1959-03-02

Hon. Gordon Churchill (Minister of Trade and Commerce) moved: for leave to introduce Bill No. C-33, to amend the Public Servants Inventions Act.
Motion agreed to and bill read the first time.



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 56-Mr. Argue:
For a copy of all correspondence, telegrams, reports and other documents exchanged between any cabinet minister and his or her deputies, and any other department of the government, and any person or persons since 1950, regarding resignations and transfers of employees of the national museum of Canada.
Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: Subject to the reservation on privileged documents.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion subject to the limitation expressed by the minister?


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 57-Mr. Argue:
For a copy of all correspondence, telegrams, and other documents exchanged between the federal government and officials of A. V. Roe Canada Limited or its subsidiary companies, relating to the discontinuance or impending discontinuance of production of the CF-105.
Hon. Raymond O'Hurley (Minister of Defence Production):: I accept the motion with the reservation as to any security documents that might be in the correspondence.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion subject to the reservation expressed by the minister?


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 58-Mr. Argue:
For a copy of all contracts and agreements exchanged between the federal government and
A. V. Roe Canada Limited and its subsidiary companies, relating to the development and construction of the CF-105.
Donat Raymond: That is subject to the same reservation as No. 57.


Mr. Speaker:: Subject to the same limitation expressed by the minister, is it the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to.


[Stage Direction]
Motion No. 59-Mr. Argue:
For a copy of all correspondence, telegrams, reports and other documents exchanged between any cabinet minister or his or her deputies, or any department or agency of the government, and any person or persons, regarding the establishment of the human history branch or the natural history branch of the national museum of Canada in any city aside from Ottawa.
Francis Alvin George Hamilton: I am glad to accept this motion subject to the reservation on privileged documents.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion subject to the reservation expressed by the minister?


[Stage Direction]
Motion agreed to.


[Stage Direction]
Motion No. 60-Mr. Argue:
For a copy of the brief submitted by the national museum of Canada to the royal commission on arts, letters and sciences.
Motion agreed to.

[Stage Direction]
Motion I. o. 61-Mr. Howard:
For a copy of all correspondence, telegrams and other documents exchanged, from January 1, 1955 to date, between the federal government and any person, organization or government, and a copy of all briefs and representations received by the federal government respecting the building of the airport at Prince Rupert, British Columbia.
Motion agreed to.
NATIONAL MUSEUM REORGANIZATION Motion No. 62-Mr. Argue:
For a copy of any study or report submitted to the government, either at its instigation or otherwise. between January 1, 1945, and December 31,
[Stage Direction]
Motions for Papers
1955, dealing with the reorganization and administration of the national museum of Canada.
Motion agreed to.

[Stage Direction]
Motion No. 63-Mr. Boulanger:
For a copy of all correspondence, telegrams, reports and other documents exchanged between the federal government and the province of Quebec, the city of Three Rivers and the chamber of commerce of Three Rivers, since January 1, 1957, with respect to the construction of a bridge on the St. Lawrence river between Three Rivers and Ste. Angele, Quebec.
Hon. Howard C. Green (Minister of Public Works):: Mr. Speaker, there is no objection to this order, provided the consent of the provincial government is obtained to tabling documents passing between the two governments.


Mr. Speaker:: Subject to the limitation expressed by the minister, is it the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 64-Mr. Argue:
For a copy of all correspondence, telegrams and other documents exchanged between the agricultural prices support board, the agricultural stabilization board, and officers of farm organizations, since January 1, 1957, referring to the question of deficiency payments and support prices on agricultural products.
Hon. D. S. Harkness (Minister of Agriculture):: Mr. Speaker, I would ask the hon. member to consider withdrawing this motion and resubmitting it in such a form as will make his meaning clearer. I do not know how this motion should be answered in its present form, because deficiency payments are one of the means by which support prices are maintained. I think what the hon. member wants is information regarding the so-called-and incorrectly called-deficiency payments being requested on western wheat, oats and barley.


Mr. Hazen Argue (Assiniboia):: That is not what 1 want, Mr. Speaker; that is what I ask for in the next order. However, I will discuss this with the minister if that is what he wishes.


Mr. Speaker:: Is it the pleasure of the house to let this motion stand?


Some hon. Members:: Agreed.
Motion stands.



WHEAT, OATS AND BARLEY-DEFICIENCY PAYMENTS

[Stage Direction]
Motion No. 65-Mr. Argue:
For a copy of all correspondence, telegrams and other documents exchanged between the Prime

Minister, any other ministers of the government, and officers of farm organizations, since January 1, 1957, referring to the question of deficiency payments on wheat, oats, and barley produced in the prairie provinces.
Gordon Minto Churchill: I wonder whether the mover of this motion would consult with me as to the meaning of the word "documents". If this is intended to refer to various briefs which have been presented by various farm organizations, may I say that I think they are already in the possession of almost everyone concerned and that it might be somewhat onerous to reproduce some of those. If correspondence and telegrams alone are meant, that is a different proposition entirely.


Hazen Robert Argue: Perhaps this motion could be passed, subject to the limitation expressed by the minister, namely that public documents already presented to the government by farm organizations should not be included.


Mr. Speaker:: Subject to that limitation, is it the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, may I direct a question to the Minister of National Revenue. Is the minister aware of the arrest in Montreal today -two hours ago, as a matter of fact-of Mr. Rene Levesque, a well-known television commentator, Mr. Jean Marchand, the secretary general of the C.T.C.C. and eight other prominent television producers, allegedly because they were singing "O Canada" in proximity to the Canadian Broadcasting Company's building in Montreal and refused to move?


Hon. George C. Nowlan (Minister of National Revenue):: I am not aware of the incident to which the hon. gentleman refers. As I came into the house I heard that some difficulties had arisen outside the C.B.C. building in Montreal in which the Montreal police felt required to participate to some extent. I am not sure what arrests may have been made. If the hon. gentleman wishes I could go into the background of this affair in 30 seconds, and tell the house what has happened up to date. Perhaps I should bring

hon. members up to date on this question, anyway; I could have done so earlier, on motions.
I am advised by the C.B.C., that the situation in connection with this strike is something like Gaul; it is divided into three parts. The first part had to do with the strike of the producers to which frequent reference was made some weeks ago. I am speaking now from memory; however, four weeks ago, so I am advised by the C.B.C., an agreement in principle was determined between the producers and the corporation under which the producers might return to work. At that stage it developed that the producers felt they should not go back to work unless something was done on behalf of those who manned the picket lines.
Subsequent to that negotiations were carried on between the corporation and the union's representatives who had been on the picket lines. The first demand made was that they should be paid for the time they were on the picket lines. That was refused. Finally suggestions were made with respect to arbitration, and in the end those matters were settled.
As I understand it, on Saturday night- and again I speak subject to correction- agreements were arrived at between the corporation and all the unions under which those difficulties were settled, and then negotiations were again resumed yesterday between the corporation and the producers with respect to that agreement which had been entered into some weeks ago. Late last night it developed that there was some misunderstanding between the producers and the corporation as to the interpretation which was to be placed on one paragraph of that agreement. As a result the negotiations broke off either at a late hour last night or at an early hour this morning, and the representatives of the producers went back to Montreal to report to their associates there. I was advised that a meeting was to be held this morning at ten o'clock at which these matters were to be discussed.
That is all I know of this matter, Mr. Speaker, subject to the report I got just as I entered the chamber and the information given me by the hon. member in his question. I take it that the meeting was held this morning, and apparently after the breaking up of the meeting there was a demonstration of some kind in front of the C.B.C. building which resulted in some activity on the part of the police. I presume this will be a matter of news and doubtless it will be fully reported in the press. I shall certainly make inquiries as soon as I can, and I should be in
Inquiries of the Ministry a position to report to the house tomorrow giving all the details. That is all the information I have.


Lionel Chevrier: A supplementary question, Mr. Speaker. Did the C.B.C. give instructions to the police officers in Montreal to intervene in this matter, resulting in the arrest of these several distinguished people?


George Clyde Nowlan: Mr. Speaker, I have no knowledge of that whatsoever, but I would be very much surprised if a police force such as the police force of Montreal would take instructions from anyone as to what they think their activities should be.


Hazen Robert Argue: Mr. Speaker, my question has to do with a radio report to the effect that the corporation would not recognize the producers' association if it was affiliated with the Canadian and Catholic Confederation of Labour. Can the minister assure the house that this right of the producers will in fact be protected?


George Clyde Nowlan: I am not sure to what the hon. member refers when he speaks of the "right". The agreement which was entered into between the corporation and the union, each paragraph of which was initialled by the representatives of the union, I am told, provided explicitly that the producers would not become affiliated with any union whatsoever. That was the position which the corporation took from the beginning. It was well understood. I believe it is the position the corporation has taken throughout all these negotiations. It was felt that if the producers were to be recognized as a union they should apply to the Canadian labour board and obtain certification. I believe it was the interpretation of that clause of the agreement which caused the adjournment of the discussion.


Lionel Chevrier: Mr. Speaker, may I be permitted to ask a further question. In view of the statement made in the house on February 6 to the effect that the producers and the C.B.C. had arrived at an understanding-not an agreement, because one was not signed, but an understanding-can the minister tell the house or can he explain the reasons for the prolonged delay in reaching an agreement between those two parties?


George Clyde Nowlan: As I explained, I thought, the reason is that after this understanding or agreement, call it what you will, was reached between the producers and the corporation, the producers then refused to go back to work until various unions which had supported them on the picket lines had, as they said, been looked after, so there were prolonged negotiations going on. Those on the picket lines first demanded that they should

Inquiries of the Ministry be paid for having marched around in the picket lines, or for having stayed at home when the picket lines were operating, and then finally the question of arbitration was discussed for some weeks. It was really a discussion not with the producers at all but with I think five other unions, three official unions and the artistes and authors who are not, as I understand it, officially recognized as unions but have been given the same status. Discussions were carried on with each of those five organizations during the last days or weeks, and they culminated only on Friday night or Saturday night when the producers came to discuss and, I am told the corporation thought, to sign the agreement which was entered into some time early in February.


Mr. Raymond Eudes (Hochelaga):: Perhaps the Minister of Justice will inform the house on what grounds or at whose request those respectable citizens were arrested this morning?


Hon. E. D. Fulton (Minister of Justice):: No,
Mr. Speaker, the Minister of Justice is unable to inform the house because, after listening to the report of the Minister of National Revenue it appears that the arrests, if any, were made by the Montreal city police, which force is not subject to the authority of the federal parliament or government.



FRENCH NETWORK


[Stage Direction]
On the orders of the day:
Lionel Chevrier: May I ask
the Minister of National Revenue if he has had time to consider his reply to the questions I asked him on February 20 last dealing with the live content of French programs on the C.B.C. network, and whether there have been violations of the regulations of the C.B.C.?


George Clyde Nowlan: Mr. Speaker, I probably should have given an answer to this question before the chairman of the board of broadcast governors went away. I discussed the matter with him the other night for a few moments, and he told me that there was no violation of the regulations. I was a little surprised, as I am sure the hon. member will be, that there are no regulations governing television content at the moment. That is something which will be rectified by the board of broadcast governors in the immediate future. I think there has been an implication that the radio regulations would apply to television. I had intended to ask the chairman to give a definitive answer to that matter and put it on the record, and if the hon. member wishes me


to pursue it further I will do so and read his statement into the record within a day or so.


Lionel Chevrier: Are there any regulations concerning private television stations as well?


George Clyde Nowlan: I had only some casual conversation with the chairman in my office about this, and he told me there were no regulations respecting the live content of television programs in Canada at the moment, nor had there been at any time heretofore.


Hon. J. W. Pickersgill (Bonavista-Twillingate):: In view of the answer given by the Minister of National Revenue, I wonder if he or the house leader could tell us when the government proposes to set up the committee on broadcasting which was promised at the very beginning of the session.


George Clyde Nowlan: I do not think it was promised at the very beginning of the session. At the time the legislation was brought in last year a promise was made that a committee on broadcasting would be established at this session of parliament.


John Whitney Pickersgill: At the beginning of the session.


George Clyde Nowlan: Whether or not "beginning of the session" was said I am not certain. I suppose it depends on how long the session is going to be whether this is the beginning of the session or not. But it is the intention of the government to set up a committee on this matter in the near or immediate future.



COLUMBIA RIVER


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Minister of Public Works. My question is based on a newspaper report in the Vancouver Sun of February 26, of remarks made in the provincial legislature by Premier Bennett, concerning the development of the Columbia. The report reads as follows:
Ready to Go
On his recent trip to Ottawa Bennett said he met with federal works minister Howard Green and offered to sign an agreement now for public development of the Columbia with the federal government. Green would not support the plan, he said.
In view of the fact that the minister's statements in the house and in the country throughout the years have consistently indicated his constructive and co-operative approach to this question in order to clear up any misunderstanding would he care to comment on this report.


Howard Charles Green: Mr. Speaker, I am very grateful to the hon. member for Kootenay West for giving me notice of his intention to ask this question and for drawing the report to my attention. Like himself, I was amazed when I read that report, so much so that I am doubtful whether the premier of British Columbia actually made the statement. The facts are that the federal government has been and is very keen to see this development of the Columbia river go ahead and go ahead quickly. We have been somewhat concerned for fear the provincial government might have lost interest and turned its attention to the Wenner-Gren proposals for the development of the Peace river.
The hon. member will recall that in the statement I made on December 5, in my capacity as acting prime minister at the time, outlining the fact that we were suggesting to the United States that the question of downstream benefits should be referred to the international joint commission, I used these words among others:
Furthermore, the postponement of such development in favour of some other power scheme could well result in making the development of the Columbia river in Canada impossible.
I amplified that in speaking in the throne speech debate on January 29, when I said, as reported at page 512 of Hansard:
It is true that this project will depend upon the co-operation of the government of the province of British Columbia. They have been giving some indication that they would prefer to have a pet scheme of their own up on the Peace river developed by the Wenner-Gren interests. I can only say this. If this Columbia river project is killed by failure of the government of British Columbia to co-operate they will be doing a great disservice to the people of our province and to the people of Canada.
With this background I met with Premier Bennett here three or four weeks ago-and by the way he also met with other ministers. I asked him as to whether or not his government really intended to do anything about the Columbia river. The hon. member knows that Premier Bennett is a very impetuous and, might I say, impatient man. He said, "Why, let us sign a letter of intent right away". Of course neither of us was in a position to sign a letter of intent, and I pointed this out to him. If he did make the statement referred to, this can be the only justification he had for making it, which I suggest amounts to absolutely no justification at all.
Actually the international joint commission met about two weeks ago in New York and had a very successful meeting. They are meeting again later in March at Chicago. The policy of the federal government remains as it was set out in the speech from the throne on October 14, 1957, namely:
Inquiries of the Ministry
My ministers are pressing for a favourable settlement of international problems in connection with the Columbia river to clear the way for a joint program with the province of British Columbia to develop the immense power in the waters of this river.
In addition to the meetings of the international joint commission, a technical committee has been set up consisting of representatives of the province of British Columbia and the dominion government. This committee has met twice and had very useful meetings. I believe a higher level committee with representatives from the two governments is also to be set up. There is every reason for hope that there will be full cooperation in the early development of the Columbia river. Certainly there will be no lack of co-operation on the part of the federal government.


Herbert Wilfred Herridge: I want to thank the minister for clearly removing any reasons for misunderstanding and establishing the truth.



INDUSTRY


[Stage Direction]
On the orders of the day:
Hon. Paul Marlin (Essex East):: Mr. Speaker, may I ask the Prime Minister whether he is in a position to answer the question I put to him on February 26, Thursday last, as to whether or not he had received a report presented to him on December 2, 1957, by the air industries and transport association of Canada?


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I had an examination made of the files, and I ascertained that on December 2, 1957, a confidential brief was delivered to myself and other members of the government, I think, by the air industries and transport association of Canada. That brief was not only confidential but even went further and stated that it was not for publication in any way. When the question was asked the other day it brought to mind the necessity of maintaining a reasonable degree of care in answering questions on the orders of the day because no one can recall the almost numberless briefs that are received over a period of time.


Paul Joseph James Martin: May I ask a supplementary question. Is the Prime Minister aware that this confidential document can be obtained from the library of parliament, and bears reference number TL523-A77-S3-B2?


John George Diefenbaker: That is perfectly true, which indicates that the hon. gentleman had the answer to the question when he asked it the other day.
1494	HOUSE OF
Inquiries of the Ministry ST. LAWRENCE SEAWAY



REQUEST FOR STATEMENT CONCERNING IMPOSITION OF TOLLS

[Stage Direction]
On the orders of the day:
Mr. W. H. McMillan (Welland):: I should like to direct a question to the Minister of Transport. In view of various press reports concerning the imposition of tolls on the St. Lawrence seaway, can the minister say when he will make a statement to the house on this matter?


Hon. George H. Hees (Minister of Transport):: Mr. Speaker, we are in touch with the government of the United States about this matter, and I expect to be making a statement shortly.



ADMINISTRATION OF JUSTICE

[Stage Direction]
lord's DAY ACT-OPERATION OF TRANSPORTATION

[Stage Direction]
On the orders of the day:
Mr. John MacLean (Winnipeg North Centre):: I should like to direct a question to the Minister of Justice. Inasmuch as the Lord's Day Act is so designed that those services which are permissible on Sunday are specifically detailed in the act and makes no provision for the operation of any service that has come into being since 1906, has the minister's attention been drawn to a case recently heard by the Alberta supreme court in which two interprovincial trucks were stopped on Sunday and charged with violation of the Lord's Day Act? If so, would the minister care to tell the house if his department at the present time is studying this statute with regard to the operation of buses, trucks, street cars and airplanes in Canada?


Edmund Davie Fulton: Mr. Speaker, the hon. gentleman was kind enough to mention to me his intention to ask this question. In reply I should advise him that the fact that a case of the nature to which he has referred is before the courts has been drawn to my attention. I have not yet been furnished with a copy of the judgment, and I am not quite sure where the case stands at the present time.
In answer to the second part of his question I can assure the hon. gentleman and other hon. members that the department is watching the progress of this case very carefully, and will watch it at all stages in order to see what the ultimate decision will be.



URANIUM-INQUIRY AS TO AGREEMENT WITH JAPAN

[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of ihe Opposition):: I should like to ask a question of the 

Secretary of State for External Affairs. Having regard to the fact that the minister stated in this house on June 23, 1958 that he hoped that Canada would be in a position shortly to begin negotiations with the government of Japan for bilateral agreement on the peaceful uses of atomic energy, and having regard to the fact that the Minister of Trade and Commerce confirmed that hope a few days later, can the Secretary of State for External Affairs tell the house when these negotiations began and what progress is being made with regard to them?


Hon. Sidney E. Smith (Secretary of Stale for External Affairs):: Mr. Speaker, I recall making that statement, and that was our hope and expectation at the time. As this matter involves several departments I shall be happy to take the question of the Leader of the Opposition as notice.



OIL-INQUIRY AS TO REPRESENTATIONS RESPECTING IMPORTS INTO U.S.

[Stage Direction]
On the orders of the day:
Mr. G. J. Mcllrailh (Ottawa West):: Mr. Speaker, I would like to direct a question to the Minister of Trade and Commerce. In view of the fact that the oil import restrictions of the United States which affect the Canadian crude oil exports expired on February 28, and in view of the news item over the week end indicating that it was proposed to make them mandatory, could the minister advise us as to what exactly is the position in this regard, and whether or not the Canadian government has made any further representations to the United States government opposing any mandatory restrictions or regulations?


Gordon Minto Churchill: My understanding, Mr. Speaker, is that an announcement will come from Washington in the course of the next few days with regard to this particular matter. The position of the Canadian government was stated very clearly at the meeting of the joint Canadian-United States committee on trade and economic affairs in Ottawa on January 5 and 6, and that position is unchanged and has so been indicated to the authorities at Washington.


Paul Joseph James Martin: Is the minister not aware that in the New York Times of Sunday last, in view of the request of the President of the United States that the matter rest until March 10, he is quoted as having said that he is going to give consideration to further representations before that date?


