1960-07-25

[Stage Direction]
First report of select committee on procedure of the house-Mr. Speaker.

Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker,
it is a great privilege today to be able to welcome to the house distinguished representatives from Nigeria. We have in Your Honour's gallery Alhaji Sir Ahmadu Bello, Sardauna of Sokoto, premier of the northern region, and also Alhaji Sir Muhammadu Sanusi, Emir of Kano who has over 3 million subjects in his emirate. In addition there are three distinguished ministers from the northern region of Nigeria, Hon. Alhaji Isa Kaita, Minister of Education, Hon. Malam Ibrahim Musa Gashash, Minister of Lands and Surveys and Hon. G. U. Ohikere, Minister of Works.
As hon. members know, the northern region of Nigeria contains well over half the population of that country and has over half the members in the federal parliament. We are delighted to have these distinguished public servants with us in Canada and also to have the opportunity of conferring with them on various subjects which are of interest to both our countries.
On October 1 Nigeria will gain its independence, and all Canadians look forward to the time when Nigeria will be one of our sister nations of the commonwealth. We firmly believe that this new nation has a vital part to play in the commonwealth and also in the continent of Africa, the United Nations and the councils of the world. We are very happy that there exists today between Nigeria and Canada the closest ties of friendship. With those thoughts we welcome these visitors to our gallery this morning.


Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, we on this side are glad to have the opportunity of sharing in the welcome which has been expressed in such fitting terms by the Secretary of State for External Affairs to our distinguished visitors from Nigeria, gentlemen who have served their people well in the past and who
will have even greater opportunities for service in the future. We welcome them not only because of their personal distinction but also because they represent a country which as the minister has pointed out is on the threshold of independence, an independence which we hope will also mean association as a free state in our commonwealth of nations.
Hon. members of this house without exception, I am sure, will support any Canadian government in any move it may make to assist this new nation of the commonwealth with the fourth largest population in the commonwealth and in any move that may be made to bring us closer together. Though far away geographically and differing in the circumstances of its background, we in Canada are anxious to work with the people of Nigeria in the promotion of all good causes; for freedom, democracy and peace in the world.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, the members of this group join with the Secretary of State for External Affairs and the leader of the official opposition in their welcome to the premier of Northern Nigeria and his colleagues and in the comments they made during their brief remarks. We in this group rejoice in this demonstration of the spirit of brotherhood that can be found and promoted within the commonwealth. We salute and welcome these representatives of another country soon to take its place within the ranks of the nations within the commonwealth. We trust, Mr. Speaker, that as a result of their visit to Ottawa and discussions with representatives of the government on matters about which they must be seriously concerned, such as technical assistance and relations within the commonwealth, they will find their visit most fruitful and enjoyable and, when they return to Nigeria, in the days ahead will be able to look back on their visit to Ottawa and say in the words of the poet Moore:
When time, which steals our years away,
Shall steal our pleasures, too,
The memory of the past will stay,
And half our joys renew.


Mr. Speaker:: We also have in the gallery today two other visitors from the commonwealth to whom I think the house would like to extend a welcome. They are Hon. Mr. Merrifield of the legislative council and Mr. Holden of the legislative assembly of the
6878	HOUSE OF
Paris Trade Meetings
state of Victoria, who are here as official visitors to their commonwealth parliamentary association branch.



VACANCIES

Mr. W. H. McMillan (Welland):: Mr. Speaker, I hereby give notice, pursuant to section 10 of the House of Commons Act, that a vacancy has occurred in the representation of the House of Commons for the electoral district of Niagara Falls, in the province of Ontario, pursuant to the death of William Limburg Houck, the member therefor.


Mr. G. J. Mcllrailh (Ottawa West):: Mr. Speaker, I hereby give notice, pursuant to section 10 of the House of Commons Act, that a vacancy has occurred in the representation of the House of Commons for the electoral district of Peterborough, in the province of Ontario, pursuant to the death of Gordon Knapman Fraser, the member therefor.



ORGANIZATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT-REPORT ON PARIS MEETINGS

Mr. Richard A. Bell (Parliamentary Secretary to the Minister of Finance):: Mr. Speaker, as the Minister of Finance is engaged this morning at the dominion-provincial conference, he has asked me to report to the house on his behalf on the meetings held in Paris on July 22 and July 23 to consider the proposed establishment of a new organization for economic co-operation and development to replace the existing organization for European economic co-operation.
Hon. members will recall that on January 18 the Minister of Finance informed the house of the results of the first organizational meeting which had arisen from the initiative taken at the end of last year by the United States, the United Kingdom, France and Germany. From that meeting a number of important proposals emerged designed to strengthen and facilitate economic co-operation amongst the countries of western Europe, the United States and Canada. One of the most important was that the existing O.E.E.C. should be reconstituted to meet the problems and challenges of the 1960's. In the new O.E.C.D. Canada and the United States would become full members together with the 18 western European governments now members of the O.E.E.C. and representatives of the European communities.
In Paris last week ministerial representatives made substantial progress toward these ends and agreed upon the broad lines of a (Mr. Speaker.]

convention for the organization. Over the next few months remaining details concerning the convention and the scope of its activities will be worked out. It is anticipated that by the end of the year member governments will be in a position to sign a convention which would be submitted to their respective legislatures for approval. We have indicated our intention to sign this convention, and if this timetable is realized the government will, at an appropriate stage, submit to the house for approval the charter of the new organization.
The meeting also appointed Mr. Kristensen of Denmark as secretary general designate of the new organization. Mr. Kristensen is a former finance minister of his country and brings to this very important post a distinguished political and administrative background. His first task will be as chairman of the preparatory committee which was established to work out the remaining details prior to signature.
The new organization will, it is expected, have three main functions. It will provide a forum for consultation about economic policies of member governments. Progress made in liberalization of trade and payments and the introduction of convertibility in Europe have led to a closer interdependence of the economies of member countries, which makes consultation necessary and desirable.
The organization will also have an important role to play in stimulating and coordinating more closely the efforts of the more advanced countries to assist the less developed countries of the world. This would in no way limit or change the nature of our existing aid programs such as the Colombo plan, nor would it involve a direct obligation on the part of Canada to provide additional assistance. However, most of the important aid-giving countries are members of the new organization, and it is the hope of the Canadian government that there will be a useful role for the organization to play in the aid field by way of exchange of information and experience.
Finally it was agreed that the new organization, in conformity with its objectives, should seek to promote the expansion of trade on a multilateral, non-discriminatory basis. The 20 countries were all agreed that any trade activities of the new organization should be fully in accordance with the obligations of member countries to GATT and the international monetary fund, and it was urged that these activities should contribute to the attainment of the objectives of these broader international organizations.
As the house knows, this is a point to which we in Canada attach the highest importance. Over 30 per cent of our trade is

done with the European countries of the proposed O.E.C.D. At the same time, like other exporting nations within that group, we attach great importance to our trade with the rest of the world. Thus in these meetings, with delegations from other like-minded nations, the Canadian delegation emphasized that it should be the purpose of this organization to encourage the expansion of mutually profitable trade throughout the world. I am pleased to report that the deliberations were, in fact, guided by this spirit and there existed a genuine desire to work together for the achievement of this important objective.
The Minister of Finance has asked me to make it clear to the house that no direct attempt was made at this meeting to settle the specific problems between the common market Six and the free trade association of the Seven. Canada is confident, however, that the O.E.C.D. will help to establish a climate in which these and other economic issues can be resolved in a manner consistent with our world-wide trade objectives and interests. While the O.E.C.D. will not constitute an exclusive or inward-looking economic bloc in any sense, Canada hopes that it will help to further a harmonious spirit of co-operation among the countries of western Europe and Canada and the United States, and in this way strengthen the free world.
With the permission of the house, Mr. Speaker, I should like now to table a copy of the resolution adopted at the conclusion of the Paris meeting last Saturday evening. It may be the wish of the house to have this resolution printed as an appendix to today's Hansard.


Lester Bowles Pearson: Mr. Speaker, I think members of the house will have listened with very great interest to the report which the parliamentary secretary, due to the understandable absence of the Minister of Finance this morning, has made on the meeting recently concluded in Paris, a meeting which is of very great significance and importance to all member states involved and to no state more than to Canada. It was a meeting which looked toward the transformation of the organization for European economic co-operation, which has played such a constructive part in economic development in Europe in past years, into the organization for economic co-operation and development, which we hope will extend the scope of the earlier organization across the Atlantic, and in which the United States and Canada will be able to play a full and important part.
The parliamentary secretary gave us some information about the meeting, but I should
79951-0-434
Paris Trade Meetings
like to point out that Saturday's London Times, which I was able to read this morning, contains an even more detailed report which has the ring at least of authority. This report refers to a resolution submitted to the conference by the United States delegate, Mr. Dillon, suggesting powers to be accorded to the trade committee of this new organization, powers which apparently are to be rather extensive in this field and will have a relationship to GATT itself. This London Times report goes on to say that the United States draft resolution on the future functions of the trade committee of O.E.C.D. foresees a confrontation of general trade policies, an examination of specific trade differences of member countries, and consideration of any remaining short or long term problems not solved by the existing trade committee of 21 powers. This is an indication, Mr. Speaker, of the far-reaching functions which are to be proposed, at least by the United States, for this new body.
It would be interesting to learn the attitude of the Canadian minister and the Canadian delegation to this specific United States proposal. In any event, Mr. Speaker, the move in Paris is an important one; it is a constructive one, and I hope the organization will be, in the words of the parliamentary secretary, an outward-looking body. In this respect it will certainly receive the wholehearted support of the members on this side.


Mr. Erhart Regier (Burnaby-Coquitlam):: There has recently arisen, Mr. Speaker, quite a lot of concern at the impending action on the part of the inner six of Europe, as a result of the proposal to raise tariff barriers on imports into their trading region. There is growing fear also that the inner six and the outer seven, rather than moving closer together are moving farther apart, and accompanying this is the realization that unless we have very early action, the economic unity which existed in the western world may be greatly endangered.
We, of course, naturally welcome the move that is now being made. However, unlike the Leader of the Opposition, I read into the announcement no far-reaching functions of the new organization, and I have particular reference to the lack of any indication that one of the main functions of this organization is to enhance the economic unity of the Atlantic world.
I took it to be a welcome announcement that there would be extensive consultation. However, in my opinion there was a lack in the announcement of the specific responsibility that was planned for this new organization. I must admit that a complicated statement

Motions for Papers
such as this is sometimes subject to misinterpretation, and the members of our group will look forward to reading the announcement of the government with a little more detailed attention, and may have other observations to make later.


Mr. Speaker:: Is it the wish of the house that the resolution tabled by the parliamentary secretary be printed as an appendix to Hansard?


Some hon. Members:: Agreed.
[For text of resolution above referred to, see appendix.']



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 131-Mr. Argue:
For a copy of all correspondence since January 1, 1960 concerning the appointment of a postmaster or postmistress at Edgeley, Saskatchewan.
Motion agreed to.

[Stage Direction]
Motion No. 132-Mr. Martin (Essex East):
For a copy of the latest report of the unemployment insurance commission advisory committee.
Hon. Michael Starr (Minister of Labour):: Mr. Speaker, in order to identify this report, I presume the hon. member refers to the meeting of the advisory committee which was held last week?


Mr. Martin (Essex East):: I was thinking of the committee meeting before that, but now that the hon. minister has advised me that there was another, perhaps he will table both.


Michael Starr: All reports of meetings held by the advisory committee have been available, but there was a meeting last week. Is that the one the hon. member refers to?


Paul Joseph James Martin: No; I was thinking of an earlier one, but as I say, perhaps the hon. minister will supply both.


Michael Starr: I will check and see if there is an earlier one.


Mr. Speaker:: Shall this motion stand until the report is identified?


Some hon. Members:: Agreed.
Motion stands.



DOMINION-PROVINCIAL CONFERENCE, 1960

[Stage Direction]
Motion No. 133-Mr. Pickersgill:
For a copy of all communications addressed by the Prime Minister to the premiers of the provinces, regarding the federal provincial conference opening on July 25, 1960, together with the replies thereto.
[Mr. Regier.l
Howard Charles Green: This is acceptable, Mr. Speaker, subject to the usual reservations.


Mr. Pickersgill:: I wonder if I might be permitted to ask the Acting Prime Minister, in view of the fact that all the premiers are here, whether an effort will be made to get the consent at once.


Howard Charles Green: Yes, Mr. Speaker. Perhaps it will be easier to get consent promptly due to the fact that they are here.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I would like to ask the Secretary of State for External Affairs whether it is a fact, as reported, that the United Nations have asked Canada for 100 signallers for the United Nations Congo force but that 25 only have been supplied to date.


Howard Charles Green: Mr. Speaker, on July 22 I informed the house that discussions with the secretary general were going on concerning an inquiry as to whether Canada could provide signals specialists for the force. I point out that these are not ordinary signallers. The secretary general has also inquired whether we would be in a position to provide assistance for parts of the logistics support of the force.
Since receiving those inquiries the government has been engaged in detailed discussions with the secretariat with a view to clarifying the needs of the United Nations. The matter had to be studied in the light of requirements of the force as assessed by its commander, and appropriate Canadian army officers have been in touch with Major General Alexander in New York, since he was widely experienced in the actual conditions in the Congo. As hon. members will recall, Major General Alexander went to the Congo in command of the forces from Ghana. No precise figures have emerged from these discussions as yet, but the Canadian army has been considering tentative establishments, including a signals squadron of about 100 all ranks. This also involves complicated questions of equipment, and there have been discussions on that point as well.
One difficulty arises because any Canadian army personnel involved would have to be immunized against the tropical diseases so prevalent in the area before they could be

sent to the Congo. This process of immunization has been started for a number of selected personnel. There has also been discussion about sending some of the Canadian signals specialists from the United Nations emergency force in Palestine to the Congo, and that, I presume, is where this mention of 25 originated. It is not clear yet whether they could be spared from the United Nations emergency force, but that particular aspect of the question is also under discussion at the present time.


Lester Bowles Pearson: Could I ask a supplementary question. In the light of what the minister has said, will he comment on the report that the Canadian government plans to send between 300 and 800 administrative, non-combat troops to the United Nations force in the Congo, and would these signallers be included in that contingent mentioned in this report?


Howard Charles Green: That report is of course purely speculative, and when there is an announcement to make about the troops to be sent it will be made in the house. I would presume that the signals specialists are meant to be included in that report.



DOMINION-PROVINCIAL CONFERENCE SUGGESTED ATTENDANCE OF MINISTER OF LABOUR

[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: May I direct a question to the Minister of Labour. Since unemployment in Canada remains a grave and urgent problem, and since its solution depends, amongst other things, on federal-provincial co-operation, can the minister inform the house why he is not attending the federal-provincial conference on this question?


Mr. Speaker:: In the hon. member's absence we had a similar question, I think two or three days ago, which was dealt with at that time and appears in Hansard.


Hazen Robert Argue: Then might I ask the minister if it is his intention to attend the conference?


Michael Starr: Mr. Speaker, I attended the opening of the conference but came to the house for orders of the day, and I will be going back to the conference.



ORGANIZATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT    REPORTED OPPOSITION OF U.S. CONGRESS

[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: May I
direct a question to the parliamentary secretary to the Minister of Finance in connection 79951-0-434i
Inquiries of the Ministry with the statement he made earlier. Has he seen the article in the last issue of the Financial Post dealing with the problem upon which he reported on behalf of the Minister of Finance, entitled "Congress may kill trade group area", in which it is stated that a significantly large section of congress is bitterly opposed to United States membership in the O.E.E.C. plan; and has he any comment to make on that?


Richard Albert Bell: I have not seen the particular article in question, but I think it would be inappropriate to make any comment at this time in relation to what may be transpiring in another country. I would think the events which will take place in that country during the next few months may have a considerable legislative influence.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. John Prali (Jacques Cariier-Lasalle):: Mr. Speaker, I would like to direct a question to the Minister of Transport. Has the minister any information which he can give to this house about the fatal train accident which occurred in Montreal last Saturday?


Hon. George H. Hees (Minister of Transport):: Yes, Mr. Speaker, I have here a report from the board of transport commissioners dealing with this matter.
In accordance with standing instructions, the board's district inspector at Montreal has made a preliminary review of the circumstances surrounding this accident and his report is now on file. Full information with respect to the circumstances contributing to this accident will not be available until completion of the investigation, but the following information may be of some help.
At 4.07 p.m. eastern standard time, July 23, a head-on collision occurred at mileage 6.6 of the Canadian National Monfort subdivision between Montreal and St. Eustache. The two trains involved were No. 368, a commuter train operating between St. Eustache and Montreal, and an extra freight train en route northward from Montreal. One passenger on the commuter train was fatally injured, and present indications are that approximately 60 other passengers on this train were injured.
The board will be furnished with a full report by its inspection staff on completion of the present investigation.


Lionel Chevrier: Mr. Speaker, I sent notice to the minister that I intended to ask a question similar to that

Inquiries of the Ministry already asked, but the hon. member was quicker to the task than I was. May I ask a supplementary question. As the minister knows, the accident occurred on a single line of the Canadian National Railways where a freight train and a passenger train met in a collision. Is this a line where a central traffic control system is in operation? If not, will the centralized control block system be put into operation on this line soon?


George Harris Hees: I am not familiar with that particular section of track, Mr. Speaker, but I will be glad to make inquiries and advise the house.



PRIVILEGE


[Stage Direction]
On the orders of the day:
Mr. J. P. Deschaielets (Maisonneuve-Rose-monl):: Mr. Speaker, I rise on a question of privilege. This morning the government majority on the committee on human rights and fundamental freedoms turned down a motion-


Some hon. Members:: Order.


Jean-Paul Deschatelets: -to invite the premiers of the provinces-


Mr. Speaker:: Order. Before the hon. member proceeds I think he ought to satisfy me and the house that there is any right to deal here with matters which transpired in a committee meeting. To my recollection the practice is that only when a committee has reported does the house take into consideration any of the events which took place there, particularly matters of order or procedure.


Jean-Paul Deschatelets: I was endeavouring to put my question of privilege, Mr. Speaker, but I was giving the background of my question so it would be understood.


Mr. Fullon:: On a point of order-


Jean-Paul Deschatelets: My question of privilege-


Mr. Speaker:: I am not asking the hon. member to state his question of privilege, because I think he might be out of order if he does so. I am asking the hon. member what authority he can cite for submitting such a question of privilege to me. I will hear the Minister of Justice on that point.


Edmund Davie Fulton: It will be well understood-


Lionel Chevrier: On a question of privilege, the hon. member was attempting to give a reason in answer to the question he was asked, and now the Minister of Justice-


Mr. Speaker:: Order. Perhaps we had better get this straightened out. I asked the hon.


member to give me his authority, which he did not proceed to do. Instead, he proceeded to state his question of privilege again. The Minister of Justice raised a point of order, which can be done, and I want to hear him on that point of order.


Hazen Robert Argue: This is most unfair.


Some hon. Members:: Withdraw.


Mr. Speaker:: I hope the hon. member for Assiniboia, if he has any comment to make, will make it in a proper way and will reconsider the statement he has just made.


Hazen Robert Argue: On the point of order, the hon. member for Maisonneuve-Rosemont was speaking on a question of privilege, and I think when a member has the floor discussing a question of privilege he has the right to be heard without interruption. The Minister of Justice interrupted the hon. member who was speaking by raising a point of order, and I do not know how a point of order can supersede a question of privilege. Your Honour then went on-


Mr. Speaker:: The hon. member is superimposing a second point of order on a point of order, which is definitely out of order. If it is proper for this house to hear the hon. member's question of privilege he will have full opportunity to be heard, but before I proceed to take the course which in my judgment is the best course, I must ask the hon. member for Assiniboia to withdraw the statement which he made.


Some hon. Members:: Hear, hear.


Hazen Robert Argue: Mr. Speaker, I was endeavouring to explain-


Some hon. Members:: Withdraw.


Mr. Speaker:: Order. The hon. member
should have a chance.


Hazen Robert Argue: I was endeavouring to explain why I used the word "unfair", and I think I have the right to make that explanation. I was going on to say-and I hope I shall be allowed to conclude-that the hon. member for Laurier then tried to rise on a point of order. Your Honour asked the hon. member for Laurier to resume his seat. Now, if a member of the House of Commons is rising on a question of privilege, and a cabinet minister, or any other member of the house, is given the floor instead of the member who is speaking on the question of privilege, how is it possible for another member of the house in orderly fashion to come to the defence of a member who, in my opinion, should have the right to complete his question of privilege?
All I wanted was to make my position clear with regard to this point of order, namely

that a person who is speaking on a question of privilege should not be interrupted by anyone else on a point of order. Having now been given an opportunity to make that explanation, I do not hesitate to withdraw the word "unfair".


Edmund Davie Fulton: The
point I was endeavouring to make was a point of order with respect to this whole question of whether a matter which took place in a committee can be raised as a question of privilege in this way.


An hon. Member:: How do you know that the matter was?


Edmund Davie Fulton: Surely it is desirable, before we decide whether it is proper to raise the question of privilege, to address our attention to the question of whether the rules provide for its being done in this way. That was the reason I rose on a point of order. I did so because I felt it was essential that the house should determine that matter. I did not interrupt any hon. member. I rose on a point of order, and I was given the floor by Mr. Speaker for the purpose I have just outlined. That is, of course, a perfectly proper procedure.
My point of order is that it is my recollection of the rules of the house that matters taking place in a committee cannot be referred to until the committee has reported. That is the first, general rule. Second, if any member of a committee does desire to question the proceedings of that committee he must do so by way of a report from the committee; there must be a reference from the committee to the Speaker, as I recall it, in a formal way by way of an appeal from the ruling of the Chair, or something of that nature, or by way of a report from the chairman raising for the consideration of the house the matter which is complained of in the committee. Neither of these things has happened. The committee has not reported generally, nor has a specific matter been reported by the chairman of the committee to the house. Neither has the member-and I am not sure that in any case the rules provide for this-appealed to this house from a ruling of the chairman, or anything of that nature.
I submit, therefore, that it is improper for any hon. member to seek to raise a matter of the kind which the hon. member is seeking to raise as a question of privilege, at least until the committee has reported. It is quite obvious what the hon. member is seeking to do, and I submit to Your Honour that this is clearly a case where the rules of the house regarding privilege should not be allowed to be abused in order that a member
Inquiries of the Ministry may make a statement in the house, in the guise of a question of privilege, which is completely out of order.


Lester Bowles Pearson: I should like to ask you two questions, Mr. Speaker, in respect of this point of order. Can there be any interruption of a statement on a question of privilege by anyone in this house except Your Honour? The second is, how can the minister raise a point of order about a question of procedure until the statement of the member raising that question of privilege has been completed?


Mr. Speaker:: Perhaps that matter can be dealt with. We are really getting involved in two points of order at the same time. As to the question asked by the Leader of the Opposition about the raising of a point of order while a question of privilege is being discussed, my understanding of the procedure is that that is quite permissible. However, a second point of order cannot be raised while the first point of order is under discussion.


Howard Charles Green: May I point out that the hon. member in rising on a question of privilege stated that it had to do with a vote which had taken place in a committee of this house. That fact is before us, and once that had been stated I submit that the Minister of Justice was quite correct in raising his point of order.
The rules of the house normally prevent any question of privilege being raised in respect of votes taken in committees. If that were not the case the business of this house could be interrupted time and again by any individual member of a committee who did not happen to like the way members of the committee had voted. He could come into this house and raise a question of privilege, arguing that a vote had been taken on such and such a question and that it should not have been taken. It is fundamental in our parliamentary procedure that the committee controls its own work. As I understand it, there is not even provision for appeal from the decisions made by the chairman of a committee. I suggest that the hon. member who raised this question of privilege is completely out of order.


Lionel Chevrier: May I be allowed to speak to the point of order?


Mr. Speaker:: I will be glad to hear the hon. member on the point of order and when it is resolved then, of course, the hon. member for Maisonneuve-Rosemont will have the floor again in the light of the decision as to what may be properly raised.

Inquiries of the Ministry


Lionel Chevrier: The point of order I should like to bring to Your Honour's attention is this. There was an attempt to raise in this house a matter of privilege dealing with something that happened elsewhere but still within the precincts of this house. While that was under discussion it was impossible for the house to know what it was all about; certainly for me to know what it was all about, because I am not a member of the committee. Three hon. members have risen on a point of order and even yet the house knows nothing about the matter raised under privilege.
While perhaps the points of order were taken in the light of the rules, still I think the house should know and is entitled to know what it is that the hon. member for Maisonneuve-Rosemont has in mind so that Your Honour under the circumstances may make a decision. That is my submission to you, sir.


Hazen Robert Argue: Mr. Speaker, may I say a word on the principle involved. I think it is a well-understood rule and practice and an established guarantee of our rights that an hon. member can raise a question of privilege. This supersedes any other order of business or anything before the house. It is in order for an hon. member to raise a question of privilege at any time. If we say that a point of order supersedes a question of privilege, then there is no question of privilege available to hon. members. The right of a member of parliament to raise a question of privilege at any time and to state it briefly without interruption is one of our fundamental rights.
I would ask Your Honour to consider this and not be led into the error of saying that an hon. member who has initiated a question of privilege can be interrupted by someone else who raises a point of order. In my opinion, in the circumstances, a question of privilege supersedes any so-called point of order.


Mr. Speaker:: I wish to thank hon. members who have contributed to the consideration of this problem. If I may give my view in the light of what has been said, it is this; the hon. member for Maisonneuve-Rosemont rose on a question of privilege, quite properly, but began to discuss a proceeding which occurred in a committee this morning until he had proceeded far enough that I had doubts that he would be in order in accordance with our practice, which does not permit the review of committee proceedings in this house except after report. I asked him then to justify the regularity of his course. Perhaps I intervened too soon. I wanted to be sure I was on sound ground in ruling, as I shall have to do, that the house


does not review the decisions of the chairman of a committee or the proceedings in a committee, nor does it hear about them until they have been reported.
In the light of the discussion, if the hon. member for Maisonneuve-Rosemont feels that the privileges of the house are involved in some way I should like him to state his question of privilege, having in mind that we are not here to hear appeals from or to review the conduct of the committees.


Jean-Paul Deschatelets: Mr. Speaker, my question of privilege is that while the federal-provincial conference is going on in Ottawa, a refusal to invite the provinces to appear before the committee is nothing less than a very serious lack of courtesy involving all hon. members of this house. I hope the government will take immediate steps to reconsider this important decision and invite the provinces to appear.


Mr. Speaker:: The hon. member did not make his point very clear and I am not sure who should have invited whom, but I take it that the hon. member is referring to an invitation by the committee to have them appear. I regret that I cannot find any prima facie question of privilege there.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, I wish to direct a question to the Minister of Justice. Has the minister seen the statement in the morning press to the effect that certain Chinese families in the Montreal area have stated that they are being ostracized, and that the Hong Kong police are being used not as interpreters but in a manner contrary to the bill of rights? Has the minister any comment to make on that statement?


Edmund Davie Fulton: Mr. Speaker, I have seen the report in the Montreal Gazette to which the hon. member refers. Once again a report appears in the newspapers containing allegations of misconduct on the part of the police without there being any chance, as the report is worded, of our investigating it to see whether or not the facts as alleged are correct.
In the light of these circumstances, therefore, I have to repeat to the house what I said before in answer to similar questions. On every occasion when an incident has been brought to our attention or an allegation has been made, in a manner which did give us

any possibility of investigating it as an identifiable incident, we have investigated it most thoroughly and promptly, and in each such case it has been established that the allegation of misconduct on the part of the police was not true with one exception to which I think I should refer again, the case in Prince Rupert where Chinese were asked to sign questionnaires which they should not have been asked to sign. I think that was in six instances only.
I have made statements before as to the role of the Hong Kong police in this inquiry. I have taken every necessary step to satisfy myself-and I am convinced that every hon. member would be satisfied-that the Hong Kong police are conducting themselves properly, that they are acting as interpreters only in their contacts with individuals being questioned, that they are not abusing anybody or attempting to use intimidation or uttering threats. They are there with the Chinese only in the presence of our R.C.M.P. officials. The questions are asked by the R.C.M.P. and then interpreted by the Hong Kong police. Certainly the allegation contained in the Gazette in this form is an example of the kind of vague insinuation that it is impossible to deal with. This is what is said:
We have been told, however, that among the Chinese questioned here, twelve have been made to sign documents of some sort or other by the Hong Kong officers.
Now, sir, could there be anything more nebulous by way of vague insinuation, without an iota of identification, whether of the persons involved, or of the documents that are being talked about, or of the time and place of the incidents?
I think I should inform the house that it appears, with respect to those who have been involved in this racket, that there is a deliberate attempt to force, by intimidation, the other members of the Chinese community to refuse to co-operate with the police. This sort of allegation of improper police methods is in my view a part of that campaign. All I can say further about it is that if anyone brings to my attention an incident which I can investigate, then an investigation will be made immediately and thoroughly. I have investigated all incidents that have come to my attention thus far and have found the allegations to be unfounded. I therefore answer the hon. member's question by saying that my discussion with the police again this morning on the basis of this report, unidentified as I say, has further convinced me that there is no foundation for allegations of this type.


Lionel Chevrier: A supplementary question, Mr. Speaker. Why is it that Canadian-born Chinese are not being used as interpreters rather than the Hong Kong police?
Inquiries of the Ministry


Edmund Davie Fulton: One very good reason is that this investigation covers activities in Hong Kong. The knowledge of the Hong Kong police as to the situation there is essential. It is essential that we have someone with a knowledge of the situation there as well as with a knowledge of the Chinese language.


Lionel Chevrier: Mr. Speaker, another supplementary question. Is this not a question of translation; and if it is a question of translation and/or interpretation, then surely there must be Canadian-born Chinese who are able to translate just as competently as the Hong Kong police.


Edmund Davie Fulton: I have endeavoured to explain that the Hong Kong police have discharged other roles and are assisting us in other matters than that of mere translation. In connection with their contact with witnesses, their role and their relation to the witnesses are confined to the translation of questions and answers. However, they are helping us in this inquiry in many other ways besides the interpretive role.
This is a matter of police operation. I have confidence in the officials who are carrying out the operation, but notwithstanding that confidence, as I have said, every case where an allegation is made that we can identify we have investigated fully, promptly and thoroughly, with the result I have indicated to the house, that these allegations are unfounded and appear to be a campaign on the part of those involved in the racket to persuade the rest of the Chinese community not to co-operate with the police in the investigation.
That could have only one result, namely that the racket would go unexposed and the Chinese community would continue in the unfortunate situation in which it finds itself now, namely the victim of an organized racket which we are endeavouring to expose and stamp out.


