1959-06-17

Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Speaker, I wish to advise the house that the government has approved initial prices to be paid by the Canadian wheat board on the basic grades of wheat, oats and barley for the crop year commencing August 1, 1959.
For wheat the initial payment is $1.40 per bushel, basis No. 1 northern wheat in store Fort William, Port Arthur or Vancouver. For oats, the initial payment is 60 cents per bushel, basis No. 2 Canada western oats in store Fort William, Port Arthur. For barley, the initial payment is 96 cents per bushel basis No. 3 Canada western six-row barley in store Fort William, Port Arthur. The new initial prices are the same as the initial prices in effect for the present crop year.



WATER RESOURCES


Hon. Howard C. Green (Secretary of Stale for External Affairs):: Mr. Speaker, I wish to table a note dated June 12 from the department of state of the United States addressed to the Canadian ambassador in Washington. I also ask the permission of the house to have the text of the note printed as an appendix to today's Hansard, which has been the practice, I believe, with other notes dealing with the same question. The note deals with the proposed diversion of water from lake Michigan at Chicago and is in reply to the Canadian note of April 9, 1959, which was tabled in the house on April 16. I propose that the note be tabled and printed, because a large number of members have indicated a continued interest in its subject matter.
Briefly, the United States note informs us that the Canadian note was transmitted to the committee on public works of the United States senate. Second, it sets forth that the department of state is not in accord with all the points in the Canadian note and that consequently it must reserve its position with respect to allegations of a legal nature. I suggest that this is a normal and proper
precaution when there are so many agreements and understandings referred to in the Canadian note. Third, and perhaps most important, the department of state suggests that consultation should take place between the two governments. Consultation is a satisfactory approach, and I am sure all hon. members will welcome this proposal.


Mr. Speaker:: Has the hon. minister leave to have the document printed as an appendix to Hansard today?


Some hon. Members:: Agreed.
[For text of note referred to above, see Appendix A]



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Mr. Speaker:: Yesterday I raised a question with respect to the notice of motion which hon. members will see standing in the name of the Leader of the Opposition at this point in the routine proceedings. There is no question in my mind as to the right of the hon. member to give this notice of motion. The question with which I was concerned, as I indicated yesterday, is where the notice of motion should go on the order paper, and that would depend on whether the proposed motion raised the question of privilege.
Yesterday I indicated that I had authorized the notice of motion to be put under routine proceedings, having in mind that the preliminary question could be dealt with at this stage. If the question raises a proper question of privilege, it seems to me it should be dealt with under the heading "Routine Proceedings". If it did not raise a proper question of privilege it would go under the orders of the day as a notice of motion.
I should like to refer hon. members to rule 17 with which they are all familiar, namely, that a question of privilege has to be taken up at the time it arises. The exact words are: "Whenever any matter of privilege arises it should be taken into consideration immediately." The effect is, of course, that a question of privilege, or a motion based on it, is a debatable motion and occupies the time of the house at that stage.
May I refer to the practice in these matters as explained by May in his Parliamentary Practice, sixteenth edition, at page 382:
It has often been laid down that the Speaker's function in ruling on a claim of breach of privilege

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is limited to deciding the formal question whether the case conforms with the conditions which alone entitle it to take precedence of the notices of motion and orders of the day standing in the order paper of public business, and does not extend to deciding the question of substance whether a breach of privilege has in fact been committed-a question which can only be decided by the house itself.
And a little lower down it says:
A prima facie case of a breach of privilege must be made out.-In judging whether a prima facie case of breach of privilege has been made out the Speaker excludes any matters which are otherwise properly to be dealt with under the practice or standing orders of the house.
Then, after noting that the matter must be raised at the earliest possible opportunity, the learned author proceeds at page 383 as follows:
As precedence is naturally desired by members, care has been taken by rulings from the Chair, not to extend that claim to any motion which does not strictly relate to matter of privilege, properly so called.
Then instances of refusals by the Speaker to grant precedence to matters claimed by hon. members to affect privilege are given. I shall not take the time of the house to deal with those but shall pass to page 384 and read this final paragraph:
Many motions more or less affecting privilege have been brought on in their turn with other notices of motion and on occasions matters to which the Speaker has refused precedence as a matter of privilege have been raised on a motion moved at a later date.
The issue at this time on which I indicated I would draw assistance from the house is really a procedural one; whether this motion is of a character which entitles it to be taken at this stage and be debated now, or whether it is not of that character; and I remind the house that of course by unanimous consent the house could hear the motion at this time regardless of its character.
I am going to ask the house to assist me in this matter before deciding whether or not a prima facie case has been made out. I think it might be relevant to draw the attention of hon. members to the question of what privilege has been infringed. This motion is based on a document which has been tabled, namely a judgment or the reasons for judgment of the president of the exchequer court. The motion recites a certain number of conclusions or observations which occur in the judgment. They are numbered from one to eight. That is the foundation for the motion.
If it is a motion of privilege and if any privilege of the house has been infringed it would, I think, depend on the significance of these conclusions which are set out from the judgment. If one assumes that all the conclusions are correct and that they may

be taken as facts, the question in my mind is what privilege of the house is involved in the conduct of the hon. member for Peel to which these observations in the judgment relate. What privilege of the house would be involved and what is the nature of that privilege? If there is a breach of privilege which could be deduced from these facts, assuming these facts are correct, one would have a basis on which to go. Perhaps I should call on the mover of the motion to speak to this preliminary question.


Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, this motion was moved by me solely as one which deals with a matter of privilege which affects the house itself, and for no other reason. I believe that in the past it has been the custom for a member moving a motion of this kind to make a complete statement giving the reasons for the motion, the background of the motion, the circumstances surrounding the motion and at the end of that statement the motion has been moved. Until the motion is moved, though it is on the order paper, I submit that there is nothing before the house. You have asked me, however-and naturally I am not questioning your right to do so- for advice on this preliminary question dealing with a motion that is not yet before the house.
The motion will be moved by me, as I have said, as a question of privilege. It is a motion to refer to the committee on privileges and elections certain findings or certain reasons for judgment given by the president of the exchequer court, which findings and reasons seem to reflect on the conduct of a member of parliament. It is my submission that the implications of some of the passages in this judgment, of some of the conclusions, are too serious to be ignored by the House of Commons.
Some of these, Mr. Speaker, are included in the motion itself, and it is not necessary for me, at least at this stage, to go into them in detail; but I do submit, Mr. Speaker-and you have had a chance to study the motion- that these do raise questions of propriety, questions of the conduct of a member of parliament, which should be examined by the appropriate committee as a matter of protecting the privileges of the whole house, especially as they are included in a judgment given by the president of the Exchequer Court of Canada.
I call Your Honour's attention to Bourinot's Parliamentary Procedure, fourth edition, at page 162 under the paragraph headed "Questions Affecting Members Referred to Select Committees". The paragraph reads in part:
A reference to a committee is no doubt the proper procedure in all cases in which there are reasonable

doubts as to the facts or the cause that should be pursued, especially when it is necessary to examine precedents or witnesses.
Therefore, Mr. Speaker, I suggest that this is a proper question of privilege; that it is properly on the order paper; that I should be given the opportunity to move this motion to the effect that the matter should be submitted to a select committee.


Mr. Speaker:: The Leader of the Opposition refers to the conduct of a member of parliament and to the privileges of this house. I would ask him whether he can go further in relating the conduct of the member to the privileges of the house, because it is not obvious how the conduct of the member affects the privileges of the house. What was done was not done in the house, if one accepts the conclusions or the observations in the judgment. What was done was not done in the house or in relation to the business of the house.
I know that the privileges of parliament are not a settled category, and they have not been fully defined. Unless there is some conduct which makes a member unfit to sit as a member of parliament, or unless his conduct relates specifically or directly to the house, its business and its dignity, then I am asking the hon. member, is there a question of privilege involved, assuming that all the facts are established? If so, what is the conduct that infringes the privileges of the house, and what privileges of the house are affected? These are really the two points which bother me.


Lester Bowles Pearson: Mr. Speaker, if I went into that in detail I would be giving the statement which I expect to make when I move this motion, and it would be a very lengthy statement indeed; but the motion itself does indicate that the judgment of the court includes certain statements, makes certain observations, comes to certain conclusions and gives certain reasons which affect the conduct of a member of parliament in a matter of public policy, and a matter which affects the revenue as well. Surely, Mr. Speaker, these conclusions, these findings, which appear to reflect on the conduct of a member of parliament and also on his conduct in relation to a minister of the crown, are such as to warrant an investigation by a committee of parliament.
That is all we are asking for, Mr. Speaker, that this matter should he referred to the appropriate committee so that inquiry can be made into the statements which are included in a judgment of the president of the Exchequer Court of Canada, a judgment
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which does repeat certain statements affecting a member of parliament, certain statements which have been contradicted by another member of parliament who is a minister of the crown, and certain statements which have also been contradicted outside parliament. In view of these statements, in view of these contradictions, and in view of the implied reflection on a member of parliament, it is our submission that the privileges of the house are affected and that the whole matter should be cleared up by an examination through the appropriate committee.


Hon. E. D. Fulton (Minister of Justice):: Mr. Speaker, you have asked for some assistance as to whether or not this motion should be allowed at this stage, whether or not it raises a prima facie question of privilege. I have before me the citation from May to which you referred, and I have no hesitation in saying that on a number of grounds the motion is not in order. I shall deal with the less substantial grounds first.
You yourself directed attention to page 382 of May, and you said it is there laid down that the Speaker has to satisfy himself that the motion makes out a prima facie case of breach of privilege and, second, that it is being raised at the earliest opportunity. I shall deal with the second ground first. I point out to you, sir, that the Leader of the Opposition has fiddled around with this matter for over a week now showing, I suggest, a fear of coming to grips with it. I can understand his reluctance-because, of course, there is here no question of privilege-to do so; but his very conduct arising out of that reluctance has shown that he had plenty of opportunities to raise this matter before had he had the fortitude to come to grips with the matter as he should. He has not done so and on that ground alone it is clear from this tender footed approach, this shrinking violet approach that the hon. gentleman has made, that he is himself abusing the privileges of the house when he now seeks to have this matter raised and given priority and precedence over the other business of the house.
On the question of whether or not there is here a prima facie question of privilege, let me point out to you, Mr. Speaker, in accord with my submission that this is not a privilege motion, that even yet the Leader of the Opposition has not had the courage to come to grips with the issue and take the course which any member must take if he is going to raise a question of privilege of this sort: he has not made a charge against the member concerned. After more than a week, as I say, of fiddling about with the matter, mincing up to it and then backing away from

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it in a most extraordinary manner, my hon. friend now solemnly tries to have parliament deal with this matter as a question of privilege, but he still lacks the fortitude to do what, as a member of parliament accepting his responsibilities, he must do if he wishes to raise this as a matter of privilege, namely say what charge it is that he founds and brings against the member concerned.
Every motion of this sort that I have examined, where questions of privilege have been raised on the basis of misconduct of members or conduct of members which requires to be investigated by the house, has stated specifically that the member making the motion is credibly informed and believes that he can prove his allegations, and then has specified the facts which it is believed he can prove, and the member makes a charge as to the specific conduct which he says should be investigated by the committee. The Leader of the Opposition still lacks the fortitude to follow that honourable course in this case.
Let me point out to you, sir, what other motions have said. I have here as a model a motion to have a matter referred to the standing committee on privileges and elections in 1891. This is found in the House of Commons Journals, volume 25, 1891, and it is in these words:


Mr.   Tarte@: , seconded by Mr. Guay, and the question being proposed, that Israel Tarte, Esquire, the member representing the electoral district of Montmorency in this house, having declared from his seat in the house that he is credibly informed, and that he believes, that he is able to establish by satisfactory evidence that-
Then follows the specific allegation of the matter alleged as misconduct on the part of the member concerned.
In 1894 a motion is recorded in the House of Commons Journals, volume 28, page 155 in which Mr. Bruneau moved, seconded by Mr. McGregor, and the question being proposed:
That Mr. Arthur Aime Bruneau, member of this house for the electoral district of Richelieu, having stated in his place in the house that he is credibly informed and believes that he can establish:
1st. That Arthur Joseph Turcotte, Esquire, a member of this house for the electoral district of Montmorency, and while he was a member of the house, to wit: from the eleventh day of March, 1892, until the first day of February, 1893, was a partner in the firm of Messieurs Turcotte & Provost-
Then it goes on to make specific allegations that he used his position as a member to obtain contracts for that firm. In a motion recorded in the House of Commons Journals, 1910-1911, page 224, Mr. Blondin, member of parliament for the electoral district of Champlain, declared:
-I am credibly informed, and I believe that I can establish by satisfactory evidence:

That in the course of the years 1908, 1909 and 1910, irregularities, abuses, frauds, malversations and robberies have been committed in the shops and stores of the government of Canada-
-at a certain place, and that certain things were illegally and fraudulently taken from this place at the expense of the government of Canada and transported to the house of Mr. Adelard Lanctot, a member of parliament.
In every case, therefore, where a member has really felt that the conduct of one of the other members of the House of Commons should be examined, that member has followed the correct and honourable course of making specific charges so the member concerned will know what it is he has to meet. The member has also referred specifically to, and dealt specifically with, the evidence upon which those charges are based, and that has been done in the motion itself. There is no such honourable course being followed here, Mr. Speaker. All that is happening here is that under the guise of a so-called motion of privilege an attempt is being made to smear one of the members of this house, without alleging in any single instance what is the conduct that is supposed to be unbecoming to the member of parliament.
What are the words used by the Leader of the Opposition when you, Mr. Speaker, gave him an opportunity this morning to do that which he should have done from the outset if he were really serious about this matter? Here are the words he used. He said the judgment, the findings and the reasons, seem to reflect upon a member of this house. I challenge him to say how it does reflect. What specific charges does he make? He says it contains findings too serious to be ignored by the House of Commons. He is not able to mention one single finding he regards as serious.
Because of course there is no finding against a member of the House of Commons. He says it raises matters that question the propriety of the conduct of a member which should be examined. In all these things the hon. member uses the camouflage about raising questions with regard to the conduct of a member that require to be examined, but when it comes down to it and he is given the opportunity, he cannot, he refuses, or he is afraid, to pinpoint any one single specific charge. What is the conduct he is complaining about, Mr. Speaker? My submission is that in the absence of anything specific, this is not a question of privilege.
Now let me refer Your Honour to the most outstanding example of this nature, and that is the case in 1907 when a motion in somewhat similar terms, a similar rather sneaky motion, was made to try to get the conduct of a member brought before the

committee on privileges and elections without the mover having the fortitude to state in particular what was the conduct that was complained of. In that case there had been a report of a royal commission which had been set up to study life insurance. The allegation made in that sneaky manner on that occasion arose out of the report of the royal commission, so there is a direct parallel with what is happening here. My hon. friend seeks to hide behind a judgment of the exchequer court. Both cases, then, have arisen by way of reports originating outside of the house, and attempts being made to bring them into the house to smear a member.
In the case in 1907 the royal commission referred in passing to the activities of certain members of parliament, but that royal commission report itself was different from the present judgment with which we are concerned in that it shed very serious doubts on the integrity of certain members of parliament. In particular, they were alleged to have used money from insurance companies of which they were directors to finance their own private undertakings, and to speculate in the stock market.
Now, as I say, a motion was founded upon that report by Mr. Bourassa on March 26, 1907, when he moved:
That the report of the royal commission on life insurance and the evidence connected therewith have made public various transactions in which members of this house participated-
Then the members were named in the motion. The motion also went on to point out that such transactions had been commented upon by several organs of public opinion in terms reflecting upon the honour, the integrity and the independence of the named gentlemen. It went on to say that references to such transactions had been made in the house during the present session, and then it detailed the occasions upon which references had been made in the house to the members named in the royal commission report. There are a number of specific references to the occasions on which comments had been made on that matter. The motion then went on as follows:
That the government should therefore ask the house to constitute a special committee to conduct a strict and impartial inquiry as to whether any ministers of the crown or members of parliament have improperly made use of their positions as such for their private gain or have otherwise been guilty of personal misconduct under such circumstances or of such a character as to justify the intervention and censure of this house.
Then we find these words:
That any charges that may be preferred against any member of the government or of the house should be formulated before that committee, and that members of this house or other persons who
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have material or data at their disposal with reference thereto should divulge them to that committee.
What was asked on that occasion, Mr. Speaker, is exactly what is being asked on this occasion. Innuendos were raised against members in general terms, but no specific charges were made against those members. The house was asked to authorize a witch hunt before a special committee, and that is what we are being asked to do here, to authorize a witch hunt before a special committee. The House of Commons did not accept that motion, but it was very properly rejected on the grounds that it was an improper one, just as this is an improper one.
Sir Wilfrid Laurier had occasion to make a lengthy statement about the proper principles and the proper bases upon which such inquiries should be asked for and granted. He said this, as reported at page 5458 of Hansard for 1907:
If there are rumours against me, or against any of my colleagues, it is open to any man to take up these rumours and to bring them forward in the shape of a charge which I can meet-
I ask my hon. friend the Leader of the Oppositon, who has succeeded to the position held by Sir Wilfrid Laurier and who I am sure would like to be worthy of that position, to bear in mind these manful and honest words and to model his own conduct upon that admonition.
-to which I can oppose my denial or in regard to which I can offer my explanations. But, sir, it is absolutely unprecedented in any British parliament that the House of Commons has ever investigated or has ordered one of its committees to investigate rumours. The House of Commons has never, either in this country or in the mother country, ordered an investigation except upon a charge which the man against whom it is levelled can face and to which he can give an answer.
Later in the course of the same debate Sir Wilfrid said:
The house has affirmed, and it is also the rule of the house which has come to us from the mother of parliaments, that the conduct or standing of any member of the house cannot be impugned except upon cause being shown and until a member rises in his place in the house and says: I have reason to believe and I can prove such and such a thing against a member.
Otherwise there is no occasion to go into this general inquisition which is proposed by the hon. member for Labelle. Under such circumstances it seems to me that the course taken by the Speaker is the correct one and we have nothing to do but stand by the ruling of the Chair. If, at a later period, the hon. member for Labelle or anybody else, thinks there is in this house any member who ought not to be a member of it, who has disgraced himself, or whose conduct ought to be investigated, it is open to him to demand such an investigation, but the house, I hope will not depart from the sound traditions which have come to us from England and according to which there could be no inquisition into any man's conduct or standing except on charges made specifically.

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Then he went on to say:
I think the common sense of the house will not allow a departure from what is a well known law of parliament, or from the rules which would be applied in England, if cases of this kind were to arise, and therefore it seems to me that we have only to maintain the traditions and rules of the house and of parliamentary government.
Mr. Speaker, I submit to you that the proper course for the Leader of the Opposition to follow would have been to make his charges and state the evidence upon which he relies to prove them, and if a motion of that kind were put forward there would be no hesitancy, not an instant's delay, in accepting it and setting up a committee to make inquiries into the specific charges made. But this parliament has always rejected, should reject, and will I hope continue to reject, allowing itself to be used as an instrument of smearing or witch hunting, and going to the formality of setting up a committee and looking into what? Charges? No; innuendos.
We have the allegation that there is something here too serious to be overlooked; yet the hon. member cannot find a single specific charge to base on something which he says contains allegations too serious to be overlooked.
If the motion were in a form such as I have indicated and such as would comply with the principle set out in the words of Sir Wilfrid Laurier, then as I say I am certain there would be not an instant's delay in accepting the motion and setting up the committee. Surely it is not the function of the committee on privileges and elections to find out whether there is something on which a charge can be laid. That is the obligation of the Leader of the Opposition if he believes what he says. It is his obligation to make specific charges, and the proper role of a committee is to examine whether or not complaints so made are justified, not to examine whether there would be a case for a member of the house to make a complaint of breach of privilege out of the study of this judgment or any other documents.
Therefore, Mr. Speaker, may I repeat my grounds upon which this motion should be rejected. First, the hon. gentleman has deprived himself of the opportunity to bring this up at the right time; he has brought it up too late. It is a proper and sensible rule that if a man wants to raise a question of breach of privilege he should do it at the earliest possible moment, because such questions should only be raised when the member raising them really believes that they are serious, and a test of his seriousness is whether he raises them at the earliest possible moment. The Leader of the Opposition, as I said, has backed and fiddled and minced around this 
thing to such an extent that it brings him into conflict with the sensible and sound rule which I suggest was placed there to ensure that if a member wants to raise a matter he must be sufficiently serious about it to raise it at the first possible moment.
Second, the motion is not in proper form to raise a matter of privilege. Let me say here, sir, that this is the most harmful aspect of this motion, because it is a motion which is not and should not be expected to be moved in this house. Yet what has been done? There is a printed motion on the order paper, general innuendos and insinuations are made, and by our rules and in order to preserve the dignity and tradition of parliament the member referred to in the motion has no opportunity to answer. That is the position in which the Leader of the Opposition has deliberately placed a member of this house. I cannot find words strong enough to condemn that course of action, sir.
I think I have said enough on the question of order, Mr. Speaker. If I were to say any more I would be bound to go even further than I have into the substance of the motion. That I do not propose to do because we are discussing here a point of order, and in the second place I submit there is no substance to this motion. There is merely shadow, innuendo and smear of a nature which should not be brought before this house.


Lester Bowles Pearson: Mr. Speaker, I propose to follow the example of the Minister of Justice in one respect and in one respect only, and that is to go into the whole question of this motion as he has done. Naturally I had expected that that would be done when I was called on to move the motion after you declared it in order, if you did declare it in order; but in view of what has been said I know you, Mr. Speaker, will give me exactly the same right to deal with this matter that the Minister of Justice took unto himself.
I am not going to say anything about the minister's personal observations. When a minister of the crown in an argument dealing with a point of order starts referring to the fortitude and the courage of a member who is taking the other side, he condemns only himself. This is a matter Mr. Speaker, which I thought could have been discussed without that kind of slurring, personal observation. It is not becoming to any member of the house, especially the Minister of Justice.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: It merely shows, Mr. Speaker, that the minister is a little worried about the substance of his case and had to fall back on that kind of talk.
The minister has talked about the Leader of the Opposition fiddling around with this

motion. I would point out to the Minister of Justice that the judgment of the court on which this motion is based was tabled in this house on Monday last, and this motion was submitted to you, Mr. Speaker, on Monday last. If a motion in this form had been placed on the order paper, or if we had requested that it be placed on the order paper before the judgment had been tabled, the Minister of Justice would have been the first to say that it was out of order because it was referring to a judgment which had not been tabled in this house. And why was it not tabled earlier, Mr. Speaker? Ask the Prime Minister. We asked the Prime Minister to table this document on the first occasion the matter was brought up in the house, but the Prime Minister said, "If you want it tabled, table it yourself." The Prime Minister said, "Table it yourself."


Mr. Diefenbaker:: My hon. friend had it.


Mr. Pickersgill:: It was not before the house.