Gordon Minto Churchill: Mr. Speaker, I feel honoured at being mentioned in such a paper as the

New York Times, but I have made no statement to that effect. We will have to wait until the text, if any, is received from Washington so we may see exactly what is proposed.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Erharl Regier (Burnaby-Coquillam):: I should like to ask a question of the Minister of Finance. Can the minister inform the house whether or not the forthcoming personnel changes in the tariff board represent a move in the direction of higher tariffs on imports into Canada? If not, can the minister indicate why a change in the board's personnel has been found necessary at this time?


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, it is quite evident that the hon. gentleman has quite misapprehended the situation. Members of the tariff board are appointed for ten year terms. The one qualification laid down by the Tariff Board Act is that a member reaching 70 years of age retires automatically. It happens that the terms of the two vice chairmen of the tariff board expire on March 31 next. That is all there is to the matter. Their terms will expire on the 31st day of this month.
As to the chairman of the board, I may say that his term does not expire at the present time and would not expire for several years. If he continued on the board he would reach the point of retirement, because of the 70 years of age provision, in about two years, I believe. But Mr. Hector McKinnon, than whom there is no finer or more highly respected public servant in this country, had decided, I am informed, well over two years ago-certainly a considerable time before this government came into office-that he did not intend to wait until he reached 70 years of age before retiring, and he had communicated that wish to my predecessor, who urged him to carry on.
Shortly after the present government took office Mr. McKinnon intimated to me that he wished to retire shortly. He gave me the reasons. I assure the house that the reasons are entirely personal. No significance should be attached to this matter on any other basis whatsoever. In view of the heavy docket of cases and references awaiting decision on the part of the tariff board, it was at my urgent request that Mr. McKinnon agreed to carry on. He has extended the period that he had agreed to carry on, and at the time of the last extension I made it a matter of a strong request to him that he should carry on until
Inquiries of the Ministry completion of the report of the board on a particular reference.
At some personal sacrifice and by changing plans he had made, Mr. McKinnon accommodated that wish, and out of a sense of public duty he agreed to carry on until March 31 and is doing so. In so doing he is earning the warm-hearted gratitude of the government.
I wish to say that I greatly regret that Mr. McKinnon is not carrying on until he reaches 70 years of age. However, the decision he has made is one that I must respect and accept. When he agreed to the last extension I promised that I would not ask him to carry on beyond March 31 because of the fact that he was yielding to some considerable pressure on my part in agreeing to carry on until March 31.
I leave this subject, Mr. Speaker, with this observation. I think Mr. Hector McKinnon, in the long years of service he has given to the people of Canada in a variety of responsible positions in the public service, has earned the undying gratitude of all Canadians.


George James McIlraith: I have a supplementary question, Mr. Speaker. In answering the question the minister has dealt with the case of Mr. McKinnon, the chairman of the board. I think we all share his views about Mr. McKinnon's work. But I should like to ask about the termination of the term of office of the other two gentlemen. Were they asked to continue their duties or to continue in office?


Donald Methuen Fleming: The hon. gentleman refers to the termination of the term of office. There is no such termination. These gentlemen were appointed for a ten-year term, and their ten-year term expires on March 31. The government has taken no step to terminate their term. It simply follows in pursuance of the terms of the statute and the terms of their appointment by the previous government.


George James McIlraith: Perhaps I did not make my question clear, Mr. Speaker. My question was whether or not the government asked them to continue in office.


Donald Methuen Fleming: Mr. Speaker, the government has not asked these gentlemen to continue beyond the term for which they were appointed.



ATOMIC ENERGY


[Stage Direction]
On the orders of the day:
Hon. J. W. Monleilh (Minister of National Health and Welfare):: Mr. Speaker, last

Inquiries of the Ministry Wednesday the hon. member for Welland asked me a question concerning the strontium 90 content of wheat and milk.
As far as wheat is concerned, the department is not at present measuring strontium 90 on a regular basis. Recent spot checks indicate, however, that wheat does not contribute appreciably to the strontium 90 content of the Canadian diet.
In regard to milk, our findings indicate no hazard to health. The next regular departmental report on strontium 90 levels in milk is expected to be ready for release in a few weeks. I might say that it has been our intention, which we hope to achieve soon, to bring out these reports at more frequent intervals.
As hon. members probably know, calcium and strontium nearly always occur together in foods and behave much alike in the human body. The most recent figures show that Canadians obtain 80 per cent of their dietary calcium from milk and milk products, in contrast to only 3 per cent from wheat in the form of flour, the main way in which wheat is consumed by Canadians. As a result it seems to us that in this country, milk analyses are currently the best means of determining the human intake of strontium.


Hazen Robert Argue: I should
like to ask a supplementary question. Has any study been made as to the danger of contamination from strontium 90 by any continuation of nuclear tests? Are we now getting near the danger point, so that further nuclear tests may in fact bring about contamination?


Jay Waldo Monteith: Mr. Speaker, when answering the previous question I think I mentioned that we hoped to have the next report out in a few weeks. At that time I imagine the report will indicate what is happening.


Paul Joseph James Martin: I should
like to ask a supplementary question. Has the minister's attention been drawn to a statement made by a government official in the province of Manitoba regarding this question, and will he give consideration, if he is not able to do so today, to making a statement at the earliest possible moment in view of the importance of this matter? The statement in Manitoba had to do with the adequacy of the federal government's standards for measuring radioactivity.


Jay Waldo Monteith: Mr. Speaker, I do
not recall the exact day, but some days ago I was asked a question-I think it was by the hon. member for Kootenay West-concerning reports coming out of Winnipeg or out of Manitoba, and the questions were answered at that time.
IMr. Monteith (Perth).]
(Translation):



PUBLIC SERVICE


[Stage Direction]
queen's printer On the orders of the day:
Mr. Alexis Caron (Hull):: Mr. Speaker, I wish to direct a question to the Secretary of State.
When can we expect the appointment of a new queen's printer for Canada?


Hon. Henri Courtemanche (Secretary of State):: This appointment being a responsibility of the cabinet, it will be announced as soon as it is made.
(Text):



DOMINION-PROVINCIAL RELATIONS NEWFOUNDLAND    IMPLEMENTATION OF REPORT OF ROYAL COMMISSION ON REVISION OF TERMS OF UNION

[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: I wonder if I may direct a question to the Prime Minister. Now that five weeks have elapsed since the Prime Minister received the representatives of the government of Newfoundland, is he yet in a position to say how soon the government hopes to be able to announce its intentions with regard to the McNair report?


John George Diefenbaker: Mr. Speaker, this matter was given the fullest consideration, and continuing consideration is taking place. When we are in a position to bring it to the attention of the house we shall do so. I hope it will be in the not too remote future. If we progress with the business ahead of the house I am sure the hon. gentleman will not have too long to wait.



HIGHWAYS


[Stage Direction]
On the orders of the day:
Lionel Chevrier: May I direct a question to the Minister of Transport. It is probably similar to one I have already asked. I must admit that I am not too sure now, on calling on my memory, what the answer was, but it arises out of a newspaper report which I recently saw. The question is, has the Department of Transport or the government made an agreement with the province of Quebec for the construction of a four-lane or six-lane highway upon property expropriated by the St. Lawrence seaway authority in the St. Lambert area?


George Harris Hees: No, Mr. Speaker.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. J. R. Tucker (Trinity-Conception):: would like to direct a question to the Minister of Transport. Has the Minister of Transport seen the report in the St. John's Telegram that the icebreaker McLean did not respond to a request from the mayor of Bell island for assistance in landing urgently needed supplies on that island; and if so, does the minister intend to do anything about the matter?


George Harris Hees: Mr. Speaker, this matter has not been drawn to my attention, but I will look into it and see what can be done.


Donald Methuen Fleming: that the house go into committee of supply.



DEFENCE POLICY, DEFENCE PLANNING, DEFENCE PRODUCTION

Lester Bowles Pearson: Mr. Speaker, this motion to go into supply provides me with the opportunity to raise certain questions concerning defence policy and defence planning in this country, with special reference to the necessity of planning defence production. I express a hope at once, Mr. Speaker, that the Minister of Defence Production will follow me immediately in order to deal with the questions in regard to this matter which I propose to raise. We have not heard from the minister on this matter Mr. Speaker. I know, he will be happy to take advantage of the opportunity we are now giving him.
As I have just said, Mr. Speaker, I propose to make special reference to the necessity of planning defence production in order to avoid in the future such wasteful, confused and harsh procedures as those which were followed in the cancellation of the contract for the CF-105. As we are now entering into a new era of defence policy, of defence production, and I hope of defence organization in this country, in view of changing circumstances it is all the more important, surely, that the government should adopt businesslike and efficient procedures, planning and development, among other things, to ensure that our defence production and defence activities do not become mere adjuncts to those of the United States.
Defence Policy, Planning and Production
The defence activities, defence plans and defence policies of our two countries are bound to be very closely related. No one on this side, Mr. Speaker, desires to do or say anything which would interfere with the necessity of defence arrangements which recognize the interdependence of the two countries; but while that surely is obvious and inevitable, the recognition of interdependence in defence matters must be a genuine recognition of genuine interdependence, and not the subordination of these matters of arrangements for the production and the planning of one country to those of the other. No one emphasized the necessity for Canada maintaining her own position within this context of interdependence more than hon. gentlemen opposite when they were sitting on this side of the house.
I should like at the beginning to look at the air defence situation with regard to policy and planning. When the government took over in June, 1957 one of the very first things it did in this field was to agree to the establishment of a North American air defence command after what we have always, on this side of the house, considered to have been quick and casual consideration. As has been made very clear in this house during previous sessions, this was done without any formal intergovernmental agreement and without referring the matter at the time to parliament. The speed with which Canada's air defence squadrons were put under this North American command was quite a contrast to the delay and uncertainty with regard to government policy respecting the Arrow contract.
I suggest that the strong and obvious desire of the United States government at that time to set up NORAD gave the Canadian government a great opportunity to ensure that Canada's legitimate rights in all aspects of continental defence should be safeguarded and ensured. We had a very high card to play in the negotiations which then took place, and it was a Canadian card which could have been played without prejudicing continental security in any way. Indeed, it might have been played in a way which would have increased continental security because, notwithstanding what the Minister of National Defence has said in this house, the United States and Canadian air defence commands at that time were very closely co-ordinated even in the absence of an agreement such as the NORAD agreement. We certainly were not standing alone at that time. This was the opportunity to have made our views known to the United States and to have laid down reasonable conditions which would have strengthened and maintained the Canadian position without interfering in any

Defence Policy, Planning and Production way with legitimate demands for continental security which, of course, must always come first.
What should we have done on that occasion? I suggest that in the first place we should have pressed for the placing of NORAD under NATO command, for NORAD becoming part of the Atlantic effort, and as genuinely collective in that regard as SACEUR and SACLANT.


An hon. Member:: You are a little late.


Lester Bowles Pearson: The hon. member says we are a little late. This matter was brought to the attention of the House of Commons and to the attention of the public almost as soon as the NORAD agreement was published; and at that time, one and a half years ago, we suggested that the arrangements should be made part of NATO. I made reference to this matter not only in the House of Commons but also in the country before the house met.
The other thing which I suggest should have been done at that time is this. We should have linked the signing of the NORAD agreement with suitable and equitable arrangements for pooling defence production and developing defence resources. We know what happened. Those things were not considered at that time, or if they were considered nothing was done about them, and as a consequence of the signing of the NORAD agreement, desirable though it may have been in other respects, any subsequent room for manoeuvre in order to protect our Canadian position in continental defence was very greatly weakened.


John George Diefenbaker: Would the hon. gentleman allow a question? He has mentioned what the effect would have been if NORAD had been, as he suggested, made part of NATO. I am not going to discuss that question or agree with him for a moment in his contention in that regard, having already taken an opposite position. But I would ask him what possible benefit that would have had-even if he be correct in his conclusion-having regard to what happened in the signing of NORAD, in bringing together a stronger sense of joint production. Did we achieve anything in that direction when we joined NATO?


Lester Bowles Pearson: The Prime Minister did not quite follow what I was saying. Perhaps hon. members opposite would permit me to make it clear. I showed the courtesy of permitting a question to be asked, and I hope hon. members opposite will show me the courtesy of allowing me to reply.
I said two things might have been done at that time. One was that we might have made NORAD a command of NATO. I said
that without any reference to the pooling of defence production or the development of defence resources. I said that the second thing which might have been done at that time-and I am not relating this to NATO- was to have linked the NORAD agreement, irrespective of its relationship to NATO, with suitable arrangements for pooling defence production and developing defence resources. That was when we had the opportunity to bring these two things about.


John George Diefenbaker: Was the same opportunity not available when NATO was set up?


Lester Bowles Pearson: I would remind the Prime Minister, though I am sure he does not need any reminder, that under the NATO pact, the tenth anniversary of which we shall be celebrating in a few weeks there were clauses designed to bring that about. Article 2 was one, and there are others. And at the first meeting of the NATO council a committee was set up to implement those clauses and put into effect the principle of balanced collective forces. But this was studied, and this was done, only in respect of the western European part of NATO defence, because the North Atlantic sector was not included in NATO at that time. Perhaps that should have been done when the commands were set up. In so far as it was not done the former government, naturally, takes its share of the responsibility. However, there was another opportunity when the United States expressed its wish to establish a North Atlantic defence command, and that was done-


Howard Charles Green: Would the hon. gentleman permit a question? Had his government not been negotiating with the United States about the setting up of NORAD, and had it done anything about this pooling of production?


Lester Bowles Pearson: The hon. gentleman raises a perfectly fair question. It is usually put in the form, did you not agree to NORAD before 1957? This, as I have said more than once, was not the case, and I am on record as saying so at half a dozen places in Hansard. Consideration of the NORAD agreement in 1957 did not proceed to the point where the cabinet took any decision with regard to it. The matter was still under consideration by the departments most concerned. The Department of National Defence, I admit, had one view with regard to the advisability of signing this agreement at once. Other departments of government-and I can perhaps include myself as the head of one such department-felt that before such an agreement was signed, with all its far-reaching consequences, every implication should be studied, and one implication was the effect upon joint production and the development

of our resources. That was still under consideration when the government changed.


John George Diefenbaker: Is there any record of that view on your part?


Lester Bowles Pearson: My hon. friend has the departmental records at his disposal, and I have some records of memoranda at my disposal. I can assure my hon. friend that if there had been unanimity in regard to this matter at the time, and if it had been discussed and decided not as it was later in 1957-at one or two cabinet meetings at the most, it would have been done; but the fact that it took so long to do it shows how seriously it was regarded by us as a change in Canadian defence and defence production policy.
What was the situation, then, in regard to the planning and development of the CF-105 when the new government took over? The Minister of National Defence has emphasized on more than one occasion that there was no immediate change and that the government decided to carry on, as the previous government had carried on, by reviewing the matter from time to time, I believe every six months or every year, and that that procedure, proceeding from stage to stage, would be carried on as of the summer of 1957.
The minister also informed us last week and indeed earlier that during the summer of 1957 some extremely significant changes took place in the strategic conditions which govern defence policy, and indeed that is undoubtedly the truth. There were three such changes that had a direct bearing, surely, on any government decision in regard to proceeding with or discontinuing the CF-105 contract. One of those changes which altered the whole world strategic picture was the firing by the Soviet union on August 27, 1957 of the first intercontinental ballistic missile. The other two changes both took place on October 4, 1957. One was the unveiling by the A. V. Roe Company of the first Arrow as a completed machine or, if you like, a going concern which made it possible in a way which was not possible before for the government to negotiate for its sale to other countries. The other change was perhaps the most far-reaching of all and it occurred, as I said, on the same day, October 4, the day the Arrow was unveiled in Toronto. On that same day the Soviet launched its first earth satellite.
The minister is quite right in stressing the importance of these developments, as he has done more than once, on the strategic picture in the world and indeed on the strategic picture in regard to our own defence policy and planning. Presumably the government took notice of these developments, but presumably also it decided at that time, in the
Defence Policy, Planning and Production autumn of 1957, to carry on for another year with the Arrow proceeding from stage to stage and reviewing the progress after each stage.
In view of what happened in the autumn of 1957 I suggest that was the time for the government to have come to certain decisions, not a year and a half later. In view of the fact the minister said only last week in this house that these developments represented very significant changes in the strategic scene, I suggest the government should have acted at that time. Those changes took place in the autumn of 1957, but it was not until February of 1959 that the government took definite if negative action with respect to our air defence planning which the minister argued the other day was required by, among other things, the changes I have jusl mentioned.
The minister will surely agree with me- and if he does not he will perhaps interrupt me and tell me-that the strategic situation as it developed following the changes I have mentioned made it quite clear, as he himself has already indicated, that the number of CF-105's needed would be far less than the 500 originally estimated as required for Canadian squadrons. If that was true it was bound to mean that there would be a very great increase in the cost of the CF-105 development unless we could sell some of these planes abroad. Therefore I ask what should the government have done in the autumn of 1957?
Surely the government should have tried to secure an order from the United States. Surely it should have endeavoured to secure a definite decision from the United States at that time as to whether or not an order was forthcoming, and in the light of what it learned from Washington then to decide before the end of 1957 whether it should gradually wind up the CF-105 project after working out alternative ways of using the productive facilities of the company, or whether it should go ahead and build the number required, which we later learned was 100, and during that period until completion, which we are now told would have taken to the summer of 1961, plan for the future use of these air production facilities.
Well, Mr. Speaker, the government did not do either of these two things in the autumn of 1957. The minister has told us that the first approach by a minister of the present government to the United States government for an order was not until September of 1958, about 10 months later. Indeed, at his press conference on television last Tuesday, February 24, the minister-and I quote from the record of that conference-had this to say:
It was only in December-
1500	HOUSE OF
Defence Policy, Planning and Production
That is, December of 1958.
-that we got the final definite "no" when we were over in Paris that the United States would not take it.
By "it" the minister meant the Arrow, of course. He then went on to say:
I got the impression-
I emphasize that word "impression".
-when I went down to Washington in the fall-
That is the fall of 1958.
-that the United States were not interested in it and then at that conference of ministers in Paris I asked for a definite decision.
In other words the minister asked for a definite decision not in December of 1957 but in December of 1958.


Mr. Pearkes:: The hon. gentleman invited me to interrupt, and perhaps I could do so at this point. If I could not get a definite decision in September of 1958, how could I get a definite decision in September of 1957?


Lester Bowles Pearson: I do not know, Mr. Speaker.


George Randolph Pearkes: Nor do I.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: But surely the minister, who is an experienced man in these matters, could have gone down to Washington in the autumn of 1957 and told the United States government, "If you cannot give us a definite decision one way or the other we will have to plan without taking your needs into consideration at all". Did the minister have to wait from June of 1957 until December of 1958 to find out from the United States whether or not they would buy the Arrow?


George Randolph Pearkes: He did not wait that length of time.


Lionel Chevrier: What did he do?


Lester Bowles Pearson: The dates speak for themselves.


Howard Charles Green: Would the hon. gentleman permit a question? Why did not your government see what it could do about selling Arrows to the United States before it got into this big program?


Lester Bowles Pearson: That is an easy question,
because it has been asked and answered before. As the Prime Minister and the Minister of National Defence have said, the minister of national defence of that time, almost as soon as the Arrow was in a stage of development that would make it possible to talk about, went down to Washington and received what the minister described the other day as an encouraging response. How could he sign up the United States or ask the government of that country for a definite decision negatively or affirmatively before the first Arrow


had been completed? No government is going to buy a plane on the drawing board; but the plane had come off the drawing board on October 4, 1957.


George Randolph Pearkes: Yes, but it had not flown.


Lester Bowles Pearson: It flew in March of 1958. If the minister is the forceful military diplomat we know he is, surely there was time to find out after October of 1957 what were the intentions of the United States government in this matter.


George Randolph Pearkes: May I answer that question? They were anxious to see performance in the air before they made a decision.