Lester Bowles Pearson: Is the minister satisfied as to both the objectivity and the accuracy of the translations and interpretations of the Hong Kong police in these matters?


Edmund Davie Fulton: Yes, Mr. Speaker, I have indicated that the Hong Kong police have our confidence and that they are behaving themselves in a proper manner.



DEFENCE PRODUCTION


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: I should like to direct a question to the Minister of External Affairs. It arises out of the need

Inquiries of the Ministry to maintain, if at all possible, the aircraft production industry in Canada. Can the minister report whether any progress has been made in the arrangement for the sale to the United States of CL-44 air cargo craft produced by Canadair?


Howard Charles Green: No, Mr. Speaker, I cannot make a report on that matter.


Hazen Robert Argue: I did not hear the minister.


Howard Charles Green: I am not in a position to make a report.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, I should like to ask the Minister of Labour if he is in a position to report to the house the decision of the interdepartmental committee regarding the proposed new method of measurement for unemployment in Canada.


Michael Starr: No, Mr. Speaker, because I have not received a report from that committee yet.


Paul Joseph James Martin: May I ask the
minister a supplementary question. Does he not recall that when this question was put to him last week he was asked whether he would take the initiative himself? Will the minister now inquire of the committee when it expects to be in a position to make a report to him?


Michael Starr: There is no necessity for the hon. member for Essex East to urge me to take the initiative in any of the work I am doing.


Paul Joseph James Martin: Do I understand that the minister does not propose to ask the committee when it will be ready to report to him?


Michael Starr: Wrong understanding as usual.


Paul Joseph James Martin: I only asked the question.



HARBOURS


[Stage Direction]
On the orders of the day:
Erhart Regier: May I ask the Minister of Transport whether it is the intention of the government to introduce legislation this session either to reconstitute or enlarge the New Westminster harbours board?


George Harris Hees: No, Mr. Speaker.



COMBINES INVESTIGATION ACT-CRIMINAL CODE AMENDMENTS RESPECTING MERGERS, MONOPOLIES, ETC.

Edmund Davie Fulton: that the house go into committee to consider Bill No. C-58, to amend the Combines Investigation Act and the Criminal Code.


[Stage Direction]
Motion agreed to, and the house went into committee, Mr. Flynn in the chair.
On clause 1-Article.
Edmund Davie Fulton: Mr. Chairman, this bill has now been reported back to the house by the banking and commerce committee, which held 24 meetings and heard at least 39 representations.
With respect to amendments, the government indicated its readiness to accept amendments which would improve the bill and four such amendments were made in the committee. Two other amendments were moved which were not accepted. With respect to one of them particularly, the one dealing with the position of industry engaged in export business, I gave an undertaking to the committee to reconsider the matter very carefully to see whether an amendment could safely be included in the bill. I expect to be in a position to report to the committee on that matter either later today or on another occasion when we are dealing with the bill.
I should like to conclude this portion of my remarks simply by saying that the committee gave the bill admirable and thorough study. It was assisted greatly by a wide variety of representations that were made, and the study of the committee confirms my impression that this is a good bill; that it clarifies the combines legislation; that in some respects it does this in a way that will be of assistance to industry in enabling them without fear of prosecution to carry out activities which will be beneficial to the economy and which we were advised previously they refrained from carrying out because of the uncertainty of the legislation.
I therefore wish to express appreciation of the consideration of this matter by the committee, and commend the bill to the committee of the whole house here on the basis of its study and approval by the committee on banking and commerce.


Mr. Caron:: When we were studying the principle of the proposed amendments on second reading of this bill, we of the Liberal party admitted being ready to accept amendments which would either clarify, ameliorate or render the act easier of application, but

having always in mind the welfare of the mass of the people, the consumers, without imposing too much restraint on the manufacturer. We express our doubts as to the fulfilment of this aim by the present bill. Many from the other side thought we were biased, that we were too politically minded.
The bill was passed, as we expected, and sent to the committee on banking and commerce. We heard there witnesses and briefs from all walks of life, consumers, industrialists, economists, lawyers and so forth, and we were struck or amazed in the committee by the opposition in one way or another of everyone who came before the committee.
I should like to look a little at the opposition which was shown in the committee stage by those appearing before us. First may I look at the special appendix to the proceedings, which relates to some correspondence. I do not intend to read everything that was said, but will refer to portions here and there to prove that most of those who appeared were opposed in one way or another to the proposed amendments. I should like to refer first to a letter written to the chairman of the committee by Mr. G. E. Britnell of the department of economics and political science, University of Saskatchewan. The letter is found on page 15 of the appendix to the proceedings of the standing committee, and reads as follows:
Under a covering letter to the Minister of Justice dated November 30, 1959, the senior members of the department of economics and political science at the University of Saskatchewan, professors G. E. Britnell, V. C. Fowke, N. M. Ward, K. A. H. Buckley and A. E. Safarian, submitted a criticism of Bill C-59. We regret that because of the late date on which Bill C-58 has been introduced, and the pressure of other commitments, we are now unable to submit a full appraisal of Bill C-58 for consideration by your committee.
It is the view of those who signed our original submission, however, that the amended bill carries over, in substantially unchanged form, several provisions of the original bill which were subject to serious criticism. Thus, although the wording has been changed somewhat, the amendments to section 32, listing permissible forms of co-operation between companies, are still subject to the dangers which we indicated in our submission. Furthermore, the amended bill is still likely to result in a significant weakening of the ban on resale price maintenance. Finally, our concluding suggestion that the application of the legislation to the service industries be examined has been completely ignored.
On page 27 of the same appendix there is a letter from Mr. J. H. Northway, president of the Canadian retail federation. I will not read the whole letter because I do not want to take the time of the committee by reading things which are accepted by all. However, in subparagraph 2 he says:
The penalties involved in section 33B are serious and there is a strong fear that they would provide to manufacturers an excuse to eliminate, in effect,
Combines Investigation Act
advertising allowances to retailers of all sizes. This could involve an effective prohibition of advertising allowances generally, which we think to be unfair and unrealistic.
Subparagraph 3 reads as follows:
It has been pointed out to us that the three definitions of "proportionate terms" in subsection 3 of section 33B do not stand alone but are cumulative. Therefore, in order to qualify to receive an allowance, the three definitions of "proportionate terms" must be met in the light of their total effect. It has been urged upon us that this is a practical impossibility for retailers generally, large or small, and amounts to a virtual prohibition of the receipt of advertising allowances. Advertising allowances cannot possibly be used in the same way by a small retailer as by a department store or as by a mail order house; yet the legislation presumes that this is possible.
A number of our member companies have told us that, after consulting with their solicitors, they have failed to obtain a satisfactory interpretation of the language of section 33B which would direct them as to what course of action they must follow should this section become law. It would appear that it is not possible for a retailer to know what course of action he should follow or under what circumstances he may properly receive an allowance from the manufacturing supplier.
I have referred to only two letters in the appendix, but most of them put forward criticisms of one kind or another. Therefore I want to say to the committee that even though the minister says the bill is a clarification, it would appear that most of the people who appeared before the committee do not seem to think so.
I should like to refer now to volume No. 2 of the proceedings of the committee, page 98. There we have the evidence given by Miss Atkinson, president of the national association of Canadian consumers. At page 99 I find the following:
Our opposition to resale price maintenance has been repeatedly stated and reaffirmed, not only to the various departments and committees which have considered this matter before, but it has been reaffirmed by our members at local and provincial levels and during discussions at meetings of the national delegate body. We felt that we definitely have a mandate from our consumer members to appear before you and present this case for them.
We feel that the enactment of the proposed amendment to clause 34 will seriously weaken this safeguard to consumers and make successful prosecution difficult and unlikely.
Mr. Gilbert's presentation of the distributors' case appears to pass on the desire to prevent that form of competition which he referred to as loss leader selling.
Our members and other consumers have never complained of the so-called loss leader selling. They do complain of the continuing of the price maintenance afforded by their wide use of lists and suggested prices.
Later on the same page Miss Atkinson says:
This submission will be limited very largely to a consideration of clause 14 of Bill C-58, which amends section 34 of the Combines Investigation Act prohibiting the practice of resale price maintenance. The reason for this limitation is not that

Combines Investigation Act
we necessarily approve of the remaining amendments but rather that many of them involve technical issues relating to the jurisprudence in combines cases and complex economic considerations which require a degree of specialist knowledge that is beyond our competence and our limited budget.
As found on page 100 she goes on to say:
Turning now to the amendments to section 34. it appears, on the surface, that the ban on resale price maintenance is not being eliminated but rather certain pricing, servicing and advertising practices are being brought under a limited control. Closer examination, however, makes it clear that successful prosecutions against "dealers" who enforce resale price maintenance will be most unlikely if these amendments are adopted.
Under proposed subsection (a) "no inference unfavourable to the person charged" with attempting to enforce resale price maintenance shall be drawn if "he and any one upon whose report he depended had reasonable cause to believe and did believe" that the seller made a practice of using the articles supplied as "loss leaders".
"Loss leader" selling of a product is defined as being "not for the purpose of making a profit thereon but for purposes of advertising". But at what level is it considered that a profit is being made? And why should the seller be forced to make a profit on the item in question rather than on his stock as a whole; and of course, who decides what the profit is? These are surely basic questions and the only answers that seem at all likely are very disturbing to our members.
As was suggested a little later, special discounts for advertising credits may be given to one and not to another. This would constitute quite an injustice, and we know quite well that these credits are generally given to those who are strong enough to be able to force the manufacturers to give them. They are always given to the powerful ones, but never to the small ones who may benefit from such a thing.
Later on in the minutes of evidence, No. 3, we have a brief presented by the Canadian [DOT]electrical manufacturers association. In general they seem to like some parts of the bill, and they seem to be quite critical of others. I read from page 165:
Section 29-Reduction or removal of customs duties
(section 11)
Therefore, we suggest that the words "from or as a result of an inquiry under the provisions of this act, or" in the first and second lines of the section, should be deleted.
They do not ask us to abandon this section, they just plainly ask that these words be deleted. Then in speaking of section 31 (2) -prohibition order without conviction-this is what they have to say:
Our recommendation therefore is that the underlined words "has done" be deleted in the subsection.
On page 166 we find this:
Section 32 (3)-Exceptions to the defences contained in section 32
(section 13)

The section as now written would appear to prevent even reasonable acquisitions of this kind. Section 33-Mergers and monopolies (section 13)
Bill C-59 of 1959 contained the following words:- "Subsection (1) shall not be construed or applied so as to limit or impair any right or interest derived under the Patent Act, or under any other act of the parliament of Canada." We believe these words should be added to this section to make it clear that section 33 is not intending to impair in any way rights derived from patents.
Section 33A (b) and (c)- Illegal trade practices (section 13)
Speaking of the words "solely" they said:
.. ."It is not clear what the addition of this word accomplishes but it can only have a meaning which pre-judges some future situation which may or may not arise. We think it unfortunate for the hapless trader who happens to be caught in the words of this paragraph that his fate may be determined by an opinion as to circumstances which may never arise. Theoretical possibilities should not govern a matter so serious as the laws which affect economic policy."
We therefore again urge that the words "or tendency" be removed from these subsections. Section 33B-Promotional allowances (section 13)
This section contains a new principle in the bill. For this reason we feel it is desirable to give the business community further opportunity to study its effect. It is impossible for us to say at this time whether the objective which the section seeks to achieve is desirable or not...
Section 41A-The jurisdiction of the exchequer court
(section 19)
We have no objection to the suggestion contained in this section that the exchequer court be treated as an alternative forum for the trial of most of the offences created by the Combines Investigation Act, but we feel that the forum to be chosen should in all cases be with the consent of the accused.
This suggestion appeared very often throughout the hearings. Those who appeared desired that the consent of the accused should be given before further proceedings were taken. Then this brief says:
We urge that this section be so worded that the forum chosen be with the consent of the accused in all cases and that in all cases the right of appeal is clearly and unequivocally given.
Section 34-Resale price maintenance (section 14) The amendments now under discussion do not restore a manufacturer the right to practise resale price maintenance. They will, however, bring a measure of relief to small retailers and the government is to be commended for its honesty and courage in providing the help the amendments will afford.
The Canadian electrical manufacturers association, therefore, found only one thing with which they seemed to be satisfied, and that is that there would be some measure of relief to small retailers in connection with resale price maintenance. The minister said time and time again that this bill would not reinstate price maintenance. These people

seem to be of the opinion that, to a certain extent, price maintenance will be permitted under this provision.


Edmund Davie Fulton: On the contrary, the electrical manufacturers association, in the sentence which the hon. member read earlier, said this provision would not restore price maintenance.


Alexis Pierre Caron: That is what I said, but they do state in addition that it would help the small merchants. They did not state it would reinstate price maintenance, but they did state the provision would afford some relief for the small merchant. Then if I go further in the minutes of evidence No. 3, I find that on page 214 Mr. Hemens, chairman of the committee on combines legislation, Canadian Chamber of Commerce, said this about clause
I	of Bill No. C-58:
Subclause (2) of clause 1 of Bill C-58 provides for the definition of "merger" and "monopoly". In providing for these new definitions and repealing the present paragraph (e) of section 2 of the Combines Investigation Act, it appears that the following wording which forms part of the present paragraph (e) of section 2 was inadvertently left out of the proposed amendment, to wit: "but this paragraph shall not be construed or implied so as to limit or impair any right or interest derived under the Patent Act or under any other statute of Canada;"-
Then further on they say:
We urge that the foregoing wording, or wording to similar effect, be restored to the act.
Clause 9 of Bill C-58:
It is suggested that the words "a finding" which appear in the first and fourth lines on page 4 of Bill C-58 should be replaced by the words "an expression of the commission's view as to".	-
Then they conclude that paragraph by stating:
It is suggested also that the word "unduly" should be inserted before the word "restricted" and before the words "to restrict" in the eighth and ninth lines on page 4 of Bill C-58.
Here is what they had to say about clause
II	of Bill No. C-58:
It is recommended that the words "from or as a result of an inquiry under the provisions of this act, or" which appear in lines 28 and 29 on page 4 of Bill C-58 should be deleted.
Then on clause 12 it is said:
It is suggested that there should be deleted from the proposed subsection 2 of section 31 the words underlined in lines 24, 27, 29, 30, 31, 32 and 33 on page 5 of the bill.
It was considered that this clause would constitute a gross invasion of private rights. Then on clause 13 it is said:
Clause 13 of Bill C-58 proposes the repeal of sections 32 and 33 of the Combines Investigation Act and the substitution therefor of proposed sections 31A, 32, 33, 33A, 33B and 33C.
With respect to subsection 3 of the proposed section 32 it is recommended that for purposes of clarity the word "unduly" be inserted before the word "restricted"-
Combines Investigation Act
Then on clause 19 it was further said:
It is recommended that subsection 3 of the proposed section 41A should be amended to provide for a right to appeal from the judgment of the exchequer court in respect of proceedings under section 31 of the Combines Investigation Act as amended,-
Then under the heading "General comments" it was said:
Since one of the objectives of Bill C-58 is clarification, it is recommended that a provision be inserted in the bill indicating clearly that the Combines Investigation Act is designed for the protection of the Canadian public and is not applicable to contracts, agreements or arrangements which relate only to export trade or commerce.
Furthermore, while it is believed that the legal right of the court to provide for a fine in lieu of the punishment provisions of the proposed new sections 32, 33, 33A and 33B exists in view of the provisions of the Interpretation Act and of the Criminal Code, it is recommended that for the sake of clarity and consistency, particularly in the light of the wording of proposed section 31A of the act and sections 34 and 39 of the act which provide for the alternative of a fine, the same alternative provision be provided throughout.
There are several places in Bill C-58 where provision is made for action based upon a suggestion that an offence is "about to be committed". Such references are found in clause 2 of the bill amending section 7 of the act; clause 3 of the bill amending section 8 of the act; clause 6 of the bill amending section 15 of the act; clause 12 of the bill amending section 31 of the act. It is suggested that the above cited words should be deleted where they appear since it is not clear what can be the criterion of "about to commit an offence" and it is conceivable that heavy expenses may be incurred by anyone accused under the above cited sections with little or no evidence of any offence.
Now I come to minutes of proceedings No. 4, containing the evidence of Mr. Hyland, director of the fisheries council of Canada. As reported on page 266 he said:
Both the fisheries council of Canada and the fisheries association of B.C. strongly support the recommendation of other important export industries that the realities of competitive export marketing should be recognized in Bill C-58. If it is necessary or desirable for Canadian export industries to reach group decisions and policies covering export marketing, such activities should be clearly exempted from the provisions of the Combines Investigation Act.
A little further on in the report Mr. Nicholson, of the council of forest industries of British Columbia, as reported at page 295 had this to say:
So our suggestion is that you put in, following subsection (f), if you like-and you will have to renumber the sections, of course-and then put in as a new subsection 2 (b) the allocation of markets and the creation of uniform prices in terms of sale in the export trade to better facilitate the competitive position of articles exported from Canada as against foreign competition.
Then as reported on page 299 he had this to say:
Our suggestion or recommendation to this committee is that no prosecution or proceedings shall be instituted in the exchequer court under section 31 (1) (b) without the consent of the accused.
6890	HOUSE OF
Combines Investigation Act
and with respect to proceedings under subsection 2 of subsection 31 without the consent of the person or persons concerned.
Further down on the same page he said:
We respectfully suggest that nobody would quarrel with the principle of that legislation. It is in the law today, and there are advantages in continuing with it.
Then as reported on pages 303 and 304 Mr. Wansbrough of the Canadian metal mining association had this to say:
Specifically it is suggested that section 31 (2) be left in its present form-that is, the form in which it appears in the existing Combines Investigation Actexcept for the necessary amendment to correct the cross reference or if this is not acceptable that it be amended in the following respects:
(a)	to provide that proceedings may be instituted thereunder only with the consent of the person charged:
(b)	in the case of an offence alleged to have been previously committed that proceedings may be instituted in any event only within three years from the commission of the alleged offence: and
(c)	that the person charged should have the same rights of appeal from any order of the court under section 31 (2) as he would have against conviction after indictment under part V.
Our proposal, with respect to section 41A, as proposed by section 19 of the bill, has been dealt with, to some extent, by Mr. Nicholson. However, I will try to make clear the distinction between the right of appeal which is provided in case of proceedings in the exchequer court and proceedings in the provincial supreme courts.
On page 304 he is reported as having said:
It is suggested that a person convicted by a judge of the exchequer court in proceedings under section 41A should have the same rights of appeal to the supreme court in Canada as he would on an appeal from a trial judge of a provincial supreme court to the court of appeal otherwise the rights of the person charged are dangerously and unjustifiably narrowed.
A little further on, in relation to the word "unduly", he had this to say:
However, grammatically it appears clear that the word "unduly" as it stands in the bill does not apply to restrictions against entering into or expanding a business and its is suggested-and this is the feeling of Mr. Nicholson-that the latter part of the subsection be amended to read as follows:
or if the conspiracy, combination, agreement or arrangement unduly restricts or is likely unduly to restrict any person from entering into or expanding a business in a trade or industry.


The Chairman:: Order. I am sorry to interrupt the hon. member, but his time has expired.


Some hon. Members:: Carry on.


Mr. Howard:: If the hon. member wishes I can speak for a few minutes, and then he can come back?


Alexis Pierre Caron: No; I have quite a lot to say.


Charles Benjamin Howard: Mr. Chairman, I have comments to make on this particular clause.
[Mr. Caron.l

When the indication was given to the house that this bill was to be referred to the banking and commerce committee I am sure all members were very hopeful of what might result from the deliberations of that committee, especially in view of the statements made from time to time by the Prime Minister to the effect that committees are going to be more deliberative than in the past, that more work is to be given to them and that their ideas are to be listened to with more respect than in the past. I know that I myself, together with many other members of the committee, approached this bill objectively and with open minds, with a sincere wish to weigh the differing opinions expressed by witnesses who appeared there in order to come up with thoughts or ideas on the bill which would be most beneficial to the consuming public who, after all, are the most important element affected by this type of legislation.
I must disagree at the outset with the opinions expressed by the minister a few moments ago, and also with the opinions the hon. gentleman expressed in the committee when he and Mr. MacDonald, the director of research and investigation, made their remarks. I will paraphrase the minister's observations, but they were to the effect that the committee had functioned well, and that the presentations before the committee bore out the hon. gentleman's contention in the first instance that this was good legislation.
This is just not in accordance with the facts, and I think the minister is misrepresenting the witnesses who appeared before the committee. While some of them certainly expressed support for some of the features in the bill, I do not think there was one witness who was wholeheartedly in favour of the bill as presented. Even the minister himself came into this category. Moreover, there were a number of witnesses who voiced very strong objections to the legislation and to the effect the bill would have upon the economy and upon the consumers.
Unfortunately, even though there were some members of the committee who approached this question objectively and with an open mind, it became evident that there were other members of the committee who had already determined the attitude they would take, and who had decided to support the bill regardless of any representations made to them. These members of the committee, of whom I think unfortunately the chairman was one, took the attitude of completely disregarding any representations made to the committee which opposed the principles in the bill itself. We discovered the powerful shadow

of the minister hovering over the shoulder of every member supporting the government, indicating that he should not be too objective and that he should not disagree too much with the bill.


Mr. Aiken:: What a lot of nonsense you do talk.


Charles Benjamin Howard: The hon. member for Parry Sound-Muskoka comes out with his usual cry of "nonsense". I hope he will take part in the debate later on, and that he will be able to express more than just that one word. He does appear to have some predilection for the word, and maybe that is why he uses it so much.
Appearing before that committee were a number of witnesses who had a specific interest in the legislation, witnesses who had an axe to grind. In this class I place the manufacturing interests, who certainly have an interest in this type of legislation which seldom coincides with the interest of the public generally. There was another group of people who appeared as witnesses whose attitude, I think, could properly be expressed as one of dissociated interest; they were interested only from the point of view of economics, the theory of competition and the effect on the consuming public.
In this group I place the various university professors who appeared. From my recollection there were some five professors of economics, among them Dr. Skeoch, who for seven years, I understand, was senior economist in the combines investigation branch and who has held other posts, including one with the Canadian wheat board, and is considered the most renowned authority in the economic field in Canada. Unfortunately the opinions of this gentleman and the opinions of Professor Maxwell Cohen, acting dean of the faculty of law at McGill University, apparently carried no weight with the minister or with the majority of the members of this committee, for none of their opinions or attitudes are reflected in the decisions of the committee.


Gordon Harvey Aiken: May I ask the hon. member a question? Is it not a fact that as a result of the committee's discussion of these objections at least three amendments were made?


Edmund Davie Fulton: Four.


Charles Benjamin Howard: We shall be getting to the amendments themselves shortly and perhaps it would not be proper at this time to deal with them.


An hon. Member:: Yes or no will do.


Charles Benjamin Howard: Again we have this belching of words spoken into the cuff instead of out in the open, and I cannot hear them.
Combines Investigation Act


An hon. Member:: This requires a simple answer. You should be well qualified to give it.


Charles Benjamin Howard: This mumbling that goes on at the back-perhaps you would explain to them, Mr. Chairman, that the proper way to do this is by getting up to speak, as did the hon. member for Parry Sound-Muskoka.
It is quite true that three amendments were agreed to. As I said, I do not know whether it would be correct to go into details at this moment. I think we would probably run foul of the rules if we did so, because this is a general discussion. I do think that one of the witnesses-and I must indicate this as early as possible because it may be the case, though I hope it will not be, that some members of the committee in considering this bill may want to advance the representations made by this witness in support of their arguments, especially with regard to clause 34-gave evidence upon which too much reliance should not be placed.
I refer to the retail merchants association of Canada, and I think for a variety of reasons we should disregard almost entirely the representations made by that group, and in particular by the witness Mr. Gilbert, who appeared before the committee. In one instance his statistics were unsupported. They were taken from two separate sources and sometimes without any explanation, with regard to some of them, as to their source.
Moreover, the brief was incomplete because time ran out and Mr. Gilbert was not allowed to be recalled to complete his evidence to the committee. Third, it was evident that Mr. Gilbert and the retail merchants association had been playing footsie with the Conservative party beforehand on this issue and got its point of view across.


Mr. Woolliams:: That is prejudice.


Charles Benjamin Howard: There was evidence before the committee that this was so. Only by accident did the presentation made to the Conservative caucus come before the committee. Even then it was misnamed, and the opinions expressed were not factual.


Gordon Harvey Aiken: Mr. Chairman, would the hon. member permit another question?


Charles Benjamin Howard: Yes.


Gordon Harvey Aiken: Is it not also a fact that this particular group was asked to appear before members of the Liberal party and the C.C.F. group in connection with the very same proposition at a different time?


Charles Benjamin Howard: Certainly that is so.


Some hon. Members:: Oh, oh.


Edmund Davie Fulton: Playing footsie.

Combines Investigation Act


Charles Benjamin Howard: On May 11, 1960 I wrote the following letter:
Mr. D. A. Gilbert General Manager.
Retail Merchants Association of Canada Inc.
Suite 112, 77 York Street Toronto, Ontario


Eldon Mattison Woolliams: Oh, good; we have the address.


Charles Benjamin Howard: I hear more noise in that quarter of the committee. I continue:
Dear Mr. Gilbert:
We have just had the amendments to the Combines Investigation Act presented and I am enclosing a copy for your information and use.
If you have any particular thoughts about the effect of these amendments, which I myself have not had a chance to look at yet, perhaps you might like to let me have the benefit of these thoughts.
Yours sincerely,
Frank Howard, M.P.
I did not receive the benefit of his thoughts or even the courtesy of a reply.


Eldon Mattison Woolliams: Did you mail the letter?


Charles Benjamin Howard: I mentioned this letter in the committee, and Mr. Gilbert's comment on my statement that he had not replied was to the effect that that was quite possible. I have yet to receive an answer from him. This indicates that he considered it unwise or unadvantageous to reply, or that he did not have time to meet the request. Unfortunately this association has fallen under the guidance of elements within our economy that are not working in the best interests of the consumer or the small businessman.


Eldon Mattison Woolliams: Or the C.C.F.


Charles Benjamin Howard: A few years ago the association engaged in a campaign of sending mimeographed letters to their constituent members which were signed and sent to members of parliament, asking for the repeal of section 34 in order to allow a return to the price maintenance system and for financial aid to small business. I received a number from my constituents. In the recess I visited them, and without exception these men did not know what section 34 was or what the effect of its repeal would be. Obviously they were asked to send these letters by the central organization.
The attitude of the association with respect to a return to resale price maintenance is not the attitude that organization expressed before the restrictive trade practices commission when it met in 1954 or 1955 to deal with the question of loss selling leader. At that time the association was represented by Mr. Gilbert, the president, and Irving Keith, Q.C., counsel. Mr. Keith presented the brief and


was then questioned on it by N. W. Wickwire, Q.C. The following exchange occurred at page 3506 of the transcript of evidence, volume 21, dated September 14, 1954:


Mr.   Wickwire@: Then, at page 3 you state that your first task today is to make clear, on behalf of the retail merchants association of Canada, that they are not in any way suggesting to this commission or to the government that legislation be drafted to eliminate or to reduce any of the advantages which derive from initiative, ingenuity, astuteness, and so on. I take it from that that your organization is not in favour of resale price maintenance, as such?


Mr.   Keith@: No, and I might say that we have probably received considerable encouragement to the opposite view from various sources. But we have not fallen in line with it.
Unfortunately the association has been led away from considering the main problem, the question of price discrimination covered by another portion of the bill with which we will deal later and to which we will offer amendments. We hope to persuade the committee to direct its attention to removing price discrimination and the abuses which result. More would be accomplished from this than from tackling section 34.
May I call it one o'clock?
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2 p.m.
Charles Benjamin Howard: Mr. Chairman, in resuming my remarks at this stage perhaps it would be well to reiterate the fact that this particular bill and anti-combines legislation of this nature have a two-fold general effect or approach, one of which is to ensure that competition exists and develops, and the other to see that the consuming public is protected, as it were, to the fullest possible extent against encroachments on their rights by large industrial organizations.
When we think in terms of competition and what it means, I think we all realize that it is not an absolute term; that there are different concepts, interpretations and theories and different qualifying phrases about competition ranging from the so-called perfect competition, which is something in theory only and a basis from which to start explaining other concepts of competition, to the so-called new competition theory which generally speaking is that there is only so much money in circulation; that the consuming public has only a certain amount of money to spend on certain types of goods and, therefore, the competition is competition for the sales dollar as between firms producing different types of commodities. The

thought flowing from this concept is that it is permissible, therefore, for firms producing the same types of commodities to enter into price-setting agreements because what they are doing is not competing with each other but competing in a price sense for a portion of the consuming dollar.
I do not wish to get involved in these theoretical concepts of competition, although we do know that there are elements in the business world which promote and have promoted from time to time the development of these different concepts of what competition should mean, and which would like to argue that whatever they do within this field is permissible even though it may be that they are engaged in price fixing.
However, the benefits which flow from the competitive forces, the ones which we should concern ourselves with in so far as the general public is concerned, are twofold. One relates to a better quality product and the other relates to a lower price for any particular product or commodity.
As I said earlier, there are generally two elements which have a stake, a direct interest, in this legislation. One is industry and the other is the public. While there may be interests different from those, I think we can confine ourselves to one or the other, industry or the public. We know that industry is organized, is vocal and is divided, of course, into provincial groups, local groups and different organizations, and is able to present its points of view with much more clarity, much more expressiveness, much more effectiveness than is the consuming public. The very fact that a corporation does exist in industry is an indication that it has organized within itself.
Then we have the Canadian Manufacturers' Association, which is the voice in one field of industry. We have the various provincial sections of the Canadian Manufacturers' Association, the boards of trade, the chambers of commerce, which to a great degree are reflecting industry's desires and the attitudes of individual trade associations, some of which appeared before the committee. 1 refer to the fisheries association, the metal mining association and the electrical manufacturers association. There are hosts of other types of associations organized on a trade or specific industry type of basis.
These associations, as I said before, are organized; they are vocal, and they are able to present their point of view with much more effect and force than the general public, which generally speaking is unorganized in terms of an organization which relates to a matter such as this and generally speaking is not amenable to organization along these
Combines Investigation Act lines. We do have the Canadian association of consumers, which is one organization representing the consuming public, but even that organization in itself is not as effectively organized or as vocal as, for argument's sake, the Canadian Manufacturers' Association or the various trade associations to which I made reference.
It does not always follow, in fact I submit it is relatively seldom, that the specific interests of industry and of the consuming public coincide with one another. I think if one will review the various representations made to the minister, the Prime Minister and other members of the cabinet, especially those made since the introduction of bill C-59 last year, one will find that the views expressed, as I indicated earlier, by the organizations or associations representing industry had much more impact than any representations which might have been made on behalf of the general public. The effect of those representations is shown in the legislation we have before us, and was also indicated in the legislation introduced and withdrawn last year.
I think we can pretty well determine therefore that the corporate element in the industrial field, the element with a specific axe to grind, has had its views and desires reflected in this legislation more than the views of the consuming public. I submit that primarily this is because the industry groups are far more vocal and effective and are better organized and better able to present their point of view over a longer period of time than the general public. The result of the activities of these pressure groups is shown in practically every proposed change of any major importance in the legislation.
We must remember that there are a number of changes in the legislation which are necessary because of major changes in policy approach. However, every other change with the exception of two pretty well reflects the attitude of the business world as opposed to the attitude of the consuming public. The first exception is the misleading advertising section, and the second is the reference to restraining or dissolution orders without the necessity of first obtaining a conviction. Even in the case of the second one, some doubt was expressed by an eminent authority on law, the acting dean of the faculty of law of McGill University, Professor Cohen, as to the constitutionality of being able to obtain a restraining or dissolution order without first obtaining a conviction.
We know that Professor Cohen was rather verbose when he appeared before the committee, and perhaps used more words than were necessary to get his point of view across. I do not intend, therefore, to read Professor
6894	HOUSE OF
Combines Investigation Act Cohen's evidence. I will simply say that his expression of doubt as to the constitutionality of the restraining or dissolution order provision is found on page 547 of the minutes and proceedings of evidence No. 9. If 1 were to read Professor Cohen's full remarks it would take too much of the time of the committee, so I simply give that reference in case hon. members wish to look at what he said. His remarks start a little more than two thirds of the way down page 547.
Apart from this matter, which is really only a side issue, I think I can say without too much fear of contradiction that in introducing these amendments the government has knuckled under, as it were, to specific vested interests and has not given the full consideration that it should have given to the effect of these amendments on the general consuming public. We all realize that one of the intentions of the legislation is to protect the consumer as much as possible against encroachment upon his rights, liberties and freedoms by large mass industrial organizations.
The hon. member for Ottawa West moved a motion for information listing the various representations made to the minister. I do not wish to go into them in detail at this time because my time is running short. I will merely say that a review of these representations indicates that organization after organization in the industrial world made its views known to the minister not only on this occasion but in years past. These views are reflected in the legislation before us, and the views, desires and hopes of the general consuming public have been by-passed to a great extent or glossed over or forgotten. I understand that my time is almost up, so I will leave the matter now having in mind that, depending on what other members may say, I may have an opportunity later to make a few other remarks.


