel that it has a great effect on freight rates because these people who operate their own trucks tend to keep down the rates of the for-hire operator. Shippers tend to say to the for-hire operators, "If you do not keep your rates down, we will buy our own trucks." This, in turn, has caused the railroads to set up what they call competitive rates across Canada.
It is my contention that these competitive rates are, in many instances, too low. I believe this has resulted in added freight rate discrimination because obviously the railroads have to be aware of their total revenue situation. If they cannot get revenue in one place, obviously they have to apply higher rates wherever the traffic will bear them. I think this fact is to a great extent responsible for the discrimination that exists in freight rates today. I do not see how any investigation by a royal commission that does not have authority to deal with all the aspects of trucking, and to determine whether trucks are paying their proper share of taxation for

the use of the roads, and various other questions of this nature, can ever arrive at any proper settlement of this freight rate question. I do not think we should even consider investigating the railroad industry by iself, without taking into consideration the trucking industry, water transport and air transport which I am sure as time goes on is going to become more and more important.
I know that somebody is going to tell me we will not have authority to do this because trucking comes within the jurisdiction of the provinces. However, I want to say this: most of the people who come here to make complaints about freight rates have been the provincial governments. I certainly feel that under the circumstances, when the provincial governments have such a great interest in this matter, there could be more co-operation between the federal and provincial governments. We seem to arrive at this same situation in so many fields of legislation today. When we come to deal with some subject we find that part of it comes under the federal government and part of it comes under the provincial government. I believe that the question of freight rates is one subject where the interests of these governments are common. It may be that whatever type of commission is set up, eventually provincial representatives of some sort could be appointed. In any case, I certainly believe that any investigation must take into consideration the impact of the trucking industry on this whole question of freight rates.
There are one or two other things that I believe the federal government could do which would help the situation. At the moment there are no provisions under the Railway Act for the trucking industry to appear before the board of transport commissioners when freight rate hearings are held. I believe that the trucking industry has now reached a stage in which it could provide valuable information to the board of transport commissioners in making decisions. It may well be that the discrimination in existing freight rates comes about because they are too low in certain areas and, consequently, have to be raised too high in others. We have the railroads setting competitive rates. They say the rates are there to meet the competition of trucks or to meet the competition of water carriers. The water carriers are able to appear before the board of transport commissioners and state their views as to whether or not there is a competitive rate. In so far as the trucking industry is concerned, they are not allowed to appear before the board of transport commissioners to state their views on this matter.
It may well be that the competitive rates of the railroads in those areas where they 66968-9-146
Freight Rates
are meeting truck competition are lower than they need to be to meet this truck competition. I should like to cite one example of this which has come to my attention in British Columbia. I do not know to what extent this situation exists across Canada, but here is one instance in which the competitive rates of the railroads have been below the existing truck rates. It seems obvious to me that if the railroads lower freight rates in one place like that, then they have to raise them higher in another area in order to keep up their total revenue position. I do not think we can accept the fact that just because the public is making a saving in one particular area it is for the general good to have the railroads do that.
There are only two results which can flow from this practice. When the railroads cut rates below the trucking rate in a specific area, either the trucks in that area are put out of business or else they have to meet the rail rates. The result is a net loss of revenue for the railroads. Perhaps that is one of the reasons we are now having to subsidize the rates as we are being asked to do by this resolution.
Here is a particular instance in British Columbia as outlined in a submission made by a tariff agent for the trucking industry in British Columbia. This case illustrates the necessity for the trucking industry being allowed to appear as an interested party before the board of transport commissioners when hearings are held. This brief has been submitted to the board of transport commissioners, along with a request for a hearing, and I have been informed since that the board has turned down this request. I do not want to get into too much detail here, so I am just going to give you a general picture. Before the railroads asked for their 17 per cent increase the rate charged by both rail and truck transportation was $1.20 per hundred pounds for this particular haul. When the 17 per cent increase in rail rates went into effect the rail rate went up to $1.40 per hundred pounds. The trucking industry, which was having its own difficulties in getting along on the rates being charged, applied to the public utilities commission in British Columbia for a 17 per cent increase so that the rates would still be competitive. However, the public utilities commission did not grant the full 17 per cent in this particular instance. They granted the trucking industry only 8.5 per cent. The trucking industry accepted this for the moment and prepared to fight the case for the second 8.5 per cent.
In the meantime the railroads reduced their rates down to $1.10 per hundred pounds. Surely, if there was any need to reduce them

Freight Rates
there was no need to reduce them below what the trucks were charging because that certainly resulted in a net loss of revenue to the railroads. As I pointed out before, the obvious thing that is going to occur is that the trucking industry will meet these rates. The net result will be that the railroads will have a loss of revenue without a net gain in traffic. This is another factor in the freight rate situation which is facing us now, and may be one of the reasons we are being asked to subsidize rail operations.
If I may sum up, I should like to impress upon the government once again my hope that whatever commission is going to be set up it will be one which will investigate fully the impact of the trucking industry in all its aspects, for-hire truckers, people operating their own trucks or U-drive trucks, upon the freight rate structure.
I firmly believe that it should be done in complete co-operation with the provinces. Before a commission is empowered to undertake this investigation I believe there should be consultation with the provinces to cover the aspect and to see if some agreement cannot be reached, to investigate whether trucks across Canada as a whole are paying their fair share of the taxes and to see whether trucks are paying too low a rate in some areas are not making rates sufficiently low in those areas and thereby causing the railroads to put their rates too high in other parts of the country.


Hubert Badanai: Mr. Chairman, this subject of freight rates is of vital importance to my constituency. I should therefore like to give a few facts and figures which are pertinent to our economy. Now that the Minister of Transport has arrived on this side of the house I am sure we will get what we ask for.
I am in receipt of several communications from various lakehead firms objecting very strenuously to any freight rate increase for northwestern Ontario. These letters also demonstrate the alarm that is felt in connection with the so-called "alleviation of discrimination" in how the proposed $20 million subsidy will be applied. If northwestern Ontario is not given the same measure of consideration which is being given to the western provinces it could mean, not only hardship to the people of northwestern Ontario but also a terrific burden to many of our firms and industries.
The failure of the province of Ontario to join the other eight provinces in protest against these freight rate increases for the people living in the northwestern part of the province, which is approximately 1,000 miles

from Toronto, is the proof that the government of Ontario is not really much concerned with its welfare. It is again an unchallenged reminder that northwestern Ontario should have been a part of Manitoba, as it is generally conceded that the interests of that part of the province are clearly more closely linked with the prairie provinces by reason of the fact that the lakehead is the transshipping point for grain, iron ore and general merchandise.
I could not do better justice to the subject than to quote a few paragraphs from a file of correspondence in support of government consideration of measures which will ensure a fair deal for northwestern Ontario. I have a letter from the general manager of the Northwestern Ontario development association which reads in part as follows:
Announcement was made recently by the federal government that it plans to appoint a special body to review the general field of rail problems and freight rates. Also announced was the intention to undertaken a study "to work out measures to relieve against inequities in the freight rate structure."
According to press reports emanating from Ottawa, serious consideration looms of a more favourable freight rates deal for the four western and four Atlantic provinces. In the middle province of Ontario, the problem confronting our northwestern economy is obvious.
The recent 17 per cent freight rate boost, unopposed by Ontario, placed an additional heavy burden on our northwestern industries, business firms and consumers. The railways have announced their intention of applying for a further rate increase.
Our association, with other regional bodies, is endeavouring to compile a fund of information and evidence to support whatever representations might be made later in behalf of our area to the proper authorities.
If we are left outside the areas to which concessions might be granted in any freight rates overhaul, the disadvantages to our existing economy would be serious and our prospects for continued growth dealt a damaging blow.
Only the other day I received the following telegram from the chairman of the joint transport committee of the cities of Fort William and Port Arthur:
Unless proposed freight rates subsidization offers northwestern Ontario same assistance as Manitoba discrimination should be charged.
I have here a communication from one of the large departmental stores. It reads in part as follows:
We learned that there may be consideration given a request by all provinces, excepting Quebec and Ontario, which would have the effect of eliminating all or part of the last (17 per cent) freight increase. We are in sympathy with Manitoba's views, but we are deeply concerned about the problem of cost differential which our company would face on goods entering our area from Manitoba. And we know that in order to be competitive, we must make every effort to appeal that the same concession apply to northwestern Ontario.

We handle in excess of $7 million at retail,- a large percentage of this volume comes from operating branch stores in the following locations:
Marathon Geraldton Schreiber Beardmore Red Rock
Atikokan
Dryden
-198 miles east of the lakehead CPR -189 miles east of the lakehead CPR -120 miles east of the lakehead CPR -120 miles east of the lakehead CNR - 70 miles east of the lakehead CNR

-135 miles west of the lakehead CNR -230 miles west of the lakehead CPR
I believe you know that transportation cost hits our type of business heavily, because thousands of small lot shipments are involved. Also, it is necessary to redistribute the bulk of our merchandise from Fort William to our branch stores. This further increases our transportation cost.
It has taken many years to build up this business, and transportation costs have been one of the biggest factors we've had to contend with. The distances mentioned in the above list help to explain why this is so.
Horizontal increases in freight rates work against us in securing supplies as well as in distribution. Protests from our trade have been plentiful against absorbing the last 17 per cent increase. Any easement in this rate, applicable to Manitoba, which was not extended to our territory would be to create unfair competition in goods into our area from Winnipeg. This would be a discrimination which we most strongly protest.
Then again I have received several others. I do not wish to read them all. I have one here in particular concerning a large hardware store also located at the lakehead. It reads as follows:
We are writing you in connection with the proposed increase in freight rates, particularly west of the lakehead.
We are given to understand that manufacturers in the east can ship to wholesalers, such as ourselves, in Winnipeg, at the old freight rate, both in carload and l.c.l. shipments. We also understand that they are able to ship from Winnipeg back to Ontario at the old freight rate.
On the other hand, we understand that on shipments from manufacturers in the east to distributors, such as ourselves in the lakehead, we are forced to pay the increased freight rate. When we ship to places such as Dryden, Kenora, Fort Frances, and Atikokan, we are charged the new increased freight rate.
If this information is correct, we wish to offer a very strong objection, for to us this is rank discrimination. We have already run into a situation with one of our competitors in Winnipeg shipping nails to Atikokan at a much cheaper price than we can offer, shipping from the lake-head. We have no way of knowing whether these are imported nails, which are considerably cheaper, or whether the above freight rate structure affects this price. This is just one item that we can think of at the moment. This could also apply to other lines of hardware.
We would certainly appreciate you taking this matter up with the transport board, and register our strong objection.
Then there is another one which says:
The situation here can be put briefly, but is, nevertheless, extremely serious. Our company operated during 1958 at a new loss of $557,488.73 and during this time we paid out $988,689.35 in freight charges. These charges of course were at the old rates before the 17 per cent increase. 66968-9-146i
Freight Rates
As can be seen from the above, any freight increase is an extreme hardship to us and further increases are beyond all reason. We are beginning to wonder how long it will take to squeeze us out of business.
I trust that the above will be of some help to you. Should you require further information by all means get in touch with me again.
Then there are others, but I do not wish to take up the time of the committee in dealing with all this correspondence which I have received. But I would just say in conclusion that in view of these representations founded upon indisputable facts, I submit that the government should give a clear indication that in the assessment of rates the voice of northwestern Ontario will not go unheeded.


Mr. Smith (Calgary South):: Mr. Chairman, I do not intend to take any more than a few minutes of the time of the committee; nevertheless I want to express a view which I offer not as a solution but as a suggestion. In making it I do so because we have had many members express concern over the problem of the rate structure as it affects many areas of Canada, particularly those hon. members represent. I think it is hardly necessary for me to point out that the rate structure as such reveals some inequality of rates, which perhaps penalize the area which I represent more than any other section of Canada, and thus I am also concerned. The problem is indeed acute. I think the point which we must remember, however, is that it is going to become a great deal more acute unless the action which has been suggested by the hon. minister is taken and acted on, because it has been indicated to us by the railways that in the next fifteen years they are going to require about a billion and a third dollars. These dollars are to be used purely for replacement costs and the extension of new services. So that while the situation is critical today, and we have a history of going from one crisis to another and from one increase in the rate structure to yet another, each of these adjustments has not altered the position nor has it attacked the problem at its source.
The source of the problem is to put somehow the railways on a paying basis. That is not just a pious hope; it has to be effected, otherwise, as previous members have indicated, we will never reach a solution either temporary or permanent. Therefore I think we should first of all recognize the need for the subsidy which has been indicated in the resolution, and while we can state that we oppose subsidies, it is intended by the government only as a stopgap until such time as the whole problem can be dealt with. This, it has been clearly indicated, will be

Freight Rates
followed by the royal commission and any action recommended by that commission will follow in due course.
I have said that the railways indicate to us that they are going to have to undertake very sizeable capital expenditures. These amount to about $83 million a year. Therefore, if we are going to attack the source of the problem, we are going to have to provide for them a source of revenue in addition to the ordinary operating revenues which as a corporation they receive. I think then it is essential that the commission recognize, as the government does now, that the next ten years are going to be more difficult than the past, because the call on our railways to meet the demands for new services and the need for the replacement of present equipment has never been as extreme as it will be in the coming years.
The suggestion that I have made is that a capital fund should be established by the government which would operate on a revolving basis over the next ten-year period, and on which the railways would be permitted to draw at a nominal low interest rate. That would get them over the hump so that they would not be required to come back repeatedly for increases in freight rates just to make temporary adjustments, thus delaying the eventual day of reckoning. I suggest that the capital fund if established would not be unlike a partial solution which the United States has followed in offering to the railways guaranteed loans to meet exactly the same situation. They have taken this positive action together with reducing services to certain areas where the railways have been asked to operate, for which there is little desire by the community and very little hope of any practical revenue being derived by the railways concerned.
I believe, then, in summary, that in order to place the railways on a paying basis it is not sufficient merely to adjust the inequalities in the freight structure but rather we are going to have to meet the costs of operation which cannot be met by current revenues. I suggest that a capital grant to the extent of about $30 million during the initial period, on the basis which I have suggested, would meet the urgent demand, thus endeavouring to attack the source rather than make, as I have said, a temporary adjustment. That is the one thought which I have with respect to the monetary aspect of the problem.
I also have two other suggestions. The first is a subject which has been mentioned by the hon. member for Vancouver-Kingsway dealing with competitive transportation, and in particular motor transport which serves and connects the various provinces in Canada. It does seem to me that we are going to have
[Mr. Smith (Calgary South) .1
to come to the day when we must place all competing forms of transportation under one administrative body to determine the relationship of the tariffs which they charge in competition with one another. It seems inconsistent to me to have a competitive system where one means of transportation is kept under a fairly tight rein, examined and made responsible by the government of Canada as a public convenience, and the other is left completely without any form of control. I have noticed a growing desire amongst the transport companies themselves to see at least that their rates are published on a federal basis, because they are not concerned, funnily enough, with the competition of the railways but are concerned with the competition of those who undercut in their the competition of those who undercut in their own business of transport. So I see a need for a different approach to bring about regulations which will relate one competitive mode of transport and another in their respective rate structures.
The third suggestion I offer is directed to the old problem of agreed charges. These are charges which are made between the railway company and the shipper whereby he agrees to ship a high volume, up to 80 per cent, of his traffic through the particular railway concerned. It was designed in a special instance to compete with certain other forms of transportation, mainly by water, and I think this is paradoxical inasmuch as it eliminates competition, especially as far as truckers are concerned. I think we should examine the agreed charge system carefully, because to a large extent it has increased the cost of transportation, certainly into the prairies. It is an established fact that in many instances it is possible to ship products from eastern Canada to Calgary cheaper via Vancouver than by shipping them to Calgary direct. I maintain that agreed charges have not served the purpose which they were intended to serve. This is an area which should receive close scrutiny in an effort to deal with the source of the problem. Nothing else will be sufficient. Unless we succeed in meeting this problem the entire financial structure of the railways could collapse around them. It is therefore of vital importance to find some constructive solution to the problem of how they are going to meet their very extensive costs over the next 10-year period.