Lester Bowles Pearson: Mr. Speaker, since when has it become the function of the opposition or the right of the opposition to table documents in this house? Then the Prime Minister said, "I see no reason why it should not be tabled." That was a week or so ago, but even then he did not bother to table it. Then when it was brought up again the Prime Minister said, "Well, I have a copy, but it is all marked up and I cannot table it." Finally, when was it tabled? On Monday last, and we put this motion on the order paper on Monday last. Who then was fiddling around with the motion? The Prime Minister will no doubt deal later with his obvious reluctance to table this document which would make possible this kind of motion.
This motion, then, Mr. Speaker, was put on the order paper as dealing with a question of privilege. That of course was not required under our rules. It would have been possible under our rules for me to have risen at any time once this document had been tabled and raise this matter on a question of privilege without any notice at all.
Now, Mr. Speaker, on every previous occasion when a matter of this kind was brought up in the House of Commons affecting a member of the house, notice was not given; the question of privilege was raised by a member of the house, and his motion was moved without notice. We put it on the order paper so that members of the house would have time to examine it and go into the question. As a matter of courtesy to the house we gave 48 hours' notice, and then the Minister of Justice said we were fiddling around. It was perhaps the kind
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of courtesy from the opposition that the minister does not understand, because he rarely gave it to us when he was over on this side of he house.
Well, this is a perfectly proper motion, and it is placed on the order paper in accord with a good many precedents, some of which I will proceed to deal with. As the Minister of Justice has brought up one or two to support his case, I will be glad to refer to one or two of those he has mentioned as well. I suggest that the action we have taken on this side was required once the exchequer court judgment was made public and that judgment was tabled in this house. We have now taken action in a form in which it could not have been taken before that judgment was tabled.


Mr. Fleming (Eglinton):: That is not right.


Lester Bowles Pearson: That does not mean that this matter could not have been raised in the House of Commons by those concerned, and I suggest that the first person who had an obligation to raise this matter in the House of Commons was the hon. member for Peel. He owed it to the house, once this judgment was made public involving him and making references to him-references which were contradicted by a colleague in the house, the Minister of Transport-to make a statement.
Once that was done, perhaps it would have been a good thing, and perhaps it would have avoided a motion of this kind if the hon. member himself had made a statement to the House of Commons. He chose not to do so, though there were occasions last week when that could have been done. Last week, too, there was a discussion of this matter on the estimates of the Department of Transport which would also have given him the opportunity to make a statement. But the hon. member, as was his right, chose to remain silent with respect to this matter and with respect to statements made by the president of one of the highest courts in this land.
Then, I suggest, it was the duty of the Prime Minister, as leader of the house, to make a statement on this matter.


Edmund Davie Fulton: What are your charges?


Lester Bowles Pearson: The Prime Minister has often talked about the desirability of maintaining the rights and privileges and dignity of parliament. Why, then, did not the right hon. gentleman, when this judgment was made public and when there was included in this judgment certain statements which certainly reflected on a member of this house, make a statement on this matter? Sir Winston Churchill did so in 1940 in a situation similar to this, which I will go into later.

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Edmund Davie Fulton: Where are the charges?


Lester Bowles Pearson: If the Minister of Justice would remain silent, as I remained silent when he talked about me, I will give him all the details later. This will take a good deal of time, so the hon. gentleman might as well contain himself in patience. If he cannot enjoy it he can at least relax.
The Prime Minister chose not to take this course. He chose to place the onus of raising this matter of requesting an inquiry on the opposition. He said, make a charge. The Minister of Justice has repeated that this morning. Then the Prime Minister said, "If your charge does not stand up, you can be charged with a breach of privilege". This, I suggest, was intimidating nonsense. The Minister of Justice said the same thing this morning; make the charge. I will come to that a little later. I propose now to read to the Prime Minister the words of Sir John A. Macdonald in 1877 when a similar suggestion was made to him as leader of the opposition at that time. Asking why he should take the responsibility of asking for an inquiry, this is what he said at that time as reported in Hansard of that date.
Why had the hon. member for West Elgin (Mr. Casey) called upon the opposition to move this resolution? Why should he think it the duty of the minority to call the attention of this house to the matter, and to protect the rights of the people? Why should it be supposed that it rested peculiarly upon the weaker half of parliament to vindicate the independence and the rights of parliament?


John George Diefenbaker: Would the Leader of the Opposition say what was the nature of the allegation at that time?


Lester Bowles Pearson: I will be glad to send that information over to the Prime Minister in due course.


John George Diefenbaker: Oh, you have not got it?


An hon. Member:: Yes, he has.


Lester Bowles Pearson: I have no apology to make for the course we are taking in this matter, and in particular I have no apology to make to the Minister of Justice.


Donald Methuen Fleming: Might I ask the Leader of the Opposition a simple question? Would he give us the page reference in Hansard for the quotation he has just read?


Lester Bowles Pearson: Yes. It is Hansard for April 9, 1877, page 1312. Perhaps the minister would like to send out for the volume.


Donald Methuen Fleming: We shall check it to make sure.


Lester Bowles Pearson: We reject the insinuations and the accusations of the Prime Minister, the Minister of Transport and the Minister of Justice-


Mr. Speaker:: Order. The Leader of the Opposition has suggested he will be some time yet, and we have run across another rule of the house which requires questions marked with an asterisk to be taken up within one hour of opening unless the house agrees to deferring those questions until this matter has been disposed of. Does the house so agree?


Some hon. Members:: Agreed.


Lester Bowles Pearson: I reject the accusations and insinuations that we had some nefarious intention in bringing to the attention of the house something which the Prime Minister himself should have brought to the attention of the house, since this concerns a judgment of a court of this land.
Last week we discharged to the best of our ability our duty of trying to get information on this matter while the estimates of the Department of Transport were before the committee of the whole. All we got in return for our pains on that occasion-and if we had got the right kind of information and the proper statements perhaps this motion would not have been necessary-was a political harangue from the Minister of Transport, and a suggestion on his part that our motives were unworthy; that we were in some way-and these are his words, not mine-investigating kickbacks-an idea, and a phrase, which had never appeared on this side of the house from the beginning to the end of our discussion on this matter. We heard nothing, of course, from the hon. member for Peel.
What we are doing in this motion now, which is, I submit, a perfectly proper one and perfectly in order, is this. We are asking for an inquiry into certain statements which were made in court, certain statements which reflect, or appear to reflect, on a member of this house. I suggest that standards of conduct are involved in these statements which appear in this judgment, and for the benefit of the Minister of Justice I will document these statements in a few moments. Furthermore these statements, as I have already said, involve contradictions between the words of a member of the house and the words of a minister of the crown, as I will also show later.
Therefore is this not a matter which should be looked into by a committee of this house? Is there something wrong in suggesting that a committee should look into these statements? Our feelings in this matter are not

unlike those of the hon. member for Kootenay West (Mr. Herridge) who, speaking on behalf of his group on June 11 said, and perhaps he will permit me to quote him:
We in this group think it is most unfair for this issue to be left in the air. It is most unfair to the hon. member concerned, and to the house.
That is from Hansard at page 4589. Then the hon. member went on to say, on the following page:
But I think in fairness to him the whole matter should be cleared up, and on that account this group would support the request of the official opposition that a committee be appointed to inquire into the whole thing to settle it once and for all.
That is what we are suggesting in this motion. Some hon. members might ask why we do not in our motion request that the entire document, the full judgment, be sent to a committee. That, I think, would be improper because it would leave a suggestion that the legislature is examining and reporting on a court judgment. In that sense it would no doubt be exceeding its powers; but the conclusions in this judgment and the reasons for the judgment expressed in this document affecting the actions of a member of parliament are something else again, and quite proper for examination by a committee of the house.
I want to deal with some of the procedural matters raised in opposition to this motion by the Minister of Justice once he got around to that part of his statement. I shall deal first with how the House of Commons has acted in the past in providing for an examination in committee of the conduct of a member, and second with the reasons for judgment in this exchequer court judgment I shall specify, because I was asked to do so by the Minister of Justice among others, the particular matters which give rise to questions relating to the propriety of the actions of the hon. member for Peel.
If I spend some time on the procedural aspects of this motion I do so not only because of the importance of the question in itself but also because of the wholly unjustified conclusions drawn by the Prime Minister and by the Minister of Justice this morning from past actions taken in cases of this kind by the House of Commons. We certainly do not intend to let these conclusions remain on the record unchallenged and uncorrected, and perhaps in correcting them it may assist you, Mr. Speaker, in the decision you will come to as to whether or not this motion is in order.
The Prime Minister made a number of comments in this house the other day in connection with procedure in such cases, and the Minister of Justice made some comments
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this morning. The Prime Minister particularly made some comments with regard to the circumstances under which a committee of this kind is set up, and the Minister of Justice followed him in this respect this morning.
I asked the Prime Minister a question on this point, and it will be found at page 4410 of Hansard for Monday, June 8. This was the question:
I should like to ask the Prime Minister whether he does not agree from a study of the judgment- and I had not an opportunity of making that study last Friday-that there are contradictions between statements in this judgment about a member of parliament and statements made outside the house on the same matter by the same hon. member, contradictions which in fairness to all concerned should be cleared up?
The Prime Minister replied to that statement as follows:
Mr. Speaker, I know of no contradictions such as are suggested by the Leader of the Opposition.
Perhaps he will know about them after I finish my talk this morning.


John George Diefenbaker: Mr. Speaker, I do not rise in order to interrupt the hon. gentleman, but this discussion is far afield from the point you raised as to-


Some hon. Members:: Order.


Some hon. Members:: Closure.


John George Diefenbaker: -whether or not this is a proper question of privilege and whether the motion is in order. I have no objection to a general discussion if the motion is held to be in order, but Your Honour did ask that the discussion be confined to certain particulars; namely, is there a question of privilege, and what, if anything, is comprised within this motion within the purview of privilege? What the Leader of the Opposition is now doing is proceeding to make an argument and stating that when he gets through-having cluttered up the record with all these observations-then you will make the ruling, thereby defeating the very point that Your Honour must have had in mind when the question was raised as to whether or not discussion at this time on this motion is within the rules.


Lester Bowles Pearson: Mr. Speaker, apart from the
fact that a point of order cannot be raised even by the Prime Minister on a point of order, which is what we are discussing, I call to your attention that if I am straying afield it is because the Minister of Justice set the example in that regard, and strayed so far afield that he found it necessary to call to the attention of the house some of my personal qualifications for introducing this motion at all. Then after the Minister

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of Justice made that kind of speech, and at a point when I am dealing with the precedents in this matter, the Prime Minister gets up and tries to halt the debate.


John George Diefenbaker: In answer to that may
I say, Mr. Speaker, that we would be very happy to hear what the hon. gentleman has to say but the point of order is that the hon. gentleman is out of order and is endeavouring-


Some hon. Members:: Order.


Mr. Speaker:: Order. If the Leader of
the Opposition has yielded the floor to the Prime Minister I will hear what the Prime Minister has to say.


Lester Bowles Pearson: Thank you, Mr. Speaker. I
will now continue.


Mr. Speaker:: Order. I understood that
the Leader of the Opposition had yielded the floor to give the Prime Minister an opportunity to reply.


Some hon. Members:: No, no.


Mr. Speaker:: If not, I will give the floor
to the Leader of the Opposition. I think the observation is correct that we are discussing a point of order and it cannot be superseded by another point of order. I believe that what was said about the course of this discussion is correct. I allowed some latitude because of the remarks that had been made by the Minister of Justice which were not strictly on the point of order. I think if we are to secure the advantage of this discussion at all, it is to prevent the time of the house being taken in long debate, so we should come to the conclusion as rapidly as we can. I do want the Leader of the Opposition to give me all the precedents he can to be specific about the conduct which he says amounts to a breach of privi-ledge, accepting the facts set out in the judgment.


Lester Bowles Pearson: The Minister of Justice challenged me to produce precedents which would support this motion, he having produced some on his side. He also challenged me in no uncertain terms-in fact he reflected upon my courage because I had not done so previously-to produce the details in the judgment which reflect on the conduct of a member of the house, and that is what I am going to do.


Some hon. Members:: State your charges.


Mr. Speaker:: Order. Would the house kindly let the hon. member who has the floor proceed.


Lester Bowles Pearson: I wish now to return to the Prime Minister's statements, which have a bearing on the nature of this motion and

which certainly have a bearing on what the Minister of Justice said in regard to the necessity of introducing a charge in a matter of this kind. That is what I want to deal with now, because as the Minister of Justice said it is a very important aspect of this whole situation both procedurally and in substance.
I asked the Prime Minister a question on this point, concerning the circumstances in which a committee should be set up to inquire into a matter of this kind. My question was asked on June 8 and although I believe I have already placed this on the record I should like to repeat it:
I should like to ask the Prime Minister whether he does not agree from a study of the judgment- and I had not an opportunity of making that study last Friday-that there are contradictions between statements in this judgment about a member of parliament and statements made outside the house on the same matter by the same hon. member, contradictions which in fairness to all concerned should be cleared up?
The Prime Minister replied, as I stated a moment ago, that he knew of no contradictions such as I suggested. Then he went on to say something that has a bearing on the nature of this motion and the question as to whether or not it is in order. The Prime Minister said:
X may say a committee is not set up for the purpose of resolving contradictions. The circumstances under which a committee is set up are very clearly shown to be based upon a charge or charges made by a member of this house.
This assertion was repeated this morning by the Minister of Justice. The Prime Minister quoted Sir Wilfrid Laurier, and I think the Minister of Justice repeated the quotation this morning with a few observations of his own on the desirability of my following in the footsteps of Sir Wilfrid Laurier, which of course had very little to do with this motion. Later the Prime Minister quoted Sir Wilfrid Laurier to the effect that:
-there could be no inquisition into any man's conduct or standing except on charges made specifically.
Again, on the following day, a question was asked by the hon. member for Laurier (Mr. Chevrier) which is reported at page 4457 of Hansard. The question was:
I wish to ask the Prime Minister whether he will provide an opportunity for a parliamentary examination in order to elicit the facts and clear up contradictions.
The Prime Minister again returned to the theory he had advanced the previous day, and I quote now from page 4457 of Hansard, where he said:
The committees are set up in respect of matters affecting the privileges of parliament. If the hon. gentleman in the ordinary course desires such an investigation then he will make the necessary

charge, and when the charge is made action will be taken in accordance with the principles that at all times-
I repeat these words:
-that at all times have been applicable to parliamentary procedure.
In support of his contention the Prime Minister also made this statement, and I quote again from page 4410 of Hansard:
I think I should refer to the authorities so the record will be complete in this regard. I say, first, that on the basis of the experience of the past and of the traditions of this house, all the cases referred to the standing committee on privileges and elections since 1867-
And I repeat that:
-all the cases referred to the standing committee on privileges and elections since 1867 had to do with alleged improper conduct whereby a member allegedly had used his public position in order to further his private interest. Those cases go back to 1877.
The Prime Minister then proceeded to put on the record in detail information in respect of the following cases; the case of Mr. Speaker Anglin in 1877; the case of Mr. Rykert in 1890; of Mr. McGreevy in 1891, and of Mr. Foster in 1915. Well, Mr. Speaker, we have looked up the precedents, including these four cases, and they are the only ones I will deal with at this time. If the Prime Minister had made the same kind of study he would have found that in only one of the four cases was a charge or charges embodied in the motion. Therefore the Prime Minister's contention that a charge is required, the statement of the Minister of Justice that a charge must be embodied in the motion, and the Prime Minister's contention that there has to be an allegation of improper conduct whereby a member has used his public position in order to further his private interest, has no foundation whatever.
Mr. Speaker, for your information in case you have not had the opportunity to look up these cases, and for the information of the Prime Minister who obviously did not have the opportunity to look at them, we can prove, I think without any possibility of doubt, as I have said, that in only one of the four cases cited by the Prime Minister was a charge or charges incorporated in the motion referring the matter to the committee on privileges and elections. I call this to the attention of the Minister of Justice.


Edmund Davie Fulton: I have read them.


Lester Bowles Pearson: This is rather flimsy evidence for the sweeping claim of the Prime Minister that "the circumstances under which a committee is set up are very clearly shown to be based upon a charge or charges made by a member of this house".
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Edmund Davie Fulton: The hon. member misread the motion.


Lester Bowles Pearson: And that such a course "is in accordance with the principles that at all times have been established as to parliamentary procedure".


Edmund Davie Fulton: The motion shows clearly that there was a personal charge.


Lester Bowles Pearson: I go on. I will proceed to deal with the first case, that of Mr. Speaker Anglin. The motion will be found in the Journals of the house-and the Journals of the house are the authoritative record in these matters- for April 9, 1877; and for the benefit of the Minister of Finance it is on page 236, volume


Donald Methuen Fleming: Thank you.


Lester Bowles Pearson: The motion reads as follows:
On motion of Mr. Casey, seconded by Mr. McDougall,
Resolved, that the attention of this house having been called to the reports, returns and vouchers laid upon the table, touching the payment of public moneys to the Hon. T. W. Anglin, member for the electoral district of Gloucester, for printing and stationery for the Post Office Department, the said papers be referred to the select standing committee on privileges and elections, and they be directed to enquire into facts, to search for precedents, and to report the result of their enquiries.


John Whitney Pickersgill: No charge whatever.


Lester Bowles Pearson: Where is the charge there? The papers were laid on the table and were referred by the House of Commons to the standing committee, and the standing committee was asked to report back its findings on the papers.


Mr. Speaker:: To assist the Leader of the Opposition, may I say I have read all four cases to which he is about to refer and I am informed of them.


Lester Bowles Pearson: Yes, Mr. Speaker, but I would like to put them on the record just the same in view of what has been said about them by the Minister of Justice.


Mr. Speaker:: I was not trying to direct the hon. member as to how he should deal with them.


Lester Bowles Pearson: I am sure it was presumptuous on my part to think perhaps I could enlighten you by reading these cases, but perhaps it is not presumptuous to assume I may be able to enlighten the Minister of Justice. The second case was that of Mr. Rykert, in 1890. I think he was the member for Dundas at that time. Sir Richard Cartwright proposed a motion which concluded as follows:
That the conduct of the said John C. Rykert in the premises-

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There is a long list of charges in this one.
-is and has been discreditable, corrupt and scandalous.
Well, these are certainly charges. No one will deny that these are specific charges; but the house, Mr. Speaker, as you know, refused to accept the motion in that form with these charges, and the house finally sent the case of Mr. Rykert to a committee on the basis of an amended motion from which all specific charges had been removed. The final motion simply sent certain papers to the committee on privileges and elections. The final motion, for the benefit of the Minister of Finance, will be found in the Journals of 1890, volume XXIV, page 198. The final motion merely said this:
That the said papers be referred to the select standing committee on privileges and elections.
Was that witch hunting? Was the previous case witch hunting? Do these cases justify the Prime Minister's statement that in all cases since 1867 charges had to be included in a motion of this kind?


John George Diefenbaker: They do.


Lester Bowles Pearson: The next case was that of Mr. McGreevy in 1891. There is no doubt that charges were included in this motion, and this is the very case to which Sir Wilfrid Laurier referred in the references made by the Prime Minister. There is no question about that one, and that of the four cases it did include charges; but I would now conclude my survey of the cases cited by the Prime Minister by reference to the last case he cited and it gets a little closer to our own time. It is the case of Mr. Foster in 1915.
This case will take me a little longer to recite than the previous one, Mr. Speaker, because it is more recent and because this all occurred eight years after Sir Wilfrid's statement on which the Minister of Justice and the Prime Minister relied, and finally because it is the most recent precedent mentioned by the Prime Minister. I think this particular case will serve to make a complete and permanent shambles of the contention of the Prime Minister and the Minister of Justice that the house has taken action only on the basis of charges.
The sequence of events in this case is shown in the Journals of the house to be as follows. Mr. Maclean, a member I think of the opposition at that time and the member for Halifax, moved for correspondence between the auditor general and the militia department, which was produced as sessional paper 122 about two weeks later, then ordered printed on a motion of Mr. Borden a week later. He was the prime minister at that time, and he adopted a different attitude

in respect of this matter than the Prime Minister adopts today in respect of the situation before us. Mr. Borden ordered that the correspondence be printed as a sessional paper, and a week later it was sent to the committee on public accounts on the motion of Mr. Maclean.
I should like to put that motion on record. It is found in the Journals of the house for March 12, 1915, page 134. Here is the motion:
On motion of Mr. Maclean, seconded by Mr. Carvell, ordered, that sessional papers numbered 122 of the present session of parliament, and all other papers in relation thereto, being copies of correspondence between the auditor general and the Department of Militia and other departments of government, laid upon the table of the house, in respect to expenditures under the War Appropriations Act, be referred to the select standing committee on public accounts.
The prime minister, Mr. Borden, who spoke in the very short debate which took place before the order was accepted-and it was accepted-fully realized the implications of the passing of this order because at that time he said, as found at page 945 of Hansard for 1915;
X am also the more inclined to accede to the motion of the hon. member for Halifax for the reason that a member of this house, the hon. member for Carleton, Ont., came to me some time ago and asked that matters in this correspondence that have been commented upon especially in the press of this country as touching his own position in the house should be fully investigated at the earliest possible moment.
That was the attitude taken by the member affected at that time, and that was the attitude taken by the prime minister at that time in regard to a motion to submit this correspondence to a committee of the house. The member for Carleton of that day, Mr. Garland, fully realized that passing this motion would involve an inquiry into his actions. He was under no illusions about that, but he asked for it just the same. Mr. Garland said, and I quote from page 947 of Hansard for March 12, 1915:
First of all, since I have become a member of parliament, I have not been in any way whatever interested in contracts with the dominion government, and have never been and am not now, directly or indirectly, by understanding, secret or otherwise, or in any other way whatever, interested in the dealings which Mr. Powell had with the militia department, or with any department.
If any further evidence is required that the house in that motion, and it has much similarity to the motion before the house today-


John George Diefenbaker: What is the similarity?


Lester Bowles Pearson: That certain papers were being referred to a committee of the House of

Commons which included information dealing with a member of parliament. The circumstances are well known to the Prime Minister.


John George Diefenbaker: There is no personal
wrongdoing as in the case cited by the hon. gentleman.


Lester Bowles Pearson: If any further evidence is required that the house in that motion realized that it was dealing with its privileges and with the actions of two of its members, I have only to mention that unless the house had realized that it was dealing with privilege it could not have entertained the motion of a private member to refer correspondence to a standing committee of the house, because that is the only kind of motion that a private member has the right to move.
From the inquiry launched in the manner I have described came a report of the public accounts committee to the house on April 15, and from it certain parliamentary consequences ensued. At that time Sir Robert Borden made, I think, a courageous statement in the debate. He dealt very carefully with both Mr. Garland and Mr. Foster, and he expressed the strongest disapproval of their actions. But I want to draw particular attention to one sentence that Mr. Borden used in reference to Mr. Foster. As found at page 2614 of Hansard for April 15, 1915 he said:
So tar as Mr. Foster's connection with the matter is concerned, it should be taken into consideration that he is a very young man, altogether inexperienced in business, and that he is not shown to have profited in any way by the transaction.
"He is not shown to have profited in any way by the transaction", said Sir Robert. Perhaps that statement may cause the Prime Minister to revise his claim made on June 8 that he could find no case in which any such submission to a committee was ever provided for except where it had been alleged that there was on the part of the hon. member improper conduct resulting in his personal gain.
There is one other case, Mr. Speaker, which I want to bring to your attention. Perhaps you have not had an opportunity to study it. It is a United Kingdom case, and it is even closer to the present situation. It is the case of Sir Robert Boothby in the British House of Commons in 1940 and the action taken by the prime minister, Sir Winston Churchill, and the House of Commons in regard to this matter. There was a motion in the British house to refer the conduct of Sir Robert Boothby to a select committee. There was no charge levelled in that motion. The prime minister of the United Kingdom at that time reached a decision himself to
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refer the matter to a select committee because he thought the circumstances justified an inquiry of that kind. These grounds, said Sir Winston Churchill, these circumstances seemed to raise the question of whether Sir Robert Boothby's action had been in accordance with the usages of parliament or the standards it is entitled to expect of its members, just as we say in connection with this motion that the findings of a court raise certain questions which should be examined as they affect the conduct of a member of parliament and the propriety of his conduct.


