1959-03-18

DISTINGUISHED VISITORS-RIGHT HON. HAROLD MACMILLAN AND RIGHT HON. SELWYN LLOYD

Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, ordinarily no reference is made to the presence in the gallery of distinguished visitors, but I am sure the house will allow me on this occasion to make reference to the fact that Right Hon. Harold Macmillan, Prime Minister of the United Kingdom, and Right Hon. Selwyn Lloyd are in the gallery of the house today, here for a stopover for this day while en route to Washington.
We regret that the Prime Minister found it impossible to address the house and Senate on this occasion, but I am sure I speak for hon. members everywhere in paying tribute to him for the tremendous inspiration he has given to the peoples of the free world, and also that conviction which he and the foreign secretary have given to the assurance of the maintenance of peace in the free world.


Hon. L. B. Pearson (Leader of Ihe Opposition):: Mr. Speaker, may I join with the Prime Minister, on behalf of the official opposition, in the words of friendly welcome that he has just uttered to our distinguished guests, and assure him and the house that we share those feelings of admiration for what the Prime Minister of the United Kingdom and his foreign secretary have been doing in recent weeks to safeguard the peace and security of the world.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, on behalf of the C.C.F. party I should like to add my words of welcome to Right Hon. Harold Macmillan and Right Hon. Selwyn Lloyd. We believe their work has been in the interests of world peace and in the interests of free nations everywhere. On behalf of all of us we wish them the greatest success in those endeavours.



THE LATE SIDNEY E. SMITH

John George Diefenbaker: Mr. Speaker, yesterday afternoon tragedy walked with the House of Commons. Today we are speaking in memory of Hon. Sidney Smith, the late secretary of state for
external affairs, not in his capacity as such but as one who in the short 18 months during which he was a member of this house earned the friendship of members everywhere in the house and the appreciation of Canadians as a whole for the contribution he made in international affairs on behalf of Canada.
Mr. Smith came into the house with a reputation fully established as one of the great Canadians of his time. One cannot look into the future with any certainty, but I know the house will agree when I say this. Here on the threshold of a new career, had he been spared, the brilliance of his contribution in other walks of life would have been repeated in large measure in this house.
His life was one of service, beginning in the first war when as a young man in his teens he went overseas and served his king and country in the artillery and subsequently in the Royal Flying Corps. On demobilization he continued his studies, first in his own locality at his birthplace of Port Hood and at Windsor in his native province of Nova Scotia. In 1921 he was called to the bar of that province. In the same year he was appointed lecturer at Dalhousie, and soon rose to a professorship. In 1929, after a period as lecturer at Osgoode Hall in Toronto, he became dean of law at Dalhousie.
He was a great university administrator and teacher. His record is enshrined in the hearts of the many thousands of graduates who came under his influence at Dalhousie, Manitoba and Toronto universities. I believe his greatest and most enduring memorial will be the lives of those who came under his beneficent influence in the course of that relationship, unique in its nature, which at all times existed between him and his student body.
His was a life of service and devotion. He had an instinctive genius for human relationships. After becoming a member of the House of Commons and a minister of the crown he visited various parts of the world. Today messages are being received from national and international leaders not only in Canada, in the United Nations and NATO but in the capitals of the world. All of them confirm the estimate that we formed of him and the respect, admiration and affection felt for one who gave so much to his country. Indeed, his loss is being felt throughout the

The Late Sidney E. Smith entire free world to the principles of which he gave unstinting devotion as a happy warrior for peace.
The range of his interests can only be appreciated by those who knew the capacity of his mind and the boundless energy which he possessed. At various times he held the position of president of the national film society, the national council of adult education, the national council of the Y.M.C.A., the national conference of Canadian universities, the United Nations association, the national council of Canadian clubs; as well as chairman of the Canadian youth commission and the national council of the student Christian movement. That is the busy life he led. He was able as well to win renown as a distinguished editor and author of learned journals and legal texts. He was a Queen's counsel in three provinces, a fellow of the Royal society of Canada, and the recipient of many degrees from leading universities in Canada, the United States and the United Kingdom. He was one of those who had the capacity for work above and beyond the normal limits of endurance. He was one who put the demands of duty at all times before other considerations.
I speak as the one who communicated with him in the latter part of August, 1957, when I asked him whether, in view of his experience and knowledge of international affairs and his relationship with the United Nations Organization, he would consider changing his mode of life and entering the cabinet. His answer, which was typical of him, was "If you think I can do something, I shall not fail". No day was too long, no burden too onerous, and all his tasks were undertaken with a cheerfulness and warmheartedness that will not be forgotten. He overtaxed his strength.
It was only a few days ago that I suggested to him that he slow his pace. That was not his nature. His end came suddenly, in a way that most of us would like to pass away, in harness and in the full possession of those attributes and capacities with which he was endowed in such great measure.
To Mrs. Smith and the three daughters go from the hearts of all of us the expression of our sympathy. The monument which Sidney Smith left behind is enshrined in the hearts of all of us.


Lester Bowles Pearson: Mr. Speaker, I would first like to join with the Prime Minister, on behalf of the official opposition and on my own behalf, in the expression of deep and sincere sympathy to Mrs. Smith and the family. I would also, if I may, like to extend our sympathy to


the Prime Minister and the government in the loss of a close friend and a valued colleague.
We are all, of course, very deeply shocked and grieved at his passing; so sudden, so untimely, but so peaceful. It was only last week, Mr. Speaker, that I attended a meeting of the committee on external affairs and Mr. Smith, the minister was there. Behind him to advise him was the assistant under secretary of state for external affairs, Mr. Donald Matthews, and within a week both those men have departed from us. One was a civil servant, quiet, unobtrusive, but dedicated to the service of his country as an official; the other, the minister.
The secretary of state for external affairs was a man who served his country with devotion and sincerity in war and in peace during all his days, from the time of his enlistment as a very young man in the Canadian army in the first war to the very last moment of his life. As an educator, especially, before he joined the government, he made a contribution to the development and progress of this country which will not be forgotten. He was a servant of the state and he was a servant of the people. He has died in action, and his name now appears on the honour roll of sacrifice to his country and to his duty.
His work, as the Prime Minister has pointed out, was both wearing and worrying, but he never spared himself. Yet his happy disposition tended to conceal the strain and fatigue he must have felt. He was that kind of person, smiling and not complaining. As perhaps I have some reason to know, his was an arduous and exacting portfolio and one which he accepted out of that sense of public service which dominated his life, at a time when years of unremitting service in other fields had perhaps given him the right to look forward to easier days. Instead, he began new service in a field in which he was achieving national and international recognition-* though he had only been in office a short time -through his calm good judgment and through his broadminded and forward-looking approach to international problems. It was a field made more difficult for him because, unlike his predecessors, he entered upon it without the advantage of previous experience in parliament or in the work of the department over which he presided.
Today we think of him not only, or perhaps not even primarily, as a minister of the crown, but as a friend, whole souled and great-hearted, with a gift for the bright and kindly word and a genius for comradeship and good companionship; a man who

made friends easily and who kept them just as easily. I was privileged to enjoy his friendship over many years, and that friendship continued without interruption or any lessening after he moved into the office where I once worked and took the seat on the other side of the house which I once occupied.
The country has lost a devoted, sincere and accomplished public servant, and we have lost a friend whom we will not soon forget.


Hazen Robert Argue: Mr. Speaker, the passing yesterday of Hon. Sidney Smith was a tragic loss for the Canadian nation. I think the statements made by the Prime Minister and by the Leader of the Opposition will be endorsed by every Canadian.
Mr. Smith had a very distinguished career in the service of Canada, a career which began many years before he entered the Canadian House of Commons. He had a distinguished career in the field of education in Nova Scotia, in Manitoba and in Ontario. He possessed those qualities which recommended him to all parts of Canada, to the east, the west and the centre.
Coming in to head the Department of External Affairs was a very onerous and difficult undertaking. I sincerely believe that as the days and months went by during which he occupied that office he displayed a greater and wider grasp of these important world problems. I believe I may say both from the statements Mr. Smith made in public and from conversations I have had with him that in dealing with difficult situations around the world he sought to establish an approach based on common sense, negotiation and peace. I was extremely pleased to see that as his term of office lengthened, greater consideration was given to the emphasis of those things that I am convinced will build an enduring and permanent peace. I have particular reference to the emphasis he placed on the need for the expansion of economic aid. His death yesterday demonstrates to all of us that this man in a very real sense died in the service of his country.
In my association with Mr. Smith and in the association of my colleagues with him I may say that at all times he treated us with respect and as equals. Whenever he acted as our host he was most genial. On behalf of the C.C.F. group I wish to convey to the Prime Minister and to his colleagues our sympathy in their loss. To Mrs. Smith and the three daughters we extend our deep, heartfelt sympathy on the loss of a beloved husband and father.
The Late Sidney E. Smith


Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, I am sure that if all those hon. members who would like to pay a personal tribute to the memory of the late secretary of state for external affairs were to do so it would require several hours. I, too, could pay a personal tribute because I suppose I had known the minister longer than any other hon. member of this parliament. It was my good fortune to attend the first class which he conducted as a lecturer at Dalhousie University after his appointment to that position. I remember his warm personality and the impression he made that morning when to a rather hardbitten group, most of whom were veterans of world war I who had recently returned to Canada, he apologized for being a freshman in the presence of seniors. Over the course of the next month or two the students developed the use of the name Sid Smith by which he has been known ever since.
It is not on a personal basis, however, that I wish to speak this afternoon. I wish rather to speak on behalf of that ancient law school to which he contributed so much and where his name will be enshrined with those of Weldon and MacRae, the deans who predeceased him. I wish also to speak on behalf of that little, old province with its rich history from which he came, of which he was so proud and of which some of us heard him speak with such force and feeling within the last few days. I also wish to speak for that county from which Mrs. Smith comes, where her family and mine have been neighbours for years and where her forebears made such a significant contribution over the last two centuries.
On behalf of that law school, of that university, of that province and of that county I wish to express the sympathy of all those people to Mrs. Smith and to the daughters who, no matter how grievous the shock is at the moment, share the proud memory of a husband and father who attained the status of one of Canada's great citizens.


John George Diefenbaker: Mr. Speaker, with the leave of the house I would ask that we revert to motions in order to make a general reference to the state funeral arrangements for the late Hon. Sidney Smith.


Mr. Speaker:: Has the Prime Minister leave to revert to motions?


Some hon. Members:: Agreed.


John George Diefenbaker: In keeping with the
general tradition, Mr. Speaker, a state funeral will be given for the late Hon. Sidney Smith.

Business of the House
The funeral will take place at 4 p.m. tomorrow at Chalmers United church. That being so, by unanimous consent of the house I move, seconded by the Minister of Public Works:
That when this house adjourns today it stand adjourned until 8 p.m. on Thursday, March 19, 1959.


[Stage Direction]
Motion agreed to.


Hon. Lionel Chevrier (Laurier):: Mr. Speaker, if you will hear me I should like to discuss a point of order in an effort to be of assistance in dealing with the business of the house. At the moment there stands in the name of the Leader of the Opposition an amendment to the motion to go into supply. Since that amendment has now been put under orders of the day, and since it concerns Canada-United States relations, and as I am sure the late secretary of state for external affairs would have taken part in the debate, I have this suggestion to make on behalf of the opposition. Out of consideration for the memory of the late Mr. Smith we on this side of the house would be prepared to waive the second day to which we are entitled for consideration of the amendment, and if the government wished to call this matter as the first item of business today we would be prepared to vote on it simply by Your Honour calling for the yeas and nays and without a formal division of the house. I realize, of course, that this suggestion will require unanimous consent.


Hon. Howard C. Green (Minister of Public Works):: Mr. Speaker, on behalf of the government may I thank the hon. member for Laurier for his suggestion, which seems to me to be very fitting. If it is the wish of all members of the house we would ask that this particular item be called as the first order of business today.


Mr. Speaker:: I think I called orders of the day, but we have not yet reached that stage on the order paper. If the house is prepared to deal at this time with the suggestion made, may I then ask if it is the wish of the house that the relevant order on the order paper be taken at this time and that the matter be disposed of as suggested by the hon. member for Laurier and concurred in by the leader of the house and the leader of the C.C.F. party? Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: May I also make it clear for the guidance of the officials of the house that in disposing of the amendment and motion by a simple division it is the intention that

the supply motion will be considered to be disposed of as if there had been a two-day debate.


Lionel Chevrier: Yes, Mr. Speaker; and I
presume the house leader will want to call the various departments he intended to call.


Mr. Speaker:: And therefore there will not be a carryover of time under the rules. I appreciate this very amiable solution of a difficulty which was puzzling me to some extent. If it is agreed I shall now put the amendment and motion which stand on the order paper.


[Stage Direction]
The house resumed, from Monday, March 16, consideration of the motion of Mr. Fleming (Eglinton) for committee of supply, and the amendment thereto of Mr. Pearson.
Mr. Speaker:: The question is on the
amendment. Those in favour of the amendment will please say "yea".


Some hon. Members:: Yea.


Mr. Speaker:: Those opposed to the amendment will please say "nay".


Some hon. Members:: Nay.
Amendment (Mr. Pearson) negatived on division.


Mr. Speaker:: The question is on the main motion. Is it the pleasure of the house to adopt the motion?
Motion agreed to and the house went into committee, Mr. Sevigny in the chair.
The estimates of the following departments were first taken up and entered for consideration:
DEPARTMENT OF LABOUR General administration-
163. Departmental administration, including grants as detailed in the estimates and the expenses of the international labour conferences, $1,105,745.


[Stage Direction]
261. Departmental administration, $866,273.
[Stage Direction]
372. Departmental administration, $303,040.
Progress reported.