Mr. Van Horne:: Mr. Chairman, my remarks will be very brief. I wish to indicate that the bill before us is a very important step forward. About two years ago I came across an important problem which at that time did not seem to be covered by the Combines Investigation Act. It had to do with abuses on the part of one or two major oil companies which, in order to get volume, made highly secret and most unorthodox deals with the larger users whereby prices would be drastically cut and the oil companies would get the volume they needed. At the same time the small consumer purchasing oil to heat his house or the small industrial plant owner using oil or oil products to heat or operate his factory got no such benefit. At that time I felt that the large consumers were getting a very unfair advantage at the expense of


the smaller consumers. However, the government could do very little then by way of an inquiry, and I am pleased to see that this bill will make possible inquiries into that practice.
In a riding such as mine we have a very difficult problem with regard to the prices being paid for pulpwood. I realize that investigation and prosecution with respect to the price fixing of pulpwood have almost been terminated. However, I should like to say that the new section 13, which gives the minister the right to appoint counsel to assist the investigation will probably also give more control to the minister through the department's counsel in order to bring some influence to bear on the methods used in carrying out these investigations. From information that has been made public at various times I can say that the investigation conducted with regard to the price of pulpwood did not reflect any credit on the government which conducted it. Methods of getting information were adopted in the offices of these pulp and paper companies which were highly unethical, undemocratic and without proper regard for due process of law and the other constitutional safeguards which our citizens have a right to expect.
Naturally, there is no question but that action has to be taken in regard to the price of pulpwood. I know that in my riding the price of pulpwood has gone down from $6 a cord two years ago to $4 per cord. This has occurred at a time when the cost of living is increasing and when wages in the pulp mills have reached the highest levels they have ever attained. The price of pulpwood has gone down by some 30 per cent in some cases.
I do not relate this, however, to any combination of factors amongst the pulp and paper companies; I do not say that is the primary cause of this reduction in price. However, I do say that the people who have to earn their living by cutting pulpwood are being placed in a very unfair position. In most cases, because of the large expanse of territory in which they work and because of the difficulty in getting them together to form a union, these people are denied the benefits that employees in the pulp mills have had guaranteed to them by the efforts of their unions. Is it fair, for instance, that a man who sweeps the floor in the pulp mill should receive $1.70 per hour, while the fellow who cuts pulpwood from morning until night should make only $4 or $5 a day. At the end of the week, when he has paid for his horse and other living expenses in camp, he may find himself left with only $15, whereas the fellow in the pulp mill may take home $75.

I feel that if there has been some definite combination of circumstances which has been fostered by the pulp and paper companies- and I have no reason to think there has- whereby the price of pulpwood is being forced down, then some definite action should be taken. If our people are being forced to eke out a living on wages which are 30 per cent less than they were, I certainly feel that this act, as it will be applied, should go a long way toward offsetting the detrimental effects of the reduction in the price of pulp-wood. Of course I realize that, fundamentally, the people who are engaged in the cutting of pulpwood are not unionized; they are not united. I know that a few years ago some efforts were made-as a matter of fact I took part in them-to organize the woodsmen of northern New Brunswick into a union. This effort did have some beneficial results and conditions in the camps improved. However, the fact still remains-


The Deputy Chairman:: Order. I must remind the hon. member that we are discussing a bill to amend the Combines Investigation Act and the Criminal Code. I rather think he has strayed away from the subject matter of this bill.


Mr. Benidickson:: May I speak to the point of order? I am sure the hon. member is quite aware of the discussion that took place in the committee with regard to export industries such as the pulp and paper industry, and the relationships that are so widespread in that area.


John (Jack) Henry Horner: The point I was making was that this act will have the necessary teeth in it to permit the curtailment of some of these abuses that have been taken for granted in the pulp and paper industry. I think that in so far as that attitude is maintained, then my remarks are very much in order. Some of my remarks in connection with unions may have been by the way in so far as this particular bill is concerned, but I am very pleased to see this bill come before the house, and I can assure you the people of my riding, as well as the people of eastern Canada, are pleased to find that we will have a law in this country which will permit the Minister of Justice to act quickly, decisively and effectively in regard to these matters.


Alexis Pierre Caron: Before the recess I was trying to prove that most of the people who appeared before the committee were dissatisfied with the whole of the legislation, although they may have been satisfied on one point or another. I noticed that a brief was presented by the council of the forest industries of British Columbia, and on page 315
Combines Investigation Act of the minutes of evidence of the committee on banking and commerce I find this:
We respectfully suggest that one way to obtain such clarification would be to amend section 32 of Bill C-58 as follows:
(a)	By striking out of s.s. (f) to s.s. (2) the word "or";
(b)	By inserting as s.s. (g) the following: "the allocation of markets and the creation of uniform prices and terms of sale in export trade to better facilitate the competitive position of articles exported from Canada against foreign competition, or,"
(c)	By renumbering s.s. (g) as s.s. (h);
(d)	By adding after the word "unduly" in line 3 of s.s. (3) the words "within Canada", and
(e)	By inserting after the word "restrict" in the second last line of the said subsection, the word "unduly".
In any event it is suggested that section 2 (the interpretation section) of the present act should be amended by inserting as subparagraph (g) thereof a sentence reading as follows:
"(g) In determining whether detriment to the public of Canada has resulted from any conspiracy, combination, agreement, arrangement, merger or monopoly, consideration shall be given to all relevant economic factors including all countervailing advantages which may result to the public."
Then on page 316 of the committee report we find this:
We respectfully suggest that provision should be made for appeals from judgments of superior courts to the court of appeal of the province concerned and thence to the Supreme Court of Canada.
Then on page 317 we find this:
We respectfully suggest that the object that we have in mind would be accomplished if (3) and (4) of s.s. (3) and s.s. (4) of 4IA be repealed and the following substituted therefor:
41A (3) For the purposes of part XVIII of the Criminal Code the judgment of the exchequer court in any prosecution or proceedings authorized by subsection (1) of this section shall be taken to be the judgment of a court of appeal and an appeal therefrom lies to the Supreme Court of Canada as provided in part XVIII of the Criminal Code for appeals from a court of appeal.
(4) No such prosecution or proceedings shall be instituted in the exchequer court in respect of an offence under part V without the consent of all the accused and in respect of proceedings under subsection 2 of section 31 without the consent of the person or persons concerned.
They conclude in this way:
This end could be accomplished by the removal from lines 1 and 2 of section 29 of the words "from or as a result of any inquiry under the provisions of this act, or".
Then in No. 5 of the minutes of evidence of the committee we have the evidence of Mr. Macintosh, acting chairman, committee on combines legislation, Canadian Manufacturers' Association, who said at page 324:
The association submits that no person should be subject to penalties without having been proven guilty of an offence by the courts and that, accordingly, from the first line of this section there should be deleted the words "from or as a result of an inquiry under the provisions of this act".
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Combines Investigation Act
Then on clause 12, as reported on page 325, they went on to say:
The association is concerned that in respect of the remedies provided for in this section, no right of appeal has been given to the accused. Section 41A (3), proposed to be added to the act by section 19 (1) of Bill C-58, provides for appeals in respect of prosecutions of proceedings under part V of the act which, it is submitted, does not include proceedings under the proposed section 31 (2).
The association submits that any person faced with an order under this section should be entitled, as of right, to appeal. The dissolution of an alleged merger or monopoly would have far-reaching, irreparable, effects; certainly, an appeal should lie to the Supreme Court of Canada.
The retroactive provisions of this section are unlimited. The association submits that some limitation to such retroactive provisions should be provided, possibly by the insertion of an appropriate time limit after the words "has done".
Then on clause 13, dealing with section 32 of the act, this is what they said about the word "unduly":
" -the word "unduly" should qualify the words "restricted or is likely to restrict any person from entering into or expanding a business in a trade or industry" appearing at the end of this section.
Then they continue:
We submit that, for the sake of consistency and ease of interpretation, the word "unduly" be inserted after the word "restrict" appearing in the ninth line of this section.
Then on clause 13 they say:
Subsection (1) shall not be construed or applied so as to limit or impair any right or interest derived under the Patent Act, or under any other act of the parliament of Canada.
Then on clause 13, which relates to section 31 (1) (b) and (c), they say:
In reviewing the proposed section 33A, we wish to express our concern over the introduction into legislation of the phrase "or tendency" which, because of its vagueness, would lead to uncertainty of interpretation.
Then on section 33B they say:
We feel that, as presently worded, the section raises many difficult problems of interpretation and may have impacts that are not intended.
Then on clause 19 of the bill, paragraph 7, relating to section 41A of the act, they say:
-it is submitted that the words "part V of" be deleted from the third line of this subsection so that an accused may be afforded the right of appeal in respect of any prosecution or proceeding under the act.
With respect to section 41A (4), the association submits that the consent of the accused should be sought before any proceedings under the act are instituted in the exchequer court.
Then further on in the report we have the submissions of the national automotive trades association which were presented by Mr. J. Lloyd, and as reported on page 355, this is what they said:
The proposed section 34 (5) will not in our judgment control any undesirable loss-leading practices and at the same time it will strike a mortal blow at the independence of distributors.


The section proposed is not addressed primarily to large merchandizing organizations which might indulge in what is popularly known as "loss leader" selling. Such an organization has the ability to choose from a large number of products of different manufacturers for the purpose of creating spurious bargains to attract customers to its stores.
Then in report No. 6 of the minutes and proceedings and evidence we have the submissions of the board of trade of metropolitan Toronto which were presented by Mr. Crysler, and as mentioned on page 380, dealing with section 32, they had this to say:
For that reason-
That is, the reason which had been stated before.
-the board recommends that section 32 (3) be revised so that it will be clear that its last three lines are qualified by the word "unduly".
Then speaking about mergers and monopolies, section 33, they refer to the Patent Act and then go on to say:
In any event, this board requests that these words be reinstated in this year's bill so that they will continue to form part of the act.
Then on illegal trade practices, section 33A (1), they say:
There is substantial concern regarding the use of the word "tendency" in section 33A (1). The effect of this general word, which is not defined, could go to the extent of precluding normal commercial price competition as it could be said that this would have a tendency to substantially lessen competition or eliminate a competitor.
Then on section 33B, this is what they say:
The section, however, is subject to a number of major criticicisms.
The language employed does not express its intention with sufficient clarity to carry the intention into effect. The wording of the section is confusing to the degree that a leading counsel has stated he did not know how he could either prosecute or defend anyone under the section as it is presently written.
I will pass along because I do not want to take too much of the time of the committee, and I come to the submission presented by the co-operative union of Canada. As reported on page 410 of report No. 6 they had this to say about price maintenance:
It is submitted that the prohibition provision against resale price maintenance contained in section 34 of the Combines Investigation Act should not be weakened.
Then on page 411 it is stated:
It is submitted that the proposed amendment to section 31 of the Combines Investigation Act is not in the public interest. Subsection (2) of this section, according to the explanatory note, is being amended to permit a restraining or dissolution order without a conviction where the offence has been completed.
Then on the same page, under the heading of combines, mergers and monopolies, they say:
It is urged that as subsection (2) of section 32, as proposed, substantially weakens the effect

of subsection (1) which incorporates section 411 of the Criminal Code and is likely to operate to the detriment of the public, it should not be passed in its present form.
I come now to report No. 7 of the same proceedings. I find that Dr. Skeoch, professor of economics of Queen's University, had this to say as reported at page 433:
It is not clear what are intended to be the differences between the tests provided under the proposed amendments, but there is no basis in economic analysis, at least, for making any difference.
On page 434 he goes on to say about section 32:
This is the basic section of the proposed legislation in so far as agreements restricting competition are concerned.
A little further on he said:
This may merely reflect the character of the established Jurisprudence, although, if this is the case, it is not clear why it was necessary to alter the legislation.
On page 435 he states, with regard to clause 14 of Bill No. C-59:
The proposed amendments to section 34 are apparently based on three assumptions, (1) that the ban on resale price maintenance is fundamentally sound and desirable but (2) that certain practices have developed under section 34 which have been damaging to the small distributor and others, and (3) that the manufacturers should be given the power to restrain such practices by refusing supplies to dealers engaging in them.
In fact, however, it can be demonstrated that the proposed amendments will effectively eliminate the ban on resale price maintenance, will provide no effective protection, either short' run or long run, for the small dealer, will open the door to discriminatory practices, will strengthen the position of the large distributor who controls private brands, will place in the hands of the manufacturer a degree of control over the final price of his products that is denied to other groups in the economy, and finally, is based on a profound misunderstanding of the way in which business is conducted.


William Moore Benidickson: That is the crux of the attack.


Alexis Pierre Caron: Turning, now, to report No. 8, let us consider what Professor Rosenbluth and Professor English had to say. Professor Rosenbluth is a professor at Queen's University. We find that on page 469 he had this to say:
Now the suppression of competition under the guise of, for example, an "exchange of statistics" is one of the oldest weapons in the trade association arsenal.
Further on, he said:
No one can know for sure how the courts will interpret the new wording if it is enacted, but one can make a good guess. At best it will make it much more difficult to prove a violation beyond any reasonable doubt.
Later on he said:
The second major weakening of the combines act concerns the ban on resale price maintenance. Bill C-58 would in effect remove this ban.
Combines Investigation Act Then, again, on page 470 he said:
Bill C-58 does indeed ban discrimination that takes the specific form of promotional allowances. But such a partial ban is not likely to reduce the extent of discrimination .. . combines legislation is by no means perfect, but it is not likely to be improved by Bill C-58.
Professor English, of Carleton University, speaking as reported at page 486 of report No. 8, said:
The amending of the legislation at the present time and by the means indicated in Bill C-58 reflects the kind of unreality to which I refer. There has been a flow of criticism of combines legislation by private enterprise over the years, and the Minister of Justice has now responded to this by proposing to amend the law in ways which would satisfy the critics in the business community. I submit that to a considerable extent criticism of existing legislation in this particular field is an indication of the success of the law, and always will be.
Now we come to report No. 9. This report contains the evidence given by Professor Cohen of McGill University. Professor Cohen does not introduce himself as an economist, but as a lawyer who has studied legislation of this kind. I really believe, Mr. Chairman, that the evidence given by Mr. Cohen should have been heard first by the committee, because he gave us all the background starting as long ago as the middle ages in order to show the trend. I should like to read what Professor Cohen had to say as reported at page 544:
In a sense, therefore, these amendments before us today are, perhaps, both too early and too late. They are too early in the sense that they come before we have had a chance to re-examine completely the general place of anti-trust legislation in this new context.
They are a little too late because they may not be able to deal effectively with many questions of merger and such other concentration questions already before us.
Then he speaks about nine points with which he wanted to deal. At page 545 he states:
I think that if the proposers of this measure. Mr. Chairman, in comparing last year's proposals with this year's proposals, went so far as to modify the proposals to eliminate those defences to a merger, it is perfectly clear to my mind that there was this degree of uncertainty-which remains uncertain-as to the direction in which merger law ought to go, and I wonder whether we should tamper altogether with the provisions.
Let me indicate, for example, how difficult even the present language is. Take the language of 2 (e) on the first page of the new bill:
"merger" means the acquisition by one or more persons, whether by purchase or lease of shares or assets or otherwise, of any control over or interest in the whole or part of the business of a competitoret cetera. Let me tell you this: I was involved in a prosecution that, for the first time, had to interpret that section. Mr. Justice Robertson did it, in Rex v. Staples in 1940. At that time Mr. Justice Robertson of the supreme court of British Columbia, held that if you bought 50 per cent of the shares of someone's business, you did not buy
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Combines Investigation Act control. When you realize how awkward that kind of decision can be. and you refine such a view as that to what is a more sophisticated problem, you can see that leaving the word "control" here, against the background of that kind of jurisprudence, perhaps needs a good deal more thought and a good deal more consideration-because we know that 10 per cent, 15 per cent, 20 per cent may have controlled very large enterprises, that 50 per cent may not give you technical control, in terms of company law, but it might give you true control in terms of the corporate and business realities of the situation.
Further along he says:
X was going to suggest, for those who know the United States Clayton act, that you will see, by comparison, the approach of the Americans to do what amounts to corporate interlocking and corporate control which far exceeds in sophistication the meagre approach in this broad language here. So on the merger side I say that clearly we need a great deal more thinking and in my opinion we are likely to face increasing situations of merger. We, therefore, need a legal framework which makes more sense than this particular legal framework does.
Further along, speaking of the second point he wanted to treat, Professor Cohen said:
In my second point, the problems of the new power under section 31-on page 5 of your copy of the bill-to restrain or dissolve before conviction, in my opinion, sir, this approach is all to the good. I will strongly support the use of the enjoining power here to restrain parties who are either going to engage in practices which are or are thought to be against the act, or to require them to dissolve situations that already have taken place.
This is very much in line with the history of the American experience and American legislation. Under the Sherman act the equity jurisdiction-
I think that is under section 3-of the courts allows the Department of Justice to do something we have never been able to do, and that is to bring the parties together and come into the courts and say, "Here is what you have to do: you dissolve the "X" oil company and break it up into eight or nine separate entities.
You have a device here which is not dependent on a criminal conviction, as such, but is part of the equity power of the court to enjoin and compel a general program of dissolution and reorganization. I think this is all to the good, and I support it. However, X question whether or not the government will soon face problems of the constitutionality of this measure.
I do not want to trouble this body with my views on constitutional law in this regard. But I would just like to say this, that it was one thing under the 1952 legislation to provide for this kind of measure when there is a conviction. It is quite another thing, however, to provide for it before a conviction-
At page 555 here is what Professor Cohen had to say:
I ask myself this question: why have the draftsmen put the word "unduly" into these clauses, where it has not been for 60 years. I can only conclude that they felt they were bringing a level of equality in the degree of undueness that would apply to all the four clauses in this section.
Let me point this difficulty out to you. In my opinion, it was left out 60 years ago for a very good reason. It was left out because, if you look at the two verbs there "to restrain or injure", they were regarded, by themselves as sufficiently 

flexible verbs for the purpose of the measurement as to "how much is too much". Really, at the heart of judicial interpretation, in this whole field, is a simple question: how much is too much -how much restraint is too much restraint-where do we draw the line? Now, the verb "restrain" or "injure", by itself implies this problem of measurement without the additional adverb of "unduly", and I would respectfully suggest that the committee and the draftsmen reconsider the restoration of the particular sentence to its original form. It has had 60 years of experience.
At page 556 this is what Mr. Cohen has to say:
Year after year responsible leaders of industry have come forward, C.M.A., and others, and have put forward what certainly to them, and to many other people, seem responsible points of view. This legislation now, it seems to me, accepts the proposition that it is worth while to cast in terms of law these, what may be called, innocent areas, of business co-operation and not merely to leave it to the courts to discover the innocence, but to give the courts specific guidance as to innocence. The best case that can be made for this, therefore- I will come to the other side of the point-but the best point that can be made for this very important policy change, is that it is already sufficiently imbedded in legal ideas about these matters to hold them licit, to hold them legal. Therefore, all we are doing is declaring what in fact is something which the courts would regard as legal.
At page 557 Mr. Cohen says this:
Now, what we have to ask ourselves is this: what is the extent to which experience teaches us that this kind of encouragement will or will not lead to abuse.
At page 558 he goes on:
My sixth point-


Charles Edward Rea: Order. I am sorry to interrupt the hon. member but I am obliged to advise him that his time has expired.


Gordon Harvey Aiken: Mr. Chairman, I seem to be in the position of speaking between the second and third instalments of the reading of the evidence by the hon. member for Hull. There were a few things said this morning by the hon. member for Skeena which have caused me to rise, and there were a few other remarks I wanted to make in connection with the proposed amendment to the Combines Investigation Act.
The hon. member for Skeena in the latter part of his remarks made an excellent presentation of facts. I could not agree with them but I think they were well presented. In the earlier part of his address I thought the hon. gentleman went off the deep end a bit in making wild statements and I accused him of engaging in nonsense. I do not often rise to interject but I did so this morning because I thought the hon. gentleman was right off the point. He has invited me to reply to him and I am going to do just that.


Charles Benjamin Howard: If you accept all my invitations I will be pleased.


Gordon Harvey Aiken: The first extravagant statement the hon. member permitted himself to make related to the Minister of Justice. The hon. gentleman said that the committee was under the thumb of the Minister of Justice. The hon. gentleman attended a good many of the meetings of the committee. If he were going to be fair I think he would have to admit that this was a very spirited committee and that at times the discussions were very lively. They were not discussions between the Minister of Justice and hon. members of the opposition at all but between hon. members of the Conservative party serving on the committee and hon. members of the opposition.
Just to illustrate my point there is one matter I wish to raise concerning the presentation made by Mr. Gilbert of the retail merchants association. During the committee meeting it was brought up that Mr. Gilbert had appeared before the caucus of the Conservative party, or rather the small business committee of the Conservative caucus, at some time before the committee started to meet. The caucus committee had asked for Mr. Gilbert's opinion on the bill. This opinion was presented to the Conservative party caucus committee on small business and was discussed with him.


William Moore Benidickson: Was the title not the committee on trade and commerce?


Gordon Harvey Aiken: No, this was the Conservative caucus committee on small business.


William Moore Benidickson: Did Mr. Gilbert's brief not say that it was submitted to the caucus committee on trade and commerce?


Edmund Davie Fulton: Surely the members of the Conservative party are more familiar than Mr. Gilbert is with the names of its caucus committees.


Gordon Harvey Aiken: Yes, Mr. Gilbert-


John Whitney Pickersgill: Was confused?


Gordon Harvey Aiken: -said his brief was a misnomer. He did not know exactly the title of the group to which it was being presented. True enough, it was misnamed when it was submitted.
The point I am trying to make is this. In his evidence Mr. Gilbert said he also made similar presentations to both the Liberal caucus and to a special committee of the C.C.F. caucus.


William Moore Benidickson: A year before.


Gordon Harvey Aiken: At the time he was asked. He said that when asked to appear before the caucus committee of any party he appeared and made a presentation. He also said that as a matter of course the retail merchants association made their presentation to the
Combines Investigation Act government of the day and to the Minister of Justice who was sponsoring the bill.


Charles Benjamin Howard: Will the hon. member permit a question?


Gordon Harvey Aiken: Yes.


Charles Benjamin Howard: Will the hon. member for Parry Sound-Muskoka give me the reference in the evidence where Mr. Gilbert is reported to have made those comments?


Gordon Harvey Aiken: Yes, I shall be glad to. If the hon. member will refer to page 136 of the evidence of the standing committee, about three quarters of the way down, he will find that Mr. Gilbert made this statement:
There is a slight reflection being cast on the association, and this is what I want to clear up immediately. The retail merchants association is not in politics. We deal with the government of the day. Our submissions are always made to the government of the day-to this government, and to the former government; and on this question our approaches have been made to the Department of Justice, constantly since 1951. However, we have kept all members of the House of Commons fully informed on what we are doing.
1 met with a caucus meeting of the C.C.F. party about May or April last year on this very subject. Also. I met with the Hon. Mr. Pearson, Mr. Benidickson and with Roger Mitchell, at the same time, on this subject, and I personally handed to them the documents, most of which were reproduced, on the matter at issue now.


Paul Joseph James Martin: If you had told us that yesterday, we could have obtained this from Mr. Pearson.
I think that is a complete answer.


John Whitney Pickersgill: Read the next line.


William Moore Benidickson: Read the next two
questions.


Gordon Harvey Aiken: I have finished reading what I had intended to read and have closed the book. If the hon. member wants to read something more he may do so.
The hon. member for Skeena tried to throw out the insinuation that there was some sort of collusion between the Conservative caucus and the retail merchants association. There was not, but I want to make this very clear, Mr. Chairman. The members of the Conservative caucus have a very great interest in the plight of the small businessman in this country. It was quite obvious from the presentations made by the retail merchants association that they were concerned about the state of the present combines legislation; that they were concerned about loss leader selling and that they were entirely in support of this bill. Just because the members of the opposition did not like what they said, they fought it and, in my submission, they were working against the interests of the retail merchants and the small businessmen in making a concerted and lively objection against the provisions of the legislation.
6900	HOUSE OF
Combines Investigation Act
We heard from a good many of the witnesses that the loss leader practice is leading to a great deal of difficulty for the small businessman in this country. We feel that the small businessman is the backbone of the economy and if he is forced out of business this trade will be taken over by the larger concern, the chain store. We feel that the ultimate taking over of retail business in this country by chains is a bad thing and that it does not tend to lower prices to the consumer at all. In fact, the MacQuarrie report, which is constantly referred to, says very distinctly that the taking over of small business by larger chains ultimately leads to increased prices because when the larger chains get control of the market in a certain area they raise prices.
It has been said that the opposition is opposing this bill because they are acting on behalf of the consumers, because they are very interested in the consumers.


William Moore Benidickson: Always have been.


Gordon Harvey Aiken: Mr. Chairman, the consumer would lose in the end, and it has been clearly proved in the evidence that unless the small businessman is kept in business in this country and unless he provides that type of competition that is necessary to our economy, the consumer will lose and not gain by the ultimate increase in prices.
So much for the retail merchants. We have accepted their evidence. I was very glad to hear it; I heard the same type of evidence from several others but the retail merchants,-


John Whitney Pickersgill: You prevented his coming back, though.


Gordon Harvey Aiken: The retail merchants' approach was the most straight forward, and it agreed with the opinion of the government and of the majority of the people on the committee. Just because they happened to agree with the government's legislation the opposition, of course, had to jump in on the other side. I do not think it was to anybody's advantage.


William Moore Benidickson: The consumer's.


Gordon Harvey Aiken: However, this is something that will have to be taken into account. The hon. member for Kenora-Rainy River says "the consumer's". Mr. Chairman, there is a lot of difference in the point of view but I should like to refer to the evidence given by Mr. Hannam of the Canadian Federation of Agriculture. Mr. Hannam came before the committee and said he was very concerned about loss leader selling but his concern was on behalf of the consumer who to a large extent is the farmer's wife who does the shopping. He thought that the loss leader was not a bad thing because it kept the price low, yet in


the very same brief he had to admit that loss leader selling was one of the most difficult problems that agriculture faces in certain of its branches, and when questioned in connection with poultry, turkeys in particular, which are often used in chains as loss leaders, and various other agricultural products, he had to admit that it was just a question of the point of view-who you are thinking about- but certainly he was against loss leader selling when it came to turkeys and other agricultural products.
On the other hand, when he was interested in the consumer, who would be the farmer's wife who was buying, he was for it. I admit it is very difficult and no one wants to step in between the farmer and the farmer's wife. Nevertheless, this was the difficult position in which Mr. Hannam found himself and in which a good many other witnesses found themselves. They tried to support the consumer in the hope that prices would go down, and they tried to support the small businessman in the hope that he would stay in business. I think this bill is a very fair compromise between the two positions and the difficult spot in which the smaller dealer was left in 1952 when the legislation was put into effect.
There is one more matter that I wish to speak about which concerns the amendments in the committee. I do not want to go into them in detail; we shall come to them when we reach the clauses of the bill. But it does concern this same point that the hon. member for Skeena makes, namely that the bill was brought in, we had a great many witnesses and the Minister of Justice just sat there and said to the Conservative members who controlled the committee, "This is our bill, and you can stick with it." That is not the case. I should like to quote just one example of what occurred in the committee in connection with paragraph (e) of section 34 (5) of the combines bill.
There is mention made there of disparagement of a product as being a good reason for a manufacturer to refuse to sell to a retailer. Quite a number of the witnesses who appeared before the committee said that they thought this clause was not good and went too far. In particular Mr. Hannam, at pages 593 and 607 of the evidence before the committee, stated quite clearly that he would like to see subsection (e) repealed. At page 607 he was asked this question by me:
Do you feel that If paragraph (e) were eliminated that some of the provisions would he tightened up in this legislation?
Mr. Hannam replied:
Certainly we would be happy if the fifth paragraph were eliminated.