Lester Bowles Pearson: It was March, 1958 when it performed in the air; but the government claims now that it acted wisely and it acted well in abandoning the Arrow in the middle of February, 1959, and in planning after the event what should be done to cushion the resulting dislocation and sudden and serious unemployment.
I suggest, Mr. Speaker, there is no possible justification for that kind of procedure, which is a sorry example of the lack of decision and lack of planning on the part of the government. Every argument the government now advances merely points up first that the government should have got that decision from the United States long before February, 1959. And if that decision had been negative, then the government should have made up its mind. If the decision it made was against putting the CF-105 in production, then the government, and not in the third week of February, should have planned alternative production policies and made orderly arrangements for change with the company, and incidentally saved the taxpayers millions and millions of dollars.
The fact is, Mr. Speaker, that we have the right to draw it to the attention of the house. The matter was allowed to drift and no final decisions were taken until February, 1959. During those months the government itself had not made up its own mind finally whether or not manned interceptors were considered to be essential in the light of the conditions as they developed. I refer the minister to his own statement in the House of Commons last January. I refer him, as I have referred him before-indeed, I have put them on the record-to his statements in the estimates committee in July, 1958, which undoubtedly encouraged the view that the CF-105 was to be continued; or, if it was not to be continued, that its place would be taken by some other manned interceptor and that Bomarcs were merely supplementary.
I think what has already been put on the record from this side has clearly shown that

this was the impression the government desired to create in the country. There is much additional evidence to confirm that view. The Minister of National Defence is reported in the Calgary Herald of January 18, 1958, over a year ago, as saying:
I do not share the opinion that the Arrow will be obsolete before it is operational. When Russia stops building bombers it will be time for us to start thinking of some other defence.
Russia has not yet stopped building bombers. Somewhere along the line in the last 12 months there has been a change in government policy and attitude in regard to the value of manned interceptors, and particularly in regard to the value of the CF-105. But, Mr. Speaker, the government now says we did plan; that we did plan ahead. The Prime Minister told the house and the country that he told the company last September that the contract was over, and therefore the corporation is to blame for not minimizing the effect of that decision on employment or for making the necessary readjustments. Well,
I have no brief for this particular corporation, but I suggest to the Prime Minister that this is a most unfair charge against the company in view of what actually happened.
The Prime Minister rests his case for the attack he made on the company not so much on the text of the September statement, to which reference has been made more than once, but on the interpretation given to that statement in press clippings. Well, I can produce as many clippings as the Prime Minister produced to show that other interpretations were given by other newspapers. But let us return to the text of the statement itself. I know it is ambiguous, All you have to do is read it to realize that it is ambiguous, but these particular words are not so ambiguous; and I quote from the statement:
The government has decided that the development program for the Arrow aircraft and the Iroquois engine should be continued until next March-when the situation will be reviewed again in the light of all the existing circumstances at that time.
The Minister of National Defence confirmed that last Monday when he spoke in the House of Commons and on the same day the Prime Minister attempted to create, from his reading of newspaper clippings, the opposite impression. The minister said on that day, a week ago today, that permission had been given last September to extend the development for a further period to try out certain changes in the interests of economy. At the same time that statement was issued, or a day or so later, Mr. Gordon of the A. V. Roe Company had this to say, and I quote from his statement:
We anticipate no change in the level of operations.
2,	1959	1501
Defence Policy, Planning and Production Mr. Diefenbaker: Where did he make that statement?


Lester Bowles Pearson: The statement was made to the press. I ask the Prime Minister or any member of the government whether they questioned publicly or privately the validity of that kind of interpretation made by the president of the company.


John George Diefenbaker: What date was that?


Lester Bowles Pearson: September 24. Indeed, Mr. Speaker, quite the contrary; because it was only after that kind of statement had been made that in November the minister gave a very encouraging interpretation to the September statement. I refer to the Minister of National Defence. The interpretation created the impression that there was no final decision. Indeed when at that time in November-I think it was the third week in November- he was asked by the press if the Arrow had been reprieved his reply in the press was:
No, because there was no death sentence.
The Prime Minister said a week ago that there was a death sentence at the end in September, and the corporation should have known. The Minister of National Defence took a very different view a couple of months later. This is another example of confusion and contradiction, Mr. Speaker, in regard to important policies. But I suggest that even if there had been-let us admit for the purpose of argument that there had been- a clear and final notice of cancellation given to the company in September to take effect later, the position of the Prime Minister and the government in this matter is even worse; because in spite of that clear and final notice which they claim they gave, they ignored completely the A. V. Roe proposals for other projects and other work made last November. If the Prime Minister had indeed cancelled the contract, as he said he had, in September, it is utterly incomprehensible that those proposals made by the company should have been ignored by the Prime Minister or the government, especially in the light of that hidden report which we mentioned this afternoon of the air industries and transportation association, presented to the government as far back as September 2, 1957, which indicated some of the consequences to the air industry of developments that were occurring, and which was also ignored by the government.


John George Diefenbaker: Hidden report in the library.


Lester Bowles Pearson: Hidden report in the library, that is right; in the library, where we were able to get access to it after the Prime Minister found it difficult to say whether or not it would be available.
1502	HOUSE OF
Defence Policy, Planning and Production
Moreover, as one of my colleagues will show in detail in this debate, the procedure regarding cancellation of contracts embodied in government regulations left the company with no alternative but to act as they did on the abrupt notice that they received. They were told by telegram, "The contract is over." There was no other work that they had to perform except that under this contract for the government. Yet they were expected to continue operations when the contract had been taken away from them.
Where is the evidence of defence planning in this situation? If in fact the government had decided last September to cancel, consultations should have taken place at once with the representatives of the company to plan ahead, at the very least, to discuss the company's own proposals. We are not alone in questioning the wisdom of the procedure followed by the government in this matter. Apart from all the criticisms that have appeared in various Canadian newspapers regarding this procedure and the way this was done, perhaps I might quote a paragraph from the London Times of last Friday which had this to say:
It has been known for six months that the Arrow would probably have to be dropped-
That is as far as the London Times goes.
It has been known for six months that the Arrow would probably have to be dropped; what the friends of Canada would like to see is more evidence than has yet appeared that the government and the company have spent the interval in fruitful consultation on the best means of lessening the impact of the impending blow-and it is from the government that the initiative should be expected.
In the eyes of the government all the initiative in this matter was to have come from the corporation which had this contract cancelled without the kind of warning that we suggest should have been given. This is just further evidence to support our major indictment of the government that it refuses to face a problem until it becomes a crisis and then acts piecemeal and in panic. In this important matter that is the record, a record of inadequate and inefficient planning.
However, the decision has now been taken. Perhaps in the long run equally important, if not more important, is the question, where do we go now? On what concept and strategy is our defence policy now to be based? What is to be our relationship to the United States and also to NATO in regard to the implementation of this policy? Strategic conditions, the minister says, and he is right, have changed in the last few years. They have changed drastically. The missile has arrived. We are told that the Soviet union will be operational intercontinentally in this field of destruction and


diplomatic pressure by the middle of this year. We are told that by a high officer of the pentagon in Washington.
So we are now in outer space with all of its implications for war and for peace. What then should be the defence policy, the defence planning, the defence production policy of a country in Canada's position in this new strategic era? Should we not at this time be reviewing our whole concept of defence planning? I hope that in this debate the government will throw some light on this vital question which is more than ever in our minds now that Canada has abandoned one sector of the defence front in so far as domestic production is concerned, that sector being the production of Canadian manned interceptors, and has changed to United States produced missiles.
Surely in the light of this change, with all of its implications, we should have a hard and long look at our air defence policy and Canada's part therein. What effect should this change and the reasons for it have on defence planning? Are manned interceptors now obsolete? Only a short time ago the government rejected this view but it seems now to agree with it. If the word "obsolete" was not used in the house a week ago the impression certainly was given that the CF-105 could not do the job now for which it was designed in the light of changed circumstances. If the CF-105 is obsolete, then all manned interceptors in service, about which we know anything at the present time, and especially the CF-100, must be considered obsolete. Yet the CF-100 is our only equipment in Canada at the present time in the field of manned interceptors.
What is the policy now? Surely the maintenance of the CF-100 which is obsolete-there can be no argument about that in the light of the weapons it might have to meet-and the introduction of the Bomarc represent not so much a change of policy as a makeshift expedient until a policy is worked out. Perhaps the Minister of National Defence (Mr. Pearkes) will have something to say about that. The minister made what I thought was a very important and rather strange statement the other day when he said in the house, as found on page 1283 of Hansard for February 23, that even if the CF-105 is ended-and it is now ended-and if the CF-100 is not adequate-and of course it is not adequate for the purposes for which it was designed-we can rely on the United States manned interceptor defence and provide additional facilities for them to operate, if necessary, over our country.
I ask the minister this question. Does that mean that we are going to give up our own

R.C.A.F. squadrons once the CF-100 is finished and we are not producing it any more, or what does it mean? Has this part of air defence by manned interceptors now been assigned to the United States air force operating, if necessary, as the minister put it, over our country, which I take it would mean operating from Canadian bases? If that is not the interpretation, if that is not the meaning, are we not moving in that direction? Is the role of the R.C.A.F., with CF-lOO's and not CF-105's now minor and secondary in continental defence to an extent greater than ever before, even though we all know that the R.C.A.F. will, as it always has, carry out whatever role it is given with skill and devotion?
There is another question which has a very direct bearing on this matter. Is any provision being made for the manufacture of these United States manned interceptors in Canada? If we are going to depend more and more on the United States for manned interceptors have we made arrangements or are we contemplating arrangements for these interceptors to be used in Canada to be manufactured in Canadian factories and give work to those production facilities which have now been rendered idle by the cancellation of the Arrow?
Then there is another question. What is our position in Canada with regard to missile defence development? Let me quote what the Minister of National Defence said the other night over the air ii a press conference. He said:
I think we have got to get into that field-
That, Mr. Speaker, is the field of missiles.
-and if we stay back too long we'll be left out.
Again, he said:
We've got to get in on the ground floor . . . and use our scientists to help in planning.
Incidentally, with regard to the use of our scientists to help in planning, the current defence research estimates having to do with defence planning have undergone a very large reduction. But the minister said, "We have got to get in on the ground floor and use our scientists to help in planning." How are we going to use them? By planning for United States manufacture? It would appear so judging from recent developments.
Mr. Speaker, this is not a question of manned interceptors versus missiles and their relative value in the light of the threat they have to meet. Only experts can decide that matter. It is a question-and we have to decide it in this House of Commons-of Canada's role now that the decision has been taken to abandon the manufacture of our own manned interceptors and to introduce
Defence Policy, Planning and Production missiles and to store nuclear warheads for those missiles on Canadian territory under United States jurisdiction and custody, something which the Secretary of State for External Affairs (Mr. Smith) told the committee on external affairs last summer was not under consideration. There has obviously been a change in policy there.
The way in which these Bomarcs, and the Sage which goes with the Bomarcs or vice versa, are being introduced into continental air defence in Canada, appears to make us completely dependent on United States equipment, technology and supply. Surely it was not the intention of the Minister of National Defence in what he said over the air the other night to suggest that Canada was going to enter into the missile field in this way and surely that is not the way in which we should enter that field if we are going to enter it at all. These Bomarcs are made in the United States. They are being supplied to R.C.A.F. squadrons for Canadian use at Canadian stations which are under Canadian command and they are paid for by the United States. I refer to the equipment, the Bomarc itself. I suggest, as I have already stated in this house, that this is the first time in our history that we have accepted what we used to call in the war "lend-lease" from the United States. The Prime Minister (Mr. Diefenbaker) tries to dispose of the argument by saying that we are doing that, not only two-thirds to one-third, but we are letting the United States pay all the cost of the D.E.W. line and we are letting them.


John George Diefenbaker: Not "we are", that was arranged when you were in power.


Lester Bowles Pearson: It was arranged when we were in office that the D.E.W. line should be built at United States expense. There was in the agreement a clause which reserved all our rights and sovereignty and which gave us the right at any time after two years to take over the D.E.W. line. The Prime Minister will remember that clause. The Prime Minister will also perhaps remember that he said a year ago, when the government came into office, that they found the situation with regard to sovereignty over the D.E.W. line stations and areas extremely unsatisfactory but that regulations were made which cleared that matter up so that any reservations which any members of the government had had have been removed and everything is fine. I asked him to table those regulations. I received them on Saturday, eight or nine months later. I was a little bit surprised because it did not seem to me to be such a big job to get these regulations together. I have read every one of those regulations

Defence Policy, Planning and Production over the weekend. There has been no change in regard to the D.E.W. line which would justify the Prime Minister's statement that things were unsatisfactory when the government took over but they had made changes and fixed them up.


John George Diefenbaker: The results have been different.


Lester Bowles Pearson: If the Prime Minister, now that he has placed all these documents on the table, can tell the house which document made this important change, perhaps he will do that when the occasion arises.
These Bomarcs are being supplied for the R.C.A.F. squadrons by the United States. R.C.A.F. squadrons are being supplied by United States' equipment. The D.E.W. line and the Pinetree line provide no parallel at all to this situation. As the Prime Minister has said, the D.E.W. line was a United States initiative, made at the request of the United States and with the approval and agreement of the Canadian government, after a formal agreement had been signed between the two governments. This is a United States development that we can take over if we want to do so. But that is surely not the same as a Canadian squadron on a Canadian base under Canadian command. So far as Pinetree line is concerned, some of the stations are manned and operated by the United States. Some are operated by Canada. It is a joint project. But surely there is no connection between an R.C.A.F. squadron armed with United States' equipment paid for by the United States taxpayers and the D.E.W. line, which is a United States line built, operated and maintained by the United States at its own expense but under Canadian control.
Mr. Blair Fraser, a distinguished journalist, in an article in MacLean's magazine not long ago had this to say:
Canadians are proud that their country has never been in the United States free list.
We never were, Mr. Speaker-


John George Diefenbaker: And we are not now.


Lester Bowles Pearson: -until this government
decided that they would permit the United States to provide equipment for R.C.A.F. squadrons. I suggest that was humiliating and unnecessary.


George Randolph Pearkes: I wonder whether the hon. gentleman would permit a question?


Lester Bowles Pearson: Of course.


George Randolph Pearkes: Does the hon. gentleman realize that on the Pinetree line there are certain stations where the equipment has been provided by the United States and those IMr. Pearson.]
stations are manned by the R.C.A.F. What is the difference between that situation and the other one?


Lester Bowles Pearson: I realize that. I have just told the minister that the Pinetree arrangement was a joint arrangement worked out as such between the two governments. Will the minister tell me of any previous occasion when the Canadian services had their equipment paid for by the United States?


George Randolph Pearkes: I am telling the hon. gentleman right now. On a number of the Pinetree stations this fighting equipment or equipment ready to detect an enemy was paid for by the United States and is manned by the R.C.A.F. In other stations the equipment was paid for by Canada and is manned by the R.C.A.F. In some other stations it was paid for by the United States and is manned by the U.S.A.F.


Lester Bowles Pearson: I know that. I know that the Pinetree line is a joint project between the two governments. I know that we have provided some equipment for the Americans and they have provided some equipment for us. But I am suggesting that this is the first time that any Canadian squadron of the R.C.A.F. has had its equipment provided for it by the United States.


George Randolph Pearkes: I have just told the hon. gentleman that it has been provided in the Pinetree line.


Lester Bowles Pearson: The minister will have a chance to speak later, Mr. Speaker. The minister must know that all during the war we managed to look after our own expenditures with regard to Canadian services activity and I say that we can do it in the future. The wheel has gone full circle. In 1912-13, the Conservative government of the day proposed to give dreadnoughts to the British fleet and opposed the Liberal policy of establishing a Canadian navy. In 1959 we received for R.C.A.F. squadrons missiles from the United States.
Will the government tell us something about their policy with regard to this missile development? These Bomarcs, whatever their effectiveness may be now-the Prime Minister merely says that the range of action, whatever it may be, is comparable to that of the CF-105-will undoubtedly soon be obsolete and will have to be replaced. Are we to continue to rely on the United States to provide, at United States expense, all the subsequent air defence missiles we require and pretend that it is a Canadian contribution? If not and if we avoid what I consider to be this mistake in the future by taking on the full financial responsibility for our own R.C.A.F. squadrons, may we not be

getting into a field that will turn out to be as expensive as the development of the CF-105?
If it is unwise to continue production of weapons which do not meet according to the government, our military requirements the alternative, the purchase-or even their receipt as a gift-of weapons in the United States which may soon be obsolete surely would be worse. The first at least provided employment and engineering development in Canada. But the second merely reinforces our dependence for production, technology and policy decisions on the United States. In puts us in the position of having to accept or refuse what the United States is going to make available to us. For manned interceptors our dependence on the United States is now absolute.
We are entitled to ask the question, is it to be the same for missiles in spite of the brave words of the Minister of National Defence the other night that we must enter into this missile field? Is the conclusion now inescapable that the continental air defence system is now under the control and organization of the United States for planning, for production and for operation? The production of the CF-100 is ended. The Astra and Sparrow projects have been terminated. The CF-105 has been abandoned; and the report of the Minister of Defence Production (Mr. O'Hurley) tabled last week in this house does not give us too much encouragement that we are going to participate in continental air defence production jointly with the United States except with regard to contracts which cover part of a greater United States effort. We have learned that there is very little to be hoped for from other NATO countries.
Therefore I ask the question, can we expect this Canadian segment of defence industry to expand, or even to survive, as an adjunct to a United States industry when it would be dependent on the consideration of the United States government or the generosity of the United States producers? How can the scientific and technological research, which the minister rightly thinks are essential, but the appropriations for which have been drastically cut this year, develop in Canada in such circumstances?
I suggest, Mr. Speaker, that these are all-important questions which should be answered in the course of this debate. I suggest that recent decisions of the government also make necessary an immediate and basic reappraisal of the whole defence situation to see what we can best do now in the changed circumstances to protect our national interests, while making our most effective Canadian contribution to the collective effort for
Defence Policy, Planning and Production security and peace. What about the radar detection and early warning system? Even in the present strategic position-I know the Minister of National Defence will agree with me on this-it could not be of more importance in so far as bombers are concerned. We must have an effective early warning system to give the retaliatory air forces of the United States strategic air command time to get off the ground and on their way to the enemy target. This after all is our strongest protection now against all-out assault, because it is our strongest deterrent.


John George Diefenbaker: Before the hon. gentleman goes on, what were the circumstances under which the government of which he was a member allowed the United States to have complete control of this strategic air command, having none in Canada of an equivalent nature in order to protect our country?


Lester Bowles Pearson: That is not a very difficult question to answer, Mr. Speaker. The Prime Minister said, what was done when we were in power-


John George Diefenbaker: I asked what the circumstances were.


Lester Bowles Pearson: -to prevent the strategic air command of the United States being solely under the command of the United States, and why did we not do something to build up, presumably, some kind of air command in Canada?


John George Diefenbaker: Within the limitations of our population.


Lester Bowles Pearson: It would have been quite impossible, on financial and economic grounds at that time, for Canada to have gone into the field of strategic bombing. The Prime Minister himself said the other day that one of these bombers is now worth its weight in gold. Does he suggest we should do in this field what no other country on the western side has done, even the United Kingdom? Of course the strategic air command is under United States command exclusively, and we were well advised not to enter that field. But it would have been better if the strategic air command of the United States was also part of the Atlantic defence effort and under collective control.


John George Diefenbaker: May I ask the hon. gentleman this. He has given us an indication that we should be producing missiles in Canada. The more costly of them amounts to $35 million. Would he say that we are in a financial position in Canada to do that which he said we could not do in arming a strategic air command?
1506	HOUSE OF
Defence Policy, Planning and Production


Lester Bowles Pearson: That is another diversionary effort on the part of the Prime Minister, but it is an easy question to answer. In the first place, the Prime Minister when he reads Hansard tomorrow will discover that I did not say that missiles should be produced in Canada. It was the Minister of National Defence who said that. He said over the air to the people of Canada that we should enter the missile field.