Mr. Caron: 
George Clyde Nowlan: Mr. Speaker, I wonder whether the hon. gentleman will call this question again a week from now. I have information with respect to one person to whom he probably has particular reference, but I have had letters sent to each of the executive members to whom the question refers and I have not heard from them all. Therefore I would prefer to have the question stand for one more week and I will then give a complete answer.


Mr. Caron:: I am willing to have the question stand.


Mr. Speaker:: Stand.
Question stands.


C.N.R. RETRAINING PROGRAM
Mr. Fisher: 1.	Has the Canadian National Railways a retraining program in connection with personnel affected by automation and similar technical developments?
2.	If so, how long has the program been in effect, what is its general policy, and how much money had been expended on it to March 1, 1959?
3.	What numbers of employees have been retrained in the central region under such a program in the (a) running trades: (b) maintenance of way; (c) clerical branches?
4.	On what basis is the employee's income calculated when undergoing such retraining?


Hon. George H. Hees (Minisier of Transport):: Mr. Speaker, the answer to part one is yes. In regard to parts 2 and 3, the management of Canadian National Railways advise that generally speaking a program went into effect as new techniques and forms of mechanization became available, and its aim is to retrain personnel as required. It is not possible to provide an exact breakdown of the number or the cost of the program.
The answer to part 4 is that the employees usually receive on the job retraining and are paid the regular rates of the position. [Later:]
On the orders of the day:


Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I should like to direct to the Minister of Transport a question arising out of his answer to starred question No. 39. Would the minister consider informing the management of the C.N.R. that in the view of the questioner the answer is incomplete and evasive?


George Harris Hees: Mr. Speaker, I would make this suggestion to the hon. member. I believe he
Starred Questions
is a member of the special committee which meets every year to go over the operations of the Canadian National Railways, and which will be meeting in a few weeks' time, and I suggest that he take that opportunity to question the president, Mr. Donald Gordon, just as thoroughly as he would wish to question him. I know he is capable of such thorough questioning.


ADVISORY BOARD ON OLD AGE ASSISTANCE, ETC.
Mr. Fisher: 1.	Is there a welfare advisory board made up of officials of the Department of National Health and Welfare, plus representatives from the provinces, which meets to discuss and review regulations and procedures in connection with matters such as old age assistance?
2.	If so, how often and when has this board met since January 1, 1955?
3.	Is any consideration being given to having this board meet in 1959?


Hon. J. W. Monteiih (Minister of National Health and Welfare):: Mr. Speaker, the
answers are as follows:
1.	Yes.
2.	The advisory board has met once since January 1, 1955, the meeting being held in Ottawa on November 5 and 6, 1956.
3.	Yes.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Fisher: 1.	Has Robert Alexander Cecil Henry, of 1405 Peel street, Montreal, been in the employ of or used as a consultant by the federal government since January, 1952?
2.	If so, what was the nature of such engagements, how much remuneration did Mr. Henry receive annually, and what department or government agency was he paid through?
3.	In this particular period, what positions outside of the government service did Mr. Henry hold?


EUROPEAN TRIPS, NEWSPAPER PERSONNEL
Mr. Fisher: 1.	Were any newspaper or syndicate employees transported to the United Kingdom and to Canadian bases in northwestern Europe during 1957 and 1958?
2.	If so, what were the names of such people, their employees, and the dates on which they were transported?
3.	Were services such as meals, accommodations, etc., supplied for these people? If so, to what persons, at what times, at what cost?
4.	Who arranges such transport and makes arrangements for visits?



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 23-Mr. Benidickson:
For a copy of all correspondence, and any agreements entered into between the federal government
[Stage Direction]
Motions for Papers
and the government of Ontario since January 1, 1958, relating to the roads to resources program.
Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: Stand.


Mr. Benidickson:: Mr. Speaker, surely the minister should be able to bring down this return before the recess, perhaps next Wednesday. Can he say anything as to that?


Francis Alvin George Hamilton: I doubt
whether I will be able to bring down the answers to this motion for papers and motion No. 5 before the recess.


Mr. Speaker:: Stand.
Motion stands.



EAST SAINT JOHN THERMAL PLANT, N.B.

[Stage Direction]
Motion No. 25-Mr. Robichaud:
For a copy of all correspondence, telegrams and other documents exchanged between the federal government or any official thereof, and the provincial government of New Brunswick, or the New Brunswick electric power commission, with respect to the signing of an agreement for the construction of the East St. John thermo plant, for the period June 1, 1958, to date.
Francis Alvin George Hamilton: Stand.


Mr. Robichaud:: This motion has been allowed to stand since January 27. Can the minister tell the house how much longer we will have to wait for the production of the papers?


Francis Alvin George Hamilton: This matter is still under discussion between the two governments. I can give no indication at this time as to when I will be able to produce these papers.


Mr. Speaker:: Stand.
Motion stands.



ROADS TO RESOURCES PROGRAM

[Stage Direction]
Motion No. 30-Mr. Argue:
For a copy of all correspondence, telegrams and other documents exchanged between the federal government and each provincial government since April 1, 1958, regarding the "roads to resources" program.
Francis Alvin George Hamilton: I shall have to ask that the hon. member allow this motion to stand.
Motion stands.



NATIONAL MUSEUM


[Stage Direction]
Motion No. 70-Mr. Argue:
For a copy of all correspondence, telegrams, reports of other documents exchanged between the Minister of Northern Affairs and National Resources or either of his deputy ministers, and

Dr. James B. Griffin, director of the museum of anthropology of the University of Michigan, since 1955. relating in any way to the national museum of Canada and its scientific personnel.
Motion agreed to.


[Stage Direction]
Motion No. 71- Mr. Argue:
For a copy of the report submitted by Mr. Jean Gabus to officers of the Department of Northern Affairs and National Resources on August 19, 1958, relating to the national museum of Canada.
Motion agreed to.

[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I should like to ask the Minister of Trade and Commerce if he has any comment to make on a press report this morning from Washington to the effect that the United States government has decided that oil import restrictions imposed on the grounds of national security should not apply to Canadian oil?


Hon. Gordon Churchill (Minister of Trade and Commerce):: I have seen the press report to which the Leader of the Opposition refers. We have been in communication with our officials in Washington, but have not had any confirmation of the report. We would welcome some arrangement such as is set out there, but we have no assurance that this will result.



SALT FISH


[Stage Direction]
On the orders of the day:
Hédard-J. Robichaud: I should like to ask if the Minister of Trade and Commerce is now in a position to answer the question I directed to him on February 27 with regard to a report on the progress made by the interdepartmental committee to discuss salt fish marketing with members of the industry in Quebec, Nova Scotia and Newfoundland?


Gordon Minto Churchill: I can assure the hon. member I will make a statement on that matter before the house rises for the Easter recess.



POLYMER CORPORATION


[Stage Direction]
On the orders of the day:
Mr. J. W. Murphy (Lambion Wesl):: I
wonder if I might direct a question to the Minister of Labour which concerns the

Inquiries of the Ministry
labour-management situation at the Polymer forms used by the St. Lawrence seaway au-Corporation in Sarnia. If a strike has been thority are virtually identical with those used called, I wonder if the minister has any report by the municipal grants division of the De-to make to the house.	partment of Finance.


Hon. Michael Starr (Minister of Labour):: The latest report I have received is that the dispute has gone through the ordinary processes of conciliation and the parties have been carrying on negotiations without arriving at a settlement. There has been a threat of the stoppage of work which, if carried to its conclusion, would continue until Wednesday of next week. It is to be done in progressive stages.
I have been in close touch with this matter, and only this morning dispatched telegrams to both parties urging them to continue negotiations and offering them the services of mediation through the labour department.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. W. H. McMillan (Welland):: I should
like to direct a question to the Minister of Finance of which I have given him notice. At the present time grants in lieu of taxes under the Municipal Grants Act are payable to municipalities for canals, canal lands and properties, which are soon to be taken over by the St. Lawrence seaway authority. My question is, what steps if any must the interested municipalities take to ensure that similar payments will be continued?


Hon. Donald M. Fleming (Minister of Finance):: I thank the hon. member for giving me notice of his intention to ask this question. The Welland ship canal property of the Department of Transport is to be transferred to the St. Lawrence seaway authority as of April 1, 1959. From this date the responsibility for payment of grants in lieu of taxes on the property transferred will lie with the St. Lawrence seaway authority.
Municipalities containing Welland canal property wishing to continue to receive grants should make applications annually, beginning with 1959, to the St. Lawrence seaway authority on the prescribed application forms. These forms may be obtained by writing to the secretary, St. Lawrence seaway authority, No. 2 building, 70 Lyon street, Ottawa. For the year 1959 it will be necessary also to submit application forms to the municipal grants division in order to receive grants in lieu of taxes for the first three months of the year. While two sets of application forms will be necessary for this one year, there should be a minimum of confusion since the application 66968-9-128


Lionel Chevrier: May I ask
a supplementary question. Is the formula in the case of the crown corporation the same as that in the case of the department for such municipal grants?


Donald Methuen Fleming: So far as I am
aware, but I think that question should be directed to the seaway authority.


Lionel Chevrier: May I ask the Minister of Transport if there is any difference between the formula for the payment of municipal grants by the corporation rather than by the department?


George Harris Hees: I shall check up on that detail, Mr. Speaker.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. D. R. Gundlock (Lethbridge):: May I
address a question to the Minister of Transport. It has been announced that Western Airlines, which for many years used Lethbridge, Alberta, airport as its Canadian base, hereafter will bypass Lethbridge in favour of Calgary. Is this change of policy one formulated by the government or by the airline itself, or is it the result of pressure from civic and other groups? Has the contribution of the city of Lethbridge and various groups therein in initiating, and for many years supporting, this air traffic between western Canada and the United States been fully recognized in this decision?


George Harris Hees: I wish to thank the hon. member for his courtesy in advising me of his intention to ask this question. The hon. member for Medicine Hat has also made numerous inquiries about this matter. I am very glad to be able to answer as follows. In the discussions which took place last week the Canadian officials offered to retain, and urged the retention, of Lethbridge as a Canadian point of call on the trans-border route into Alberta, but the United States wished Calgary to be added as a Canadian terminal on this route in place of Lethbridge, rather than in addition to it. The agreement has had to be concluded on that basis. The position, however, is that if at any time a trans-border carrier wishes to serve Lethbridge I will be quite ready to make traffic rights available in Lethbridge for this purpose without any hesitation.

Inquiries of the Ministry


Mr. E. W. Brunsden (Medicine Hai):: In
view of the very great interest in this subject on the part of many men in southern Alberta, I should like to ask the minister if this matter could not be reopened with a view to using both airports, at Lethbridge and Calgary?


George Harris Hees: As I just pointed out, in our discussions last week we urged the United States to include Lethbridge as well as Calgary, but the carrier concerned was not willing to do so. However, if at any time a carrier is willing to call at Lethbridge, we will be pleased to provide the traffic rights.



REQUEST FOR SHOWING OF DOCUMENTARY FILMS TO MEMBERS

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: My
question is to the Minister of Citizenship and Immigration. In view of the particular interest of some members of the house in the work and productions of the national film board, would the minister inform the house if arrangements could be made for the showing of documentary films in the railway committee room on Wednesday evenings, for the information of members, their wives and guests? In fact I am asking whether a very good practice of some years ago could not be revived.


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: As the hon. member has said, this was the practice some time ago, but the attendance at these showings was so low and the acoustics in the room were so poor that the showings were discontinued. Subsequently they were shown in another room in the house where the acoustics were a little better, but again the attendance did not warrant the time that was put on the showings.
Consequently this year the film board decided to make available showings of films in their own small theatre on Kent street, and invited small groups of parliamentarians. Since the hon. member himself was one of those who turned up, I am sure he will be interested to know that 30 persons were invited to attend the showing and three showed up. If there is any real indication that there is some support for such a program we shall be happy to resume showings, with the consent of Mr. Speaker.



CIVIL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. W. L. Houck (Niagara Falls):: I should like to direct a question to the Minister of


National Health and Welfare. Having regard to the apparently serious aspect of the Berlin situation, will the minister tell the house if he has any further plans to step up civil defence?


Jay Waldo Monteith: Mr. Speaker, I had expected that a statement on civil defence would have been made to the house prior to this time. Owing to unavoidable delays the statement had to wait a few days. I fully expect that this statement will be presented to the house later this week or, at the latest, in the first part of next week. I think possibly the question would be better answered at that time.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Hon. Paul Martin (Essex East):: Mr. Speaker, in view of the fact that we are to recess in a few days, may I ask the Minister of Labour whether or not he will be introducing the amendments to the Unemployment Insurance Act which were referred to in the speech from the throne several months ago, a measure which, as he will understand, will give relief to many thousands of persons now out of work and who cannot qualify for benefits under the Unemployment Insurance Act?


Michael Starr: Mr. Speaker, as the hon. member knows the Unemployment Insurance Act is based on the insurance principle. No such amendment is contemplated in the amendments that will be placed before the house for approval.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
William Moore Benidickson: Mr. Speaker, I should like to direct a question to the Minister of Justice. The Minister of Justice is aware of the fact that the district court of Rainy River has been without the services of a judge for a great number of months partly because the nominal judge for that district when he was appointed formally to the court in Toronto, had been serving in Toronto for many months. In consequence there is a great backlog of judicial work to be done in that county. I would ask the minister to consider this as an urgent matter, and I would hope there is to be an early appointment.


Hon. E. D. Fulton (Minister of Justice):: Yes, Mr. Speaker, I shall be glad to take into consideration what the hon. gentleman has said.



NATIONAL DEFENCE


Hon. G. R. Pearkes (Minister of National Defence) moved: the second reading of and concurrence in amendments made by the Senate to Bill C-27, to amend the National Defence Act.