William Hector McMillan: Mr. Chairman, before this resolution passes I should like to direct a question or two to the Minister of Transport. I understood him to say the other night that shipments across the international boundary line between Canada and the United States would not be subject to the increase in freight rates. I would point out that shipments from

Michigan, and particularly shipments of farm products, get the benefit of a cheaper rate to Toronto than do farm products from the Windsor area in Canada, and I should like to know from the minister whether or not the increase in freight rates will give United States farmers any further advantage in connection with getting their products to Toronto and to other Canadian markets.
Another thing which has been brought to my notice is the fact that Canadian farmers can ship to points in eastern Canada-to Montreal for instance-from the Essex-Kent area by routing their shipments by way of Detroit. These products are carried by United States railways to Montreal and points east. I should like to ask the minister to comment on this aspect of the question.


Paul Joseph James Martin: Just before the minister comments on the statement made by the hon. member for Welland, I should like to join with him in asking the minister to give consideration to the question which has just been put to him because it is a very serious one for the farmers of southwestern Ontario.
Undoubtedly the interest of the hon. member for Welland in this matter arises from the fact that he was born in the district and, more particularly, that he joined with a number of us during the Easter weekend in giving consideration to some aspects of this very problem. The increase in freight rates does seem to give United States farmers-farmers in Michigan, for example-an advantage over farmers in Essex or in Kent-corn growers or soybean growers in both jurisdictions-and if the advantage is as great as it would appear to be, the situation is undoubtedly a very serious one. The question implied by the hon. member for Welland is this: is it not a fact that a farmer in the state of Michigan, for instance, is able to ship corn or soybeans in competition with the Canadian growers into Canada over Canadian railroads with an advantage denied to Canadian farmers as a result, in this instance, of the increase in freight rates?
This situation is, I know, not one which arises as of yesterday, although the particular situation which does confront the farmers in this district is one which is accentuated as a result of the increase in freight rates to which the government acceded a few months ago. The situation is, of course, serious in its basic quality. It is possible for farmers to ship corn from Chicago to points in Canada cheaper than it is possible for Canadian corn growers or Canadian soybean growers to ship those commodities to various points in Canada from a Canadian point of origin.
Freight Rates
If this action of the government will lead to a settlement or a resolution of the long term problem which I have just mentioned, or of the short term one created by the increase in freight rates, there will be much satisfaction. In any event I strongly support the implication of the question put by the hon. member for Welland as to whether or not something can be done immediately to take care of the discrimination which now exists and which allows such preferential treatment of United States farmers as opposed, say, to farmers in Essex and Kent who are confronted with the burden of these increased freight rates.
There is also, of course, the long term question of being able to ship United States farm products from points in the United States into Canada cheaper than they can be shipped from points in Ontario such as Kent and Essex to other points in Canada. It seems to me that the whole question of the depressed state of agriculture in this particular section is in a large measure attributable to the defects of the freight rates structure. This might be an appropriate moment for the government to take a second look at the whole problem and try to bring relief to thousands of farmers in southwestern Ontario, notably in the counties of Essex and Kent.


Douglas Mason Fisher: I was hoping that the minister would answer some of the questions put to him as we went along, but I will give him a few more to answer later.
The minister obviously feels, since he has tried to repeat his original statement several times, that it is a model of clarity. I have gone over this statement, and this model of clarity makes very little sense. I took home with me copies of the debates on this subject which occupied the house just before the recess and gave them to a couple of acquaintances of mine who are the only people in our area, I would say, who are knowledgeable on the question of freight rates. I asked one of them for his comments afterwards, and he said: "It seems to me that most of the people in the House of Commons who speak on freight rates are boobs." I said: "Well, it is a very complicated topic and you must understand we are just amateurs at this sort of thing." He said: "Yes, but it seems to me that the biggest boob is the Minister of Transport, and he is the man who is supposed to have a policy on it."
What hits me about this statement is that I do not think the minister wrote it. I think it was written for him, and I think that is one of the reasons he sticks so closely to it. I do not think the minister understands much about what this interim policy is going to

Freight Rates
mean any more than we do, and I think there are some questions which should be answered before this is referred to the committee.
This is one of the techniques employed by the minister. He appeared to say, "Let us get this thing to the committee where we will have all the technical people and all your questions will be answered in detail." My experience in committees, which is admittedly brief, has been that when we get to the committee with all the experts very soon we poor amateur boobs, the members of this house, quickly find ourselves out of our depth. While we are in this committee and amongst our peers-especially our peer the Minister of Transport-I think this is the time when we should have the preliminary exposition as to what the interim policy will be.
I should like to know from the minister how this will apply in an area way. Will we land in the committee on railways, canals and telegraph lines and find that we have representatives there from eight provinces, each representative stating his case, or will we have to ferret out from the representatives of the minister exactly how it will bear provincially or on a regional basis? These are some of the things I think we should know from this statement.
I should like to know what the minister meant by the statement he made on March 24 in introducing this resolution as reported at page 2207 of Hansard of that date:
The government has decided that the most effective relief is to be afforded by confining the subsidy to a reduction in the non-competitive class and commodity rates, including the joint rail-water rates which are differentially related to the rail rates. These rates are generally known as "normal" rates, and are the ones which have taken the full percentage increases authorized by the board over many years.
I should like to have a simple exposition of that statement. I would like a fuller explanation of what is meant by rates which are differentially related to rail rates and what is meant by normal rates. I should like to have the explanation made right here and now. Beyond that I should like to know how this subsidy will affect the bridge subsidy or if it will affect it at all. I think the minister knows what I mean by the bridge subsidy. We have never been able to figure out how it affects northern Ontario. All we know is that we have the highest freight rates in Canada. We are interested in finding out about the regional basis of the application of this measure because we wonder if we are going to be lumped with the west.
In one of his off-the-cuff statements in which I assume he would be more frank than usual the minister indicated that if British

Columbia suffered the most it would gain the most from this subsidy. I should like to have a fuller explanation of what he meant by that. We in northern Ontario feel that we have suffered. I feel it is about time we had a clear exposition.
When hon. members got back from the Easter vacation we discovered the usual number of briefs and representations in the mail. I just enjoyed reading the submission of the Canadian lumber association to the cabinet committee on freight rates. In essence the brief represented a call for the repeal of the Crowsnest pass rates. In the same mail I discovered a pamphlet published by the Alberta wheat pool called "The Crowsnest Pass Agreement in Review", which is a very clear exposition of why we maintain these rates.
Several hon. members have spoken about the position of the trucking industry. Probably the minister has looked at some of the material contained in The Motor Carrier, a magazine that represents the interests of the trucking people. I was particularly intrigued by the headline I found on one page which read:
Subsidy Issue Sparks Dramatic Cabinet Cloak and Dagger Affair
It is not difficult to imagine our dashing minister involved in a cabinet cloak and dagger affair of some kind or other. What I would like to know is what recognition will be given in this interim period to the position advanced by the truckers? They are dead set against this subsidy. Let us have an explanation from the minister as to how this subsidy is going to apply fairly to the railways and not apply unfairly to their competitors, the trucking people. In effect that is what was asked by the hon. member for Vancouver-Kingsway. I think we merit from the minister at this time something much better than the exposition he has given us.
The whole purpose of the minister's exposition seemed to be, "Let us get this to the committee on railways, canals and telegraph lines." To my way of thinking that is not the place for a clear outline of how this legislation is going to apply for the next year. I believe the place for that is right here and now in this committee. I was pleased to find that my opinion in this regard is identical with that of the hon. member for Laurier. Doubtless the minister will recognize that some of us over here in our opinions do not always dovetail with the opinions of the hon. member for Laurier but this is a case where we are in agreement in feeling that this statement is not good enough. We need a clear, concise outline of how this legislation will work in this one-year period.

I should like to say that I think that we have had enough of royal commissions especially those set up to inquire into freight rates and transportation. I feel it is about time this government took advantage of the knowledge of the board of transport commissioners and of the findings of previous royal commissions and demonstrated two things, some leadership and some guts, in nailing down a national transportation policy without resorting to another royal commission which will take an interminable amount of time to report and is almost certain not to have the authority to consider all the problems relating to the question. Royal commissions do serve a purpose but I feel that sometimes we campaign too frequently to have them set up. In this case the government should show leadership with respect to a national policy on transportation and freight rates rather than shoving the question into one of these corners. The present record of the government with respect to royal commissions is not really an enchanting picture if we look at the various royal commissions that have been established and consider the great length of time it has taken them to getting around to making even interim reports and the fact that there seems to be some lack of agreement on interpreting just what their findings mean.
I do not see how the idea of the establishing of a royal commission to study this question could excite anybody except perhaps the lawyers who will make a killing presenting the cases for the various provinces in connection with the freight rate aspect of the question. If the minister really digs into the transportation and freight rate problems and gets down to work-


The Deputy Chairman:: Order. It being five o'clock it is my duty to leave the chair in order to permit the house to proceed to the consideration of private bills, pursuant to section 3 of standing order 15.
Progress reported.



CRIMINAL CODE


Mr. Frank McGee (York-Scarborough) moved: the second reading of Bill C-19, to amend the Criminal Code (corporal punishment).
He said: Mr. Speaker, I have the privilege of introducing this bill which deals specifically with the abolition and removal from the Criminal Code of the provision for whipping, a provision which calls specifically for the use as so described in the Criminal Code of a weapon-I think it can only be properly described as a weapon-known as the cat-o'-nine-tails. This is a device which is not
Criminal Code
normally seen by Canadian citizens today unless they happen to be watching late movies such as Mutiny on the Bounty, the Corsican Brothers and others. Vivid in my mind, as I am sure in the minds of many other members also, are scenes where human beings are flogged, in some cases flogged to death.
The arguments in favour of the abolition of corporal punishment follow a pattern very similar to that in the case of the arguments established in support of the abolition of capital punishment. They deal specifically with the aspect of a deterrent and the fact as no doubt will be established by speakers from other parties in the house, that there is no evidence, statistically or otherwise to support the retention of corporal punishment. The argument that corporal punishment, whipping in particular, is motivated by revenge is, of course, true. We have all heard people discussing a certain crime that has been committed and making the statement that hanging or whipping is too good for the person who committed the offence. When this subject has come up in private conversation I have often asked people who have made such statements what they would prefer to do. In most cases they go further than the use of that unhappy device, the cat-o'-nine-tails, as a means of torture to extract revenge and suggest some of the ancient oriental methods but finally before we reach drawing and quartering they concede my point.
There are morbid aspects of corporal punishment which disturb me as a member of parliament no more or less than they disturbed me as a private citizen. You, Mr. Speaker, I, every member of the house and each and every member of our society has a hand on the whip when a whipping takes place in the same way that we have a hand on the rope in the case of a hanging. We as citizens of Canada and members of the house are elected specifically to enact such legislation as truly reflects the feelings and instincts of the people we represent.
In the case of corporal punishment the same risk of error is involved, although I grant not to the same extent, as in the case of capital punishment. If a man is hanged and evidence is later discovered indicating that the accused was in fact innocent, nothing can be done, but I submit there is permanent damage to the recipient of corporal punishment in that the man carries the marks of it to his grave.
The debate concerning corporal punishment has raged in many countries of the world for many years and in a few the use of the whip or lash has been abolished for over 100 years. There has been a trend in