George Randolph Pearkes: I did not say we must produce them.


Lester Bowles Pearson: That is exactly the question that I want the minister to clear up. He said we must get in on the ground floor in the missile field. I am asking whether this means that we are going to produce these missiles for Canadian use in the future. Does it mean that we will produce them for United States use and have them handed back to Canada, or does it mean that we should produce them under United States contracts and buy them back?


George Randolph Pearkes: If you want an answer to that question, it is because it is the policy of this government to ensure there is sharing of production.


Lester Bowles Pearson: Perhaps the minister will let us know in more detail what he means by "sharing of production"? I suggest to the Prime Minister that before we enter this missile field we had better be very careful that we are sure, in the first place, that the missiles we are taking over, which today are the Bomarcs, are effective; and secondly, that if we are going to buy the missiles from the United States or from Canadian production we should make sure what that means in terms of expenditure. I make the point again that if it were beyond our financial capacity to continue the manned interceptor effort represented by the CF-105, the Prime Minister had better inquire whether, if we take over the responsibility of having missiles in the future, it might not be even more expensive.


John George Diefenbaker: Does the hon. gentleman then admit that in so far as our joint defence with the United States is concerned, there are certain fields in which, by reason of finance, we cannot possibly equal the United States contribution and must place the responsibility on the United States to provide this defence?


Lester Bowles Pearson: Yes, I agree entirely with that. As I said the other day, it is obvious that a country of 17 million cannot take over the responsibility for its defence unless it interprets that defence in a narrow sense: The defence of its own borders and that is all. I say that Canada has to take part in 

continental defence, and that is the best procedure for its own defence. In doing that there are certain things which the United States has to do which we cannot do, and we should not lose sight of that fact. I also said, in regard to the arming of those squadrons which we have in our own air force, that that is not beyond our financial capacity but is something we ought to do.
I was beginning to say that we should be careful before we get into this new field of missiles, which the Minister of National Defence said we must enter on the ground floor, so that we may learn about all its implications in terms of strategy and economy. Now, after this diversion, I am going to-


John George Diefenbaker: It was a 100 per cent diversion in this case.


Lester Bowles Pearson: Yes; 100 per cent in terms of words, I admit. I am now going to turn to the question of the operation of the early warning lines, the importance of which as a protection or deterrent can hardly be overexaggerated in so far as the bomber threat is concerned, but which at the present time has no importance at all with regard to intercontinental ballistic missiles, which they tell us in Washington the Russians will have in operation in the middle of 1959. I am one of those who feels that if we can afford to take over activities on our own soil which are now being done by someone else-in this case the United States-we should do so. Therefore the question arises, which I have asked more than once: Should we so adjust our defence planning and defence policy to take over the operation of the D.E.W. line? What would that mean in terms of expenditure? Similarly, what would taking over the Pinetree line, or that part of it which is now operated by the United States mean, in terms of expenditure? There is a strong argument, I suggest, to the acceptance of Canadian responsibility here. I am quite sure that the government is not likely to do that, and they should not do it without finding out exactly what they are taking over. Perhaps the minister will be able to give us some information on that score, because we are told- when I say we are told, we are told from public sources-that the present D.E.W. line will soon be quite obsolete, even against the newest, most modern bombers; and in so far as intercontinental ballistic missiles are concerned it will only give a few minutes' warning.
Therefore, if we do decide to take over this line, would we be taking over what has been called an airborne Maginot line, which may have been essential and which was effective a couple of years ago-but a lot has happened in the nature of the threat to

this continent in the last two years. What has been the effect of these developments on the D.E.W. line and on the Pinetree line and what changes will be required in order to make the D.E.W. line effective to meet this threat? Some astronomical figures have been given out in Washington regarding the amount that would have to be spent to make this line effective. What are the implications for Canada in a situation which goes beyond the D.E.W. line and into an early warning system against the missile, with an antimissile missile behind it?


John George Diefenbaker: Would the hon. gentleman permit a question? Would the hon. gentleman, in the event of the improvement of the D.E.W. line, have the United States make the entire contribution? What are his views in this regard because of the astronomical cost which he has mentioned as likely to be necessary to counteract its obsolescence?


Lester Bowles Pearson: As I have tried to tell the Prime Minister before, if the alterations to the D.E.W. line are such that we can bear the cost within our borders, even if this might mean the readjustment of defence expenditures, then because this is an activity on Canadian soil we should bear that cost, if we can, to the greatest possible extent of our resources, but always on the understanding that we are not taking over something which has now become-so I have been informed in the past few months-practically obsolete. And if it is obsolete, and if the United States approaches the Canadian government with proposals to build a new kind of ballistic missile early warning system, what should be the Canadian part, if any, in that kind of development? If we are to play a part in this type of development, which would be on our own soil, must we withdraw from some other phase of continental air defence in order that we may meet this commitment and assume a special responsibility for it? Or is this anti-missile warning system, which, by the way, has the appropriate title of Bemuse, to be one of such a character and of such a magnitude-and I have seen figures mentioning billions of dollars-as would force us in this field to become an auxiliary of the United States effort? If that were true it would perhaps be better for us to withdraw from this ballistic missile early warning development and direct our resources to some form of defence which would be effective from a Canadian point of view as well as being effective from a collective point of view.


George Randolph Pearkes: What would that be?


Lester Bowles Pearson: I could think of a lot of things, but then we would have to go into
Defence Policy, Planning and Production the whole range of defence policy. We shall have a good opportunity to discuss these questions when the estimates of the minister's own department come up for consideration. For one thing, I should like to see the department's white paper before talking on the general aspects of defence, that white paper which he said last Friday could now be brought down because a decision had been taken with regard to the CF-105-or, rather, he said it could now be started. I am asking these questions with regard to the air defence of this country and of this continent in the hope that the government will be able to give us some of its views on this vitally important question which would remove some of the apprehension we feel on this side of the house, not only with regard to the nature of our defence effort in the light of the changed situation but also with regard to the relationship of that effort to continental defence and the United States.


Gordon Minto Churchill: Why does the hon. gentleman not give us his views instead of just asking questions?


Lester Bowles Pearson: That is very interesting. The hon. minister says: why don't you give us your views? I am asking a lot of questions in the hope that we may be able to obtain from the government information upon which to form views, I would remind him that the other day, when we put forward question after question to the Secretary of State for External Affairs, although he had 20 minutes in which to get up and give us some kind of answer he did not even wind up the debate in accordance with normal practice, and none of those questions were even considered. I am reminded that only one minister was in the house when we asked those questions. So perhaps the Minister of Trade and Commerce (Mr. Churchill) would stop parroting that played-out old phrase "what are you going to do".
In conclusion, I say that the questions I have put to the government are serious questions. None could be more serious. All these questions, and the situation which requires them to be asked in this house, reinforce our repeated request for a complete and comprehensive review of defence policy by a small group which could hear and question those experts who are now discussing these matters publicly almost daily. Perhaps never before in air defence history-and I will restrict it to air defence history-has such a review been more greatly needed. And if anything were needed to underline the necessity for this kind of review it has been the procedure adopted by the government in the past week in
1508	HOUSE OF
Defence Policy, Planning and Production respect of a most important aspect of defence policy and defence production.
Because of the way in which this matter has been handled by the government, and because of the procedures of confusion and delay which have been followed, I beg to move, seconded by the hon. member for Laurier (Mr. Chevrier):
That all the words after the word "that" be deleted and the following be substituted therefor:
this house regrets that the prolonged delay of the government in determining air defence policy and planning in co-operation with our allies is preventing the effective use of Canada's defence production facilities and manpower.


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, at 2.30 this afternoon I was feeling in good spirits and good health. I am not quite certain how I feel at the moment. The whole issue is undoubtedly an important one, and I know it to be a most confusing one. The problems which must be resolved in order to arrive at an effective air defence policy are, indeed, vastly complex.
They are so complex that it is necessary almost to think in terms of social economy, the budget, industry, national theories and international theories in order to arrive at a conclusion which is most likely to lead to the achievement of what we all desire, namely the maintenance of peace and the satisfactory air defence of this country.
We all know that over the years Canada has been making very heavy defence expenditures. I think it is important that we should try to start at the very beginning and follow the situation through if we hope to arrive at any reasonable and logical conclusions. In view of the fact that we are spending hundreds of millions of dollars annually through the Department of National Defence and the Department of Defence Production it seems reasonable to ask ourselves this question: why are we making these expenditures? I think it is fair to say that our heavy defence expenditures are necessary only because of fear of aggression, to prevent aggression or to protect Canada as fully as possible in event of aggression. I believe it can be said that Canada is making these expenditures because of fear of a possible war.
If we concede that we make heavy expenditures for defence because of the fear of possible aggression then it seems only natural to consider what kind of aggression it is against which we are trying to defend ourselves. All present indications are that there can be only three types of aggression, either all out thermonuclear war, a limited nuclear war or a conventional war. It could only be one of the three.
Aggression in the form of an all out thermonuclear war can only come about either 

through a miscalculation or through desperation and would undoubtedly be mutual suicide for those concerned. As far as Canada's air defences are concerned we will surely all admit we have neither the knowledge, equipment or resources to defend ourselves in the event of an all out thermonuclear invasion. I believe we find ourselves in a similar position with respect to a limited nuclear invasion. It seems logical to conclude that a limited nuclear invasion would have almost as serious results for Canada as an all out thermonuclear invasion and indeed it would undoubtedly lead to an all out thermonuclear war.
In view of this situation there can be no question but that Canada finds itself in a most difficult and vulnerable position partly because of power politics as they are being played today. As has already been pointed out and as is in the knowledge of all our members Canada is a country that is small in population but large in territory. We must be factual and honest in assessing the situation. We in Canada would be in the position of being in a no-man's land, if I may use that term, should a conflict develop between the United States and the U.S.S.R.
I was interested in the brief remarks made by the Leader of the Opposition (Mr. Pearson) with reference to the relationship of Canada to NORAD and of NORAD to NATO. We reiterate what we said here a year ago when NORAD was under discussion, that in our estimation NORAD should have been part and parcel of NATO. There should have been full integration and full partnership. We are more than ever convinced of the correctness of our position at this time. I believe that had that policy been pursued a year ago Canada today would be in a far stronger position to go to the United States and discuss proper terms of relationship and partnership in the production of defence materials. It would not have been in the position of an under-populated country talking to a powerful neighbour nation; it would have the voice and authority of all the countries that make up the organization of NATO. We in this group feel a very serious mistake was made a year ago and we are beginning to learn some of the results today.
I was interested in hearing the Leader of the Opposition use the word "planning" as often as he did in the course of his remarks.
I believe he was absolutely correct in emphasizing the need for planning with respect to our defence situation. The present condition that exists in our defence has come about as a result of a lack of planning. Because of a lack of economic, social and defence planning we find ourselves today in a predicament involving what almost amounts to the closing

down of factories and actual hardship imposed on thousands of workers who are now unemployed.
Of perhaps even greater significance-important as the other factors are-is the fact that the unplanned approach to the question of defence has resulted in confusion being confounded. An analysis of the statements made by the Prime Minister and other members of the government on the question of defence if put all together represent a highly contradictory series of statements and conclusions. One just cannot make any kind of sense from the type of information that is given to this house and the people of Canada with respect to defence in general and air defence in particular. We had an announcement on the part of the Prime Minister concerning the cancellation of the contract for the construction of the CF-105. The hon. gentleman made it clear time after time that the basic reason for the cancellation of the contract was that the threat of aggression by bombers had greatly lessened and that in view of the potential type of aggression possible today the CF-105 was completely obsolete and therefore, heartbreaking as it was, the government had to reach that conclusion.
If that statement was correct-and we had to accept the statement as being correct- what is the point of spending $350 million on the purchase of Bomarcs? As I understand it the Bomarc is no defence against an ICBM but is against the bomber. If the manned interceptor, even as up-to-date a manned interceptor as the CF-105, is no longer required because we will not have to face aggression by manned interceptors-using the Prime Minister's approach-then it is just as ridiculous to purchase Bomarcs because surely they are just as obsolete as the CF-105. Why cancel the expenditure of $400 million or $450 million which would provide work in Canada and instead spend $350 million in the United States on a weapon that is just as useless and obsolete as the Arrow is considered to be?


George Randolph Pearkes: Where did you get those figures from?


Harold Edward Winch: It is not common sense; it is stupidity, and stupidity which is very serious for Canada.
Now, because of the repercussions to the Prime Minister's statement, he tries to put himself in a better position by placing the responsibility for all the heavy lay-offs on the Avro company itself. He made quite an effective speech here the other night. He went right back to the preliminary announcement of September and brought it up to date, to his own announcement, and then told the 66968-9-96
Defence Policy, Planning and Production house and the people and the unemployed at Avro that the company knew there was another $100 million that it could spend. The company knew that there would be somewhere in the neighbourhood of three weeks dissociation or separation pay. Mr. Speaker, all I can say is that that was pure arrogance and pure nonsense, in view of the telegrams which were sent, and which were mentioned by the Leader of the Opposition, to the companies concerned. The telegrams were tabled, and, sir, there can be no question as to what the telegrams mean because they say:
You shall cease all work immediately, terminate subcontract and orders, place no further subcontracts or orders and instruct all your subcontractors and suppliers to take similar action.
Then, in another telegram dealing with capital requirements we find the following:
You are hereby authorized to cease immediately all purchasing or other acquisition and installation of the capital equipment listed in schedules "A", "B" and "C" to the CF-105 aircraft capital equipment agreement dated September 29,	1955, as
amended, bearing references B.18-38-4540 and B.69-12-44. Take notice that the cost of any capital equipment purchased subsequent to the receipt by you of this notice shall not be subject to reimbursement under section 4 of the said agreement.
Mr. Speaker, I think I understand the English language fairly well. When you receive a telegram saying that you shall cease all work immediately, which the company did, for the Prime Minister to rise in his place and make the kind of statement he did, placing all responsibility on the company, is to display, as I said a few moments ago, arrogance and nonsense.
This decision could not have been arrived at on a few minutes notice. The government must have known not just weeks ahead but months ahead of the development of nuclear weapons and the fact that present weapons, if not obsolete, would have to be replaced with something new. Surely, that was the time to reach a decision in the way of planning so that in the event of any cancellation having to be brought about there would not be the disruption of a major industry in this country nor the unemployment of thousands of people in the country by the taking of action in the way in which it was by the government the other day.
But no such thing was done. Of course, the government is now trying to recover a little bit of lost ground and therefore it has reached some kind of agreement for the retention of a few men, an agreement which could have been arrived at the day before the announcement at least and not a few days after. We hope the Minister of Finance (Mr. Fleming) is correct in his hope that it will mean the re-employment and the holding together of a band of technicians,
1510	HOUSE OF
Defence Policy, Planning and Production perhaps in the number of 1,000, although I understand from the press that the union is afraid the number may not exceed 250.	1
hope the minister's estimate will turn out to be correct.


Donald Methuen Fleming: I did not use that figure of 1,000.


Harold Edward Winch: We have to go beyond the situation which has developed because of the cancellation of the CF-105 and the purchase of the Bomarc to consider other angles where the defence air has to be cleared by the government.
As I mentioned before, it is not good enough for the Prime Minister to tell us that the CF-105 contract is cancelled because the manned interceptor is no longer of use and is obsolete, and he is going to buy the Bomarc which is obsolete except that it is not manned, and not explain the position and the decision of his government in relation to the other countries of the western powers. If it is correct that the day of the manned interceptor is gone and the manned interceptor is obsolete, then this house is entitled to know, if the decision of Canada is the correct one, why is it not the decision of the United States? If the decision is the correct one for Canada and the manned interceptor is no longer needed for continental defence, will the Prime Minister explain to us why in the budget introduced only two weeks ago in Great Britain they allocated hundreds of millions of pounds for new manned interceptors? If it is necessary there and our decision is correct, then why is it that West Germany has placed a contract for the renewal of parts and engines for their manned interceptors?
We hear a great deal of the dangers and the serious critical situation surrounding West Berlin. Canada has squadrons there equipped with the CF-100. Are we leaving them there with the CF-100? In the event of an attack are we leaving them there with something which is completely obsolete? These various things put together, just do not make sense, and at least I understand why the Leader of the Opposition asks so many questions. This confusion needs to be cleared away. It can only be cleared away by the contradictory statements being expunged and the house given information as to why various countries have differing policies.
We are all interested in the same thing, namely the maintenance of peace and the protection of our own country. I also feel that a few things must be said on the particular air defence situation in regard to Canada and our relation thereto with the United States.


According to the government's declaration, Canada is no longer going to produce manned interceptors. Moreover, we are no longer going to equip our squadrons with manned interceptors. We are not going to produce the new types of defensive weapons which modern defence makes absolutely essential. That can only mean, therefore, regardless of our interest in continental defence, that we are placing the main, if not the whole, responsibility on the United States. This means, whether the government likes the term or not, that because we are not in the major field of production any more, because we are not even going to produce the defensive armaments that we hope to have, because we are not going to be able to continue the work of scientific production in the greater fields of defence against nuclear or thermonuclear aggressive weapons, we have handed over a great part of Canadian sovereignty to the United States. This becomes of particular note when we remember the statement of the Prime Minister (Mr. Diefenbaker) that the retention, possession and control of all nuclear warheads will remain with the United States. There is something that has always puzzled me, especially in view of the statements made by cabinet ministers opposite that the threat now is the ICBM. I understand that these missiles will travel 12,000 to 15,000 miles per hour and have a range of 5,000 to 6,000 miles. That means that if we are going to be able to shoot them down we have to be mighty fast. Suppose we do have a retaliatory or defensive weapon. What are these ICBM's going to do? Are they going to remain motionless in the air until we can collect warheads from the United States wherever they may have them in order to shoot down ICBM's travelling 12,000 miles an hour?
The Minister of National Defence (Mr. Pearkes) was taken aback a little the other day when he was asked a question about a statement made by a Conservative member of parliament in Great Britain who used to be deputy commander of the NATO Atlantic fleet. That gentleman said that although he was second in command of the NATO fleet in 1952 he did not know where the atomic warheads were kept and if anything had happened to the supreme commander he would not have known what to do because he did not know where the warheads were and did not know who could tell him. I suppose he would have just waited until he found out where they were.
I think we are in a somewhat similar position in Canada. Even if somebody in Canada does know where the warheads are or will be, unless they are right where the defensive weapon is they are not going to

be of any use against an ICBM. It may be that for security reasons the government does not give us more information. But, as I said before, until the government does give us more information there is going to be a continuation of confounded confusion or confusion confounded. That is not fair to members of the house when they have to vote hundreds of millions of dollars for two departments because members of the house have a basic responsibility for Canadian defence policy and the question of where control lies.
There can be no question that we have to enter into a partnership in respect of continental defence but it is of the utmost importance that it be a true partnership, an honest partnership, a partnership on the basis that Canada is not just permitted but is expected and given every opportunity to collaborate and work on scientific projects and to produce not just a few small parts but to make a major contribution in the production of those things that will be used to mutual advantage in continental defence. It is absolutely essential for the maintenance of our economy and productive capacity and the maintenance of our scientific and technical personnel that such a true partnership should be brought about.
I have no hesitation in saying that the government should be most roundly and soundly condemned for taking the action they took the other day without at least having some definite agreement with the United States on these matters. Why, the situation was positively farcical. "Farcical" is the only word I can think of to describe it. We were told that the Minister of Defence Production (Mr. O'Hurley) would be making a major speech in which he would tell us all about the situation. But when he got up and made his speech, Mr. Speaker, it was not a matter of a balloon being pricked; there was just no balloon to prick. How he spoke with pride of the $1,700,000 contract obtained by one company to build a wing or some other part of the Bomarc missile.
Surely when the government was faced with having to make this most important and far-reaching announcement, which extends far beyond the laying off of 14,000 or 30,000 men, a statement which means a complete revision and alteration of Canada's whole defence policy, the government should have taken far greater strides and reached far greater objectives in negotiations with the United States on the question of production in Canada and the holding together of our scientific and technical personnel. From the inefficiency and ineptitude of the government it would almost appear that they had in the 66968-9-96J
Defence Policy, Planning and Production back of their minds the handing over of the sovereignty of Canada to the United States.