Mr. Kinneard of the national automobile trades association also brought up the very same point. As found on page 365 of the evidence, he said that apart from loss leaders generally their trade has been most seriously concerned about the effects that may accrue from the last two paragraphs (d) and (e). Then he went on to explain their concern. Finally, Miss Atkinson of the association of consumers, whose case was so ardently supported by the Liberal members of the committee, suggested that clause (e) went too far.
I think there were others who took the same position but I only had an opportunity during the lunch hour to find the references to these three parties who had suggested that subclause (e) should be removed.
After considering the whole matter, a recommendation was made in the committee that subclause (e) should be removed from the bill. In the opinion of at least three of the witnesses who appeared this would help the bill a good deal and make it much better. As I mentioned this morning, I believe there are three other amendments reported in the proceedings which were made by the committee following the recommendations of the witnesses who appeared. Therefore I think that is a complete answer to any suggestion that the bill was railroaded through the committee by the Minister of Justice in just the form he wanted it.
I have one final comment to make concer-ing the export market. The minister said this morning that his department had considered the export problem and that when the appropriate time came a statement would be made. I suppose that means we will wait until we come to the clause. However, this was one of the things that came up in the committee from which I think a great deal of value will result. In many cases our exporters are dealing with or competing against economies which are state controlled and which are able to set prices at anything the state wishes in order to enter a competitive market. Several of the groups that appeared before the committee, particularly those from the west, the fisheries council and the lumbering interests on the west coast, made the statement that it was almost necessary to have some arrangement between exporters in order that they may compete with state-controlled economies. Personally I feel very strongly that these people need some special provision to make their position stronger.
Canada has a good deal of difficulty dealing in the export market for many very obvious reasons, the difference in wage costs, the differences in costs of production and also the fact that other economies set their prices so they will be competitive and without regard
Combines Investigation Act to cost. I believe that some provision should be made with regard to the export market. One thing has occurred to me which I think I should mention and which I do not believe was raised in the committee. Perhaps the minister will give it consideration. I refer to whether such a provision in the Canadian combines act would contravene any international agreement such as GATT or any other similar international agreements. It may be that it will but if it does not I should very much like to see something done with regard to the export market.


Charles Benjamin Howard: Mr. Chairman, since the hon. member for Parry Sound-Muskoka did not quite succeed in doing so, perhaps I might as well set the record straight and point out a number of inconsistencies resulting from his comments. First of all, if I heard the phrase correctly I understood him to say, although it may have slipped out inadvertently without the hon. member realizing what he was saying, that the small business committee or section of the Conservative caucus asked Mr. Gilbert of the retail merchants association to give this committee on the caucus the benefit of his opinions on the bill. Is that right?


Gordon Harvey Aiken: That was the basis of the evidence that Mr. Gilbert gave to the committee.


Charles Benjamin Howard: On the 1958 bill?


Gordon Harvey Aiken: It was not the bill that was introduced; it was the previous bill on which he commented.


John Whitney Pickersgill: It was not even that.


William Moore Benidickson: It was before any bill was submitted.


Charles Benjamin Howard: That clears that up because the hon. member knows very well from the evidence that Mr. Gilbert of the retail merchants association met the Conservative caucus subcommittee two days before the bill was introduced. Unless Mr. Gilbert knew what was in the bill, I do not think he could have made his comments on this particular biU.


Gordon Harvey Aiken: I think that was cleared up in the committee. We had quite a long discussion about this matter in the committee and it was quite clear that when I said "his bill" I referred to the amendments to the Combines Investigation Act.


Charles Benjamin Howard: That is fine. The hon. member said also that similar presentations were made to the C.C.F. and Liberal parties. This is not factual and I intend to show that it is not the case. That is why I asked the hon. member to give me the page reference in that it would more easily help me to find
6902	HOUSE OF
Combines Investigation Act the passage. I was at the committee meetings and I recall this discussion with Mr. Gilbert and others. The hon. member was kind enough to refer me to pages 136, 137 and 138 and following.
To get down to whether the retail merchants association made any representations to the C.C.F. party with respect to this bill or its predecessor, Bill No. C-59, this is not so. Mr. Gilbert of the retail merchants association made no such representations. We had a meeting with him. When this question arose in the committee I am reported as saying, as found on page 137:
Mr. Chairman, what Mr. Gilbert said was quite correct; we did meet with him in April or May of 1958.
The hon. member for Kenora-Rainy River then said that it was 1959. I was incorrect as to the year and I was also incorrect as to the month. We did have a meeting with Mr. Gilbert, and I have a letter from him dated March 2, 1959, addressed to myself. The letter is from the retail merchants association of Canada and it is signed by D. A. Gilbert, general manager. The letter reads:
I want to express my sincere appreciation for the time devoted to me by the C.C.F. caucus meeting on Monday, February 23-
It was on Monday, February 23, 1959, that we had this meeting with Mr. Gilbert at which we discussed a number of matters. One of those matters was financial aid to small business which this government promised, incidentally, but has not put into effect and probably will not unless they happen to do so before an election. This was one point in our discussion and, as Mr. Gilbert points out in his letter, we discussed also the orderly marketing of consumer goods. This was the only meeting that we had with Mr. Gilbert and I point out that this was February 23, 1959, a full four months before Bill No. C-59 was introduced last year. He made no representations whatever on this Bill No. C-58.


Gordon Harvey Aiken: May I ask the hon. member a question?


Charles Benjamin Howard: Yes.


Gordon Harvey Aiken: Was Mr. Gilbert ever asked to appear before a caucus of the C.C.F, party to give his views?


Charles Benjamin Howard: I thought I indicated that this morning.


Gordon Harvey Aiken: What the hon. member said was that he had written a letter asking Mr. Gilbert to write. I am asking if he ever-


Charles Benjamin Howard: My hon. friend does not mind if I answer the question. I read this letter this morning, and it was written on May 11


which, I believe, would be five days after the introduction of Bill No. C-58 by the minister. It is addressed to Mr. Gilbert at the correct address as shown on his initial correspondence with us. I sent him a copy of the bill and asked him for the benefit of his thoughts. He was told verbally that he was always welcome, but we asked Mr. Gilbert at that time for the benefit of his thoughts. We not only have not received the benefit of his thoughts in any personal way, but we have not had the courtesy of an answer to our letter.


Gordon Harvey Aiken: But what I rose-


Charles Benjamin Howard: Let me finish the answer to your question, and then you can ask another one. I mentioned this very matter in the committee to Mr. Gilbert when Mr. Gilbert said he had met with the C.C.F. party in a caucus meeting about May or April of last year on this very subject, and then he met with members of the Tory party and the Liberal party. I pointed out to Mr. Gilbert that he would recall that when the bill was tabled in the house I sent a copy to him as soon as it was possible to do so. I had asked Mr. Gilbert if he would care to make his opinion available to us and I had not had any answer so far. Mr. Gilbert replied that that was quite understandable. I imagine it is quite understandable. Perhaps he did not have any intention of replying or giving us his opinion. The fact is that I personally wrote him a letter, sending him a copy of this bill and asking him for the benefit of his thoughts. I do not mean to imply that this was my personal letter. I wrote it on behalf of the C.C.F. party.
As I have said, I did not get the benefit of his thoughts or even the courtesy of a reply. All I received was a smart crack to the effect that the reason I did not get an answer was quite understandable. This is quite unfortunate-


Gordon Harvey Aiken: I was just going to ask the hon. member if he had finished answering that question. I do have one more I want to ask. Was it not a fact that in committee the result of the complaint was that, for once, the Conservative members came to the committee too well prepared?


Paul Joseph James Martin: That is not the
way I remember it.


Charles Benjamin Howard: I doubt if the Conservative members have ever been too well prepared on anything. I would point out, however, that they did come to this meeting having had presented to them a document which was

denied to the C.C.F. and, as my friend from Essex East says, to the Liberal party as well.


Mr. Morton:: May I remind-


Charles Benjamin Howard: We wrote a letter to Mr. Gilbert and he refused to answer, refused to send this information and it only came out incidentally.


Murray Douglas Morton: Is it not true that there were only certain members of the Conservative party who had access to that document and, as others pointed out in the committee, they did not have it either.


Charles Benjamin Howard: I do not know who in the Conservative party had this document. Some very strange things occur within the Conservative party, especially in caucus meetings. I did not know that this was one of them.
Another point I should like to mention is that in this particular submission, which is misdirected to the steering committee of the Department of Trade and Commerce-


John Whitney Pickersgill: Would the hon. gentleman permit a question?


Charles Benjamin Howard: Yes.


John Whitney Pickersgill: Is the hon. member really sure that was misdirected?


Charles Benjamin Howard: I was just about to say that. I did not know that the Tory caucus now ran the Department of Trade and Commerce, nor was I aware that politics had become so powerful in this government.


Gordon Harvey Aiken: Now you are getting into nonsense again.


Charles Benjamin Howard: I will tell you something about the nonsense in this particular document, misnamed or otherwise. The statistics in it are incomplete. This Mr. Gilbert attempted to take some statistics from the dominion bureau of statistics and some from Dun & Bradstreet. He took his cue from the Canadian Electrical Manufacturers Association presentation to the restrictive trade practices commission in 1954 when they used Dun & Bradstreet figures.
In any event there were some things missing from this presentation. There were references made to appendices A, B, C, D and E. In the document which was presented there was appendix A and appendix B, but there was no appendix C nor was there any appendix D. The hon. member for Port Arthur, who was in the committee, pretty well ruined Mr. Gilbert's approach to the 79951-0-435
Combines Investigation Act statistics by pointing out that they did not mean anything. Then he said, as reported on page 139:
There is one other question which bothers me in this connection.
The hon. member read a sentence from the brief in which there was a reference to appendix D, and then he said:
Now. appendix D is not in this.
He was referring to this particular trade and commerce Conservative party submission or whatever it is. Mr. Gilbert said:
That is unfortunate. It is in most of the copies. However, some of those were assembled in a hurry, and that might explain it.
I was one of the fortunate ones or unfortunate, because when Mr. Gilbert made reference to this document that had been presented to the Tory caucus, misnamed or otherwise, I went to see Mr. Gilbert who gave me a copy of it and indicated that copies would be mailed to each member of the committee. I received a copy in the mail and when I looked through it I found appendix D was still missing and so was appendix C. These are important parts of the brief because reference is made to them. If a brief is to be submitted that is incomplete and contains statistical information which paints an incorrect picture, if Mr. Gilbert is denied the right, by the Tory majority on that committee, to reappear before the committee and answer some of these questions, then I do not see that we should pay too much attention to the representations of Mr. Gilbert or the retail merchants association, especially when he threatened members of that committee in a tone and in a manner which was not conducive to the best of feelings between the members of the committee and the witness.
I should like to make some comments, if I may, on the remarks of the hon. member for Restigouche-Madawaska, to which I listened with interest. He dealt with the oil industry and the pulp and paper industry and related some difficult circumstances which had developed because of the activities of the oil industry, that their secret deals, as I believe he called them, on prices had allowed the large consumer to benefit to the detriment of the small consumer. In dealing with the pulp and paper industry he indicated, I took it, that perhaps they were doing something which was not beneficial to the small pulp and paper cutters and people in that industry.
Then the hon. member went on to say that he supported the bill because it would allow proceedings to be undertaken and investigations to be prompted and promoted which would deal with this sort of thing. I assume

Combines Investigation Act he means that then they would be able to deal with investigations of this sort in an easier and quicker manner than possible under the act at the moment; yet I cannot for the life of me-I hope the hon. member for Restigouche-Madawaska will clear this point up-see how that is possible. I say that because the minister himself said that there are no substantial changes in the legislation, only changes designed for clarification purposes. There was nothing to do with additional research facilities, or with additional investigatory powers given to the officials of the branch, or with additional staff; it is merely the same act only clarified.
I think the hon. member for Restigouche-Madawaska does not have a correct understanding of the bill. Certainly if his understanding is correct, I for one would appreciate it very much if he was able to direct my attention to the clauses of the bill which he thinks give added powers of investigation, and so forth, because I have not yet been able to find any.
I would also like to make one other comment which deals with the references in the bill to the application of section 32 and the amendments thereto. That is the section dealing with combinations, agreements and conspiracies which are in restraint of trade, enhanced prices, and things of that nature. Some presentations were made before the banking and commerce committee to the effect that perhaps these amendments are a subtle way of bringing in the so-called specific detriment aspect which courts have refused to consider up to now. The courts have taken the view, and the witnesses appearing before the committee also took the view, that the courts should not be called on to assess any specific detriment to the public of any agreement or conspiracy which the parties charged may have entered into. The courts and the economists take the position that this is a task too difficult for the courts to deal with, and that if we are to bring before the courts such cases and insist that the courts make an assessment as to the specific detriment caused by any such conspiracy, and so on, the courts would be doing nothing else than listening to arguments of opposing counsel about theoretical concepts of economics or competition and it would be almost impossible to assess what the specific detriment was.
Dr. Skeoch, who is now professor of economics at Queen's University and for some years was senior economist in the combines investigation branch, had some thoughts in this regard which I think will be of interest. He was senior economist to the combines investigation branch of the Department of

Justice for about seven years, and prior to that was senior economist with the Canadian wheat board. Dr. Skeoch made a reference to this specific detriment question on page 432 of the minutes of proceedings, where the brief which he read was reproduced, and he said as follows:
To suggest, as the brief of the Canadian metal mining association on Bill C-59 did, that our courts are capable of determining the effects of interferences with competition because they "deal with complex subjects, such as those relating to income tax, customs and patents, and weigh technical evidence submitted to them by specialists and experts" is to fail to understand the nature of the issues under consideration. The courts are not required to assess the incidence of the income tax, to determine its effect on the level of savings and investment and the like, all of which would be involved in determining the effects of the income tax. Nor are they required to determine whether our patent laws promote or hinder innovation and development, either in general or in a specific case.
It might be added that if parliament were to enact legislation requiring the courts to forecast the trend of stock market prices, the hilarious reception such an enactment would receive can easily be imagined. Yet to determine the specific effects of combines restricting competition would be a far more complex matter.
This is not quite so clear a reflection of the government's attitude in this regard as was Bill No. C-59 of last year. If I may be allowed to make one or two references to that bill, I submit it indicates government attitude, but much has since been covered in the bill before us. On page 4 of Bill No. C-59, the proposed new section 19 (l)(a) with respect to the restrictive trades commission reads as follows:
(a)	where it appears that a conspiracy, combination, agreement or arrangement has existed, shall include a finding whether or not the conspiracy, combination, agreement or arrangement relates in whole or in part to any of the matters specified in subparagraphs (i) to (v) of paragraph (a) of subsection (2) of section 32 and, if not, shall include a finding whether or not the conspiracy, combination, agreement or arrangement, in the opinion of the commission, has operated, or is likely in the foreseeable future to operate to the specific and substantial detriment of the public-
Et cetera.
Then in the proposed changes last year to section 32, which is the section setting out certain offences in relation to trade-that is the conspiracy, combination, agreement or arrangement section about restricting trade, limiting facilities for production, and so on- subclause 2 reads:
In a prosecution for an offence under subsection
(1), it is a defence if the accused ...
(b)	also establishes that the conspiracy, combination, agreement or arrangement has not operated and is not likely to operate to the specific detriment of the public, whether consumers, producers or others.
May I point out that these references to last year's bill make express reference to the

words "specific detriment", and that while the minister says that the proposed changes to section 32 are for purposes of clarification only, a great deal of the evidence submitted to the committee, although there was some conflict, some people saying yes and others no, was directed toward injecting these specific detriment arguments into the courts which would be a serious weakening of the combines laws themselves.


John Whitney Pickersgill: I should like to say a word or two about what was said by the hon. member for Parry Sound-Muskoka. The hon. member for Parry Sound-Muskoka said, if I understood him correctly, that Mr. Gilbert had presented a brief of some description at some meeting of the Liberal caucus. There is absolutely no evidence of that and certainly none in what the hon. member read from page 136. What the hon. member read from page 136 merely reported Mr. Gilbert as having said:
X met with the Hon. Mr. Pearson. Mr. Benidickson, and with Roger Mitchell-


William Moore Benidickson: Before the 1949 bill was introduced.


John Whitney Pickersgill: I was just going to say, as the hon. member for Kenora-Rainy River pointed out on the next page, this had nothing to do with the legislation at all; it was simply the annual presentation of this organization.
Moreover, there was a complete and unequivocal understanding in the committee, as the hon. member for Skeena will recall, that Mr. Gilbert was to be called back for further examination, but on account of the rather chaotic way in which this committee had to be carried on because of the circumstances with which we are all familiar-and which I do not intend to go into further unless I am provoked-because of this chaotic condition it appears there was a meeting of the steering committee at which it was decided that enough witnesses had been heard.
When this matter was brought up again, it was brought up by me on July 12 as will be found on page 621 of the minutes and report, and I drew the attention of the committee to the fact that Mr. Gilbert was to have been recalled and that the members were no longer able to examine Mr. Gilbert. We should have welcomed an opportunity to have had the same kind of education or indoctrination, or whatever it was that the committee on trade and commerce, or small business, or whatever it is, had enjoyed, though I do not think the results would have been the same. However, we were willing to try the medicine and see, but apparently the majority of members on the steering committee suddenly lost their enthusiasm for having
Combines Investigation Act Mr. Gilbert before the committee any more. The result was that we were deprived of the inestimable advantage of examining Mr. Gilbert further on his brief, though we very much wanted to do so.
What in my opinion is very much more serious, when, in our view, a back door method of restoring resale price maintenance is being attempted by means of this legislation, was that the Canadian retail federation, which is, I understand, a much larger, more important and more representative body of the retailers of this country, was never called before the committee, though it did make representations in writing which my hon. friend from Sudbury succeeded in getting appended to the record.


Gordon Harvey Aiken: Would the hon. member permit a question? Is that not the organization which embraces the large chain stores, Eaton's, Simpson's and so forth?


John Whitney Pickersgill: They are in the retail business in this country and my understanding is that it also includes a great many other independent businesses and that it has no connection with wholesalers and manufacturers. It is a genuine retail organization.
Mr. Gilbert gave us some evidence on the first occasion he appeared before the committee with regard to the membership of his organization, and it was a very odd conglomeration indeed. I must say it is very hard not to form an impression that perhaps it was a retail facade-that behind the facade was something very different from the retailer. I should like to have had the opportunity to examine that impression further. Whether the chain stores which, after all, are connected with what is still legitimate business in this country, belong to the retail federation or not, they are still Canadian entities, they are still Canadian taxpayers, and I would think that with regard to legislation such as this they have as much right to be represented as anyone else.


Gordon Harvey Aiken: Does the hon. gentleman know whether this group asked to be heard?


John Whitney Pickersgill: I do not know whether they did or not, but I do know that my hon. friend from Sudbury was anxious to have them heard. Hon. members opposite purport to be doing something for the retailers and for small businessmen and I should have thought we should have sought to hear the views of this group, and go on hearing them together with the views of all others concerned.
I asked Mr. Gilbert two or three questions. I can look them up in the record if hon. members wish, but I can recall them fairly



HOUSE OF&quot; COMMONS

[Stage Direction]
Combines Investigation Act accurately. I asked him precisely what organizations belonged to it, how much each contributed, what were their subscriptions and what funds they had available for the purpose of putting forward their views. I asked those questions so that we really should have known with whom we were dealing, and I cannot suppress a slight feeling that this, perhaps, is the real reason why Mr. Gilbert was never recalled. It would certainly have been desirable to have had answers to these questions but that, as I say, is characteristic of the whole proceeding. This committee, as my hon. friend from Hull has been showing in the last two acts of his three-act speech-
An hon. Member:: Glad you know it's a play.


John Whitney Pickersgill: What my hon. friend from Hull is doing is presenting a tragic comedy to show what a farce this legislation is. As my hon. friend has shown already, the majority of the witnesses found fault with one or other aspect of this bill and it was hard to find any witness who was satisfied with all aspects of the bill. Most of them were dissatisfied with most of the aspects of this bill. The inescapable opinion of the majority bf witnesses was, I believe, that this half-baked measure should not be passed in this half-baked state. The minister, when he was objecting to various suggestions which were made, said he was contemplating a more thorough revision of the legislation. It would be better to wait and make any changes that ought to be made at a time when a more thorough revision is carried out on another occasion.


Alexis Pierre Caron: May I go on with the case I have been presenting? I was quoting some of the evidence which was given by Professor Maxwell Cohen, acting dean of the faculty of law, McGill University, and I had come to the sixth point which he made during the examination of his point of view. Professor Cohen said:
My sixth point was concerned with this new section dealing with promotional allowances. You will notice the notes to your bill at page 7 indicate that this particular proposal, now section 33 (b), results from the report of the Stewart royal commission on price spreads of food products.
I have no strong feelings on this matter. It seems to me, as a practical question it may he very difficult to work out some of the technical aspects in applying clauses 3(a), (b) and (c). I will give you an example:	supposing the Admiral
radio corporation is going to give a promotional allowance to Eatons in the amount of $100,000 a year; it must give something proportionate to Mr. "X" at the corner store, say in the amount of $500 a year, in relationship to the size of his sales as compared to Eatons, to "equalize" the promotional facilities on each side. I think this is a very difficult thing to administer. Obviously, this is something of an injustice which the royal

commission felt because, yet which the actual situation, it makes the result ridiculous. For example, in the case of Eatons receiving $100,000 a year promotional allowances from the Admiral radio people and, Mr. Smith, in the comer store, in terms of his sales, is entitled to $500, that $500 does not give him much promotional opportunity and it seems somewhat absurd. So, the actual relative fairness in that bill may leave you, in the end, with a very great absolute difference between the respective capacities to promote.
With respect to his seventh point Mr. Cohen was not too critical. He said:
My seventh point is the one of misleading advertising-the new section; section 33 (c).
He goes on to say:
When you relate section 33(c) to the new proposals under 31(2), the right to get a restraining order before a conviction, we now may be in the same position as the federal trade commission is in in its "cease and desist" orders. Because the federal trade commission can issue a "cease and desist" order to a company that has been carrying on this misleading kind of advertising for years. We could not do that before; but looking at 33(c) here, in relation to restraining orders before conviction, it seems to me that we are now in this position, that we have virtually the same powers as the federal trade commission exercised, and seems to have exercised quite sensibly since 1914 in the United States.
Mr. Cohen's eighth point was as follows:
My eighth point is the loss leader problem, at the bottom of page 8, clause 14 of the amendments, section 34 of the act. I suppose, next to the new defences I mentioned with respect to loose-knit combinations a moment ago, this is the most controversial part of the bill. What puzzles me about the proposal is this. After all, we have had some major studies in Canada by the director and by the commission, which have shown over the years that though the loss leader question is dramatized heavily by some manufacturers and some associations, the actual number of instances in which you can find persons selling at less than a profit-however you define the word "profit": and it is not easy to define what is a profit- are so small as not to make it a serious problem for purposes of measurement. You cannot find enough instances to say that this is a serious problem, if one is to take the coast-to-coast surveys that were made on this subject.
Therefore, I ask myself the question: if the objective inquiries we have made, which have been made by responsible people, show that the number of cases in fact are very few, why is there this urgency to put into the bill something which opens doors to a very large number of new possible abuses?
The abuses here are twofold. First, it is going to be very difficult to administer clauses (a), (b),
(c), (d) and (e), in terms of the language itself; not only because words like "profit" are hard to define; but words like, in clause (d) on page 9, "level of servicing" are going to be very difficult to define. Words like "unfairly disparaging" are going to be very hard to administer. Not only that, but much more significant, I suggest to you, is the introduction to section 14, clause (5), because if you look at page 8, at the bottom, you will notice that the language encourages a whole system of what I would like to call private informers; a whole system of basing a private regulatory mechanism upon gossip, upon subjective impressions, and not upon objective data. Look how the language now reads;

"Where, in a prosecution under this section, it is proved that the person charged refused or counselled the refusal to sell or supply an article to any other person, no inference unfavourable to the person charged shall be drawn from such evidence if he satisfies the court that he and any one upon whose report he depended. .. Not only he; but, any one upon whose report he depended."
-had reasonable cause to believe and did believe. Just think of that as a defence! Think of the number of letters that might be written to a manufacturer by an aggrieved retail competitor, by someone who is angry or annoyed because he simply is losing out and claims that disparagement is involved, and who claims that things are being sold at less than a profit. And then the vendor says, "I am going to cut you off." He cannot cut them off now, under 34.
At page 561 Mr. Cohen stated:
I come now to my last point. That is a very interesting and novel idea which comes to us, for the first time, in this country-namely that there should be an option, if all the accused agree, except in one case, to go to the Exchequer Court of Canada for these proceedings under this act...
I do not say for one moment that persons as able as the President of the Exchequer Court of Canada-who once taught me evidence, for whom I have a great fondness, are not judges of the highest rank. I am not speaking at all ad hominem. I am sure that every member of the exchequer court would approach this act with as much objectivity, fairness, detachment and skill as they would approach any other piece of legislation. I merely suggest that the atmosphere of the tribunal is an atmosphere which may affect the approach to the kind of problems before them. The atmosphere of that tribunal is partially determined by its major preoccupation, in areas where such matters as restrictions on trade are legal. It is a tribunal without the usual attributes of criminal jurisdiction. It thinks of punishment in terms of other standards, but not in terms of the criminal law and imprisonment. It is accustomed to nonimprisonment sanctions, but not imprisonment sanctions.
I could quote at great length from the remarks of Mr. Cohen who was one of the clearest witnesses to appear before the committee. I think we may discuss these matters further when we come to the specific clauses of the bill.
I turn now to the minutes and proceedings of the committee on banking and commerce, No. 10, dated July 11, 1960. The witness appearing on that occasion was Dr. H, H. Hannam, president and managing director of the Canadian Federation of Agriculture. He presented the view of the farmer as a producer, a consumer and a businessman. He suggested that the farmer has a special stake in the combines legislation and that he is required to be an expert as a producer and as a distributor as well.
With respect to clause 14 of the bill, the clause relating to the resale price maintenance, he stated:
The Canadian Federation of Agriculture has consistently supported the principles of public policy embodied in section 34 of the present Combines Investigation Act. It is this section which makes it an offence for a dealer to set up his own
79951-0-436
Combines Investigation Act
machinery or follow private policies for enforcing maintenance of the resale prices of the commodities which he sells.
This is what Mr. Hannam had to say at page 592:
Let us look at these five practices which provide defences for refusal to supply:
(1)	The use of an article as a loss leader for purposes of advertising, not for the purpose of making a profit on the article. In our opinion this provision clearly opens the way to the establishment of resale price maintenance.
(2)	The sale of articles not for the purpose of selling such articles at a profit but for the purpose of attracting customers to the store in the hope of selling them other articles. This provision in the amendments is in many ways similar in nature and intent to the previous one regarding loss leaders. Our objections to it are the same-that this should not be a matter for private determination; that it is extremely imprecise for purposes of legal interpretation, and that it will open up a road to resale price maintenance.
(3)	Engaging in misleading advertising in respect to an article. We do not support misleading advertising, and believe that it should be a matter for continuous review and policing by public authority. If it can be proved by an official investigation that a retailer is engaging in misleading advertising, then prosecution should follow. But again, we believe that to place the policing of this matter in the hands of dealers can only open up another avenue to the achievement of what we are trying to avoid, that is, resale price maintenance.
(4)	Inadequate levels of servicing for the purchasers of articles. We firmly believe that to permit the re-establishment of resale price maintenance because in the opinion of a manufacturer or other supplier his products are being inadequately serviced by a retailer or other seller, could result in the complete elimination of the existing prohibition on resale price maintenance, which prohibition has contributed so much to the freeing of price competition for countless commodities now marketed in Canada.
(5)	Unfairly disparaging the value of articles supplied, in relation to their price or otherwise. This question of disparagement is, in our opinion, perhaps the most unsatisfactory of all... We would be inclined to think that any dealer desirous of enforcing resale price maintenance for his product would consider that any selling of that product below his suggested price, would constitute disparaging the value of the article in relation to its price.
It is quite clear that the representatives of the farmers do not seem to agree very much with the idea put forward by the Minister of Justice. Farther on, Mr. Hannam had this to say:
In conclusion: the farmers of Canada will be disappointed if parliament passes a bill whose effect proves to be the weakening of price competition between their suppliers-which is bound to aggravate further the unfair relationship now existing between the price levels at which the farmer sells and buys.
I should have liked to read more of the evidence given, Mr. Chairman, but I pass over a lot of it. It would have proved more clearly that our point of view expressed on second reading of the bill, when we spoke on the principle, is the real point of view of the
6908	HOUSE OF
Combines Investigation Act public of Canada. Most of those who are in favour of the bill, if they had attended the committee sessions, would have seen that those who favoured a small part of the bill were against the main parts of the bill. Those representing the important part of our society, namely the consumers, were far from being in accord with the minister. They claim it would be unfair if we took away the prohibition against price maintenance; it would be unfair to the small businessman if we wanted to retain him in business. We know that all of the failures and bankruptcies are not in the field of the small businessman. We have had more failures and bankruptcies this year among contractors in the building industry, and this cannot be on account of the prohibition against retail price maintenance. It is owing to the fact that there was a lack of money and they could not go on with the work they were doing before.
I know that in a few minutes the minister will bring in a few amendments of secondary importance which will not give a new look to the bill we have before us. They will change nothing in so far as the export traders in Canada are concerned. They are not satisfied; they have asked for more clarity in the bill. I do not know whether some of the amendments will produce that clarity, but I do know that objections have come from all parts of the country. Almost everyone who appeared before the committee opposed the bill. They might have been satisfied with one point or another, but for the most part they were against the bill. I think this proves only one thing. The bill has been introduced too quickly; it has not been studied sufficiently to constitute a good amendment to the existing law. We are not opposing any change which will improve the law but we are opposing changes which would make the law worse than it is now.
I know that this is a very difficult field in which to work; I know it is practically impossible to satisfy the two extremes, but I do know one thing. The manufacturers, and those who control the money of the country, have more ways at their disposal to fight the law than the consumers have.
I think the minister has not paid enough attention to the problem of the consumers. Unless he is prepared to bring in something much clearer, much more satisfactory and much more acceptable to the consumer, I do not think we can support this bill.


Charles Benjamin Howard: Some pretty far-reaching
and important comments have been made by members from all parties in the house about the legislation before us at the moment. 

Before we put the question, has the minister any comments to make on what has been said?