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human behaviour and human conscience reflected in the legislatures and laws of many lands which tends toward what I like to think is an enlightened point of view regarding corporal punishment.
Not too many weeks ago I saw in a popular pictorial magazine a series of pictures of a thief who had been apprehended in one of the Middle Eastern countries. The picture was taken by a man who had secreted a camera into the area. The sequence of pictures showed a poor man, a beggar, being dragged into the public square and held down by three or four other men while a policeman cut off a hand. The last picture showed the man minus his hand sitting in front of his hovel and the hand that had been cut off was nailed to the doorway of his abode. The final comment in the story accompanying the picture was that some of those who had their hands removed had died. Yet burglary continues in that country. I have read a discussion of corporal punishment in "The History of Corporal Punishment" by George Ryley Scott and in his book he describes the action of the cat-o'-nine-tails. I tried to obtain and bring to this house this afternoon a cat-o'-nine-tails. I have no reason to believe that the present day version differs substantially in structure or effect from the original. I should like to quote briefly from the book to which I have referred in order to give the house some idea of the specific effects of the cat-o'-nine-tails, provision for the use of which is found in our Criminal Code. The author has this to say at page 83:
The English cat-o'-nine-tails, the weapon employed, was a terrible instrument of flagellation. It was a close rival of the Russian knout. The "cat" consisted-
I understand it still does.
-of nine separate thongs of leather or thick whipcord, each two feet in length, and knotted in three places. At each stroke the thongs cut through the skin like so much paper, the knots tearing out lumps of flesh. The sensation of the whipped individual, says Shipp, is "as though the talons of a hawk were tearing the flesh off the bones," and, as stroke follows stroke, and the "cat" becomes clotted with blood, it "falls like a mass of lead upon the back."
This, Mr. Speaker, seems to be a voice from the distant past, something that one might find in such a novel as Mutiny on the Bounty. Yet today in our Criminal Code we find this same instrument, this same weapon, prescribed.
The matter of sadism so far as this subject is concerned is very pertinent and relevant in at least three aspects. Before going into this part of the argument, I should like to give you a definition which I heard of a sadist. A sadist is defined as someone who is kind to a masochist. While this definition

may have a humorous connotation, it leads into an aspect of the punishment which concerns the recipient of flagellation. It has been, I think, demonstrated in studies made of certain aspects of sexual crimes that, far from being a punishment for certain types of such crimes, the whip is possibly a most desirable form of experience for that individual.
Sadism most certainly can occur in the application of the sentence. A judge meting out a sentence, trying by some method to come to the correct number of lashes which might suit a particular crime, has the effectiveness taken out of his decision according to the degree of physical strength and sadistic inclination which may exist in the mind of the individual who is handling the lash. Finally, Mr. Speaker, I submit that sadism is a natural reaction in the minds of society, particularly on the part of those closely associated with a specific crime, but is certainly not something of which we as citizens of Canada today can be proud to find in our laws and in the designated penalties attached thereto.
There is another aspect of this question which many of my colleagues in the house, as I have mentioned, will be discussing. I should like to quote briefly from the chapter headed "Summing-up the Position" in this book on the History of Corporal Punishment which deals with the fears presumed to be part of the deterrent which applies and results from the retention of corporal punishment. The author says:
But the fear Induced by corporal punishment belongs primarily to none of these categories. It is essentially and pre-eminently the fear of physical pain. It is the fear inevitably associated with suffering of a degrading, deliberate and debasing nature. Fear which is associated with and restricted to physical pain, as a punitive factor, possesses no true reformative power. Thus the qualities which commended corporal punishment to primitive and savage races, and which still provide strong justification for its employment by the individual as a means of exacting private vengeance, become indefensible as applicable to any penological system of the modern state.
Later on the author refers to another aspect of it which I should like to quote.
In many quarters the fear has been expressed that the abolition of the "cat" and the birch would lead to an increase in the incidence of crime. There is no justification for any such contention.
Historically, as the demand has been made for the removal of the more severe forms of punishment, the cry has gone out that if this is removed there will be a flood of crime. Nobody will be safe in his bed. Finally, when enlightened governments have taken action to reduce the bestiality in our penalty sections those fears, so vigorously expressed, have proven to be unfounded. The abolition of

corporal punishment for women and girls did not lead to any increase in crime amongst the female population.
One of the most powerful and most convincing arguments against any form of corporal punishment is that the sentence which the judge or magistrate may consider merely adequate will be transformed, by those responsible for its application, into a brutal attack or the severest torture reminiscent of some of the days of the Spanish inquisition. These, Mr. Speaker, are some of the reasons why those of us who favour the abolition of corporal punishment are supporting this bill.
There is a further reason, of course, contained in the report of the committee of the Senate and House of Commons which reported on this matter in 1956. I am quoting from page 47 of the final report of that committee, paragraph 27:
Accordingly, the committee recommends that corporal punishment be abolished for any of the offences for which it is presently prescribed in the Criminal Code.
The broader aspects of the reform of our penal system, which I understand are receiving most active consideration at the present time by the government, must embody some other set of principles, principles which will result in remedy, reform and rehabilitation rather than extracting what I submit are the outmoded, savage penalties presently prescribed in the Criminal Code.


Harold Edward Winch: Mr. Speaker, I welcome this opportunity of speaking for a few minutes in support of the bill which has been introduced by the hon. member for York-Scarborough (Mr. McGee), asking this house to pass an amendment to abolish corporal punishment as part of a judicial sentence in Canada. It is rather extraordinary, and to our shame, that Canada is one of the few countries in the world that still retains the lash and the paddle as part of a judicial sentence. I can only express the hope that hon. members of this house who have to deal with matters of law can visit or will visit our institutions and ascertain just what takes place there. I am certain that almost every person who has been inside a penal institution and has seen the lash and the paddle used, or who have been informed how they are administered, could never stand in his place in this house and oppose the abolition of the lash or the paddle.
May I just take a few minutes to explain the procedure to those who are keenly interested in this question, and tell them just what that means. When a person who receives a judicial sentence of the lash or paddle, in accordance with the order of the court, the 66968-9-147
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warden of the penitentiary has to carry out that order. The inmate in prison is taken down to a small room in the basement of the penitentiary. The lash, as was pointed out by the mover of this bill, is sometimes known as the cat-o'-nine-tails. I disagree with only one statement that he made. It is different from the book he quoted. It is now eight lengths of nylon cord. They have modernized it to that extent. It is now nylon cord.
As I said, Mr. Speaker, the inmate is taken into a small room. If it is the lash, there is a table sloping at a 30 degree angle up against the wall. At the end of that table embedded in the concrete are steel plates. The feet of the inmate are fastened by leather straps to the steel plates in the concrete so that he cannot move. He is then stretched along the inclined board, with arms extended, and his arms are strapped to the board so as to be completely immovable. He is stripped to the waist.
Then, Mr. Speaker, in case you have never seen that procedure, may I tell you that a leather belt is put around the kidneys because a blow on the kidneys can kill. Then the man who is strapped there, his feet on the floor, his arms extended, with protection so that he cannot be killed, with a leather belt over the kidneys, gets in Canada what is known as the lash. I want to tell you Mr. Speaker, that I have personally visited penal institutions in Canada where a man has been ordered the lash by a court, and I have seen men in hospital with their backs wrecked by the lash seven days after they received it.
If the order is not for the lash it is for the paddle. Although it is called the paddle, actually it is the strap. The strap varies in Canada according to the institution. It does not vary in length nor width nor thickness but it varies as to whether or not it has any holes in it. About half the institutions use a strap called the paddle with holes. The difference in the administration of that form of punishment is that instead of being on a sloping form-their feet are still strapped to steel plates to the floor-they are bent over a table with their arms outstretched and the leather belts holding their arms. The trousers are down. The leather belt is over the kidneys. Then the paddle is administered. It is bad enough without the holes. But if the leather belt has the holes in it, the flesh is lacerated. There, too, Mr. Speaker, I have seen these men in hospital.
We do not forget the crimes of these mei but we should give consideration to the purpose of their punishment. Surely we in Canada have now reached a point of understanding of modern penology to realize that the purpose is not a matter of revenge but for the protection of society. It is an answer

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that they are obliged to give to the people for an anti-social act. But I believe- especially from knowing the present Minister of Justice (Mr. Fulton)-in the application of education in an endeavour to rehabilitate.
I have long had an interest in penology. About five years ago I visited a penitentiary and I asked the warden if he would call into his office everyone he knew of in that institution who had received the lash or the paddle either as a judicial punishment or as part of a discipline under the authority of the warden's court and the warden did so. That afternoon the warden and I together interviewed right in the institution some 17 men, I think it was, who in their criminal life had had the lash or the paddle. They were told to speak absolutely bluntly. It is all on the record.
The warden said, "This is Mr. Harold E. Winch, M.P. and he wants to ask you some questions." So in turn we questioned every inmate. We asked, "Are you a better man because of corporal punishment?" "What is your reaction to corporal punishment?" "Is it a detriment to further crime or to breaking the law of the institution?" "Has it made you a better boy or a better man?" Sixteen of them said no and one said yes. It was most interesting, Mr. Speaker, that one chap said "It almost made a murderer out of me." He said, "The first time I ever received corporal punishment was when I was at a reformatory in Ontario, and I got the paddle because I broke the law in the reformatory; I had one dollar in my pocket and I was not supposed to have any money. After what happened," he said, "I swore I would get that man." He escaped from the reformatory and he and a chum went across the border. They stole a car, stole a gun and came back. This boy told me-and the warden can confirm what I say-that he had had the man that gave him the paddle in the sights of that rifle. However, luckily for him, his chum woke up to what was taking place and removed it. That is one experience I had along with the warden in talking to those in the institution.
The hon. member for York-Scarborough mentioned the joint committee of the Senate and the House of Commons which investigated this matter. Our joint committee had the counsel of that committee, a well-known lawyer of this city, interview in the city of Toronto a number of men who had received the lash or the paddle but who are now out of the institutions. Most of them have been very well established in the business life of the city of Toronto. The members of our committee kept completely away. The interviewing was done only by our counsel, and the report of our counsel

referred to the men only by a letter of the alphabet so that the names of the individuals were kept completely in confidence. I would invite the members of this house to read the transcript of the evidence of that interview with those who have become rehabilitated, some of them prominent in business, and who had had the lash or the paddle. With only two exceptions their replies were that corporal punishment antagonizes a man, makes him bitter and vicious, and more anti-social than when he was sentenced.
Mr. Speaker, there is the matter of the transcript record of the three-year study of the joint committee of the House of Commons and the Senate; there is the record from such authority as that quoted by the mover of this bill; and there is my own experience. But may I just add one other word and it is this. In a few days or weeks this house will be asked to pass millions of dollars for the maintenance of penitentiaries in this country, millions of dollars for the maintenance of police forces in this country. All that money comes out of the taxpayers' pockets. As I said before, the Minister of Justice (Mr. Fulton) I am sure has in mind modern methods of rehabilitation, not crocodile tears or simply retention and education. Surely when we recognize the cost of keeping a man in a penitentiary, which is I think $4.70 a day, it must be the hope of the government, the minister and the members of this house that when these men are released from the penitentiary they shall not return. We spend, as I say, millions of dollars every year, and we are going to vote millions of dollars inside the next few weeks for the following twelve months to try to rehabilitate those who have proven themselves anti-social.
Mr. Speaker, in nearly every penitentiary across this country now we have wardens of course, doctors, psychologists, psychiatrists and educationalists, and we are teaching the inmates vocations. If by judicial sentence we have a continuation of what is still the law in this country when the judge orders the lash or the paddle, I am afraid that the money spent in providing the educators, the psychologists and psychiatrists is wasted when a man is strapped and has his back lacerated or his pants taken down and his backside lacerated. It just does not seem to make sense.
But in particular I want to emphasize the absolute stupidity of some of the judges who give a sentence of lashes in two sections; one shortly after the prisoner is admitted to jail and then later before he comes out, so that all that work done by the educationalists, the vocational training men and the doctors is ruined because of the law as it stands today. I am certain from personal interviews, studies and my knowledge of this question that the

bill which is now before us is a bill which demands worthy consideration of all the members of this house, and I sincerely hope that we will wipe this blot off Canada's name and cease to be one of the few remaining countries of the world to use the lash and the paddle as part of a judicial sentence. We do not want to see, because of the approach to this problem of the Minister of Justice and the government, the taxpayers' money being sent down the drain. I hope that this bill which has been introduced many times now will receive the vote of all members of all parties in this House of Commons.


Mr. R. J. McCleave (Halifax):: Mr. Speaker, it is a pleasure for me to second the bill proposed by my hon. friend from York-Scarborough (Mr. McGee). Only a week ago it seems we were on opposite sides of the fence on a somewhat similar bill involving capital punishment. I had some reservations about that question, but I have no reservations about the fact that my hon. friend through his fine argument presented this afternoon, backed up by the persuasive emotionalism of the hon. member for Vancouver East (Mr. Winch), is on the right track. I hope in my own modest way to produce some statistics for the attention of the house which will support the conclusions which have been reached by both those hon. members, and also the conclusions which have been reached in other countries in the world which have decided to abolish this particular method of punishment.
But first, sir, may I be permitted to examine two arguments that will probably be used by those who are in favour of retaining this particular form of punishment. The first one is probably best expressed by that old master of the English law, William Blackstone, Oxford's first Vinerian professor of law:
Of all parts of a law the most effectual is the vindicatory. For it is but lost labour to say, "Do this, avoid that", unless we also declare, "This shall ^ be the consequence of your non-compliance." We must therefore observe that the main strength and force of a law consists in the penalty annexed to it. Herein is to be found the principal obligation of human laws.
This, Mr. Speaker, may be a persuasive argument at first blush, but I suggest to the house that this argument contains a fallacy, and that is that there are other methods of punishment available for offenders quite apart from the inhumane one of corporal punishment. The other punishment available is simply the threat or the actuality of imprisonment.
The second argument that might be used to maintain the present situation comes from the old adage, "Spare the rod and spoil the
66968-9- H7J
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child." This is a wonderful field for professional and amateur psychologists, and anyone who has seen children in action or been a child himself, which takes in everybody, has a wonderful opportunity to vent his or her personal opinion on this philosophy. But again, I think that to spare the rod and spoil the child has no particular application to this argument. For one thing, the child in the home loves the parent and expects the parent to assert a certain amount of discipline. The child also knows that if the parent is forced to take drastic measures, such as a spanking, if it is done out of a love for the child, while the child's love might abate for the moment under the stings of the punishment, it will return in full force and be strengthened by respect.
On the other hand, in the penal institutions of this country, Mr. Speaker, it is very unlikely that any of the inmates love the warden or that the warden, for that matter, loves the inmates, and the imposition of the rod under such circumstances would not be accompanied by the factors which play such a vital role in the home, namely the factors of love and affection and the need for children to be obedient to their parents. I hope in those short words that I have helped dispose of two of the arguments that will probably be used by those who favour the retention of corporal punishment.
Now for the matter of the statistical argument. Does it work anyway? This was considered before the joint committee of the Senate and the House of Commons in 1954. I have their report and I shall read very briefly from it if I may. I do not think the statistics given that committee by the Canadian authorities are particularly helpful, because the numbers involved are not large enough. Then I will go on to quote some of the findings of a committee in the United Kingdom which dealt with a much larger number of offenders, and I think I can prove statistically beyond all reasonable doubt to even the most sceptical in this House of Commons that there really is no merit in retaining the use of the lash or the strap. As to the Canadian picture, it will be found at page 781 of the joint committee's report. Question No. 20 asked:
In your opinion, does corporal punishment operate as a deterrent to (a) the young offender, (b) the recidivist, (c) the sexual offender?
There are answers to this question from several of the western provinces-British Columbia, Alberta and Saskatchewan. There is no comment from Ontario, and some actual figures from the commissioner of penitentiaries. The answer from British Columbia is that there seems to be some evidence of paddling having been useful in helping young