Gordon Minto Churchill: Nonsense.


Howard Charles Green: That is silly.


Harold Edward Winch: Whether or not they like it, consciously or unconsciously, they have achieved that result. It is not just a question of Canadian pride. It is a matter of serious import to our economy, to our people and most of all to our defensive position. I have no hesitation in saying that the defensive position as it has been outlined by the government is simply that the government has no defence. If Canada has no defence, then let us be honest. If the government thinks it has been courageous so far in cancelling the CF-105, then let the government have the courage to come out and say that there is no defence. Let us then give a lead to the world in respect to disarmament because that is practically the position that the government has put Canada in at the present time.
We in this group agree completely with the position of the Leader of the Opposition that defence is of such importance and that the responsibility of each and every member in respect of defence is such that all members must have as much knowledge as possible without infringing on the realm of security, and that can best be done by a policy of setting up a permanent defence expenditures committee with the authority to investigate expenditures and to reach a realization and understanding of government policy.
I know there are many who want to take part in this debate and I will not detain the house any longer except to reiterate as I so often do-perhaps it is a mistake-the need for a lot more information from the government and to emphasize to the government that they have to remove the confusion by removing the contradictions for which they themselves are responsible. The people of Canada merit the confidence of the government and deserve to know whether their money is being well spent. However, because it is obvious from the position of the government that knowingly or unknowingly, consciously or unconsciously, they have placed Canada in the position of a United States satellite, in the position where Canada is the first line of defence of the United States and that country intends to use us in that way; because we think it is important that it should be made known to that great country that we want to be and are going to be a partner; because we feel that is not even mentioned or emphasized in any way in the amendment
1512	HOUSE OF
Defence Policy, Planning and Production moved by the Leader of the Opposition I should like to move, seconded by the hon. member for Skeena (Mr. Howard):
That the amendment be amended by changing the period at the end thereof to a comma and by adding the following words: "and is contributing to the erosion of Canadian sovereignty."


George Randolph Pearkes: Mr. Speaker, I will deal first
with one slightly unrelated remark which was made by the hon. member for Vancouver East (Mr. Winch). He said it did not make sense to him that the United Kingdom should be developing manned interceptors at this time while Canada was not going ahead with the development of the CF-105 or words to that effect. I think that is a correct interpretation of his remark. The reason is of course this. The great bulk of the Russian bomber force is made up of short-range bombers, sometimes referred to as medium bombers. These are not capable of travelling from Russia to the North American continent-Canada or the United States-turning around and going back again. However, they are quite capable of going from Russia to the United Kingdom. If the Russians wanted to start a war, surely they would use that type of bomber against targets which were within the range of that bomber. Therefore the United Kingdom, with their Royal Air Force, must be prepared to meet that threat. That is a threat which is not serious against this continent because the range of those medium bombers would not allow them to come and attack targets here but it does allow them to attack targets in the United Kingdom. I think that should answer the question raised by the hon. member for Vancouver East.
The leader of the Opposition (Mr. Pearson) raised a number of questions. I will endeavour to answer them in some form of sequence, but it is not easy to do so because they were not in a definite logical order as they were put to the government. First of all, he queried national defence policy. National defence policy is based on our external affairs policy and it goes back to 1950. In 1950, at the time the Korean war broke out, Canada and the other countries which had the same desire for peace and democracy, bound themselves together in a solemn covenant that they would stand united against any aggressor. We have adhered to that policy which, by the way, was initiated by the Liberal government. There has been no fundamental change in that policy since the change of government. We believe it is imperative that we stand together with the other countries in what has now become known as the North Atlantic Treaty Organization and that we recognize as a solemn


obligation the agreement that, if any one of them are attacked by an aggressor, the attack will be met by the combined effort of all NATO countries. That is the fundamental policy behind our endeavour to give peace and security not only to this country but to the rest of the world.
Now a word as to the application of that policy. The plan for the application of that policy has been drawn up by commanders from the different countries meeting together as an advisory council. The policy of NATO is to provide, first of all, a shield which is partly in Europe and partly on this North America continent, in order to protect, first of all, those powers of retaliation which are the second half of the NATO defence concept; second to gain sufficient warning in Europe or on this continent to make quite certain that any advances made by the aggressor are of sufficient strength to warrant the full response of our retaliatory forces; and third, as far as Europe is concerned, if possible to delay the advances of any ground forces so that the countries of western Europe are not overrun. I think you might say that these are the main duties of the shield element of NATO.
As to the strike-back element or the powers of retaliation, they consist of the United States bombers, the British bomber force of the R.A.F. and also such missiles as may be in location in Europe at the present time. That is the force of retaliation. I suggest to you, Mr. Speaker, that this policy has held good and has prevented war for the last ten years and more. The proof of the soundness of this NATO policy is the peace which the western world has enjoyed all during this time. When people ask you what you have to show for these enormous expenditures on national defence, the answer is that you have enjoyed peace ever since NATO has been formed and that no territory has been taken away from any NATO country since it was formed. To support NATO in a balanced organization is the defence policy of this government and it will continue to be the defence policy of this government.
When NATO was first set up it was decided that there should be an integrated balanced force, not each country having a little balanced force of its own but a balance of the collective countries of NATO, each country contributing to that integrated or balanced force the particular type of weapons or manpower which that country with its resources could give and which was dictated by the element of geography. So we see now an attempt which has been growing, getting stronger and more closely co-ordinated every

year, leading to an integrated balanced force available for the defence of the western world.
We have to keep adjusting the type of forces which we are providing and the type of assistance which we are giving to the western world. We have to adjust the help which we are giving in other channels, not only that related to armed forces but also in the channels of diplomacy and our contribution to the welfare of underdeveloped countries. All of those things are part of the deterrent; they are part of the effort being made to prevent the spread of communism.
Periodically we have to consider the changes which have to be made in our approach to this problem in the type of weapons which we are providing, the numbers of troops which we may have available for any particular task. I do suggest to you, Mr. Speaker, that we are living today in an era of extremely rapid advances in science and technology. I am not ashamed to say that some of the programs which appeared to have great merit only twelve months ago no longer have the same importance of urgency in view of progress made on more technically advanced projects. We have to review the situation continually. Continually we are trying to see where the threat lies and what are the best means to counter that threat. Science is not standing still. Science is producing innumerable new developments, and the armed forces must adjust their programs and equipment to the advances made by science. It is so easy to have said twelve months ago, "You should have done this", or "You should not have done that". If we were planning against an enemy who was kind enough to inform us exactly what was in the inventory of his armament, it would be very much easier than trying to guess what a possible aggressor might do when the means of obtaining information are extremely limited and are not available immediately there is any change in the would-be aggressor's plan of armament and organization of his forces.
I therefore suggest that it is no discredit to any government if they are cautious at times and want to be perfectly certain before they take some particular line of action, and if they try to be as near certain as possible that that action is right. When this Avro Arrow program was started, I mentioned the other day that the Right Hon. C. D. Howe said it made him shudder that it was expected he would have to spend possibly $100 million, as he put it, "of other people's money". It is no easy responsibility to shoulder when instead of $100 million you are faced with the possibility of having to spend on one single project $781 million of other people's money,
Defence Policy, Planning and Production who will hold this government responsible if that money is not wisely spent.
Furthermore, Mr. Speaker, the government is charged with the responsibility of providing the best defence it can, within the limitations of the money that is available without ruining the economy of this country, so that the people of our country can live in peace and security. If we let our armour down we would be blamed. There probably would not be very many people left to blame, but it is a responsibility which we have to face, and we are conscious of that day in and day out. You are not going to discard some particular form of development which only a few months ago looked to be a very encouraging and worthwhile project to pursue.
In 1957 we assumed office, in June, without the knowledge which had been accumulated in the years before. We had to take advice from the service chiefs who had studied this problem continually, and they were then of the opinion that we should still go ahead with the development of the Avro Arrow. After the government had been in power only a few short months we made the decision to go ahead with the development of the Avro Arrow for one more year. That recommendation was made with the advice of the service chiefs. The same men, with one exception, are our chiefs of staff today. They had the courage, when new light was brought on a possible threat, to change their recommendation in this respect. They had the courage to advise the government that the nature of the threat had changed, that they had consulted with their opposite numbers in other countries and were convinced that there was a change in the degree of the threat. That recommendation was given only late last year.
There has been some suggestion to this effect: "Why did you not go to the United States as soon as you were elected to office and tell them that they had to buy the Avro Arrow?"


Lester Bowles Pearson: No one ever said that.


George Randolph Pearkes: "You have to buy the Avro Arrow", as the Leader of the Opposition indicated, "or else".


Lionel Chevrier: He did not say that.


George Randolph Pearkes: He did not use those words, but that was exactly the intent of his remarks. He was indicating that I should have gone down to Washington in the summer of 1957 and said to the United States, "If you do not take the Avro Arrow we shall discontinue it."


Lester Bowles Pearson: Mr. Speaker, the minister has quoted me and therefore I am entitled to say that what he is quoting is quite inaccurate. If he reads what I said in Hansard he

Defence Policy, Planning and Production will see that I said that after the changes in the autumn of 1957 he should have gone down to Washington and found out the intentions of the United States government in respect of the purchase of Canadian Arrows.


George Randolph Pearkes: The hon. gentleman went a little further than that, but that is good enough. I should have gone down there and found out the intention of the United States regarding the Arrow. Well, if the Americans do not want to tell me, I do not know how I am going to drag it out of them, and if the Americans have not made up even their own minds I do not know how the hon. gentleman expects me to read their minds.
In the fall of 1957 the Avro Arrow had just come out of the work shops. One of these Avro Arrows was available for inspection on the runway. It did not come out under its own power; it was dragged out on a tractor. There were United States officers present, and they were very impressed with the look of the Avro Arrow; I understand they reported back to their superiors in Washington that the Arrow had great promise. And in the fall of 1957 there was very little change in the United States attitude toward this machine which had been indicated to my predecessor, the Hon. Ralph Campney, when he went down to Washington and when he was given encouragement to go ahead with the Avro Arrow, no commitment being made. And we were given encouragement to go ahead with the Arrow in 1957 because the United States thought it might be the answer and they might have to adopt this aircraft. I went down in the fall of 1958, and by that time the opinion of senior officers of the United States air force was changing, and they were becoming doubtful.
In Paris, as I said, I got an indication that the United States was no longer considering any possibility of adopting the Arrow, but it was not a firm decision at that time, and no firm negative was expressed. It was not until December of last year when we were in conference at a meeting of the two groups of ministers that they said once and for all that they would not take the Avro Arrow. It is so easy to think that everything is black and white and that one can go down and talk with a group of statesmen from another country and get a definite yes or no on the very first visit, before they have even made up their own minds.


Mr. Hellyer:: Would the hon. minister permit a question? In what month of the fall of last year did he go to Washington and get the opinion that the United States was becoming less interested than they had been previously?


George Randolph Pearkes: I think it was in September. And that was only an indication. I want to stress the fact that no final answer was given. That is borne out by the reply which was given to us in Paris, which was something like this-that the minister's assumptions were correct.


Lester Bowles Pearson: If there was no final decision from the United States in December, how then does the minister justify the alleged decision which was taken by the government not to reach a final decision with regard to the cancellation of the Arrow before that time?


George Randolph Pearkes: In September there was, as I said, an indication that the United States would not take it. That indication, or that assumption on my part, was confirmed in December at the Paris conference. It was clear enough in my mind, although it had not been formally stated; it was clear from conversations I had had with various air force officers and others that it was very unlikely at that time that the United States would proceed with the Arrow. Hon. members must remember that it was only a week ago that we received a final and definite note from the United Kingdom on this matter.
During all these months we had been approaching officials, governments and ministers both in the United States and in the United Kingdom to see whether there was any possibility of interesting them, or any other of our NATO partners, in the CF-105. I think it is clear, therefore, that we were making efforts to interest other countries in this project, and that until the fall of last year it was impossible for this government to have made any decision about the continuance of the Arrow. It was about the same time that this government, the government of the United Kingdom and the government of the United States were able to reassess the threat which they considered would most likely come from any aggressor.
What is that threat? As I said in answer to a question by the hon. member for Vancouver East, the threat to the United Kingdom is still considered to be a threat by manned bombers as well as by missiles, the reason being, as I said earlier, because of the range of the majority of the manned bombers in the soviet armament inventory.
Now with regard to the threat to Canada. In the past, as I said last week, we had anticipated a big build up of Russian long range bombers capable of attacking targets on this continent and returning to airfields inside the Soviet union. That threat does not appear to have materialized, and according to the best information that it is possible to secure

Defence Policy, Planning and Production
it is thought that the Russians are not building up long range bomber fleets but are turning their effort into that of producing missiles rather than bombers. Hon. gentlemen opposite have asked why, if we are going in for Bomarcs, the United States and ourselves are still keeping in operation such interceptor aircraft as the CF-100, the F-101, the F-104 and the F-106 in the United States air force. The reason is that for the next few years if the Russians intended to attack this continent it is reasonable to think that they would put into operation the intercontinental missiles which they have, and that they would also, in all probability, put into operation such of their bombers as they might be able to spare for targets better within the range of the bombers that they possess. So we believe we had better keep a defence against these bombers which might be used against this continent although they would not be considered as the main arm of the aggressor. They might well come over and take on secondary targets or targets which had escaped attack by missiles. Therefore, it is surely wise to keep a certain number of interceptor squadrons for that purpose.
The United States is reported in the press as having some 70 squadrons of supersonic interceptors available for the defence of the North American continent. We have 9 squadrons of the CF-100. People ask the question whether the CF-100 and the Bomarc are obsolete. They are not obsolete as long as the Russian bombers exist. The moment the Russians scrap their bombers they will become obsolete. The moment the Russians place their whole dependence upon the missile attack then the Bomarc and the manned interceptor will become obsolete but as long as there is a bomber in the Russian air force which is capable of coming to this continent and back, or is capable of coming to this continent and being scrapped here we should still keep our interceptors in the form of our CF-lOOs which are quite capable of dealing with the majority of Russian bombers.
The interceptor squadrons of the United States air force, some of them being supersonic, are of course in a more advanced stage of development than our own CF-100. That is one of the advantages that flows from entering into an alliance or an agreement to produce balanced forces. All countries do not have to have equipment which is produced to meet the threat at exactly the same time.
A couple of years ago when the CF-100 was coming into operation Canada had the best all-weather interceptor on the North American continent. The United States did not have as good an aircraft as we had. The
United States has caught up for the time being and they have an interceptor and a means of intercepting Russian bombers superior to the CF-100. In the NORAD agreement about which some remarks were made this afternoon it is written that the squadrons of either side may for a short period or may temporarily move across the boundary and in order to facilitate that there will be certain developments made at some of our air fields particularly in western Canada where we have no defence provided by the R.C.A.F. It is outside of the range of the CF-100 or the CF-105 and so we rely today upon squadrons of United States air force to provide protection against enemy bombers over a large portion of Canada. I hope that clears up the question of obsolescence. The CF-100 will become obsolete when the Russians remove their bombers from the inventory they have.
We are being accused of having taken no action since last September to find some alternatives for the workmen at the Avro plant. I should like to give hon. members an idea of some of the missions which have been carried out since September not only by the R.C.A.F. but by the Royal Canadian Navy and the army in order to interest the United States in placing some work in Canadian plants.
We have a requirement for new aircraft for the search and rescue operations which are carried out here in Canada. As hon. members well know the R.C.A.F. have to carry out search and rescue operations in all parts of our country, on the oceans and up in the north country. It seemed there might be a possibility of getting some United States firm which had airplanes that could be used to enter into an agreement with the Avro company to see whether they would let us operate under license and build some of those aircraft that will be needed in the near future. Very soon after the September announcement a team of R.C.A.F. officers was sent to the Grumman Aircraft Company at Long Island, New York, to evaluate the SA18B, a seaplane, to see if it could be used for that purpose. This occurred on October 30 and November 1. Then we considered the possibility of getting some work done for our transport command. On November 24 and December 5 we sent a team of R.C.A.F. officers down to the Lockheed Aircraft Company in Georgia to investigate the possibility of having some work done in Toronto with respect to the C130B aircraft.
Another problem we have before us is the possibility of having to replace the Sabres of our air division, the F-86.	Between
December 7 and 20 teams went down to the
1516	HOUSE OF
Defence Policy, Planning and Production Edwards, Eglin and the Tyndall air force bases in the United States to get what information they could as to the MA-1 integrated electronics system in the F-106 and the MG-13 FCS in the 101B aircraft with the idea of seeing if they could be introduced.
Again between December 1 and December 4, another team went to the Grumman Aircraft Corporation at Bethpage, New York to investigate the technical and operational characteristics of the F11F-1F Super Tiger, which is one of the many planes we are investigating and examining to see if it would be suitable for replacing the F-86 in Europe and which if it is found suitable may be built in Canada. All this information was passed to the Avro company as soon as it was obtained. In fact, in many cases representatives of that company as well as representatives of the Department of Defence Production accompanied the R.C.A.F. officers.
On January 6 of this year a team visited the Northrop Aircraft International Company at Hawthorne, California, for the purpose of examining an aircraft and engine that might be used. Again on January 7 and 8 and on January 13 of this year a team visited Autonetics Incorporated at Downey, California, for the purpose of investigating the NASSAR radar system.
On the 6th, 7th, 9th and 17th another team went to the Northrop Aircraft International Company at Hawthorne, California also to make further inquiries. On the 14th and 16th of January yet another team went to the Lockheed Aircraft Company at Burbank, California. On the 19th to the 21st they went to St. Louis in Missouri. On the 19th to the 20th another team went to the Republic Aircraft Company at Farmingdale in New York. On the 12th to the 14th they went to investigate the Blackburn General Aircraft Company in Yorkshire, England, to see whether their aircraft could be manufactured here in this country and to see whether that aircraft was suitable. I might say that I interviewed the president of that company right here in Ottawa when he was visiting Canada about six weeks ago.
Again in February they went to Edinburgh in Scotland to see the Ferranti Electric Company. And again on the 17th of February they went back to the Blackburn people. These are some of the steps that we have been taking to see what can be done in connection with finding work for the employees at the Avro plant.
Further than that, we have had teams considering the Bomarc installations and how much of the Bomarc missiles and launching equipment could be made in Canada. They [Mr. Pearkes.l

started on October 22 and have been continuing ever since. We have had teams down to Dayton investigating the production sharing as far as the Wright-Patterson Company is concerned. On October 30 and 31 they were at Rome in New York investigating the possibility of having the SAGE computers and equipment made here. I could go on. I have not come to the end of the list by any manner of means.


Gordon Minto Churchill: Put it on the record.