Edmund Davie Fulton: Mr. Chairman, I did listen carefully to everything said here today and it certainly seemed to me it did not so much call for reply as it invited controversy. Most of the things that have been said have been simply repetitious, sweeping and it considered criticisms of the bill in general or in particular. If I were to reply to them I would simply be promoting a controversy, but since I am invited to say something, perhaps I should take advantage of the opportunity to refute some of the inaccuracies which have been placed upon the record.
First of all, it has been suggested that since a number of criticisms were made in the committee by witnesses, ipso facto the legislation should be rejected. This was an extraordinary and unconsidered approach to take to legislation of this kind because legislation of this kind by its very nature is bound to give rise to much criticism. It is legislation which imposes restraints upon the freedom of businessmen to do what they like or what they would like to do. Naturally, therefore, when you come to introduce a bill amending such legislation you are going to be criticized and to be told that you have not gone as far in the amendments as they would like to see you go. I am surprised indeed that those who have suggested erroneously that the bill is a surrender to business should on the other hand call as their support by way of illustration of the unsoundness of the bill the fact that businessmen have criticized it. The reason businessmen criticize it is that it does not do a number of things that they would like to have the legislation do in relaxing restrictions upon them.
In making this point may I say that I am not annoyed with the businessmen for criticizing us. It is quite natural that when we do not do what they would like to see done they will express their disappointment and their criticism, but I am amazed at the shortsightedness of those who adopt the extraordinarily inconsistent position that, on the one hand, we are doing everything for business while, on the other hand, they say that the bill must be bad because the business interests say that it does not do the things they would like to see it do.
With regard to the allegation made that there was virtually no witness who had anything good to say about the bill, this is completely erroneous. There were several witnesses who came before the committee with balanced criticisms. Much has been said about Professor Cohen. Professor Cohen gave a long and most interesting resume of the economic theory as well as the legal

history behind anti-combines legislation. Then he delivered himself of a number of criticisms but he also balanced his approach by a number of positive approvals. I would refer the committee to page 561 of the record.
At this point Professor Cohen was summarizing. I know that other hon. members will be able to point to parts of the record where Professor Cohen said some harsh-seeming things about the legislation but, as everyone knows, Professor Cohen is an enthusiast, and I think he himself would admit that at times he says things in his enthusiasm with a force that, if he were writing an essay, he might not use as he does when, as he himself puts it, he is speaking under steam. I make that comment because at this point Professor Cohen was summarizing his views with regard to the bill and I think it is important to see what he felt when he came to summarize his criticisms and to balance off the pros against the cons. I refer to page 561 where he said:
My general conclusions, I would say, I could draw now in the form of a balance sheet. In favour of this bill are several important technical matters. I am in favour of changing the confusing definitions and using section 411 instead of the old combines act section, and making it part of this act, except for the elimination of the word "unduly" in the clause to which I have referred. I fully approve of the strengthening of section 412, and of restraining orders before conviction, even though constitutional problems might arise, which one cannot foresee. I think this is a very helpful device.
I think it is a very important and useful thing to have an approach to misleading advertising which, in conjunction with restraining procedures before conviction, gives almost the same powers as the U.S. federal trade commission has had since 1914 in dealing with unfair methods of competition, in issuing "cease and desist" orders.
So he finds there are four important and far-reaching particulars in respect of which he approves the bill. Then he deals with the other side of the balance sheet and I am going to summarize here because the paragraphs are fairly lengthy. On the balance sheet against he finds, first, that there is a totally inadequate approach to the current merger problem. What was he saying there? His criticism was not directed so much to something that was faulty in the bill as such, but his criticism was that we should have done a great deal of study on the merger problem and that we should have introduced legislation that dealt in a definitive manner with the merger problem.
There is a point of view there. I am not going to say that he is right or I am right. My point is that we prefer to wait for the decisions of the courts to see what the present legislation means and what effect it has before we embark, in the dark as it were, on a far-reaching legislative project to revise the merger provisions.
Combines Investigation Act
As his second criticism on the other side of the balance sheet he says that there is a misconceived approach to the problem of brand name manufacturers, in other words, the loss leader problem. In Professor Cohen's view we have become over-concerned about the problem of small business as it has been placed before us. It is quite true that we are concerned about the problem of small business and we believe we should be concerned because this is a vital segment of our economy. Certainly in so far as the loss leader practice is concerned, several members have referred to the strictures of the MacQuarrie committee itself on the loss leader practice. What Professor Cohen is saying really is that we have been carried too far in our concern in this field and have opened up the door to dangers when he would prefer to see the door unopened.
I do not agree with him or with others in their interpretation of the effect of the change embodied in section 34. I think it is quite clear, and can be proved when we come to that section, that it does not restore the system of resale price maintenance. Of course, for those who want to make a political attack, and that is a temptation into which all my hon. friends opposite have fallen, this is a convenient vehicle in which to make it, and so they say that the government is hereby restoring resale price maintenance.
That kind of inaccurate and foolish statement, made only for the purpose of its political effect, is, I know, very difficult to answer. It is placed on the record and written about in the Winnipeg Free Press. We knew we would have this kind of trouble when we opened up this legislation, but we felt it was our responsibility to make improvements in the legislation which were necessary notwithstanding the fact that the opposition, as we expected, has done everything they possibly could to distort the political realities of the situation.
Coming back to Professor Cohen, who made a reasoned argument and not a political criticism, I simply say that there is a difference of opinion with regard to the matter of whether we have gone too far in dealing with the loss leader problem. I do, however, remind hon. members opposite, and particularly the hon. member for Hull who seemed to think we had made no changes in the bill since it went before the standing committee, that, consistent with my understanding to take seriously any suggestions made in the committee and to do our best to improve the bill, we have accepted the suggestions that we delete paragraph (e) from the proposed amendments to section 34. This is the paragraph that was most heavily criticized

Combines Investigation Act by Mr. Hannam of the Canadian Federation of Agriculture and also by Professor Cohen. So that we have not indicated a determination to insist on any course when it has been shown that it should be modified.


George James McIlraith: I wonder whether the minister would permit a question before he leaves the second point raised by Professor Cohen?


Edmund Davie Fulton: Yes.


George James McIlraith: The minister has summarized it as if Professor Cohen had made his criticism on the ground that the government was going too far. Does he not think that the words "there is a misconceived approach" mean something different from going too far? I apprehend that the meaning is different.


Edmund Davie Fulton: I think Professor Cohen felt we had been carried too far in our concern and in our efforts to deal with the problem of loss leaders. I think that is very close to saying that we have misconceived the nature of the loss leader danger. His next criticism by way of summary was that he felt it was undesirable to resort to the Exchequer Court of Canada. It seems to me, sir, that here you have a complete expose of the ridiculous nature of some of the reactions of my hon. friends opposite to the bill and the ridiculous basis upon which they have carried on the discussion. Here we have done nothing other than provide an alternative forum. We have not made it impossible to take people into the trial courts where prosecution and conviction is the proper course. We have simply provided an alternative forum which may be available to be used in appropriate cases.
My hon. friends have attacked this as though it were going to be the death knell of combines law in Canada. Their strictures on the proposal to use the exchequer court as an alternative forum are made, to use Professor Cohen's words, on an entirely misconceived basis as to the nature and effect of that amendment. Indeed, it is interesting to recall some of the discussion that took place in the committee just after it had risen at one point. Professor Cohen put it on the record at the next meeting. After he had made his strictures on the exchequer court procedure which, you will remember, were echoed by others on the basis that this was opening the door through which every big business would rush with the greatest of zeal to get into the exchequer court, one of the very experienced counsel in these matters pointed out that if the consent of the parties were necessary to get into the exchequer court, then in his view business would be more than eight to one against going to the


exchequer court. It is, therefore, certainly arguable that we have provided an alternative forum in which the attitude of the court and its dealings with business will be equally harsh, and possibly more adverse than if we only went to the trial court.
This is not my view. Personally, my view is simply that there are types of cases in which it is appropriate to go to the exchequer court and where that is the situation then, with the consent of the parties, we can take those cases to the exchequer court. In other types of cases, it is obvious the appropriate course is prosecution and conviction takes place in the trial courts, and in those cases that will be the course to be followed. It is for that reason that it is absurd to deal with this question of alternative procedure as though it were introducing some fundamental and fatal weakness into the combines legislation.
Then, Professor Cohen's last criticism in his summary was with respect to the new provisions making it compulsory, in cases where promotional allowances are offered, to grant them on a proportionate basis to all competing purchasers from the person allowing them. But at page 559 of the committee evidence, Professor Cohen dealing with this particular section said:
I have, as I say, no strong views. I think it has an intrinsic fairness about it.
Now, is that not a terrible criticism? He goes on to say:
I think it is going to be difficult to administer, and I think some of the results will be disappointing.
What then is this balance sheet as given by Professor Cohen, an authority much relied upon by my hon. friends opposite? He finds four points on which he strongly supports the bill and four points on which he criticizes the bill. The interesting thing about his criticism is that in one case he is not really criticizing us for the things that are in the bill, he is criticizing us because he feels we should have had an earlier and greater study, and should have introduced a legislative project making substantial revisions in the merger field which we have refrained from doing.
I think the best contribution I can make to the debate is this attempt to get the discussion into balance. I would remind the committee that an impartial review of the things that have been said about this legislation in the banking and commerce committee, and an impartial review of what is in the legislation itself, will indicate that there are areas in which there is difference of opinion. There always will be areas in which there are differences of opinion in legislation of this kind. Much of the criticism we receive, referring

now to the briefs of business associations, chambers of commerce and so on, related to the fact that they would have liked to see us do things which we have refused to do. When they had an opportunity to come before a committee to criticize a piece of legislation they felt this was an opportunity to urge that the legislation be changed to go along the road that they would like to see followed.
I come back to the point that if my hon. friends opposite are going to criticize us because we have not done all those things that business would like us to do, and if they are going to get any comfort out of the fact that business is critical of us for this reason, then it is a strange position for them to be taking, and I think their friends in the Winnipeg Free Press will be amazed by their attitude.
I said at the beginning of this discussion in committee this morning that I felt the legislation was good legislation. I said I felt the committee study had been useful. I still feel those things. I only regret that the committee study did not serve my hon. friends opposite as they might have allowed it to serve them, by giving them a better sense of proportion when they considered the bill in this committee. I remind them that we made four amendments in committee and I have promised to consider a fifth, about which I undertook to make an announcement before the discussion here has been concluded.


John Whitney Pickersgill: The minister has, by his highly partisan observations, stimulated me to make a speech which, perhaps, I otherwise would not have made. The minister used such words as "ridiculous" and "taking party advantage", as well as other phrases of that sort. Well, I have been whiling away the odd moments looking at Hansard for the month of December, 1951. I must say that when I heard words of that kind from an authority such as the hon. member for Kamloops, I can only assure him that we are slowly learning the lessons that he taught when he sat in those days in opposition, in the realm of partisanship, in the realm of repetition and in the realm of exaggeration. Unfortunately we have not yet-I hope we never will-reached the lengths to which he and his friends went at that time with regard to a bill to do one specific thing, a bill to put section 34 into this act, a section which those hon. gentlemen at that time denounced up hill and down dale as something that was going to destroy small business. However, they have not now got the courage to repeal it as they gave every impression they intended to do if they ever had the opportunity, and which they are seeking instead to undermine.
This is, of course, our fundamental objection to the legislation. We do not object to
Combines Investigation Act everything in the bill. We say that it is like the curate's egg; it may be good in parts, but an egg that is only good in parts is the kind you could never get rid of unless you sold it as a loss leader. As a matter of fact, this question of loss leaders was one on which the minister made such a lot of eight and a half years ago when he did his best to keep this house here over Christmas, and succeeded. At that time the minister talked a great deal about loss leaders. We all agreed that if a satisfactory, clear-cut, precise legal definition of loss leader could be found, in the light of the views of the MacQuarrie commission, and if the court could enforce it, instead of private individuals enforcing their own law, there might be a great deal to be said for it.
However, we did not believe that manufacturers should be allowed to make private law and impose it on other Canadians. We feel that is what the government is seeking to do here; that is what resale price maintenance was. It was the forcing of private legislation on a section of the public. We think this is a bad principle and we continue to think so.
I would just like to say something about Professor Cohen's evidence, because the minister stopped at a very convenient point and made it sound pretty good, because he stopped at the word "finally". Perhaps the minister does not know Professor Cohen as well as or for as long as I, because "finally" is usually in Professor Cohen's introduction. The next paragraph begins "Let me now conclude, sir", and there are other paragraphs after that. However, I think this observation is really worth putting on the record. On page 562 appear these words:
How urgent is all of this? In my opinion, we do not face, except for the four or five items I mentioned, which I support, and I think could well be passed by this parliament-we do not face a crisis in this field. We do not face a crisis, in terms of the per se doctrine; we do not face a crisis in terms of loss leaders; we do not face a crisis in terms of the right court to go to; we do not face a critical merger problem except in so far as it may be a crisis in terms of our lack of knowledge of what is happening.
Therefore, it seems to me that we need far more information than we have on these matters indeed may I suggest five areas where we need a better study-
I will not read any more because that supports the point I made a few moments ago when I previously took a little time of the committee.
We feel that what has been put before us is a half-baked affair and that there is, as Professor Cohen said, no crisis. There is no reason why legislation of this kind should have been brought into parliament virtually at the end, or what ought to have been the end of the session if the government knew how to manage the business of parliament.
6912	HOUSE OF
Combines Investigation Act


Edmund Davie Fulton: It was brought in in May.


John Whitney Pickersgill: It was brought in at a very late stage of the session, at a time when the best you could say about the sessions of the committees is that they were chaotic. I was very interested in the committee and attended every meeting which I conscientiously could. So did most of the other members of the Liberal party, and certainly the hon. member for Skeena was very assiduous in his attendance when he was able to be there. But the plain fact is that none of us could follow proceedings consecutively.


William Moore Benidickson: Nor even the minister.


John Whitney Pickersgill: As the hon. member for Kenora-Rainy River says, nor even the minister. However, I want to be fair. The minister was certainly not showing any lack of conscience. We know that every time the minister was away he was away because he had other and even more urgent things to do, and I want to give him full credit for that. But that would not have been necessary in February or March if we had wanted to embark on the study at that time, when there were not so many other committees to manage.
That is why I say, in light of all the history of this measure at this session, that we think it is regrettable that the government is going to persist. But since it appears that they are going to persist with this legislation we will endeavour, as I think is the duty of an opposition, to take as many of the bad parts out of the egg as we are allowed to, and we will try to make these amendments at least a little less objectionable than they now seem to us.


Charles Benjamin Howard: Mr. Chairman, I think perhaps we could call the Minister of Justice the "minister of misconstruction" because he certainly has misconstrued what Professor Cohen had to say to the committee, the minister being very selective in what he read. He did not indicate-and I appreciate his reasons, because he did not want to be embarrassed-that the two most important and key proposed changes to the bill, namely the proposed changes to section 32 and the proposed addition to section 34, were opposed by Professor Cohen. He did not indicate that on the balance sheet he drew up.


Edmund Davie Fulton: I did not draw up the balance sheet; it was Professor Cohen's balance sheet.
I read from the transcript.


Charles Benjamin Howard: The Minister of Justice
adopted it as if it was his own brain child and-


Edmund Davie Fulton: I am sure the hon. member does not wish to be unfair. I could rise on a question of privilege because of some of the words he used, but I did make it clear I was quoting the balance sheet of Professor Cohen. Professor Cohen said "To sum up, I could put it in the form of a balance sheet", and that is what I read.


Charles Benjamin Howard: Although I do not consider that to be a question of privilege, I said that the minister adopted the balance sheet as his own because he used it to support his own arguments. Therefore I assume the minister agrees with it, but perhaps he disagrees, I do not know. I merely point out that the minister should have read additional references of Professor Cohen's about the proposed changes to section 32 and to section 34, because he would have found an entirely different picture presented. He dealt with inconsequential things in relation to the bill and left out the meat of it and what the Professor had said about it.
Incidentally, if the minister was that concerned with the opinions expressed in the academic field, he would be well advised to be influenced by the expressions given by a gentleman like Dr. Skeoch, who I understand is the present director of investigation and research and is classified as a very competent person. In fact, in the presentation which the present director made some five or six years ago to the restrictive trade practices commission, in compiling a so-called dream book on loss leaders, he said that it was prepared under the competent supervision of Dr. Skeoch. If the minister had paid more attention to what gentlemen in the academic field had said who do not have any particular axe to grind as far as the bill is concerned perhaps he would not be in the embarrassing position of trying to defend something of this nature on a selective basis, picking out only those points which support his own point of view.
Professor Cohen, in commenting about the proposed amendments to section 32, had this to say. This is after he deals with the inclusion of the word "unduly" in the proposed paragraph (d), that is, to restrain or injure trade or commerce unduly in relation to any article. Then in wondering why the word "unduly" is in there he passes on to the next point and says, as reported on page 556:
My next point, you will remember, was the one defence provided for in section 32	(2). This
proposes the most striking, or one of the two most striking features of this bill. I could spend a great deal of time on it.
Perhaps I might say here that Professor Cohen did spend a great deal of time on it. He goes on:
Let me address your mind to what has happened here. You will notice that against the background of my remarks during the past two days



I860

[Stage Direction]
I said that the courts in this country have said that so far as multi-firm behaviour is concerned, where several firms are engaged in agreements, the courts will not ask the question whether these agreements have been good for prices, or have been bad for prices. They will not go beyond the central question; is there an agreement which in effect restricts trade and involves a predominant section of the industry? This had led to what has been called the per se doctrine. The courts have not found it necessary to go into all these questions because they say the primary objective of this legislation is to limited restraints upon competition. So once we see a restraint of any sizeable dimension, the refined economic consequences of this restraint are not for this court to decide. They decide the main policy question. They seek to apply the main policy objective, namely to prevent these substantial restraints upon competition particularly where they find a preponderance of industry involved.
Most prosecutions since 1923, where there has been success-and of course, the degree of success has been extraordinary-since the number of acquittals has been marginal over the years-most prosecutions have involved these multi-firm situations where the preponderance of industry is concerned.
The witness goes on to deal with these points in greater detail and merely because they are not specifically related to the development of this theme I can, perhaps, skip the next paragraph or so. But this is directly related to the subject, when he says:
Year after year responsible leaders of industry have come forward, C.M.A. and others, and have put forward what certainly to them, and to many other people, seem responsible points of view: This legislation now, is seems to me, accepts the proposition that it is worth while to cast in terms of law these, what may be called, innocent areas, of business co-operation and not merely to leave it to the courts to discover the innocence, but to give the courts specific guidance as to innocence. The best case that can be made for this, therefore- I will come to the other side of the point-but the best point that can be made for this very important policy change, is that it is already sufficiently imbedded in legal ideas about these matters to hold them licit, to hold them legal. Therefore, all we are doing is declaring what in fact is something which the courts would regard as legal.
Then, after an intervention by the hon. member for Essex East, Mr. Cohen went on to say:
One must realize that there is a vast body of experience with respect to what happens when businessmen get together. It is true that the rest of the section-that is the warning clause, because one must go on to see subsection 3-says that subsection 2 does not apply if the conspiracy agreement or arrangement has lessened or is likely to lessen competition unduly in respect of (a) prices, (b) quality or quantity of production, (c) markets or customers, or (d) channels or methods of distribution. So the section already is aware of the possibility that although businessmen may get together for purposes only of advertising, or only for information, or only on research, it may lead to fixing price; it may lead to restrictions on production. At that point then the defences of subsection (2) will not operate.
Now, what we have to ask ourselves is this: what is the extent to which experience teaches us that this kind of encouragement will or will not
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lead to abuse. The real problem is not the juridical aspect so much, because one can argue with some,
I think, clarity and force, Mr. Chairman, that clause 2(a), (b), (c), (d), (e), (f), and (g) includes matters that most of us already regard as licit and as legal. What is important in subsection 2 however, is this: does it provide psychological encouragement to go further? This is the question.
Then Dr. Cohen goes on to talk about the literature which exists on the subject and other matters. He winds up as reported toward the bottom of page 557 by saying this:
Will this give the businessman a kind of feeling of legality that in my opinion he already has with these activities, or will it perhaps induce some of them to go a great deal further than they ought to go? My view is that this particular formulation is a flag of temptation, not a rule of legal importance. This temptation may lead to illegalities.
The point is that Professor Cohen is of the opinion that these proposed loopholes should not be contained within a bill of this kind. Then, on page 559, Professor Cohen is reported saying with respect to another subject:
My eighth point is the loss leader problem- particularly section 34 of the act.
The witness goes on to deal with this question extensively. In his remarks he is somewhat critical with regard to the proposed addition to section 34 and he is especially critical about the words "reasonable cause to believe, and did believe". Referring to this phrase with ridicule, he says:
Just think of that as a defence! Think of the number of letters that might be written to a manufacturer by an aggrieved retail competitor, by someone who is angry or annoyed because he simply is losing out and claims that disparagement is involved, and who claims that things are being sold at less than a profit. And then the vendor says, "I am going to cut you off." He cannot cut them off now, under 34.
I mention these things so that the balance sheet which the minister adopted as his own in support of this bill might, indeed, be properly balanced and would contain the rest of the opinions of Professor Cohen.
Again on this question of loss leaders, may I refer to some of the opinions reached by the restrictive trade practices commission in the report made in 1955 after an inquiry had been made into such practices. One of the conclusions reached by the commission- it has not yet been carried out by the government, but perhaps it should have been carried out-is given on page 243 of the report. This concerns the need for study. At the top of the page the commission states:
In the recommendation for a thorough study of loss leader selling the committee to study combines legislation indicated that one of the objectives should be to determine the prevalence of the practice. This emphasis on the need to determine to what extent loss leader selling is employed is only to be expected, because without such knowledge it would not be possible to make a realistic appraisal of the effects of the practice.
[Stage Direction]
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A certain amount of material was obtained at that time and this led the commission to the conclusion that loss leader selling was not so great a problem as to require any action to be taken. However, the key point is that it was not possible to make a real estimate of the effects of the practice until the extent of the practice was known. This was in 1955, and since then, to the best of my knowledge, there has been no such study made. That is the position, certainly according to the evidence given by one witness who appeared before the committee, Doctor Skeoch, who told me in reply to a question that there had been no comprehensive examination of loss leader selling since those days. We are therefore operating on assumptions.
Evidence was given before the committee that certain things were taking place and that goods were being sold at below what the witnesses considered to be the cost of producing them. We were told that this was upsetting retailers, causing bankruptcies and so on. But once one began to inquire in detail into these allegations, or into this evidence, he found there was not much in the way of concrete details to back them up. In fact, there was no detailed information as to what was happening. We could very well take one or two of the comments of the restrictive trade practices commission in 1955 and correctly apply them to the situation today. Chapter 9 of the summary and conclusions of the restrictive trade practices commission report at page 241 reads in part:
Throughout the hearings in this inquiry the commission was struck by the failure of many representatives of business to make any clear distinction between competitive pricing by dealers and the more extreme forms of price-cutting which could be regarded as loss leader selling.
They could not come to any conclusion as to the definition of loss leader selling. The same situation exists today. In its 1955 report the commission said it could make no effective appraisal of the effect of loss leader selling or the extent to which it exists. Since then nothing has been introduced to indicate how extensive it is or what effect it has. Despite this we are asked to legislate contrary to the views of the commission and without any analysis of the effects.
A second point made by the commission was that many businessmen fail to make a distinction between competitive selling-that is price reduction because of competition-and loss leader selling or below cost selling. I submit that situation prevails today. The representative of the Canadian association of consumers summed it up succinctly when she said that it was painful competition and not loss leader selling that was being objected to. This problem-call it what you will-arises

because of the activities of some industries in the field of price discrimination and not because people are selling below invoice price.
George James McIlraith: Mr. Chairman, I want to place paragraph 2 of clause 1 on the record in order to make the point I intend to advance. Clause 2 as amended reads as follows:
(2) Paragraphs (e) and (f) of section 2 of the said act are repealed and the following substituted therefor":
(e)	"merger" means the acquisition by one or more persons, whether by purchase or lease of shares or assets or otherwise, of any control over or interest in the whole or part of the business of a competitor, supplier, customer or any other person, whereby competition
(i)	in a trade or industry,
(Ii) among the sources of supply of a trade or industry, or
(iii) among the outlets for sales of a trade or industry is or is likely to be lessened to the detriment or against the interest of the public whether consumers, producers or others;
(f)	"monopoly" means a situation where one or more persons either substantially or completely control throughout Canada or any area thereof the class or species of business in which they are engaged and have operated such business or are likely to operate it to the detriment or against the interest of the public, whether consumers, producers or others;
Then the committee added part 2:
-, but a situation shall not be deemed a monopoly within the meaning of this paragraph by reason only of the exercise of any right or enjoyment of any interest, derived under the Patent Act, or any other act of the parliament of Canada.
The explanatory note indicates that the present paragraphs (e) and (f) of section 2 are as follows. Then they are set out as I placed them on the record:
(e) "merger, trust or monopoly" means one or more persons
(i)	who has or have purchased, leased or otherwise acquired any control over or interest in the whole or part of the business of another, or
(ii)	who either substantially or completely control throughout any particular area or district in Canada or throughout Canada the class or species of business in which he is or they are engaged, and extends and applies only to the business of manufacturing, producing, transporting, purchasing, supplying, storing or dealing in commodities which may be the subject of trade or commerce; but this paragraph shall not be construed or applied so as to limit or impair any right or interest derived under the Patent Act, or under any other statute of Canada;-
The committee's addition is one which we welcome concerning the reference to the Patent Act. My point is this. This former definition on which any jurisprudence on the subject hinges defines "merger, trust or monopoly" in one definition. The minister made it clear in the committee stage as to why the use of the word "trust" was deleted from the definition. I think there can be no quarrel with the dropping of the word "trust". There does seem to be, however, a

difference created in the operative part of the definition between "merger" and the definition of "monopoly".
I should like to know from the minister why that change was made. The definition of the word "monopoly" in the new bill follows the definition in the act but the definition of the word "merger" involves a substantial change. Would the minister explain why that change took place?


Edmund Davie Fulton: Yes, I think that was explained in the committee, Mr. Chairman. The definition of "merger" is not changed in so far as the words which say that constitutes a merger are concerned. Those words are still the same, or much the same, namely:
-the acquisition by one or more persons, whether by purchase or lease of shares or assets or otherwise, of any control over or interest in the whole or part of the business of a competitor-
Those words are substantially the same. The change is to point the attention of the court to the fact that parliament is concerned about a merger not only in what might be described as a horizontal way but also a vertical way. When one talks about a merger one usually thinks of a company in one line of business acquiring a competitor in the same line of business, one engaged in producing the same line of goods; but we have had brought to our attention the fact that there is an increasing tendency toward concentration not just in that horizontal way but also vertically, in perhaps a company which produces the commodities it needs in its own production. In other words, companies now tend to acquire their suppliers. This often seems to set off a chain reaction. If a competitor of company A is in competition with company B and company A then acquires a supplier, company C, company B then immediately becomes concerned because somebody who formerly was an independent supplier and could supply him and enable him to continue in competition with company A has now passed under the control of company A so company B looks around for other suppliers to acquire. As I say, it seems to set off quite a chain reaction.
We are concerned about this integration, this vertical merging; therefore, we have expanded the area where the lessening of competition is of concern to indicate to the courts that it is not only with respect to horizontal acquisitions but also acquisitions which have the result that competition among the sources of supply of a trade or industry are affected. That is the reason for that enlargement.
May I just say this. It is my view that this does not actually change the law but does point the attention of the courts to something in a way that was not the case before, 79951-0-437
Combines Investigation Act and I think that is a proper thing. In effect, we are asking parliament to indicate to the courts that it is concerned about these other types of mergers.


George James McIlraith: The purpose the minister is seeking to achieve may be clear now, but I wonder why he has substituted the words "is or is likely to be lessened" for the former phraseology "which has operated or is likely to operate to the detriment or against the interest of the public". I do not follow how the reasoning he has given to the committee would warrant the change in these words as indicated.


Edmund Davie Fulton: The previous words were;
"Merger, trust or monopoly" means one or more persons
(i) who has or have purchased, leased or otherwise acquired any control over or interest in the whole or part of the business of another, or-


George James McIlraith: It is in line 23.


Edmund Davie Fulton: Those words are imported in the bill from the definition section (2) of the present Combines Investigation Act, which contains the words:
-which combination, merger, trust or monopoly has operated or is likely to operate to the detriment or against the interest of the public.
Since we have separated the merger and the monopoly provisions into separate subparagraphs, have dropped the trust and have put combination in its own section, the words "which merger, trust or monopoly is likely to operate" just do not seem to fit in, and we have made the point apparent that what we are concerned with is the lessening of competition; therefore, it is now whether competition is or is likely to be lessened to the detriment or against the public interest. I do not really think there is much change there because the only way in which competition would be likely to be lessened would be tied up with the effects of the operation of the merger, therefore I do not think there is really any change in substance.


George James McIlraith: I thank the minister for his explanation. I must say I really prefer the words "has operated or is likely to operate to the detriment or against the interest of the public" to words "is or is likely to be lessened to the detriment or against the interest of the public" because they have the advantage of having judicial interpretation, and I think it is desirable to retain them. Perhaps the point is one that could be argued indefinitely and to bring the matter to a head I would move that paragraph (e) of subclause 2 of clause 1 of the bill be amended as follows:
The deletion of all the words after the word "person" in line 18 up to and including the word

Combines Investigation Act
"lessened" In line 23, and the substitution therefor of the following words: "which has operated or is likely to operate".


Edmund Davie Fulton: Perhaps we should hear what the hon. member for Skeena has to say before I say anything.


Charles Benjamin Howard: I just want to say perhaps in general I agree with what the hon. member for Ottawa West is getting at. What I think he is getting at is the removal of what I consider to be the restrictive nature of the language in subparagraphs (i), (ii) and (iii). For that reason, perhaps the amendment could be accepted. However, 1 would suggest that a more correct approach to this question would be for the amendment to read, "the deletion of all the words after the word 'person' ", so that we would then know what a merger is. A merger would then be:
"Merger" means the acquisition by one or more persons, whether by purchase or lease of shares or assets or otherwise, of any control over or interest in the whole or part of the business of a competitor, supplier, customer or any other person.
This would define what is a merger, and I think the part about the effect of the merger, which is what the hon. member for Ottawa West puts in, namely that which is operated or is likely to operate as a detriment or against the interest of the public, whether consumers, producers or others, should properly be contained, I think, in the proposed new clause 33, which is the liability clause or the penalty clause. Clause 33 now reads in part:
Every person who is a party or privy to or knowingly assists in, or in the formation of, a merger-
Then we could put in the reference "which has operated or is likely to operate to the detriment of the public". This would make it a better prepared amendment and more in keeping with what I think the proposed amendment should be.
In so far as the removal of the words contained in subparagraphs (i), (ii) and (iii) are concerned, it is a commendable suggestion to make because it is my opinion-and this has been verified-when you make a law which is restrictive in its nature it then excludes the possibilities which are not contained within the subparagraph (i), (ii) and (iii). I think the amendment should be supported. In fact, I think it should have gone a bit farther and removed the effect part of the amendment from here and put it in clause 33.