Criminal Code
offenders to redirect their activity. From Saskatchewan, there was the following reply: We know of no evidence to support the view that corporal punishment in fact operates as a deterrent to any group of offenders.
These are, apparently, opinions plucked out of the air by attorneys general or by people in their offices who may be softhearted or hardhearted as the case may be. However, the commissioner of penitentiaries did offer some statistical fodder to the committee. I suppose the main question really is whether the lash, once given, tends to ensure that a person will not repeat his offence, so I do not intend to deal with all the statistics which the commissioner presented to the committee, though I will deal with some of them, those which concern the recidivists. One hundred and ninety three persons were awarded corporal punishment who had previously served sentences of imprisonment in the period from January 1, 1943 to December 31, 1953. The figures with regard to these people are as follows:
Subsequently convicted again after having
received corporal	punishment	
59No record of further	sentences	
56Still incarcerated	
78Total	
193
I myself had a very interesting interview with a recidivist a few weeks ago. This recidivist had recidivisted time and time again, because he had spent 10 different terms in Canadian penitentiaries. It was his opinion, in the light of his studies, that recidivism took place within one year of an offender being released from a penal institution. I think that is significant, for if there is anything about the lash and the strap it should be that the scars and the humiliation and the degradation of undergoing such punishment are still fresh within this period, if not upon the body then on the mind at least of a released prisoner. And yet statistics from Canada supplied by the commissioner of penitentiaries seem to indicate, if they indicate anything at all, that the lash has no particular effect.
May I turn now to what has occurred in the United Kingdom, and I use as my source material a report of the departmental committee on corporal punishment, 1928, issued by Her Majesty's stationery office. This committee had this to say as reported on page 80:
We have given due weight to the opinions which witnesses have expressed to us on this point on the basis of their personal experience; but we thought it desirable to supplement this evidence by obtaining some statistical information regarding the subsequent record of offenders who have been dealt with by means of corporal punishment. Statistics based solely on the subsequent

records of persons sentenced to corporal punishment would be defective in two respects. First, they could not show what the man's subsequent career might have been if he had not been flogged. Secondly, as corporal punishment of adults is always combined with a sentence of imprisonment or penal servitude, they could not show how far the subsequent career may have been influenced by the term of imprisonment or penal servitude. No figures could elucidate these two points completely; but, in order to throw some light on this aspect of the matter, we have obtained figures which enable a comparison to be made between the subsequent record of persons who actually received corporal punishment and of persons who were liable to corporal punishment but were dealt with by other means.
The statistical analysis which the committee presented with the help of the home office and New Scotland Yard was an analysis of the records of 440 persons who were convicted of robbery with violence during the period 1921 to 1930. The report states:
Of the 142 flogged, two have subsequently been convicted of a second offence of robbery with violence, and in a third case a charge of robbery with violence was dropped when the offender was sentenced to ten years' penal servitude on another charge founded on the same facts. Of the 298 who were not flogged, three have since been reconvicted of robbery with violence: but two of these men were mentally unstable and it seems very doubtful whether either of them would have been restrained from committing the second offence if he had been flogged on the first occasion.
And the conclusion which the committee reached was this:
So far as these 440 cases are concerned, it appears that a sentence of imprisonment or penal servitude without corporal punishment was no less effective in deterring the offender from committing a further offence of robbery with violence than a sentence of imprisonment or penal servitude combined with corporal punishment. As regards subsequent offences other than robbery with violence, the record of the men flogged was bound to be worse than that of those who had not been flogged. Of those flogged 55 per cent were subsequently convicted of serious crime, as compared with 43.9 per cent of those not flogged.
I find this report very interesting, and I hope other hon. members will also. I think there is much food for thought in this very fine study which was made in the United Kingdom. The report continues:
It might have been assumed that this would be due to the fact that the persons not flogged included a higher proportion of first offenders who might be less likely to offend again: but when the cases were subdivided into groups according to the previous record of the men concerned it was found that, even among the first offenders, the subsequent record of those flogged was less satisfactory than that of those who were not flogged.
Time is getting on, and there are others who wish to take part in the debate. I think that perhaps I have given enough statistical information to the house at least to knock the props out from under those who would argue

that flogging and the lash do have a beneficial effect and do tend to alter the personality of a prisoner who undergoes this method of punishment.
In conclusion, if I may, I should like to make two more observations. One is that the mere fact of subjecting a human being to the inhumanity of the whip undoubtedly sets a mark of Cain upon that person. If not, it gives him a peculiar stamp in his own circle and sets him apart from ordinary mankind. It may even, in certain circles, tend to make him a heroic figure, a type of outcast beatnik who is given recognition because of the fact that all the forces of society have combined to subject him to the most inhuman of treatment.
If I have any reservations about the bill I think they would only go so far as the matter of prison discipline. Perhaps the lash or some form of physical punishment is necessary in prison. I am not sure about that. Perhaps my hon. friend will deal with it at some future time. I know we are not going to pass this bill this afternoon. Let us be frank about it. I also heard my hon. friend's heartening words that action may be undertaken by the government. Our debate this afternoon will at least serve the useful purpose of bringing this matter again to the attention of the Canadian public and provoking some new thought about what has become in this country a rather fearful and degrading sore on our body politic.
(Translation):


Mr. Adrien Meunier (Papineau):: Mr. Speaker, I would like to tell the house that I support this bill. When the Criminal Code was amended in 1954, we entrusted a joint committee of the house and Senate with the responsibility of making appropriate investigations with regard to capital and corporal punishment, and lotteries.
In 1956, the joint committee of the Senate and the House of Commons reported to us after investigating the abolition of capital punishment. There is, to my mind, no need to quote from the statements by expert witnesses like doctors and others, who were heard before that committee and who repeatedly explained how corporal punishment was applied. Following the evidence heard, the committee came to the conclusion that capital punishment should be abolished. The relevant report was published at that time in the press and we were able to learn the reasons in favour of abolishing the lash as well.
Some of my learned friends opposite have studied the question. The hon. member for Scarborough (Mr. McGee)) gave us some good arguments and the hon. member for
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Halifax (Mr. McCleave) gave lengthy quotations. However, the hon. member for Vancouver East (Mr. Winch), who was a member of the committee which studied the abolition of capital punishment, gave us a description of what that punishment is today, of its bad aspects and detrimental consequences, leading up to the conclusion that it should be abolished.
I share the views of those hon. members and I am in favour of abolishing capital punishment. I shall however limit myself to the following two reasons: the effects of capital punishment on the indivdual are very bad. It induces in him the idea of revenge against society and he becomes embittered against his fellow men. As a matter of fact, that measure which was introduced in the middle ages is obsolete today. Moreover, judges in criminal cases no longer sentence anyone to the lash. Why? Because they know of its detrimental effects on those subjected to this punishment.
Then another amendment was made to the Criminal Code which today would justify the abolition of the lash. The amendment was passed several years ago when the penalty of life imprisonment was introduced for individuals known as habitual criminals.
To those who are opposed to the abolition of the corporal punishment and who say: "What about the man who does not want to mend his ways, who is always before the courts, and constantly sent to prison?" We might answer that, after a third charge, the crown in each province may lodge a complaint and prove to the courts that such a man, being recognized as an habitual criminal, could be given a life sentence.
For all those reasons I believe we should now abolish corporal punishment because it is bad for the individual. I believe that, in a society which prides itself on being modern and in an advanced state of civilization, this form of punishment is no longer warranted and I am convinced that if it were eliminated from our statutes, it would be all to the advantage of the individual.
(Text):


Arthur Smith: Mr. Speaker, it will be suggested, of course, that I am talking out this bill and I would not consider that I had been offended if such an accusation were made because I am opposed to this bill. I recognize that a great body of public opinion is in favour of the intention behind this bill. Many eloquent speeches today have expressed the point of view which I believe is widely held. I would suggest, however, that if I had an opportunity to speak at great length I would also express the view of a large body of public opinion

Freight Rates
in saying that I believe the terms of this bill are far too broad and general. It deals with the subject in a manner which in effect gives little consideration to the other side of the argument and there does exist another side which is both substantial and important.
We have listened this afternoon to a great deal of maudlin sentimentality. I agree with the argument that corporal punishment should not be imposed to the extreme but let us bear in mind what it is intended to prevent. It is an important deterrent to the recurrence of many crimes. For instance, section 136 of the Criminal Code provides that everyone who commits rape is guilty of an indictable offence and subject to imprisonment or to be whipped. I have not reached the position where I could accept the abolition of corporal punishment in respect of crimes of this nature. I do not believe that a prison term is fully adequate. Corporal punishment could serve as a deterrent to those who commit crimes of the nature I have mentioned. The hon. gentleman who introduced this measure said that one who receives corporal punishment may carry the memory of it to his grave. I suggest that with respect to some crimes it is perhaps justifiable that the individual should so do.


Harold Edward Winch: He may deserve it but what good does it do?


Arthur Smith: The hon.
gentleman who interrupts had an opportunity to take part in this debate.


Mr. Speaker:: Order. I am sorry to interrupt the hon. member but the hour for the consideration of public and private bills has expired. The house will resume the business interrupted at five o'clock.



FREIGHT RATES


[Stage Direction]
The house resumed consideration in committee of the following resolution-Mr. Hees -Mr. Coates in the chair:
That it is expedient to introduce a measure to direct the board of transport commissioners to require by order the reduction of class and commodity freight rates (other than competitive rates) charged by carriers subject to the order of the board dated November 17th, 1958, and to authorize payments to reimburse carriers for the resulting reduction of their revenues up to an aggregate amount of twenty million dollars.
At six o'clock the committee took recess.
[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
George Harris Hees: Mr. Chairman, I might take this opportunity to answer the questions asked by hon. members so far in the debate. The hon. member for Fort William asked that the subsidy should not discriminate against northwestern Ontario. I have already said that there will be no discrimination against any province or region. The hon. member for Port Arthur asked, first of all, what normal rates are, what does it mean when rates are differentially related and what effect will the proposed subsidy have on the existing bridge subsidy.
Normal rates are the ones which have taken the full percentage increases authorized by the board and do not include competitive rates. The differentially related rates referred to are the joint rail and water rates and they are lower than all-rail rates. With respect to the hon. member's inquiry whether this measure will affect the bridge subsidy the answer is that this subsidy is in addition to the bridge subsidy and not in substitution for it in any way.
The hon. members for Welland and Essex East referred to rates on agricultural products moving into Canada from Michigan compared with rates from southern Ontario to points in Canada. The reason for the difference is that the United States produce comes in on international rates which in this instance are lower than the local, domestic rates. These local, domestic rates will have the benefit of the subsidy and the international rates will not. If there is still any discrimination the shipper can complain to the board of transport commissioners and have his complaint investigated.
Lastly, the hon. member for Laurier asked what is the formula which the board of transport commissioners will use to distribute the $20 million subsidy. From the discussions I have had with the board I can say that there will be a horizontal reduction in the level of non-competitive class and commodity rates from the 17 per cent increase authorized by the board to approximately 10 per cent, or a 7 per cent reduction. In effect there is no real formula. This is simply the method by which the subsidy will be applied.


Douglas Mason Fisher: Mr. Chairman, while I appreciate the rather brief answers we have had from the minister with regard to certain questions I still feel that we deserve a fuller exposition. For example, with regard to the question of the hon. member for Laurier, just how is this formula going to be applied across the country? We want to get some idea of the regional position. Let me put it this way. The Canadian Pacific railway dominates freight rates in so far as western Canada is

concerned. In the way this formula is going to be applied will more of the subsidy go to one railway than to the other because of regional differences? I see the minister shaking his head. This means, of course, that his explanation has not been thorough and clear enough. I want him to remember all the way through that, as I told him at the beginning, I am approaching this matter from the point of view of the boob, the amateur who wants a clear explanation.


George Harris Hees: If I may answer the hon. member's question, the $20 million will be used in what we, after a great many discussions, consider will be the most effective way to relieve the burden on the person who pays for freight rate increases, namely the consumer. The method which has been indicated to us and which we believe will provide the most effective relief is to apply the $20 million right across Canada to all non-competitive class and commodity rates because those are the rates which take the full increase and bear most heavily on those people whose goods have to be carried over the long haul.
The board of transport commissioners has advised us that in its opinion the application of the $20 million to the non-competitive class and commodity rates of the railways and the water carriers affected will make it possible to reduce these rates by approximately 7 percentage points, from 17 per cent to 10 per cent. We believe that this method of applying the subsidy will give the greatest relief to the people who need the relief the most, the consumers whose goods are carried on the long hauls.


Douglas Mason Fisher: Let me take a specific example and ask the minister for information on it. We have a plywood mill in our region which ships plywood into the Toronto market, a haul of around 800 miles. When the 17 per cent increase came into effect it applied to all plywood shipped by that mill into the Toronto market but the increase did not apply to British Columbia plywood entering the Toronto market because competitive rates were available via United States lines from Seattle through to southern Ontario. Are we to assume that under this new scheme the subsidy will apply so far as plywood from our particular area is concerned and will not apply on the British Columbia plywood because it was not affected originally by the 17 per cent increase?


George Harris Hees: From the type of question the hon. member has asked I think it is very obvious that to obtain answers to complicated, specific questions such as he has asked is the reason that a bill of this kind is referred to the committee on railways,
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canals and telegraph lines. I think the hon. member must realize that to become a freight rate expert able to answer off the cuff any freight rate problem that is propounded requires 10, 15, 20 or 30 years of continuous work on freight rates. That is the length of time that our expert on freight rates with the board of transport commissioners has spent on this subject. Those working with him have spent shorter periods of time but a great many years doing the same kind of work. I suggest to the hon. member, who is a member of the committee on railways, canals and telegraph lines, that the best way to get specific answers with respect to specific commodities in specific districts is to give the bill second reading as soon as possible and get the committee operating. He can then ask questions in that committee to his heart's content. He can ask them of the experts who will be there and I feel sure they will be able to give him the answers or at least will do their very best to do so.


Douglas Mason Fisher: That may be so but I am not convinced that we will get an exposition of policy. What so often happens in a committee is that you go there and you have technical advisers there and they will give you the answer in detail to a specific question but when you bring up a general question they say that it involves policy and the minister or the government determines the policy. That is why I was hoping we could obtain a more complete clarification of policy. I see the Minister of Trade and Commerce in the chamber. Of course we all know that according to the reports about this cloak and dagger affair he was the one who threatened to resign. Since he felt so seriously about the matter that he threatened to resign, maybe he can give us a clear exposition of just what is involved in this interim 12-month policy and how it is going to apply in a general way across the country in the various regions.