[Stage Direction]
Motion agreed to, amendments read the second time and concurred in.
[Stage Direction]
The house in committee of supply, Mr. Sevigny in the chair.

Donald Methuen Fleming: Resolved, that a sum not exceeding $616,654,878.69, being the aggregate of
(a)	One-sixth of the total of the amounts of the items set forth in the main estimates for the fiscal year ending March 31, 1960, laid before the House of Commons at the present session of parliament, $606,770,511.84;
(b)	Five-twelfths of the amount of item 209 of said estimates, $791,666.67;
(c)	One-third of the amount of item 38 of the said estimates, $216,666.67;
(d)	One-sixth of the total of the amounts of items 175. 182, 183 and 358 of the said estimates, $713,163.17;
(e)	One-twelfth of the total of the amounts of items 64, 210, 259, 384, 451 and 454 of the said estimates, $8,162,870.34, be granted to Her Majesty on account of the fiscal year ending March 31 1960.
Mr. Chairman, the amounts proposed in the present resolution are those required to provide for the needs of the public service up to May 31. With the exception of 12 items, the proportion of the total item in the estimates is one-sixth or in other words the equivalent of a straight proportion of two months of the total.
In the case of the 12 items to which I have referred, there are special reasons why the amount is required in excess of the fraction of one-sixth, because these are expenditures of a type that do not fit the program of the year on an even, uniform basis, month by month. I point out to the house, Mr. Chairman, that even in the case of these dozen items in no instance is the total amount of the item being released by the present resolution and the bill to follow. The form of the bill to be presented is the same as that of interim supply bills passed last year.
I give the usual undertaking, Mr. Chairman, that the passing of this bill will not prejudice the rights and privileges of hon. members to criticize any item in the estimates
66968-9-128i
Interim Supply
when it comes up for consideration in committee of supply, and that the rights and privileges of hon. members in this regard will be respected and will not be curtailed or restricted in any way as a result of the passing of this measure.


William Moore Benidickson: Mr. Chairman, as the minister has indicated, only $10 million of the $616 million asked as interim supply for the first two months of the fiscal year starting April 1st involves more than one-sixth of the items appearing in the book of estimates for 1959-60. I am well aware that particularly today the house is not in a controversial mood. I am aware also that we are hoping very soon to have a budget which will give us a fairly extensive opportunity to discuss monetary and fiscal policies. On the other hand, despite that introduction I must tell the minister that inasmuch as he did on introducing the new estimates make a fairly extensive statement, which has not been made in that way for quite a number of years, not since 1954, I do take a little exception to the terms of his statement. I thought it was unduly slanted in a political direction, and I therefore feel obliged to say something to the committee at this time with respect to the 1959-60 estimates.
We all know that the minister was one of those who talked a great deal in the past about cutting expenditures. In the statement which he made, in the form in which he utilized the combination of figures, and in the place in his statement where he put what was a very interesting statement, I find that he made matters controversial and unduly political. I do not feel that this is desirable on the introduction of the estimates for the year, particularly as one knows that those who heard the statement on that occasion have had no advance notice of the items in the statement. They are very complicated and very difficult to reply to at that time.
One of the difficulties for members of the house hearing a statement of that kind is that a speaker often is not comparing oranges with oranges. The minister on that occasion directed his statement in such a way that we were really unknowingly, to many I am sure, comparing oranges with grapefruit, as one might say. He compared the first proposals of expenditure for the new year 195960 in the main estimates then tabled with the total expenditures in the main estimates of a year ago; with besides the supplementary estimates, plus supplementary estimates No. 1; and third, also supplementary estimates No. 2. He related the total of his proposed new expenditures for the forthcoming year to the main expenditures and these additional expenditures known to February 5 for the current year.

Interim Supply
If one were comparing equals, what we really should consider is the fact that the main estimates for this year total $5,595 million, compared with $5,179 million at the same stage of proposed expenditures a year ago. That is an increase of $416 million. This, in itself, is confusing and I think that the minister in addition, putting at the top of his second paragraph this statement, has done something which has resulted in publicity favourable to him, perhaps, but I do not think it presents the true state of the financial proposals for the coming year. These were the words of the minister, as reported on page 705 of Hansard for February 5, 1959. This was the emphasis, the impression, he wanted to give, not only to this house but to the country at large. He said:
The most noteworthy feature is that compared with those for the present year, 1958-59, these estimates provide for a decrease of $39.1 million in the non-statutory items.
Mr. Chairman, the minister and some of us on this side do at times find difficulty in reconciling our methods of calculation and arithmetic, but I would like the minister to tell us before the item is passed whether or not he has an explanation for what I consider to be a departure from a justifiable practice in arriving at his conclusion, namely that there was a reduction of $39.1 million in non-statutory expenditures. Because when I examine in the blue estimates book the statement that was prepared a year ago, presented to the press on May 13, 1958, it was calculated that the statutory items amounted to $1,788 million. This year when the minister is making a comparison between statutory items for last year and this year he refers to an item of $1,766.8 million. This I found very hard to reconcile; but afterwards I found that, differing from the similar press statement of last year, there has been omitted this year with respect to last year's statutory items an item of $12 million with respect to the C.B.C., which appears on page 10 of last year's estimates. In addition, in this new figure relating to last year's statutory items, the reference to $12 million for C.B.C., there is omitted $10 million with respect to a special statutory item of last year relating to taxation sharing with the provinces on electricity companies. The result is that you have $22 million which appeared last year as statutory but does not appear the same way this year. If the minister had used the same yardstick, he would not have been able to use the figure of $39 million, but it would have been $22 million less than the figure that he used so very conspicuously and prominently put at the masthead of his statement to the house and to the press, which was of course circulated to the country.

As I say, in addition to that he was comparing, not the main estimates this year with the main estimates at the same stage last year, but related to the main estimates plus all the known expenditures of last year up to date, which included supplementary estimates. This is certainly misleading, and with respect to the statutory item on the C.B.C. which was described as such in last year's estimates at page 10 I frankly cannot account for the failure to include that in the press release figure of approved statutory items for last year. With respect to the special compensation to the provinces of $10 million to which I have referred, I can see that there has been some change in the intended practice there because last year we did have a special statute which authorized this particular transfer of federal funds to the provinces. However, it had an expiry date limiting its application to one year. This year the item is apparently not intended to be a statutory item, because we have an item in the estimates presumably now non-statutory for this purpose.
The effect of this kind of bookkeeping is that the minister's figure of $39 million, representing so-called reductions of controllable or non-statutory expenditure, is larger than, I suggest, it is fair for the minister to use in deference to the house. I think matters of this kind should not involve sleight of hand or gimmicks, but that the minister should at all times be completely frank with the house and with the public. I should appreciate knowing why the two items to which I have referred were not included again in this year's press release and why the minister has changed the figure from $1,788.1 million, representing last year's statutory items, and used this year the figure of $1,766.8 million.
We have, of course, seen a great deal of inconsistency from the treasury benches this session in relation to what we were led to believe was to be the policy of the government and, in particular, the policy of the Minister of Finance in fiscal and monetary matters. I think the committee is well aware that the minister wasted no time after being sworn in to his present position in June, 1957 before meeting the press, and one of the many things he said would be accomplished under his guidance, as reported in the first paragraph of an article in the Ottawa Journal on June 26, 1957, at a press conference was an undertaking that he would declare war on waste and extravagance. I have indicated that comparing the main estimates this year with the main estimates last year we find an increase of $416 million. 1 recall some strong statements made by the minister when he was in opposition on this as on many other matters, and again I point out to the committee that he is unduly acrobatic, and that this is

another occasion when we are witnessing a very remarkable somersault.
I should like to make some general remarks to the minister in connection with interest rates, because in the statement he made on February 5 he pointed out that one of the chief items of increase in the estimates for the forthcoming year as compared with the current year was the item of an increase of $106 million accounted for by the necessity of paying larger amounts in interest on the public debt. It is in this connection that I find, in odd comments made by the minister during the present session, an unwillingness, again, to be frank with the house. I think that many of the minister's statements this session, particularly on the subject of interest rates, have been unduly fatuous and, indeed, vacuous. I will give the committee an example of what I have in mind. How can anybody either in this chamber or outside reconcile statements of the minister with his past onslaughts on tight money or, indeed, with the present facts in relation to high interest rates? On page 997 of Hansard the minister is reported as saying:
No one can accuse the present government of doing anything to create an increase in interest rates.
All right. Would the minister say something about what this government has done to reduce interest rates? He says he has done nothing to increase them. I should like to know what is different about the present government's performance in relation to the central bank, the method of selling treasury bills, marketable securities or any other type of government security, from that which he criticized when he was on the hustings and talking about the tight money policy.
I regret having to point out some of the very unfortunate circumstances surrounding the cost of money today, not only to the federal government but to other governments and to the private commerce of our country. I know that we have been told, not only in recent debates but even last year-and when the Conservatives were in power in the thirties they had the same argument to make in reply to any criticism by the opposition; they inferred that criticism was disloyal and that the communists might hear it-


Donald Methuen Fleming: Would the hon. gentleman permit me to interrupt him? Is he proposing now to embark on a full dress debate on these questions? I ask this because he, I think, must recall the words that were very often used in the past by my predecessors, particularly by Mr. Abbott, who consistently took the stand that a motion for interim supply was not an appropriate motion for opening up a general debate. Mr. Chairman, we are going to have a budget debate
Interim Supply
soon, and I call to the attention of all hon. members that an undertaking is always given by the Minister of Finance, when the present type of motion for interim supply is under consideration, that the full rights of all members will be respected and that they will be able to discuss any item of supply when it is called in due course in committee of supply. The whole purpose of such an undertaking is to avoid duplication of debate. It was never intended that a motion for interim supply should be the occasion for a full dress debate.
This is not a motion to resolve the house into committee of supply, upon which it would be appropriate to raise questions which might be called grievances, or to introduce amendments in relation to matters upon which the house might wish to divide. The hon. gentleman is familiar with these procedures, and has had experience with regard to them, having been parliamentary assistant to the minister of finance when this same position was consistently taken by my predecessors. He will appreciate that if a motion for interim supply is to be made the occasion for a general debate, it will simply mean that there is bound to be a very extended discussion. Is it not the wish of the committee that this course is the one which should be taken, having regard to the program which is still before us and the number of items to be passed before the Easter recess?


Alexis Pierre Caron: Mr. Chairman, may I refer to Beauchesne's Fourth Edition, page 192, 59(2), which simply says:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.
As we are voting one-sixth of the whole budget for 1959-60, I think the remarks which are being made on the general nature of the administration are relevant, and even if it has been the custom in the past, on certain occasions, not to have a full-fledged debate on these matters I think the hon. member should be permitted to continue his remarks on the general nature of the estimates now before the committee.


William Moore Benidickson: Mr. Chairman, the Minister of Finance has done as his predecessors have done, and is pointing out that subsequent debate will not be denied to members of the house, because no one item is being completed under the resolution he is presenting. That never in the past restrained the Minister of Finance and his associates when they were on the opposition side of the house from debating particular items which they felt could not wait for the estimates to come up.


Donald Methuen Fleming: That is not true.


William Moore Benidickson: That is certainly true. It reduced debate undoubtedly because we were

Interim Supply
not going to discuss every item with respect to the numerous entries in the blue book but there never has been a denial of hon. members' rights at this stage to speak if they felt the requirement, on a particular item which in their opinion they felt was of sufficient urgency that discussion should not be delayed. I say that an item in the new estimates of expenditure that involves almost 25 per cent of the increase in expenditures amounting to some $400 million odd to which I referred is worthy of a little consideration at this stage. I am not trying to be unpatriotic in making some reference to this very important question. I intend to be brief with respect to it but I must point out to the committee that the bond market of this country is indeed in a real crisis with respect to confidence respecting federal government securities.
The interest rates that are being paid for federal bonds are at a differential in relation to those paid by high grade private corporate bond issues that was never so narrow as at the present time indicating that the traditional premium of confidence in federal government bonds does not prevail at the present time.


Donald Methuen Fleming: Mr. Chairman, may I ask the hon. gentleman a question. Does he think it is a very responsible course to pursue the line he is following now knowing that the effect of it can only be to hurt the credit of this country when we have to go to the bond markets?


William Moore Benidickson: Mr. Chairman, on that point of order-


Donald Methuen Fleming: That was not a point of order; it was a question.


William Moore Benidickson: I should like to answer the question. I expected my hon. friend to again raise some bogeyman of this kind in the hope that we would not have a debate here on dirty dishes he would like to keep from view. However, I am not introducing this thought. I was just about to tell my hon. friend that the financial editors of two of the best-informed newspapers in this country on monetary matters, the Globe and Mail of Toronto and the Gazette of Montreal, have had a great deal to say on this subject and that is public knowledge. I do not need to express an opinion if my hon. friend does not wish me to at this time. I shall simply say that about ten days ago Mr. Fraser Robertson the financial editor for the Toronto Globe and Mail, a newspaper that is very friendly to my hon. friend, was visiting western Canada and went as far as the west coast. In his column of March 2, he had this to say:

As one investment dealer put it to me, the quickest way to lose the confidence of a client is to suggest he buy Dominion of Canada bonds.


Donald Methuen Fleming: Mr. Chairman, would my hon. friend agree with that statement and take the responsibility for saying those words in this committee? Is my hon. friend prepared to make that his statement?


William Moore Benidickson: Mr. Chairman, I feel that for many weeks this country has awaited some decisive statement from my hon. friend or from the Prime Minister with respect to their policies on fiscal and monetary matters and even the budget is being postponed-


Donald Methuen Fleming: It is not being postponed. You have been told when it is coming down.