Gordon Minto Churchill: Will you give us the reference, please?


Lester Bowles Pearson: The reference to the United Kingdom Hansard is October 17, 1940, page 830. It is a very well known case. At that time Sir Winston Churchill, then Mr. Winston Churchill, felt that the circumstances justified submitting to a committee, without, as he said, prejudicing the issue in any way, this particular situation which concerned a member of parliament who was a member also of his own ministry. He was not in the cabinet but he was in the ministry.


John George Diefenbaker: What were the facts?


John Whitney Pickersgill: The facts were to be found by the committee.


Lester Bowles Pearson: I will read the motion. Mr. Churchill's motion may be found in the British Hansard for the date and on the page I have given. It reads as follows:
That a select committee be appointed to investigate the conduct and activities of Mr. Boothby in connection with the payment out of assets in this country of claims against the government of and institutions in the Republic of Czechoslovakia: to report generally on these matters and in particular to consider and report whether the conduct of the hon. member was contrary to the usage or derogatory to the dignity of the house or inconsistent with the standards which parliament is entitled to expect from its members.
The prime minister and the house made no charge in this motion. They asked that the circumstances surrounding these transactions, claims against the government of and institutions in the Republic of Czechoslovakia and Mr. Boothby's relationship to them, should be investigated by a committee without prejudicing the issue, as the prime minister said at that time. Surely, Mr. Speaker, there is a very close relationship indeed between that situation and the one we are concerned with in this motion.
Let me conclude by discussing this particular situation in the terms which the Minister of Justice challenged me to do a few moments ago when he said that I did not have-I forget the word-

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Some hon. Members:: Fortitude.


Lester Bowles Pearson: -the fortitude to bring forward specific statements in specific cases from this judgment on which to base our motion.


Edmund Davie Fulton: Oh, no.


Lester Bowles Pearson: I will go into that now.


Donald Methuen Fleming: Your charges.


Edmund Davie Fulton: On a point of order, Mr. Speaker-


John Whitney Pickersgill: There cannot be a point of order on a point of order.


Mr. Chevrier:: You are out of order.


Edmund Davie Fulton: On a question of privilege, I did not say what the hon. gentleman alleges. What I said was that he did not have the courage, the fortitude, to bring forward specific allegations and base charges on them specifying what improper conduct he is complaining of.


Lester Bowles Pearson: Exactly; well, Mr. Speaker, I have been spending about half an hour showing the Minister of Justice and other members of the house that contrary to what he has said, motions of this kind do not require specific charges. There are a great many cases in which specific charges are not made for many reasons. I have just cited one in the British House of Commons under the leadership of Sir Winston Churchill against a member of his own ministry which did not include charges. Does the Minister of Justice suggest that Sir Winston Churchill was lacking in fortitude in taking the course he took?


Edmund Davie Fulton: My reference was to you, not to Sir Winston Churchill.


Lester Bowles Pearson: No doubt if the Minister of Justice had been in the British House of Commons he might have made that charge, because he certainly has verbal fortitude.
In this particular matter we are dealing with a case which in one respect at least is unique and different from all these cases which I have cited and many others which could have been cited. We have laid the foundation for our motion upon grounds to be found in a document issued over the signature of the president of the Exchequer Court of Canada, a document which was finally tabled by the Prime Minister last Monday, the day we submitted our motion. The responsibility for statements in this document rests upon the president of the exchequer court.


Donald Methuen Fleming: You do not take the responsibility?


Lester Bowles Pearson: Of course it rests on the president of the exchequer court. These are

findings of the exchequer court which we are entitled to take into consideration in this House of Commons when they refer to a member of parliament. Does the Minister of Finance deny that?


Donald Methuen Fleming: May I ask a question of the Leader of the Opposition? Is the Leader of the Opposition going to take any personal responsibility, as a member of this house, for what he is about to do?


Lester Bowles Pearson: Indeed I do, Mr. Speaker. As a member of the opposition I take responsibility for submitting this motion to the house, and no member of the government will take any responsibility for making any inquiry into this matter. What responsibility does the Prime Minister take? He says, washing his hands of the whole thing-


Mr. Speaker:: Order. The Leader of the Opposition is getting to the point now in which I am particularly interested, that is his discussion of the statements in the judgment as they relate to the privileges of the house.


Lester Bowles Pearson: Yes, but I felt it necessary to answer the Minister of Finance who found it necessary to interrupt.


Mr. Martin (Essex East):: These interruptions should not be permitted.


Lester Bowles Pearson: Mr. Speaker, in answer to a question by the Minister of Finance I was saying that I take responsibility by putting my name to the motion; but no member of the government including the Prime Minister, is willing to take any responsibility for making any inquiry into this matter. The Prime Minister has gone so far as to say that there is nothing into which to inquire. The Prime Minister went even further. He said there were no contradictions even into which to inquire.
This is the point to which I am coming now, and I know you will be interested in listening to what I have to say. I should like to assist you in this matter by mentioning certain specific grounds which in our opinion justify a committee of inquiry. I shall mention certain questions arising out of these findings of the exchequer court which we think should be answered or to which a committee of this house should try to find the answers. All these questions, Mr. Speaker, are mentioned by me only because they are included or are implicit in the judgment of the exchequer court. This is the basis upon which we bring them before the House of Commons, because they have appeared before the public.
The first question is, is it proper for a member of parliament to bring pressure upon a government department to appoint an independent appraiser to value property,

some of which has already been valued approximately six times according to the Minister of Transport, and with which valuations the Department of Transport, according to the evidence before the courts, was satisfied? Another question arising out of this judgment is, is that course and its acceptance by the minister unfair to those 180 property owners who had already settled and who had no opportunity of participating in the new and upward valuation? Also is it proper for a member of parliament to seek to bind the crown by agreement in advance to accept a valuation? Is that not a question which affects the privileges of parliament?
The hon. member for Peel, Mr. Speaker, testified under oath that agreements had been reached to accept the valuation of an independent appraiser, Mr. Clare. Being satisfied in his own mind that the crown had been successfully bound in advance to accept the valuation, was it then proper for the member to secure the appointment as such independent appraiser one with a special relationship to the member, such as Mr. Clare admittedly had? The hon. member for Peel, Mr. Speaker, stated under oath that the minister had accepted his proposal that the crown be bound to accept the Clare valuation. The minister told us he had made no such agreement. There is one contradiction to which I call the attention of the Prime Minister. This committee to which we suggest this matter should be sent is justified in our view, if only to clear up this grave contradiction and to set out the facts.
The word "agreement" is a matter for further clarification. Relying on the oath of the hon. member for Peel, are we not entitled to find out whether the acceptance of a proposal means, in the mind of the Minister of Transport, something entirely different from making an agreement? Is this contradiction only a matter of semantics? If it is only a matter of semantics, then what is the responsibility of the minister in this matter? If, as the Minister of Transport states, no such proposal was accepted in any form, was the hon. member for Peel acting properly in representing to his constituents and later to the court that his proposal had been accepted? These are questions which surely should be cleared up.
Here is another question arising out of a statement in the judgment of the court at page 9:
On December 9, 1957, Mr. Pallett sent Mr. Clare's valuation reports to the minister's executive assistant and they were then placed before the minister.
Is this regular procedure? Is it proper for a member of parliament to receive reports of this kind from an independent valuator? Did Mr. Clare review his reports in detail with
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the hon. member before later transmitting them, not to a departmental officer but to the minister's executive assistant, who is a political officer?
Now, turning to page 16 of the judgment, at the bottom of that page there is this statement by the then presiding judge:
I have no hesitation in rejecting Mr. Clare's valuation. I do not believe he was a free and independent appraiser.
Then the president of the court proceeded to give reasons for this conclusion. This surely is where parliamentary privilege enters again. These are the reasons given by the president of the court for the statement I have just quoted. He said:
He admitted-
That is, Mr. Clare.
-that Mr. Pallett, who had recommended his appointment, said that he wanted a good price and on his cross-examination, after long hesitation, he admitted that Mr. Pallett had instructed him to put as generous a valuation as possible on the properties and he told Mr. A. A. Speer, the Department of Transport's district land agent, that it was difficult for him to carry out his instructions.
Later in this house, Mr. Speaker, the Minister of Transport said that the hon. member for Peel was not interested in securing any more than fair and equitable treatment for his constituents. Well, there is a contradiction between this statement and also the statement the member himself made outside the house, and this finding of the court.
The next question, Mr. Speaker, is at the heart of the matter. Were any instructions given by the member for Peel the cause of the evaluator losing his freedom and independence; because the president of the court said he could not consider him as a free and independent appraiser? Did those instructions influence the evaluator in reaching land values which were erroneous and excessive? Were they the cause of his reaching property values that were out of line with the other property values and settlements in Malton? Were they the cause of Mr. Clare reaching valuations which, if accepted, as the hon. member for Peel expected them to be accepted because he felt an agreement had been made that they should be accepted, would have placed an extra burden on the treasury?
Surely, Mr. Speaker, the House of Commons is entitled to inquire into these questions which concern the propriety of the conduct of one of its members and which are raised in a judgment of the Exchequer Court of Canada? We think the government should have asked for this inquiry days ago. All we on this side of the house are asking for is that there should be an inquiry into these observations and conclusions in the judgment of the exchequer court which affect a member

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of parliament, so this whole question can be cleared up and a report made by that committee to the House of Commons. That is all we are asking for in the motion, and I suggest we are entitled, Mr. Speaker, to ask for this inquiry and to make this motion which I respectfully submit to you is quite in order.


Mr. Speaker:: I would like to ask the Leader of the Opposition one further question about the last part of his submission that privileges of the house are involved. First of all, is he founding his motion now on matters extraneous to the judgment? The hon. member has referred to statements made outside, and it may have a bearing on the case; or is he asking the committee to deal solely with the judgment?


Lester Bowles Pearson: We are founding our motion on the statements made in the judgment of the exchequer court, and on any comments made on those statements both in the House of Commons and outside the House of Commons.


Mr. Speaker:: I had not realized that, and of course that would have a bearing. I had understood the hon. member to say at first that he was basing his motion upon what appeared in the judgment. The other question I wish to ask the Leader of the Opposition is this. Assuming that the observations of the learned judge are substantiated on an inquiry, then what specific misconduct does the hon. member say is involved which affects the house?


Lester Bowles Pearson: On that point, Mr. Speaker, I think it would be quite improper for me to attempt to answer such a question now.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: I have put this question in the form of a motion and called attention to certain statements made in the judgment. I suggest that it is the responsibility of the committee of this house on privileges and elections to go into this matter and decide whether any misconduct has been committed, and if so what it was. I submit that it is not my responsibility in moving this motion to answer that question at this time.


Gordon Minto Churchill: It is brinkmanship, that is all.


Mr. Speaker:: I will not pursue the matter further, but-


Lester Bowles Pearson: If I may be permitted, may I ask, when Your Honour has considered it, whether it is proper for me to answer this question in the house at this time?


Mr. Speaker:: The reason I asked for the advice of the house-and I have probably

taken the wrong course, because we have had the debate which I thought might have been out of order-was to be advised if the select committee made the findings which are suggested, would any question of privilege of the house be involved as a result? If that were not the case then I would not consider the motion one of privilege.


Lester Bowles Pearson: Mr. Speaker, I think I must intervene to say that I have suggested no findings that a committee might make, of any kind. I suggested certain questions which the committee could look into to find the answers, but surely they will decide what report to make.


Mr. Speaker:: Let me put it more specifically. I am really trying to shorten the matter and dispose of it. Assuming that there was no discrepancy in the evidence as stated, what privilege of the house is involved? Of course if a member were convicted of perjury that might be a matter of privilege of the house; but I take it there is nothing in the judgment to suggest anything other than a conflict in testimony.
Then there is the question of the valuator. Does the appointment of the valuator raise a responsibility of the department or of the member? This motion is phrased as a question of privilege relating to the conduct of the member for Peel.


Edmund Davie Fulton: Mr. Speaker, may I rise on a question of privilege. The Leader of the Opposition has attacked my accuracy and called into question the statements I have made with regard to the motions which have previously been made when a matter such as this has been referred to a committee. It is my understanding that a member clearing up inaccuracies is bound to do so at once. I understand that other members wish to speak, and I just wish to rise at this point merely to say that I regard it as necessary, and I believe I have the right before this discussion closes, to set the record straight and place on the record the motions as they appear in the Journals, and correct the inaccuracies of the Leader of the Opposition.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, first of all I must say that, as everyone knows, I am a sort of plain and simple person, and I lay no claim to be a student of the niceties and technicalities of law or parliamentary law and procedure. If I have a problem in life, Mr. Speaker, I usually try to approach it from a common sense point of view.
However, I have listened very carefully to the debate this morning, in particular to the case made by the Leader of the Opposition, and I think he has made a very good case in

support of his claim that his motion is in order. I do not pretend to be an expert in that respect, Mr. Speaker, but after listening to both sides of this argument today and on previous days, I say-and I speak for this group on this occasion-that regardless of the technicalities of parliamentary procedure in our opinion the Leader of the Opposition is on the soundest moral grounds in asking for a parliamentary inquiry into this matter.
I listened with particular interest, Mr. Speaker, to the statements made by the Minister of Justice. I always listen with interest to any statement or speech the minister may make, but I thought today that his argument was not quite on the high level it usually is.


Mr. Speaker:: I do not think the hon. member for Kootenay West was involved in the former argument which strayed off the point of order, but I would appreciate it if the hon. member would speak to the point of order so this matter does not extend into an indefinite debate. The point of order was whether there is a question of the privilege of this house before us, and, if so, what does that involve.


Herbert Wilfred Herridge: I bow to your ruling, but Your Honour does on this occasion fence me in more than some of the other speakers. I have suffered that experience in the past. But I do wish to say, dealing with the argument put forward by the Minister of Justice, that I was a bit shocked to hear him refer on one occasion to a statement from judgment of the exchequer court as "rumour".


Edmund Davie Fulton: I said no such thing.


An hon. Member:: You did.


Herbert Wilfred Herridge: Such a statement, with reference to a judgment coming from the Queen's bench, would tend to undermine the prestige of the courts of this country.


Edmund Davie Fulton: On a question of privilege, the hon. gentleman has of course misstated what I said. I said no such thing. The rumour to which I was referring was the rumour raised by the Leader of the Opposition.


Herbert Wilfred Herridge: We can read the record tomorrow and see who is correct. I want to say this on behalf of this group. This group believes that in fairness to the people of Canada who are taking an increasing interest in this case-and this is evidenced by the correspondence we are receiving, and the correspondence coming from the neighbourhood concerned-in fairness to the minister, and in fairness to the hon. member whom we have particularly mentioned, and in order to remove the miasma of suspicion, bewilderment and dissatisfaction, and to establish the truth, the
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Prime Minister should agree to the referring of this question to a committee as the Leader of the Opposition suggests.


John George Diefenbaker: I am going to direct my attention particularly to the question of privilege, and to the remarks made by the Leader of the Opposition with respect to other occasions in the House of Commons when such motions have been made.
The hon. gentleman referred to the four motions to which I made earlier reference, and by a play on words endeavoured to lead the house to understand that no charge had been made as a preliminary to the motion in question. In every case, and I reiterate that, there had been charges made of wrongdoing or personal aggrandisement or actions which involved moral turpitude in a financial way, and in every case which was cited, from the beginning to the end, the Leader of the Opposition endeavoured to delude the House of Commons into believing that there had in fact been no charges made in the various cases.
He ended up by dealing with the Boothby case in the United Kingdom. That was the case of a minister of the crown-and I speak now from recollection-who allegedly had engaged in certain transactions through his company in a manner which was believed to be derogatory to the privileges and rights of members of parliament. The prime minister of that day, Mr. Winston Churchill, believing on the face of the allegations made that there was such a degree of wrongdoing as to be incompatible with the position of a member of parliament, took the course he did. Every case to which I referred, and I repeat every case which has ever taken place in Canada when there has been a submission to a committee, has followed charges and allegations made in this house.
Now what is the attitude of the Leader of the Opposition? Insinuation; inference. But hon. members will have noticed how, when he is asked what is the nature of the allegations of wrongdoing, he adopts the clothing of injured innocence. "Don't place me in such a predicament", he says. If the Leader of the Opposition-and I challenge him now-will make any allegation of wrongdoing that is in any way incompatible with the position of a member of parliament, I will ask this house immediately to support the setting up of a committee.


John Whitney Pickersgill: Another Diefenbaker diversion.


John George Diefenbaker: I know his defence, Mr. Speaker. He knows there is none. He admitted that he agreed with me when the matter first came up. I had the Hansard

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here a moment ago. When the matter first came up on Friday June 5 his words were, in effect, that he agreed with the viewpoint that I expressed on that occasion-


Lester Bowles Pearson: On a question of privilege, I made no such statement. Perhaps the Prime Minister had better read what I said. I said I had no quarrel with what the Prime Minister said at that time, that he would look into the matter and report back. And that is all. Now read it.


Donald Methuen Fleming: What a retreat.


John George Diefenbaker: That, indeed, is a retreat. The hon. gentleman said nothing like that the other day when I mentioned it.


Mr. Speaker:: I am sorry to interrupt the Prime Minister, but it is one o'clock.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
Mr. Speaker:: The Prime Minister had the floor when we adjourned and I believe the Minister of Justice wishes to intervene again shortly to reply to some argument that was made and I dare say some other members may wish to intervene, but may I say that we are discussing a point of order. Obviously it is an important point or I would not have felt the necessity of bringing it so fully before the house, but I hope that we can deal with the point of order and keep the discussion to that and perhaps not make it too extended.


John George Diefenbaker: Mr. Speaker, I shall certainly endeavour to keep within the ambit and circumference of your suggestions. At the moment of adjournment, as I recall it, I had made it very clear that in every case to which I referred on an earlier occasion and which I understand the Minister of Justice will refer to because of the statements made by the Leader of the Opposition, whatever the wording of the motion had been there had always been a charge. I made that abundantly clear and I re-emphasize now that if the Leader of the Opposition or any other hon. member will make a charge in this connection there will not be one moment's delay in asking for the convening of the committee on privileges and elections.
I do not want to enter into a controversy with the Leader of the Opposition but just as I was concluding at the time of adjournment I referred to the fact that there was no charge made by the Leader of the Opposition. I leave those who are inclined to reason to

determine whether or not I misrepresented the situation when I made the following statement as reported at page 4361 of Hansard of Friday, June 5:
-I think I should say at this time that in so far as any reference to any hon. member in this house is concerned, and in particular to the hon. member for Peel, the integrity and honesty of purpose of that hon. member leaves no question in my mind.
Let me quote exactly what the Leader of the Opposition said as reported on the same page:
Mr. Speaker, may I ask a supplementary question. In view of statements made in the judgment- and I am not quarrelling in any way with what the Prime Minister has said-has the Prime Minister considered referring this matter to the appropriate standing committee of the house so that it may be given the fullest and most impartial examination?


Lester Bowles Pearson: Mr. Speaker, on a question of privilege, the Prime Minister has left out a very important sentence which he should have read when quoting his remarks. Before saying the words he has read into the record the Prime Minister, as reported at page 4361, said:
It is my purpose to examine the judgment and the surrounding circumstances.
That sentence appeared in the context immediately prior to the sentence the Prime Minister did read.


John George Diefenbaker: Mr. Speaker, I know that Hansard has no conscience and is never able to alter itself after the events. I would point out that on Monday, June 8, as reported at page 4409 of Hansard, I referred to that statement and at the top of the page I am reported as having used these words to which the Leader of the Opposition raised no objection. His conscience had not started to operate until the subsequent import became known to the hon. gentleman. Let me read what I said as reported at the top of page 4409:
I wish to thank the Leader of the Opposition for the support he gave me in this regard-
I was referring to the integrity of the hon. member for Peel. I continue:
-when he said:
I then read into the record the words of the Leader of the Opposition to which reference has already been made, which words are reported at page 4361 of Hansard. Let me place them on the record again:
Mr. Speaker, may I ask a supplementary question. In view of statements made in the judgment-and I am not quarrelling in any way with what the Prime Minister has said-has the Prime Minister considered referring this matter to the appropriate standing committee of the house so that it may be given the fullest and most impartial examination?

I then went on to say:
I repeat that I very much appreciated the attitude taken by the Leader of the Opposition in entirely supporting me when I said that the honesty and integrity of the hon. member left no question in my mind.
Mr. Speaker, there was not one word and not a hint or suggestion to the effect that I misrepresented the Leader of the Opposition.


Lester Bowles Pearson: Mr. Speaker, I rise on a
question of privilege again. The Prime Minister has misrepresented what I said because immediately after the Prime Minister sat down I corrected that statement and if he will refer to page 4410 of Hansard he will find out how I did it.


John George Diefenbaker: Mr. Speaker, I shall
proceed to read it because I know how the hon. gentleman feels. At page 4410 of Hansard the hon. gentleman is reported as having said:
Mr. Speaker, In view of the Prime Minister's reply and particularly in view of his reference to myself perhaps I might be permitted to make an observation. It is quite true, as the Prime Minister has said, that I stated in the house on Friday that I had no quarrel with what the Prime Minister said on that occasion. Of course I would have no occasion either to quarrel with or support any statement the Prime Minister made on that occasion, because it was a preliminary statement pending the examination which at that time he promised to make.
And then, these were his next words:
Naturally I am glad to confirm what I said on that preliminary occasion.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: Mr. Speaker, will the Prime Minister not read the rest of it? I urge him to read the full paragraph.


John George Diefenbaker: Yes, I will read it and gladly proceed to the end because this type of equivocation-


Some hon. Members:: Oh, oh.


John George Diefenbaker: -in which the hon. gentleman has indulged this morning and in this resolution needs to be clearly brought to the attention of the house.


Mr. Mcllrailh:: Why not follow the record then?


John George Diefenbaker: The hon. gentleman went on to say:
We on this side will now study the Prime Minister's very important statement today. If that statement seems to require further discussion in the house no doubt there will be an opportunity later to refer to it.


Lester Bowles Pearson: Go on. Read the next
paragraph.
Business of the House


John George Diefenbaker: Oh, I will. No amount of twisting and turning can get the hon. gentleman out of the position in which he has placed himself today when he went back on the statements he had made earlier. I read on:
I should like to ask the Prime Minister whether he does not agree from a study of the judgment- and I had not an opportunity of making that study last Friday-that there are contradictions between statements in this judgment about a member of parliament and statements made outside the house on the same matter by the same hon. member, contradictions which in fairness to all concerned should be cleared up?
Nothing that has been said by the hon. gentleman today derogates from the fact that on two unchallengeable occasions the hon. gentleman unequivocally admitted the honesty and integrity of the hon. member for Peel.


John Whitney Pickersgill: More diversion.


John George Diefenbaker: Then, the hon. gentleman equivocated on the question that the judgment was not available until Monday. The judgment was in his hands. He was quoting from it on Thursday or Friday when the estimates of the Minister of Transport (Mr. Hees) were before the house. They were quoting from it; they were excerpting it. All of this alteration of the point of view, Mr. Speaker, simply comes back to one thing. They do not want to say, they dare not suggest, that the honesty and integrity of the hon. member for Peel are challengeable, and that was accepted by the Leader of the Opposition. On the other hand they lacked that something that every leader of the house from 1877 to 1943 demanded as the basis in respect of which such a motion would be permitted to be moved and considered by a committee. No amount of denial of that will meet the situation. Whatever the wording of the motion, in every case there had been charges made.
The hon. gentleman says he cannot be challenged and placed in the position where he would make a charge. No, sit back; make your indictment by innuendo, make your statements by a suggestion. That is not what Mr. Mackenzie King said was the proper course to follow. In the days when Mackenzie King and Arthur Meighen were in the house that was not the course accepted as the course of parliamentary responsibility.
During the noon hour I looked up the first case I want to refer to, which is that of Mr. Murdock of the Home Bank. I refer to Hansard of May 22, 1924. Mr. Porter, the then member for West Hastings,-


John Whitney Pickersgill: What page?