Gordon Minto Churchill: Mr. Chairman, I shall
participate in the debate to the extent of denying the hon. gentleman's statement. I did not threaten to resign.


Lionel Chevrier: There is a matter which I think has not been answered satisfactorily by the minister, and I am sure he will agree with me when I go into it in a little greater detail, not in any way to delay the passage of this measure because I know that the minister and the committee are anxious to get it through. The point I want to make now is one which has already been made. I want to insist upon it because I do not think it is fair for the minister or the house to ask parliament to pass this measure unless

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we have a statement from him or from the Prime Minister dealing with the royal commission on transportation. I think that the least that can be expected of parliament when a measure of this kind is being debated, and when parliament is being asked to pass a subsidy to provide for $20 million in reduction of the judgment of the board of transport commissioners, that the minister or someone on behalf of the government should tell parliament what the other half of this measure is going to be.
I want to refer to a statement which was made by the acting prime minister in the absence of the Prime Minister and which was given to the press concerning this whole matter. In his statement he dealt with two matters. He dealt first of all with this interim measure and he dealt also with a study which would be made of the whole transportation matter. He said this in his statement which is dated November 26, 1958, and I quote:
A study is being undertaken at once to work out measures to relieve against inequities in the freight rate structure, including any that may be aggravated by the present increases.
I presume the minister was then referring to this measure which is now before us. He went on to add this, and I quote:
Steps are also being taken to set up a suitable body to review the general field of railway problems and policy. This study will include not only a comprehensive consideration of the railway freight rate problem-including the situation of the long haul provinces in the west and in the Atlantic region-but also other specific problems which require solution if Canada's railways are to serve the national interest without prejudicing particular industries or areas.
Then he went on with an additional part to his statement with which I shall not bother the committee at this time. The point I make now is this: I do not think that this measure should be allowed to pass at this stage without the minister giving some indication as to when the royal commission is going to be established, if it is a royal commission; what the scope of the royal commission is going to be and whether or not it will deal with inequities, discrimination, inequalities in freight rate structures and what other matters will be referred to it with reference to a national transportation policy. I invite the minister at this stage to tell us what is the policy of the government with reference to the other half of this freight rate matter.


George Harris Hees: I might answer the hon. member's question now, if I may. This bill deals with the question of the government making available a $20 million subsidy to relieve certain freight rate burdens which the government believes should be relieved. The

statement on the setting up of a royal commission will be made by the Prime Minister in the course of the next few days. I am not in a position to make it now, and therefore it cannot be made. It will be made by the Prime Minister who will outline the matters with which the royal commission will deal and how it will operate. My suggestion to the hon. member and other members of the house is this: As soon as possible, we should pass this resolution, give the bill second reading and have it go to a committee where it can be thoroughly studied. This will take some time. I feel absolutely positive that by the time the bill comes back to the house, and certainly before there will be any chance to have it passed in its entirety, the Prime Minister will have made his statement regarding the royal commission and the hon. member, as well as others, will be able to express his views on it if he wishes.


Lionel Chevrier: Will the minister give the house an undertaking that before second reading of the bill the Prime Minister will announce the royal commission and the terms of reference thereof?


George Harris Hees: I did not say before second reading, I said before the bill is passed. As the hon. member knows there is second reading, then the measure will go to a committee. It will come back to the committee of the whole house when a free debate is allowed. Then, there is third reading after that. I believe this gives ample opportunity for debate on this matter after the bill has been considered by the committee on railways, canals and telegraph lines. I urge hon. members to make it possible for the bill to go to that committee and be examined. This will take some time as there is necessary work to be done on the bill. Then, the measure could come back and I feel sure, by that time the Prime Minister will have made his statement.


Lionel Chevrier: Can the committee get an undertaking from the minister, then, that before third reading of the bill there will be a statement or announcement with regard to the royal commission?


George Harris Hees: Yes, I make that.


Hazen Robert Argue: I do not agree that the commitment of the minister is entirely satisfactory so far as a discussion of the royal commission is concerned. As the minister well knows and as the chairman is well aware, second reading provides for a study and general discussion of the bill or anything that might come within the terms of the bill. Once the bill has been given second reading and once we are in committee of the whole

on the bill, then the minister well knows that you must keep your discussion confined to the clauses of the bill.
As I understand it, there is no clause in this bill that has anything whatever to do with the setting up of a royal commission, so we will have no opportunity under the rules of the house to discuss the government's policy so far as a royal commission is concerned. This afternoon, on orders of the day, when we probed the government the hon. member for Vancouver East, I believe it was, asked about a royal commission, asked about the government's policy. The Speaker, and I think quite rightly, said that since today we would be discussing this resolution in committee the proper place to find out about the government's policy was in committee. We have been trying all afternoon to find out what is the policy. There has been no announcement as to the terms of the royal commission. The Prime Minister, according to a press statement, stated during the Easter recess that such a royal commission was to be set up. Surely, when we are discussing the government's transportation policy, that is the time to discuss the royal commission.
I would ask the minister if the order in council has been passed setting up the royal commission. I would ask him if the order in council has been passed whether the terms of the order in council can be given to the committee because surely it is not good enough for the members of this house to be asked now to deal with this very important resolution and approve a subsidy of $20 million, yet be left entirely in the dark so far as the royal commission and its terms of reference are concerned. I see the Prime Minister is in his seat. I think he could be most helpful to the committee. He could tell us what the scope of this royal commission is going to be.
Another thing about which I am most concerned is the position of freight rates in this country within the next 12 months or between now and the period when the royal commission is considering the statements put before it and before the commission makes its report.
The hon. member for Laurier this afternoon was asking-and he can correct me if I misinterpret what he said-what position the board of transport commissioners would be in if a new application is placed before the board, if in the meantime the railways are faced with a wage increase. Does this mean that the board cannot increase freight rates within that interim period? The Minister of Transport side-stepped the question. He said that he was not able to say whether or not that was the position.


An hon. Member:: That is all he could say.
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Hazen Robert Argue: That seems to be a rather
strange attitude for the minister to take, in the light of the statement he made in this house on March 24 when he said, as reported at page 2208 of Hansard:
In the meantime the government does not propose to permit any further general increases in railway freight rates.
Does this mean that the application now before the board will be left in abeyance? I hope that is exactly what it means. Does it mean that there will be no further consideration of this application in the meantime? I think that is the position that parliament should take. But I think that the minister should clarify to the committee this statement that he made on March 24, particularly in the light of the discussion this afternoon. I think we are entitled to be told at this time what are the terms of reference of the royal commission and whether or not this means that until the royal commission makes its report-at least until that time-there is to be a ceiling on freight rates, namely the present ceiling, above which they will not be allowed to go. I should like to know whether the royal commission which the government has in mind will have on it persons entirely different from the persons who are now on the board of transport commissioners. As the hon. member for Laurier has said, I think that when parliament is being asked to consider this half of the government's transportation policy we should be given information as to the scope of the royal commission, when it will be set up and who the personnel will be.


Harold Edward Winch: I am most happy that the Prime Minister is now in his seat this evening. On the orders of the day this afternoon I asked a question which Mr. Speaker said could be answered and dealt with under the business of the day. A great deal of discussion has taken place between that time and now. I want to say that I understand the position of the Minister of Transport. I understand that in the resolution he is asking for an expenditure of $20 million in one year but that he also realizes that that is not the answer. I appreciate the position of the Minister of Transport, having regard to the fact that there is to be a royal commission. But the establishment of a royal commission is a government decision and a government policy. Therefore, because it is a government decision and government policy, it can be announced only by the Prime Minister himself. As I say, I appreciate the position of the Minister of Transport who is trying to answer questions which he has not the power to answer. But, Mr. Chairman, because this matter of transportation policy, the royal

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commission, is of such great importance, I am grateful that the Prime Minister is now in his seat because we can now direct to him a question. According to his cabinet ministers, when it is a matter of government policy such as the terms of reference of a royal commission, he alone can make that statement. Without further words, while we are still on this resolution will the Prime Minister now give us some indication as to the terms of reference of the study that is to be made of the transportation system of Canada? May I ask that question of the Prime Minister?


Joseph Pierre Albert Sévigny: Shall the resolution carry?


Hazen Robert Argue: No, Mr. Chairman.


Harold Edward Winch: No, Mr. Chairman. This afternoon I asked a question and Mr. Speaker said it could be asked under the business for the day. May I say to the Prime Minister that I watched him and he nodded his head all the way through. I asked a question on the royal commission and its terms of reference and the Prime Minister nodded his head in complete agreement with the Speaker and myself that it would be done today. I am now asking the Prime Minister whether he is in a position to give the committee any information on the royal commission and its terms of reference; or, if he will not do that, may I ask what is his broad objective in solving the competition problem in Canada?


John George Diefenbaker: Mr. Chairman, may I first refer to the nod to which reference has been made. The nod was in appreciation of the fact that the Speaker's ruling was in keeping with the rules, not with regard to those matters alluded to by the hon. member.
In so far as the royal commission is concerned, the minister has been in a position to make the announcement which he has made, namely that the terms of the royal commission will be placed before the house before the bill is passed. That is the undertaking that the minister has given and that undertaking will be upheld.


Lionel Chevrier: May I just ask a further question for the purpose of clarification? It is quite true that the minister has given that undertaking and I am sure the committee is appreciative of that fact. But there is a point which has been raised by the hon. member for Assiniboia-and I think it was raised earlier-namely that if the announcement is not made until third reading-which broadly speaking is the undertaking which the minister has given and the Prime Minister has confirmed it-then there will not be an opportunity of discussing either the royal commission or its terms of reference. I am sure the Prime Minister
would not want that to be the position because, in the statement which the acting prime minister made on the whole subject in November of last year, it was clearly stated that this matter was divided into two parts, one the interim measure which we now have before us and the other a study of some kind or nature that was to be made of the whole transportation policy including the freight rate structure, inequities therein and so on. The second aspect of this policy we have not got. We are going to get it soon. Can we have from the Prime Minister an assurance-and I am sure the Prime Minister would agree with this procedure-* that when the announcement is made it will be made at a time when we shall have an opportunity of discussing its terms of reference.


John George Diefenbaker: I am sure the government would be happy to have any suggestions as to those terms which might be embodied in the reference. The responsibility as to what terms will be embodied in the submission to the royal commission is, of course, the responsibility of the government. I remember on several occasions discussions in the past when I was sitting on the other side of the house when the government of those days pointed out that the responsibility for the terms of reference of a royal commission must necessarily be that of the government. I had thought that out of the discussion during the resolution stage recommendations and ideas would be advanced by hon. members in all parts of the house setting out their views which might be incorporated therein.
The objective was clearly set forth on the occasion in November by the Minister of Public Works. That still is the objective and the purpose, and any ideas and expressions of views in this regard will be welcomed. I know the hon. member and I will welcome any views at all. The hon. gentleman, who was minister of transport, is well qualified in every way by his experience to place before the committee those views which he suggests be included in the terms of reference of the royal commission. I have no hesitation in saying to him from the manner in which he has approached the subject, as has also the hon. member for Vancouver East, that the terms, when they are brought before the house, will be the terms included in an order in council setting up the commission. They will be subject to discussion, but there will be no alteration of them after that.
The former minister, the member for Laurier, knows what a tremendous problem transportation is at the present time. There have been injustices through the years

because of the geography of our country and disparity in population, the wide distances between various points, and many other reasons which would warrant the setting up of a royal commission. There was set up the Turgeon commission, which went into the transportation problem. On the evidence placed before that commission and on the report which it made I would reiterate what I said and what the hon. minister said, that when the royal commission is set up both hon. members will be given the opportunity to express their views. But I point out that by that time the terms will have been determined, and there cannot be, under normal circumstances, an amendment of the terms. Therefore I now ask hon. members to place before us their suggestions and views on this matter to the end that their views may be fully considered by the governor in council in the determination of the ambit of the royal commission.


Lionel Chevrier: I thank the Prime Minister for the intervention he has made in the debate and for the suggestion he has just made. I have too much respect for the government and the Prime Minister to make any suggestions at this time in connection with the terms of reference, because I think the committee will agree that a matter of this kind is of such importance that at this stage, at least, I should not venture to make any suggestion, although I would like very much to make suggestions when the time comes. The point I was making, Mr. Chairman, is this, and I say this with the greatest respect, that I do not think the Prime Minister is adopting the right attitude with respect to this matter. I say this respectfully, and I am sure he will not take it otherwise. It seems to me that when we in this house are asked to vote a subsidy of $20 million, that is one-half the policy of the government with reference to the settlement of the freight rates question.


John George Diefenbaker: One-half of the policy?


Lionel Chevrier: Yes, because the other part of the policy, if the Prime Minister prefers, has to do with the establishment of the royal commission. If the Prime Minister remembers, and I say this subject to correction because I am drawing on my memory now, it seems to me that when the former royal commission was set up there was given full opportunity to discuss the terms of reference-


John George Diefenbaker: Might I ask which royal commission the hon. gentleman is referring to?


Lionel Chevrier: The Turgeon royal commission.
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John George Diefenbaker: I will send out for that; I cannot say offhand.


Lionel Chevrier: I draw on my memory now because I have nothing else to call on. My recollection is that when the prime minister, or the former minister of transport, did make the statement, there was an opportunity for discussion and my recollection is that the Prime Minister, in his capacity as the then member for Prince Albert, made a number of comments on the royal commission. Now, I say again that I might be mistaken, and it might well be that these comments were made with reference to the report when it was brought in. If my memory is wrong I will have to take that back, of course.
But the point I desire to make now is that I do not think it is appropriate or sufficient for the house to be asked to vote this subsidy without knowing something about what the royal commission is going to study, and if the Prime Minister makes the statement after third reading of the bill there will be no opportunity for discussion. I think the house should have an opportunity, and I am sure the Prime Minister would be the last one to say that there should not be such an opportunity.


John George Diefenbaker: I am not going to argue about that because I am trying to be so helpful at the moment, and I want every suggestion, but I do point out that if the opportunity to discuss the terms of reference of the royal commission is given, as I hope it will be, the royal commission will then have been set up and the suggestions will be to late. I am asking now for the opportunity to discuss the terms. Naturally I will be available, and I will even go further and say that opportunity will be given during the discussion in committee and on second reading, not later than that.