William Moore Benidickson: It is the uncertainty with respect to policies and the attempt on the part of the government to ride two horses that is resulting in this lack of confidence in government bonds at this time.


Hazen Robert Argue: They cannot stay on either one.


William Moore Benidickson: The Minister of Finance made an important speech that received a great deal of publicity on January 5 in Toronto. His talk seemed to emphasize the problem of inflation but in the speech from the throne that did not seem to be the matter that was concerning the Prime Minister. He referred to continued spending and deficits if necessary. I say that what is holding back confidence in government bonds is a lack of some decisive statement or action by this government. It is most unfortunate in my opinion that the budget was not introduced prior to the Easter recess.
Again to indicate this is something that is not being stated from a political basis-


Donald Methuen Fleming: Oh, no!


William Moore Benidickson: -I offer to my hon. friend a statement by Mr. John Meyer, financial editor of the Montreal Gazette, a newspaper that is also friendly to the minister. The following statement appeared in an article published on December 9


Donald Methuen Fleming: December 9?


William Moore Benidickson: -in which Mr. Meyer said:
The investor no longer believes the government can, or will, restrain inflation.
Only a budget and the stated intentions of the government for next year would indicate whether or not the government is concerned in a serious way about restraining inflation. The article goes on to state:
This fear has become increasingly apparent over the last few months. It was offset, at first, by compensating increases in return and other attractions inherent in a government bond.
There is another feature to which I hope the minister will give consideration. This has

been causing me alarm in recent weeks and I believe it also requires some very decisive action on the minister's part. All hon. gentlemen know that we recently had the floating of two fairly short term bonds, one at a nominal coupon rate of 2f per cent for 13 months and the other at 3 per cent for one year, 9i months. The thing that is worrying me and which I draw to the minister's attention because I feel it will be helpful to him in consideration of budget proposals to which he will be giving very rapt attention over the recess is the fact that there seems to be an unseemly and unholy competition on the part of public borrowers-[DOT] and I include the federal government, the provinces and the municipalities-in seeking from the public funds with a silent gimmick or attraction, namely bonds sold at a discount which when one relates it to an income tax rate results in very expensive cost for public money.
In January of this year the province of New Brunswick floated bonds which carried a coupon rate of 2J per cent but by reason of the discount and short term the effective rate will be 4.75 per cent. I am told that one of the municipalities in Quebec has been utilizing this gimmick to the extent that it offered money at a nominal rate of 1 per cent but the non-taxable discount was so substantial that it still had attractions for borrowers because they believed they would not be responsible for income tax on the difference between the par value of the bonds and the discount prices at which they got them.


Donald Methuen Fleming: Mr. Chairman, would the hon. gentleman care to give the date of the municipal issue to which he refers?


William Moore Benidickson: I refer to the municipality of Malartic.


Donald Methuen Fleming: And would my hon. friend give the date?


William Moore Benidickson: I have not got it.


Donald Methuen Fleming: I think my hon. friend will find it was several years ago under the, previous government.


William Moore Benidickson: I am not so informed by the Bank of Canada. When I inquired yesterday the date was not given me. I have cited this as a recent illustration of what is happening. Hon. members of the committee know that except in the provinces of Quebec and Ontario any tax advantage in the matter of floating bonds of this kind is at the expense of the federal income tax collections and so unless this thing is straightened out the minister himself will find that the federal treasury will be losing in taxes on these highly discounted bonds for short terms whether his or offered by other governments.
Interim Supply
I want to give a little illustration of what the actual value was of the most recent flotation of federal bonds by the minister. I will refer to the 2f per cent bonds due, as I said, 13 months after issue, $85 million of which was subscribed. This bond will go up $20 per thousand in 13 months.


Donald Methuen Fleming: My hon. friend says "subscribed". He knows it was over subscribed and that was the limit of the allotment.


William Moore Benidickson: My friend has boasted about oversubscription. I want to indicate to the house why this bond has perhaps proved satisfactory to the extent that it was oversubscribed.


Donald Methuen Fleming: Don't say $85 million was subscribed.


William Moore Benidickson: In the minister's advertisements to the public the issue is referred to as 2J per cent, due April 1, 1960, issued at 97.90, a discount from 100 to yield on that basis 4.76 per cent. I want to point out to the minister that the corporation tax is approximately 50 per cent and that a great number of the personal taxpayers who buy bonds are paying on the last portion of their income an income tax of at least 50 per cent. The result is that people in that category who buy these bonds would have to get an annual yield of 6.6 per cent on another bond sold at par in order to net this amount. That is how attractive the minister has been forced to make his interest rates for his purposes.


Donald Methuen Fleming: Surely my hon.
friend is not going to leave on the record a shockingly misleading and inaccurate statement of that kind. The hon. member knows perfectly well how interest rates are calculated, and if anybody paid any attention to his last statement it could not possibly fail to do very serious mischief. I ask the hon. member if he does not think that a sense of responsibility would dissuade him from making a shocking statement of that kind.


William Moore Benidickson: I will spell out how
attractive it is and the type of argument that is made by the sellers of these bonds to people who, as I say, may have an income tax rate of 50 per cent. A person or corporation paying a 50 per cent tax would receive in a year after paying tax $13.75, being one-half of a 2| per cent coupon, plus $19.32-I am using a year as the basis although the issue was for 13 months- being twelve-thirteenths of $21. The result is that he receives in that year a benefit of $33.07 per $1,000 bond after tax. I repeat that to net that amount on another bond sold at par he would have to get an annual yield of 6.6 per cent.
But the point I am making is that there is unseemly competition going on between

Interim Supply
public bodies in this respect, and I hope the minister will consult the provinces about this because on the facts-


Donald Methuen Fleming: Will the hon.
member recall that bonds were issued at a discount under the previous regime where it happened to meet the needs of the market at the particular time, even when he was parliamentary assistant to the then minister of finance? This is nothing new at all.


William Moore Benidickson: I will challenge the minister to give the house particulars of returns from government bonds in any recent flotation by the former government or going back for many years that netted to a taxpayer paying a rate of 50 per cent a yield of 6.6 per cent as a result of the use of this feature of discount which is non-taxable.


Donald Methuen Fleming: The hon. gentleman is running away from my question completely.


William Moore Benidickson: Not at all. The minister has all the information. He says that this feature of the federal government losing the income tax is something that he can attribute to the previous government in similar conditions in recent times, and I simply ask him to inform the committee of those facts. In addition, I have always heard from the minister that interest rates in Canada have been rising recently simply because of our proximity to the United States. It just happens that in recent weeks, Mr. Chairman, while rates in Canada have been rising very markedly, the trend has been the very opposite in the United States, and I do not see the validity of that kind of argument.


Donald Methuen Fleming: That is not true.


William Moore Benidickson: The point I really want to draw to the attention of the house-


Donald Methuen Fleming: Does the hon. member say that interest rates in the United States have been going down? Did I hear him say such a thing?


William Moore Benidickson: Yes.


Donald Methuen Fleming: Then I am sorry, Mr. Chairman, that my hon. friend is not better informed as to the facts because the facts are dead against him.


William Moore Benidickson: I will put a quotation on the record and the minister can correct me if I am wrong. We do not have the sources of expert information that he has. I simply have to do my own reading. In the U.S. News and World Report of March 9 I find the following:
Short term interest rates have declined despite the firm hand of the federal reserve on credit

supplies. The treasury on its February 23 offering of 91-day bills accepted an interest cost of 2.589, down from 2.726 the week before and 3.035 on January 19.
I think this statement, Mr. Chairman, is a direct challenge to the minister. When questioned on the matter of interest rates and government action to encourage raising them or to prevent them from rising, he has always taken the attitude that he has nothing to do with it. He says he sits in a vacuum and lets the money market settle the matter. If there was anything that the government did to bring interest rates down after they came into office I should like to hear about it. On January 27, 1958, as found at page 3852 of Hansard, the minister had this to say:
That tight money policy has now been eased in line with the policies of this government.
In other words, when interest rates were declining he took credit for it but when interest rates have been rising rapidly he absolves himself from any responsibility. He says that he is a complete neutral.


Donald Methuen Fleming: I am no neutral.


William Moore Benidickson: On November 25, 1957, and this is another example of the political advertising the minister does with respect to this very important problem-


The Chairman:: Order. I regret to interrupt the hon. member but I must advise him that his time has expired.


William Moore Benidickson: I just have a three-line quotation.


Joseph Pierre Albert Sévigny: Does the committee consent?


Some hon. Members:: Agreed.


Mr. Fraser:: Let him get it off his chest. It is not very good anyhow.


William Moore Benidickson: This is what the minister boasted to the federal provincial conference on November 25, 1957:
Here in Canada, quietly and gradually over the last three months, the tight money situation has been eased. Those whose business it is to follow the bond market will have noticed it-and that includes many of you here-but it has not attracted as much attention as one would think it has merited. Interest rates have declined.
I simply say to the minister that if he takes credit for his administration when rates decline will he give the committee some explanation of present government policy because there has been a very marked increase in rates in recent times?


Herbert Wilfred Herridge: Mr. Chairman, I rise to deal with two questions which I assume I can deal with properly on going into interim supply. They come under the administration of the Prime Minister and the Minister of Justice. According to the Prime Minister, the

government has made a decision in the one case and as to the second we presume that the matter is still under consideration. The two questions I wish to deal with this afternoon on behalf of this group are the request on behalf of the Canadian Labour Congress for inquiry into the unfortunate and regrettable incidents in Newfoundland and the request for a judicial inquiry by the premier of the same province.


Donald Methuen Fleming: Mr. Chairman, my hon. friend has indicated that he approaches these matters as on a motion to resolve the house into committee of supply. May I point out, Mr. Chairman, that this is not that situation at all. We are not on a motion to resolve the house into committee of supply, we are in committee of supply now. May I point out to the hon. gentleman that the subjects he is proposing to discuss now are surely not appropriate for discussion on interim supply, that is, discussion in committee of supply. If my hon. friend is looking for a place to discuss this question there will be an item in the supplementary estimates dealing with the Royal Canadian Mounted Police.


Hédard-J. Robichaud: The minister will object.


Donald Methuen Fleming: Whatever may be appropriate for discussion there may be discussed, and whatever is improper obviously will not be permitted. But I do urge that this is not the place to discuss matters as though this were a motion to resolve the house into committee of supply. This is not such a proceeding at all.


Herbert Wilfred Herridge: I cannot agree with the contention of the Minister of Finance. The minister is asking for supply and I understand this request covers all departments. We have a right when the minister is asking for supply for a department to go into any question concerning that department. In support of that contention I want to quote from May's 16th edition, page 739:
Matters which can be discussed upon the grant on which an advance is sought, may be discussed, in anticipation, upon the motion for the grant on account: though the proper occasion to examine the grants in detail is when the final grant to complete the sum demanded is proposed to the committee.


Donald Methuen Fleming: That last statement is the important one. I do point out to my hon. friend that once we are through with interim supply we are going to have before the committee the supplementary estimates for the year 1958-59. It seems to me that whatever may be relevant to the item for the Royal 66968-9-129
Interim Supply
Canadian Mounted Police should be said there, and not on this present proceeding in committee of supply.


Herbert Wilfred Herridge: According to the rulings that have been made in connection with dealing with supplementary and further supplementary estimates, we have been tied very closely since this government came into power to the actual item under discussion. The matters I wish to raise here go somewhat wider than that. I think this is the appropriate opportunity to discuss a matter of very urgent concern to the Canadian people.


Joseph Pierre Albert Sévigny: I must bring to the attention of the committee that the item which was read by the hon. member for Kootenay West can be found on page 739 of May's 16th edition. This paragraph reads as follows:
Matters which can be discussed upon the grant on which an advance is sought, may be discussed, in anticipation, upon the motion for the grant on account; though the proper occasion to examine the grants in detail is when the final grant to complete the sum demanded is proposed to the committee.
It is the opinion of the Chair that this question concerning Newfoundland should be discussed when the detailed estimates are brought forward, but not at the present time. Actually, at the present time we are in committee of supply and discussing the estimates on a very broad, general basis. It is the opinion of the Chair this is not the appropriate time for discussing the matter to which the hon. member for Kootenay West refers. It would be preferable, in my opinion, to discuss the matter under the detailed items.


William Moore Benidickson: May I speak to the point of order? I feel that this is something which involves the rights of all members of the opposition. I feel that the suggestions of the minister are quite contrary to the practice of this house over a great number of years. I could not, if I were in the position of the hon. member for Kootenay West, agree to the suggestion of the Minister of Finance because recently we have had other supplementary estimates before the committee and I thought the minister was unduly technical. As I say, he completely ignored the practice that he and the present Prime Minister advocated when the supplementary estimates were being considered under the former administration.
I would ask him to cite any illustration in recent years when supplementary estimates were under consideration when points of objection were taken by the former government that was then in power similar to those he took earlier this session in the debate on the

Interim Supply
supplementary estimates. I feel that we would end in a trap, in view of the rulings that were made, if it was agreed to postpone discussion of this particular subject, the Royal Canadian Mounted Police.
I put forward this thought to Your Honour. Would it not be possible for a member of the house at this time to move that we do not vote one-sixth of the supply for the months of April and May for a particular item, such as the administration of the mounted police, because certain members are not satisfied that the committee has had an adequate opportunity to discuss the program of that force for the two months for which the force is being given this blank cheque?