George Randolph Pearkes: During November 13 and 14 and again from the 16th to the 20th of February a team went to the Eglin field to the Bomarc test sites. I went down there myself earlier-it was before Christmas-in order to see and interview the manufacturers there. I met the Boeing people down at the Eglin field and I discussed with them-I have not got the exact date but it was before Christmas-the possibility of manufacturing Boeings here. A staff representative was sent down to meet me from Mr. McElroy's office in that connection. Furthermore, the joint planning staff has met on two occasions to consider what can be done in order to share the production of this sort of work. This deals with some of the main endeavours which have been made by the Royal Canadian Air Force.
The Royal Canadian Navy has been carrying out a similar line of investigations in order to see whether there is any work which could be found in their particular line of electronics, both in the United Kingdom and in the United States, which could be placed in Canada. They have been to the Portsmouth naval yard in the United States; they have been to the General Electric at Lynn, Massachusetts; they have been to the Breck Aircraft Company at Wichita, Kansas; they have been to the Lycoming Company, Connecticut; they have been to Bayonne, New Jersey; they have been to the United Kingdom, to Germany, to France, and to Sweden in order to evaluate the missiles systems in those countries and to see whether it would not be possible for them to manufacture some of their missiles in this country. They have been to the Damneck Company in Virginia; they have been to firms in the New York area. I could go on and tell exactly the same story in connection with the army.
I have here a list of places where the army has been investigating the missile development of the United States army, always with the intent to see whether it is not possible for some of that work to be placed in the Avro plant. Every one of those missions which I have mentioned has taken place since the announcement of last September, and then hon. gentlemen across the way say that the

government has been doing nothing to try to find work for this company.
I might put on the record some of the results of those endeavours so far as defence production is concerned. I see in the report of the Department of Defence Production from January 1 to December 31, 1957, under table 6B, page 52, the value of expenditures by the United States government in defence contracts placed in Canada through the Canadian Commercial Corporation and Defence Construction Limited in 1956, was $43,447,000. Practically the same amount was spent by the United States in Canada during 1947, namely $42,970,000. In a report that I received from the Department of Defence Production at the end of last week I was advised that the total cost of United States prime contracts placed in Canada during the calendar year 1958, consisted of the following figures: For construction, $25,600,000; equipment, $32,300,000; services, $7,600,000; or a total of $65,500,000. I think this is an indication that the efforts which have been made in order to share the production of equipment between Canada and the United States are bearing fruit.


Lester Bowles Pearson: Will the minister permit a question? Can he tell us what proportion of those figures represented expenditures in Canada by the United States and for United States activities in Canada?


George Randolph Pearkes: These figures are United States contracts placed in Canada for-I think I am correct in saying this-United States requirements.


John Whitney Pickersgill: Including construction?


Lester Bowles Pearson: Bases, and so on?


George Randolph Pearkes: I gave the figure for construction; it was $25 million. As I said, this is an indication of the results of the efforts which are being made to interest the United States in the sharing of production costs.
I think it is well to recall how this sharing of production started. You will remember that a few days after sputnik was launched in 1957 the Right Hon. Harold Macmillan, Prime Minister of the United Kingdom, visited Washington and discussed with the President of the United States what they were going to do to meet the new threat. They declared then their new intent of combined co-operation. Their statement has frequently been referred to as the declaration of interdependence. That declaration of interdependence has also been shared with Canada.
You will recall that after Mr. Macmillan visited the President of the United States he came to Ottawa and consulted with our own Prime Minister (Mr. Diefenbaker). Emphasis 66968-9-97
Defence Policy, Planning and Production was laid then on the importance of interdependence, not only interdependence in the use of weapons but interpendence of production. A very few days later Mr. Dulles came to Ottawa and had further discussions along these lines. As a result a committee was set up consisting of three ministers of the crown from Canada and three ministers from the United States. Our respective departments have been in constant touch with the corresponding departments not only in the United States but also in the United Kingdom.
As far as the United Kingdom is concerned, it may be of interest to hon. members to know that within the last few weeks contracts for the "43" torpedo-that is not the number but the type-have been placed in Canada. The United Kingdom government is not only buying torpedoes from us but is also buying sonic equipment for underwater listening. These are indications that not only are the United Kingdom and Canada anxious to work toward the principle of interdependence but the United States is also working in the same direction. Some of the figures I have given today are indicative that progress is being made, and we have firm assurance from the government of the United States that it is their intent to work toward the development of the policy of interdependence in production.
The Leader of the Opposition asked whether we could take over the D.E.W. line. The D.E.W. line was built by the United States at a cost of some $400 million and the United States let on tender the administration of the D.E.W. line involving the maintenance of all equipment at the primary and secondary stations. I believe that somewhere in the neighbourhood of 800 civilians are employed in that work and the great majority of them are Canadians. It is a civilian contract. I have not official figures from the United States but I have seen in the newspapers, and I believe the figure is reasonably accurate, that the amount of the contract to maintain the D.E.W. line is somewhere between $30 million and $40 million annually. We could take over and let a contract to a Canadian company for the administration of the D.E.W. line. It would cost us between $30 million and $40 million annually, but as approximately 90 per cent of the employees are Canadian one might query whether that would be a good move.
But we are doing more than merely taking over control of the control centres. The Department of Transport is considering, and I think progress is being made, the taking over of the administration and operation of some of the airfields on the D.E.W. line. Thus we
1518	HOUSE OF
Defence Policy, Planning and Production are gradually assuming more of the administrative costs as well as the costs of the control of that line.
A question was asked about the cost of taking over the Pinetree line. At the present time plans are under way to extend the Pine-tree line farther north so as to make it more effective. Some seven new major Pinetree stations will be constructed, five in western Canada and two in northern Ontario and Quebec. When constructed, all these stations will be manned by the R.C.A.F., not by United States personnel. There will be no more manning of Pinetree stations by United States personnel. As was mentioned earlier today, the Pinetree line was built on a cost sharing basis, two-thirds and one-third, between the United States and Canada, with Canada paying one-third. Some of these stations were built and are manned today by United States personnel. Some were built with United States money and are manned today by R.C.A.F. personnel. Other stations were built with Canadian money and are manned by R.C.A.F. personnel. In the last two years we have taken over some installations which were previously manned by United States service personnel but are now manned by Canadian personnel. I cannot give the actual figures of the cost of manning these lines although I may be able to get that information later this evening.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
George Randolph Pearkes: Mr. Speaker, before the house rose for the dinner recess, the Leader of the Opposition had asked for information with regard to the cost of the Pinetree system. As I explained, the Pinetree system is shared by the United States and by Canada, some of the stations being operated by Canadians and some being operated by the Americans. The cost to Canada of operating each year is approximately $28 million; that is the cost of operating those Pinetree stations which were either built by Canada and manned by R.C.A.F. personnel or were built by the United States and manned by R.C.A.F. personnel. The cost to the United States is approximately $43 million for operating their stations. That figure of $43 million includes some $5 million which the United States are spending on purchasing equipment for those stations in Canada.
Hence if Canada were to take over the operation of the line in its entirety it would mean the addition of $43 million to our defence budget at the present time. I put in


that qualification "at the present time" because additional equipment is being provided for these radar stations in order that their range and control may be improved. There are always advancing techniques in this field of electronics. If we are to keep up to date and if we are to increase the scope of these radar stations we must put in the additional and new equipment.
Questions were asked with regard to the D.E.W. line and I made some reference to the extent to which Canada was assuming more responsibility for the administration as well as the operation of D.E.W. line stations. In order to round off that part of the statement I had made I think it might be of interest to hon. members who had made inquiries about this development if I were to state that the Department of Transport plans to take over the administration and operation of some seven air fields on the D.E.W. line. This taking over will not be done overnight, but in two or three years' time I hope that we shall be operating those stations.
One of the biggest difficulties that has existed for those people who wished to go into the Canadian Arctic and to utilize such facilities as have existed in the past at the D.E.W. line air fields has been the lack of accommodation. Naturally when the Federal Electric Company, which is carrying out the administration of the D.E.W. line, established their stations it was agreed that they would not be required to provide unlimited accommodation for those persons who for other purposes than those connected with the D.E.W. line might be visiting the north. As there has been in recent months a phenomenal interest shown in our Canadian Arctic more and more people may be expected to move into those far northern regions. Therefore the Department of Northern Affairs and National Resources are making plans to construct accommodation at the principal D.E.W. line stations so that Canadians who are visiting the Arctic will no longer be required to obtain accommodation in the quarters of the Federal Electric Company. That accommodation will be a great convenience to the many prospectors, engineers and scientists of oil companies and so on who are developing the potential wealth of those Arctic islands. Hence we have the Department of Transport and the Department of Northern Affairs and National Resources both co-operating in, may I say, the maintenance of Canadian sovereignty in the far north. Everywhere you go at all these stations on the D.E.W. line you now see the scarlet coat of the Royal Canadian Mounted Police.

Defence Policy, Planning and Production
The hon. member for Vancouver East, in moving his subamendment, made some extraordinary statements with regard to the cost of equipment. He compared the cost of the equipment that might have been required for the CF-100 with that of the Bomarc.


Harold Edward Winch: The CF-105.


George Randolph Pearkes: May I give the actual figures of the cost. If we had gone ahead, as I said last week, with the development of the CF-105-the Avro Arrow-100 of these aircraft would have cost us $781 million and they would have been providing interceptor security between North Bay and Bagotville, over this part of Canada's industry, over the approaches to the great industrial centres and a certain number of SAC bomber stations in the eastern states. As hon. members know, we are establishing two Bomarc squadrons, one in the immediate vicinity of North Bay and the other north of the area between Ottawa and Montreal. The cost of those two Bomarc squadrons, with their missiles, is in the neighbourhood of $100 million, of which Canada is providing $20 million. Hence Canada is paying a premium of $20 million as opposed to the premium she would have had to pay for similar security of $781 million. The figures quoted by the hon. member for Vancouver East were therefore not accurate. I am afraid that he was confused with the ground environment establishments which are required. However, they are required for the Bomarc and would have been required on exactly the same scale for the CF-105.
Reference was also made to a small contract which had been obtained to provide parts for the Bomarc here in Canada. A figure of approximately $1.5 million was quoted. Of course, that is only one of three contracts which have already been let. One contract is for engineering assistance amounting to $2.4 million. There is a contract for wings and other parts of $1.7 million, to which the hon. member referred, and there is a third contract for communications equipment for the Bomarc for $1.6 million, making a total of $5.7 million.


Harold Edward Winch: May I ask the hon. minister a question before he gets away from the subject of the Bomarc. He stated that there are two locations for the Bomarc, both between Ottawa and the east. May I ask the hon. minister what is the Bomarc defence from Ottawa to the Pacific ocean?


George Randolph Pearkes: I said that one squadron
would be north of the line Ottawa-Montreal and the other would be at North Bay. West of that there are no squadrons planned at the present time, but by the extension of our 66968-9-971
radar system further north the Bomarc squadrons which are planned by the United States air force will be able, on account of the coverage given by our more northern radar stations, to cover practically all the populated districts in that area.
I think the figures which I gave of the missions which have been carried out by the air force and the navy are indicative of the help that the services have endeavoured to give to the Avro company in order to provide additional projects which perhaps that company might be able to undertake. They are also indicative, I hope, of the forward-looking policy of the services in trying to obtain the latest information both from the United Kingdom and the United States of developments in the more modern equipments. It is also a furtherance of the policy of interdependence between our three countries in the sharing not only of cost but of defence production.
I did not give any details regarding the army. The army is carrying out exactly the same policy, and between the end of September and December of last year they had seven different teams which had visited plants in the United Kingdom and the United States making inquiries into the system of missile development. In the United States army, as hon. members will realize, each of the three services has an organization which is concerned with the development of missiles. Our armed forces are keeping in touch with all the developments which are taking place there.
In conclusion, Mr. Speaker, I would like to refute emphatically the suggestion that defence policy is muddled and confused. I recall the fact that only last week a similar amendment was moved in the House of Commons in Westminster, and there the opposition also accused the government of not having any defence policy. Our defence policy is based on the recommendations which are made by the chiefs of staff of our armed forces, and I would like to say here that there is no group of officers more loyal than those who comprise our own chiefs of staff. They are a devoted band of capable and experienced men dedicated to the service of this country. They are not only men who have had actual experience in recent operations, in command and in staff duties, but they are also a forward-looking group who are trying to provide us with the soundest advice that is possible for any group of officers to give. They are confronted with almost insurmountable difficulties. They are trying to peer into the future, trying to keep up with the advance of science, but they are resolving those problems.
1520	HOUSE OF
Defence Policy, Planning and Production
Again I must insist that our defence policy is perfectly clear. Furthermore, it has proved effective. Through collective agreements we contribute to the integrated balanced forces of the free nations, thus preserving peace by the twin media of the shield and retaliatory forces of NATO. In Europe our troops share the responsibilities with those of our allies in preventing the western countries from being absorbed by communism. On this side of the Atlantic navy, army and air force have the double task of protecting our own country and that of providing security to the forces of retaliation so that they, in their turn, may be an adequate deterrent to any enemy. If the deterrent should fail to deter the would-be aggressor we shall endeavour to provide the best means we can for the survival of our nation under the nuclear attack which is bound to follow any act of madness that might plunge the world into another global conflict. As far as policy is concerned I assert that there is no confusion.
Regarding the program for the provision of forces and their armament to give implementation to this policy, this program must be flexible. Because of the improvements in technique and the advances of science, because of changes which may be introduced in the armament inventory of a potential aggressor, as well as the long period of time that must elapse between the inception of a modern piece of equipment until it comes into operational use, I fear there is a possibility that programs may in the future be changed, perhaps before some of the projects have been completed. Rigidity in this respect would be fatal. On Friday last the Prime Minister clearly outlined the principles associated with defence, and the broad basis of our program. There was no confusion in his thinking. He made it perfectly clear that caution will be used in defence expenditure; courage when a hnal decision is required.


Harold Edward Winch: Could I ask the minister a question? I did not want to interrupt him while he was speaking. In the closing part of his speech he indicated that there are no Bomarcs west of Ottawa. Will he now tell us whether there are Bomarc bases established or contemplated on the United States side of the border for the protection of the populated areas of Vancouver, Calgary, Edmonton, Regina, Winnipeg, Port Arthur, and other large centres of population some of which are beyond the range of the Bomarc missile? If not, where is the defence which the minister mentioned?


George Randolph Pearkes: I did not understand that last sentence: what is beyond the range of the Bomarc missile?


Harold Edward Winch: I understand, according to
statements given in the house that the Bomarc has a range comparable with that of the CF-105-375 miles supersonic, and 500 miles in the case of certain other conditions. The minister told us in the last five minutes of his remarks that there are no Bomarcs for defence purposes west of Ottawa. He said, if I understood him rightly, that United States defence arrangements must take care of the populated areas of Canada. I have mentioned a number of major cities in Canada, a number of which are far beyond the range of the Bomarc, so I ask: what is their defence?


George Randolph Pearkes: I just say that they are not far beyond the range of the Bomarc.


Lionel Chevrier: Mr. Speaker, the house, I am sure, has listened with keen interest to the remarks which have been made during the course of an hour and a quarter or more by the Minister of Defence (Mr. Pearkes). I think I should say in fairness to him that some of the points he made were effective, but others went far off the mark.
The hon. gentleman resented the fact that we on this side of the house should have stated that the government's defence policy was muddled and confused. I say to him respectfully and to those who sit with him, that during the course of his remarks, lengthy as they were, he did nothing to rebut the presumption that the policy for which he and his colleagues are responsible is indeed confused and muddled.
The minister went on to complain about the Leader of the Opposition (Mr. Pearson) and spent a large part of his time dealing with the defence policy of the government and the application of that policy. I should like to tell the Minister of Defence that the Leader of the Opposition never attacked the defence policy. He never attacked the objectives of that policy. What he did attack were the procedures and the delays.
The minister went on to say that in the circumstances in which we live it is necessary to keep adjusting the policy to meet changing conditions. We on this side of the house say that is exactly what the government has failed to do. I note, also, that the minister quoted with great approval the words of the Right Hon. C. D. Howe, and in the debate which took place here last Monday, the Prime Minister did likewise. I and my colleagues on this side of the house have not forgotten that those who now sit on the benches opposite were highly critical of that great man, but nonetheless if they had him on their side today perhaps they would not be in the unfortunate position in which they are now.


Gordon Minto Churchill: Would the hon. member permit a question? I should like to ask him who arbitrarily and abruptly terminated the jet transport contract and the Velvet Glove contract.


Lionel Chevrier: That is an easy question to answer. In the first place, who abruptly terminated the Arrow contract? With reference to the other contracts, and the question to which the hon. gentleman has just asked, at least Mr. Howe was able to get something else in their place.
I want to deal with another great man whose words members on the other side of the house are most anxious to cite from time to time. The Minister of Labour (Mr. Starr) quoted him with great approval the other day, and the Prime Minister also quoted him with great approval. I refer to Cardinal Leger who said that it is the duty and the responsibility of the government to help provide additional work and that it is also the responsibility of industry and of the government to get together to see what can be done in situations such as the one that has arisen since the cancellation of the Arrow contracts. Members of the government and their supporters like to quote these men when it suits them, but never like to put into action their advice.
The Minister of National Defence said something about the shifting of the responsibility on to the chiefs of staff, and he defended the chiefs of staff. No one has attacked the chiefs of staff. We on this side think as the government does with reference to these men. We think, as does the government, that they are hard working citizens just as the minister said, but I should like to point out to the Minister of National Defence that there is one former chief of staff, now deputy commander at Colorado Springs, Air Vice Marshal Slemon, who stated on November 24 that a manned interceptor in the R.C.A.F. was an inescapable requirement for as long as he could foresee. Then he went on, with his commander-in-chief, General Partridge, to recommend to the Canadian chiefs of staff that manned interceptors be retained for a long time to come in the air defence system to counter the threat of manned bombers. I noted some days later that the Minister of National Defence agreed with that statement. But either Air Marshal Slemon and General Partridge are right, and the government is wrong, or the NORAD commander and deputy commander are wrong and, if they are, why is their advice being sought, and what confidence has the government in that recommendation?


George Randolph Pearkes: They are not obsolete.
Defence Policy, Planning and Production


John Whitney Pickersgill: The new plane is obsolete, the old one is not.


George Randolph Pearkes: They are not obsolete as long as the threat is there.


Lionel Chevrier: The minister this afternoon said that as recently as two weeks ago the government was still trying to sell the CF-105 to the United Kingdom. The Prime Minister (Mr. Diefenbaker) spent several minutes on Monday last telling us that he had indicated to the company last September their contract was at an end. There seems to be a clear conflict between the statements made by the Minister of National Defence and the Prime Minister. During the course of his remarks today, if I understood him correctly, the Minister of National Defence led us to believe that the distance between Russia and the United Kingdom is greater than that between Russia and Canada-


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: Nonsense.


John Whitney Pickersgill: That is what he said.


Lester Bowles Pearson: That is exactly what he said.


Lionel Chevrier: Let me go on. On that basis the minister went on to say that the United Kingdom still needed a manned interceptor similar to the Arrow but that Canada did not need one. If the United Kingdom needs one, a fortiori it seems to me we in this country need one. But the most amazing part of the minister's statement was the fact that he suddenly became the minister of defence production. For almost thirty minutes he put on the record all of the things that had been done in order to obtain contracts and in an effort to get work in substitution for that which had been stopped. But with what results? He said they were not successful, notwithstanding all of the effort expended in this direction.
It occurs to me that this is one area in which the minister should have been successful but perhaps there is a reason why the government, the minister and those associated with him were not successful in obtaining these orders. If the minister was right in the fact that these difficulties arose around the middle of October of 1957, then we know what was happening at that time. The government was getting ready for another election. Ministers on the other side of the house stated repeatedly that the session at that time was nothing more or less than a preparation for the next election so it is no surprise to us on this side of the house that perhaps the government was not paying the attention that it should have paid to matters of this importance.
1522	HOUSE OF
Defence Policy, Planning and Production


Gordon Minto Churchill: The election surprised you though.