Edmund Davie Fulton: Mr. Chairman, the effect of the amendment would be to take out these words in which we are seeking to direct the attention of the court to areas which it is not clear are covered in the present wording;


perhaps I should say rather than that which it is not made clear parliament is concerned about. It is our desire to attract attention to this problem of vertical integration as well as horizontal integration. For that reason I would not be able to accept the amendment that deletes those words having that effect. Further, I would point out that if the amendment were accepted it would have the result of going back to the old words "which has operated or is likely to operate" and so forth, but those words are only opposite if you do what the former definition did, namely repeat the original words "which combination merger, trust or monopoly has operated", and so forth. Since these words are not repeated here the meaning is far from clear. In other words, the formula which my hon. friend is putting forward here is a formula which was applicable in an earlier definition but was applicable because there had been repetition of certain other words and without these certain other words repeated the meaning here is not clear. On both these grounds I am afraid I could not accept the amendment.
Amendment (Mr. Mollraith) negatived: Yeas, 19; nays, 55.


Charles Benjamin Howard: Mr. Chairman, although I consider that the amendment of the hon. member for Ottawa West was a reasonable one, I appreciate the desire of the minister to have contained in the legislation a specific or implied reference that a merger which functions in the vertical field should be looked at just as much as a merger which exists or develops in the horizontal field as between industries rather than in the channels of distribution from top to bottom. To that extent this is an acceptable approach although I still think that the effect of mergers with respect to the lessening of competition in a trade or industry or among the sources of supply of a trade or industry, etc., should be provided for in section 33 as I suggested earlier. However, this is relatively inconsequential.
I am concerned though that there might be circumstances in which a merger will take place whereby competition and so on in a trade or industry, vertical or horizontal, are not directly involved. There was some doubt expressed in the committee whether this provision would apply to the so-called glomerate or conglomerate mergers. We discussed the matter in the committee and the minister did express the opinion that if a merger took place involving different industries whereby a holding company, let us say, would absorb a firm in the mining field, another in the transportation field, another in the pulp and paper field and so on and if this so-called

conglomerate had the effect of lessening competition to the detriment of the interests of the public with regard to a particular trade or industry the matter could still be dealt with under this section.
When it comes to the drafting of statutes I am not a lawyer but I understand that the courts will use this approach. Where something is restrictive, as subparagraphs (i), (ii) and (iii) are, they are inclined to view anything outside of the restriction as having no connection and the law would therefore have no applicability to it. I wish to refer to the proposed change in the new subsection 2 of section 32 only for purposes of comparison. The new subsection 2 reads as follows:
Subject to subsection 3, in a prosecution under subsection 1 the court shall not convict the accused if a conspiracy, combination, agreement or arrangement relates only to one or more of the following-
Then (a), (b), (c), (d), (e) and (f) are listed and are followed by subparagraph (g) which is in these words:
(g)	some other matter not enumerated in subsection 3.
That is a sort of all inclusive catch-all phrase to indicate that there may be fields other than those listed in subparagraphs (a) to (f) in which co-operation or agreement may be entered into. Subparagraph (g), "some other matter not enumerated in subsection 3" is designed to be all-embracing and to take in these other possibilities. I think the same thing should apply to the proposed definition of a merger. There should be another provision there so that if a case does come before a court the court will have no hesitation in understanding that it was meant that the provision should be broad enough to apply to mergers in areas not contemplated by subparagraphs (i), (ii) and (iii). I have an amendment I should like to move which I think will deal with this matter. I move:
That paragraph (e) of subclause 2 of clause 1 be deleted and the following substituted therefor:
"(e) 'merger' means the acquisition by one or more persons, whether by purchase or lease of shares or assets or otherwise, of any control over or interest in the whole or part of the business of a competitor, supplier, customer or any other person, whereby competition
(i)	in a trade or industry,
(ii)	among the sources of supply of a trade or industry,
(iii)	among the outlets for sales of a trade or industry, or
(iv)	otherwise than in subparagraphs (i), (ii) and (iii), is or is likely to be lessened to the detriment or against the interests of the public, whether consumers, producers or others:"
You will note, Mr. Chairman, that the only change is to add another subparagraph, if that is the proper designation, reading: "otherwise than in subparagraphs (i), (ii) and (iii)". The proposal we have put forward 79951-0-437i
Combines Investigation Act will mean that the provision will not be as restrictive as it is now and will be broad enough so that if the question arises in the courts whether or not a merger has taken place in some field other than those set out in (i), (ii) and (iii) which has lessened competition the courts will be able to find along these lines and be able to protect the public interest properly in this regard.


John Whitney Pickersgill: Mr. Chairman, while I
think we would have preferred the amendment of the hon. member for Ottawa West, the committee has made its decision on that and I think I can say that this amendment commends itself to me at any rate.


George James McIlraith: As I understand the amendment, and I find it a little difficult to understand some of these things when they come before us quickly, its effect is merely to remove the limitation now contained in the provision by reason of subparagraphs (i), (ii) and (iii).
It will provide for the acquisition of one company by another and the words, "whereby competition is or is likely to be lessened to the detriment or against the interests of the public", will still remain.


Charles Benjamin Howard: Yes.


George James McIlraith: So far as I am concerned, it is in order.


Edmund Davie Fulton: It seems to me that in the enumeration (i), (ii) and (iii) we have really listed every possible field in which a merger could operate with reference to the lessening of competition. I would be inclined to say that this is a case where we have made an exhaustive enumeration and we do not need to put in any saving words. However, if that is true, then the worst I can say about the amendment is that it changes nothing; it adds nothing, and it is unnecessary. I am not putting that view forward now in the sense of saying, for that reason, I will not accept the amendment. I do not believe it does any harm. My inclination is, rather than to divide the committee, to simply accept the amendment because I do not think it changes anything. I do not believe it does any harm.
I am not prepared to quarrel about it and I will accept it, subject to the indication that if in thinking it over tonight my advisers and draftsmen should tell me that it does have some undesirable effect, then I would have to come back to the committee on another occasion and ask that this portion be rescinded.


Charles Benjamin Howard: May I say that the minister's statement is quite acceptable to us.

Combines Investigation Act


William Moore Benidickson: Would the minister allow it to stand?


Edmund Davie Fulton: No, I do not want to allow it to stand.


John Whitney Pickersgill: Is the minister quite sure he can speak for all his followers?


Edmund Davie Fulton: I said I am prepared to accept it.


John Whitney Pickersgill: The minister also said, "rather than divide the committee".


Edmund Davie Fulton: If I felt the amendment were wrong I would put forward the reasons because I know that reasons always appeal to Conservatives rather than to Liberals.


John Whitney Pickersgill: I just wanted to underline
the arrogant implication in the minister's words, that if he accepted it there would be no division in the committee.


Edmund Davie Fulton: That is just the way you waste time.


Jacques Flynn: I understand the minister would like this matter to stand?


Edmund Davie Fulton: No, my suggestion was that since I could really see no harm in it, I would be prepared to recommend that it be accepted. I find it is not always good to accept an amendment on short notice, but if we have made a mistake I might have to come back tomorrow and move that a certain part of it be rescinded. I do not believe that would be necessary.


Jacques Flynn: I do not know if this course would be feasible if the amendment is carried. The only thing I can do now is to ask the committee if the amendment is carried. Shall the amendment carry?
Amendment (Mr. Howard) agreed to.


Jacques Flynn: Shall the clause as amended carry?


George James McIlraith: There is one very small
point that I want to clarify with the minister. In the committee's amendment it sought to return to the bill a portion of the definition which had been left out of the bill as submitted to the house on second reading. I note at the end of that paragraph, as contained in the amendment of the committee the words, "under the Patent Act or any other act of the parliament of Canada", are used. The section of the act which was sought to be returned to the bill reads, "under the Patent Act or under any other statute of Canada". I am not familiar with any difference in meaning, and I wonder if the minister would suggest what the difference is?


Edmund Davie Fulton: I am told that there is no difference, but that this is current drafting terminology.


Charles Benjamin Howard: There is another point I should like to raise on clause 1. Here again there was some discussion about this in committee between the minister, myself and other members. This has to do with the definition in paragraph (a), the definition of "article". The definition now reads:
(a) "article" means an article or commodity that may be the subject of trade or commerce;
Our discussion, which I do not intend to enter into, again revolved around whether the act applied to what we classified as the service industry, not the service industries which would be dealing in the distributive field, distributing materials, but the field in which a service only would be involved. So far as we are aware there is only one reference to this question in the act and that is section 32 (1) (c) relating to the price of insurance upon persons or property. It is considered that insurance is not a material thing in the sense that we normally refer to articles; it is, in fact, a service. It was thought that perhaps this definition of "article" might be expanded to cover the so-called service industries in order that they would be brought within the ambit of the bill itself.
I thought perhaps one or two comparisons might be drawn in this regard. For instance, while my wife and I have not had to worry about diapers for children for a while, I understand that there are people who provide a service by supplying diapers. This service may be provided in two ways. The first method is by someone calling at the house and selling her disposable diapers. These are used once and then thrown away. Since it is a material article that the individual is selling, his operations are covered by the bill and if he contravenes the law or engages in a conspiracy to set the price of these disposable diapers he may be subject to prosecution.
Another manner in which this service is provided is to have a laundryman call and pick up the soiled diapers in exchange for which he gives the housewife clean diapers. The diapers may be the property of the housewife, and if the launderer makes an agreement with another launderer to fix the price for the service of laundering the diapers, then he may be outside the ambit of this particular legislation. If, of course, the laundry is using diapers which the laundry owns and merely exchanging them or renting them to the housewife, then the launderer comes within the legislation. There is this conflict.
Another case in point with regard to people belonging to a union is what I think is a most open and blatant conspiracy to raise

prices, namely the barbering industry. Barbers provide a service, the service of cutting hair; yet because service industries are not included in the bill there are continual increases in the price of haircuts. Of course, as members of parliament we are not subjected to that because we have a subsidized service here, and I am sure many other members of society would like the same sort of subsidy. But in normal cases the prices are raised from $1 to $1.25 to $1.50, and so on.
I remember in Vancouver a few years ago this being done without any hesitation or equivocation, and done openly as the result of an agreement amongst barbers to raise prices.
As I say, this does not come within the ambit of the legislation because there is no reference to services. I think there should be a reference to this question of service so that these things may be dealt with. I realize, as the minister indicated, that in the studies given to the act the question of bringing service industries under the act was not thought of or the studies had not progressed sufficiently far enough for this to occur, but I think perhaps it is time it is done now.
The wording of the proposed amendment I am introducing is not perhaps one which would be developed by draughtsmen in the minister's department if they were to draft such an amendment, but it gets at my point. Again for the sake of clarity, I am suggesting the removal of the whole paragraph and the substitution therefor of an entirely new one so that the wording is quite clear. Therefore, I move:
That paragraph (a) of subclause (1) of clause 1 be deleted and the following substituted therefor:
"(a) 'article' means an article or commodity, and includes any service, that may be the subject of trade or commerce;"


Edmund Davie Fulton: Mr. Chairman, we went over this ground in committee, as the hon. member has said, and I do not think I can add anything to what I said there. I said that we were not prepared at the moment to change the legislation so as to include what are commonly called service industries. That would be a far-reaching and complicated proposal, to place this industry within the purview of the Combines Investigation Act. They are not in it now and no one has demonstrated to me that with respect to those fields of industry there is any public detriment being suffered. For that reason I am not prepared to make an amendment or accept an amendment or recommend the acceptance of an amendment which would bring them in.
I must say in addition that when one looks at the amendment which has been drawn I fail to see how it could refrain from affecting the question of trade unions. This in itself
Combines Investigation Act is an enormous field, and to suggest that it be extended that far would require detailed examination and could only be looked at, let alone be embarked upon, after the most careful consideration. I am not able to recommend this amendment.


Erhart Regier: Mr. Chairman, although I shall have something to say on the over-all principle of clause 1 later on, I do want to speak now specifically to this amendment.
The minister mentions the influence that this amendment might have on a limited number of trade unions. However, I believe that no trade union or any interest in our society ought to have the right to determine the price of its services without the public interest being heard and adequately represented at the time those prices are determined.
The hon. member for Skeena mentioned the barbers. I am not so much concerned about the barbers but I am concerned about the legal profession having the right to determine their own scale of fees willy-nilly regardless of the interests of the general public. I am concerned about the medical profession and the architectural profession and a fairly large number of other professions having, in effect, a closed shop, not having to take into consideration the interests of the public at large. I think the amendment raises a very timely discussion at this point and ought to be pursued by hon. members of this committee, and I believe the amendment is worthy of support.


William Moore Benidickson: Mr. Chairman, this is a very interesting amendment.. Do I recollect that the minister said with respect to legal fees that in the province of British Columbia the regulation was with respect to maximum fees and not to minimum fees?


Edmund Davie Fulton: That was my comment by way of aside in the committee, yes, that our tariff is a tariff of maximum charges.


John Whitney Pickersgill: Is it ever exceeded?


Edmund Davie Fulton: That would be the responsibility of the British Columbia law society to examine; I do not intend to be the policeman of the law society.
Amendment (Mr. Howard) negatived: Nays, 75; Yeas, 5.


Jacques Flynn: I declare the amendment lost. Shall clause 1, as amended, carry?


Erhart Regier: Mr. Chairman, as I indicated earlier, I have a few words to say after the amendments have been dealt with.
We had before us last year some proposed amendments to the Combines Investigation Act which were not then proceeded with. I had hoped that after the introduction of a
6920	HOUSE OF
Combines Investigation Act new bill this year the government would in the committee stage have agreed to an acceptable number of proposed new amendments and would have considered a number of the voices of objection, and that we would have had a different kind of bill before us now returning out of the committee stage. It was most amazing how last year, to the best of my knowledge, only one organization, one of the boards of trade, out of one of the major Canadian urban areas, expressed their reservations.
Immediately upon a telegram being received at that time by the government, the government at once knuckled under and was not prepared to proceed with the bill at the session which was then in progress. It is amazing how one powerful organization is able to make this government alter its plans and agree to postpone certain action being taken, yet when a year has rolled by there can be many voices raised in objection but the government feels it ought to proceed regardless.
The minister in reply to earlier speakers said in effect that the government was now imposing restraints upon businessmen. It is our contention that a lot depends on what is the definition of the word "businessmen". I do not think the minister is restraining the more powerful businessmen of Canada from continuing to do what they like. I believe that the legislation now before us is, however, going to place a lot of restraint on businessmen of small and average size, a restraint of which many of them are not aware. It all depends on what class of businessmen the minister had in mind when he spoke of placing restraints on businessmen. I should like to ask whose interests are now being served by this legislation? We have in this bill a clear indication that whereas the law heretofore placed offenders before the courts, for the courts to decide whether there was any violation of legislation and, if so, what penalty should be imposed, now we have a bill before us which is going to make the manufacturers, in effect, the judges of the activities of the small retailers, and it will be up to the manufacturers to levy penalties upon the small businessmen of our nation.
I regret that the government did not amend the legislation so as to remove from the manufacturer or the distributor the right to be the judge of the activity of the small businessman. I regret it did not remove from the manufacturer and the distributor the right to penalize the small retailer if, in the opinion of the manufacturer or the distributor-not in the opinion of the law-the small distributor was found to be ultra vires of the intent of the act.

I believe that here is very clearly indicated the attitude of this government with regard to the announcement by the minister of the government's attempt to place restraint upon businessmen. Yes, there is going to be a limitation of the rights of the small retailer. He is placed, as he has always been placed, at the mercy of the law, but now he is also placed at the mercy of the prejudices of the distributors and manufacturers of any commodities which he happens to be retailing.
I should like to refer for one moment to the submissions which were made this year by the retail merchants association of Canada, and when I look at their attitude and compare it with that expressed in Ottawa in 1954 I cannot come to any conclusion other than that the executive, the directors, or at least the executive management of the association has become nothing more than a mouthpiece of the Canadian retailers association. I refer, as did the hon. member before me, to the report of the restrictive trade practices commission on loss leader selling and particularly to the evidence found in volume 21 at page 3507. I call the attention of the committee to the following questions and answers. Mr. Keith, on behalf of the association, is replying to Mr. Wickwire.


Mr.   Wickwire@: Some briefs have been presented, and some very strong arguments have been made, that the solution to this whole problem is the restoration of resale price maintenance. Your organization would not agree with that?


Mr.   Keith@: No, that is not our approach to the problem. We are retailers, primarily and throughout, and our desire, as all proper retailers, should be to bring goods at as low as possible a figure to the public as we can get them; and to have manufacturers dictate our prices-and our policies- well, we do not agree with that.


Mr.   Wickwire@: And that applies to your whole association, not to just a particular department of it? It does not apply only to the food field?


Mr.   Keith@: No, I do not think there is any distinction.
Now some limited number of years later this organization, which derives so much of its income from the small retailers of Canada, is now becoming an echo of the interests and opinions of the Canadian Manufacturers' Association.
As we explained to Mr. Gilbert a little over a year ago, I think it was, we have no fundamental argument against a planned economy which, naturally, would involve fixed prices to a certain degree. However, before we would ever agree to that principle we would demand and call for protection for the interests of the consumer. We do not believe that Canadian manufacturers or Canadian distributors should be granted arbitrary authority to fix retail prices and ignore completely the interests of the consumer and to have only their own

interests at heart. We believe every naan is worthy of his hire, and that includes not only the manufacturer but the retailer as well. However, if you are going to impose price maintenance you have to precede that with some measure whereby the interests of the consumer are adequately heard and represented.
We realize that with regard to the bill now before us the Progressive Conservative party is in a difficult predicament. I cannot, obviously, be both progressive and conservative at the same time. It is not possible to represent at the same time the primary interests of the manufacturer, the distributor, the retailer and the consumer. A position has to be taken somewhere along the line. Exactly as the government is attempting to ride several horses at once, in its name, Progressive Conservative, it is here attempting to introduce a major amendment to a bill of first rate consequence to the Canadian consumer. On the one hand they are pretending to help the small retailer. In actual effect we feel the bill before us will only hurt the small retailer and hasten the day of his complete disappearance. It serves primarily the needs of Canadian manufacturers and the distribution agencies of the dominion.
I believe that in 1958 we had a vote in the amount of $30,000 in the estimates of the Minister of Trade and Commerce to establish a branch to aid small business. That sum is less than enough to build one filling station or to mail one mimeographed letter to all the small retailers of British Columbia advising them how to make more money by requiring their wives to work longer hours behind the counter. No money was voted for that branch in 1959 and in this year's blue book again no money is voted. We have just to look at the blue books for the last three years to recognize the lack of sincerity of the Conservative government in pretending to express any interest in the welfare of the small retailer.
I regret that the government has been able to persuade so many well-meaning boards of trade, chambers of commerce and retail merchants associations that their interests are being served. Most of these organizations on the national level have completely submitted the interests of their mass membership to the interests of the manufacturers of Canada. We again note that the Conservative government as it did from 1930 to 1935 is acting in the interests of large monopolistic business and the money lenders of Canada.


Charles Benjamin Howard: Mr. Chairman, the definition "clause" defines certain words. The definition of "article" is clear and merely says what an article is, making no reference as to how the
Combines Investigation Act article might be used. The definition of "business" for the purpose of the act defines what business is but does not attempt to relate the activities of the business or indicate whether or not they are contrary to the law. The definition of "minister" is clear and does not set out his duties or functions which are dealt with in another clause of the bill. The definition of "trade or industry" does not go into what may occur within a trade or industry. The definition of "commission" is clear; it states that it is the restrictive trade practices commission appointed under the act and its functions and duties are dealt with later on. "Corporation" includes a company and although "director" is referred to his functions and duties are set out in another clause of the bill.
The definition of "merger or monopoly" contains references which I do not think should be there. I discussed this when speaking to the amendment proposed by the hon. member for Ottawa West. For the sake of uniformity and clarity there should be a simple definition of "merger or monopoly" and the effects of mergers or monopolies should be more properly set out in clause 33, the offence clause. The relevant portions of the bill would then read:
(e)	"merger'' means the acquisition by one or more persons, whether by purchase or lease of shares or assets or otherwise, of any control over or interest in the whole or part of the business of a competitor, supplier, customer or any other person.
And then:
(f)	"monopoly" means a situation where one or more persons either substantially or completely control throughout Canada or any area thereof the class or species of business in which they are engaged.
The operative sections of both definitions should be placed in clause 33.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
Charles Benjamin Howard: Mr. Chairman, at six o'clock I was leading up to the suggestion that in the definition section of this legislation we should concern ourselves only with definitions, and that in this section there should be no reference to what effect could arise out of some of the circumstances or arrangements defined. The effects themselves should be placed in another section, preferably No. 33. I know it perhaps does not make too much difference one way or the other whether they are in the penalty section or in the definitions section, so long as they are contained in the legislation. For the sake of
6922	HOUSE OF
Combines Investigation Act simplicity or ease in following the legislation and for uniformity in these matters it would be my thought that this is what should occur. I expressed these views when the hon. member for Ottawa West moved his amendment. I said then that the two matters should be separated and that reference to the effect should not be contained in the definition part. I intend to deal with that in another way in just a moment.
However, there is a question in this regard which I should like to pose to the minister and I shall precede it by quoting a part of the brief submitted by Dr. Skeoch. I am reading from page 433 of the proceedings and evidence of the banking and commerce committee, No. 7:
Mergers and Monopolies
There are two basic questions about those parts of section 1 of Bill C-58 which define "merger" and "monopoly". The first is why. since a "merger" could very well result in a "monopoly" as defined in the bill, the test to be applied to each should not be the same. They can both be manifestations of "undue" market power and both should be judged on the same general criteria. It is not clear what are intended to be the differences between the tests provided under the proposed amendments but there is no basis in economic analysis, at least, for making any difference.
Unfortunately, perhaps this is a question which should have been posed to Dr. Skeoch, inasmuch as it was his presentation to the committee. I failed to perform that duty of posing the question to Dr. Skeoch and to ask him to expand upon this and to explain in some detail which differences in definition or which differences in criteria he was referring to. I know the minister has followed the proceedings assiduously and carefully. I wonder whether he had directed his thoughts to the suggestion of Dr. Skeoch and whether he has any thoughts to express as to the suggestion of Dr. Skeoch that two different criteria exist by which he would judge a merger on one set of circumstances and a monopoly on another? Perhaps at this stage the minister can indicate whether there is any validity in the suggestion contained in Dr. Skeoch's presentation?


Edmund Davie Fulton: Mr. Chairman, of course, the reason for the difference in the definition is that a merger contemplates an arrangement to be brought about in the future by which at least two persons in competition at the present time merge and therefore cease to be competitors. Therefore, the test there, the operative words in the definition, rather, refer to the acquisition of one by the other whereby competition is lessened to the detriment of the public.
On the other hand, a monopoly by its very nature is an existing situation and by definition it is a situation in which one person


or company substantially or completely controls the class or species of business in which he is or they are engaged. That is an existing situation. There is no competition and therefore the test has to be the question of whether or not they operate such business in a manner which is to the detriment or against the interest of the public. Because of the different nature of the two problems there have to be different criteria of damage.


Charles Benjamin Howard: I take it that Dr. Skeoch's suggestion has no validity; it is not a valid criticism or suggestion. That is what I understand the minister to say?


Edmund Davie Fulton: Dr. Skeoch is an experienced and highly qualified man, and the fact that I do not accept his criticisms does not mean that I have less respect for his qualifications. I think it is correct to say I do not accept his criticisms here.


Charles Benjamin Howard: Perhaps it was my error in not posing the question to Dr. Skeoch when he was here. I have somewhat the same thoughts. The minister is far more knowledgeable in this field than I am and may have approached the matter in a different way from what I have. That is why I pose the question to the minister. Perhaps this may be implied within the definition of merger, although it is specifically mentioned in the definition of monopoly. In the definition of monopoly reference is made to "throughout Canada or any area thereof"; whereas in the definition of merger there is no reference to "throughout Canada or any area thereof" although I would say it is probably implicit or implied in the definition itself. Perhaps the minister would indicate why the reference "throughout Canada or any area thereof" is contained in the definition of monopoly but not contained or perhaps needed or required in the definition of merger?


Edmund Davie Fulton: It would hardly be necessary, for much the same reason that I gave in outlining the reason for the difference in the test of damage in the one case as against the other. A merger which eliminates competition to the detriment of the public is an offence wherever and whenever it is committed. On the other hand, a monopoly may be a monopoly covering the whole of Canada or covering only one area of Canada. Therefore it is necessary to say what you mean by a monopoly. Otherwise somebody might come along and say that as it does not cover the whole of Canada it cannot properly be called a monopoly.


Charles Benjamin Howard: I submit that is a sensible view to take of the matter. A monopoly can exist within a municipality if there are no other competing elements in the immediate



I960

[Stage Direction]
vicinity and yet, so far as Canada is concerned, it in fact would not be a monopoly. Apart from that, it would appear to me that even though it is implicit that a merger means the acquisition by one or more persons, and so on, whereby competition is or is likely to be lessened, for clarity's sake there should be some general reference to a merger taking place throughout Canada or in any part thereof, without at the same time admitting that the effect of the merger or monopoly should be contained in the definition section. I am getting away from what I initially started to talk about, and that is that there should be no reference in the definition section to anything else except the definition or defining what the circumstances of the situation are, and the effects arising from that circumstance or situation should be dealt with in another part of the bill. Perhaps the minister would indicate what the difference would be if we were to make the definition of "merger" end with the word "person" in line 18 and the definition of "monopoly" end with the word "engaged" in line 29 and place the provisions as to the effects of the merger or monopoly in section 33 so that they would be tied in with the penalty provision. Section 33 is in these words:
Every person who is a party or privy to or knowingly assists in, or in the formation of, a merger or monopoly is guilty of an indictable offence-
Would it not be better draftsmanship to put those parts to which I have made reference, the detriment or effect provisions, in section 33 rather than obscure the clarity of the definition?
Edmund Davie Fulton: I think the answer to that is that it is considered to be a better drafting principle to define your offence and say what constitutes the offence and then to provide a penalty clause rather than to put in the penalty clause the offence with which you are dealing and to which the penalty is applicable. The classic tradition of drafting is to have your definition complete and then have the penalty provision applicable to one who commits that offence.


Charles Benjamin Howard: Perhaps I was not able to follow fully what the minister said. It seems to me what he said is inconsistent with what he is proposing with respect to section 32 because section 32 reads as follows:
Every one who conspires, combines, agrees or arranges with another person... is guilty of an indictable offence.
If he conspires, combines, agrees or arranges with another person to do certain things as set out here he is guilty of an indictable offence and a penalty is provided. There you have the effect and the penalty 79951-0-438
Combines Investigation Act all wrapped up in one clause. Yet the minister says that in so far as mergers are concerned you must divorce the two.


Edmund Davie Fulton: Of course, you have the very short word "unduly" here which makes it easy to say what is the offence there, and I think it is also a fact that we have roughly followed the scheme of the present act. The only thing we have done is to separate the definition of combinations.


Charles Benjamin Howard: Such being the case does not make the minister's argument sound. If he says that good draftsmanship demands a thing in one instance perhaps it should also demand it in the other. That is all I am getting at. For the sake of clarity I think what should be done is to follow the proposal already made by the minister with respect to section 32 (1) where he has the effect and the penalty combined and also in section 33A where he has the effect, price discrimination, and the penalty combined in the same clause. As I recall, section 34 of the act contains the same thing except that in that section the definition of "dealer" is contained in the middle of the act rather than in the definition section where it should be. The effect of the activity of a supplier or dealer is combined here with the penalty and for clarity's sake I think this practice should be followed all the way through.
Perhaps I might move an amendment at this stage which will give us some basis on which to discuss the matter. The amendment will apply only to monopolies and I realize that it may appear to be inconsistent to deal only with the definition of a monopoly and not with the definition of a merger. However, one amendment has already been defeated and one has been accepted with respect to the merger section and there is some doubt whether, except by unanimous consent, we can have additional amendments to the merger section. I will leave that alone and deal only with monopolies. I move:
That paragraph (f) of subclause 2 of clause 1 be deleted and the following substituted therefor:
" (f) 'monopoly' means a situation where one or more persons either substantially or completely control throughout Canada or any area thereof the class or species of business in which they are engaged."
This is in line with the suggestions I made earlier and would, of course, necessitate the relocation of the words themselves or a slight variation thereof, if not the actual words, having to do with the operation of such monopoly where it is likely to operate to the detriment or against the interests of the public, whether consumers, producers or others. Similarly the provision respecting the effect of a merger would have to be transferred to section 33. I think this would
6924	HOUSE OF
Combines Investigation Act accomplish what the minister has accomplished in his proposed changes to section 32.


Edmund Davie Fulton: All I can say is it probably could be done either way. This way it is perfectly clear and satisfactory and in accordance with the act as it now is. Therefore I see no reason why I should take the time of the committee to give more explanation than I already have.
Amendment (Mr. Howard) negatived: Yeas, 3; nays, 62.


Charles Edward Rea: Shall the clause as amended carry?
Clause as amended agreed to.
On clause 2-Application jor inquiry.


George James McIlraith: I should like to raise one question. In dealing with section 7 of the act, as it appears in line 5 of clause 2 of the bill, we find that it provides that six persons who are of the opinion that an offence has been committed may apply to the director for an inquiry, and so on. My point is this: The section of the act from which this clause is taken provided for persons having an opinion that offence has been or is being committed, that is the past and present tense. The bill now before us provides for a situation where the six persons are of the opinion that an offence has been or is about to be committed, the past tense and the future tense. The present tense has been dropped from the act by this amendment.


Edmund Davie Fulton: This was discussed in the banking and commerce committee at some length. I shall see if I can reproduce the explanation within a short compass. The phrase was at one time "has been or is being committed", and I believe elsewhere in the act the words used are, "has been, is being or is about to be". We considered that carefully as a drafting matter and came to the conclusion that it was not necessary to put in all three tenses, "has been, is being or is about to be", because one of them is redundant.
If you think of a situation where an offence is being committed, then remember the act says, "are of the opinion that an offence has been or is about to be committed", the persons who are of that opinion may apply to the director for an inquiry. They have to do so by writing him a letter; they have to take the prescribed action with respect to the situation about which they have this opinion. If the offence is being committed, that may be their present opinion, but by the time they get into communication with the director the offence has been committed. If it is not covered by the words "has been", 

at that point of time, then it would be covered by the words, "is about to be committed".
When you realize that, first of all, you have to have an opinion as to the existence of a set of facts, then you have to take some action with respect to that opinion by way of bringing it to the attention of the director, then the words "is being" do seem to be redundant because if the situation is not covered then by the words "has been", it would certainly be covered by the words "is about to be". It might be less trouble to put the words "is being" back in than to spend a lot of time discussing it. I am convinced, however, it would be a wrong step because we are satisfied that the words are not necessary and I think it is a great pity to retain in a statute words which are clearly not necessary.