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John George Diefenbaker: -brought this matter before the house. He referred to the press alleging that certain wrongdoing had been committed by the Hon. Mr. Murdock who was subsequently cleared.


Paul Joseph James Martin: What page?


John George Diefenbaker: Page 2402. It was discussed at some length. He went into detail and finally moved the motion, which is found at page 2405. He took the course- not the course of innuendo, insinuation and inference-that members have taken in every generation in this parliament. He made a charge, and this is the motion he made:
That E Guss Porter, a member representing the electoral riding of West Hastings, in this house, having declared from his seat in the house, that he is credibly informed and that he believes he is able to establish by satisfactory evidence that:
The Honourable James Murdock, Minister of Labour, did withdraw from the Home Bank, at its Ottawa branch, on the 15th day of August, 1923, two days before such bank's failure, thousands of dollars on deposit therein, to his credit, using certain information he had received as such minister, of the likely immediate failure of said bank, and had received advantage and profit to himself to the extent of such withdrawal, contrary to his obligations as such minister, and in derogation of his office and the honour, dignity and traditions of parliament:
That it be referred to the select standing committee on privileges and elections of this house to inquire fully into the said allegations with power to send for persons, papers and records, to examine witnesses under oath or affirmation, and that the said committee do report in full the evidence taken before them, and all other proceedings on the reference, and the result of their inquiries to this house for such action thereon as the house may determine.
I want to make it perfectly clear that the committee absolved him. During the course of the discussion, at page 2408 of Hansard, Mr. Meighen set for the rule, the same rule as I will refer to in a moment, which was enunciated by Mr. Mackenzie King in this house during the days when I was a member. Mr. Meighen said:
On this occasion the proper course undoubtedly has been pursued by the hon. member for West Hastings (Mr. Porter). He has made allegations of conduct against a minister of the crown, conduct inconsistent with the traditions and honour of parliament, conduct designated as improper in every case where similar questions have arisen in this or in the British house. He has taken the full responsibility, and in a speech temperate in tone and very fair in every respect has laid his charges and made his motion. The motion is the right motion. The privileges and elections committee historically is the committee which always deals with any contested questions affecting the privileges of parliament. There has never been a case in our history where, a charge being formally laid, the full responsibility being taken and a reference to this committee asked for, such a request or such a resolution has been negatived.
I repeat that if either the hon. gentleman or anyone associated with him will take that

responsibility he will not have to wait hours, but within minutes provision will be made for the convening of that committee and an opportunity given to have the charge proceeded with. Mr. Meighen continued at page 2410 of Hansard:
The motion in your hands, Mr. Speaker, embodies the proper procedure, and when charges are formally laid the committee on privileges and elections is the proper tribunal.
The motion was immediately agreed to unanimously by the house. Mr. Mackenzie King was the prime minister at that time. In no way to be challenged is the fact that this course is not only in keeping with the decorum of our traditions of parliament but it is the course that has always been followed. Arising out of this, during the noon hour 1 recalled a case that occurred during the days of the war when Mr. Liguori Lacombe, a member of the house, made some statements. He said, as reported at page 4175 of Hansard of June 29, 1943:
We have in the government three new millionaires since the declaration of war. We will denounce them at the proper time and place. Fortunes are being built up.
Now, that carried with it, of course, the suggestion that there was on the part of one or more members of Mr. King's administration ministers who were, at least by reason of their advantageous position, making fortunes. There was no basis for that, but that was the statement made by Mr. Liguori Lacombe. At page 4073 of Hansard Mr. King said this:
I submit, Mr. Speaker, that the hon. member should be obliged either to withdraw the statement completely or else to convert it into a specific charge to be investigated in the usual manner, and the consequences of the investigation also to be followed up in the usual manner.
That is exactly what I said the other day. In this house we cannot make charges against one another. We can, in the course of debate say those things that sometimes we regret but, as Mr. King says, charges should be made in the usual manner. He asked Mr. Lacombe to make the charges specific. If charges are made we will then have the necessary machinery set in motion with a view to assuring fairness in the conclusion. At page 4176 of Hansard the Speaker said this, in dealing with the privileges of the house:
I wish to say that the hon. member for Laval-Two Mountains has made a grave accusation against three members of the government, so grave that the implied and, it seems to me, the only meaning which can be drawn from the statement is that these three unnamed members are using their position to accumulate fortunes. Although unnamed, as the statement how stands, all and every member of the government stand accused.

Then he goes on to point out how serious this is, and he says:
The Prime Minister has challenged the statement and has asked that the hon. member should be obliged either to withdraw the statement completely or else to convert it into a specific charge to be investigated in the usual manner.
Those are the two latest cases. In every respect these cases bear out the interpretation I gave in respect of the four cases I named last week. That is the course of conduct that the experience of several hundred years of parliamentary life has made necessary. Otherwise all you would have to do would be to produce a shilly-shally motion such as this wherein nobody takes a stand on anything and wherein the Leader of the Opposition, instead of saying "I say that", says that a document, a judgment of a court in a case, affirms certain matters. If that were the basis, Mr. Speaker, upon which members could make charges in this house then none of us would be safe because we would always be in the position of having placed before the house a suggestion made outside the house, a judgment of a court, if you will, wherein there is no evidence of wrongdoing within the meaning of wrongdoing as established throughout the years as a basis for submission to such a committee.
I am going to say no more than this, Mr. Speaker. I will at all times, regardless of the personality of the individual in the house, try to uphold the dignity of the house and of parliament in the tradition of Mackenzie King, Mr. Meighen and all the others who were prime ministers throughout the years. Mr. St. Laurent did not have a case such as this to deal with.


Lester Bowles Pearson: The C. D. Howe charges.


John George Diefenbaker: I will uphold the dignity of the house and of parliament in order to assure-


Some hon. Members:: Oh, oh.


John George Diefenbaker: Let me say this to hon. gentlemen opposite, and the Leader of the Opposition is one of those who will know what I mean. We shall not permit, we shall not allow, in our country that something to occur which brought about devastating effects on a responsible government in another country whereby individuals were tried by television, whereby evidence was introduced by innuendo and hearsay.


Some hon. Members:: Hear, hear.


John George Diefenbaker: I say this, that it ill
becomes anyone in the house to bring forward a shadow of a motion that in no way offers any proof and behind which the mover does not stand. I will do my utmost to protect the rights of parliament. It is one of the 66968-9-306
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glories of the Canadian parliament that there are few cases in our history where there has been wrongdoing, but where there is wrongdoing it is the responsibility of the prime minister and all members of the house to do their part to see that it is punished. Here we have but a piece of paper containing a motion ingeniously contrived in order to sow suspicion. The hon. gentleman moving the motion will not take his stand behind the truth of the allegations and the alleged wrongdoing of the hon. member for Peel. I say this. I hope I shall never allow any hon. member to be struck in his honour and integrity by a motion such as this, a motion of suspicion fortified only by questions, with the mover holding the high and responsible position of Leader of the Opposition refusing to accept his personal responsibility to make a charge on the basis of his opinion and belief with respect to the alleged findings of wrongdoing by a judge.


Paul Joseph James Martin: Mr. Speaker-


An hon. Member:: Take the hide off him, Paul.


Some hon. Members:: Oh, oh.


An hon. Member:: What a hope.


Paul Joseph James Martin: Mr. Speaker, I am sure that all of us in the house are seized with the solemnity of this particular proceeding. It is only correct that we should seek to address ourselves to the matter before the house in the spirit of seeking to preserve the strength of the traditions and practices of this house, and to recognize, no matter what position we take on this matter, that this is the only consideration that should motivate any of us. I suggest to the Prime Minister, (Mr. Diefenbaker), understanding as I do the difficult position that he as head of the government and Prime Minister has in a matter of this sort, that I do not think it is unfair to indicate that if, when this matter was first raised, he had sought to act not as leader of his party but as Prime Minister of the country this matter would not, I am sure, still be before us and under discussion.
I suggest to the Prime Minister that if he will look at the records of the proceedings of this house and in the United Kingdom, where matters of this sort have fortunately rarely presented themselves, it will be found in practically every instance that the prime minister-there is no better example than Sir Robert Borden-took a position of objectivity, one in which he sought to picture himself as adviser to the house and not as

Business of the House
counsel for any individual particularly involved. From the beginning of these proceedings the Prime Minister, possibly habituated by his great experience in the criminal courts, has sought to defend instead of directing the house in the course which he thought it should pursue. Because the Prime Minister has taken that course he has unwittingly, I think, been the cause of these proceedings being protracted and having reached the stage in which we now are. I suggest to him that this matter could have been resolved effectively if the hon. member involved had been encouraged to make a statement in the house, a statement which I think would have been readily accepted, at any rate, a statement which under our rules would warrant acceptance in the face of possible argument to the contrary.	.
But no; that is not the position taken by the Prime Minister. He has asserted that the Leader of the Opposition (Mr. Pearson) seeks to embark on an expedition to malign and to destroy the character and the integrity of an hon. member of this house. The Prime Minister has not done himself the kind of justice which I think he would want when he charged the Leader of the Opposition with having ulterior motives and when he charged that the Leader of the Opposition did not have the courage to address himself to the matter by making a specific charge. The only one who has mentioned repeatedly the making of a charge has been the Prime Minister.
The Leader of the Opposition quite properly has said: "This is not a question involving a charge; I am making no charge. I am simply pointing out that whatever charge exists is to be found embodied in a judgment of the president of the Exchequer Court of Canada." Why the Prime Minister-experienced lawyer that he is-should persist in seeking to encourage the laying of a charge I find it difficult to appreciate. Certainly I do not think it lies within the power of the Prime Minister in this context to suggest that this was the motive of the Leader of the Opposition or that a charge should be made.
The Prime Minister referred to various cases, particularly the Home Bank case involving a minister of the crown, and the Lacombe case. He said that those two cases, as do others, indicate that there was a reference to the committee on privileges and elections following the making of a charge. Let us examine these cases once again because the Prime Minister has not properly interpreted them.


John George Diefenbaker: As far as the Lacombe case in concerned, I never said it went to a committee. Mr. Lacombe withdrew the motion.


Paul Joseph James Martin: In the Lacombe
case the circumstances were altogether different. What was in issue in the Lacombe case was an alleged statement of one hon. member of this house against a minister of the crown. That is not what is involved here. As to the Home Bank case, that too was based on a charge made by an hon. member of this house; likewise in the Anglin case, the Foster case, the Hooper case and in other cases which one could refer to. The question in those cases did not involve a charge made by anyone. There was no charge made in the Foster case. My hon. friend distinguishes those cases from the case confronting us by saying that while it is true that in some of these cases no charge was involved in the specific motion-and I think I interpret the Prime Minister correctly; he nods his head now-in the subsequent discussion a charge was levelled of one kind or another.


John George Diefenbaker: In the previous discussion?


Mr. Marlin (Essex Easl):: In the previous discussion. All right. How does that affect those cases? The decision in those cases was not based on the discussion. The vote was on the motion. Let us look at these motions. Here is the motion in the Foster case. I have before me the Journals of the House of Commons for 1915, page 134:
On motion of Mr. Maclean, seconded by Mr. Carvell,
Ordered, That sessional papers numbered 112 of the present session of parliament and all other papers in relation thereto, being copies of correspondence between the Auditor General and the Department of Militia and other departments of government laid upon the table of the house, in respect to expenditures under the War Appropriations Act, be referred to the select standing committee on public accounts.
Where is the charge there, Mr. Speaker? There is no charge whatsoever any more than there is involved in the motion now before the house. Then let us consider the Anglin case. Obviously the Prime Minister has not carefully analysed these cases. I have before me the Journals of 1877, volume II where at page 236 we find the following:
On motion of Mr. Casey, seconded by Mr. McDougall (Renfrew),
Resolved, That the attention of this house having been called to the reports, returns, and vouchers laid upon the table, touching the payment of public monies to the Honourable T. W. Anglin, member for the electoral district of Gloucester, for printing and stationery for the Post Office Department,-


Edmund Davie Fulton: That is a charge.


Murdo William Martin: If the Minister of Justice will just contain himself and listen instead of interrupting, I should be obliged. The quotation continues:
-the said papers be referred to the select standing committee on privileges and elections, and they

be directed to enquire into the facts, to search for precedents, and to report the result of their enquiry; and whether the said Honourable T. W. Anglin has vacated his seat.
There was no charge made in that motion.


John Whitney Pickersgill: It was a recital of the facts.


Paul Joseph James Martin: Yes, it was a
recital of the facts, just as is being done in the case before us. But let us assume that there are some cases in which there was a charge, and there are such cases. My hon. friend has referred to statements made in this house by Sir Wilfrid Laurier. That is an argument, but it is not an argument in answer to the contention made by the Leader of the Opposition. The very fact that we have now been engaged for two and a half hours in a discussion of this matter surely establishes the correctness and the validity of the position taken by the Leader of the Opposition.


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: There is obviously a question of privilege involved.


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: My hon. friends laugh, but laughter is no substitute for argument. We were reminded by Mr. Speaker himself this morning of the principle applicable to this very point. He directed our attention to the words of Sir Thomas Erskine May in May's Parliamentary Practice at page 382, 16th edition, and these words bear repetition:
It has often been laid down that the Speaker's function in ruling on a breach of privilege is limited to deciding the formal question whether the case conforms with the conditions which alone entitle it to take precedence of the notices of motions and orders of the day standing in the order paper of public business; and does not extend to deciding the question of substance, whether a breach of privilege has in fact been committed-a question which can only be decided by the house itself. The conditions with which a claim of privilege must comply in order to be accorded precedence are those mentioned above (1) a prima facie case of breach of privilege must be made out-
Does any hon. member seriously argue that that has not been done?


Edmund Davie Fulton: Yes.


Paul Joseph James Martin: The Minister of Justice says yes. I say to the Minister of Justice that, as Minister of Justice, he should be the last one in this house to repudiate a finding of one of Her Majesty's judges.


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: In a matter of this sort I think hon. gentlemen will want to hear all sides express their point of order without the use by them of their numerical strength
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in this house. The Prime Minister referred to this same judgment as an alleged finding. No


John George Diefenbaker: An alleged finding?


Paul Joseph James Martin: The Prime Minister's words are there to be scrutinized and observed by everyone. The Prime Minister said that. While this might be understandable in the mouth of a lay prime minister, it certainly is not proper for the Prime Minister, a distinguished advocate in the criminal courts of our country, to refer to a finding of a judge as an alleged finding. Whether we agree with the decisions of our courts or not, once those decisions are made then unless appealed they must not be referred to in the language used by the Prime Minister as "alleged findings".
A suggestion was made by the Minister of Justice (Mr. Fulton) which 1 did not think was worthy of him. After all, in a matter such as this he could easily have taken the position that a famous lord chancellor is said to have taken in the latter part of the nineteenth century, when he said that in a matter of this sort it was clearly the duty of the lord chancellor to associate himself with the Queen's first minister and give the house direction rather than act as a partisan on one side or the other.
That is not what the Minister of Justice did this morning. He indulged in a personal attack on the Leader of the Opposition. He accused him of lack of fortitude. He accused him of lack of courage. I suggest that one might say about the Leader of the Opposition that those are two characteristics which do not fit him. The reason for the course taken by the Leader of the Opposition was because in the face of this judgment-which stands, and unless answered there will continually be uncertainty on the part of members of this house and by the public-he thought the duty of the Prime Minister was to initiate proceedings in the matter. Because the Prime Minister did not do so he, as Leader of the Opposition and an officer of this house-and that is what the Leader of the Opposition is -felt that it was his duty objectively to bring this matter forward to the attention of the house in the way he has done. No one can say that his presentation today or on other occasions of this matter has in any way run counter to the highest standards that one would expect from one who occupies the post of Leader of the Opposition. He made no charges, that is true. That is his continuous answer to the Prime Minister who repeats, "Make charges". The Leader of the Opposition said, "We have no charges to make".


Some hon. Members:: Oh, oh.

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Paul Joseph James Martin: The Leader of the Opposition says that we have no charges to make. But what we do say is this.


Mr. Harkness:: You only have insinuations.


Murdo William Martin: Why does my hon. friend, the Minister of Agriculture (Mr. Harkness) want to mar a fairly unimportant record of achievement by this further intervention? What the Leader of the Opposition has done is to say that there is a judgment of the president of the exchequer court which makes certain affirmations, and among those affirmations are:
(6)	That Mr. Clare was not a free and independent
appraiser;
(7)	That according to Mr. Clare's own admission, Mr. Pallett instructed him to put as generous a valuation as possible on the properties and that Mr. Clare told Mr. A. A. Speer, the Department of Transport's district land agent, that it was difficult for him to carry out his instructions;
(8)	That Mr. Clare's land valuations were quite erroneous and excessive and that his property valuations were out of line with other valuations and settlements made in the Malton area.
The Leader of the Opposition made no charges. Whatever charge is involved lies in this judgment of the president of the exchequer court. Does the Prime Minister say to us that parliament is free to ignore this finding of the exchequer court? Does the Prime Minister not agree that in fairness to the hon. member concerned-and I put it on that ground first, in fairness to him-and out of respect for the traditions of this house this judgment should not be allowed to stand without some answer being made on its merits by those who are in a position so to do? What other vehicle is there for such a presentation unless it is made in the committee proposed in the motion presented by the Leader of the Opposition? There is only one answer to this argument, and that is a statement by the hon. member involved himself.
Therefore, Mr. Speaker, there can be no doubt that the course taken by the Leader of the Opposition is in keeping with his duty as Leader of the Opposition and in keeping with our traditions in this house. They were honourable proceedings initiated by him. It would have been easily possible to suggest, as some outside have suggested, making political innuendos as the Prime Minister has said was being done in this case. But what innuendo was ever made? What fairer statement could be made than that which I have made supporting the statement already made by the Leader of the Opposition? No charge is being made by any member in this house. AH we are calling the government's attention to, as well as the attention of all hon. members in this house, is a judgment of a court.

In the absence of an appeal from that judgment to a higher court is there any other course open, I suggest to the Prime Minister, than to recognize (a) that this is a question of privilege, and (b) that it should be referred to a committee so that it can be resolved in a manner satisfactory to all concerned?
I cannot understand the Prime Minister failing to take this course. The Prime Minister shakes his head. I suggest to him that if this matter is not regarded as a question of privilege, if this house declares that it is not a matter of privilege, if this house does not accept this motion and give the opportunity for a final settlement of this matter, there will always rest in all its power and sanctity a judgment of the court which reflects seriously upon the conduct and actions of one hon. member of this house. I say, then, that what ought to be done forthwith is for the Prime Minister to recognize that in this matter he does not speak as a leader of a party; he speaks as the Prime Minister in this house. He should give us a lead, a lead which will enable us to determine whether or not there is an answer to the findings made by the court, instead of resting upon the argument that all the precedents show that a charge must be made, when the documents before us clearly indicate that is not the case. I ask the Prime Minister to rise from his political moorings to recognize his responsibility to this house, and to give it the kind of direction and leadership which this parliament and this country I know will demand.


Edmund Davie Fulton: Mr. Speaker, I rise at this stage primarily for the purpose of setting the record straight with respect to an erroneous statement made by the Leader of the Opposition (Mr. Pearson) this morning as to the pattern of previous motions of this sort. Mr. Speaker, I shall prove that the Leader of the Opposition has completely misstated the effect of those motions, as I shall show by reference to, I believe, every motion of this sort since confederation.
If the Leader of the Opposition has read, as he said he did, the full text of these motions, I am completely unable to understand how it was he could come before the house this morning and make the statement that he did make as to their effect. What were the statements with which the Leader of the Opposition was dealing when he said that motions of this kind did not necessitate the laying of charges? They were statements made by the Prime Minister and by myself to the effect that always, in motions of this sort, specific charges had been made, and that certainly they had been made before

the house would take into consideration a motion of this sort or refer it to a committee.
Let us look at the history of these motions. Here is what the Leader of the Opposition said about that statement as I took down his words this morning and made notes of them and if he believes I am misrepresenting them I shall be glad to be corrected. As I understood him this morning; he said that the Prime Minister's contention that a charge would be required, and the statement by myself that a charge must be embodied in the motion, and the Prime Minister's statement that there had to be an allegation of improper conduct whereby the member concerned had furthered his private interests, had no foundation whatsoever.
Let us look at the motions as they have been laid since confederation. The first is dated April 9, 1877 and is a charge against an hon. member of that day, the Hon. Mr. Anglin, to which reference has already been made. I may say that the Leader of the Opposition and members of his office have apparently taken all the English Journals out of the library-and I have only the French copies. I find the same situation applies with reference to several other volumes of the Journals, which hon. members opposite have been reading, or to which they referred, and, as I say, if they have read them I find it difficult to understand how they could have made the statements which they did make.
The motion, in this 1877 case, contains these words:
That the attention of this house having been called to the reports, returns and affidavits laid on the table concerning the payment of public money to the Hon. Mr. Anglin . . . for printing and stationery for the Post Office Department, the said papers be sent to the standing committee on privileges and elections.
If that is not a specific allegation of the misuse of public money-


Some hon. Members:: No, no.


Edmund Davie Fulton: -I am unable to agree with hon. members opposite about the use of words.


Paul Joseph James Martin: It is a statement of fact.


Edmund Davie Fulton: The statement made is that the Hon. Mr. Anglin was paid public moneys for printing and stationery for the Post Office Department.


Lester Bowles Pearson: A report was to that effect.


Edmund Davie Fulton: Hon. gentlemen opposite may try to make all the refinements they wish, but I believe I have correctly stated the effect of that motion and it bears out what the Prime Minister said, namely that before any hon. member can ask this house to look
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into this matter or refer it to a committee there must be an allegation of improper use of public office for private benefit.
The next motion was in 1890, as reported at page 175 of the Journals, the Rykert case. I am not going to read the motion in detail. It is true that the motion as finally adopted was amended. But what did the hon. member who brought the matter before the house do? He adopted the proper course. He said that it appeared from certain documents and correspondence:
That the said Rykert did make use of his position and influence as a member of this house, in the matter of the said limits, for his own pecuniary advantage; and that he did afterwards make a statement, from his place in this house, with regard to his connection with and the obtaining the said limits, entirely at variance with the facts, and calculated to mislead the house and the country.
I hope hon. gentlemen opposite are not going to argue that this was not a specific charge of improper conduct, and conduct for the personal advantage of the member concerned.


Lester Bowles Pearson: It appeared in documents.


Edmund Davie Fulton: It appeared in documents, yes, but the member making the motion that the committee be set up made the specific charges himself.


Lester Bowles Pearson: And the motion was amended to take them out.