Mr. Regier:: Before you make a final ruling on this matter, Mr. Chairman, I may say that your early indication would leave serious implications for us. Never in my six years of experience has the opposition been prevented before on an interim supply motion from discussing something that broadly affects the policies of the government-


Joseph Pierre Albert Sévigny: I regret to interrupt the hon. member for Burnaby-Coquitlam, but I should like to inform him and the hon. member for Kenora-Rainy River that the Chair did not rule out the debate on the present matter. It was simply a request that was made that this matter to which the hon. member for Kootenay West referred be discussed when the detailed estimates come along. This was a request made in line with the paragraph to which the hon. member referred in May's 16th edition.
It is stated in the latter part of the paragraph:
-the proper occasion to examine the grants in detail is when the final grant to complete the sum demanded is proposed to the committee.
The Chair has not ruled out of order the debate upon which the hon. member is starting, but has simply requested that members limit their remarks as much as possible to matters of a general nature on these items. I must also bring to the attention of the hon. member the fact that since we are discussing the question of supply we cannot allow debates to stray into all fields, in all directions, and consequently if this matter is discussed it will have to be debated with the greatest possible respect for the question of relevancy.


Herbert Wilfred Herridge: Mr. Chairman, I thank you for your opinion in this connection. It was not my intention to go into the details of these estimates. We intend to go into them very fully when the main estimates come before the committee, at which time the ministers and departmental officials will be
[Mr. Benidickson.l
here. What I am dealing with is something more in the line of general principles which concern the Prime Minister and the Minister of Justice.
As I said before, I was going to deal first with the request of the Canadian Labour Congress for an inquiry into the unfortunate and regrettable incidents in Newfoundland, and a similar request for a judicial inquiry by Premier Smallwood to the Prime Minister of Canada.


Donald Methuen Fleming: Let us clarify this matter for the guidance of us all. My hon. friend has indicated he is proposing to initiate a debate on a subject which concerns the Prime Minister and the Minister of Justice. This emphasizes the point that I was seeking to make earlier, Mr. Chairman, a point which has been recognized in this house all the time that my hon. friend and I have been members of this house. When the house is in committee of supply for the purpose of granting interim supply we do not have debates involving other ministers. The Minister of Finance is the only minister who takes part in the discussion of interim supply. This has been the invariable practice all the time my hon. friend and I have been in the house.
If he wishes to find an occasion for debating the question that he has indicated, one involving the Prime Minister and my colleague the Minister of Justice, I can assure him this is not the occasion. I have no doubt, that my hon. friend will have other occasions. However, this is not the occasion. If I may say so, my hon. friend approaches this matter as though this were a motion to resolve the house into committee of supply on which he can raise grievances or introduce amendments to test the feeling of the house on a particular issue that he chooses to raise as a grievance. But that is not the situation we are in now. We are in committee on this motion for interim supply.


Herbert Wilfred Herridge: Mr. Chairman, I certainly
cannot agree with the Minister of Finance that in the absence of other ministers he does not represent them in dealing with interim supply or supplementary estimates. That matter has arisen on a number of occasions throughout the years. If he were in interim supply or on supplementary estimates he would answer for the minister who was not present.


Donald Methuen Fleming: Quite so. Let
there be no misunderstanding. I am here to answer with respect to the present motion within the proper limits of the present proceedings. My hon. friend has indicated he wishes to raise a matter or to initiate a debate on a matter that properly calls, as I understood him to say, for the presence of

the Prime Minister and the Minister of Justice. I emphasize that this is not the time for that kind of debate.


Joseph Pierre Albert Sévigny: It is not my opinion that
actual matters affecting the departments of ministers who are not in the house cannot be debated even during the ministers' absence. However, once again, in line with the remarks I made in my ruling a few minutes ago, I must remind hon. members that since we are at present in committee of supply debating an interim supply matter we should limit our remarks more to matters concerning sums of money rather than other principles. Otherwise the principle of relevancy would not be observed. I must therefore ask hon. members please to try to restrict their remarks to the matter that is being discussed at this time.


Herbert Wilfred Herridge: Mr. Chairman, I am taking
advantage of the minister's coming before the house and asking for interim supply. In this interim supply the minister is asking for money that would go to Newfoundland for the services of that province. I do not see how one can talk about money only without talking about policy in relation to the money, its expenditure and the surrounding circumstances.
Mr. Chairman, I have had two starts. I hope I can get away satisfactorily this time. I would have been finished now if the Minister of Finance had not got on his high horse. I should remind him, Mr. Chairman, that when I am talking, no other member of this group is talking because we have only opportunity to talk one at a time. I must say that we were extremely sorry about the reply the Prime Minister made the other day to the request of the Canadian Labour Congress and to the request of the premier of Newfoundland that an investigation be conducted into these unusual happenings in Newfoundland. We think such an investigation would have been of great advantage to all parties concerned. I think it was wanted by a large number of people in Canada and that it would have established the truth in these matters where there are such wide differences of opinion.
In that connection before proceeding I want to refer to the hon. member for Bona-vista-Twillingate whom I had the dubious pleasure of witnessing on "Press Conference" last night and his vigorous defence of the loss of freedom of choice of the Newfoundland people and their rights and his, I must say, amazing performance in which he was able to reconcile opposites and make national Liberal policy and provincial Liberal policy appear as one. The hon. member said this, and I wish he were in the chamber because 66968-9-1291
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I do not like talking about members when they are absent. These are the words used by the hon. member for Bonavista-Twillin-gate on "Press Conference" last night when being interviewed by the press men. He said in part:
I talked to Mr. Knowles about this at the press gallery dinner. I don't think it was a private conversation.
As a matter of fact, I made inquiry of Mr. Knowles and he tells me that it was a private conversation. The hon. member for Bonavista-Twillingate went on to say this:
I asked Mr. Knowles why it was that the I.W.A. had jumped all the way from British Columbia to Newfoundland. He said that was a difficult question and he didn't try to answer It.
My point is this, Mr. Chairman. I think it is somewhat unethical to quote from a private conversation on a press conference in this country, and particularly a private conversation at a press gallery dinner which even the press itself treats as being so confidential that never a line appears in the papers about it. I am rather surprised at the hon. member for Bonavista-Twillingate doing that. I am sure that the members of the committee generally will consider his remarks to be somewhat unethical. If we were all to go on "Press Conference"-


Joseph Pierre Albert Sévigny: Order. I must with regret tell the hon. member for Kootenay West that his present remarks are quite out of order. If I heard them correctly, he is at present criticizing the reference which was made at a press conference to a private conversation and his remarks are directed mostly to the question of the ethics to be observed under certain circumstances. This matter has no reference to the item under discussion. I must therefore tell him that I must rule these remarks out of order.


Herbert Wilfred Herridge: Thank you for your ruling, Mr. Chairman.


An hon. Member:: They got on the record.


Herbert Wilfred Herridge: I shall have to complete my remarks on a question of privilege later. But in any event I was extremely sorry to observe his course of action because I do not think it was quite up to the hon. member's usual standard. Now I do not know quite where I am at.


An hon. Member:: You are in the woods.


Herbert Wilfred Herridge: Anyway, we in this group urge the members of the government to give reconsideration to their decision with respect to this request for an inquiry into the whole situation in Newfoundland. It is not too late for this matter to be reconsidered. We

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feel that a great deal of good could be done by establishing the truth in this situation.
I do not know whether or not I am going to be out of order again, but I must say that when I was listening to the hon. gentlemen in the official opposition on a number of occasions asking questions of the Prime Minister on the matter I thought to myself, "Whatever has happened to the Liberal party? It is a different party from what it was when I belonged to it". I knew an old gentleman in my district who was president of the district Liberal association. In order to show the deterioration, I just want to tell of an incident.


Joseph Pierre Albert Sévigny: Order. I know that the remarks of the hon. member are most entertaining but once again I must tell him that they have little reference to the item under discussion. I must therefore once again, and with regret, rule his remarks out of order.


Herbert Wilfred Herridge: Thank you, Mr. Chairman. I shall be obliged to deal with that incident of the supplementary estimates on the recommendation of the Minister of Finance. I now get on to the second question. The C.C.F. believes that the government of Canada should disallow this unfortunate legislation that was recently passed in Newfoundland. There is no question about the authority of the government in that respect in support of that proposal.
Mr. Chairman, I notice you are repeatedly turning and looking at me, but I am eliminating some of my notes from time to time. Therefore it is most difficult for me to retain a normal continuity of argument. I see that the hon. member for Essex East is looking at me, and I am going to quote from a law book, the Canada Supreme Court Reports for 1938, with respect to the power of disallowance. On page 72 I find a reference is made with respect to this question of disallowance. There are four questions to be answered. The first question is:
Is the power of disallowance of provincial legislation, vested in the governor general in council by section 90 of the British North America Act, 1867, still a subsisting power?
The decision of the supreme court, which is found on page 80, is:
Question 1. Yes. The power of disallowance is and remains in full vigour.
The second question is:
If the answer to question 1 be in the affirmative, is the exercise of the said power of disallowance by the governor general in council subject to any limitations or restrictions and, if so, what are the nature and effect of such limitations or restrictions?

The answer to the second question is:
Question 2. The power of disallowance by the governor general in council is subject to no limitation or restriction whatsoever, save that it has to be exercised within the period of one year after receipt of the Act by the governor general;
Question 3 is:
Is the power of reservation for the signification of the pleasure of the governor general of bills passed by the legislative assembly or legislative authority of a province vested in the lieutenant governor by section 90 of the British North America Act, 1867, still a subsisting power?
Then the answer in the judgment is:
Question 3. Yes. The power of reservation is and remains in full vigour.
Then question 4, which is on page 73, of the report, is:
If the answer to question 3 he in the affirmative, is the exercise of the said power of reservation by the lieutenant governor subject to any limitations or restrictions, and if so, what are the nature and effect of such limitations or restrictions?
Then the answer is to be found on page 80:
Question 4. The exercise of the power of reservation by the lieutenant governor is subject to no limitation or restriction whatsoever, save that the lieutenant governor is, under the terms of section 90 of the British North America Act, required to exercise the power "according to his discretion but subject to the provisions of the said act and to the governor general's instructions."
Mr. Chairman, that is placed on the record for the information of people who are very interested in this question.
Now I want to deal for a moment or two with the Prime Minister's attitude toward the question of the right of association. We have all heard the Prime Minister speak on that subject in the house over a period of years, either when he introduced his resolution urging the bill of rights and fundamental freedoms or when he was supporting a similar resolution introduced by the former member for Rosetown-Biggar. I find in that connection on page 2857 of Hansard for April 12, 1948 that the Prime Minister had this to say when he was then a member of the opposition. On this important question he said:
If a municipal authority has the right by licensing, by imposing a licence fee, to deny the privilege of practising one's religion it then can do indirectly what it cannot do directly. I suggest to the Prime Minister as the culminating act of his career that he give to Canadians everywhere the assurance of full rights of equality in Canadian citizenship which was placed on the statute book by his government, by amending the Supreme Court Act to give the individual the right to the preservation and maintenance of his freedoms against provincial intrusion wherever it occurs.
Then again on page 3153 of Hansard for May 16, 1947, the Prime Minister had this to say in a similar debate:
We have political rights: what about the individual rights? After all, denying the individual

his rights denies freedom. Our British heritage gave us our national freedoms. Our individual freedoms are maintainable only at the caprice of the government of the day. If we acknowledge the right of a government to declare the nonexistence of these freedoms, while at the same time the great charters proclaim their existence, we deny those freedoms unless we permit the aggrieved individual recourse to the courts.
Then again at page 3158 on May 16, 1947, in the same debate the Prime Minister had this to say:
A declaration of a Bill of Rights in this country would be a positive declaration on the part of men and women of all political faiths in their belief in civil liberties. Whether the federal authority has the power or not to pass legislation respecting civil liberties, its passage would strengthen the hand of the Minister of Justice in the matter of the disallowance of any statute which would deny freedom anywhere in our country.
Now, Mr. Chairman, we all know the very strong stand which the Prime Minister has taken throughout the years with respect to fundamental rights and human freedoms and the protection of the individual in this country. And we are all quite certain that that is his opinion today. That is why we are making this appeal to him with respect to this legislation recently passed by the legislative assembly of Newfoundland. As a result of the passage of this legislation the Canadian Labour Congress has made representations to the government of Canada, and on March 10, 1959 senior officials of the Canadian Labour Congress presented the petition of the congress to the governor general in council for disallowance of the Newfoundland trade union (emergency provisions) act, 1959. This petition mentions at great length-


Joseph Pierre Albert Sévigny: Order. I must regret interrupting the hon. member again. I have listened to the text which he read from the law book he referred to; I have also listened to his comments on the Prime Minister's remarks on civil and human rights. In connection with the latter part I must inform the hon. member that there will be a debate on this bill of rights and I do not think that this is the proper time to discuss that particular item. Furthermore, in connection with the allowance or disallowance by this house of the measures taken by provincial legislatures, I must advise the house that the disallowance of provincial laws is not one of the functions of the dominion parliament. This is clearly expressed in Beau-chesne, fourth edition, page 135, item 161, which reads as follows:
Disallowance of provincial laws is not one of the functions of the dominion parliament. The fact that this subject is dealt with in section 90 of the British North America Act and not in section 91 shows clearly that the legislator did not intend to include it with the residue of powers vested in the dominion parliament. The only
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authority that can disallow provincial laws is the governor in council. As the governor in council is responsible to parliament, the House of Commons may criticize the action taken by the cabinet in cases of proposed disallowances, but a member cannot raise a debate on a provincial act on the motion to go into supply.
Since the only power enjoyed by our House of Commons in matters of disallowance is to criticize the action of the dominion government after it has either disallowed or refused to disallow a provincial act, it follows that the house must await government action before taking the matter up. If the house considered the act before the expiration of the one-year period during which council must give its decision, it would exceed its own jurisdiction.
When the year within which disallowance may take place has expired, the government's action or inaction may be discussed in the House of Commons. The practice usually followed has been to wait until the question of disallowance has been decided upon by the government and then to move for the production of papers relating thereto.
The adoption of a resolution calling upon the government to disallow a provincial act would be an encroachment by the House of Commons on the powers of the Legislative Assemblies as set forth in section 92 of the British North America Act. Such a resolution was moved in the Canadian House of Commons on the 15th of May, 1873, but it was severely criticized and never accepted as a precedent.
Lefroy, "Canada's Federal System", says, page 32: "Moreover the Dominion House of Commons cannot constitutionally interfere with the operation of provincial acts by passing resolutions urging their disallowance by the Governor-General." And Lefroy quotes Lord Kimberley's dispatch of June 30, 1873, saying that: "If such a resolution were allowed to have effect, it would amount to a virtual repeal of the section of the British North America Act, 1867, which gives the exclusive right of legislating on these matters to the provincial legislatures."
Consequently, the Chair must rule that a debate on this question on disallowing actions taken by a provincial legislature is out of order and cannot be permitted.