Lionel Chevrier: Then if that is the case I am satisfied. I have no objection to that, and I think that is an answer to my objection.


Harold Edward Winch: I would like to ask about a problem which has puzzled me all day. We are concerned with an interim payment of $20 million over the year, and I would like to ask what is the basis of setting up a royal commission and what are the terms of reference. But the Prime Minister says that information cannot be given; it will be announced and will be a fait accompli. I cannot accept that from the Prime Minister. He and I sat very close together for about four and a half years, and the present Prime Minister gave me a lot of advice when I was a newcomer on this side of the house and I think I learned a lot from him. I thought I learned

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from him something about diplomacy and parliamentary procedure.
I have listened very carefully and very closely. The Prime Minister and the government have decided that in the interest of Canada they should introduce a resolution, which means in due course, a bill, providing for a subsidy of $20 million for 12 months. It is not for the railways, according to the Minister of Transport; it is intended to help the consumers. What we are trying to find out now is on what basis this question is to be referred to a royal commission. What are the terms of reference? As I say, I have been listening very carefully, and all I can gather from the Prime Minister is that he intends to bring down these terms of reference. I am just waiting until hon. members opposite are ready. And I am asking this question: how does democracy work? How can we convey to the Prime Minister, before he presents us with a fait accompli, what should go into these terms of reference?


John George Diefenbaker: If I might just answer that question now, may I say that I asked the hon. gentleman to place before us his suggestions as to what should be included. However, the paucity of his thinking has apparently brought about a hiatus in this regard. I asked him what he would like to see incorporated. The hon. member is probably speaking about this with a knowledge of the past. Let me say to him that never did I at any time on the other side of the house or elsewhere, suggest that the setting up of a royal commission was a matter the nature of which should be determined by the house. That is the responsibility of the governor in council. But we are going further than that on this occasion. I want to ensure that this commission shall have as its basis of responsibility the best suggestions that the house can offer, and I am waiting to hear the hon. gentleman place before us what he thinks should be included in those terms of reference. It would be very helpful, I am sure.


Harold Edward Winch: Thank you very much. I am sorry the hon. gentleman was not here this afternoon when I spoke for 20 minutes on that very subject, namely what should be included in the proposed study. I said that it was not just a matter of freight rates but that it was a matter of national policy; that there was a need for a complete analysis of both passenger and freight transportation in the light of the position of one province as compared with another. The power to be given to the commission under the terms of reference to be announced by the hon. gentleman himself, because the Minister of Transport could not do this, should include

authority for a complete study enabling the commission to make recommendations with regard to a national transportation policy. I am certain that the Prime Minister when he spoke just now did not know that I spoke for 20 minutes on this subject this afternoon.


John George Diefenbaker: Mr. Chairman, I read everything that takes place in this house. I read Hansard most carefully and I know that I will peruse every word and every suggestion made by the hon. gentleman with the greatest care.


Hazen Robert Argue: We have seen a complete metamorphosis as far as the Prime Minister is concerned. When the Prime Minister and the Minister of Public Works sat in opposition they castigated the then government for allowing one increase in freight rates after another. They did not regard as an acceptable policy of the government an escape by way of a royal commission. Oh, what a different attitude we find now as compared with the attitude which was taken before 1957. Then, the freight increases were not going to take place. There was an interim increase of 3.6 per cent; the government, before the 1958 election, stepped in and said this increase would not be allowed.


John George Diefenbaker: Mr. Chairman, I am glad of the opportunity-


Hazen Robert Argue: I have the floor.


John George Diefenbaker: I rise on a question of privilege. That statement is completely inaccurate. During the election campaign no reference was made to the matter; no decision was made, and it was only after the election campaign that a decision was taken, when it could in no way affect the voting in this country.


Hazen Robert Argue: I am sure I do not know what the Prime Minister is contradicting. All I said was that when he was in opposition he was very much opposed to increases in freight rates but that following the 1957 election when a 3.6 per cent increase in freight rates was awarded by the board of transport commissioners the government stepped in and said: this increase will not be allowed. That was before the 1958 election.


John George Diefenbaker: That was not so. If the
hon. gentleman is not paying greater attention to verity than he is in that statement, then I can only weigh the rest of his statement with the sense of responsibility which he exhibits.


Hazen Robert Argue: That is not a very profound statement from the Prime Minister. He is losing his temper now. A few moments ago he was very careful. He was glad-


John George Diefenbaker: Mr. Chairman-


Hazen Robert Argue: I have the floor and I claim my right to the floor.


John George Diefenbaker: I rise on a question of privilege, and I want to clarify this. The hon. gentleman keeps repeating that the decision was made prior to the election. That statement is not in accordance either with fact or truth.


Hazen Robert Argue: My statement was that the 3.6 per cent award was made, the judgment was made before the 1958 election. I do not think there is anything to deny in that.


John George Diefenbaker: Not the decision.


Hazen Robert Argue: Not the decision to disallow it; that was made shortly thereafter. But that was the policy of the government before the election. That was the policy which was brought about by this decision taken to disallow the 3.6 per cent increase in freight rates. But that is a policy far different from the policy to be followed now, if, indeed, it is worthy of the name of a policy, namely that an increase of 17 per cent in freight rates is first to be allowed and then at some later date the Minister of Transport brings in a motion to provide a subsidy to the railways to roll back the 17 per cent to 10 per cent. We still have at this very moment a 10 per cent horizontal increase in freight rates which is adding to the great burden of discriminatory freight rates in this country against which the Minister of Public Works complained so effectively and so frequently while he was in opposition.


Howard Charles Green: May I ask the hon. gentleman a question? Does he believe that the wage increases should not have been allowed?


Hazen Robert Argue: I will tell the Minister of Public Works that it is a mistake for either this government or the board of transport commissioners to tie together recommendations of a conciliation board and awards of the board of transport commissioners. No increase in freight rates should automatically result from an increase in wages. The position taken by the Minister of Transport and by this government is, apparently, that if there is an increase in wages an open and shut case is provided for the board of transport commissioners to grant a corresponding increase in freight rates. That is not the position I take. The position I take is that the board of transport commissioners should at all times look at each and every application on its merit and should not postpone its decision until some other board has made a decision or until the cabinet has decided what action to take.
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It is up to the board of transport commissioners to consider each request on its merits. Eight provinces came before this government. The Prime Minister can correct me if I am wrong but I believe they came not to complain about the increase in wages but to ask that the 17 per cent freight rate increase be disallowed. The government got into so much trouble with eight of the provinces that it has decided on this half-measure as a method of quieting the provinces and calming the people of the country.
Apparently we have in embryo a royal commission. I have been trying to find out if the order in council has been passed setting up the royal commission. The Minister of Transport under whose department this legislation comes apparently is not going to make the announcement but he has prepared the way for the announcement that is to come later. He hinted in the house that an announcement would be made by the Prime Minister.


George Harris Hees: Mr. Chairman, I did not hint at all. I definitely stated that there would be an announcement made by the Prime Minister.


Hazen Robert Argue: Not about the royal commission. You did not say that.


George Harris Hees: Yes I did, today.


Hazen Robert Argue: It took considerable effort on the part of the opposition to find out if there would be a royal commission or some other body appointed. The Minister of Transport did not make that too clear. The hon. member for Laurier asked him a question to this effect on March 24 and as reported at page 2208 of Hansard of that date, the Minister of Transport replied:
I might answer the hon. member for Laurier on that point now, Mr. Chairman. A much longer, long term inquiry is under very active consideration by the government at the present time and T expect that in the very near future the Prime Minister will be making the kind of announcement to which the hon. member has referred.


George Harris Hees: Well?


Hazen Robert Argue: Well, there was no reference in the words of the minister to a royal commission.


George Harris Hees: Mr. Chairman, if the hon. member has reached the stage where he is so naive that he cannot read into that statement that in all probability the announcement of a royal commission was going to be made then he is not as smart as I know he is.


Hazen Robert Argue: But, Mr. Chairman, with this government I have learned that you have to find out precisely what is meant and then you have to watch hon. members of the government very carefully to see that they do not sneak away from what they have said. The

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minister did not use the term "royal commission". He implied it, and that is exactly what I said earlier when the minister started bobbing up and down in his seat. We had no announcement in the house and then, according to the press, the Prime Minister during the Easter recess announced that a royal commission would be appointed shortly. An article by Harvey Hickey in the Toronto Globe and Mail of April 3, reads in part:
A royal commission will be appointed shortly to examine the whole structure of railway freight rates, Prime Minister Diefenbaker announced today.
Parliament was not in session. According to this press report the Prime Minister made the announcement during the Easter recess. We are now attempting to ascertain the terms under which the royal commission will operate. We have met with no success. We have been told that we will have an opportunity to discuss this question. We have not been told whether it would be in order but the government agreed it would make the announcement so parliament would have a chance to have the order in council before it when hon. members were in committee upon the bill that is to follow this resolution. In other words, it will be before us when we are in committee on another matter. At that time if the chairman should rise and say we cannot discuss the terms of reference of the royal commission because we have to stick to the clauses of the bill, will there be anyone to say that the chairman is not correct?


Mr. Nowlan:: Mr. Chairman, surely the hon. member knows he could not be more out of order than he is at the moment in discussing a royal commission on this resolution?


Hazen Robert Argue: Well, is that not a brilliant comment from the Minister of National Revenue?


George Clyde Nowlan: It may not be brilliant but it is perfectly true.


Hazen Robert Argue: I do not know if the minister was in the house on the orders of the day-[DOT]


George Clyde Nowlan: He was.


Hazen Robert Argue: -but if he was he would know that Mr. Speaker said the place to discuss the question of the royal commission was at this very point and because of Mr. Speaker's suggestion we have been discussing it.


George Clyde Nowlan: Is the hon. member then afraid that the Speaker later on will rule him out of order?


Hazen Robert Argue: That is not quite the ground that the minister raised just a moment ago when he accused me of being out of order. My point is that I am in order because the Speaker said we would be in order. The

Speaker has not said he would allow a discussion at a later date which might be ruled out of order.
The Minister of National Revenue should know that the Prime Minister has been discussing this very question. The Prime Minister has been alluding to a royal commission. He said a royal commission would be set up but apparently its terms have not been decided upon. I should like to know if the order in council has been passed. First it was hinted that there would be a royal commission appointed and then an announcement was made during the Easter recess but now we are told it has not been set up. The announcement has been made but the government is looking to the opposition to tell it what the terms of reference should be. The government has been floundering for a long time and well they might seek our advice.
My advice to the government is first of all that it does not need a royal commission. There have been enough royal commissions on this subject. All the government needs to do at this time as far as further increases in freight rates are concerned is to continue the position it took not many months ago that there should be no further increases in freight rates.
I suggest that the government give consideration to amending this resolution. It is possible to amend it provided a cabinet minister other than the Minister of Transport moves the amendment and provided there is a seconder. I suggest it should be amended to provide a subsidy that would roll back the total 17 per cent freight rate increase so there would be no increase at all and particularly in view of the fact the government disallowed the 3.6 per cent increase. That would be much better than this wishy-washy, catch-as-catch-can policy the government is now trying to get away with. The Prime Minister needs help on what the royal commission should be inquiring into and with respect to what it should do. I do not agree that a royal commission is necessary but if that is the policy of the government I suggest the first instruction to be given the royal commission to bring in recommendations that will prevent further increases in freight rates. That is the first thing that should be provided in the terms of reference in the royal commission.
The second instruction given the royal commission should be to bring in suggestions as to how equitable freight rates can be provided in this country. Those are things the commission should be doing, if there must be one at all. It should also be instructed to examine into the balance sheet of the Canadian Pacific railway to see how this railway

has shown low profits on its railway operations when it is in fact making all kinds of profits on its other operations.
I suggest to the Prime Minister that the terms of reference should include the matter of the board of transport commissioners considering all of the profits of the Canadian Pacific railway and not just those profits earned from railway operations. The Canadian Pacific railway is a mammoth corporation with many departments. It pretends to show need as far as its railway operations are concerned but it has very large profits in several fields.
I have in my hand its 1958 annual report and on page 25 there is a statement of "other income". With regard to net earnings from steamships there was a loss of $1,212,571 in that year. Net earnings from hotel, communication and other properties amounted to $481,393. Dividends amounted to $7,943,339. The next item is net income from petroleum rents, royalties, reservation fees and land rents. There is a very large profit of $6,828,123 resulting from land granted to the C.P.R. from the public domain many years ago. Net income from interest amounted to $3,808,428, and the sub-total is $17,848,712. There are the profits of the C.P.R. other than the profits that have been made from railway operations. These are things that should be considered in any inquiry.
Then, as has been mentioned by the hon. member for Vancouver East, we feel that a royal commission should give consideration to a national transportation policy to serve the needs of the Canadian people. It should consider the efficient operation of the railways and the provision of adequate services. It should discontinue the policy of taking only the railway operations of the C.P.R. as the yardstick in establishing freight rates in this country.
We have had many royal commissions in this connection in the past. We do not need another one today. We need action by the government, action to roll back increases in freight rates, action to prevent further discrimination through horizontal increases in the future. The government should be enunciating its policy and program instead of bringing forward this temporary measure which may provide very little by way of alleviation to the Canadian public.
I do not think this point has been clarified yet and I should like to ask the Minister of Transport or the Prime Minister to say whether or not it is the policy of the government to prevent further increases in freight rates until such time as the report of the royal commission is in the hands of the government. That, at any rate, would be some progress.
Freight Rates


George Harris Hees: Mr. Chairman, if the hon. member had been in the house and had paid attention or had read Hansard he would know that in the statement I made at the opening of this debate I said, as found on page 2208 of Hansard:
As hon. members know, the government has indicated its intention of proceeding with a comprehensive inquiry into matters affecting the railways. The proposed legislation therefore limits the assistance to a 12-month period, when it is hoped a report will be available to the government. Consideration will then be given to means of further relieving the unfair discriminatory burden of the freight rate structure. In the meantime the government does not propose to permit any further general increases in railway freight rates.
I do not think I can spell it out any more clearly than that.


Hazen Robert Argue: Mr. Chairman, the minister used the word "hope". He hopes that a report will be available within a 12-month period.


George Harris Hees: That is right.


Hazen Robert Argue: If the report should not be available within a 12-month period, does the minister's position still stand, namely that for any additional period until the royal commission reports there will be no further increases in freight rates? My question is very specific. It is not tied to a 12-month period or a 10-month period or a 14-month period. Is it the intention of the government to prevent further increases in freight rates between now and the time the report of the royal commission in question is placed in the hands of the government?