Edmund Davie Fulton: In this particular case, yes. The motion was amended to take out the charges. But the charges had been before the house. Let us now look at all the other motions, because the Leader of the Opposition said he had read them all and that they did not support the statement made by the Prime Minister. We come to the McGreevy case and here again I point out that the member making the motion made a charge from his seat alleging specific evidence of specific improper conduct. Here is one of the allegations:
That before tendering, and in order to secure the influence of the Hon. Thomas McGreevy, then and now a member of the parliament of Canada, and a member of the Quebec Harbour Board by appointment of the government, Larkin, Connolly and Company, took into partnership with themselves Robert H. McGreevy, a brother of the said Hon. Thomas McGreevy, giving him a 30 per cent interest in the firm, and this was with the knowledge and consent of the said Hon. Thomas McGreevy.
The next case was in 1894, and the allegation moved by Mr. Bruneau, contained the following:
That the said Arthur Joseph Turcotte, while a member of this house, sometime in the year 1893 was interested in contracts and agreements with the Department of Marine and Fisheries for the government of Canada, on behalf of the crown, and large sums of public money of Canada were

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paid under said contracts and were received by the said Arthur Joseph Turcotte, which said contracts were tor the supply of groceries and similar goods for the use of the Department of Marine and Fisheries.
That motion contained an allegation, as in the case of the previous one which I read out. The next case in 1903, was the case of Mr. Loy, and again it was moved by the hon. member who made charges in the house specifically to the following effect:
That from the time the said George Loy handed his said property to Archambault up to the day of the sale of said property to the crown or government of Canada, he never ceased to be the proprietor of said property, and that at the time of the sale of said property, on the 20th January, 1903, said Robert Brice Johnston was merely acting for and on behalf of said Loy, who in said manner did indirectly sell his said property to the crown or government of Canada, in violation of Chapter II of the revised statutes of Canada 'An act respecting the Senate and House of Commons'.
The next case in 1911 is one to which I have already referred this morning. It is the motion against Mr. Lanctot, and it contained a definite allegation, and I quote:
That said goods were so fraudulently appropriated to, and said work so fraudulently done at the expense of the government of Canada, for the benefit of the said Adelard Lanctot, then and now a member of the house as aforesaid, with his knowledge, assent and approval, the said Adelard Lanctot abusively and fraudulently profiting at the public expense and to the public detriment, by his position as member of the house.
That motion, also containing a charge, was adopted by the House of Commons. Then we come to the Foster case in 1915 about which hon. gentlemen opposite have sought to make so much. Here, the motion was to refer a report to a committee. That is true, but the great distinction in this case was that there was no allegation sought to be made against a specified member, and there was no motion to refer the matter to the committee of privileges and elections. The matter did not arise as a breach of privilege at that time; it was a motion asking that certain public documents, being accounts of financial transactions, be sent to the public accounts committee. When the hon. gentleman finds himself on such extraordinarily weak grounds that he is driven to this case in order to attack the statement that in every motion of this kind a charge has been made, it clearly shows the weakness of his case as a whole. The motion in the Foster case is in no sense applicable to this situation.


John Whitney Pickersgill: Mr. Speaker, would the hon. member permit a question about the Foster case?


Edmund Davie Fulton: The final cases were in 1924-


John Whitney Pickersgill: Would the hon. member permit a question about the Foster case? Would the Minister of Justice maintain that Mr. Maclean's motion was not a motion of privilege?


Edmund Davie Fulton: Mr. Speaker, Mr. Maclean's motion speaks for itself.


John Whitney Pickersgill: Exactly. He was a private member.


Edmund Davie Fulton: Mr. Maclean's motion was to the effect that sessional papers numbered 122 and all other papers in relation thereto being copies of correspondence between the auditor general and the department of militia and other departments of government laid upon the table of the house in respect to expenditures under the War Appropriations Act be referred to the select standing committee on public accounts. In that motion, Mr. Speaker, there is not the slightest reference to the conduct of a member.


Lester Bowles Pearson: He could not have made it except as a matter of privilege. He was a private member.


Edmund Davie Fulton: What we have said is that if one wishes to attack the conduct of a member then the person making the motion must be specific with reference to the conduct he seeks to attack.
Coming down to the cases of 1924, there are two cases in that year. Again I only have available the French copy but I believe I am translating correctly when I read from page 299 of the Journals of 1924 in French which accused James Murdock, as has been pointed out by the Prime Minister, of having received advantage and personal profit to the extent of the withdrawals that he had made contrary to his obligations as minister and in contradiction to his function and the honour, dignity and traditions of parliament. That, I think, is the last of the cases.
I have cited these cases at length, because this list, I believe, covers every case of this nature which has come before parliament since confederation. These recitals establish that in every case where a motion of this sort has been made and has sought to raise the conduct of an individual member as a matter of privilege and have that matter referred to the committee on privileges and elections then the member making the motion has been required to state specifically what is the conduct that he complains of, how in his view it amounts to a breach of privilege and what is the evidence or proof that he intends to rely upon to prove his charge.
In every case the matter has been brought before the house by way of a motion containing a personal charge. That has been

true in every case of this sort. I believe it is important to have those cases on the record because of the extraordinarily misleading statements made about this matter by the Leader of the Opposition this morning.
In conclusion, Mr. Speaker, I suggest to you that there is a compelling reason why in making a motion of this kind the mover must state in what respect he alleges or charges that the member of parliament concerned has been guilty of a breach of privilege. The reason is this. It is the duty of the Speaker to decide whether or not in fact a breach of privilege or the privileges of the house are involved here in order that such a motion may take precedence over the other business of the house. It is, of course, impossible for the Speaker to determine whether there is a question of privilege or a breach of privilege here unless the hon. member making the motion follows what I suggest is the honourable course of stating specifically how it is that he alleges this is a breach of privilege. Otherwise we have nothing but these vague generalities to go upon.
So the issue is simply this. There is here a judgment in the exchequer court. I am surprised-perhaps I should not be surprised because it is done often, but shall I say, I could not help but note-that the hon. member for Essex East (Mr. Martin) and I think also the Leader of the Opposition and one or two other hon. members have attempted to suggest that I am criticizing the judgment of the exchequer court.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: The "alleged" findings.


Edmund Davie Fulton: I have in no way criticized the judgment of the court nor have I at any time attempted to repudiate the court's findings. The judgment is there. But the interest of the situation arises from the fact that when we ask hon. members opposite in what respects they suggest that the conduct referred to in that judgment amounts to a breach of privilege they are suddenly overcome with shyness and modesty and say, "Oh, that is not our job."


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: Look at the motion.


Edmund Davie Fulton: They say: That is not our job; we want a witch hunt, we want the committee to find out if there is anything at all that can be suggested or dragged in on the basis of which a charge could be made.
The record is there for us to examine. The exchequer court's judgment speaks for itself. We say that if it discloses a breach
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of privilege-and that is the allegation made by my hon. friends opposite-we would be extremely interested in knowing in what specific ways they say there has been a breach of privilege.


Lester Bowles Pearson: Why do you not listen?


Edmund Davie Fulton: Surely, Mr. Speaker, when you are confronted with the extremely difficult and important duty of making the decision you have to make, when you yourself have besought hon. members opposite to give you the assistance you need by specifying the ways in which they say the conduct referred to in the judgment constitutes a breach of privilege-


Lester Bowles Pearson: What about the agreements?


Edmund Davie Fulton: -and when, as I say, they are overcome with shyness and modesty when confronted with these simple questions, then to my mind, and I am sure to Your Honour's, it is a complete indication that in fact they know that the document itself discloses no breach of privilege.


Some hon. Members:: Oh, oh.


Lionel Chevrier: Mr. Speaker-


Mr. Speaker:: Does the hon. member for Laurier feel he can add anything at this stage to this debate?


Lionel Chevrier: Yes, Mr. Speaker, I should like to participate in this debate.


Mr. Speaker:: We have heard from both sides of the house for two and one-half hours and I think the advice and assistance I have had are all that I can bear. However, I do not want to prevent any hon. member who feels that he can contribute to this point from doing so. After all, it is a very important issue which seldom comes before the house in so definitive a way as it has in this motion. If the hon. member feels he can contribute something useful, I am prepared to hear him.


Lionel Chevrier: May I draw to your attention, Mr. Speaker, the fact that the Minister of Justice has already spoken twice on this matter?


Edmund Davie Fulton: So has the Leader of the Opposition.


Mr. Speaker:: I believe I have heard equally from both sides but if the hon. member has something to contribute I will hear him. I trust, however, that he will be the last participant.


Lionel Chevrier: It will be up to you, Mr. Speaker, of course, to determine whether I have something to contribute in the course of

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this debate, but I am prompted in rising not only because of the statements that were made by the Prime Minister (Mr. Diefen-baker) but more particularly because of the statements made by the Minister of Justice (Mr. Fulton). He rose on two occasions. The two occasions on which he spoke are entirely different in so far as the nature and the tone of that participation is concerned.
This morning he directed his attention to personalities, as the house well knows, and made it quite clear that we lacked the fortitude and courage in that a substantial charge had not been laid. This afternoon he proceeded to put on the record some of the earlier charges and some cases-


Edmund Davie Fulton: All of them.


Lionel Chevrier: -and he wound up his remarks by stating that it was the responsibility of the Speaker to decide whether or not there had been a breach of privilege.


Edmund Davie Fulton: No.


John Whitney Pickersgill: Hansard will show that that is what you said.


Lionel Chevrier: That is what the Minister of Justice said. My submission to you is that that is not the case and I say it with deference because if Your Honour looks at what is contained in Beauchesne's Parliamentary Rules and Forms, fourth edition, citation 104, paragraph 5, you will find this:
As a motion taken at the time for matters of privilege is thereby given precedence over the prearranged program of public business, the Speaker requires to be satisfied, both that there is a prima facie case that a breach of privilege has been committed, and also that the matter is being raised at the earliest opportunity.
Those, I submit, are the two points upon which Your Honour has to determine whether or not this motion is in order. Your Honour is not called upon to determine the question of privilege, it seems to me, with all deference. That is a matter for this house to determine. I go a step further in dealing with paragraph 5 of citation 104. It reads as follows:
If he-
That is, the Speaker. I continue:
If he is not so satisfied he may allow the member to make a statement with a view to ascertaining whether or not a prima facie case can be made out. The right of making complaint of a breach of privilege is open to any member of the house, and, even if an individual member alone is affected, is not confined to that member.
Mark you, there is no question here of a charge. It is clearly stated:
The right of making complaint of a breach of privilege is open to any member of the house, and, even if an individual member alone is affected, is not confined to that member.

I say to you, sir, that this motion which is now before you and before the house is properly before the house.
It has been suggested here by both the Prime Minister and the Minister of Justice that this debate must be circumscribed; that there must either be a charge on the one hand or on the other hand nothing at all. That is the effect of the statements made by both hon. gentlemen. Either put up or shut up. That is the effect of the statement.


Some hon. Members:: Hear, hear.


Lionel Chevrier: I knew that that would immediately draw strong applause from the other side. In other words, it means this. Either you must lay a charge or you cannot do anything. That is not the procedure laid down in the rules and in the motions and debates that have taken place previously. Anyone trying so to establish it, even if it be the Minister of Justice, is making an inaccurate and an erroneous statement, because these are not the facts. If that were the case, then it would be impossible ever to question or ever to seek information having to do with the propriety of an hon. member, and that is certainly what the Leader of the Opposition is attempting to do by the motion which he has now put on the order paper.
The Minister of Justice and the Prime Minister referred to a number of cases. I shall not prolong the debate by dealing with those cases save two of them which have not been discussed, at least they have not been discussed thus far. The first of those is the Schell case. It came up in 1903 and the discussion of it can be found at page 4959 of the debates of June 18, 1903. Mr. Fowler asked this question:
Is J. T. Schell, member of the House of Commons, for the electoral district of Glengarry, a partner in the firm of McPherson and Schell, who supplied goods to the Department of Agriculture?
The amount of goods supplied in this case amounted to $5.50. It was the alleged supply of barrelheads by the hon. member to the Department of Agriculture. The reply of the minister of agriculture was that the government had no information as to the personnel of the firm referred to in the auditor general's report in connection with the item of $5.50. Then, on June 25, 1903, at pages 5416 and 5417 of Hansard, appears this statement on a question of privilege regarding the question asked previously, given by Mr. J. T. Schell, in which he said, and I quote:
I submit myself and the whole matter to the judgment of this honourable house.
Whereupon the minister of justice, conducting himself in an entirely different

fashion in those days from the Minister of Justice today, moved:
That the statement just read by Mr. Schell, the member for Glengarry, be referred to the committee on privileges and elections.
And the motion was agreed to. Was there any charge in this case? There was not the slightest iota of a charge. Then, a little later on in the course of the debate, Mr. Sutherland presented the first report of the select committee on privileges and elections and it was found that from the evidence adduced the committee found that the goods in question were sold by the firm of McPherson and Schell to the said Scott personally and therefore there has been no infringement of the law respecting the independence of parliament in this case. There is a clear cut case having to do with a very small amount which showed how in those days there was a great deal of jealousy in so far as the privileges of parliament were concerned.
Then, I come to the Daoust case, which has not been referred to during the course of the debate. In this case Mr. Taschereau moved on March 16, 1876 that certain papers be referred to the committee on privileges and elections as follows-and this will be found in the Journals of 1876, volume 10, page 160:
On motion of Mr. Taschereau, seconded by Mr. Laurier;
Resolved, that it appearing from the statement of Mr. Daoust, the member for Two Mountains, made in his place, that he is the person referred to in the papers, in the case of the Queen versus Daoust, the said papers be referred to the select standing committee on privileges and elections, to examine into the legal questions arising in the case, and to search for parliamentary precedents applicable thereto; and to report to this house the result of their enquiries, and whether any, and if so, what further proceedings should be taken by this house in the premises.
The committee reported back on March 28, 1878, and the conclusion which can be found in the Journals of 1878, volume 10, page 209, is as follows:
That for the reasons mentioned in the first and second resolutions, your committee are of opinion that the seat of Mr. Daoust is not vacant by reason of the premises, and therefore your committee do not recommend that any further proceedings should be taken by your honourable house in the premises.
Again, there was no charge, and not even the suggestion of a charge of the nature or kind that has been mentioned by the Prime Minister and the Minister of Justice. There was nothing other than an assignment to a committee to deal with the matter that was before the house.
Then, there is the case which has been mentioned both by the Prime Minister and the Minister of Justice, in which there was a charge. I should like to put this charge on 66968-9-307
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Hansard so that it may be compared with what was done in the Daoust and the Schell cases and in this case which I am about to deal with now, so that the house can clearly see what is a charge and what is not a charge, and how in certain cases the house has proceeded by way of a charge and in other cases it has proceeded in the same manner and to the same effect as the resolution which is now on the order paper. I refer to a definite charge proposed by Mr. Israel Tarte, which is to be found at page 146 of Hansard of May 11, 1891. Mr. Tarte rose and said this:
I believe, sir, I have every reason to believe, that I am in a position to prove, by documentary evidence and verbal evidence, every statement contained in the motion I am going to place in your hands; and those statements are to the effect that, since 1882 or 1883, the secrets of the Department of Public Works have been penetrated and divulged, for money considerations, to public contractors, by the hon. member for Quebec West (Mr. McGreevy), who, according to the evidence I have in my hand, has been paid year by year, contract after contract, large sums of money; that, during that period of time, he has used his influence, as a member of this parliament and as a member of the Quebec harbour commission, against the public interest on numerous and important occasions.
There is a charge, and there is all the difference in the world between that and the two cases I mentioned earlier, those of Schell and Daoust. Therefore, I say there is no truth in the fact that in order to bring a matter of this kind before the house, or before a committee of the house, a charge must be laid. Those who attempt to circumscribe the debate to that extent by saying that a charge must be laid are not doing justice to themselves and to the precedents of parliament.
I have a final case to bring to the attention of the house. Mention was made of it earlier, but some of the statements contained in this case I do not believe have been put on the record. I would like to put them on now. It is the case of Mr. Boothby, which can be found in the United Kingdom parliamentary debates, fifth series, volume 365, at page 830. On that occasion the prime minister of the United Kingdom, Mr. Churchill, rose and made this motion:
That a select committee be appointed to Investigate the conduct and activities of Mr. Boothby in connection with the payment out of assets in this country of claims against the government of and institutions in the Republic of Czechoslovakia: to report generally on these matters and in particular to consider and report whether the conduct of the hon. member was contrary to the usage or derogatory to the dignity of the house or inconsistent with the standards which parliament is entitled to expect from its members.
That is in essence the same kind of language which is to be found in the motion moved by

Business of the House
the Leader of the Opposition. Listen to what Mr. Churchill said on that occasion. He said:
I have placed a motion on the paper, which is in the possession of hon. members, the terms of which they have no doubt studied.
That was the reason why we gave 48 hours notice of this motion. It was incumbent on the part of the Leader of the Opposition to have raised this matter without motion, without notice, because under the privileges of the house any hon. member may, before the routine proceedings of the day are reached, raise a question of privilege. Yet because the Leader of the Opposition gave 48 hours notice he is being censured and it is stated that he lacked courage. The same thing was done in the United Kingdom. Mr. Churchill went on:
It will be remembered that after the occupation of Prague-


Gordon Minto Churchill: Read the sentence before
that.


Lionel Chevrier: I am sorry. Let me begin again, if I may, so there will be no doubt about it.
I have placed a motion on the paper, which is in the possession of hon. members, the terms of which they have no doubt studied. The house will require to know the grounds on which this motion has been put down.


Gordon Minto Churchill: That is right.


Lester Bowles Pearson: What do you think we have been doing this morning?


An hon. Member:: Nothing.


Lionel Chevrier: There are at least ten grounds to be found in the motion. May I go on?
It will be remembered that after the occupation of Prague certain Czech assets were blocked in this country, and there arose the question of payments from these assets to those who had claims against the Czech government or institutions in that country. The hon. member for East Aberdeen (Mr. Boothby) took a very active part interviewing ministers in this matter, pressing for legislation, and he spoke in this house on the bill which was subsequently introduced. He became chairman of an informal committee of Czech claimants, and has pressed for the payment of claims. Evidence has recently been placed before the government which indicates that the hon. member had a financial interest in one large claim. This appeared to be inconsistent with a statement he had made to the former chancellor of the exchequer, and, together with other evidence, it seemed to raise the question whether his action had been in accordance with the usages of parliament, or the standards it is entitled to expect from its members.
Is there a charge by Mr. Churchill?


Gordon Minto Churchill: A charge with regard to financial interest.


Lionel Chevrier: Then he went on to say:
When I communicated these apprehensions to the hon. member it became clear that there was a conflict between the evidence in the possession 
of His Majesty's government, and the facts as he described them. The matter, therefore, requires to be investigated by a committee of this house. I considered whether I should then move that it should be referred to the committee of privileges but, after obtaining guidance as to the precedents, I came to the conclusion that as the case appeared to raise other issues besides that of privilege, it was better that it should go to a select committee, so that the truth could be ascertained and the conduct of the hon. member considered.
I could go on and read the rest of Mr. Churchill's statement but there are just one or two other sentences that I want to put on Hansard. Mr. Churchill added:
I do not consider it fitting at this stage to call for the hon. member's resignation of the office which he holds with distinction in the government, as this might appear in the eyes of the public to prejudice the issue. The hon. member has, however, asked to be suspended from his duties in the meanwhile, and I am prepared to make the necessary arrangements for this.
Then, a little farther on:
It would be manifestly improper for me to enter into detail upon the matters which will be investigated by the select committee-
That is the point under discussion now.
and, still more, that we should debate matters which, if this motion is accepted, will at once become sub judice.
That is what members on the other side of the house want us to do. They want us to debate matters now which, if we did, would become sub judice if the matter is referred to a select committee or to the committee on privileges and elections.
The terms of reference have been widely drawn, but when the evidence is heard I do not think the committee will have any difficulty in deciding what matters are relevant to their inquiries.
There is a precedent in the mother of parliaments, as it has often been called, which clearly indicates-I say this in all frankness -that on a matter far more serious than this one now before us there was no charge laid but none the less it was referred to a committee. This business of trying to scare members of the opposition into laying a charge or doing nothing has had absolutely no effect at all, first, on the Leader of the Opposition and, second, on the rest of us. You may go on making that statement as long as you like. That is not the practice which has grown up in the house and I am sure it is not going to be the practice in the future.
May I pass on now to another aspect of the case? What is being done by the terms of this motion? We are not prejudging the case at all.


Some hon. Members:: Oh, oh.


Lionel Chevrier: This is not a censure on the member. We are putting the judgment of

the court before the house. It is the judgment of the court which censures the member of parliament.


Some hon. Members:: How?


An hon. Member:: Nothing of the sort.


Lionel Chevrier: My hon. friends say, "Nothing of the sort". The judgment of the court says this, and I will put it in the form of a question rather than an affirmation so that I will not be accused of being unfair to the hon. member. The question arising in the judgment is this: Is it proper for an hon. member to recommend the appointment of an independent appraiser with the one hand and with the other make sure that his independence is lost altogether? That is the point which arises out of this judgment. That is the gravamen of the judgment, and unfortunately that is what hon. members have sought to avoid altogether.


An hon. Member:: Is that your charge?


Lester Bowles Pearson: It is the judge's charge.


An hon. Member:: Answer the question.


Lionel Chevrier: Let me pause for a moment to give some indication of how these valuations take place, if I may. There is in the Department of Transport a very efficient lands and real estate branch. It has officers all over the country and it has a number of officers in the city of Toronto. When a property is sought by Her Majesty the Queen for the benefit of Canada a notice of expropriation is filed against that property and then the valuator or appraiser proceeds to discuss the question of settlement with the property owner. Sometimes a settlement is arrived at without difficulty. At other times owners will not accept the amounts offered by the appraisers.
In such cases, as mentioned in the judgment, there were a large number of property owners who had accepted the amount of compensation set by the appraisers of the department. But there were some eleven who were not able to accept the valuations. In the preamble to the judgment it is stated that an agreement was made between the minister and the property owners that they would be bound by the valuations of Mr. Clare. The minister, of course, denied that statement. The question which arises is this and it is one which has to be determined by you, Mr. Speaker. Is it proper for a member to seek to bind the crown in such a manner? That is a question which falls to the determined-


Mr. Speaker:: May I ask the hon. member whether he said that the judgment found that the department had agreed to be bound by the valuation?
66968-9-307J
Business of the House


Lionel Chevrier: No, Mr. Speaker, I did not say that. I said that in the preamble of the judgment it was alleged by the suppliant in the issue that that was the case. Then further the question which arises is this. Is it proper for a member of parliament to proceed to act in this fashion? Is it proper for him to receive, as was stated in the judgment, the valuations himself from Mr. Clare and give them to the minister's executive assistant? Is that a proper act? Again that will be a matter for the committee to determine. Was the member interfering improperly in the administration of the affairs of the Department of Transport by so acting? A couple of the officers of the Department of Transport or at least one of them, the assistant deputy minister, Mr. Booth, made it quite clear to the minister that all this was irregular and that it should not be done.
Then, of course, there is the matter of the independent evaluator. The minister, I believe in the course of the consideration of his estimates, said that he was satisfied with his qualifications as a real estate appraiser. But that is the whole point. Was he an independent real estate appraiser in the ordinary sense of the term or in the ordinary common parlance? If he received instructions whereby he was bound beforehand, then he was not a qualified real estate appraiser. Neither was he an independent appraiser. These matters are to be found in the judgment and are matters of record.
Then, Mr. Speaker, there were several valuations that had been made of the property. I believe it was stated that six valuations were made. Why was it necessary to make another one? I can see no reason why, under normal circumstances, there should not be an independent appraiser. There is nothing abnormal about bringing in an independent appraiser when the officers of the Department of Transport are unable to get agreement on the valuation of a property. But when there have been six such so-called independent evaluators called in, is it necessary to have still another? That is a matter which I believe deserves clarification. The judge made a clear finding that there was no indication whatever of an independent valuation.


Mr. Hees:: May I be permitted to ask a question?


Lionel Chevrier: Yes.