Herbert Wilfred Herridge: I accept your ruling, Mr. Chairman, and in conclusion I will simply say this: that had I been permitted, according to the rules, I would have asked the government on behalf of this group to disallow this most unfortunate legislation in order to protect the rights of the Canadian people.


Mr. Carter:: Mr. Chairman, since you have permitted the hon. member for Kootenay West to put on record in Hansard certain statements concerning recent legislation in Newfoundland I hope you will accord me the same privilege so that I may correct the impressions he gave to this committee in the course of his argument that the legislation should be disallowed.


Donald Methuen Fleming: Order.


Chesley William Carter: I am asking for the same privilege as was accorded to the hon. member for Kootenay West.

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Joseph Pierre Albert Sévigny: It has just been ruled that all debate on this particular matter of the allowance or disallowance of a decision taken by another legislative assembly is out of order. Consequently, I cannot permit the hon. member for Burin-Burgeo to continue his remarks on this subject.


Mr.   Carier@: On a point of order. I think Your Honour has misunderstood the position. 1 have no intention of debating the question of disallowance. I merely wanted to correct certain wrong impressions which you permitted the hon. member for Kootenay West to put on record in Hansard.


Joseph Pierre Albert Sévigny: Provided the hon. member confines himself within the regulations governing our procedures and the ruling which has just been made, he may continue his remarks.


Mr.   Carier@: I realize that all this is out of order, but since the hon. member for Kootenay West has been out of order and placing statements on record in Hansard ever since I entered this chamber, I think I should be given the right to say one word.


Joseph Pierre Albert Sévigny: It is quite impossible for the Chair to rule an hon. member out of order until he has made a statement which puts him out of order. It is quite true that the statements made by the hon. member for Kootenay West were reported in Hansard, but a ruling was made, and the fact that he was ruled out of order does not entitle any other hon. member of this house to make a statement which would be out of order, especially if he advises the committee in advance that his statement will be out of order. I regret that I cannot permit the hon. member to make such a statement.


Mr.   Carier@: I have not made any statement yet. I hope you will permit me to make one. What I was going to say was that the hon. member for Kootenay West placed on record certain statements which implied that the legislation to which he referred, and which has recently been passed in Newfoundland, took away certain rights from the citizens. I want to tell the committee that that is not the case. That legislation did not take away the rights of any citizen of Newfoundland or of Canada. It merely took away from a union the right to bargain and that, as was ably pointed out last night on television, was not a right but a monopoly.


Joseph Pierre Albert Sévigny: I must tell the hon. member that he is at present referring to a matter which comes under the jurisdiction of another legislature and that it is not permissible for him to discuss matters which concern one of the provinces. With regret I must therefore tell him that he is out of order.


Alexis Pierre Caron: Mr. Chairman, I think you will be satisfied if I begin by saying that I do not intend to follow the pattern traced by the hon. member for Kootenay West. Neither do I wish to delay the committee for very long before accepting this motion for interim supply.
May I, however, express regret that members of the civil service and especially those in the lower income brackets have not been looked after better during the past year. Many demands have been made on their behalf for increases in salary. This matter has come before the cabinet for consideration month after month, but a decision has always been delayed and nothing has been done. Meanwhile, salaries all over the country have been increased because the cost of living has increased. Employees of the government are now placed in a worse position than that of any other Canadians working at the present time. We know that post office employees all over Canada have protested. They have protested in Montreal, in Toronto and in Winnipeg and they intend to protest in Ottawa next Sunday. They have a right to ask for higher pay. There are people working for the government of Canada who are earning as little as $2,300, $2,500 and $2,800 a year. There are many people earning that latter figure. This means a wage of $40 or $50 or $56 a week. When one deducts income tax and other charges, one finds that the take-home pay is, in certain cases, as little as $40 a week. For a man who is married and who has children, it is almost impossible to live on such a salary.
The recession we are encountering today cannot be compared with the recession of the thirties. When that recession was in progress, though it is true there was an increase in unemployment, there was a decrease in the cost of living. The civil servants at that time did not ask for an increase because the cost of living was so low that they were able to take advantage of the situation. But at the present time, even though there has been an increase in unemployment there has also been an increase in the cost of living, and a very marked increase, too. That is why we say that the employees in the civil service are today, because of this rise in prices, in a worse position than that of any other employees.
Today it has become almost impossible for a civil servant to live on the same level as the rest of the comparable working force in Canada. That is one of the reasons why the Wives of civil servants have to leave their children in the care of others and take employment to fill the gap and supplement the low income received by their husbands. The only thing this body seeks at this time is to have

the government take a responsible position toward the people who receive salaries as low as $2,500 or $3,500 a year. It is practically impossible to live on these wages. If you examine the records you will see that a great majority of civil servants receive less than $3,000 a year.
I feel the time has come for the government to take action in this regard. Our budgets are constantly increasing and are greater than ever before in our history but nothing is being done to help those who are most in need, the civil servants of Canada. I hope the government will stop spending in every direction without first taking care of greater and more immediate needs.
When the post of the chairman of the civil service commission was vacated another should have been appointed. I suspect the government did not take action in this regard because it did not want to revive the question of civil service salaries. If it were to meet the requests of the civil servants we would have an even larger deficit than we are expecting this year. Last year the minister said our deficit would not be more than $700 million. If the deficit does not increase it is because the government has failed to take care of those Canadians who are in need. I urge the government to curtail expending money in every field until it has done a little more for the Canadian civil servants.


William Hector McMillan: Mr. Chairman, I should like to say a few words on the interim supply bill and refer particularly to the high price we must pay in this country for money that is borrowed and incidentally the high prices our municipalities and provinces must pay as a result of our federal high interest rates.
To give some background of the thinking of the Minister of Finance I should like to refer to some statements he has made since coming into office. With respect to dominion-provincial relations he indicated that there would be a meeting at which no doubt the question of interest rates would be discussed. When speaking on November 26, 1957 at a press conference he said there would be such a meeting next year and that they would deal with this and other problems. He also said that at that time interest rates were at a higher level than they had been for a generation.
At a Conservative nomination meeting held on February 23, 1958 the minister said the needs of the municipalities were ignored by the former government and with respect to the action taken by his government he said:
We have eased the burdens of the municipal governments by bringing about easier credit and lower interest rates-
On February 28, 1958 on a broadcast over the trans-Canada network the minister said:
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What has been accomplished must be measured in the light of the doubtful legacy bequeathed to us by the former Liberal government when we took office on June 21. These are some of the things we inherited from the Liberals-


Donald Methuen Fleming: What was that date?


William Hector McMillan: February 28, 1958. Listing the shortcomings of the previous administration the minister said:
Interest rates are at the highest point in a generation.
The needs of the municipalities were ignored by the federal government.
In a speech made by the minister in Quebec he said:
Relations between the federal and provincial governments were marked by discord and irritation, with the federal government centralizing power and taxation at Ottawa.


Donald Methuen Fleming: That was under the former government, of course.


William Hector McMillan: 
Donald Methuen Fleming: No.


William Hector McMillan: I have in my hand the report of the Royal Bank of Canada dated March 2, from which I shall read some quotations concerning provincial bonds. Alberta bonds maturing in 1963 carry a price of $93.50 and yield 4.43 per cent. New Brunswick bonds maturing in 1961 carry a price of $96.25 and yield 4.50 per cent. Ontario bonds maturing in 1965 carry a price of $90.50 and yield 4.65 per cent. Ontario bonds maturing in 1968 yield 4.73 per cent and those maturing in 1965 yield 4.54 per cent.
Even these figures do not tell the whole story. If you examine the bonds of hydroelectric power commission of Ontario you will observe that those maturing in 1967 yield 4.77 per cent and sell at $96.50. Certainly many of our dominion bonds must give a better yield than that.

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Many of the municipalities cannot borrow money and those that can pay between 5J and 6 per cent in interest. We are reaching the point where the Minister of Finance will have to pay nearly as much for his money as do some of our towns and villages.
The last federal bonds that were sold had attached income tax gimmicks to which reference was made by the hon. member for Kenora-Rainy River. He referred to the last issue of 2J per cent bonds selling at a discount of $97.90 and yielding 4.76 per cent. These bonds will go up roughly $21 per thousand and that amount will be tax free. Suppose the dominion government sold bonds at 97, a discount of $3, with interest at 3 per cent. On the appreciation amounting to $30 there would be no income tax while there would be income tax on the $30 representing interest. Therefore a big corporation paying a 50 per cent income tax rate would pay tax of $15 out of income amounting to $60 and have $45 left.


Donald Methuen Fleming: May I ask my hon. friend a question? Does he suggest it is something new in the experience of federal government financing that bonds should be issued to sell at prices less than par? May I ask him if he is aware of these instances on the part of the previous government? Here are just a few I have picked out at random since the hon. member for Kenora-Rainy River spoke this afternoon. I will give the date of issue now so that my hon. friend can identify them.


William Hector McMillan: Tell me the length of term.


Donald Methuen Fleming: Here are the examples: July 1, 1938, a 3 j per cent bond put on the market by the former government at 98.5; June 15, 1950, a 2| per cent bond put on the market at 99.5.


Lester Bowles Pearson: What term?


Donald Methuen Fleming: The term does not matter for this purpose.


William Hector McMillan: The term does matter.


Donald Methuen Fleming: I can give my friend that, if he needs the information, but I am now giving the date of issue and the fact of a discount on the price at the time of issue. The third instance was June 1, 1954, a 3i per cent bond put out at 99; January 15, 1953, a 3| per cent bond issued by the former government at a price of not less than 97 to the Bank of Canada; September 15, 1956, a 3f per cent bond issued at 97. May I also remind the hon. member that the former government put out an issue of per-petuals on September 15, 1936 at a price on the market of 96.5. I hope the hon. member

does not pretend that it is anything new to put out bonds at a discount.


William Hector McMillan: I do not pretend that it is anything new but the bonds I am discussing only have a term of one year. Certainly I have never heard tell of dominion bonds being put out at a discount for just for one year.


Donald Methuen Fleming: You have something to learn.


William Hector McMillan: Certainly if a bond is put out at 97 to mature in one year the appreciation will be $30 per thousand over that one year but if it is put out at 97 to mature in 5 years the appreciation will only be one-fifth or $6 per year. I think the minister has missed that point. Certainly the particular bonds I was discussing mature in 13 months or a little over a year. I was giving an example. Suppose the government put out a bond at 97 to yield 3 per cent. As far as big corporations are concerned, that would be equivalent to being paid 9 per cent on a bond sold at par. But the government did not do that. They did however put out an issue at 97.90 to bear 2j per cent to come due in 13 months and, as the hon. member for Kenora-Rainy River said, that comes out to 6.6 per cent from the point of view of the net result to the corporation and certainly the net result to the treasury of Canada.
I should like to ask the Minister of Finance how he can expect the ordinary people of Canada, the small people of Canada, to buy the bonds that he wants them to buy. They have more money in the bank now than they ever had but how can he expect them to buy bonds when he treats big corporations in this way? We do know that these bonds were issued in units as high as $1 million and certainly they were not readily available to the ordinary people of Canada.


Donald Methuen Fleming: What bond is my hon. friend speaking of when he refers to $1 million?


William Hector McMillan: The last ones were advertised in units as high as $1 million.


Donald Methuen Fleming: How ridiculous can you become?


William Hector McMillan: They were. I saw it myself. I have not got the information here but I can produce it for the minister.


Donald Methuen Fleming: Those bonds were open to anybody.


William Hector McMillan: It seems to me that when the bonds were sold within 15 minutes they were not readily available to the public. I know people who tried to get them through

their banks because they saw it was a good thing and they could not do so.
I want to leave the bond issue for a minute and refer to the Bank of Canada. In my opinion there is one fundamental weakness in the Bank of Canada. Members of the judiciary are appointed by the different parties when in power and I think they can be said to be above reproach. However, the members of the board of directors of the Bank of Canada might not always be held to be as above reproach as they should be. Just the other day, for instance, we heard about one director contributing large sums of money toward the election of different members in Vancouver.


Douglas Mason Fisher: Conservative members.


William Hector McMillan: That is right. I recall the public discussion a year or so ago between the Minister of Finance and the governor of the Bank of Canada concerning the tight money policy. In fact, it got in the press. I am not accusing any member of the board of directors of the Bank of Canada of not acting in the best interests of Canada but the implication is there that sometimes they may act in a certain way for political reasons. If a man is contributing $20,000 or $25,000 of his own money to a political party, what assurance do we have that the people of Canada will get the best action from him as a director of the Bank of Canada? Will he always have the good of Canada at heart?
If we look at the list of directors of the Bank of Canada we see that more than one is a recent political appointment. Our fiscal policy at the present time is not good. We have the highest bank deposits we have ever had in our history. Yet the Minister of Finance cannot get the people to buy his bonds.


Donald Methuen Fleming: That is not true. The last issue was oversubscribed.