George Harris Hees: Mr. Chairman, the government is dealing with this matter 12 months at a time. If at the end of that 12 months it is obvious that it will not be possible to receive the report then it is obvious that the government will have to give this matter further and very serious consideration, and that the government will do. In the meantime we intend to proceed along the lines I have outlined.


Hazen Robert Argue: I do not think that answer is particularly satisfactory because it shows that unless the government has some club that will force this royal commission to report within a 12-month period the people of the country have no assurance that after that 12-month period and before the royal commission may make a report there will not be further horizontal increases in freight rates. I know one can take it from the statement of the hopes of the minister that the royal commission may report within a 12-month period, in which case the people of the country will be saved during that time from further horizontal increases in freight rates but there is

Freight Rates
no guarantee that there will not be further increases after the 12-month period if the royal commission report has not been made by that time.


George Harris Hees: And I feel sure that if the government gave an assurance for two years the hon. member and his colleagues would ask for five. If the assurance was for five, they would want 10 and if it was for 10 they would want 20 and so on. You cannot please them.


Lionel Chevrier: May I have another word in connection with the invitation extended by the Prime Minister with reference to suggestions? I do so with great timidity because I know this is a matter of extreme importance but a number of things come to my mind now and I give them to the house, to the government and to the Prime Minister for what they are worth. In the first place, we have already had an excellent royal commission on transportation, and if I remember what the Prime Minister said when he was on this side of the house I think he was very happy when the announcement was made of the personnel of that commission. I think he was also very happy about the recommendations brought down by the Turgeon commission. Be that as it may, there is no doubt that the inquiry conducted by that royal commission with respect to the freight rate structure was one of the most exhaustive that has ever taken place. Therefore, first of all I think that the royal commission to be established should not be asked to go over the same ground covered by the former commission unless there are matters which have intervened between the 1951 report and the position as it obtains today, which need inquiry.
I also think that the royal commission might well give some consideration to a subject which has been discussed in the house so often, namely the impact of horizontal increases on the extremities of our country, on the maritime provinces, on the prairie provinces and on British Columbia. The Prime Minister will remember that when he was on this side of the house he complained very bitterly, and perhaps rightly so, about the impact of horizontal increases. The 17 per cent case has had a very serious effect so far as horizontal increases are concerned. In other words, that judgment has pointed up the discrimination horizontal increases create in the case of the eastern and western provinces. The 7 per cent reduction is simply an alleviation of that difficulty, but not a solution; and therefore I think this is another matter to which the commission might give consideration.
But perhaps the most important matter that I think should be considered is a long term and short term policy for the railways of this country. I am sure that the Minister of Transport and the government do not have the time to deal with matters of this kind. It seems to me that the commission might well be given, as one of its terms of reference, the consideration of the long and short term policy for the railways of Canada.
With reference to the short term policy I can give to the house four matters which might well be considered. The first is this: The railways have always maintained that some passenger services are an unprofitable operation. Should these services be curtailed or should they not? There is no doubt that some of these services should not. Whether or not the commission should be entrusted with consideration of matters of that kind is, of course, for the government to determine. However, it seems to me that since the railways complain so often, not only in statements by the presidents of both railways but in statements before the board of transport commissioners, that some of these are unprofitable operations then perhaps this is a matter which the commission should be considering.
Then, there is the question of the branch lines of the railways. Are unprofitable branch lines to be maintained? There are some branch lines that must of necessity be maintained. There are, I know, in the Canadian National Railways branch lines that are unprofitable. Are they to be continued at the expense of the ratepayer who will, in effect, because of these pay increased freight rates?
There is also the all important question of the dieselization of the railways. Should railways be completely dieselized or should they not? This is an extremely important matter. Again there is a new factor that has come into railway operation recently and that is the piggy-back rates. Should they be maintained? Should the railways be allowed to fully exploit these rates?
There is another matter which I refer to the government and it is a matter which is of particular interest to the western provinces, but more particularly to the province of Alberta than to any other province. I refer to the one and one-third rule. The Prime Minister will recall that the Turgeon commission made a recommendation concerning the one and one-third rule for intermediate territory and that recommendation of the royal commission was implemented by an amendment to the Railway Act. Unfortunately, however, because of a judgment handed

down by the board of transport commissioners the one and one-third rule is practically inapplicable today. It has no force. While it did apply it was, I am told, of tremendous benefit to the intermediate territory, that is the territory to which transcontinental rates do not apply. This is a matter which the royal commission might well consider, as to whether or not it is possible to implement the one and one-third rule and give the benefit to Alberta and intermediate territory which was envisaged by the Turgeon commission.


Harold Edward Winch: Is it not now in operation?


Lionel Chevrier: It is in the Railway Act, but unfortunately because of a judgment which the board of transport commissioners handed down in the cast iron pipe case it is, I am informed, no longer operative. I think that is a matter to which the commission might well give consideration.
I do not want to delay this measure any longer. I conclude simply by saying that these are matters that refer to the short term policy of the railways. There is something far more important and that is the long term policies of the railways. I would not attempt to deal with them because that is a matter for the experts. I think that if a royal commission is going to be established that is another matter which should be considered.
If I may, and if the Prime Minister will allow me, I should like to refer to the discussion which took place a moment ago. There were some very pertinent statements made by the Prime Minister dealing with freight rates. I should like to bring them to his attention and ask him if he will comment on them. When he was in Saskatoon on February 13, 1958, here is what he had to say with regard to freight rates:
Mr. Diefenbaker said that last year he had criticized general railway freight rate increases as being unfair to the western provinces.
"Did we act?" The government had "help up" a 3.8 per cent railway freight rate increase allowed by the board of transport commissioners earlier this year.
"We said it could not at this time be justifiably brought into existence".
Then, later on, according to a Canadian press report from Windsor, the Prime Minister is reported as stating:
On freight rates, Mr. Diefenbaker spelled out for the first time his government's apparent intention on the increase granted in January by the board of transport commissioners.
"We said before we were in power that freight rates were unjustifiably high when raised horizontally", he said.
"Did we act? When the board allowed an increase, we held it up because it couldn't be justifiably brought into existence on the basis the increase was provided."
Freight Rates
Those two statements were made in February of 1958 and that, of course, was before the March election. I bring them to the attention of the committee. My purpose in rising was not so much to do this as to make suggestions, which are given in all modesty and which I know do not begin to deal with the all important problem. They are given for what they are worth, and in an effort to be constructive.


Harold Edward Winch: I only rise to make one statement. A few minutes ago the Prime Minister and I engaged in a little crossfire which we both appreciated. At that time he said that since the terms of reference are not yet drawn he would appreciate any information or suggestions concerning the terms of reference. I told the Prime Minister that I had expressed my thoughts in connection with a number of matters this afternoon.
There is one more thing to which I should like to draw the attention of the Prime Minister and which I think is of some importance in connection with freight rates. This afternoon mention was made of the competition between the railways and the truckers. I believe that it would be interesting if any commission appointed by the Prime Minister were to have the power to investigate what the truckers get and what the railways get, and to ascertain how many of the major trucking lines in Canada are owned by the railways. It would be interesting to find out just what this camouflage is. I know it exists because of the information which I receive in my office from certain truckers' associations. I know that the majority of these truckers are owned by the railroads, and it might be interesting if the commission were to study the competition between the railroads and the trucking lines, and the trucking lines that are owned by the railroads.


John George Diefenbaker: May I ask a question of the hon. gentleman for information? He says he believes that the majority of the trucking firms are owned by the railways-


Harold Edward Winch: I said that some of the major trucking lines are owned by the railroads. In British Columbia you will find that is particularly true, and last year one of the biggest trucking companies in Canada was bought by the railroad. In spite of this these truckers, in their association, raise cain about the freight rates set by the railroads when they are themselves owned by the railroads.


Douglas Mason Fisher: It was very sweet of the Prime Minister to come in and give the debate a bit of focus which it was not getting from the Minister of Transport. He asked us to offer suggestions. One of the first ones we have to offer-and it is not so much a suggestion as

Freight Rates
a conclusion that I would draw-is that in one year you are not going to get a decent royal commission report on a topic of this size unless you instruct the royal commission to go away for six months into retreat and to plow through the information that is available from the previous commission and also from the hearings that have taken place before the board of transport commissioners.
The fundamental problem in our whole railway policy, according to Mr. Currie who has prepared the longest, most detailed and most difficult book on it, is this. He boiled it down. As he said, it could be expressed in one sentence. It was that Canadians had never made up their minds whether they wanted their transportation policy to be socialistic or free enterprise. In other words, we have never made up our minds whether we are going to be for subsidization all the way across the board wherever possible or whether the railways are expected to operate as business units.
It seems to me that if you are going to charge a royal commission with the investigation of the railways there is a real starting point, namely should the royal commission not advise us as to whether the railways are supposed to operate as business organizations or whether they are institutions operating in the public interest and so the question of profit does not enter into it at all. This sort of hybrid arrangement that we have at the present time with the Canadian Pacific Railway supposedly operating as a free enterprise concern and the Canadian National Railways operating as a government concern needs resolving. That is what the royal commission really should do. It certainly cannot do it in one year, and thresh out a policy like this. That is why the whole idea of this being an interim measure and that we are going to get some magic report is rather nonsense. The very number of people who will want to appear before this royal commission when it has hearings I think is an indication that it is going to take more than a year.
The minister said earlier that it took from 15 years to maybe 30 years to begin to appreciate and understand freight rates. I am wondering where we are going to get for this royal commission the personnel with that kind of experience. The only place that I know of where you can get it is from the board of transport commissioners. As they are already constituted, why not let them handle this particular job?
One of the things the hon. member for Laurier mentioned that the commission should investigate fits into this picture of free enterprise or socialism, namely this question of

non-productive lines. You get some really stupid examples. We had one in our region where the C.P.R. ran a railway into Manitou-wadge from the south and the C.N.R. ran one in from the north. There is not enough traffic to keep either one going on a really prosperous basis. This is something that happened recently, within the last three or four years. It is a typical example of mismanagement or poor planning or something like that. However, somebody is stuck with the result and I have a hunch that it is the people of Canada.
I think one of the decisions that really needs to be made very firmly by this royal commission is what is to be done about nonproductive lines. Do we go along with them or do we not? As the minister knows, _ every time there is a suggestion of reduction in service, howls go up. I know that I happen to have more railway division points in my constituency than has anybody else in Canada. I have six of them. Last year when the Canadian National Railways was taking off one of its transcontinental trains a tremendous uproar went up and as a result of the uproar the Canadian National Railways reversed its decision. The decision must have been reversed because it was in the public interest. Here is a typical example of public interest determining something that the president of the C.N.R. had said was uneconomic. Hence essential to this whole problem of the commission in its terms of reference and what it is going to decide is the decision whether we are going to have a national transportation policy based upon the general interest of the country or whether we are going to go on with this half and half system, of pseudo free enterprise and pseudo socialism. I hope that the terms of reference will be such that the royal commission can come up with some real answers.
The hon. member for Laurier mentioned another aspect, as did the hon. member for Vancouver East, namely that the study has to be more than just a study of railway freight rates. The largest pressure groups in this whole field of freight rates or the most vocal and vociferous ones are the ones in relation to trucking. There is also the question of the international aspect of rates and the water rates with the water shippers that need to be studied closely. In other words, from railway freight rates you immediately branch out into all forms of transportation. You cannot consider freight rates without looking at passenger tariffs because they are indivisible in terms of the service that is being provided, since trains have to run over the same rails and the same provisions for one kind of service are used in another. I therefore suggest that the terms

of reference should be extremely broad and that the commission should be encouraged to bring in a complete report setting out a national transportation policy for the government and for the people of Canada, not for five years nor for ten years but for the foreseeable future.


Lionel Chevrier: May I ask one question of the minister. First I should say that there are now two applications before the board of transport commissioners, one for an additional 15 per cent by the railways which the minister said would be held up and another for commuter rates. I am just wondering whether the statement the minister made in his first speech before the Easter recess, namely that there would be no increase in freight rates, covered the application for commuter rates as well.


George Harris Hees: I was talking about a general freight rate increase.


Lionel Chevrier: May I just clarify that matter? The application with regard to commuter rates is a general application. Does the minister mean that his answer does not apply to the commuter application?


George Harris Hees: That is correct.
Resolution reported and concurred in.
Mr. Hees thereupon moved for leave to introduce Bill C-38, to make provision for the reduction of certain class and commodity rates on freight traffic.
Motion agreed to and bill read the first time.


Mr. Speaker:: When shall the bill be read the second time?


George Harris Hees: Now.


Mr. Speaker:: By leave now?


George Harris Hees: Now.


Lionel Chevrier: Next sitting.


Mr. Speaker:: By unanimous consent.


George Harris Hees: the second reading of the bill.


Lionel Chevrier: Mr. Speaker, I have some remarks to make on the second reading. From the leader of the house I understood last night that this matter would be put over for discussion until another day.


Hazen Robert Argue: Next sitting.


Lionel Chevrier: I do not wish to delay it unduly but I think there are things which could not be said on the resolution but which might preferably be said on the bill.


Mr. Speaker:: Shall this bill be read the second time at the next sitting of the house?


Some hon. Members:: Agreed.
Canada Shipping Act CANADA SHIPPING ACT



AMENDMENTS RESPECTING MORTGAGES, CERTIFICATES, PILOTS, ETC.