George Harris Hees: The hon. member has suggested that there is something irregular about having an independent valuation after five or six independent valuations have been taken. His predecessor in office had these five independent valuations taken previously. Would

Business of the House
he say that his predecessor in office was at fault in having a third, fourth, fifth or perhaps sixth valuation taken?


Lionel Chevrier: Apparently the minister was not listening.


George Harris Hees: Oh, yes; I was listening.


Lionel Chevrier: I clearly stated that there was nothing the matter with bringing in an independent appraiser. I made that statement quite clearly. But I said that when there had been as many as six appraisers already on the case and when the officials of the Department of Transport were satisfied with the appraisals that were then made, I asked the question-as the judge must have asked himself-whether it was necessary to call in an additional one. If the valuation was too low which the independent appraiser-


Donald Methuen Fleming: Mr. Speaker, I rise on a question of privilege. What has this matter which the hon. member is now discussing to do with the essential question of whether the privileges of the house are involved?


An hon. Member:: Nothing.


Lionel Chevrier: That is exactly the point, Mr. Speaker.


Mr. Speaker:: I think the hon. member is asking a question but perhaps not indicating that, if the answer is of a particular character, there is a breach of the privileges of the house involved. I was hoping that he was coming to that and I therefore allowed him to continue. I expect that the hon. member is near the end of what he has to say.


Lionel Chevrier: My hon. friends cannot have it both ways. They want us to lay a charge. We have proceeded to show that a charge need not be laid or rather need not necessarily be laid and that there are many occasions as shown in the debates where charges were not laid and where investigations took place. I am now proceeding to indicate the statements contained in the notice of motion and my hon. friend the Minister of Finance rises and says that this procedure is irregular. Let me just read-


Mr. Speaker:: If the hon. member who is dealing with the affirmations as they are called in the judgment, would not simply ask a question, assuming that the valuator was not independent, for example-and that was one of the questions-would then go on to indicate what privilege of the house has been thereby breached, that would answer the question which I initially asked him.


Lionel Chevrier: Then may I put on record a statement of the judge-


Some hon. Members:: No.


Lionel Chevrier: -dealing with this matter. It is to be found in the judgment.


Mr. Speaker:: I think that the hon. member might confine himself to the allegations in the motion itself which have been abstracted from the judgment and which are all that are before the house.


Lionel Chevrier: Will Your Honour just allow me to read one short sentence. It deals with the matter which is now under discussion and which is also in the motion. It reads as follows.


An hon. Member:: Answer the question.


Lionel Chevrier: The president of the Exchequer Court of Canada has said this:
I have no hesitation in rejecting Mr. Clare's valuation. I do not believe that he was a free and independent appraiser.
I do not want to go any further than that. That ought to dispose of the matter having regard to the point about which His Honour the Speaker inquired.


Mr. Speaker:: If the hon. member accepts that statement of fact, would he then say that by reason of that statement the hon. member whose conduct is impugned is not a fit member to sit in the house?


Lionel Chevrier: Oh, Mr. Speaker-


Some hon. Members:: Oh, oh.


Mr. Ricard:: He is afraid of that.


Lionel Chevrier: Mr. Speaker, I do not think that question is a proper one coming from the Speaker of the house.


Mr. Speaker:: I indicated at the beginning of this request for the assistance of the members of the house that I was concerned to know whether, if all of the affirmations in the judgment were accepted as fact, a breach of the privileges of the house would thereby arise and, if so, in what way. I have had no answer specifically to that question. I had hoped that the hon. member who has the floor would give me some assistance. He must appreciate the fact that I accept his statement and the other statements of law that it is my duty to determine whether there has been established a prima facie case of breach of the privileges of the house. If it is alleged that there is a breach of the privileges of the house it seems to me that I should know what privilege has been breached.


Lionel Chevrier: I agree that that is a responsibility which is yours, Mr. Speaker. But with great deference I say that it is not the responsibility of the Chair to draw from me a conclusion which belongs to the house.

It is a statement which it is the responsibility of the house to determine as to whether or not there has been a breach of privilege. I submit, sir-


Some hon. Members:: Oh, oh.


Lionel Chevrier: If I may have silence perhaps I can proceed. I submit there is a prima facie ease the moment the judgment is produced. The moment the judgment is produced and is read there is to be found there, and I say this with deference to you, sir, everything that embodies a prima facie case which throws the presumption on the other side of the house to rebut. The only way in which that presumption has been rebutted is in this fashion: "Oh, lay a charge. Lay a charge or shut up."
I submit that the precedents show quite clearly that there is an intermediate position between laying a charge on the one hand and doing absolutely nothing on the other. Therefore I would ask this final question.


Mr. Drysdale:: Get off the fence.


Lionel Chevrier: My hon. friend behind me says, "Get off the fence". There is no better example of people sitting on the fence than hon. members who sit in the cabinet of the present government, so let my hon. friend not interrupt me with a remark about fence sitting.
I ask this question:	If the hon. member
had not been a member of parliament could he have done what he did effectively? If he were not a member of parliament, particularly a government member of parliament, could he have recommended the appraiser with the one hand, assuring the department that he was independent, and with the other hand have given him instructions to make sure that he was not independent? As I have stated by citing the statement in the judgment, here is a question calling the conduct of the hon. member in question. But we have had other examples of this before, and I would just like to remind the house of a statement made by the former leader of the opposition against the Right Hon. Mr. Howe. There was no question here of a charge of the nature of the McGreevy case. In this case Mr. Howe rose and made these remarks, which will be found in the debates of March 5, 1951, page 901:
That is the cheapest remark that has ever been made in this House of Commons. C. D. Howe and Company Limited has been in existence for thirty-five years. I severed my connection with it in 1935. The trade was notified, and so were the customers, that 1 had no association with it. I do not seek advice from it, and I do not go into the company office. I suggest that my hon. friend has gone down in the estimation of this house by such a remark. I never thought too much of him before, but I shall think less of him from now on.
Business of the House
Did the hon. leader of the opposition resign his seat because of this?


John George Diefenbaker: What was the allegation?


Lionel Chevrier: The allegation was that the right hon. minister had an interest in the C. D. Howe Company.
Then again there is the case of Mr. A. E. Dewar, the former member for Qu'Appelle, against whom certain statements had been made both in and out of the house, and I will give the house an idea of what was done on that occasion. A statement was made by the hon. member, and it is to be found on page 29 of Hansard of 1953.


Gordon Minto Churchill: He resigned.


Lionel Chevrier: Yes, he resigned, but at least he made a statement. So did others who found themselves in similar circumstances.
Therefore I say that the precedents are not as our hon. friends on the other side have indicated. There is an intermediate position. It is not necessary in order to have the matter investigated to lay a charge. That is not the practice or the jurisprudence in the House of Commons. But it seems to us on this side of the house that there has been established a prima facie case to allow this matter to go to a committee for investigation.


Lester Bowles Pearson: Mr. Speaker, may I have permission to ask Your Honour one question before you make your ruling? It arises out of the motion and the excerpts from the court judgment which we have included in the motion. My question is this: If this motion is ruled out of order, does it mean that no question of privilege can be raised in this house for submission to a committee which arises out of allegations, direct or implied, made against a member of this house outside the house by a judgment of a court or in some other way, unless a member associates himself with those allegations to the point where he has himself to lay a charge against another hon. member?


Mr. Speaker:: I think there is a fairly clear difference of opinion on the question which the hon. Leader of the Opposition has just raised. We have had a very full and lengthy discussion of the legal principles of procedure which are involved in dealing with a motion of this kind, which purports to be a motion on the question of privileges of the house.
I feel sure that hon. members would want me to give a fully considered judgment in a matter of this kind, and as I see that no harm will be done by delaying the delivery of the judgment I would ask hon. members to give me that forbearance so that I can

Starred Questions
consider what has been said and come to what I hope will be a correct solution to a point which to my mind is of great significance. It is for that reason I make this request.
As I said, it is not a frequent occurrence in the house, fortunately, but it does involve a matter of procedure of great importance to hon. members, namely what ground has to be laid before it is the duty of the house to take under consideration as a matter of privilege some conduct of one of its members. What turns on the decision, of course, is whether this motion is debated at once or whether it is a notice of motion which stands on the order paper for later consideration and is not a motion of privilege because, as I said at the beginning, the motion can clearly be brought. At least I am reasonably clear that it may be brought by any member as a notice of motion, but if it is asserted that it is a motion of privilege, then the preliminary question is, is a prima facie case of breach of privilege of the house involved? That is the point which I shall deal with later.
May we then pass to the next order of business.



MOTION FOR APPROVAL OF INTER- NATIONAL AGREEMENT

[Stage Direction]
On the order:	Government notices of
motion.
June 15-the Minister of Trade and Commerce- the following proposed resolution:-That it is expedient that the houses of parliament do approve the international wheat agreement opened for signature at Washington, D.C., on April 6, 1959, and that this house do approve the same.
Mr. Speaker:: Pursuant to section 2 of standing order 21, this government notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the house.



STARRED QUESTIONS


Mr. McMillan: What is the present average yield at price to the government, including all costs, on all borrowings made since July 1, 1957, and including the conversion loan of 1958?


Donald Methuen Fleming: Mr. Speaker, the answer is as follows: 4.128 per cent for an average term of 9.629 years.


BOARD OF REFEREES CHAIRMAN, UNEMPLOYMENT INSURANCE COMMISSION, TORONTO
Mr. Hellyer: 1.	Has the chairman of the board of referees of the unemployment insurance commission at Toronto been relieved of his duties?
2.	If so, what was the reason for his dismissal?
[Mr. Speaker.)


Hon. Michael Starr (Minister of Labour):: Mr. Speaker, the answer to the first part of the question is yes. The answer to the second part is as follows. Chairmen of boards of referees are appointed and hold office at the pleasure of the governor in council. Mr. Cooper, the chairman referred to, was appointed in February, 1942. His replacement was made in accordance with a policy to review all such appointments and to make new appointments where it was felt necessary to do so in line with changing conditions.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Martin (Essex East): 1.	What were the names of the chairmen on the board of referees operating under the unemployment insurance commission as of June. 1957?
2.	How many of these are still acting in this capacity?
3.	Have any been replaced? If so, how many and for what reason in each case?


Michael Starr: Mr. Speaker, because of the fact that the answers to this question are of great length and detail I would request this be made an order for return.


Paul Joseph James Martin: May we have an answer fairly quickly?


MOTIONS FOR PAPERS
[Stage Direction]
Motion No. 120-Mr. Brassard (Lapointe):
For a copy of all telegrams, correspondence, reports and other documents exchanged since August 1, 1958, between all persons or public bodies, and the Canadian Maritime Commission or the Department of Transport, regarding the ferry service operated by Rosario Harvey between St. Joseph de la Rive and St. Bernard de l'He aux Coudres, in the county of Charlevoix.
Mr. Brassard (Lapointe):: Mr. Speaker, I have had a word with the Minister of Transport with regard to this motion and also with the chairman of the Canadian Maritime Commission, and as I have been supplied with the information required I wonder whether with the unanimous consent of the house I could withdraw it.


Mr. Speaker:: Has the hon. member leave to withdraw?


Some hon. Members:: Agreed.
Order discharged and motion withdrawn.


SARNIA INDIAN RESERVE-LAND ACQUISITION BY ONTARIO HYDRO
Mr. Pickersgill: For a copy of all communications including memoranda of telephone conversations, since January 1,

1958, between the Ontario hydro or any of its officials on the one hand; and the Minister of Citizenship and Immigration or any officials of the department, on the other, regarding the acquisition by Ontario hydro of land on the Sarnia Indian reserve.
Motion agreed to.


TERRA NOVA NATIONAL PARK
Mr. Pickersgill: For a copy of all communications received by the Minister of Northern Affairs and National Resources or any official of the department at Ottawa since February 18, 1959, regarding employment in Terra Nova National Park, together with a copy of all replies thereto.


Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: I have no objection to this motion, except the usual reservation with regard to privileged documents.


John Whitney Pickersgill: May I just put a question to the minister. Since this question does not refer to private correspondence, what does the hon. gentleman mean by "privileged documents"?


Francis Alvin George Hamilton: Those which have been accepted as such under the rules and practice of this house.


John Whitney Pickersgill: I am rising on a point of order. I know of no such reservation. Certainly that phrase was never used when we were in office. If it is not already quite obvious, this question is certainly not intended to cover intergovernmental communications with regard to which the phrase has, of course, been used in the past, and in these circumstances it does not seem to me that any reservation of any kind should apply.


Mr. Speaker:: Perhaps the minister could state more explicitly the reservation which he desires to attach to the acceptance of this motion.


Mr. Benidickson:: Political reservations.


Francis Alvin George Hamilton: I know of no document which I cannot table, but I think it is customary that when documents come marked "personal and confidential" they should remain so.


Mr. Speaker:: Shall the motion carry, subject to the reservations expressed by the minister?


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: In view of the fact that the Prime Minister, according to the press, made a very interesting statement in the United States yesterday on the work of the Geneva
Inquiries of the Ministry conference, I wonder if he would favour the house with the views of the government regarding this very important matter.


Howard Charles Green: In answer to the question which has been asked, I think it is correct to say that a crucial stage has been reached in the foreign ministers' conference at Geneva. A private meeting is being held today at which the three western foreign ministers will be tabling revised proposals for an interim solution for the problem of Berlin. The Soviet foreign minister had previously submitted proposals for Berlin which the western powers found unacceptable, particularly so because they seemed to contain a threat of unilateral action toward the elimination of western rights in Berlin if certain conditions were not met. It is to be hoped that a sufficient common basis can be found for the continuation of negotiations.
I think perhaps there would be very little which would be helpful that I could add at this particular time.
(Translation):



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. L. J. Pigeon (Jolietie-L'Assomplion-Monfcalm):: Mr. Speaker, I should like to direct a question to the Postmaster General. Will the Post Office Department issue a special stamp in 1960 to commemorate the third centenary of the heroic deed of Dollard des Ormeaux at Long Sault?


Hon. W. M. Hamilton (Postmaster General):: Mr. Speaker, we are now considering the choice of postal stamp designs for 1960, and we shall probably have a detailed announcement to make in this regard before long.
(Text):



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: May I ask
the Minister of Labour if he has any comments to make on the statement of the premier of Quebec that employees of the provincial government should not seek to be included under the provisions of the Unemployment Insurance Act which was introduced by a Liberal government in this house in 1940?


Michael Starr: No, Mr. Speaker.

Unemployment Insurance Act BUSINESS OF THE HOUSE



INQUIRY AS TO AMENDMENT OF NAVIGABLE WATERS PROTECTION ACT

[Stage Direction]
On the orders of the day:
Mr. J. R. Garland (Nipissing):: I wish to address a question to the Minister of Transport or the Minister of Public Works, each of whom has a responsibility in this matter. Does the government intend to introduce legislation this session to amend the Navigable Waters Protection Act with respect to certain misuses of our navigable waters?


Howard Charles Green: No, Mr. Speaker.



UNEMPLOYMENT INSURANCE ACT


[Stage Direction]
The house resumed from Tuesday, June 16, consideration in committee of Bill No. C-43, to amend the Unemployment Insurance Act -'Mr. Starr-Mr. Rea in the chair.
On clause 1-Repeal.
William Moore Benidickson: When we were discussing this matter at the time of adjournment last night I had not completed the few remarks that I wanted to make. I was drawing attention particularly to the decision made by the cabinet, and the suggestion that this decision was not in strict compliance, or adequate compliance, with section 86 of the Unemployment Insurance Act, and I pointed out that this section directs the unemployment insurance commission to requisition directly to the Minister of Finance for a loan. This is the first time a loan has ever been made, and I suggest this has been taken in a very casual way.
We heard references in the committee to conversations between the Minister of Labour and one member of the unemployment insurance commission, and then the minister told us he had a conversation with his colleague, the Minister of Finance. We know that on April 1 or April 2 there was an order in council authorizing a loan of $80 million, with the bonds of the unemployment insurance commission pledged with respect to the repayment of that loan. Overnight, I was confirmed in the view I held that the procedure had not been strictly complied with, and my curiosity has increased as to what went on in the latter days of March in this respect. The minister will recall that in the last sittings of the committee there were a couple of unanswered questions. These questions have subsequently been answered by the chief commissioner of the unemployment insurance commission. One of those questions was asked by the hon. member for Essex East, who inquired:

Did the commission recommend to the Bank of Canada that sales of securities be made to take care of the cash requirement for April 1959?
The chief commissioner has supplied the hon. member for Essex East with an answer to that question, and has also supplied a copy of his requisition, which is in formal form, unlike the kind of informal conversations which took place with regard to a matter of this consequence with respect to section 86 of the act, and my surprise was increased when I found that this requisition is dated March 25. We know it takes time to make submissions to the cabinet, but somehow between March 25 and April 1, this other decision was reached and without the type of requisition or request on the part of the unemployment insurance commission sitting as a commission and acting as a commission and dealing in an adequate and formal and proper manner as contemplated by the statute on something as serious as this.
Last night I made reference to the fact that while we are using hindsight as our base it turns out that perhaps this decision has not been particularly profitable for the unemployment insurance fund in that if the bonds had been sold earlier they could perhaps have been sold more satisfactorily than one would imagine at the moment because of the drop in the market value. I want to apologize to the committee, however, in that I had in mind the actual total drop from book value to present market value when I referred to $7 million. The actual drop as I calculate from April 1 to the present time would be about half that amount but that does not in any way reduce the import of my argument.
My argument simply is that a further substantial capital loss has taken place. I base this calculation on a figure of approximately 94f. According to my notes that was the market price of the 4J 1972 bonds around about April 1. If hon. members had looked at the Montreal Gazette this morning they would have seen that there is a 90 to 91 quotation in connection with these particular bonds.
I want to correct the statement I made last night in this category. The proper figure would be a further drop in market value of $3,500,000 with respect to the securities which were pledged. The argument remains the same, however. Why was not the commission asked for a requisition as contemplated in section 86? Why in something of this magnitude were the investment committee avoided? What were the general financial considerations that resulted in a decision which I say was taken by the cabinet itself in a way not contemplated by the statute?

Later in our discussion I shall perhaps have an opportunity to refer to the matter which in the committee on industrial relations we regarded as very serious concerning whether or not it was proper under such conditions as we have had in the last year or so to have two senior officials who are the chief advisors on debt management of the Minister of Finance sitting as two members out of three on an investment committee concerned with trust funds of this magnitude of which almost 80 per cent comes from nongovernment sources.
I was looking over the report of the committee discussion this morning and in that connection I find that I was misquoted in the committee on industrial relations. At page 379 of the minutes of proceedings and evidence dated June 9, 1959, when questioning Mr. Coyne I was reported as having said:
These witnesses-
Of the investment committee. I continue:
-were brought here on the motion of two government supporters. There is every justification to decide whether or not there is any possibility of having a dual responsibility or incompetency, as Mr. Martin said, in the investment committee-
Neither the hon. member for Essex East nor I used the word "incompetency". The word we used was "incompatibility". I am sorry this has remained so long in the record without my noticing it. I think that is confirmed by the final sentence of my remarks on that page where I am quoted as using the word "incompatibility". That was the word I had used previously. I went on to say:
That the committee said, is not so; that there has been no incompatibility-
"Incompatibility" rather than "incompetency" was the word I have consistently used in connection with this type of review.


Murdo William Martin: Mr. Chairman,
yesterday afternoon when I had occasion to speak briefly on this clause I dealt with two points. The first was the confusion which has been caused by this government and the second was the arrogance shown by this government with its tendency to use its vast majority to ride roughshod over the wishes and advice not only of the opposition but of various organizations throughout Canada.
This morning I received a letter which beyond any shadow of doubt bears out both points I made yesterday. I should like to place this letter on the record and then deal with the matters it raises. The letter is postmarked St. Catharines, Ontario, and reads as follows:
In the office where I am employed we have received (a week or more ago) from unemployment insurance commission, Ottawa, under date of June 1, 1959, their bulletin No. 20 advising
Unemployment Insurance Act changes in contribution and benefit rates effective June 28, together with table of amounts form UIC 465	(4-59).
Upon calling the local unemployment insurance commission for two more copies of these bulletins for use in our office, I was told they knew nothing about the matter, that they had no information, and did not believe the changes were in effect. I was advised to ignore the information!
I later called the post office, and they said they had had people coming in all day asking for the new stamps-which I was asking for-and that they knew nothing about the matter.
Does this mean that such changes have to be passed by legislation and, if so, does it mean that Ottawa has printed and sent out this advice, ignoring parliament? I am greatly disturbed at the thought. At the very least it is a muddle of muddles with local unemployment insurance office and possibly offices, not being advised.
I do not know how this came about but it illustrates the two points I raised yesterday, the confusion caused by this government throughout the country and its arrogance.
The hon. member for Hull placed on the record a list of organizations that presented briefs to the government on the measure before us today. This list included the Canadian Chamber of Commerce, the Canadian Labour Congress, the board of trade of metropolitan Toronto, the Vancouver board of trade, the Canadian Retail Federation, the Canadian Manufacturers' Association, the Canadian Construction Association and there may have been others.
Something else of interest came to my office today and possibly it reached the offices of other hon. gentlemen. I refer to a newsletter issued by the department of economic development of the Canadian Chamber of Commerce. I mentioned yesterday that the actions of this government have had the effect of making strange bedfellows throughout this country. I never thought I would see the day when I would be in relatively complete agreement with so many things promoted by the Canadian Chamber of Commerce. It has not been my experience in the past to find myself in such agreement with many of the things they say. The newsletter contains some things that I think are very pertinent to the debate before us now. In the second paragraph it says:
At that time the executive council urged the government to appoint a representative commission of enquiry to examine the operations of the Unemployment Insurance Act as to sources of drain, coverage and financing before any increases in unemployment insurance contributions are made.
Surely, this is a very reasonable request. I think that when a C.C.F. member finds, as I said before, that he can agree wholeheartedly with the Canadian Chamber of Commerce, then surely there is no reason why this government should not take this

Unemployment Insurance Act into consideration. Farther down in the newsletter the following appears:
The chamber brief held that over the years there has been a gradual attrition of the insurance principles and actuarial soundness of the unemployment insurance fund, brought about by working into the provisions of the act arrangements that were never contemplated under the original concept. The view was expressed that before a large increase in rates is added to the existing structure, the whole basis of unemployment insurance should be examined and that in addition to reviewing areas of drain and alternative financing, examination be given to the restricted coverage now in the act, with a view to seeing if excluded groups cannot now be properly covered.
Is that not exactly what the members of this group have said, not only this year, last year or the year before, but for many years in the past? Still farther down in this newsletter we find this:
The spokesman for the executive council made it abundantly clear-
This is the executive council of the Canadian Chamber of Commerce:
-that the brief was not in any way opposing the principle of unemployment insurance. Indeed, reference was made to the fact that the successful operation of the Unemployment Insurance Act has been a strong bulwark against the hardships that workers suffer from unemployment, and has been a factor in maintaining the purchasing power that has held down the recession.
We find, Mr. Chairman, that we can go along in complete agreement with these remarks of the chamber of commerce.
All these organizations that I have listed have presented briefs to this government. I do not know exactly what answers they received from the government, but I am sure they would fall within some of the categories I have here which have been so often expressed in this house by the Prime Minister and other members of the cabinet. I am sure the statements given to them will fall somewhere in those categories: that it was being given consideration, or serious consideration, or continuing consideration, or active consideration, or sympathetic consideration, or due consideration, or proper consideration, or careful consideration, or further consideration.


John Whitney Pickersgill: Or still further consideration.