William Hector McMillan: He tells us that he requires money. If so, why are there so many bonds held by the banks? I call on the Minister of Finance and the government to have members on the board of directors of the Bank of Canada who have no political axe to grind and who will at all times give their best consideration to the people of Canada and not make decisions based on political reasons.


Douglas Mason Fisher: Mr. Chairman, I was delighted to hear the remarks of the hon. member for Welland about political appointments and their possible relationship to and effect upon policy. I simply want to mention in passing that I was delighted to hear his remarks. It would seem that our lone stand with regard to this particular matter has found one convert at least in the party with respect to
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which I had the feeling up to this time that they did not agree with our point of view. I am sorry that I did not hear the remark of the hon. member for Halifax and I feel that perhaps he did not want it on the record.


Mr. McCleave:: I said that the C.C.F. is sucking in more Liberals every day.


Douglas Mason Fisher: The remarks I want to make have to do with the promise made last year by the Minister of Northern Affairs and National Resources with regard to a review of the taxation policy of the government as it affects the forest industry and particularly the pulp and paper industry. We have already heard today something directly about the pulp and paper industry in so far as it affects Newfoundland. Of course, the Anglo-New-foundland Development Company Limited has an interest up in northwestern Ontario, as the hon. member for Kenora-Rainy River will know. This company happens to hold a concession, at least a lease for a period of time while it makes up its mind whether or not it will establish a pulp and paper mill at the town of Sioux Lookout.
I know the hon. member for Bonavista-Twillingate already has given wide publicity to the fact that another pulp and paper company, Crown Zellerbach, has decided not to go ahead with developments in Newfoundland. The general picture in the pulp and paper industry at the present time is that of a tendency to pull in horns in so far as further capital expansion is concerned. There is a general indication, if one reads the financial pages, that the market for newsprint especially but also other forms of paper products such as kraft, wrapping and fine papers, is at least saturated.
I just point out in passing that the difficulties of the pulp and paper industry have not been reflected so far in dividends or in profits to any marked degree. I see one hon. member on the other side look up with a quizzical expression, and I imagine he follows this particular industry pretty closely. I believe he will agree with my remarks here so far, that none of these pulp and paper companies seem to be going deeply in the hole. However, there is this factor, and this is from the point of view of silviculture and forest management, that whenever any suggestions are made that these companies should be held to the type of responsibilities related to forest management and silviculture they always say that the governments are taking such a bite from them they just cannot afford to accept these particular responsibilities.
One of the consequences of this is that a bill, rather famous in Ontario, known as

Interim Supply
Bill 89, has never been implemented to force these particular companies who hold timber limits to carry out regeneration policies. You are probably asking what this has to do with the federal government, and I want to come to that. Whenever pulp and paper companies make these representations they go to the premier of Ontario, and the premier nearly always says that, of course, the difficulty really does lay in Ottawa. He has said this often enough now for the pulp and paper companies to believe they are being overtaxed by Ottawa and, as a consequence, are not in a position to carry out responsibilities relating to forestry and silviculture. As a consequence of this position being reiterated at meetings of the pulp and paper research institute, the Canadian pulp and paper association and the Canadian institute of forestry, the appeal is made then to the federal government on this basis: You take the lion's share of taxation out of this industry; it is the most important industry in the country, and you bear a very large responsibility in so far as putting some of that money back into the forest regions is concerned in order to encourage regeneration and reproduction, natural or artificial, of the species.
The Minister of Northern Affairs and National Resources recognized at least the possibility that these arguments might contain some truth, and last year during a committee meeting he gave a promise that he would have a report prepared on this particular aspect. I understand he has indicated a report was prepared. He received a memorandum from his officials who went into the subject, and this memorandum was passed around amongst the ministers and officials of other departments, we presume the Minister of Finance and his deputy minister. It seemed odd to me at the time, and this is where I made a misinterpretation, that if the minister of northern affairs gave the assurance there was going to be a study by government officials on taxation as it affected the pulp and paper industry, then surely the department that would be most interested would be the minister who is with us today, the Minister of Finance.
However, it turns out his department may have given some continuing study to the subject, but the department played no fundamental part in the matter. This is, to me, a serious fault. I understand that the minister of northern affairs is not satisfied with the report he got. He has referred it back and is going to attempt to get another report. I should like to know what the Minister of Finance plans to do in this particular field. If the minister of northern affairs recognized

the need for such a study, why does not the Minister of Finance? One of the difficulties that was discussed a short time ago with reference to the pulp and paper industry in Newfoundland is that the pulp and paper companies there play a very large part in the economy of that province, and that they are not doing too well because of high wood costs. We assume that one of the other large cost items would be high taxation costs.
Actually, the situation in Newfoundland, as compared with the situation in northwestern Ontario, is almost ridiculously different in terms of costs, wood costs and transportation costs. In our part of the country, where you have many more pulpmills than you have in Newfoundland, these costs are much higher than they are in Newfoundland, but our mills do not put on such a poor mouth as these particular mills in Newfoundland do. We have assumed that since all these industries and corporations are crying the same thing, that is the difficulty in competing in world markets for newsprint and paper, they have a point which should be considered by the government of Canada and especially by the Minister of Finance.
One of the things that has intrigued me about this is the unpopularity of the Minister of Finance in these particular circles. I have discovered he is certainly no great white hero to this particular industry. They feel that this particular government, judging by the comments they made in annual reports and as quoted in the newspapers, has taken a very short term view. You may take it, Mr. Chairman, that I am speaking in the interests of these pulp and paper companies. Heaven forbid that I should be identified completely with the Anglo-Newfoundland Development Company, the Bowater corporation or any of these other British colonial corporations. We do feel, however, that it is essential we have this kind of taxation study so that we will get a realistic idea of whether or not these corporations can afford to carry out proper forestry policies. This is coming at it from a different point of view completely. It is the point of view that we have renewable resources in our forests, the majority of them are crown lands, and that some of the revenue that comes from these crown lands must go back to see that they continue at a certain standard.
I feel the minister should give some serious undertaking that such a study will be commenced. The problem is definitely complicated by the fact that the provincial governments involved all seem to have the same view-this of course stems from something that has been repeated ad nauseam in connection with all types of provincial-federal relations-that the federal government takes

an inordinate share of the taxation. If this is so, there is no other industry to which this will apply more than to the pulp and paper industry because it is the big money earner for the federal government in terms of tax revenue. For all these reasons, therefore, Mr. Chairman, I want to completely remove myself from any identification of interest with the Anglo-Newfoundland Development Company Limited or the Bowater corporation, but I think we should have this year a study by the officials, not of the Department of Northern Affairs and National Resources but of the ministry of finance, of this whole question of taxation of the pulp and paper industry, and whether it does indeed put a crushing burden upon these corporations to the extent that they cannot carry out responsibilities in the field of forest management and silvaculture which legislation in almost all the provinces imposes but which is not now really implemented.


[Stage Direction]
Motion agreed to.
Resolution reported and concurred in.


Donald Methuen Fleming: Resolved, that towards making good the supply granted to Her Majesty on account of certain expenses of the public service for the fiscal year ending March 31, 1960, the sum of $616,654,878.69 be granted out of the consolidated revenue fund of Canada as set forth in the resolution concurred in this day in the committee of supply.


[Stage Direction]
Motion agreed to, and the house went into committee, Mr. Rea in the chair.
William Moore Benidickson: With respect to the dozen items where more than one-sixth is being asked for, would the minister just indicate the reasons therefor?


Donald Methuen Fleming: Mr. Chairman, the proper place to have asked that question, of course, was in the committee of supply rather than the committee of ways and means. The reasons, I think, are quite obvious if anyone will take the trouble to look at the items. The first is item 209 where an additional five-twelfths is being asked for in addition to the standard two-twelfths. This item is for purchases of air photography and the expenses of the interdepartmental committee on air surveys. There are contracts out for air photographs of the Arctic archipelago and these include provision for advance payments amounting to over one-half of this vote. I can enlarge on that if any hon. member is interested.
Then item 38 is an item of which we are asking for an additional one-third in addition
Ways and Means
to the one-sixth. This item is for grants for research and investigations with respect to atomic energy. One-half of the amount of this vote is required for the first two months of the fiscal year for research projects carried out at the universities.
The next three items, namely items 175, 182 and 183 pertain to legislation, votes for the Senate and the House of Commons. Of course the rate of expenditure is governed by the session rather than by a uniform basis from month to month.
The next item is No. 358, an item in the Department of Public Works. This is an item to provide balances required to complete any projects undertaken in previous fiscal years and for which no specific provision is made in the fiscal year 1959-60. By its nature this vote is subject to heavy expenditures in the early part of the fiscal year, as final payments are made on projects completed or nearly completed in the previous fiscal year. Expenditures to May 31 are expected to reach $250,000.
The next item is No. 64 in the Indian affairs branch of the Department of Citizenship and Immigration. The additional one-twelfth, in addition to the one-sixth, is required to provide for teachers' salaries and tuition fees for Indian pupils because the schools are operated on a ten-month basis rather than a twelve-month basis and expenditures arise in that proportion rather than on a monthly basis.
The next item is No. 210, an item respecting the polar continental shelf project. This is a project which will end in June or July. Consequently there is a concentration of expenditures in the first part of the fiscal year..
As to items 259, 384 and 451, I think it is quite obvious what the reasons are. In the case of item No. 259, the additional one-twelfth is asked for because the bulk of this vote is for salaries. April and May are the peak work load months, during which seasonal help is required to process tax returns.
In the case of item No. 384, an item for the standards branch of the Department of Trade and Commerce, expenditures under this item are heavier in the spring and summer months because the inspectors cannot travel in the rural areas in the winter.
In the case of item 451 under the Department of Veterans Affairs treatment services, may I point out that this vote provides for net treatment expenditure after recoveries from outside sources. The introduction of provincial health insurance programs will increase substantially the proportion of gross

Ways and Means
expenditures which are met from recoveries. Since there is a lag between expenditures and recoveries, net expenditures in the early months of the year exceed one-twelfth of the net vote in each month.
In the case of item 454, the prosthetic services branch, here again, as with treatment services, there is a lag between expenditures and recoveries in this vote in the early months of the year.


William Moore Benidickson: Mr. Chairman, if the committee would permit me to do so, I should like to speak on a point of order. At the earlier stage a question was raised as to the right of members to discuss a matter such as that which was introduced by the hon. member for Kootenay West. In the interim I have had an opportunity of looking at the debate which took place at a similar place in the calendar during the session of 1957. I refer to March 29.


Donald Methuen Fleming: Mr. Chairman, surely we are in a different committee now. My hon. friend is not in order in raising this point in committee of ways and means on something which happened earlier in committee of supply, and which was settled by a ruling of the Chair.


The Deputy Chairman:: The hon. member has raised a point of order. Until the Chair hears what the point of order is, I do not think the chair should rule on the matter.


William Moore Benidickson: Mr. Chairman, I will
endeavour to be brief. The minister endeavoured to pursuade the other committee that it was not traditional or was not proper at that stage to discuss such a matter as that which was raised by the hon. member for Kootenay West. I do not want to makd prolonged remarks in connection with this item. However, I find that the Minister of Finance on March 29, of 1957, at the same stage of the session, on a matter of a request for one-twelfth of supply-


Charles Edward Rea: Order. I now understand the hon. member's point of order. It refers to another committee. I think that the hon. member is out of order.


William Moore Benidickson: Mr. Chairman, I would say that the same procedure would apply at this stage. That is why I was going to say that the Minister of Finance used 13 columns of Hansard in order to speak about the C.B.C. at that stage of the debate.


Donald Methuen Fleming: Mr. Chairman, the hon. member must have known perfectly well that he was out of order before he ever raised that point. However, now that he has raised the matter may I be permitted

to point out that the occasion to which he refers was not one in which the right of members to raise points later on the items in the estimates could be carried out because that was a situation where we were at the end of the session. The situation was entirely different. I think my hon. friend is well aware of that fact.


William Moore Benidickson: Mr. Chairman, I do not think it is fair just to let the argument rest there. May I say very briefly that we were not at the end of the session. As I said at the beginning of my remarks, we were in March, prior to the Easter recess, a situation exactly analogous to that in which we are today. On that occasion the minister used 13 columns of Hansard himself in order to speak about a particular item that he felt had to be brought forward at that time.


Donald Methuen Fleming: The hon. member knows that every word he has uttered is out of order.


[Stage Direction]
Motion agreed to.
Resolution reported and concurred in.
Mr. Fleming (Eglinlon) thereupon moved for leave to introduce Bill C-35, an act for granting to Her Majesty certain sums of money for the public service of the fiscal year ending March 31, 1960.
Motion agreed to, bill read the first and second times and the house went into committee thereon, Mr. Rea in the chair.
Clauses 1 to 3 agreed to.
On clause 4.
William Moore Benidickson: Mr. Chairman, with regard to clause 4, I should know this but 1 do not. What is the section of the standard statutes that authorizes this? The hon. minister made reference to it. He said it was a standard practice.


Donald Methuen Fleming: I said the bill was in standard form. This bill simply follows the form that was passed on several occasions in the last session.


[Stage Direction]
Clause agreed to.
Clause 5 agreed to.
Schedules agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.
Donald Methuen Fleming: the third reading of the bill.


The Acting Speaker (Mr. Rea):: When shall the bill be read a third time?


William Moore Benidickson: Next sitting of the house.


Donald Methuen Fleming: I do not recall any previous occasion on which unanimous consent was withheld on third reading of an interim supply bill. It has to go to the other house and the royal assent is required before the Easter recess.


The Acting Speaker (Mr. Rea):: With unanimous consent.


Donald Methuen Fleming: the third reading of the bill.