John Whitney Pickersgill: This strange exercise in basic English is very interesting, but the words were in the statute before. There does seem to me to be need for a present tense, a past tense and a progressive present tense in the English language in order to express all those nuances of meaning we want to express. Even the British North America Act contains the words "for greater certainty", and it does seem to me, in all these circumstances, it would be advisable to put the words "is being" back in the act.


Charles Benjamin Howard: It is true, as the minister said, that we did have a discussion in committee about the words "is being", "has been", or "is about to be". Why the present tense has been omitted I do not understand. Perhaps I should draw the attention of the minister to the fact that our discussion about the use of these words in committee was not related to the proposed section 7 of the act but to another proposed section which dealt with the activities of the director after it had been brought to his attention that an offence had been committed. The minister's argument, perhaps, in that light, if he wanted to stick to the point, would be valid.
Perhaps, for the sake of argument, we might go to section 15 of the act which states that the director may return any evidence or discontinue an action, for consideration as to whether an offence has been committed against any of the provisions of this act or is about to be committed. This would be after the director had cognizance of the alleged offence. In so far as section 7 is concerned, I think that here at least we should return to the present tense and put in the words "is being". Under this section the six people have to form an opinion and they cannot be of the opinion that an offence is presently being committed as well as being of the

opinion that it has been committed. Let us consider that an offence is being committed and suppose there were no reference in here to the present tense, then I think that would throw an entirely different light on the situation because then the action that the six citizens will take will be based on their opinion of the circumstances at that moment After it gets out of their hands to the director, for the sake of argument, then the situation is normal.
The other point is that no initiative or direction is required of the director under this section 7, but after he starts his inquiry of the alleged offence then he can talk about an offence that has been committed or is about to be committed. He can talk in terms of that nature. The director may not be in a position to talk about an offence being committed because by the time it has been brought to his attention it has been committed, and it is in the past tense that he deals with it. I believe that under this section 7, at least, the minister would be well advised to arrange to have these words "is being" put back in the clause so that any six citizens, if they are of the opinion that at that moment an offence is being committed, they can act. Although I admit that by the time it gets to the director it is in the past.


Edmund Davie Fulton: This same problem will arise in three sections of the act, if the amendment carries, section 7, section 8 and section 15. I suppose we had better settle it one way or the other now. I do not believe the point I made is destroyed in the least by the arguments of the hon. member for Skeena. If six people in this House of Commons came to the conclusion that an offence is being committed and they walked to the door of the chamber to pick up the telephone to communicate with the director, by the time they got to the door that instant of time in which they formed the opinion is past. If there were an offence being committed at that time, then by the time they got to the door and were in communication with the director, the offence would have been committed. It is just an absurdity to say that the section refers to the time when they first formed the opinion. This contemplates the six people getting in touch with the director. They get in touch with the director on the basis of the opinion that they formed. They cannot instantly get in touch with the director. By the time they get in touch with the director, the offence has been committed. If the situation is not covered by that phrase, then obviously it is an offence that is about to be committed, but it is covered by the other words.
79951-0-438J
Combines Investigation Act
There is not, therefore, the slightest necessity to cover this situation by the use of the words "is being". As I say, it is going to occur three times and if my friend wants to put unnecessary words into the statute three times it would probably be in the nature of an economy for the country to put them back in rather than take time here.


George James McIlraith: With deference to the minister, I think he has not been careful in looking at this section. Six persons may hold the opinion that an offence is being committed. If they do hold that opinion then the director under the bill now submitted to us, may throw their request away and is not obligated to do anything with the request which comes before him if in fact the opinion they hold at the time they submit the request is that an offence is being committed. In other words, there is a gap there and that is what I am concerned about. I want the director to be obligated to act if the six persons, complying with this section, apply to him, and the minister has only covered two of the circumstances. But as I say, if the six persons hold the opinion that an offence is in the course of being committed, then the director can throw their application away.


John Whitney Pickersgill: If you look at it as an ordinary grammatical problem, the subject of the verb is "an offence". I would say that if at the time the six persons formed the opinion that an offence has not been completed and is still going on, then it is not an offence which has been completed, nor is it an offence which is about to be completed.


Edmund Davie Fulton: The hon. member does not understand the principles of criminal law. If there is a contravention of the act now, there is a contravention of the act and an offence is committed. Two minutes from now the offence becomes one which has been committed.


John Whitney Pickersgill: I admit that I am not a criminal lawyer and have never pretended to have any knowledge of criminal law; but I do have a little knowledge of English grammar and I cannot believe the minister would say that a murder had been committed until the man died, notwithstanding the fact that he might be in the process of being murdered at the time someone formed an opinion that this murderous act was being carried on.


Edmund Davie Fulton: But the hon. member forgets that we are dealing here with mergers, monopolies and combinations, not murders.

Combines Investigation Act The situation is quite different. For an offence to be committed there has at some time to be a merger in process.


John Whitney Pickersgill: The merger may just be emerging.


Edmund Davie Fulton: If people are engaged in activities under a merger or a combination, or if they are conspiring to do the things which the combination section covers to the point where six persons form the opinion now that an offence is taking place, then there is a contravention of the act.


William Moore Benidickson: Has been committed or is about to be.


Edmund Davie Fulton: No. The hon. member is worried because the words "is being" are not in here, but they are not necessary. If they form the opinion now that an offence is being committed, by the time they physically get in touch with the director that situation is covered by the fact that the offence has been committed. So you do not need the words "is being" either here or in clauses 8 or 15.


George James McIlraith: If that is so, then in the merger provisions where the minister by this bill is now taking the right to proceed by way of a mandatory restraining order rather than by criminal prosecution, if an offence has not been committed and someone finds out in the course of the process of the merger operation going on that it is going on, then the offence is stopped by the restraining order and no complaint could ever be made under this section, because how can you prove that an offence was about to be committed? All you would know is that it was in the course of being committed. The director in that circumstance would be in the position that he would never have to conduct an inquiry at the request of six persons. The minister, in the other words, addressed his reply a moment ago only to those cases where an offence was committed.


Edmund Davie Fulton: No.


George James McIlraith: I want to ask the minister to address his mind to the problem which arises in merger cases where the civil proceedings only are taken by way of the order on information.


Edmund Davie Fulton: What clause is the hon. member referring to?


George James McIlraith: Clause 2. I want to have the minister address his mind to that problem as opposed to those cases where a criminal prosecution is going to be taken; in other words, the type of case which stops upon proceedings by the crown short of criminal proceedings, and therefore a criminal offence is not committed.


Edmund Davie Fulton: We are not talking of prosecution here; we are talking about an inquiry under this section. That is why I asked the hon. member what clause he referred to. Here we are dealing with the case where six persons form the opinion that an offence under part V has been or is about to be committed and then get in touch with the director, and in accordance with the requirements of the act make a statement to him setting out the reasons for their opinion. It is obvious that this will take some time. Some time must pass between the moment they form their opinion and the moment they get in touch with the director, so that if they were of the opinion at that time that an offence was being committed, by the time they get in touch with the director that point of time has passed, and therefore the opinion then is that an offence had been committed. Or, as I say, if it is not covered by that it is then covered by the words "is about to be committed".


George James McIlraith: Let me put this situation to the minister. A merger is an operation which takes some time. Companies have to merge. If six persons know that the merging operation is going on and they believe the director and the Minister of Justice will interfere to prevent the merger if they draw it to the attention of the director under this clause- that means those six persons believe an offence will never be committed under part V -then holding that view the offence is not committed, they cannot avail themselves of the past tense and they cannot avail themselves of the future tense in making the request, they must rely on the present tense.


Edmund Davie Fulton: No. Under the circumstances the hon. member has outlined they would avail themselves of the words in the future tense, that the offence was about to be committed, and they would say to the director that it had been in the newspapers or had come to their attention otherwise, that company A and company B are discussing an exchange of shares, and there is going to be a merger. That is an offence about to be committed and they are perfectly well covered by those words.


George James McIlraith: But is that offence about to be committed if they believe that the Minister of Justice will interfere and prevent it from being committed?


Edmund Davie Fulton: Yes. They will say to the director, "We are of the opinion that the offence of merger is about to be committed because of the plans the companies have disclosed", and they will make a formal submission to him in the way required and the director will have to initiate an inquiry to see if an offence is about to be committed.


George James McIlraith: I do not want to let it go
at that because I believe there is an important point here. If these six persons in the circumstances outlined by the minister believe that an offence will not be committed because of action being taken or which will be taken by the minister by way of the restraining order, then the director does not have to make the inquiry at all.


Edmund Davie Fulton: The hon. member is really straining the point somewhat incredibly there. He is saying that because those people believe that the director will act and then the minister may interfere-


George James McIlraith: No, will not act.


Edmund Davie Fulton: -to prevent the commission of the offence because they may believe in the efficacy of the administration, they would then not be entitled to say that they believe that an offence is about to be committed. That is certainly straining the thing most incredibly. They apply to the director because they believe an offence is about to be committed. Of course, they hope it will be stopped, but if they do not apply they know it will be committed. So they go to the director and say, "We are of the opinion that an offence is about to be committed unless you do something". The mere fact that we do do something and prevent an offence from being committed does not mean that those persons would not have formed an opinion that an offence was about to be committed.


George James McIlraith: We have a section of the act here which gives six persons in certain circumstances the right to call on the director to take certain action. That right, in my view, is being put in jeopardy in certain of the merger cases. The fact that the administration will be a good administration and that it will prevent the public from being victimized by a merger is not, surely, the answer to this question about the right of the six persons to compel the director to investigate. They have the right to do so.


Edmund Davie Fulton: They will still have that right, and if the hon. gentleman compares these words with the words which were in the act previously he will have to agree that these words are stronger and protect better the right of the six persons to have an inquiry.
The present section now reads:
Any six persons, Canadian citizens, resident in Canada, of the full age of 21 years, who are of the opinion that an offence has been or is being committed-
There is nothing said there with respect to the future at all. They cannot say: "We anticipate that an offence is going to be committed" and go to the director under the
Combines Investigation Act present wording. But in the proposed wording they can, because the words now read:
Any six persons, Canadian citizens, resident in Canada, of the full age of 21 years, who are of the opinion that an offence ... has been or is about to be committed-
They can, in certain cases, take certain action. Therefore, the rights of the six citizens are amplified, rather than restricted, by the new wording.


George James McIlraith: I should like the rights of the six persons to cover all the circumstances. What is happening here is that they are only covered in part.


Edmund Davie Fulton: I can assure the hon. gentleman that that is not the case. The wording covers the full ambit of all possible events, an offence which has been committed, one which is being committed at the time they form that opinion, and an offence which is about to be committed in the future.


Charles Benjamin Howard: However that may be, I would point out that the act at this moment does make reference in one section to things which may occur in the future. I do not know whether this has resulted in an inconsistency in section 7 of the act or not. I will read again what the section says now. The minister read it and I will read it again so as to get the proper connection:
Any six persons, Canadian citizens, resident in Canada, of the full age of 21 years, who are of the opinion that an offence has been or is being committed.. .may apply to the director-
And so on. Then the second part of the following subparagraph (b) reads as follows:
And if the application relates to an offence against section 32, the manner in which and where possible the extent to which, the alleged combine is believed to operate or to be likely to operate to the detriment or against the interest of the public-
That information has to appear in the statement. So in part of section 7 we say, according to the minister, that they can only be of the opinion that an offence has been or is being committee, while in another part of the section it is possible to talk about what is likely to occur, or is likely to be the result-


Edmund Davie Fulton: That is quite different, "likely to be the result".


Charles Benjamin Howard: It is true that one relates to the offence and the other relates to the effect of a combination which, in effect, is the offence itself.
I think the minister had the right approach when he said that he is quite prepared to accept the suggestion that the words "is being" be put in in order to avoid a lot of discussion. I think the minister could save a lot of debate on this point. Some people may think it is a minor one, but the rights

Combines Investigation Act of the six people seem to me to be a matter of importance, and I think the hon. gentleman should move such a motion as I have suggested. In fact, I wrote an amendment down here just in case the Minister of Justice wanted me to draft one for him.
It reads as follows:
That the words "is being" be inserted in line 8 of clause 2 between the words "been" and "or".
This would make it read:
And six persons, Canadian citizens, resident in Canada, of the full age of 21 years, who are of the opinion that an offence under Part V has been, or is being, or is about to be committed may apply to the director for an inquiry into such matter.
I think this would solve the question and it would probably have the effect of avoiding a long delay or a difficult discussion, or extended debate as to which one of the three tenses was correct. In fact, I will move the motion I have just read and put it formerly before the house.


George James McIlraith: I wonder if before the motion is put I could ask the minister to look at line 23 to see if he thinks the words "is being" should be added there, also.


Edmund Davie Fulton: For exactly the same reasons that I have been trying to make clear to the committee, I do not consider they should be inserted there. This matter was discussed in considerable detail in the committee as will be seen from the transcript at page 646. It was explained to the satisfaction of the committee. No amendment was moved there. We did consider it there. I am sorry if I have not been able to make the reasons clear. They are clear to me, and it must just be some inability to communicate my ideas to the committee or some refusal on the part of the committee, or of certain members of the committee, to accept the logic in the ideas.
The words "is being" are not necessary. If we insert them here we shall have to make a number of changes; not major changes, it is true, but a number of changes throughout the bill. It is not sound, it is not good drafting and it is not necessary and therefore I think it will be objectionable to accept this change Anyone who is really concerned about any limitation upon the rights of those six citizens need only consider what has been said and then read the wording of subclause 2 of clause 7 which shows that an application must be accompanied by a statement in the form of a solemn or statutory declaration showing:
(a)	the names and addresses of the applicants, and at their election the name and address of any one of their number, or of any attorney, solicitor or counsel, whom they may, for the purpose of receiving any communication to be made pursuant to this act, have authorized to represent them;
(b)	the nature of the alleged offence and the names of the persons believed to be concerned therein and privy thereto; and


(c)	a concise statement of the evidence supporting their opinion that the offence has been or is about to be committed.
If anyone reading that and realizing what these six persons have to do in order to bring a complaint formally to the attention of the director thinks that can be done without time having passed so that an offence which was being committed was not, by then, a past offence by the time they had informed the director, I should be surprised. Although the opinion may be one that an offence is being committed, by the time they communicate with the director and do what they are required to do time will have moved on so that it will be an opinion that an offence has been committed-


William Moore Benidickson: Not necessarily.


Edmund Davie Fulton: -and if the offence is not complete it will be covered by the form of words "or is about to be committed". Nothing could be plainer and nothing could be more comprehensive than the present form of wording.


Alexis Pierre Caron: Mr. Chairman, I have listened to the discussion that has taken place between the lawyers who do not seem to be able to determine whether this is clear or not clear. If the lawyers cannot agree perhaps a humble layman could be permitted to suggest that for the purposes of clarification the plain words "is being done" should be added and then we would be done with it and could proceed with the rest of the bill.


Charles Benjamin Howard: The minister said this was clearly dealt with on page 645 of the evidence.


Edmund Davie Fulton: Yes, quite clearly.


Charles Benjamin Howard: I just want to point out that the minister is wrong. At page 645 we discussed clause 2. There appears some comments of mine about what the minister said when in opposition and he agreed that the Liberal government of the day had some influence on his education and that he changed his mind and reversed his position. We went on to discuss how many times this had been used and the director said just once to his knowledge. Clause 2 was agreed to and we went on to clause 3. As the evidence shows this was the part about the director having reason to agree that certain things existed. Then the hon. member for Bumaby-Rich-mond whom I sometimes confuse with another hon. gentleman-the parliamentary secretary to the Postmaster General is waving his hand in circles and I wonder if he is indicating his state of mind or-


Charles Edward Rea: Order.


Charles Benjamin Howard: The hon. member ior Bur-naby-Richmond put a question and the minister gave his interpretation about why it was so and that was the end of it. There was no extensive examination of the point contrary to what the minister said. It was not on the proposed section 7 but on clause 3. Once the director gets involved in these inquiries he can talk about the past. At no time did the committee discuss a reference to the present tense of "is being" as far as section 7 is concerned.


John Whitney Pickersgill: Mr. Chairman, I am just going to appeal to the Minister of Justice to shift gears and go on to the "Conservative" instead of the "progressive" side. Since these words were in the act in the past, since the previous draftsman seemed to think they were good drafting, and since there is some objection to leaving the words out, could the minister not consider accepting the amendment and putting them in?


William Moore Benidickson: Mr. Chairman, frequently during the discussion in committee the minister indicated that in his view we were not in this bill radically departing-and he did not want to radically depart-from the jurisprudence that had been developed in connection with combines law. The government is now under criticism for the deletion of these words. If their deletion is under criticism here I suggest it might be under similar criticism in subsequent discussions in our courts. The minister also said he thought this might involve subsequent changes in a number of other clauses in the bill.
The minister will not mind my saying that I gave him notice that this appealed to me as an item that probably should have amendment in committee of the whole. I cannot think that this might require amendment beyond the next clause, clause 3 of the bill. Inasmuch as every hon. member of the committee will recognize that these words "is being" are in present statutes I wonder why we are wasting so much time about retaining them if what we were told in the banking and commerce committee was the desire of the committee to not upset unduly the present situation with respect to judicial decisions having regard to our combines law over the years.


Edmund Davie Fulton: This, of course, Mr. Chairman, does not relate to anything as I see it that comes before the courts but relates to the making of an inquiry by the director. Certainly admit I had notice from my hon. friend. We had another look at it. This is a case in which regardless of any risk I run of appearing stubborn, I think it would be unsound to accede to my hon. friend's request and therefore I must reject the amendment.
Combines Investigation Act
Amendment (Mr. Howard) negatived: Yeas, 17; nays, 51.


Mr. Peters:: I am not interested in the discussion of the grammatical structure of this clause. Why must these six people make this type of petition? If six people were to send in a petition saying that gasoline at all filling stations in their town was selling at the same price there would probably be something wrong. It is unlikely that the price of gas would be the same at both big and little filling stations.
At page 646 of the report of the committee I read that this came to the director's attention only once within his knowledge and probably not more than three or four times altogether. This may be the safest way to handle this but it is not necessarily the best.
I know a coal dealer who referred a case to the government and since then nearly lost his business and was fined besides. I raised an agricultural problem concerning rennet with the director. I am told that rennet sold for $7 this spring and it now sells for $27. Something is wrong in this respect. I was of the opinion that if somebody brought this to the attention of the director he would not only think about it, but do something about it.
I have read the act and I have heard the discussion. It seems to me that unless six people-whether they be members of parliament or not-collectively fill out some form giving the director all the information and building up the case for him he does not have to give any consideration to it. Because of the use or lack of use that this section has received over the years this may be one of the reasons why the Combines Investigation Act has not been more successful in relation to small combines and small mergers of people, which in the opinion of the man on the street have not been in the best interests of the Canadian public. I am wondering why this clause is not changed to one person. If one person wishes to fill out this information, why will the director not look into it? He does not necessarily have to indicate that he agrees. If he will not look into it unless six people sign the form, why not reduce it to one person who will fill out this type of application?


Edmund Davie Fulton: My hon. friend should realize that this is a control. This is the means by which citizens can compel the director to make an inquiry. It is not the only way in which an inquiry can be initiated. By far the bulk of inquiries are initiated on the basis of knowledge or facts coming to the attention of the director in a much less formal way than this. It may be as the result of a phone call, an individual letter or a personal visit. If the director gets an inkling of facts,
6930	HOUSE OF
Combines Investigation Act why he then looks into it informally and if he then finds they warrant a formal inquiry he goes ahead and makes it. He does not act only if he gets this formal complaint from six citizens; therefore this formal complaint, as I said, is in the nature of a control. If the citizen who may perhaps be dissatisfied with the attention he feels the director is giving his informal communication gets together with five other persons and they sign this document, then they can force the director to make the inquiry. That is the answer, that it is a control; it is not the only method by which an inquiry can be initiated.


Mr. Fisher:: I tried twice to get six citizens together under this particular section: first, in connection with the purchase of pulp-wood by the pulp and paper companies; and, second, in connection with the gasoline station complaints down in Peterborough, and I found it does not seem to open up a real field for complaints. I just wish to find out from the minister whether paragraph (c) of subclause (2) is designed to make it simpler-


Edmund Davie Fulton: Yes.


Douglas Mason Fisher: -or is it likely that there will be more complaints laid under this clause than formerly?


Edmund Davie Fulton: I think, Mr. Chairman, it does make the requirements of the document a little less substantial; it is a little easier. Frankly, I do not expect that we shall get a whole host of complaints put in in this way because, as I say, this is not the only way in which citizens can bring matters to the attention of the director.
The director tells me that one piece of information he gave to the committee should be amplified. He said that he could recall only one occasion when the six citizen method was used. On checking with the annual report for 1959 he found, and asks me to inform this committee, that there have been three occasions: one in 1953-54; one in 1955-56; and one in 1957-58.


Douglas Mason Fisher: The minister will remember that in the committee our friend from Bona-vista-Twillingate gave us a short oration on the tragedy it would be if the branch or director became too militant and the agency was running around making investigations sort of on speculation. I think I am interpreting it correctly.


John Whitney Pickersgill: I hope the hon. gentleman does not think that has any reference to the commission of crimes. That was in reference to a case that was not for the protection of the generalities of the citizens, as the hon. gentleman will remember, but the section was put in so that dealers could get a certain protection and it is a very different thing in


so far as rooting out combines is concerned. I do not think they can be too zealous, though, of course, no law enforcement agency in my opinion should go around prosecuting people for frivolous reasons.


Douglas Mason Fisher: I am glad to have that correction. In other words, the hon. member for Bonavista-Twillingate, so far as this aspect of the bill is concerned, is very anxious to have the branch looking and searching for infringements. Because of my experience and my inability to get six people to complain in connection with the pulpwood case, I wonder whether the branch and the minister might not consider it would have a little to do with this particular section and whether they would be prepared to consider giving more publicity to this particular section and to the meaning of this concise statement of the evidence so that we can convince people that it is actually quite easy to lay an information and to get something going. If the director of the branch has had the example of only one action under this-


Edmund Davie Fulton: Three; I just told you three.


Douglas Mason Fisher: Perhaps one of the reasons it has not been used is that an informal complaint by letter is quite often sufficient. It would seem to me that perhaps we should not have this in at all; if we are going to have it in, it should be given more publicity and people should be made aware that there is not any great requirement in so far as eking out the facts is concerned.


William Moore Benidickson: In connection with the possible offence to which the hon. member made reference, may I ask him whether he himself applied to the director and indicated he felt that there was some offence, and was he not given some satisfaction as a result?


Douglas Mason Fisher: No, Mr. Chairman. I got in touch with the minister and asked about it and he pointed out this section of the act to me and suggested I get six names. This was at the time of the pulpwood investigation in Quebec which had not led to a report and, as the hon. member for Kenora-Rainy River knows, right from the time of the strike that took place in his own area there has been considerable feeling amongst the pulpwood farmers or settlers up in northwestern Ontario that the very same kind of situation existed there as existed in Quebec. I made a suggestion to the minister, I think informally, that it should be investigated. He suggested that six names be obtained. I went to both the union that was trying to organize in the area and to a number of individual settlers but I could not get them to make a proposal under this six names section.


William Moore Benidickson: I was only going to comment that it could not have been very serious;
I was also going to say that in my experience here there has been the odd occasion when I have had some feeling that perhaps the public interest was at stake in certain commercial matters and I have never found that the combines branch was not prepared to look at that very seriously on my responsibility as a member of parliament.


[Stage Direction]
Clause agreed to.
On clause 3.
Alexis Pierre Caron: Mr. Chairman, I do not want to re-open the debate which has just taken place on clause 2. I admit that the minister might have been technically right when he said that what is in the process of being done at the present time the next moment has been done. With respect to mergers and monopolies, however, sometimes it will take six months, eight months or a year for the process to be completed. The process is started and it goes on for months and months before the merger or monopoly is complete. In order to clarify the clause and to put everybody at ease, I move:
That clause 3 be amended as follows:
That the words "is being" be inserted in line 28 and line 30 after the words "has been".


John Whitney Pickersgill: Just before the question is put I should like to point out that this also applies, of course, to resale price maintenance. I do not think the minister would argue for a moment that resale price maintenance is something that would be covered exclusively by "has been" or "is about to be". This is something that might be a continuing process and, indeed, would certainly be a continuing process. In order to make amply certain that it is covered I suggest to the minister that he might consider accepting this amendment.


Edmund Davie Fulton: It is quite true it would be a continuing process but as it is a continuing process it is also clear that there is an infraction of the act at any point in time during which that process continues, and that therefore at this point what took place a minute ago is an offence that has been committed.
With regard to the point of the hon. member for Hull about mergers being the sort of thing that take some time to complete, that again is quite true, and that is exactly the point I had in mind when I said with respect to mergers that they are covered almost certainly under these circumstances by the words "or is about to be committed". These words would also cover the continuing feature of the resale price maintenance situation to which the hon. member for Bona-vista-Twillingate referred.
Combines Investigation Act
Amendment (Mr. Caron) negatived: Yeas, 15; nays, 54.


[Stage Direction]
Clause agreed to.
Clause 4 agreed to.
On clause 5-Counsel.
Charles Benjamin Howard: Mr. Chairman, there was some discussion of this clause in the committee. Relating the alteration in the bill to the act as it now stands, the act provides that if in the opinion of the director the public interest so requires he may apply to the minister to instruct counsel and the minister may accordingly instruct such counsel to act. The explanatory note reads as follows:
The proposed amendment will enable counsel to be employed on the recommendation of the commission as well as the director.
I suppose in one sense that is quite true because the amendment reads:
Whenever in the opinion of the minister the public interest so requires, he may appoint and instruct counsel to assist in an inquiry under this act.
If the director is of the opinion that the public interest requires the appointment of counsel to assist in an inquiry, presumably the director will make his views known to the minister and the minister will then exercise his discretion with respect to whether in his opinion such an appointment should be made. In addition, if the restrictive trade practices commission was of the opinion that counsel was required to assist in an inquiry it would undoubtedly make its views known to the minister and the minister likewise would come to a decision whether in his opinion the appointment of counsel was required.
I wonder why it was not done the other way round so that it would be specific and give some recognition, as the act does at the moment, to the desires of the director. Perhaps it should read, "Whenever in the opinion of the director or of the commission the public interest so requires". It should spell out precisely whether the commission has the right to apply formally or informally to the minister for assistance in an inquiry under the act. The first question I should like to pose is why this recognition was not given. Second, I understand that the commission made representations to the minister for an alteration in the act to provide them with the opportunity or right to express their opinion about the requirement of counsel to assist in an inquiry and that this amendment is what resulted from the representations of the restrictive trade practices commission. This information was given to the committee by the director, Mr. MacDonald, at page 647

Combines Investigation Act of the proceedings where he had this to say with reference to the act:
It did not seem compatible with the independence of the commission. So the commission requested that the provisions be widened so as not to put upon them the necessity of going to the minister through the director. And when the section was redrafted, as a result of that request from the commission, it took this form.
What I should like to know is whether the commission requested the specific form in which the amendment now is or that the wording be somewhat similar to what exists at the moment with respect to the director, although expanding it to include the commission. I should also like to know whether or not if the clause were amended to provide that the commission specifically had the right to do this, as the director now has, this would not be more compatible with the independence of the commission. Would it not be more compatible with their independence if we were to spell out precisely that the commission could make this determination and follow the same course as the director does now except on an independent basis?


William Moore Benidickson: This amendment, in my opinion, is of some importance. I think the minister should tell us in a more explicit fashion why he feels these words should be interchanged in what looks like an innocent way. I must tell the minister that I look upon this alteration as having implications that are suspect and sinister. I speak very seriously.
We are all acquainted with the rules in parliament that parliament has not the right to ask for certain information that comes from an employee to the minister in the ordinary course of his activities. Now, whether I am right or wrong, I am of the opinion, after looking at this so-called innocent amendment, that if it is passed parliament will not have the right it has now to expect answers from the minister in the ordinary course of inquiries concerning the opinion of the director as to the propriety of appointing counsel or instructing counsel. If this amendment were passed I am of the opinion the minister could henceforth answer, as was done some years ago, that information conveyed to him by the director is confidential and is not something to which parliament has any right.
I want to know specifically whether, in the opinion of the minister, we can henceforth ask whether he has received information from the director that it would be advisable and desirable to appoint and instruct counsel and whether as a result of this amendment the minister can confront parliament in the future with the statement that this is confidential information from an employee?


Edmund Davie Fulton: Mr. Chairman, this is a clause on which the Winnipeg Free Press3 by the most extraordinary process of so-called reasoning I have ever tried to follow, bases some most extraordinary criticisms against the minister with respect to his deep, dark plot and intent under these amendments. The hon. member for Kenora-Rainy River appears to have echoed some of these sentiments here tonight. It is surprising to me that they were expressed in no manner when the clause was under discussion in the banking and commerce committee.


William Moore Benidickson: The minister knows why.


Edmund Davie Fulton: I do not know why at all.


William Moore Benidickson: The minister knows that the bill was introduced in the dying hours of the session, and it was not possible for most members of the committee to be there at all sittings of the committee.


Edmund Davie Fulton: That is an absurd statement; the bill was in committee for just over one month. It went to the committee on the 16th of June and was reported from the committee on July 18.


Mr. Hellyer:: When there are a dozen other things to do.


Edmund Davie Fulton: There were 24 meetings of the committee and if my hon. friends, who had representatives there most of the time, were not capable of asking one question about a very small clause, then they are less capable of interruption than I have ever held them to be.
The purpose of this clause is to take care of an embarrassing situation, a situation which is embarrassing to the commission and not to the minister. At the present time the act says that whenever in the opinion of the director the public interest so requires the director may apply to the minister to instruct counsel to assist in an inquiry, and upon such application the minister may instruct counsel accordingly. It is quite clear, therefore, that if the director feels an inquiry would be facilitated by the instruction of counsel he is authorized to go to the minister and the minister now has authority to make the final decision as to whether counsel will be appointed. The minister is not taking any greater authority under the present amendment than he has under the present act.
However, if the commission felt that it was desirable to appoint counsel, the act provides no way in which the commission may come to the minister. It is the opinion of my advisers that since the act lays down a way in which an approach may be made to the minister, then the only proper way in which that approach could be made would be through

the director. This meant that the commission, if it felt that it should have counsel to assist it, had to go through the director to the minister. This is, I think, an embarrassing and unnecessarily discriminatory provision. The matter was brought up, therefore, and an agreement reached that there should not be this placement of the director and the commission in different positions with regard to their right to go to the minister to ask for counsel. We decided, therefore, that the obvious way to take care of the situation was simply to provide that wherever, in the opinion of the minister, the public interest so required, then the minister may appoint counsel. This will have the effect that both the director and the commission, equally, can come to the minister with a recommendation on this point.
The minister is placed in no more authoritative position than he had before because the present act uses the words, "the director may apply to the minister, and upon such application the minister may instruct." The application always had therefore, to be to the minister, and it was always the opinion of the minister that determined whether or not counsel should be appointed. Here again, we have made the section more flexible because now, as the amendment is worded, the minister may reach an opinion himself, and form an opinion, to instruct counsel and may do so without the necessity of an approach from the commission or the director. The whole thing is placed on a non-discriminatory basis, and it is a sensible, aboveboard basis. Why the sudden suspicion should have developed, I do not know. The director tells me that the provision is only very rarely used, and neither he nor I can recall a case in which he has done so in the last three years. It is very rarely done, but it may be done, and there may be a requirement for it.
When we were reviewing the act this particular condition was brought to our attention and we decided to remove the differentiation between the position of the two bodies. With respect to whether I can keep this information from parliament, I do not think the position under the amendment is any different from what it has been. If I had received a report or advice from the director that counsel should be appointed under the present act I think my position as minister would have been that advice I receive from public servants is confidential, that is advice given to me in my capacity as minister and in his capacity as a public servant. I could take the position now, and should take the position now, if I were asked a question under the present wording of the statute with relation to a specific inquiry as to the advice I got from the director about the appointment of
Combines Investigation Act counsel, that that information would be a confidential communication. The position, therefore, will not change as a result of the wording of this amendment.