Murdo William Martin: I am sure it would fall into one of those categories, because those categories are becoming all too prevalent in the replies which we receive in this house from the Prime Minister and the other members of the cabinet. I think it goes to show, Mr. Chairman, just how empty and hollow are all of these considerations which are being given to these various organizations by the present government. I would say further, Mr. Chairman, in view of this letter which I


have just read, it is shown very clearly that all of these considerations, regardless of what adjective goes with them, mean nothing whatsoever because it is quite apparent that the government had already made up its mind, strictly aside from anything that the members of Her Majesty's loyal opposition may say, or strictly contrary to any advice given by any organization in this country. The government had already made up its mind what it was going to do and that they would just go through the motion of presenting it to parliament.
I say, Mr. Chairman, that the action referred to in this letter is an insult to all of these organizations; it is an insult to the opposition in this house; it is an insult to parliament itself. I would ask the government even at this late date to reconsider this matter. It is still not too late to redeem itself. It still has time to convert this fund and put it on an insurance basis and not just on a purely political basis.


Paul Joseph James Martin: Before the hon. member takes his seat, may I ask him a question? I was engaged in something else at the time. When my hon. friend spoke at the outset he referred to a letter that had been sent out by the unemployment insurance offices, I understood, to someone in a particular community in Ontario. Would my hon. friend be kind enough to say what the effect of that letter was and would my hon. friend indicate the purport of the letter? If I understood it correctly, it would seem to represent a very serious situation which calls for response at once on the part of the government.


Murdo William Martin: Mr. Chairman, I shall be glad to accede to the hon. member's request. I said this letter was sent from St. Catharines, Ontario. The first paragraph reads:
In the office where I am employed we have received a week or more ago from unemployment insurance commission, Ottawa, under date of June 1, 1959, their bulletin No. 20 advising changes in contribution and benefit rates effective June 28, together with table of amounts form UIC465 (4-59).


Paul Joseph James Martin: We will have to pursue this very serious matter.


John Whitney Pickersgill: Mr. Chairman,-


Michael Starr: Mr. Chairman,-


John Whitney Pickersgill: I was recognized.


Michael Starr: All right.


John Whitney Pickersgill: If the minister would like to reply-


Michael Starr: No; go ahead.


John Whitney Pickersgill: I do not want in any way
to interfere with the minister's reply.


Michael Starr: You did.


John Whitney Pickersgill: If he wishes to reply
briefly; otherwise, I want to speak about something which the hon. member for Timmins was also speaking about, namely the newsletter issued by the department of economic development of the Canadian Chamber of Commerce. Unlike the hon. member, I cannot find myself wholly in agreement with this newsletter, though I fully sympathize with the main point made by the chamber of commerce which is, I think, the point that was made by us at an earlier stage in the debate, namely that there are certain groups and they are not just fishermen. I may say that the fishermen very much resent the fact that they are always singled out. There are other groups who are also seasonal workers which are a much bigger drain on the fund than fishermen; but I admit very readily there is a situation that ought to be corrected. It is the situation of those groups which have been progressively added, and when we were in office we included some of them.


Michael Starr: All of them.


John Whitney Pickersgill: The hon. gentleman is
saying the present government has included nobody.


Michael Starr: All of the seasonal groups that are now under the fund were included by the former government. All these anomalies were created by the former government. The hon. gentleman invited me to answer.


John Whitney Pickersgill: No; I merely asked a very simple question.


Michael Starr: The hon. member does not want an answer.


John Whitney Pickersgill: The minister loves to make speeches. When one word would do the minister always uses 10.


Mr. Bell (Saint John-Alberl):: You are no
shrinking violet yourself as far as speaking is concerned.


John Whitney Pickersgill: At least I once in a while rise in my place when I speak. I do not always speak from my seat, as does the hon. member for Saint John-Albert, though I occasionally do speak, I hope, with a little more effect.
I want to come back to this matter. The Minister of Labour has given the Liberal government credit for bringing under social security all the seasonal occupations in the country and I thank him for giving us that credit. I am very proud of the fact that we did it but I admit-and I have never pretended to the contrary-that by themselves these groups do, taking one year with another, probably draw more out of the fund than they pay into it. I have taken the view-I do not mind
Unemployment Insurance Act admitting that I took this view even when I was a minister-that for these groups some special provision should be made out of the treasury into the fund. In considering this matter we should not forget that everybody who is insured gets a contribution from the taxpayer because, under the present law, the fund as to 20 per cent comes out of the treasury. So that the insurance of none of these groups is completely actuarially sound.
In fact, there are two elements in unemployment insurance. One is the element of insurance and the other is the element of social security, if I may put it that way. That has been the situation from the beginning. The addition of seasonal workers has undoubtedly increased the proportion of those who are covered by social security and I think it has increased the grounds for a larger contribution from the treasury.
But what I and the people I represent object to are these statements that seasonal workers of any kind should be removed from the operation of the act and put into some special scheme. I will state very briefly why the fishermen resent that. Fishing everywhere on the Atlantic coast is a seasonal occupation and the men who pursue the fishery want to be able to use the stamps they get from fishing and combine them with the stamps they get from logging and other occupations at a time when there is no fishery in order to work as long as possible and still be covered. We do not want to put a premium on idleness. We have never wanted that, quite the reverse. I understand that the chamber of commerce changed its position considerably from the time it first appeared before the committee until it left and I hope there are others who have also changed their position because it would be a very retrograde step in my view to try to cover fishermen, loggers or any other seasonal group by some other scheme than the unemployment insurance scheme.
But I agree completely with the hon. member for Timmins who spoke a few moments ago that the fund does need replenishment from the treasury on a larger scale for these groups than it does for those who approach more nearly to being actuarially covered by their contributions. In order to emphasize the point, and this is repetition, I want to say again that it would be a very retrograde step to bring fishermen or loggers or, in my view, any other group of seasonal workers out from under the operation of the act into any other scheme, no matter how beneficial that scheme might be.


Mr. Regier:: I wonder whether the minister has an answer to the rather serious charge made by the member for Timmins.

Unemployment Insurance Act


Michael Starr: I have endeavoured to do so on two or three occasions but there are too many who are very anxious to take part in the debate at this time. It is not a serious charge at all.


Paul Joseph James Martin: It is serious.


Michael Starr: Did the hon. member for Essex East say something?


Paul Joseph James Martin: I said I thought it was serious.


Michael Starr: If the hon. member for Essex East can contain himself sufficiently for me to give the explanation-


Paul Joseph James Martin: Parliament is a very important body.


Michael Starr: I think I appreciate parliament far more than does the hon. member for Essex East, for various reasons. With regard to what the hon. member for Timmins has said about bulletin 20, I was not aware of it but the unemployment insurance commission has sent me the following information. Bulletin No. 20 for employers had to be prepared in anticipation of the bill being passed. They were not to be issued unless and until the legislation was passed. Unfortunately and inadvertently some of them were placed in the mail last week, and the commission assures me that there was no attempt to circumvent parliament.


William Moore Benidickson: I take it from that statement that a great deal of the preparation for the new regulations and benefits has actually been going on. I would not think it would be practical for the unemployment insurance commission to anticipate that the minister would probably be successful in putting through this unpopular bill.


Michael Starr: If it is unpopular, I do not see why there is this opposition.


William Moore Benidickson: The minister knows that nobody came before the committee to make representation whose complaints did not exceed any commendations they had.


Michael Starr: Then I cannot understand the opposition.


Paul Joseph James Martin: You cannot?


Michael Starr: No.


Paul Joseph James Martin: My hon. friend says he cannot understand the opposition. Will he tell us specifically what he means by that?


Michael Starr: The hon. member for Kenora-Rainy River says that this is a very unpopular bill. Therefore I would presume that he and the hon. member for Essex East would like to have the bill passed.


Paul Joseph James Martin: This bill is unpopular because it is unjust, it is unfair because the minister persists in imposing additional contributions of almost $100 million on the workers and employers of the country and giving $20 million or thereabouts in benefits. That is what is wrong with the bill. Further, what is wrong with this bill is the fact that the fund has been put in a perilous state as a result of some of the policies of this administration, policies for which the Minister of Finance is largely responsible.


Michael Starr: Of course, that is the opinion of the hon. member for Essex East and I for one would not pay too much attention to it.


John Whitney Pickersgill: I think what the Minister of Labour has said is an insult to every member of the opposition. To suggest that we would want to put through unpopular legislation just for the sake of creating some unpopularity for the government is a most unworthy imputation. We are here trying to do our best for the sake of the people of Canada and the minister has made an unworthy suggestion.


Michael Starr: Let the people of Canada decide that.


Donald Methuen Fleming: Mr. Chairman, it is nothing unusual for the hon. member for Essex East to give free rein to his imagination and indulge in a multitude of slippery and baseless accusations. His speech yesterday, to be found at page 4798 and following of Hansard, represents a new high in my opinion on the part of the member for Essex East in making false accusations, false charges.


Paul Joseph James Martin: Mr. Chairman-


Donald Methuen Fleming: I certainly think-


Paul Joseph James Martin: -I am rising on a point of order. The minister saw fit to remain out of the house yesterday in spite of the undertaking of the day before. The minister has said that I have made false accusations. You can say that in your judgment I have made an inaccurate observation, which is quite different, and I ask the hon. minister to withdraw his remark.


Donald Methuen Fleming: Mr. Chairman, my remark is not only parliamentary but correct. It is an expression that has been used in the house quite often. To refer to the charges that have been made as false charges is not unparliamentary. I and other members have used that expression in the house and in this case it is, as I shall proceed to show,

an accurate observation with respect to many of the statements made yesterday by the member for Essex East.


Paul Joseph James Martin: We shall see.


Donald Methuen Fleming: The first assertion that the member began with was that there is some fundamental incompatibility in the positions of the members of the investment committee under the terms of the Unemployment Insurance Act. If there is any incompatibility in that respect it was created by parliament itself, and was there before we came into office, for we have made no change whatever. There has been no change whatever in the case of two of the three members of the investment committee. The gentleman who represents the Minister of Finance on that committee is the same gentleman, the deputy minister of the Department of Finance, who was there before I became minister of the department. He is a highly competent and qualified person to sit on the investment committee and I do not propose to make any change in that respect.
The governor of the Bank of Canada was there before we came into office and we made no change. The only change made followed the retirement of an assistant deputy minister in the Department of Labour. His successor in that department was appointed to take his place on the investment committee. There has been no change in the structure of the committee since we came into office, and if the hon. member is talking about incompatibility of positions then I suggest that his quarrel is with the legislation enacted by parliament and also with the government of which he was a member which was responsible for the creation of this situation. If there is incompatibility he and his colleagues created it. That is my first observation about incompatibility.
But the hon. member went on from that, in his imaginative flight compounding these false charges that he levelled against the government, to say that the members of the committee were in a dual position. The members of the investment committee were not in a dual position. They discharged their responsibilities under the terms of the Unemployment Insurance Act and there was no interference with them whatsoever. There was no duality of interest or responsibility on their part.
The whole basis or the whole argument of the hon. member for Essex East was that there was some kind of subtle interference with the members of the investment committee in their decisions with regard to the purchase of bonds or the conversions of bonds. Mr. Chairman, there has been no interference
Unemployment Insurance Act whatsoever with the members of the investment committee in their free decisions with regard to the acquisition of obligations of the Dominion of Canada in accordance with the provisions of this act. There has been no suggestion made to them at any time as to what obligations they ought to invest in. There has been no interference of any kind whatsoever. They have their responsibility under this act and, as Mr. Coyne stated in the evidence he gave to the industrial relations committee, they performed their duty to the best of their ability and they have done so without the slightest interference on the part of the government or of any minister of the government. I trust that statement will dispose of the second false charge in which the hon. member for Essex East indulged himself.
Next-and I am taking them as I find them in this extraordinary speech of his which is full of aberrations and excursions into the realm of fiction-he said that there was some fault on the part of the investment committee in that they did not sell out all their holdings of bonds something like a year ago and realize on them all because the bond market in this country, like the bond market in the United States, weakened after that time. As the hon. member for Kenora-Rainy River was frank enough to say this afternoon, the opposition in this respect is proceeding on the basis of hindsight.


Paul Joseph James Martin: He did not say
that.


William Moore Benidickson: Not on that point.


Donald Methuen Fleming: I suggest that it would not be unfair to ask the hon. member for Essex East if he foresaw in the summer of 1958 the course of the bond market in the next year.


Paul Joseph James Martin: Are you asking me that question?


Donald Methuen Fleming: If he did so, then I suppose he sold out all his bonds in the summer of 1958 and proceeded then-


Paul Joseph James Martin: On a point of order-


The Deputy Chairman:: Order.


Donald Methuen Fleming: -to take advantage of any weakening in the bond market that has taken place since that time.


Paul Joseph James Martin: I rise on a point of order. The Minister of Finance must learn to respect the Chair and to observe the rules of order.

Unemployment Insurance Act


Donald Methuen Fleming: What the hon. member means is that the Minister of Finance must learn to respect the hon. member for Essex East.


Charles Edward Rea: Order.


Paul Joseph James Martin: The hon. minister for whom, on most occasions, I have a high regard, has asked me a question. Does he wish me to reply now?


Donald Methuen Fleming: The hon. member will have an opportunity to reply.


Paul Joseph James Martin: Do not ask me
these questions then if you will not allow me to reply.


Donald Methuen Fleming: I said that if the hon. member for Essex East had all this foresight that he expects of others we can presume that he liquidated his bond holdings last summer and has made a fortune since then because anybody who had the foresight that he expected the investment committee to use in the summer of 1958 could not have failed to make a fortune on the basis of that foresight.


John Whitney Pickersgill: Did the minister do that?


Donald Methuen Fleming: I do not know whether or not the member made a fortune, if you are asking me that question. But I am saying that if the hon. member for Essex East had the foresight that he evidently expected of the investment committee, that would unquestionably have been the result.


John Whitney Pickersgill: The minister misunderstood my question. I asked does the minister admit that anyone who had the foresight could have made a fortune?


An hon. Member:: You changed your question.


Donald Methuen Fleming: Anybody who could foresee the trend of the market in that space of time could always, I should say, make a fortune, from the movement in the market.


William Moore Benidickson: Can you sell bonds short without owning them?


Donald Methuen Fleming: My hon. friend had better ask the hon. member for Essex East about that matter.
The next observation on the part of the hon. member for Essex East was that there had been book losses, and he tried to associate the introduction of the present bill with the alleged book losses. Mr. Chairman, actual losses occur only when securities are liquidated. The hon. member is talking about book values of obligations of the Dominion of Canada that are held by the investment committee. He is not talking about losses that have occurred. The loss that occurred, as


was indicated earlier, was a loss of $10 million. But he has gone on from there into astronomical figures on the assumption that the unemployment insurance commission proceeded to liquidate all its holdings. It has not done so.
I remind the hon. member for Essex East that, as against the actual loss of $10 million on sale, when his government was in office there were losses in precisely the same way; but he does not face up to that fact. He does not say anything about it. I remind the committee that in the last month in which the former government was in office there was a $2 million loss in that one month in respect of realizations by the commission on its holdings of Dominion of Canada obligations. It will therefore be seen that there is nothing new or unprecedented about this experience. It has occurred previously.
But let us go further with this question. The hon. member says that this matter has something to do with the present measure. The reduction in the book value of the commission's holdings of Dominion of Canada obligations has nothing whatever to do with the introduction of the present measure. It was a most palpable pretence on the part of the hon. member for Essex East in the deliberations of the committee on industrial relations to pretend that this bill arose out of the fact that there has been a shrinkage in the market value of bonds. Mr. Chairman, the complete answer was given to the hon. member for Essex East by Mr. Coyne, the governor of the Bank of Canada and chairman of the investment committee, when he appeared before the committee on June 9. The fact is and it is incontestable, that the situation with regard to the bond market had nothing whatever to do with the introduction of this present measure. This present measure is designed to put the contributions to the fund on a basis of equality with the outgo from the fund, based not on any short period but on the average over a period of the past five years. That is the simple basis. The present measure will not do more than that. It is not based upon a period in the winter of 1957-58 or the winter of 1958-59. It is not built up to meet the withdrawals from the fund at the rate that prevailed in those two winters. It is based on the average over the last five years. I say to this committee that that is a sound and fair approach and that this bill has nothing whatever to do with the bond market or any shrinkage in the market value of bond holdings of the unemployment insurance commission.
Then we had from the hon. member for Essex East another charge which has no foundation or truth in it whatever, and it

was echoed by the hon. member tor Kenora-Rainy River. I did not expect the hon. member for Essex East to exercise very much care in the statements that he has been making on this subject. He has been engaging in utterly reckless statements all the way through at the various stages of this measure. But I will say to the hon. member for Kenora-Rainy River that I expected from him something a little more responsible than simply to echo the errors of the hon. member for Essex East.
The hon. member for Essex East says that the terms of the statute were not observed in the matter of the loans because there were no requisitions. That is his statement. You will find it in his speech of last evening. The hon. member for Kenora-Rainy River said the same thing last evening.
The hon. members have taken it upon themselves to make an assertion as if it were a statement of fact that there were no requisitions pursuant to the terms of section 86 of the Unemployment Insurance Act, and that the Minister of Finance proceeded to make loans to the unemployment insurance commission, a number of them, without having any requisition. Mr. Chairman, the statements made by both these members of the opposition are completely wrong. There is no truth in their allegations that there were no requisitions.


William Moore Benidickson: Will the minister table the requisition he speaks of?


Donald Methuen Fleming: I shall have reference to those requisitions right now. The terms of section 86 are to this effect:
(1) Where the amounts standing to the credit of the unemployment insurance fund in the consolidated revenue fund are not sufficient for the payment of benefits under this act, the Minister of Finance, on the requisition of the commission, may,...
(b) on the security of such obligations, credit further amounts to the unemployment insurance fund ... on such terms and conditions as the governor in council determines.
When speaking in this house on second reading on May 14, I gave the house full information concerning the two orders in council which gave authority to the Minister of Finance to make these advances to the unemployment insurance commission and determine the terms and conditions upon which those advances should be made. The act does not say that those requisitions must be in existence before there is any approval given. It says that the Minister of Finance may, on receiving the requisition of the commission, make advances on terms approved by the governor in council. That was done. The terms of the statute were observed literally and in the spirit.
17, 1959	4849
Unemployment Insurance Act
Mr. Chairman, there was a series of requisitions on this subject. The first of these came to the Department of Finance from the unemployment insurance commission properly transmitted through the chief treasury officer of the unemployment insurance commission. The first of these was on April 3 and it reads as follows:
In accordance with authority contained in order in council P.C. 1959-383, dated April 2, 1959, will you kindly arrange to grant the unemployment insurance commission a loan of $10 million on April 7, 1959.
That was the first requisition and the others were in the same form. There was a requisition-


William Moore Benidickson: That was after the loan decision was made.


Donald Methuen Fleming: These hon. members evidently still have not read the statute, and they are back in the same position and labouring under the same confusion and mental fog as they were in the debate on second reading. The act says that the Minister of Finance may on requisition from the commission make loans to the commission. In each case where a loan was made by the Minister of Finance to the commission, a requisition was received from the commission. No loan was made to the commission without the proper requisition from the commission being first had and obtained.


Paul Joseph James Martin: The hon. member has just indicated that that is not the case.


Donald Methuen Fleming: I have just indicated that that is the case, and the hon. member for Essex East is just going round either in a deplorable mental fog, or he is still engaging in utter recklessness in these misleading statements which simply pour from him at any time he rises in this house to speak about unemployment insurance. We have adhered to the statute to the letter. I think it is quite clear, that the hon. member for Essex East evidently does not wish to know what the statute provides because it cramps his freedom in saying these foolish and misleading things which we have now come to expect from him.
I proceed now to the next of the errors, those numerous and egregious errors, of the hon. member for Essex East. The last one is to be found at page 4802 of yesterday's Hansard, and here he was saying that the Minister of Finance had applied some pressure on the unemployment insurance commission to persuade the commission to acquire bonds of the Canadian National Railways bond issue of January, 1958. Mr. Chairman, there is not a word or tittle of truth in the statement made by the member for Essex East in that regard. At no time have I ever made a suggestion or

Unemployment Insurance Act a hint to the members of the investment committee under the Unemployment Insurance Act as to how they should proceed to invest. They have a trust laid upon them by parliament and it is to parliament that they are responsible for the discharge of that responsibility. Never have I interfered in the slightest degree with their right, their freedom and their responsibility to make the investments that commend themselves to that very capable and competent investment committee acting pursuant to the terms of this enactment of parliament.


William Moore Benidickson: On this point, Mr. Chairman, would the minister indicate if the Bank of Canada is not his agent in the matter of sales not only of government of Canada bonds but government of Canada guaranted bonds?


Donald Methuen Fleming: Mr. Chairman, the
hon. member knows quite well that under the provisions of the Bank of Canada Act the Bank of Canada is the fiscal agent of the Minister of Finance. But what has that to do with the matter now under discussion? The situation was the same when the former government was in office.


William Moore Benidickson: I said that in the industrial relations committee.


Donald Methuen Fleming: The situation was exactly the same when the hon. member for Kenora-Rainy River was parliamentary assistant to the minister of finance, and we did not hear then any of this silly, vapid talk about any incompatibility of the functions of these very competent men. I think the government can consider itself fortunate that it has in the investment committee under the Unemployment Insurance Act three men of the competence of those who now constitute that committee. I do not know how the public interest could be more competently served than it is by those men.
I wish to refer to the attempts made by the hon. member for Essex East and the exhibition he put on in the industrial relations committee, making long speeches under the guise of asking questions of the governor of the Bank of Canada when he appeared as a witness on June 8. It was an exhibition of which I am sure only the hon. member for Essex East among all hon. members of this house is capable.


William Moore Benidickson: My hon. friend is too modest. I can remember him recently in past days.


Donald Methuen Fleming: Well, however it may be, I think the hon. member for Essex East is in a class by himself when it comes to putting on these matinee performances. He is pre-eminent as a matinee star in this House

of Commons, and I was told he was at his matinee best in his conduct in the standing committee on industrial relations. He did not give the witnesses a chance to answer questions; he just went on making long speeches. This was the way he asked his questions; it was a series of propaganda harangues. Mr. Coyne had at least an opportunity to get a word in once in a while, sufficient at any rate to enable him to make it crystal clear that all the nonsense the hon. member for Essex East had been talking about bond values, conversion loans and investments, had nothing whatever to do with the circumstances which gave rise to the necessity of introducing this bill; that is simply a matter of equating the contributions to the fund with the outgo from the fund on the basis of a five-year average, which is a sensible spread.
Therefore, Mr. Chairman, I say to you that we have had to listen in this house to a compound of one false charge upon another brought by the hon. member for Essex East, and in the speech he made last night I do not think there is one thing he had to say that had any basis in fact, that had any relationship whatever to the responsibility of the government. He has just recklessly put aside the facts here and engaged in a series of charges which has not behind them the slightest tittle or basis of truth.


William Moore Benidickson: Now the debate will start all over again.


Paul Joseph James Martin: I am sure that my friend the Minister of Finance, after the many fine tributes he has paid to the member for Essex East, would expect that hon. member to acknowledge those tributes in a spirit of gratitude.
They touch me so deeply, I must say, as to be almost beyond my ability to properly acknowledge them. I thank the minister for his high estimate of my worth-


Donald Methuen Fleming: I overestimated it.