Lionel Chevrier: Mr. Speaker, I rose not so much to deal with that aspect as to deal with the defence production aspect of this contract and if the house will be good enough to listen to what I have to say there are two or three points I should like to make before dealing with this question in particular.
At the outset I should like to say that in my view the decision which was made to produce the Arrow was a sound one. I do not believe there is any disagreement with that statement in the house. I believe, too, there is agreement that under the circumstances in which the country found itself at that time the decision to develop that aircraft taken in 1953 was justified from a military standpoint. There is also another point that is consequential upon that one and it is this. That decision meant that the Canadian aircraft industry would continue to develop after having succeeded in producing the CF-100 which had proved so effective. This meant more employment opportunities and also an increasing number of skilled personnel and research personnel working in Canada in fields that are vitally important for our future technological and industrial programs.
During the post-war period the aircraft and allied industries had become a major sector of the Canadian economy. It was therefore also sound for the government to develop the CF-105 on a tentative basis. I repeat again that I do not think there is any disagreement on this point and it was my impression that the Prime Minister was in full agreement with that position when he spoke the other evening. However, as was pointed out by the Minister of National Defence, the Leader of the Opposition and others, the launching of the first earth satellite by the Russians on October 4, 1957 was a basic factor which should have affected our air defence policy because it was quite clear at that time that a new era was beginning, that of the intercontinental ballistic missile.
What did the government do? The Minister of National Defence complains about the fact that we on this side of the house say the government did nothing. Well, if the minister objects to that form of accusation let me say this to him. At least for a period of a year, from that time until the statement was made to the press in September 1958 by the Prime Minister, certainly there had been no indications given to the public or to the house that anything was being done. If there is a complaint because of that perhaps it is, as has already been stated on a previous occasion by the hon. member for Essex East (Mr. Martin), that at about that period and


to a large extent still the views of the Canadian government were not received too sympathetically in the United States. I need not quote some of the things that were said during a former debate-I would be out of order-or some of the things said by the press, in an effort on my part to embarrass anyone. In view of statements made by hon. gentlemen opposite during two election campaigns in connection with our subservience to the United States in other fields, surely it cannot be objected to now when we say what I have just affirmed that we are complaining unduly about the conduct of our friends on the other side of the house.
However, it is a fact that in October of 1957 a new situation existed because of the Russian satellite orbiting the globe. We also knew then that we would need less of these aircraft than the 500 or 600 to meet our requirements. We further knew that the cost of producing the aircraft added a great deal to our defence requirements and that that might be well beyond our financial capacity unless, of course, Canada were successful in selling these aircraft to the United States.
It was one year later that the government decided to discuss that possibility in accordance with what has already been said. If these discussions had been initiated earlier or immediately after the events following October 4, 1957, when the CF-105 was unveiled and the Russians launched the satellite, the results probably would have been entirely different. I say that the delay between October of 1957 and September of 1958 in reaching a decision was completely unjustified. If the government is right now in abandoning the CF-105 it could and should have reached that decision if not a year and a half ago at least a year ago after the second election and saved about $200 million of the taxpayers' money. However, the issue was allowed to drift.
Statements made by the Minister of National Defence in July indicated that at that time the government certainly had not faced up to the situation. It was only in September of 1958 when the Prime Minister issued his first statement to the press that the government gave some indication it was at last considering this problem.
Now, if I may take a moment I should like to say a word about the statement made by the Prime Minister during the debate which took place here last Monday. It seems to me that if the Prime Minister had followed the tactics of the Minister of National Defence in giving to the house his version of the events and the facts instead of throwing the blame for this whole matter on the company it would have been far better not only for the

Prime Minister but for the country as a whole. The Leader of the Opposition said earlier that he had no mandate to defend the company and neither have I, but I do want to say without hesitation that the attack which was made on the company in my humble opinion was not only improper and unfair but it was unwarranted.
It was contended during the course of the debate that the press release of September 23, 1958 made it clear that the government intended to cancel the CF-105 at that time. I am not going to put on Hansard the words which the Prime Minister quoted himself because the Leader of the Opposition has already done that. I am not going to go into the fact that for quite a lengthy part of his speech the Prime Minister quoted press statements to the effect that his statement was clear and did indicate a cancellation at that time. However, in order to substantiate my argument, I shall quote just the last sentence of the press release which was made by the Prime Minister in September 1958 and which is as follows:
The government has decided that the development program for the Arrow aircraft and Iroquois engine should be continued until next March, when the situation will be reviewed again in the light of all the existing circumstances at that time.
Surely these words are clear; surely they mean exactly what they say and I do not see how they could be interpreted by anyone, certainly not by the company, to mean that the CF-105 was abandoned and that it was the intention of the government to cancel its production at that time. I say, further, if you go along with the Prime Minister and assume that he was right and that that statement did give an indication of cancellation, which I deny, then does the house, does the minister, does the government think that that is the way in which to sever the relationship between that aircraft company and the government? Surely that is not the way to operate as between government and industry in this country.
Listen to what the president said in his statement to the Globe and Mail the day following the announcement made on February 20. He said:
The Prime Minister's announcement cancelling forthwith the Arrow and Iroquois programs came as a complete surprise to the company. We received no advance notice whatever of the Friday announcement itself nor did any government department seek prior consultation to arrange for orderly and gradual cease-work procedure.
Then, further on he goes on to say:
Such drastic action would not have been necessary if there had been prior consultation and if the government had taken the company into its confidence, and advised us in advance of its intentions. This would have permitted an orderly and
Defence Policy, Planning and Production gradual adjustment of seniority and related staff problems and given employees a chance to seek other employment.
Still further, the president said:
Since the Prime Minister's original announcement September 23 which cast doubt on the future of the program, the company has repeatedly proposed to various government departments and even to Mr. Diefenbaker himself, alternate programs for the useful employment of the technical resources that have been assembled at Malton and which are second to none in the western world. However, the government has not seen fit to discuss these matters or consult with us in any way.
This is a statement which is in complete contradiction with what has already been said in this debate and, as the hon. member for Bonavista-Twillingate (Mr. Pickersgill) said, thus far it has not been contradicted. Therefore, again I put the question. Does the house think this is the way to sever the relationship between the government and this company? This is certainly not the way to deal with responsible private interests. There is no sharing here of confidence, as there should be. There is no opportunity to explore alternatives to the memorandum presented by the president of Avro to the Prime Minister on September 16, 1958.
I should like to deal for just a moment with the manner in which this contract was cancelled. I have in my hand the contract itself, or, I should say rather I have a form of contract with the Department of Defence Production which is "General Conditions DDP-26A", covering supplies. Section 26 is the termination clause of that contract. It states:
Notwithstanding anything in the contract contained the minister may, by giving notice to the contractor (hereinafter sometimes referred to as a "termination notice") terminate the contract as regards all or any part or parts of the work not theretofore completed. The minister may, at any time or from time to time, give one or more additional termination notices with respect to any or all parts of the work not terminated by any previous termination notice.
This is the termination clause. How was this contract terminated? I say that if the Prime Minister is right, that the September 23 statement is in itself a termination, that was quite an improper way to do it, and it is therefore unfair, unwarranted and improper on the part of the Prime Minister to suggest that the September statement was notice to the company. In fact, his statement did not affect in the slightest the obligations of Avro under the several contracts that it had with the Department of Defence Production, and until the formal notice was given, not in the house here but in the manner provided for under the contract and in the manner provided for under the Department

Defence Policy, Planning and Production of Defence Production Act for the termination of contracts, the contract was not terminated and that notice I submit was not given until February 20, 1959.
Let me go a step further. I hold in my hand the manual of procedure on termination of contracts with the Department of Defence Production and on page 10 of this manual, chapter II, there is a part dealing with the termination of the contracts.


Gordon Minto Churchill: This has nothing to do with the amendment.


Lester Bowles Pearson: It certainly has.


Lionel Chevrier: It has to do not only with the amendment but with the contract, and instead of interrupting me the Minister of Trade and Commerce should listen to what the termination clause says. If he wishes to get up afterwards and deal with this part I will welcome his intervention in the debate. In fact, I hope he enters the debate to reply to what I intend to say.


George James McIlraith: He will not.


Lionel Chevrier: The termination clause says:
All contracts placed by the Department of Defence Production contain a clause permitting termination or cancellation of the contract, or of the work called for by the contract, at any time, in whole or in part, by notice in writing by the minister.
Again I repeat, the minister did not give the notice. The Prime Minister says that he gave it. Now then, under the same chapter, continuing the effect of the termination clauses, we find this:
Upon receipt of a notice of termination, a contractor is required to cease work under the contract in accordance with and to the extent specified in the notice.
Here is the notice that was given to the company on February 20 by the Department of Defence Production, not by the minister as required. I quote from the notice:
Take notice that your contracts bearing the reference numbers set out below including all amendments thereto are hereby terminated as regards all supplies and services which have not been completed and shipped or performed thereunder prior to the receipt by you of this notice. You shall cease all work immediately, terminate subcontracts and orders, place no further subcontracts or orders and instruct all your subcontractors and suppliers to take similar action.
Could there be any clearer language than "you shall cease all work immediately, terminate subcontracts and orders and instruct all your subcontractors to take similar action"? What does the termination clause in the manual of procedure of the Department of Defence Production have to say with reference to that position? In it I find the following:

If the whole of the uncompleted portion of the contract is terminated, compliance with this requirement may involve cancellation of outstanding subcontracts and/or commitments for materials and parts, release of employees whose services are no longer required, or cancellation of contracts for the supply of power or other services.
So I say without any hesitation that the moment the company received this notice it had no other alternative but to do what it did, and that was to cease all work immediately. It had no other alternative but to diminish the claims which it might have for wages against the crown. It was its obligations and its responsibility so to do under the termination clause and certainly under the order which it received from the government. Not only that, but on Friday, February 20 when Avro had 14,000 men working they were told to cease work and if they had any of these men working after February 20 they would have no right to recover their wages from the crown except to the extent that their services were a necessary consequence of the termination. I have not heard it said in the house by anyone so far that the claim for wages that had been referred to would be a necessary termination of this contract. Therefore, though these employees were discharged on February 20 and although they are entitled to severance pay for three weeks, I believe the Prime Minister said, what I have pointed out follows as a consequence of the termination clause which I have put on the record.
The Prime Minister has stated in effect that the company took this action to embarrass the government. If you read the telegram you see that that is not the case. On the contrary, it was done by order of the government, on instructions received from the government and if the suggestion made on the other side of the house that the company should have kept these men on had been put into effect the company would have done so at its own expense and not at the expense of the crown as has been intimated in the debate. Therefore, the conclusion one must come to on this point is that before blaming the company and not the government for what happened on Friday, February 20 we must take cognizance of the following points. The government's decision was announced suddenly on February 20 instead of on March 31 as was expected.


John Whitney Pickersgill: As the Prime Minister promised.


Lionel Chevrier: 
Mr. Speaker:: Order. I am sorry to interrupt the hon. member but his time has expired.


Donat Raymond: Mr. Speaker, I should like to commence on a rather humble note what is really my first speech in the house since my appointment as Minister of Defence Production. As I was appointed only in May last and have been obliged by illness on two different occasions to be absent from the House of Commons I do not pretend to know all the answers to production sharing nor do I pretend to know all the answers to defence production. You will perhaps like to know that it is a long distance from .my former occupation of forestry and wild life conservationist to the position I occupy today of Minister of Defence Production.


Paul Joseph James Martin: It is still a wild life.


Mr. O'Hurley:: It certainly is. But I think my past experience, although it was in a different field, serves me well in this new occupation.
The primary function of the Department of Defence Production is placing the contracts for the requirements of the Department of National Defence. For this reason naturally the two departments have worked and are working very closely together. My officials and the officials of the Department of National Defence are in daily discussions on matters of mutual interest. The complete accord reached by the two departments to extend this policy of production sharing and the work being done I think is a sign of success. Notwithstanding the gloomy picture portrayed by the Leader of the Opposition (Mr. Pearson), we are optimistic as to the results we hope to obtain. For example, in order to denote the change of view in Washington I should like to be permitted to read and to have inserted in Hansard a press release from the Pentagon in Washington which proves just the opposite of what the


hon. gentleman referred to. The press release reads as follows:
U.S. Department of Defence Press Release,
February 23, 1959.
The air force announced today the signing of a contract by Boeing Airplane Company with Canadair Limited, Montreal, for the production of wings and ailerons for Bomarc missile.
The long range fully automatic Bomare missile is in quantity production for four U.S.A.F. bases already under construction in the northeastern United States. Ten additional Bomarc bases in the U.S. have been announced. The Canadian government has also decided to introduce the Bomarc into the Canadian air defence system. This was announced by the Prime Minister of Canada in September, 1958. The establishment of the Bomarc bases will be in accord with plans developed by the North American Air Defence Command (NORAD) for the defence of the North American continent. It is expected that in accordance with past practice the two governments will share the cost of the Bomarc installations in Canada which will be an integral part of the North American air defence system.
The Canadair contract is the first significant production contract awarded as a direct result of the production sharing effort agreed to after high level discussions between the two governments last year.
Due in part to the growing integration of Canadian and U.S. air defence, and in part to the high cost and technical complexity of modem defence equipment, both governments have recognized the desirability of moving toward a better utilization of their defence production capabilities.
This is from the Pentagon in Washington.
To this end, it is of great importance to North American defence that Canada as well as the United States maintain an industrial defence base capable of a significant contribution to the common defence and to the development of a fund of technology necessary to increasing productivity in the field of defence production.
It was jointly decided, therefore, to explore the possibility of closer co-operation between Canadian and U.S. industry in the production of weapon systems related to the defence of North America. Canadian industry has highly trained scientists, engineers and other skilled technicians and modern equipment, and it is expected that the increased emphasis on production co-ordination will result in greater utilization of Canadian defence production facilities by United States industrial and governmental procurement agencies in order to assure the most economical and effective use of the capabilities of both countries.
A series of conferences between Canadian and U.S. officials have been held during the last four months with a view to developing better co-operation in the production of defence weapons. The interdependence of Canada and the U.S. in defence matters was recognized in the Hyde Park declaration, April, 1941, and in the statement of principles for economic co-operation of October, 1950. The recent discussions have been carried out within the framework of these principles.
The immediate aim has been to utilize Canadian industrial capacity in the Bomarc, Sage and radar programs which are being financed jointly by both governments. Both governments are assisting inter-industry contact and facilitating exchange of information and personnel between American prime contractors and potential Canadian suppliers.
Interested American prime contractors have made visits to Canadian plants to obtain first-hand knowledge of their capabilities, and progress has been

made in having the names of Canadian firms placed on American industrial and governmental bidders' lists. Many companies have already submitted technical proposals and quotations, and several contracts have been placed on a competitive basis. It is expected that progress along these lines will continue.
Groups of officials are also looking beyond the immediate programs in order to work out effective arrangements for sharing the production of future defence equipment. To achieve this, the long term program must be based on Canada's ability to participate in co-ordinated development programs of mutual interest leading in time to production contracts. Studies are continuing in seeking areas of mutual interest in which a co-ordinated development effort is possible. Through proper long range planning in this manner, both governments feel the maximum use can be made of each country's skills and resources in the fulfilment of the common defence objectives of Canada and the United States.
That is a press release from the Pentagon in Washington.
Mr. Speaker, I wish to acquaint this house with the members of the joint Canada-United States production sharing committee who have held to date three general meetings. Might I add that there were meetings of a ministerial committee arranged by the Prime Minister (Mr. Diefenbaker) and the President of the United States one of which was held in Paris in December. The Canadian delegates of the joint Canada-United States production sharing committee were the deputy minister of the Department of Defence Production, Mr. Golden; Mr. Miller, deputy minister of the Department of National Defence; Mr. LePan, who has taken another position, assistant undersecretary of state for external affairs; and Mr. MacNeill, assistant secretary of treasury board. The United States delegates were: the assistant secretary (material) United States air force, who was chairman; the assistant secretary (logistics) United States army; and the assistant secretary (material) United States navy. The meetings held by this committee were on October 9, 1958, November 18, 1958 and February 10, 1959.
Between these meetings, members of the different departments have been holding continual discussions and meetings. Only this afternoon three members of my department left for Washington and other parts of the United States in connection with this program of production sharing and the removal of different objections mentioned by the member for Laurier (Mr. Chevrier) which hampered -I will deal with this situation later-the ease by which the Canadian contractors can obtain work from the United States.
I wish here to give some outline of the work that is being done in my department to bring production sharing into effect, not only as pieces of paper but so that our contractors in Canada can share in the gigantic defence
Defence Policy, Planning and Production program which is going on in the United States. One of the first major tasks in increasing the opportunities for Canadian industry to share in the production of military equipment for the United States has been to familiarize United States procurement agencies and the prime contractors with Canadian industrial capabilities; and, secondly, to arrange for Canadian industry to quote on current military requirements. On the Bomarc missile program considerable progress has occurred in the last three months.
First of all, facility capability reports on 63 Canadian industrial concerns have been forwarded by the Department of Defence Production to the Boeing airplane company in Seattle. Secondly, under the auspices of the Department of Defence Production senior Boeing officials have visited about 50 Canadian companies throughout Canada for on the spot investigation of their capabilities. Over 45 Canadian companies have sent representatives to Boeing for a thorough briefing on the Bomarc weapon system. Boeing has issued over 170 invitations to tender to 77 Canadian companies. Many tenders have already been submitted and are presently being evaluated. Similar arrangements are being made with the major United States subcontractors to Boeing in instances where Bomarc work had already been contracted for. These companies are in turn exploring the areas where they can subcontract some of the work into Canada.
With the Sage and radar improvement programs opportunities for production sharing are not as extensive, but do represent a very significant dollar potential in the fields of radar, communications and data processing equipment. Four major United States prime contractors along with procurement specialists from the United States air force have undertaken extensive tours of potential industrial sources in Canada. In all, over 50 electronic and electro-mechanical companies have been visited in the last three months. Over 25 Canadian firms have visited a like number of United States firms and government procurement agencies in the same time period. Eighty invitations to tender have been received. Over 50 of these have resulted in Canadian bids being submitted, and these are now being evaluated.
The efforts of the government to improve the knowledge of the United States as to our capabilities and increasing the opportunities for Canadian industry to quote have not been restricted to the Bomarc, Sage and radar programs. A number of other programs of mutual interest are being examined. United States prime contractors involved in these programs are being approached by Canadian government and industrial personnel. We are

Defence Policy, Planning and Production being assisted in these endeavours by the United States military departments who are giving every encouragement to the United States companies to share with Canadian industry the development and production of military equipments for which they have been given contractual responsibility.
Mr. Speaker, I wish at this point to acquaint this house with the fact that the Department of Defence Production has sent invitations to Canadian concerns who have the capabilities to tender on defence programs, and we are ready and willing in the department to proceed to arrange interviews for them, to brief them on how to tender, and advise them on the material which is best suited to any given tender. The Department of Defence Production is working extensively on this problem of helping Canadian contractors.


Mr. Godin:: Would the hon. minister permit a question?


Raymond Joseph Michael O'Hurley: Yes.


Osias.-J. Godin: When were these invitations which you are referring to sent out?


Raymond Joseph Michael O'Hurley: These invitations were sent out in the month of December. The hon. member for Laurier in making his speech very rightly said that there were several impediments to getting contracts from the United States. In our department we call them road blocks. He mentioned a few of them, and with your permission, Mr. Speaker, I will mention several more road blocks, about which I am glad to say progress is being made. I can truthfully say to the house that several of these road blocks to Canadian production sharing are being constantly removed, and we are quite optimistic on a final result being obtained.
Procedural and administrative road blocks in the United States are receiving the active attention of senior officials of the Canadian and United States governments with a view to a liberalization of United States procurement policies and procedures. In this manner Canadian firms will have a better opportunity to compete on an equal footing with United States firms for defence production in programs of mutual interest. Considerable progress has been made toward the removal of hindrances to production sharing which existed during the days of the former government.
Some of the impediments which are being removed, and some of the relaxations now permitted may be listed as follows:
1.	The "Buy American" act as applied to United States defence purchasing in Canada.
2.	Duty free entry to the United States of Canadian defence material.