George Harris Hees: the second reading of Bill S-3, to amend the Canada Shipping Act.
He said: Mr. Speaker, the amendments proposed by this bill are for the most part of a technical nature and many of the clauses represent merely a clarification in wording or a tidying up of existing legislation. Since there will be ample opportunity to discuss these technical details in the committee to which this bill will be referred I will not go into detail on them at the present time. They cover such matters as registration of mortgages on vessels, definition of international voyages and of minor waters, certification of officers and engineers, inspection requirements, and so on. Apart from this the principal clauses in the bill deal with the certain aspects of marine pilotage.
For some years officials of the Department of External Affairs have represented to us that the existing section 346, which provides exemptions from the compulsory payment of pilotage dues, is discriminatory against foreign flag ships in that the exemptions apply only to ships registered in Her Majesty's dominions. Such discrimination is contrary to the provision of a number of treaties in force between Canada and other states, such as the United States, dealing with navigation matters. With the opening of the St. Lawrence seaway and the expected extension of the great lakes trade to the gulf of St. Lawrence this point will assume considerable importance. Our treaty obligations require that we be in a position to accord to the ships of the other nations with whom we have these treaties the same kind of treatment as we give to British ships that may be engaged in the same trade, but the present section 346 does not permit exemption to be granted to any ships but those under the British flag. A proposed amendment will correct this situation.
Perhaps it would be well at this time, Mr. Speaker, for me to say an additional word of explanation concerning this matter of compulsory payment of pilotage dues. There is at present no compulsory pilotage in Canada.	The view	has
been held that the master of a ship must be responsible for the safety of his ship, and the decision must rest with him as to whether or not he requires local assistance in navigating narrow waters. The Canada Shipping Act in section 340 is quite specific on this point.
When a district has been declared by the governor in council to be one in which the

Canada Shipping Act
payment of pilotage dues is compulsory, certain exemptions apply covering naval ships, government ships, fishing vessels and other small vessels, and ships regularly employed in the domestic trade. However, certain of the exemptions made under the provisions of section 346 may be withdrawn by the pilotage authority of the district by bylaw approved by the governor in council.
We also feel that it should be within the power of the pilotage authority, with the approval of the governor in council, to adjust or add to these exemptions according to the changing times. That is, we believe that just as the government has power now to withdraw exemptions power should also exist to add to the exemptions. This would, however, be done only if a master or mate possessed full confidence and experience to navigate in a pilotage district without the help of a pilot. Only the pilotage authority is in a position to reconcile the sometimes apparently conflicting interests of the pilots and their employers who are the masters or owners of the ships they serve.
The other pilotage amendment covered in clause 10 of the bill is a different matter. It provides for a new part VIA under the heading "Great Lakes Pilotage", and I would ask hon. members when considering this part of the bill to separate it completely from the provisions of part VI of the act. There has never been a pilotage district west of Kingston, Ontario on the great lakes. The masters and officers of the regular lake vessels are, of course, familiar with the waters which they ply, and when the occasional ocean vessel entered the great lakes it was the practice for the master to employ a man who, to distinguish him from the licensed pilots in the St. Lawrence, was referred to as a "sailing master". These sailing masters remained on the ocean ships throughout their voyages on the great lakes and assisted the foreign masters through the narrow channels and in the entrances to the ports. The sailing masters took their rest while the ships were on the open waters of the lakes.
It is obvious that whatever arrangement is made for pilotage on the great lakes should be a reciprocal one as between Canada and the United States, and we have held a number of discussions with the United States authorities on this subject. We do not as yet, however, know the exact form of any legislative action they may take in this regard. However, our sections dealing with pilotage on the great lakes are so designated as to permit us to proceed independently, or to fit in virtually with any scheme which the United States authorities may develop, and also provide for reciprocity with the United States in recognition of pilots' licences or

certificates either government may issue. Our basic approach is that within restricted waters which will be defined by the governor in council full pilotage should be required, while elsewhere on the open waters we should at least be satisfied that the ship is carrying a navigating officer or officers fully competent to handle the ship in the open waters.
To summarize the proposed part VIA, it is intended as enabling legislation to empower the governor in council, at a time and to such degree as may be deemed expedient, to require the employment of local pilots by ocean vessels when in the restricted waters of the great lakes; also to take the necessary steps to ensure that every ocean vessel has on board officers who know the rules of the road for the great lakes and can speak English sufficiently to use the radio-telephone.
The only other clause of the bill still to be mentioned is clause 9, which provides that a pilot licensed by the United States authorities for waters forming part of the boundary waters is not committing an offence when he takes his ship across the boundary line. The need for this is obvious when one considers that Canadian pilots must cross and re-cross the boundary line when taking ships up and down the St. Lawrence.
At the conclusion of second reading it is my intention to move that this bill be referred to the committee on railways, canals and telegraph lines for more detailed examination.


Lionel Chevrier: Mr. Speaker, the house I am sure will welcome the statement which the hon. minister has made with reference to the second reading of an act to amend the Canada Shipping Act. There are in this bill some sections which are entirely innocuous. There are other sections, on the other hand, which are contentious, and I would like to direct my attention to those sections of the bill which it seems to me are of a very serious nature. I am prompted to say that these sections should not be passed without the most serious consideration. There are several sections that 1 consider contentious and to which I know the house and the committee will want to give the most careful and serious consideration. These sections the hon. minister has already referred to in general, and I shall not deal with them specifically until I come to them.
In the first place, the question that comes to my mind is this. Why is this legislation necessary? The hon. minister in his statement has given no reason why this legislation should be passed at this time. I presume that the bill is brought down because of

the opening of the St. Lawrence seaway, which will take place some time next month. But while that is the pretext I think the main reason for this legislation is the insistence of the United States to enact this measure.
It seems to me that we should not be asked to pass this kind of legislation until we know what the legislation in the United States congress is going to be. Last year there was a bill brought before congress; it did not go through. We know what the nature of that bill is; I have a copy of it here in my file. But the bill which is now before the United States congress, even if it does goes through all of its stages, cannot possibly be passed until October or November of this year. So I ask the question: Are we being asked to pass this kind of legislation before we know what the concurrent legislation on the other side is likely to be? The minister a moment ago used the expression "reciprocal legislation". Well, this is not reciprocal legislation. It is unilateral legislation. It cannot be reciprocal legislation until the two parties have agreed to what they want in the legislation.


Harold Edward Winch: And they have not agreed.


Lionel Chevrier: And they have not agreed, as the hon. member says. I say respectfully to the minister and to the house that we should not be asked to pass legislation of this kind until an agreement has been reached with our friends on the other side, because we are going to be at a tremendous disadvantage if this legislation is put through unilaterally as I consider it.
Now I come to another question: why is this legislation required? I can see no reason why such legislation as this should be required at this time. It may be necessary in 12 months time; it may be necessary at another date, but it is certainly not necessary now, and the proof of this contention is that there have been any number of ships-deep draft vessels, perhaps not ships drawing 25J feet of water, but certainly ocean trampers- which have been going up to the head of the lakes and passing through the St. Lawrence without the necessity of this kind of legislation. This has been going on now since 1947, and according to the evidence which was given in the other place, one pilot stated there were as many as 744 voyages made, I believe, in 1958. This was done by virtue of the present sections of the Canada Shipping Act, and under the appropriate sections of that act, without regard to the bill which is now before us. There is in the act all the power and all the force necessary to deal with the situation which might arise because of the opening of the
Canada Shipping Act
St. Lawrence seaway. So I ask again: Why should this bill be enacted at the present time.
The next question which comes to my mind is this: Who is asking for this legislation? The St. Lawrence seaway authority does not want it; the St. Lawrence seaway development corporation, which is the United States entity, does not want it; the state department in the United States does not want it; the department of commerce in the United States does not want it. But the United States coastguard wants it. I am almost prepared to go a step further and say that I believe the officials of the Department of Transport deep down in their hearts do not want this legislation either. What has happened is that the coastguard service has put it into their minds that it must have this legislation, and before even it is passed in the congress of the United States they come and ask us to enact a measure of this kind.
I say, with respect to the house, that we should not be asked to pass this sort of legislation because it is not enough to be told- and I say this with respect-by a foreign power that this is necessary. And in effect that is what is happening; the Department of Transport is being pushed around, and the Canadian government is being pushed around at this moment by the demand for the implementation of this bill. We should know why this legislation is required. As it is now, the bill before the congress of the United States provides for certain features which are not acceptable to Canada, and if they are not acceptable to Canada, how do we know that this type of legislation will not affect us in some way or another, and that it may not affect us detrimentally.
How did the minister proceed when he decided, for instance, to implement tolls? There was a section in the St. Lawrence Seaway Authority Act which clearly said that the St. Lawrence seaway authority could establish tolls either by itself or concurrently with the United States. What hap-ened was that the seaway authority set up a tolls committee jointly with the seaway development corporation. It was the tolls committee which made an agreement, and the minister came to this house and asked the house to approve the agreement which had been made by the two countries. That, I submit, is the way in which the minister should have proceeded in this case and there could be no complaint about that because it would be an agreement made between Canada on the one side and the United States on the other and implemented by parliament.

Canada Shipping Act
Why do we not proceed in the same manner in this instance? After all, pilotage is important. Pilotage is as important as tolls, and tolls are as important as pilotage. Why is there not a committee composed of a group of three Canadians and a group of three Americans to determine questions of pilotage in the international section of the river, that is to say from St. Regis to the head of the lakes? If we had such a committee, and if an agreement were consummated, we could implement it by way of legislation. But there is no agreement. All we know is that there is a bill before congress, and that this bill, as I have said, may have serious implications for us. I submit once again we should not be asked to pass this legislation until we see the United States legislation and know what it is going to be. What harm will be done if we carry on for another year in the same way as we did in 1958 when 744 voyages were made from the great lakes and the St. Lawrence to ports overseas?
There is another point which comes to my mind and it is one which has not been cleared up yet. It is this: is this legislation valid? I have grave doubts about the validity of this legislation. I may be quite wrong, but I know that there are a number of prominent lawyers who share this view, namely that legislation of this kind cannot and should not be implemented by parliament unless based upon agreement, as I said earlier, or upon a treaty. There should be a treaty or an agreement covering pilotage in international waters. This should be brought before the house and the subject of the agreement or treaty should be implemented by legislation. Even if legislation were required, which I doubt and which I deny, then I say that this is not the method we should use-the passing of legislation which the minister has called reciprocal or concurrent but which, really, is unilateral legislation. In my opinion the course of action to be followed is quite clear-and this is what I said earlier-namely that Canada and the United States should come to an agreement on the subject and that it should be implemented by this house.
What is this going to mean with reference to costs? This is an important matter. There was some discussion earlier about the costs which the seaway is going to bring about and, of course, I now speak of costs in the sense of tolls only. Does the house know that if it is considered by some that tolls on the seaway are high the pilotage which is going to be brought about by this legislation is going to be even higher than the costs brought about by tolls on the seaway, so that if there are elements in Canada or elsewhere that think the tolls on the
seaway are high, because of this legislation the costs will be greatly increased.
We must be careful not to play into the hands of the opponents of the St. Lawrence seaway. There have been groups outside of this country that have opposed the St. Lawrence seaway down through the years. When they were finally defeated in the congress of their own country and saw that there was no hope in stopping the seaway they then proceeded to carry on a fight to make the tolls on the seaway so high that they would be prohibitive and make it impossible to move traffic competitively and as well succeed in amortizing the costs of the seaway.
I am afraid that if we pass this legislation without knowing more about its consequences we will be playing into the hands of the opponents of the seaway. These people have but one thing in mind. They have continued by intense lobbying both in the United States and indirectly in this country in favour of high costs for ships moving up and down the St. Lawrence and the great lakes.
I repeat that we do not need this legislation at this time. I suggest instead that there should be a complete overhaul of the Canada Shipping Act with a study of the matters that are dealt with in this legislation. I know what the minister will be prompted to say. He will likely ask, "Why did you not do it when you were on this side of the house?" I will admit at once that perhaps I should have. Possibly I did not realize in the early days when I was on the other side of the house how important this statute was. This is one of the most important statutes to have been passed by this parliament, but it is outmoded and outdated and should be modernized and brought up to date by means of a commission. But over and above modernizing the statute the commission should consider the question of pilotage and the other matters that are under discussion in this legislation. It seems to me that a commission could be very rapidly established. I could suggest names to the minister for that purpose and I know he would consider them very carefully although perhaps not act upon them. Be that as it may, I think there should be a further study of the Canada Shipping Act and of this legislation before we are asked to give these amendments our approval.
There exist now in this act, as I intend to prove, all the sections and powers that the governor in council or the minister need to deal with this situation, to accomplish everything the minister seeks to accomplish without the necessity of this amendment. I

appreciate that that is a far-sweeping statement but I believe I shall be able to establish the validity of it as I go along.
The powers to which I have referred are to be found in many sections of the act but particularly in sections 323 to 329. If the minister will not accede to my request and consider that the time is not yet ripe for this legislation, then I ask him to give consideration to the suggestion that any legislation at this time having to do with the Canada Shipping Act, in the light of what has transpired on the St. Lawrence and the great lakes, should seek to ensure that all advantages be gained by the opening of the seaway. Any legislation at this time should make sure that neither ocean shipping or domestic shipping will be injuriously affected by what is now before the house.
As I said earlier, the legislation arises out of the insistence of the United States authorities to pass a pilotage bill before congress which may well be detrimental to Canadian interests. It appears that the United States authorities and particularly the coastguard want a law that will make pilotage compulsory on the great lakes for ocean vessels other than Canadian or United States vessels by forcing such vessels to carry an additional officer to the normal complement without by proper enabling legislation creating the machinery which would provide the pilotage service required under the bill, a service which where needed, namely in restricted waters, would only be acceptable and satisfactory if it were government controlled and apt to provide the development of a sufficient pool of trained pilots for these restricted areas where pilotage is necessary for the safety of navigation.
What is important, arising out of the development of the St. Lawrence seaway, is the safety of navigation. That is paramount it seems to me and unless we keep that in mind continually we might well get ourselves into serious difficulties. The government should oppose this legislation and by "this
Business of the House
legislation" I mean the legislation that is now before congress. It should oppose the legislation and protect itself under its own laws as they are now in existence by setting up pilotage authorities in these restricted waters. It should try to convince the United States authorities that the Canadian system of pilotage provides a suitable pattern on which the United States government could rely to pass enabling legislation providing for the organization of a similar system in the United States which would permit joint administration of pilotage in the restricted waters of the great lakes.
I come back again to the idea of joint administration and concurrent administration just as there is with reference to tolls. If this were found possible with reference to tolls by means of a committee composed of three Canadians and three Americans, surely the same attitude, the same method and the same procedure could be found possible with reference to pilotage. I have no doubt that if the government pursued it in that light, there could be no difficulty whatsoever. The most serious and flagrant danger of this bill is the one that is contained in clause 8 with which I shall deal on another occasion.
Mr. Speaker, may I call it 10 o'clock?



BUSINESS OF THE HOUSE

Lionel Chevrier: Mr. Speaker, may I ask the leader of the house what the business will be for tomorrow?


Howard Charles Green: Tomorrow we shall commence with item No. 5 on today's order paper, the second reading of the bill concerning the appointment of parliamentary secretaries; then continue the debate on the amendments to the Canada Shipping Act; and then take the second reading of the bill concerning freight rates.


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