Paul Joseph James Martin: I only wish I could reciprocate but I find that the hon. gentleman in this particular matter, and particularly in the highly emotional state of his last utterance, is not deserving of reciprocity.
I hope the Minister of Finance will not think I am ungrateful or that I do not fully appreciate his own high motives. I can only say to him that notwithstanding his tributes, we in the opposition feel we have an obligation not to be unduly influenced by bouquets of this sort, and that we should continue to discharge our duty as we see it. As the hon. member for Kenora-Rainy River has indicated, this most unusual interruption from the Minister of Finance, who has learned the

art of being phlegmatic, has dodged continuously the real issues of the indictment which members of the opposition have made against this administration.
The Minister of Finance has not, of course, taken the committee into his full confidence, and I hope he will do me the honour of listening to what I have to say, because I think he should reflect carefully on what I am going to tell him. The real reason for the hon. gentleman's outburst of impatience for his undue sarcasm, for his use of words the meaning of which he has not fully comprehended is, I am sure, because the hon. gentleman is in this particular matter charged, by implication, with having failed in his budget to disclose to this nation the full obligation which he intended to impose by way of additional taxation. That is the reason for the hon. gentleman's impatience and concern today.
The hon. gentleman brought in a budget in which he imposed some $350 million of taxation on the people of Canada, notwithstanding the fact that his government and he himself had promised to reduce taxation without disturbing existing benefits. Having done that, a few days later through this bill, the hon. gentleman, resorting to back door tactics, imposes, or seeks to impose by this method, without raising any benefits and without changing the pattern of benefits under the Unemployment Insurance Act, an additional burden on certain groups of taxpayers in this country. I am sure this act of the Minister of Finance has never been paralleled by any of his predecessors. The hon. gentleman laughs, and I know why he laughs. I know he does not like this. He did not like it when I mentioned this subject on a previous occasion.
When the Minister of Finance introduced his budget he should have told the country that within a few weeks the Minister of Labour intended to bring in this particular measure imposing an additional burden of taxation on the people of this country.


Donald Methuen Fleming: Would the hon. gentleman permit a question? When he talks about this not having been done before, has he completely overlooked that this was precisely what was done when the Unemployment Insurance Act was introduced by a Liberal minister and that when it was amended by Liberal ministers, on every occasion it was not introduced as part of the budget but was kept quite separate from it and was not referred to in the budget?


Paul Joseph James Martin: The hon. gentleman usually seeks to clothe his arguments with some material. All he does now is to wear an old coat, and that old coat does not
Unemployment Insurance Act appear well on him. The minister does not answer one argument by a denial. That is all he has done. I remind him that we have made certain charges against this government predicated on the fact that we are disturbed by this particular bill which imposes on the workers and employers of this country a responsibility which we believe belongs to the government, a responsibility which this government is not discharging. That is the reason for our concern, and the reason we have gone into the operations of the investment committee was that we feel that certain decisions taken by that investment committee have resulted in actual and in-book losses in the security holdings of the unemployment insurance commission, and because of that circumstance this government, faced with a fund which is in a perilous state, has had to find methods of restoring the fund to a financial state which will permit the characterization of it to one no longer in a perilous state. That is why we have referred to the operations of the investment committee.
There is nothing we on this side of the house have said which warrants the implication by the hon. gentleman that there is no appreciation of the competence of the personnel of the investment committee. We have acknowledged their competence. As he said, we were responsible for their appointment, and the former government would not have made these appointments if it had not felt that the men appointed were competent individuals. That is not the point. The point is that the policies of the hon. gentleman, his policies as Minister of Finance, have placed the members of the investment committee in a most difficult position. Any incompatibility about which we have spoken has arisen because of the financial policies of the hon. gentleman, and he knows that what I am saying is the case.


Donald Methuen Fleming: I know it is nonsense.


Paul Joseph James Martin: The minister said that these members of the investment committee had been appointed by the previous administration and that if there is any blame attached to their operations and their judgment, then the government which appointed them should bear the responsibility for it. What the hon. gentleman forgets is that at no time when that investment committee was in existence during our administration did its duties conflict in any way with the general interests of the nation or the policy of the government.


Donald Methuen Fleming: Will the hon.
member permit a question? Is the hon. member forgetting that the values of bonds

Unemployment Insurance Act in the market were dropping from 1955 to 1957; in other words, that throughout the last two years of the government of which the hon. gentleman was a member the same situation faced the investment committee as has faced it since?


Paul Joseph James Martin: That is right. There is no denial of that. But that is not the question. It is a characteristic speech gratuitously uttered by the Minister of Finance, and he has missed the point. And that is the sad thing about this whole situation-that he does not understand the point which is involved in the very serious criticism which causes him at this moment such laughter at a time when it should be causing him serious consideration-


Donald Methuen Fleming: I am laughing at you.


Paul Joseph James Martin: -and when he should be indicating to the country that he is really concerned about the problems and welfare of the people instead of treating this matter in the cavalier manner in which the hon. member for Eglinton, the Minister of Finance, is treating it now.
What the hon. gentleman fails to realize is that the previous administration did not present the investment committee with a situation involving a huge deficit. It did not present the investment committee with a situation where there was an extremely high level of unemployment causing an unusually large drain on the fund. What the hon. gentleman has not pointed out was that the previous government did not embark on a program of bond conversion which was contrary to the interest of the unemployment insurance fund.


Donald Methuen Fleming: Nonsense.


Paul Joseph James Martin: My hon. friend says "nonsense".


Donald Methuen Fleming: I certainly do.


Paul Joseph James Martin: Let us see how
much nonsense there is in this. My hon. friend introduced his bond conversion scheme. Under that scheme he and the Prime Minister in addresses to this house and at Canadian clubs and at organizations of all kinds and over television using every conceivable vehicle urged the people of Canada to convert victory bonds into the bond conversion scheme.


Donald Methuen Fleming: That is more of your imagination.


Paul Joseph James Martin: The Prime Minister joined my hon. friend in this great outflow of Eglintonian rhetoric.


Donald Methuen Fleming: I did not appear before any groups of women or Canadian clubs.


Paul Joseph James Martin: The Prime Minister joined with my hon. friend in urging the Canadian people to convert their bonds into this scheme to which the Minister of Finance has been dedicated. I am not arguing this point now but while my hon. friend may claim that the bond conversion scheme was a desirable operation I say that it was not desirable for the investment committee to convert the 5th, 6th, 7th, 8th and 9th victory bonds in the amount of over $300 million under that scheme. Certainly it was desirable that the fund should have remained liquid because there was going to be a heavy drain on the fund. What I say my hon. friend by his program caused the members of the investment committee to do because of the dual position in which they found themselves was to invest in long term securities that were not at that time in the interests of the unemployment insurance fund.


Donald Methuen Fleming: They made a free decision.


Paul Joseph James Martin: My hon. friend says they made a free decision.


Donald Methuen Fleming: They certainly did.


Paul Joseph James Martin: Let us see how
free that decision was. Here the deputy minister of finance by virtue of his office must have been associated as the loyal servant he is with the Minister of Finance in the prosecution of the bond conversion scheme; a member of this investment committee in one particular status urging the people of Canada to convert their bonds and in another capacity as a member of the investment committee being called upon to consider the extent to which he as one member of that committee should participate in long term investments of the unemployment insurance commission. How was he a free agent? If the deputy minister and the governor of the bank had invested those securities in short term securities, as they should have, in treasury bills, or if they had sold them on the market-a market which at that time was supported by the Bank of Canada-they would have, I am sure, run into the criticism of the Minister of Finance who with respect to the largest trust fund in our country would have said, "How can you justify not investing this money in the bond conversion scheme when we, including you, are urging the people of Canada so to do? How can you justify putting these securities into anything other than the bond conversion scheme?" The Minister of Finance says that these officials

were free agents. I say they were not free agents. I say they were confronted with a conflict of interests and a conflict of duty, a serious conflict that should have been removed by the Minister of Finance.


Mr. Graffley:: How?


Paul Joseph James Martin: How? I have already indicated that. It could have been removed by coming to parliament and amending the act thereby releasing these highly competent individuals from the conflict of interests which confronted them as a result of the policy of bond conversion of my hon. friend.


Donald Methuen Fleming: May I ask my
hon. friend a question?


Paul Joseph James Martin: My hon. friend says I was absolutely wrong in attributing in any way his having anything to do with the decision made by the investment committee to invest some $15 million or $17 million in the 1958 $300 million Canadian National Railways issue.


Donald Methuen Fleming: May I ask the hon. member a question before he leaves that point?


Paul Joseph James Martin: What are the facts of that? Let us examine the situation in detail.


Donald Methuen Fleming: Before my hon. friend leaves the conversion loan and the decision of the investment committee to convert its holdings of victory loan bonds into the conversion bonds, would he permit a question? The hon. member will recall that this occurred last summer while parliament was in session. With the foresight that he has enjoyed why did he not at that time raise this question in parliament while the conversion loan was in progress? Why did he not raise this question as to the alleged incompatibility of interests? Why did the hon. member wait for a year to do that, Mr. Chairman?


Paul Joseph James Martin: Mr. Chairman, I do not mind my hon. friend putting questions to me but I do not want him to make any more speeches. The reason I hesitated to answer his question is that every question he asks is in the form of a speech. I will answer the hon. gentleman's question right now concerning why I did not do it last year. I will tell him.


Donald Methuen Fleming: Yes, with all your foresight.


Paul Joseph James Martin: If I had had the
information that the members of the investment committee had and if I had had the information about government policy that was
Unemployment Insurance Act in the mind of my hon. friend I would certainly have unhesitatingly recognized that there was a conflict of interest between the bond conversion scheme and the interests of the unemployment insurance fund, and I would have come into this house and urged that section 20 of the act be amended so that it would be possible for this house to authorize the government to nominate members of a committee that would be free from any conflicting interests. I certainly would have taken that course.
My charge and my indictment against the Minister of Finance in particular is that he did not take that course. Instead he left the members of the investment committee in this very difficult position where they had conflicting interests and conflicting obligations. As a result of that investment- whether or not my hon. friend considers a book loss important-the fact is that in addition to the realized loss of over $10 million there is this unrealized book loss of $62 million and that represents a serious situation because this fund must at all times, particularly in the face of heavy unemployment, be in a liquid position so that the contractual obligations of the unemployment insurance commission could be performed for the benefit of the insured working population of Canada.
As a result of the investment in this bond conversion scheme, not only have there been these losses but these securities are tied up away beyond the time accorded certain large corporations in this country. Certain corporations in Canada participated in the bond conversion scheme at the outset but there is one corporation, and the minister knows the name of that one, which in spite of its heavy investment was permitted to retire from the bond conversion scheme and invest its securities in shorter term securities and in some cases to actually sell its bonds on the open market receiving 100 because the price of the victory bonds at that time during the months of July and August, September and October, 1958, was supported by the Bank of Canada.


Donald Methuen Fleming: Mr. Chairman, that simply is not true. The hon. member has made a serious statement which is completely untrue. Any person, or any corporation-or anybody-who subscribed and signed a binding subscription for conversion loan bonds was called upon to carry out the contract. There were no exceptions made. The innuendo and the statement we have just heard are baseless and represent another false charge.


Paul Joseph James Martin: My hon. friend suggests that I am advancing a false charge. I ask him at this time if he will deny that some time between the months of July and

Unemployment Insurance Act August, September and October, a large insurance company in this country that had decided to participate in the bond conversion scheme was able to extricate itself from that obligation and with the proceeds representing almost 100-because the price was supported by the Bank of Canada-was able to re-invest its securities in other forms of investment? Will the minister deny that that is the case?


The Chairman:: Order. I must remind hon. members that we are discussing the Unemployment Insurance Act and this present discussion is completely out of order.


Paul Joseph James Martin: Mr. Chairman, with great respect I say that it is in order.


Donald Methuen Fleming: Mr. Chairman, in view of the very serious statement the hon. member has just made let me say that if he is saying to me that anybody or any corporation, insurance or otherwise, was permitted to withdraw from a binding contract, there is no truth whatsoever in his statement.


Paul Joseph James Martin: We shall see as to whether or not there is validity in what I say.


Joseph Pierre Albert Sévigny: Order. The question has
been asked and answered. I still declare that this debate is out of order.


William Moore Benidickson: Mr. Chairman, on a point of order, may I simply say this. If you examine the minutes of the industrial relations committee which examined this bill you will see that the investment committee was called before that committee for examination of the investment of this very substantial fund. The interest earnings alone are a very considerable factor in connection with the establishment of rates, assessments, benefits and everything else. Some $270 million of earnings on interest alone have resulted from the investment portfolio. I simply must point this out to you, because I think you have overlooked the fact that this was pertinent to the committee which held the investigation.


Paul Joseph James Martin: Mr. Chairman, before the end of this debate I shall show whether my statement is without foundation.


Donald Methuen Fleming: I can tell you
right now it is without foundation.


Paul Joseph James Martin: I give my hon. friend the opportunity to examine not only it but other cases as well. My hon. friend will recognize that in the month of September-I think on September 15-some $17 million worth of the commission's participation in this bond conversion scheme was sold at a satisfactory price supported by the Bank of Canada. If that was possible on September 15, it was possible on a program basis 
in between, let us say, early in July and the end of October. If that course had been followed the fund would have appreciated; there would be more money in the fund now and it would not have been necessary perhaps for the government to come to parliament and ask that we increase contributions on the workers of this country from 25 per cent to 56 per cent in order to keep this fund in a replenished state.
My hon. friend diverted me from the C.N.R. issue. I asked him the day before yesterday, when we were discussing the financing of the C.N.R., whether or not any decision taken by the board of directors of the C.N.R. with respect to borrowings it proposed to make were as a result of collaboration and concurrence by the Minister of Finance and he replied yes. Therefore, my hon. friend knew of the decision of the board of directors of the Canadian National Railways to float this issue-


Donald Methuen Fleming: Of course.


Paul Joseph James Martin: -in January of 1958. My hon. friend says "of course". Now, last year-


Donald Methuen Fleming: You surely do not think I would give a guarantee without knowing about the issue?


Paul Joseph James Martin: Of course he
knew about this. I presume there was a meeting between the president of the Canadian National Railways and the minister or some other appropriate officer of the Department of Finance. I say the facts are that that issue was not popular when it was offered.


Donald Methuen Fleming: You do not know what you are talking about.


Paul Joseph James Martin: My hon. friend can deny it. I say these are the facts. This issue was not one that was readily taken up and-


Donald Methuen Fleming: You just do not know what you are talking about.


Paul Joseph James Martin: -when the unemployment insurance commission decided to invest $15 million in that issue, they took a loss-because a year later the bonds sold at around $85 and $89-that could have been avoided. I suggest that one of the reasons why the unemployment insurance commission securities were invested in that particular issue was for the same reason that the securities of the unemployment insurance commission were placed in the bond conversion scheme of my hon. friend. I say, in the first place, there was participation in the bond conversion scheme because that was regarded as one way to stimulate, to

encourage and to popularize this controversial bond conversion plan. The reason that $15 million of the unemployment insurance commission securities was invested in the C.N.R. issue at 4 per cent, maturing in 1980, was that that was an unpopular issue and it would have popularized it for the public to have known that funds contributed to by workers and by the employers of this country were being invested in the C.N.R. issue.


Donald Methuen Fleming: You do not know what you are talking about.


Paul Joseph James Martin: I say further that when the minister concurred in the decision to have this loan he must have had knowledge of the intention of the investment committee to make this investment.


Donald Methuen Fleming: I did not.


Paul Joseph James Martin: It was a bad
investment.


Donald Methuen Fleming: At the time of the approval of the C.N.R. loan?


Paul Joseph James Martin: Yes.


Donald Methuen Fleming: Well, I did not.


Paul Joseph James Martin: My hon. friend says he did not. I accept his word; I have no other course. If he says he did not I believe him; but I say the facts are so significant in their implications as to cause one to wonder greatly whether or not the unemployment insurance fund has been used to bolster up doubtful programs of finance, which were very close to the heart of this government, and particularly to the Minister of Finance. In any event, we have had our lesson. The Minister of Finance sees the situation now. He knows that there is conflict of duty and function. Whether he admits it or not there is a conflict of interest between the members of the investment committee when the same gentlemen are participants in the debt management policy of this government.


Donald Methuen Fleming: I just denied it.


Paul Joseph James Martin: My hon. friend denied it. The more denials he makes the more ridiculous he makes himself in this particular situation. Here we are asking for further contributions from the employers and the workers because of bad judgment in the investments of the unemployment insurance commission, as well as other contributing circumstances.


Donald Methuen Fleming: That is absolutely untrue.
Unemployment Insurance Act


Paul Joseph James Martin: My hon. friend says that is not true. That is no argument. I am stating the facts here.


Donald Methuen Fleming: You are making ridiculous statements and utterly untrue statements.


Paul Joseph James Martin: I am trying to show why this government is trying to saddle the people of this country with a form of hidden taxation not disclosed in the budget in order to relieve this government of responsibilities which it should be courageous enough to shoulder. That is the situation.


Donald Methuen Fleming: I would not be permitted in this house to say what you are trying to do.


Paul Joseph James Martin: If the members of the two opposition groups had not persistently in the committee, in the face of great opposition, in the face of great obstruction, sought to elicit some of these facts we would not have been able to demonstrate to the Canadian people why this bill is so inadequate and undeserving of support. No wonder the Canadian Manufacturers' Association, the Canadian Chamber of Commerce, the Canadian Labour Congress, les syndicats catholiques, and the director of the united automobile workers and others have protested against this bill. They have protested against this bill because it represents one of the unfairest and most ill-conceived propositions ever put before parliament by a government of this country.


Donald Methuen Fleming: Mr. Chairman, I hope it will be fully appreciated by the members of the committee just what it is that the member for Essex East has been saying. I offer the committee this extract from the evidence of Mr. Coyne, the chairman of the investment committee, given to the standing committee on industrial relations, in part, on page 363 of the committee's proceedings of June 9. Here is what Mr. Coyne had to say to the committee about the work of the investment committee:
We did what we thought was in the best Interest of the fund, and we have done this throughout the period when we, or our predecessors, have been acting as an investment committee for the fund.
The fund is not one which can quickly, or in large volume, switch out of one kind of security into another. There are times when it seems desirable to do that, but usually it can only be done on a limited scale without taking a loss, or indeed having an adverse effect on the market.
In the circumstances, it is our opinion we did what was in the best interests of the fund as we saw it from day to day, week to week, month to month and so on, over this period.
The member for Essex East says that the committee should not have converted their

Unemployment Insurance Act bonds. The fact is, Mr. Chairman, if they had not converted their bond holdings of the remaining victory loan issues, the fifth to ninth inclusive, their holdings would be worth much less today than are the conversion bonds into which the committee converted its holdings. Moreover, they have by that conversion added 1J per cent per annum to their interest yields on their holdings of those bonds, and that is a very substantial gain to the unemployment insurance commission. The fact remains-


Murdo William Martin: Will my hon. friend permit a question?


Donald Methuen Fleming: With pleasure.


Murdo William Martin: Will my hon. friend say that if the securities amounting to $300 million had been sold on the open market at a time when these bonds were backed by the Bank of Canada they would not have yielded a greater principal and income return than the situation that now exists?


Donald Methuen Fleming: That would depend entirely, of course, on what was done with the proceeds. This is what the hon. member for Essex East does not face up to. He says, "Oh well, the investment committee should have foreseen that the values of all bonds were going to drop in the markets of this country and of the United States and therefore they should have sold them in the summer of 1958". What would they have done with the money? You see, Mr. Chairman, evidently he is assuming that the money lies idle or that at some time or other it would have been invested in something more profitable. He has made a series of assumptions of that kind-


Murdo William Martin: Does my hon. friend-


Donald Methuen Fleming: -and if the hon. member for Essex East has that kind of foresight in relation to the bond market then he is either a mighty success in the bond market himself or he is depriving himself of the legitimate fruits of a foresight that is not possessed by any other person in this country. I do not think that the people of this country-


Paul Joseph James Martin: Will my hon. friend permit a question? My hon. friend overlooks the fact that the unemployment insurance fund does not have the status of a private investor. There were reasons why the fund should have cash on hand. It had heavy obligations to meet. Thousands were out of work as a result of the policies of the government. That is why they should have been in a liquid state. My hon. friend

says, "What would they do with the cash?" They would have given that cash to the unemployed in our country in accordance with contractual obligations.


Donald Methuen Fleming: Mr. Chairman, does your mind carry you back five, ten or fifteen minutes ago when the hon. member for Essex East complained that when I asked him simple questions I was introducing statements? It is very interesting now to sit back here and listen to him ask a question which is but one more declamatory speech full of the same kind of errors and misleading propaganda as practically all his interventions in this debate and quite on a par with the way he conducted his questioning in the standing committee on industrial relations.
I tell the hon. member again that the transactions on the part of the investment committee in 1957, 1958 and 1959 have nothing whatever to do with the bill. They have nothing whatever to do with the reasons for coming to parliament for the enactment of this bill. If the bond market had not weakened this measure would still be here because it was necessary to bring into balance measured over a reasonable period of time, in this case the last five years, contributions to the fund and outgo from it, and nothing that the hon. member for Essex East has said in these aberrations of his will change that fact.


William Moore Benidickson: Is the Minister of Finance going to be with us tomorrow as we continue discussion of this bill? I have a few questions.


Donald Methuen Fleming: Why not go ahead and ask them?


William Moore Benidickson: I will indeed but I was wondering how much we would get from the presence of the Minister of Finance and his interventions in the debate. He made the point in connection with some of the references to section 86 that there had been no interference with the investment committee with respect to acquisitions. With respect to the decision to sell or not to sell, on that point it seems that the cabinet has in this case intervened with respect to a decision not to sell and has completely avoided the advice of the investment committee. We heard the governor of the Bank of Canada state in the standing committee that he was not consulted about this matter by the unemployment insurance commission. Did the Minister of Finance consult him when he had the responsibility for taking to his colleagues in the cabinet a decision of this import, a decision to lend $80 million involving the question of whether or not that was the right thing to do as opposed to selling Dominion of Canada securities? Did the Minister of Finance consult the governor of the: Bank of Canada?


Donald Methuen Fleming: As the governor of the Bank of Canada pointed out in his testimony before the committee, the investment committee has nothing whatever to do with operations under section 86. Their responsibility is with regard to investment. The responsibility created by section 86 is on the commission, the Minister of Finance and the governor in council whenever there is a question of a loan by the Minister of Finance to the unemployment insurance commission.


William Moore Benidickson: We have been discussing this question of dual responsibility. As one of the members of the investment committee with a responsibility established by parliament, Mr. Coyne said that he had nothing to do with the decision to sell or refrain from selling securities of the unemployment insurance fund. In his other capacity as governor of the Bank of Canada, a capacity which we have suggested might at times be incompatible, did the Minister of Finance consult the governor of the bank when a decision had to be made by the cabinet with respect to whether or not securities of the fund should or should not be sold?


Donald Methuen Fleming: I do not recall having any discussion with the governor of the Bank of Canada about the question of loans by the Minister of Finance to the unemployment insurance commission. I have said already that the investment committee has nothing to do with that question.
Business of the House


William Moore Benidickson: It was with respect to his other capacity that I asked the question.
Progress reported.



BUSINESS OF THE HOUSE

John Whitney Pickersgill: Is there any change in the plans for tomorrow?


Howard Charles Green: No, Mr. Speaker. We will continue with this debate and then take the estimates of justice.


John Whitney Pickersgill: They will be followed by veterans affairs?


Howard Charles Green: That is right.


John Whitney Pickersgill: There will be no finance estimates this week?


Howard Charles Green: That is right.


Paul Joseph James Martin: Can the Minister of Public Works say whether the Minister of Finance will be here tomorrow?


Howard Charles Green: It would seem that the hon. member for Essex East has lost his courage and is not willing to ask the Minister of Finance himself.


Murdo William Martin: He will not talk to me.


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