3.	Qualification approval of Canadian manufactured equipment such as electronic components.
4.	Security restrictions which in the past have prevented Canadian firms from participating in classified United States projects.
5.	Transmission to Canada of United States technical information in order that Canadian firms might be better qualified to quote on United States defence requirements.
6.	Easier negotiation of licensing agreements between United States companies and the Canadian government or its contractors in order to permit the manufacture in Canada of United States designed equipment.
Reticence on the part of the United States defence industry has always existed in the past with regard to subcontracting work to Canadian firms. Through the active co-operation of the United States military departments, United States industry is being made aware of production sharing arrangements between Canada, and the United States and are being assisted in every way to assess our capabilities and to place more defence work in Canada. This will take some time, but already significant results are occurring. I have here a list of contracts which have been carried out in Canada. These are known major United States subcontracts placed in Canada in the last four to five months.
U.S. Prime	Equipment	ValueBoeing	Engineering service	$2,400,000Boeing	Bomarc, wings andailerons	
1,700,000General	Development drive	emitElectric FPS-7	
500,000Westinghouse	Tropo scatter for Bomarc	1,600,000Hughes	Tape readers	
1,100,000Bendix	Klystrons, 2 contracts____	300,000Total	$7,600,000
There are 250 defence contracts which are open at the present time, and 100 Canadian contractors have been asked to tender. Several of these contracts have already been submitted to the prime contractors in the United States and I have every hope, judging from the results already obtained that the Canadian manufacturers have a good chance of obtaining a number of these contracts.
In past years there was a program of production sharing during the construction of the radar lines. I wish to be quite clear, and to say quite frankly that I am speaking now of engineering work in the electronic field; I am not speaking of construction or of air transport. Under the United States air force radar augmentation and gap filler project referred to in diplomatic note No. D-155 and No. D-156, dated June 1955, the Canadian

government reaffirmed the principle that electronic equipment at installations on Canadian territory should as far as practicable, be manufactured in Canada, the factors to be taken into account would include availability at the time required, cost and performance.
Of a total of nine stations having a total equipment value of $10 million, Canada obtained only $75,000 for installation, having stated, with regard to the equipment that it was not practicable for Canadian industry to deliver on time. In view of the urgent nature of program 572, which concerned preliminary site surveys and the construction of two trial sites for the D.E.W. line, Canada waived participation. The total estimated cost of this project, which is referred to in the diplomatic note No. 163, was $29 million.
Under the terms of diplomatic note No. 306 of May 1955 the terms governing the practicability of D.E.W. line construction were similar to those contained in previous notes and included such considerations as availability at the time required, cost and performance. Of an estimated cost of electronic equipment of more than $125 million, Canadian industry share was $10 million. With regard to project Dewdrop, involving a radio communication system from Cape Dyer north across Thule, Greenland, similar terms were agreed as referred to in diplomatic note No. 158 of July 1957. Because time was short, Canadian Arms were unable to participate in the supply of electronic equipment needed for this project, the cost of which was estimated at $10 million.
It was obvious that the practicability clauses used by the former government were not proving effective and therefore the present government had to consider alternative arrangements in order to accomplish the desired objectives. Hon. members who consider the content of the diplomatic notes I have just read will see that we obtained only $10 million out of an estimated total of $175 million, or only 5.7 per cent of the contracts awarded.
At this point I should like to turn to the question of the Arrow. The Leader of the Opposition suggested that the proper time to have begun discussions with the United States regarding the sale of the Arrow to the United States air force was in October, 1957. He stated that the unveiling ceremony conducted at the Avro plant would have been an appropriate time at which to have raised this question. I suggest that this statement clearly indicates the bankruptcy of ideas of the former government with respect to production and cost sharing with the United States. Surely the proper time to have initiated such discussions was during the
Defence Policy, Planning and Production early stages of the program in 1952 and 1953. If proper cost and production sharing discussions had been held at that time the Arrow weapon system might have become a common requirement of both the United States and of the R.C.A.F. The fact is that it was too late, as we ultimately found out, to interest the United States government in this aircraft, because their own plans for aircraft in the interceptor category had been made. What we are now attempting to do in the production and cost sharing field is what should have been done years ago.
The Minister of National Defence (Mr. Pearkes)-and I wish in passing, to thank him very kindly for the assistance he gave me in his speech this afternoon-fully explored the possibilities of selling the Arrow to the United States. As I have indicated, it was too late. Never will this government enter into a program of such magnitude as the one just ended without prior discussions with our allies on production and cost sharing.


Lester Bowles Pearson: I wonder if the hon. minister would permit a question? Does he realize that his colleague, the Minister of National Defence (Mr. Pearkes), has already told the house that those discussions took place during the period about which he is speaking, prior to 1952?


Some hon. Members:: He did not say that.


Raymond Joseph Michael O'Hurley: I listened with great interest to the remarks made by the hon. member for Laurier about the termination of the Avro contract. The hon. gentleman read part 1 of the termination clauses. If he had read part 2 he would have found that it says: "... to proceed with any portion of the work which is not terminated." We did not terminate work on the production of spares and overhaul for the CF-100. We did not terminate the program which Avro has under way for the United States. We did not terminate at the Orenda works the program for production of Orenda engine spares and overhaul. When the termination notice was given it was the intention of the Department of Defence Production that the other programs should continue and that the men should be maintained at their work or on leave of absence under the labour contracts. As I say, we have not cancelled the contracts for the production of CF-100 spares and Orenda has a contract on hand from the West German government worth $6 million. The CF-100 spare contract amounts to $10 million for this current year-money which should be spent by March 31-while there is a further amount of some $3 million in
1530	HOUSE OF
Defence Policy, Planning and Production respect of Orenda engine spares which is not already spent and which should be spent by March 31.
There was still work to be done and the company should have had every reason to continue to employ certain of their employees. The reason given by the company was that they did not have on hand the seniority list of those they should keep on according to the labour contracts. It is a requirement under a union contract that a company must have for the inspection of the labour department up to date seniority lists. I cannot justify the position the company took in letting everyone out as soon as they got notice of the cancellation of the Arrow program.


Lionel Chevrier: Mr. Speaker, may I ask
the minister a question? Did he or any of his officers get in touch with the company officials to indicate to them what was going to happen?


Raymond Joseph Michael O'Hurley: To answer the hon. member for Laurier may I say that before the telegram was sent my assistant deputy minister spoke to the officials in Avro.


Lionel Chevrier: Could the minister say
when?


Raymond Joseph Michael O'Hurley: The day of the declaration
in the house. We did not terminate the contract before then. The contract was terminated on February 20. But if it is true that the company had no inkling whatever that the contract was going to be terminated how is it that I should have copies of letters going back over the months, exchanged between the Avro company and my department containing references to termination costs?
At the company's insistence negotiations were entered into during 1957 regarding the termination procedures to be followed concerning capital equipment and other matters. These negotiations lasted over a period of many months and were only partially concluded at the time of termination. In letters from Orenda dated October 27, 1958, and from Avro dated October 22, 1958, reference was made to termination. I quote specifically from a letter dated January 27, 1958 addressed to my deputy minister:
However, and in accordance with our normal practice as previously mentioned, both companies will have further substantial outstanding commitments at that time, and the purpose of this letter is to draw this matter formally to your attention and obtain your recognition of this fact, so that in the event of termination the actual expenditures arising therefrom which are deemed to be reasonably and properly incurred, will be recognized and reimbursed by your department.
And again I quote from a letter dated February 9 to the Minister of Public Works


(Mr. Green) who served as acting minister of defence production whilst I was ill:
My purpose in writing you, therefore, is to state that we are carrying on the work in accordance with what we understand to be your wishes, notwithstanding the literal provisions of the contracts, and on the assumption that the reasonable and proper costs incurred will be reimbursed in the event of termination.
The charge has been made that the current defence production policy is permitting our trained engineers and technicians to leave Canadian industry for the United States and elsewhere. I would like to point out that upon termination of the Astra and Sparrow projects arrangements were made with some ten firms to retain a nucleus of their engineering teams totalling some 300 personnel until such time as other work could be obtained as a result of United States-Canada production sharing activities.
In the case of the CF-105 cancellation the house is aware of the arrangements which are proposed with Avro and Orenda companies to retain a number of their skilled technicians until such time as other useful work of a commercial or defence nature may be found for them.
The Leader of the Opposition this afternoon implied that the cancellation of the Arrow has resulted in the destruction of the aircraft industry in Canada. I would like to correct this erroneous impression.


Lester Bowles Pearson: Mr. Speaker, before the hon. minister corrects that impression may I be permitted to say that I made no such statement during the course of my remarks this afternoon as he will discover when he reads Hansard.


Raymond Joseph Michael O'Hurley: I shall take the hon. member's word in this respect but I believe he strongly implied that the industry had been adversely affected. May I be permitted to go on to state that Avro and Orenda are today in operation with 20 per cent of the manpower they employed at the time of termination carrying out their other contracts for the government which are of a continuing nature. Avro also holds contracts from the United States air force and the United States army for the development and prototyping of a vertical take-off aircraft, which appears at this time to have considerable potential and may develop into a long range development program.
Canadair Limited in Montreal are presently occupied building the Argus CC-107; the long range transport CC-106 and the turboprop Cosmopolitan CC-109. The latter two are passenger transport aircraft and show promise of developing into excellent commercial sales.

In addition Canadair are supporting the F-86 Sabre and the T-33 trainer, both with spares and repair operations. This company has also successfully supplied spares support to aircraft utilized by the U.S. air force.
At De Havilland Limited the development of the Caribou is progressing extremely well and a production line has been started. At the same time De Havilland are continuing to produce Beavers and Otters for commercial and military sales. The CS-2F, the R.C.N. tracker, continues to employ a large labour force at De Havilland with subcontracts at Bristol, Winnipeg; Canadian Car, Fort William; Fleet Manufacturing, Fort Erie, and Enamel and Heat in Amherst, Nova Scotia.
Canadian Pratt & Whitney are continuing to produce the R-1820 engine installed in the CS-2F for the R.C.N. as well as supplying spares for existing engines both in Canada and the United States. In 1958 their sales in spare parts only to the United States amounted to over $11 million. This firm also provides a large employment of personnel to support the repair and overhaul of service aircraft and helicopters.
Rolls Royce Limited are continuing to support the Nene engine powering the T-33 aircraft and will service and repair Tyne engines for use in the CC-106 cargo transport aircraft. Here again the firm enjoys a large commercial program and is not wholly dependent on defence contracts.
Behind these major contractors in the aircraft industry is a network of subcontractors and suppliers in support. These cover every phase of aircraft production and although some will be affected by the termination of the Arrow the majority of them are diversified enough to be able to continue in a relatively strong position.
There are many other companies engaged in the repair and overhaul of service aircraft, many of whom contribute to the production programs. Although the strength of the industry has been depleted it is still a very healthy industry and will continue to be so.
The suggestion has been made that the present policy of defence production is resulting in a sellout to the United States. I would like to correct this erroneous impression by giving the house the figures for the calendar year 1958. Of a total of $730 million in defence contracts placed during that year only 3 per cent thereof or $20 million was placed outside Canada and of this amount only $10 million net represents contracts placed directly in the United States. Here I would also like to note that with respect to the moneys spent by my department, 92 per cent is spent here in Canada.
Defence Policy, Planning and Production
The Leader of the Opposition has challenged me to state what is the policy of the Canadian government with respect to defence production. The policy of the Canadian government is to maintain a production industry capable of providing the requirements of the Canadian forces, while at the same time utilizing the production resources of our allies where appropriate and making available to our allies our production resources where appropriate. Although this policy must be flexible enough to meet changing conditions, it is in essence the same policy pursued by the previous government, of which the Leader of the Opposition was a member, the difference being that now we want and are achieving more results in the fields of production sharing.


Osias.-J. Godin: Mr. Speaker, I am pleased to have the opportunity to engage in this debate on the amendment of the Leader of the Opposition. I should like to read it to remind hon. members of what is under debate at the present time. The amendment reads:
This house regrets that the prolonged delay of the government in determining air defence policy and planning in co-operation with our allies is preventing the effective use of Canada's defence production facilities and manpower.
I am honoured to follow the Minister of Defence Production in this debate but I must say at the outset that I was disappointed in his reading of his statement in the last 45 minutes because, in my opinion, he gave us very little in his elaboration of what he said last Monday after the affair of the Arrow had occurred on the previous Friday when he had occasion to make his statement in the house.
I am not rising to speak on this matter because I feel that I have technical knowledge of the various angles of the problem involved; but as I left my area of the Nickel Belt last night my people asked me to take part in the debate, if the occasion arose, concerning the catastrophe which has occurred in the aircraft industry in Canada, and I am pleased to do that on their behalf. It was said last week by the hon. member for Trinity (Mr. Hellyer) that the effects of the breakdown of the Arrow contracts and program upon the aircraft industry will be felt in the not too distant future by many industries and citizens of Canada. With that in mind I am sure that the people of the Nickel Belt realize the effect that it will have on the production of nickel which was necessarily involved in the production of the Arrow.
This amendment was placed before the house for the purpose of discussing possibly two things, namely the merits of the action taken by the government on the one hand

Defence Policy, Planning and Production and on the other the method by which the government proceeded to achieve the decision which it made a very short while ago. Since I am not a specialist I do not wish to, and I do not think that I could, cope with the problem of the merits of the question of the cancelling of the Arrow contract, although I realize that every member in the house would expect the government to make its decision with all the information possible in hand. Later on we may not be pleased to realize that our government, with all the information at its disposal, made a wrong decision. The matter under discussion, is the obvious method used by the Conservative government in dealing with this problem. It is a method which has shown up in every problem which this Conservative government has been called upon to solve since I became a member of this house for the first time.
There is one problem that possibly the Canadian people felt this government could solve with some knowledge, and that was the problem of the Arrow. As I see it, the problem is simple. The government had to make a decision and probably they made the right decision. It had to think of the conversion of the utilities of that great industry; it had to think of the diversion of the utilities which that industry could continue to give to Canada. In these two fields this government has shown itself as a specialist both in conversion and diversion. On the other hand, I know that the Canadian people, as they inquire, as they read the newspapers, realize that, as on other occasions, this government has fumbled the ball and has not brought about the solution which the citizens and the taxpayers should expect from this government. I will attempt to prove that, Mr. Speaker. This is not just a loose saying on my part.
What was the attitude of the government?


Some hon. Members:: Oh, oh!


Osias.-J. Godin: I hear laughter. There are many interjections by our Conservative friends, but I am amazed to learn that most of them interject when a member of the opposition is speaking. They should take their turns, and if they have opinions on this very grave matter they should tell the government. They are entitled to take their turns. There are many interjections, mostly when members of the opposition are discussing important matters.
What occurred when this was first announced in the house? It was indicated that there was no problem at all. It was not a grave problem; it was well in hand. That was the first indication regarding this matter by the Prime Minister himself and the members of the government. That has been the

attitude taken on many other grave problems in Canada since I have been a member of this house. I could mention the matter of coal which was brought up in the house. That was the attitude of the government at that time and that is the attitude today. An attempt was made to adjourn the house to discuss the matter of coal but we were not successful.
Once the opposition made it clear that there were grave problems about the method by which this decision was made we were told, as we have been told on many occasions when important matters have been discussed, that the people had made a decision last March; that there were 208 Conservative members in this house and that was a good enough answer to any problem which the Canadian people may have. You can read the debates. I heard the hon. member for Brome-Missisquoi (Mr. Grafftey) say that that is not true. He can read the speeches made by the members of the government last Monday and if he does he will find that this matter of the majority was brought up once again.
We all know that the CF-105 was cancelled. The suggestion was that the government would like to replace it with the PC-208. That is roughly the suggestion. I feel it is a very limited argument, and we do hear it very often in this house and that it will take care of the Canadian people; that they had an opportunity last March and we know what they did with that opportunity, Mr. Speaker. I think that today, and especially on the morrow of this decision of the government concerning the Arrow contract and the method by which it was terminated, the Canadian people are disappointed and they would favour an opportunity of using the ballot to deal with the PC-208.
What is the government's attitude concerning the Arrow problem? I have dealt with the first two matters. There is a third attitude, the attitude of "so what". We can well recall that when the major Canadian problem of unemployment was being dealt with in the house at another time over many weeks and months the hon. member for St. John's West (Mr. Browne), the junior Minister without Portfolio, said with respect to unemployment, "so what"? We heard the same words again not long ago in the house when the grave problem with respect to coal in the eastern provinces was brought to the attention of hon. members. What did we hear? We heard the hon. member for Cape Breton South (Mr. Maclnnis) indicate that there was no such thing.


An hon. Member:: Order.


Osias.-J. Godin: I say this to show that the method used in making the decision we are

discussing was absolutely the same and I feel that I am entitled to do so. If I am to prove that the Conservative government deals with these problems only in one way, I think I am entitled to indicate that the processes are absolutely the same. I want to do that to show the very thing I am trying to prove.


An hon. Member:: What is that?


Osias.-J. Godin: Then we come to the Arrow project. We can all read the speech of the Prime Minister (Mr. Diefenbaker) to see what he thinks about that. His attitude was "so what" too, that there was no problem except the problem created by the company. That is the way the government takes upon its shoulders the responsibilities given to the government by the Canadian people with a very large majority last March. The government says that there is no responsibility on their shoulders concerning the aircraft industry and their future, that it is all on the shoulders of the company. It is surprising that the Prime Minister would make such a statement when on the day following the announcement of cancellation the president of Avro had this to say:
Such drastic action would not have been necessary if there had been prior consultation and if the government had taken the company into its confidence and advised us in advance of its intentions. This would have permitted an orderly and gradual adjustment of seniority and related staff problems and given employees a chance to seek other employment.
That is what the president of the company had to say. We were told only a few moments ago by the Minister of Defence Production (Mr. O'Hurley) that the discussions which should have taken place were considered only on the very day of the announcement. That is a confession by the Minister of Defence Production himself. What is the answer as to the policy and attitude of the government concerning this grave decision? It is obvious. Absolutely no assurance was given to the house of any sign of preparedness before the announcement was made.
To indicate that this is so I should like to refer to what was said by the Minister of Defence Production tonight. He said the government is confident that something could well occur and that the government has extended invitations. Everything is in the future but for the last week the Canadian people have known that the decision is in the past and proper action should have been taken before the decision instead of extending invitations for the future tonight.
In his statement of a week ago the Minister of Defence Production said in the first paragraph that a Canada-United States ministerial committee on joint defence has been
Defence Policy, Planning and Production established. That is what he said last week. I recall the Leader of the Opposition (Mr. Pearson) indicating some time ago that the specialty of the government was to study the possibility of instituting a committee to study something. That is the process which has been used in this case. We come to the second paragraph of the statement of the Minister of Defence Production where we find the following:
A committee of senior officials of Canada and the United States has been established to deal with the development and production sharing aspects of our military requirements.
Again something in the future, something in the realm of study only. Then we come to paragraph four where we find these words:
We are now determined to make these existing agreements effective in action.
Again something in the future. Here is what we find in paragraph five:
Both governments are helping to establish better inter-industry contact than has existed in the past.
More political talk. Something in the future, nothing concrete. What do we find is the minister's conclusion? He places the burden of solving the problem on someone else's shoulders, for in his statement he says:
The real success of production sharing endeavours depends, to a large degree, upon the determination of Canadian industry vigorously to seek defence business in the United States either as prime or as subcontractors.
There is the measure of the policy of the government, to have industry take the entire load. We also have the statement made by the Minister of National Defence (Mr. Pearkes). His words were in part confusing to me and certainly to many other members of the house. When he spoke last week he made reference to the money involved. On this score I will only say that I do not criticize the decision. I hope it was the proper one. I feel that the government may have made the proper decision, but in reading his speech again after listening to it I see that he was concerned with the money involved. If one couples that with the statement made by the Minister of Finance (Mr. Fleming) and puts two and two together I fear that when the budget is brought down we will find that the defence of Canada possibly has been used to satisfy another portfolio. If that should be the case, and I am not suggesting for one moment that it is-


An hon. Member:: Why mention it then?


Some hon. Members:: Oh, oh.
1534	HOUSE OF
Defence Policy, Planning and Production Mr. Godin: The Postmaster General (Mr. Hamilton) laughs at that.


Mr. Hamilton (Notre Dame de Grace):: No,
I laugh at you.


Osias.-J. Godin: He may laugh on account of what I may have said but he can check this.


William McLean Hamilton: doubt it.


Osias.-J. Godin: Reference was repeatedly made as to the significance of the dollars involved

in expenditures on national defence. That was the gist of the speech.


William McLean Hamilton: Don't you think $1 million a day is significant?


Mr. Speaker:: I am sorry to interrupt the hon. member but the time for adjournment has arrived.


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