[Stage Direction]
Motion agreed to, bill read the third time and passed.
[Stage Direction]
The house in committee of supply, Mr. Rea in the chair.
[Stage Direction]
Special-*
723.	Estimated amount required to recoup the agricultural commodities stabilization account for the net operating loss of the agricultural stabilization board during the fiscal year 1958-59, $15,017,182.
William Moore Benidickson: Mr. Chairman, on item 723 I wonder if the Minister of Finance would indicate to the house why there seems to be quite a downward revision of this firm indication of requirement to the end of March in relation to the indication which was given not long ago by the Minister of Agriculture when he was speaking in the throne debate on, I think, January 23? He estimated at that time that the requirement would be somewhat larger than this. I think it was nearly $19 million. I wonder if the hon. minister would give us full details as to the distribution under the statute for the item required, and could he give any indication why within these recent weeks he has determined that this substantial amount less than indicated before is required?


Donald Methuen Fleming: Mr. Chairman, the item 723 is the estimated amount required to recoup the agricultural commodities stabilization account to cover the net operating cost of the agricultural stabilization board during the fiscal year which will close on March 31. As to programs completed in 1958-59, the current fiscal year, the net cost has been calculated with respect to all commodities that have fallen within the scope of the activities of the agricultural stabilization board. These amounts have been worked out and it is possible at this stage of the fiscal year to be more precise than it was possible to be earlier.


William Moore Benidickson: Could the minister give the breakdown of the very precise-


Donald Methuen Fleming: These figures have been precisely calculated now.
Supp ly-A griculture


William Moore Benidickson: Would my hon. friend give the breakdown? The Minister of Agriculture was equally precise, because he did not give a round figure to the house at that time, he gave a very specific figure on January 23. He referred to the item of $18,741,000, and I wonder if the Minister of Finance would read out to the committee the details both of the estimate as at that time, according to the products which were involved, and the distribution, according to the product, of the $15,017,182 which is referred to now?


Donald Methuen Fleming: Mr. Chairman, I point out that this amount is provided for programs completed in 1958-59, the net cost of which has not already been included in previous recoupment amounts. These are the amounts in detail. In 1957, New Brunswick potatoes, $244,450.


William Moore Benidickson: Are we now on the $15
million item?


Donald Methuen Fleming: Yes.


William Moore Benidickson: Is my hon. friend prepared also to give the relationship to the $18 million item?


Donald Methuen Fleming: This is the precise figure which is being asked for at the end of the year when we are in a position to calculate the amount with much greater precision than possible at an earlier stage of the year. This now becomes a matter of recoupment of sums which have already been provided. I gave the first item, 1957 New Brunswick potatoes, $244,450; 1957, Prince Edward Island potatoes, $122,932; 1957 British Columbia apples, $768,415; 1958 asparagus, $105,999; 1956 butter, $30,806. The total of those five items is $1,272,602.
Next we have the estimates of other items of net cost for programs not completed but which will probably be completed by March 31 next, and they are as follows:
1958 wool	 $1,500,000
1957 butter	
Here we have a profit which will reduce the net amount required by $253,575.
1958 cheese	 $ 828,860
1957 dry skimmed milk	 3,909,493
1957	shell	eggs	
1,853,7411958	shell	eggs	
462,1131957-58 fowl	
562,7721958 lamb	
280,252Total	
$9,143,656
The next group consists of items where programs will still be in progress on March 31, 1959. Net cost has been estimated to March 31 as follows:

Supply-Agriculture
1958 butter	 $ 301,367
1958	dry skimmed milk	
2,866,0961959	shell	eggs	
750,0001958-59 hogs	
600,7131958 B.C.	tomatoes	
77,6711958 B.C.	raspberries	
5,077Total	
$4,600,924


William Moore Benidickson: Has the minister any figures with reference to the present stocks of commodities which are being supported?


Donald Methuen Fleming: Which particular ones does the hon. gentleman mean? Does he wish me to give the whole list?


William Moore Benidickson: No. I should be glad if the minister would table that statement. Has he got the comparative figures for an earlier date, perhaps a year ago?


Donald Methuen Fleming: In the case of butter, the estimated amount on hand at March 31, 1959 was 25,184,071 pounds; cheese, nil; shell eggs, estimated at March 31, 1959, 3 million dozen; fowl, nil; dry skimmed milk, 65.4 million pounds; lamb, nil; hogs, 33 million pounds; B.C. tomatoes, 2.3 million pounds; B.C. raspberries, nil.


William Moore Benidickson: Can the minister relate that to the figures of a year ago? Are the comparative figures in that reference paper? I know he is not Minister of Agriculture.


Donald Methuen Fleming: I can in some instances. I have not the figure for butter for March 31, 1958, but the figure for 1956-57 was nil. May I supplement that statement in part and correct it in part by giving to the house the information, Mr. Speaker, that at March 31, 1957, the inventory figure of butter was 29,638,010 pounds, and the inventory figure of March 31, 1958, was 25,184,071 pounds. In the case of dry skimmed milk, at March 31, 1958, the figure was 27,719,717 pounds. In the case of shell eggs, at March 31, 1958 the figure was 88,754 cases.


William Moore Benidickson: Mr. Chairman, the minister indicated that there was a profit of $253,000 with relation to this year's operations under the stabilization act, with respect to butter. Does that mean that the support or stabilization scheme with respect to butter during the current year's operations is not expected to bear any loss at all but that on the contrary it will provide a profit to reduce the cost of stabilization payments with respect to other items?


Donald Methuen Fleming: The profit was made as a result of sales of 1957 butter in 1958-59.


William Moore Benidickson: Is it a profit, or is it simply income during the year?


Donald Methuen Fleming: It was a profit.


William Moore Benidickson: A net profit on butter for the fiscal year resulting in a surplus of $253,000?


Donald Methuen Fleming: The price advanced from the time of purchase in 1957 to the time of sale in the fiscal year 1958-59.


[Stage Direction]
Item agreed to.
CANADIAN BROADCASTING CORPORATION International Shortwave Broadcasting Service-
724.	Maintenance and operation-further amount required, $84,000.
Douglas Mason Fisher: Would the minister explain this item in some detail so that we may be able to understand why this expenditure is necessary. Does it reflect some expansion in the service or the provision, possibly, of new capital equipment?


Donald Methuen Fleming: No. This is an item with respect to the international shortwave broadcasting service. It is not for the general operation of the Canadian Broadcasting Corporation at all. Nor does it reflect an increase in the scope of operation of the international shortwave broadcasting service. Actually it was a mistake on the part of the C.B.C. with respect to a billing in the previous year. This really dates back to the previous year; we are simply picking up a delayed billing in this item.


Douglas Mason Fisher: What does the minister mean by "billing"?


Donald Methuen Fleming: A billing for the service which was rendered. This is a service which the C.B.C. performs for the government; it is no part of their general broadcasting operations but an entirely separate matter. In this case instead of rendering a bill to the government for this service prior to the close of 1957-58 there was an oversight and the bill was rendered in the fiscal year 1958-59. No provision was made for its payment in the 1958-59 estimates.


William Moore Benidickson: I noticed that in the main estimates for 1958-59 it was expected that the cost of this operation would be reduced by $6,405. I think that during meetings of the external affairs committee a great deal of criticism was expressed in the past by members of the party which is now in power with respect to the expenditure under this particular item. I take it that the result of this supplementary estimate is that the overall cost, instead of being less than in the previous year, will be up to the extent of $78,000 or $79,000? Is that the result?


Donald Methuen Fleming: That would not be a true way of describing the operation. I have indicated that this item, or certainly the bulk of it-$72,285-is attributable to a payment

which really should have been charged against 1957-58, instead of against 1958-59 and, of course, the appropriation for it lapsed at March 31, 1958. So really the comparison, if the hon. gentleman is looking for a reduction, is much more favourable to 1958-59 operations than the figures he has quoted would indicate.


William Moore Benidickson: Except that the hon. gentleman and his friends were in the administration during 1957-58 for, I think, three-quarters of that period and if they had not seen fit to make the expenditure provided for, admittedly by the previous government, they need not have done so.


[Stage Direction]
Item agreed to.
DEPARTMENT OF CITIZENSHIP AND IMMIGRATION Education-
727. Administration, operation and maintenance- further amount required, $1,183,436.
Douglas Mason Fisher: The minister explained why this substantial amount was required and I would just ask him if he has there the details that would enable one to ask him about specific schools?


Donald Methuen Fleming: This item No. 727 for a sum of $1,183,436 is principally in respect of salaries. There are three elements in the item. The first is salaries, an item of $862,800. As a result of improved recruitment allowances for staff turnover did not materialize and in addition a higher salary range for teachers was approved and came into effect on April 1, 1958.
The second element is the matter of allowances totalling $160,636. The isolated post regulations were changed and as of July 1, 1958 entitled more teachers to allowances and increased the rate of allowances.
The third element is one of $160,000 which represents the final settlement with religious denominations covering 1957 operating costs of government-owned residential schools as authorized by the treasury board.


[Stage Direction]
Item agreed to.
DEPARTMENT OF EXTERNAL AFFAIRS A-Department and missions abroad-
729. Canadian representation at international conferences-further amount required, $63,000.
Douglas Mason Fisher: Has this item anything to do with such things as parliamentarians going to NATO conferences?


Donald Methuen Fleming: No, Mr. Chairman. That is to be found further along in the estimates under the heading "Legislation", item No. 756.


[Stage Direction]
Item agreed to.
Supply-External Affairs Pensions and other benefits-
733. Pension to Miss Hilda L. Waddell, a former locally engaged employee, at an annual rate of 60,000 Brazilian cruzeiros, the equivalent in Canadian dollars for the balance of the present fiscal year being estimated at, $175.
William Moore Benidickson: Mr. Chairman, I do not want to probe unduly because I see this item involves an individual. May we have the assurance of the minister that this is a normal and recurring type of obligation on the part of the government and it does not set a precedent of any kind?


Donald Methuen Fleming: Mr. Chairman, this item relates to a provision made for a locally engaged employee at the Canadian embassy at Rio de Janeiro commencing December 1, 1958. The lady in question was employed as a telephone-receptionist at the embassy at a salary which translated into Canadian dollars, amounted to $864. She was 65 years of age and had completed a little more than nine years of employment with both the Department of External Affairs and the trade commissioner service in Rio de Janeiro. Since there is no pension system for local staffs abroad except in the United States and the United Kingdom it has been the policy of the treasury board to grant pensions on an ad hoc basis to deserving local employees.
It was reported to the board that the lady in question would be entitled upon retirement to a separation gratuity of one month's salary for each completed year of service, or $653 in Canadian currency. Payment of this amount would be in accordance with Brazilian labour law. I can go into more detail but I think that is enough to indicate to my hon. friend the nature of the item.


William Moore Benidickson: I was just doing to indicate to the Minister of Finance that my curiosity arose from the fact that reference was made in the report of the Auditor General for the year ending March 31, 1958 to a practice which he said was contrary to the statutes with respect to paying pensions even, I think, in the United Kingdom and United States to employees of Canada engaged outside of Canada. Has the government some plan of regularizing that practice which was criticized in the report?


Donald Methuen Fleming: Mr. Chairman, our view is that this is a practice that is properly authorized by statute of this parliament.


William Moore Benidickson: I think there has been some practice which the Auditor General has pointed to but I believe he said it ran directly counter to a specific prohibition in our basic pension statute. I know that this is in effect legislating for a specific item. My question was whether or not the minister had been

Supply-External Affairs giving consideration to our practice as criticized by the Auditor General even in the United Kingdom and the United States and whether or not he proposes to bring in some legislation to regularize what was criticized.


Donald Methuen Fleming: Those papers are not here, Mr. Chairman. We can have a look at them another time.


[Stage Direction]
Item agreed to.
Terminable Services-
734. Purchase of flour to be given to the United Nations Relief and Works Agency for Palestine Refugees in the Near East,-Further amount required and, notwithstanding section 35 of the Financial Administration Act, to authorize payments to be made pursuant to this vote up to the 1st day of April, 1960, $1,500,000.
William Hector McMillan: Mr. Chairman, I have been wondering about this item and item No. 741 which is for the purchase of wheat and flour to be given to commonwealth countries in south and southeast Asia. The passing of this item will enable the government to give this assistance in the coming fiscal year which concludes on April 1, 1960. My question is this. Why should we not vote the money for the amounts of wheat delivered in the next fiscal year and only vote at this time what has been delivered in this fiscal year?


Donald Methuen Fleming: Mr. Chairman, the purpose is to enable this flour to be moved as quickly as possible. Some of it is moving before March 31. It is moving as fast as the Minister of Trade and Commerce can arrange for its movement. This particular item of $1,500,000 under item No. 734 was announced
in the house by the late secretary of state for external affairs within the last fortnight. The purpose of providing this item now on a non-lapsing basis as of March 31, 1959 is to enable the government to move this wheat as quickly as possible. You cannot just cut off a movement at March 31 midnight. This is the proper, and I think I may say the businesslike way, of making provision of this kind. It comes before parliament. Parliament has full view of the matter. This makes it possible to move this flour as quickly as opportunity is afforded.


William Hector McMillan: This is a large sum and while we do not want to hold up this amount it occurs to me we could between now and March 31 vote for that portion of the flour or wheat that has been sent up to that period. Why should not the major part of this be left over until next year?


Some hon. Members:: Six o'clock.
Resolutions adopted in committee of supply this day reported and concurred in.



BUSINESS OF THE HOUSE

William Moore Benidickson: Mr. Speaker, would the leader of the house indicate what the program of the house is for tomorrow evening and, if possible, for Friday?


Howard Charles Green: Mr. Speaker, we shall continue with the supplementary estimates and then take the estimates of the Department of Agriculture.


[Stage Direction]
It being three minutes after six o'clock the house adjourned.