George James McIlraith: The early part of the minister's remarks having to do with the committee were both inaccurate and unfair.


Edmund Davie Fulton: I recognized that and I intended to come back to it. I said it was not discussed, and that was not accurate; I am sorry. I should have said that this particular aspect of it was not raised in committee. I thank the hon. member for Ottawa West for pointing this out to me. I had meant to come back to it at the end of my reply and correct the inaccurate reference I had made.


George James McIlraith: I do not propose to pursue the remarks about the committee sittings, but I should remind the minister, as he well knows, that if he would take the trouble to check up on the sittings of the committee he would recall that this was an extraordinarily difficult committee to serve on. I do not propose to pursue that subject unless it becomes necessary in the course of the proceedings here tonight, but I propose to address myself directly to the clause before the committee.
When the hon. member for Gloucester raised this point when this clause was before the committee on banking and commerce the minister made clear with the assistance of the director that the purpose of changing section 13 of the act was to remove the discrimination between the position of the director and the position of the commission in so far as the right to apply to the minister to instruct counsel and so on was concerned. The minister has reiterated that in a more extended form here tonight and I accept the proposition that that is the purpose of the change in section 13 of the act. But I believe it will be better accomplished by an amendment I would like to submit to the committee.
Therefore I move that clause 5 be amended as follows:
That the word "minister" be deleted in line three and the words "director or the commission" be substituted therefor, and that the words "he may" be deleted in line four and the words "the director or the commission may apply to the minister to" be inserted.


Edmund Davie Fulton: I am not able to see just how it would read in full at the moment. Perhaps the hon. member would read the clause to me as it would read if the amendment were accepted?


George James McIlraith: I would be glad to. It would read as follows:
Whenever in the opinion of the director or the commission the public interest so requires, the
6934	HOUSE OF
Combines Investigation Act director or the commission may apply to the minister to appoint and instruct counsel to assist in an inquiry under this act.


William Moore Benidickson: That is much closer to the present law.


Edmund Davie Fulton: There is one defect in this amendment. It has the effect of deleting the authority to appoint.


George James McIlraith: I am sorry; that was not intended.


Edmund Davie Fulton: Now if both the director and the commission come to the opinion that it is desirable-that is the first change; the second change is that the director or the commission may apply to the minister to appoint and instruct counsel; but then you have taken out the authority which was formerly given to the minister.


George James McIlraith: I did not intend to take out the authority.


Edmund Davie Fulton: Perhaps I might suggest this clause stand. I have no objection in principle to what is done in the amendment; it is really the same form as the present with the commission put into a parallel position with the director, but the power to appoint is omitted. I will work out an amendment and see if I can bring one back which will meet everybody's opinion tomorrow morning.


George James McIlraith: I thank the minister.


Jacques Flynn: Shall clause 5 stand?


Some hon. Members:: Agreed.
Clause stands.
Clauses 6 to 8 inclusive agreed to.
On clause 9-Findings to be included in report.


John Whitney Pickersgill: Mr. Chairman, on this clause I am going to ask the minister if he would be good enough to agree to let this clause stand for a technical reason, namely that it is the intention of one of my hon. friends, when we get on to clause 13, to move an amendment which, if the committee should accept it, will have a consequential effect here. It would mean that we would have to come back to this clause and change it. If the minister would simply allow it to stand now and proceed, then if our amendment is not accepted on clause 13 we would agree to come right back.


Edmund Davie Fulton: That is agreeable to me if it is to the committee.


Charles Benjamin Howard: If I might just make a suggestion, perhaps the better course would be to go ahead and delete clause 9 altogether and that would solve the problem entirely.
[Mr. McHralth.l


John Whitney Pickersgill: I think the minister has already agreed to let the clause stand.


Jacques Flynn: Shall clause 9 stand?


Some hon. Members:: Agreed.
Clause stands.
Clause 10 agreed to.
On clause 11-Reduction or removal of customs duties.


Douglas Mason Fisher: Mr. Chairman, as the minister knows a number of people who appeared before the committee made recommendations with regard to this particular clause. The minister will remember that he gave a fairly extended statement as the result of questions by myself, the hon. member for Burn-aby-Richmond and the hon. member for Saskatoon.
I should like to draw to the minister's attention a paragraph which appears on page 494 of the minutes of proceedings and evidence which puts the case for the amendment I wish to move to this particular clause. This is an extract from the evidence of Professor English:
Third, there are the remedial economic measures. Section 29 of the law, in which the governor in council is given permission, to alter customs duties where a restrictive practice might thereby be controlled should in my opinion be altered so that tariff action is mandatory where relevant. No factor in Canadian economic life contributes more to the potential or actual restriction of competition than our commercial policy. Action to ensure competition through tariff reduction is potentially a very important deterrent of and remedy to restrictive practice. So long as it is permissive it is unlikely to be used because the power to determine tariff levels is not the responsibility of the government body charged with control of restrictive practices. Experience demonstrates that where conflicting administrative interests are involved, a mandatory provision is the only way of ensuring appropriate remedial action.
This strikes me as being a very good argument, and I am sorry we did not force from the minister-I do not mean in a physical way-an explanation with regard to the matter raised here by Professor English of the tariffs being under a different part of the government. It is very easy to make the action by the minister or by the governor in council mandatory, and I would think the minister's own evidence tends to support the idea that it should be mandatory. He will remember that I brought up the case of the fine papers people who were, according to a report-of course the minister insisted he had to deny this-the minister sent instructions or a letter to them, the story I got was, that they should show cause as to why this tariff protection should not be removed.
According to the information we have received, the power in this particular section

has never been used before; this is the one case in which it has been used, and according to the arguments which come from one of the unions, at least, the companies are definitely taking advantage of the duty under the present situation. As long as this power is a permissive one and not a mandatory one there will always be a tendency on the part of the firms to continue a practice which is, in effect, a conspiracy, until their bluff is finally called. Making a reduction of tariff mandatory would serve as a stiff warning to the companies. There was a situation where a conviction took place several years ago. There were fines. Now the minister is proceeding. If he had been aware that this lowering of the tariff duty was mandatory and not permissive 1 think action would have been taken long ago and we would not have the situation which exists at the present time. Therefore I should like to move:
That clause 11 be amended by deleting in line 40 the word "may" and substituting therefor the word "shall".


Edmund Davie Fulton: What the hon. member for Port Arthur says is interesting in the light of some of the opinions he expressed in the committee when we were discussing this matter. One cannot just say: "Let us make a reduction in tariffs mandatory in this section" and leave it there. If that were done it would be necessary to write in a whole schedule of tariff reductions and a table by which to measure the seriousness of offences so as to determine how far they would lower rates. Unless the hon. member is going to say that any application of this section will result in complete elimination of the tariff, that would be the situation. He will realize that the only remedy, in accordance with his proposal, would be the complete elimination of the tariff on the whole industry.
If the hon. member does not intend to go as far as that he will have to write in a schedule providing that an offence of a certain extent will result in the reduction by 1 per cent, or something of that nature. That is quite impossible. Therefore, the only way we can make this section applicable is to make the reduction discretionary with the governor in council, which means that the extent of its application and the extent to which the tariff will be reduced has to be decided bearing in mind all the factors that are relevant, and there are many factors that are relevant. There is the question of the industry itself and, of course, the welfare of those who are dependent on the industry and who are not in any way party to the offences that have been complained about. All such things have to be taken into account by the governor in council in deciding whether to take action and to what extent.
Combines Investigation Act


Douglas Mason Fisher: Would the minister permit a question?


Edmund Davie Fulton: I have not quite finished. If a reduction of tariff were made mandatory these factors could not be taken into account, and in that case it would not be possible for any representatives of the men working in the industry to make representations to the government or to anyone else because the tariff reduction would be automatic. If the hon. member does not want representatives, say, of the employees in an industry to have the opportunity of making representations that notwithstanding any offence the tariff should not be reduced, if he takes the position that there should be an automatic reduction and that no one should have any power to stop it, that would be the effect of his amendment.
For all these reasons-and I think I could go on to point out others as well-it seems to me this is one of those cases where action against somebody, not imposed by a court, must be left to the discretion of the governor in council.


Douglas Mason Fisher: Before you come to the word "shall" in line 40 there are such phrases as "it appears to the satisfaction of the governor in council" at line 31. The words are:
-it appears to the satisfaction of the governor in council that with regard to any article there has existed any conspiracy, combination, agreement, arrangement, merger or monopoly to promote unduly the advantage of manufacturers or dealers at the expense of the public-
The point I am making is that there are qualifications which leave a great deal of initiative to the governor in council in determining the situation. I call attention also to the phrase "it appears to the satisfaction of the governor in council".


John Whitney Pickersgill: I wonder if I might be permitted to say a few words to explain why, as a privy councillor who hopes to be employed again instead of being unemployed, I cannot possibly support the amendment which the hon. member has moved. This is a matter for which we have to hold the government accountable under our doctrine of responsible government, but it is not something about which we could legislate in this kind of way at all. Further, if this legislation, amended in the way the hon. member proposes, purports to upset the balance of ways and means I would suggest, Mr. Chairman, that the amendment may be out of order, although I am not advancing that as a serious argument.
We are not here imposing a penalty on someone after he has been convicted. We are suggesting that the government, in order to facilitate the purposes of this act, should use the discretion invested in the governor in
6936	HOUSE OF
Combines Investigation Act council to facilitate the operation of the act. I must say that on this occasion I completely agree with the Minister of Justice that this is not the kind of thing which is capable of being spelled out in a concrete and precise manner. It could well happen, as I think was brought out in the evidence in the committee, that the use of this power, if there were a mandatory provision here, would have ancilliary and lateral effects which would have nothing to do with the persons involved, effects which might have very serious economic repercussions. It does not seem to me that the kind of approach suggested by the hon. member is suitable at all.
I think the argument could be made by purists that this is the kind of discretion which should not be given to the governor in council to be used against a subject in any circumstances. It might be argued that there should be a conviction first. Personally I think there is a justification for this provision. Perhaps I think so because this legislation was recommended to parliament by my hon. friends when they were in office. It seems to me that it is a good ancillary provision in the form it now is but that it would not necessarily accomplish the purpose we have in mind here and it might have effects that would be quite incalculable.
There is one other aspect of this matter about which some care should be taken if I may say so while we are on this subject. I do not think this was ever intended or should be-


Mr. Drysdale:: Or "is being".


John Whitney Pickersgill: -used in any long range sort of way. I think that if questions arise it would be desirable that the governor in council should exercise his discretion in a case like this expeditiously, but I do not think that is a thing about which one can legislate. One can only criticize the government if it does not do it properly. I am sure we would be only too happy to find occasion to criticize the government if it does not do it properly. I agree as far as the objective the hon. member has in mind in his amend-men is concerned.


Charles Benjamin Howard: If the hon. and unemployed privy councillor persists in his line of reasoning he will remain in his present unemployed capacity longer than he would like.


John Whitney Pickersgill: I knew I was giving the hon. member an opening.


Charles Benjamin Howard: I will take every opportunity to keep the hon. gentleman unemployed in that capacity.


Paul Theodore Hellyer: And that is the only employment you may ever have.


Charles Benjamin Howard: The hon. member does very well as a student lawyer and biographer and perhaps should keep his eye off the distant goal of getting across to the other side of the chamber.


Paul Theodore Hellyer: Someone some day will write about the fall and decline of socialism.


Charles Benjamin Howard: I hear muttering from the back benches.


John Andrew W. Drysdale: We are just filling in until the hon. member gets to the point.


Charles Benjamin Howard: I am just waiting until the muttering subsides.


John Andrew W. Drysdale: Bill No. C-58; clause 11.


Charles Benjamin Howard: After all the noise my friend the hon. member for Burnaby-Coquitlam made about this question in the committee I thought he would rise and express his views but he has not decided to do that.


Mr. Robichaud:: The hon. member is wasting time. He thinks he is speaking on a divorce bill.


An hon. Member:: Burnaby-Richmond.


Charles Benjamin Howard: I should have referred to the hon. member for Burnaby-Richmond. I only know he is from a delightful part of the best province in Canada and I sometimes cannot differentiate between the two Burn-abys.


An hon. Member:: Be careful.


Charles Benjamin Howard: Perhaps this levity is not in keeping with the subject before us. I will repeat what the hon. member for Port Arthur said. Authority is given to the governor in council under this clause to lower or eliminate duties and tariffs under certain circumstances, if specific circumstances are found to exist, so competitive forces can import into Canada at rates to compete with related industries and the public, as the bill says, will receive the benefit of reasonable competition.
The hon. member's amendment does not make it absolutely mandatory for the governor in council to take this action and no other. There are clauses in the bill which permit the governor in council to use discretion. The clause reads:
Whenever, from or as a result of an inquiry under the provisions of this act, or from or as a result of a judgment of the supreme court or exchequer court of Canada or of any superior, district or county court in Canada, it appears to the satisfaction of the governor in council that with regard to any article there has existed any conspiracy, combination, agreement, arrangement, merger or monopoly to promote unduly the advantage of manufacturers or dealers at the expense of the public, and if it appears to the governor in council that such disadvantage to the public is

presently being facilitated by the duties of customs imposed on the article, or on any like article, the governor in council may direct either that such article be admitted into Canada free of duty, or that the duty thereon be reduced to such amount or rate as will, in the opinion of the governor in council, give the public the benefit of reasonable competition.
The governor in council, as its first determination, must decide if there has existed any conspiracy, combination, agreement, arrangement, merger or monopoly, to promote unduly the advantage of manufacturers or dealers at the expense of the public. If it then appears to the governor in council that such disadvantage to the public is presently being facilitated by the duties of customs imposed on the article or on any like article, as a second determination the governor in council may direct either that such article be admitted into Canada free of duty or that the duty thereon be reduced to such amount or rate as will, in the opinion of the governor in council, give the public the benefit of reasonable competition.
I believe it was the hon. member for Essex East who in the committee advanced the reasoning that this is an authority which the governor in council has in any event, to reduce or eliminate tariffs without reference in the act to that at all. This action is taken when the crown sees fit as unilateral action or as a result of negotiations with any country or countries with respect to the elimination or reduction of a tariff or duty on different articles or even the same article. Listening to the Minister of Justice and the hon. member for Bonavista-Twillingate I conclude that they are in fact arguing that we have no need of section 29 of the act because it should never be used to bring this advantage to the public.


John Whitney Pickersgill: Not at all.


Charles Benjamin Howard: I am trying to relate what was said this evening to what was said in the committee by the hon. member for Essex East about the crown already having this right so there is no need to have it spelled out here. But if it is in the act and is to be used primarily to give the public the benefit of reasonable competition then it should have some teeth in it. The governor in council should not be given discretionary power with respect to (1) determining if there is a conspiracy; (2) determining that it is facilitated by customs duties; and (3) determining whether or not it should be lowered or eliminated.
The effectiveness of the present law is indicated by the fact that it has not been used. We do not know if the minister plans to use it or not. Presumably it is a deterrent. Presumably this force in the economy which
Combines Investigation Act would think in terms of engaging in a conspiracy to fix prices, for argument's sake, would look at the law to see whether court cases had been developed and would say, "Well, we are liable to a number of things; we are liable to be fined; we are liable to be imprisoned or to lose our patent rights"- this is under another section; if they have any patent rights-"we are liable to lose our tariff protection and the merchandise will not be able to enter Canada and our economic position within the nation will not be quite as good as it was before".
I am quite sure that if this is the reasoning that goes on within a group of manufacturers' minds on the question of whether they enter into this sort of an agreement, then this is not a deterrent. It has not deterred anyway in the past by the mere fact it is there, because the Liberal party did not see fit when it was in office so many years to take any steps under this section and people presumably came to the conclusion that it was not going to be used and there was no sense worrying about it.
If the Minister of Justice is taking the position that it is not going to be used or perhaps should not be used because of all these other complicating factors, perhaps there is no need to have it in the legislation; but so long as it is there I submit, Mr. Chairman, as the hon. member for Port Arthur has indicated-and if its purpose is to give the public the benefit of reasonable competition- then there should be some teeth in there and some authority given to the cabinet to take action if they find that certain things exist and use has been made of certain tariff protection. They have two discretionary powers and I do not think they should have three to bring the public the benefit of reasonable competition. This is when they should act, and I think the legislation should say so.


John Whitney Pickersgill: Mr. Chairman, I do not intend to labour this point at length, but I cannot forbear to point out that the hon. gentleman has shown that there are half a dozen matters of opinion that the governor in council must form before he acts, anyway. The teeth he suggested he is going to put in by changing the word "may" to "shall" are pretty false teeth. All he was really doing, .as the hon. member for Skeena I think pretty effectively showed, if his arguments were valid at all, was showing that the amendment is meaningless. That was the whole purport of his remarks. But I do not think it is proper to use a word like "shall" when in fact you do not mean shall. This is obviously a matter where, under our system of responsible government, it is not possible for parliament to lay down all the detailed rules under which this thing would apply, and we simply have

Combines Investigation Act to give the government a certain measure of latitude and hold them to account. For that reason I certainly intend to vote against the amendment.


Douglas Mason Fisher: I should like to answer the hon. member for Bonavista-Twillingate. Surely the logic of what he has just said is that we should wipe this clause out of the bill.


John Whitney Pickersgill: Not at all. May I ask the
hon. gentleman a question? Does he think it is wrong to have any kind of armaments unless you use them?


Douglas Mason Fisher: Surely the hon. member was saying that the teeth of the hon. member for Skeena was referring to were false teeth. One of the most important parts of the argument, I think, was the fact that the governor in council had powers to reduce duties, anyway.


John Whitney Pickersgill: He has just as much power with "may" as with "shall".


Douglas Mason Fisher: Whether he has with "may" or with "shall" he does not really need it in this section, then, and this wonderful legislation, this wonderful section-as the hon. member for Essex East was saying, once in 22 years was a mighty short time, or words to that effect-has been in effect I do not know how many years, but it has never been used. I have tried to look at this phrase "disadvantage to the public" and it seems to me that "disadvantage to the public" has to do with the difference between the cost price and the selling price; there is some inordinate margin as a result of the combination. Then, as a result of an inquiry if it appears to the satisfaction of the governor in council that a conspiracy exists I cannot see why it would not go ahead instead of saying "may". Surely, it would consider the other factors.
One of the reasons I like "shall" better than "may," despite the minister's argument and the argument of the hon. member for Bonavista-Twillingate, is that I can see as in the fine papers case, that pressure groups have an opportunity to come into the situation in such a way that the whole matter can be befogged and you get the situation where a number of small pressure groups can contradict or stop what should be the general intent of this clause; whereas in another industry or with another group of producers with less powerful persuasion they could be proceeded against under the word "may". Therefore, I presume to argue that the words "shall direct" are better than "may direct".
Amendment (Mr. Fisher) negatived: Yeas, 2; nays, 67.


Douglas Mason Fisher: There is one point I want to make. The minister has said that if we use


"shall" it would be necessary to insert a schedule in this particular clause. I cannot follow that argument at all. In the light of the phrase "the duty thereon be reduced to such amount or rate as will, in the opinion of the governor in council, give the public the benefit of reasonable competition" I just want to point out whatever the fate of the amendment, I cannot accept that particular phase of the minister's argument.


William Moore Benidickson: Mr. Chairman, on this clause I recall very well that in the banking and commerce committee we had some discussion about grammar teachers, grammar pupils, semantics, and so on, but I find there has been a depature in a material way in this clause from the bill as introduced last year. The bill last year had the words "has been" which were fairly positive; but I am more concerned in this particular clause with the words "presently being" in the 38th line. I wonder what significance they have? I have looked at this fairly carefully and I am convinced that they could be deleted without any material effect to the intent of the clause and perhaps would make the reading of the clause more basic and understandable. On that basis I move, seconded by the hon. member for Hull:
That clause 11 be amended as follows:
That the words "presently being" be deleted from line 38.


Edmund Davie Fulton: Mr. Chairman, this was also discussed in the banking and commerce committee and, as I explained at the time, on the grounds that this is a remedial section, not a punitive section, it seemed to us to be much more appropriate in a remedial section to point up the fact that you could only apply the remedy if there was an active use being made or an active advantage being taken of the existence of a tariff to promote the public disadvantage. If you simply say that the disadvantage is facilitated because tariffs exist and that therefore a situation exists under which any disadvantage is or might be facilitated, that did not seem to us to be going quite far enough to establish that before you had the authority to apply the remedy you had to have evidence and be satisfied not only that the potential situation existed but that actual advantage is presently being taken of the tariff to bring about a disadvantage. That is why we put in the words "is presently being".
Amendment (Mr. Benidickson) negatived: Yeas, 14; nays, 56.


Charles Benjamin Howard: I should like the minister to make something a little clearer. Is it correct that the governor in council has the authority to do this regardless of whether or not this section is in the act?


Mr, Fulton:: I think there may have been some uncertainty as a result of what I said in the committee on this point. On reflection I am of the opinion that the governor in council must find some specific authority to interfere with the ordinary rates of customs tariffs. The ordinary situation is that they can only be changed by parliament and therefore, unless there is this specific authority, the governor in council would not have the right to change them.


Charles Benjamin Howard: That clears up that point. Anybody who argues that this can be done is not arguing correctly.


Edmund Davie Fulton: That is my view, it could not be done without this section.


[Stage Direction]
Clause agreed to.
On clause 12-Prohibitions.
John Whitney Pickersgill: Mr. Chairman, I intend to move an amendment on clause 12. I will read it now and move it after I have concluded my remarks. The amendment is a very substantial one indeed and reads as follows:
That subsection 2 of section 31 in clause 12 be amended as follows:
That the words "has done" in line 24 and the words "or continuation" in line 27 and all the words to the end of the subsection after the word "offence" in line 29 be deleted.
It will readily be seen that the basic purpose of this amendment which I intend to move is to remove this alternative procedure to criminal proceedings in the case of something that has been done. It does appear to us to be quite wrong to provide that only a civil action needs be taken after an offence has been committed, and it also seems to us that the Attorney General of Canada should not be substituted for the courts in determining whether an offence has been committed. We submit that this is very objectionable in its basic principle, that if an offence has been committed under this act or if the Attorney General of Canada has sufficient reason to believe that an offence has been committed and is of the opinion that proceedings should be taken, then proceedings should be taken in the courts by prosecution and the offence should be established.
We have no objection to the injunction procedure. On the contrary, there is a great deal to be said for the injunction procedure in cases where there is a good deal of evidence and the Attorney General of Canada has grounds to believe that an offence is about to be committed. In some of these offences, as the minister and all of us know, it takes a long time to get a conviction, and an injunction does no harm to anyone. It
Combines Investigation Act only tells the person that he cannot go on doing something which is against the law. But surely if someone has committed an offence it should not be possible merely to say that he is not to go offending. It should be essential to prosecute.
As it does appear that this would be an alternative procedure and as, of course, injunction proceedings would be possible in any event if there was any reason to think that the offence might be repeated by someone who would have already committed it, it does not seem to be necessary, for the purpose of enjoining someone who might be about to commit an offence, to put in those words. Therefore we think that on the grounds of treating all offenders alike, which of course is a basic principle of our law, especially of our criminal law, the words "has done" and "or continuation" should not be in the section. I omitted to move the motion and I will do so now.
I move:
That subsection 2 of section 31 in clause 12 be amended as follows:
That the words "has done" in line 24 and the words "or continuation" in line 27 and all the words to the end of the subsection after the word "offence" in line 29 be deleted.


Edmund Davie Fulton: This, of course, completely
deletes the amendment in the bill, except that it would leave the change in the cross reference referring to Part V instead of the numbered sections which were used before. I cannot accept the amendment, and I cannot accept it in large part because in addition to destroying the amendment in the bill, it is based on a misconception. My hon. friend has said that it seems to him wrong to authorize a court to make an order against the continuation of a situation arising out of a past contravention except on the requirement of the strictest proof. What he fails to appreciate is that there will be the requirement of the strictest proof that an offence actually was committed. May I refer to the opening words of the new subsection. I shall have to read the subsection, I think, completely:
Where it appears to a superior court of criminal jurisdiction-
The first thing to remember is that this is a court of criminal jurisdiction. It will therefore be required that before it does make an order the facts, as alleged, will have to be proved to the court under the ordinary laws of evidence applicable in criminal proceedings. This paragraph says:
Where it appears to a superior court of criminal jurisdiction in proceedings commenced by information of the Attorney General of Canada or the attorney general of the province for the purposes of this section that a person has done, is about

Combines Investigation Act
to do or is likely to do any act or thing constituting or directed toward the commission of an offence under Part V, the court may prohibit the commission of the offence or the doing or continuation of any act or thing by that person-
And so on. Before you could obtain your order from the court it would be necessary to prove to the court-this is a criminal court -that a person has done an act or thing constituting or directed toward the commission of an offence. I am here dealing with the words to which my hon. friend objected, the words "has done". You are going to have to prove to the court that a person has done something directed toward the commission of an offence. You must, in order to prove that, discharge the same onus of proof as you would have to discharge if you had simply prosecuted him in an attempt to get a conviction because this court is going to say, I am asked to make an order prohibiting something; I am asked to make this order on an information alleging that something has been done which is an offence under the act; I am not, therefore, going to make the order unless the attorney general who lays the information proves that the facts alleged in this information are correct. He will have to prove that an offence has been committed.
There is, therefore, no lesser onus of proof. It is not as though we could go to the court, if this subsection passes, and simply make a vague allegation that an offence had been committed and have the courts accept our application without our proving it. This, fortunately, and I say that very sincerely, is not the way the courts of criminal jurisdiction would act on our application. They would say, you have laid an information; you have alleged that certain things exist or have been done, and you have applied to us for an order. As a result, they would say, very well, prove your case and we will see about making an order.


John Whitney Pickersgill: I should like to put a question to the minister about this. If the minister will look at subsection 1 under section 31, he will see there, in addition to any penalty imposed-this is after a person has been convicted-the court may prohibit the continuation or repetition of the offence or the doing of any act or thing. It would appear to me, if the minister is right and I hope he is-of course, as I say my ignorance of criminal procedure is profound and complete-that the words "has done" and "or continuation" are completely redundant because everything that can be done in the case of an offence that has been committed and which can be done under subsection 2 can be done under subsection 1.
Therefore, on the principle on which the minister opposed "is being" a while ago, but


I think on stronger ground, I say why create an impression in the lay mind, in the mind that has no criminal intent and no criminal experience, that there is an escape hatch here. There is the impression left with the lay reader that, in some way or other, all you need to do is get the court to say that these people have done something and to ask for no other penalty than to tell them to stop doing it. I do feel that would be discriminatory and undesirable if that could happen under this section, since everything that otherwise could happen under this section could, because somebody has done something, apparently be done under subsection 1, so it would not appear to be necessary anyway. Perhaps the minister could answer that.


Edmund Davie Fulton: Yes. This arises out of the fact we did desire to create two alternative methods of procedure. It has been made quite clear we desired to create a method of procedure under which we could apply for an order, a restraining or dissolution order, without having to obtain a conviction because if you obtain a conviction then the court must impose a penalty under subsection 1, you see. We felt, particularly in a case where you were concerned with an offence or a situation that might have been completed a number of years ago-I think the figure used in committee for this illustration was as long ago as seven years-and which you have only discovered now, that it was not desirable to put the crown in a position where its only remedy, if it wanted to undo what had been done, would be to ask for a conviction which would require the imposition of a penalty. Then you seem to be resurrecting something that happened long ago and penalizing somebody for it.
We felt it might well be better for the crown to be able to go to the court and say that this was done a long time ago; we have only now discovered it; its effects have only now become apparent, and we want to be able to get an order dissolving the effect of what was done; we want to be able to get that order without the necessity of a conviction which, automatically, would result in penalties being imposed. We can only get an order under subsection 2 upon the same proof as we could have obtained a conviction under subsection 1.


John Whitney Pickersgill: In other words, if I may put it quite simply in words I can understand, if you find a fresh corpse, you get a conviction, but if the corpse is seven years old you do not bother with a conviction and you tell the murderer not to do it any more.


Edmund Davie Fulton: No, because we can if we feel the nature of the offence warrants it, still take that seven year old offence into court to get a conviction.


Charles Benjamin Howard: Perhaps I should inquire of the hon. member for Bonavista-Twillingate whether the effect of the amendment is contrary to the proposals in subsection 2. Is it designed to defeat the purposes set out in subsection 2?


John Whitney Pickersgill: No, it is merely designed to make it necessary for the government, in a case where the attorney general believes an offence has been committed, to prosecute and not merely to ask for an injunction. We feel that if an offence has been committed, even if it is seven years old, there should be a prosecution and a conviction. In that case, as the minister has said, under subsection 1 all the other things that can be done under subsection 2 can be done anyway. We do not believe there should be any escape hatch for people who have actually committed an offence. Do I make it clear?


Charles Benjamin Howard: Yes. I think if one were to delete subsection 2 it would accomplish the same end?


John Whitney Pickersgill: No, because subsection 2 also refers to someone who is about to commit an offence and the MacQuarrie commission recommended this procedure, as I recall it, as did other parties. Before an offence has been committed but when it is pretty evident that someone is getting himself in the position where he is going to commit an offence and you apply under the act to the court for an injunction, it seems to me that is a good thing to do because these things are against the public interest, and if we can prevent them altogether so much the better.


Edmund Davie Fulton: I think I should explain that
the effect of the amendment is to undo the effect we have sought to write into clause 2. There are additional reasons to the ones I gave for having clause 2-in addition to the fact that you might want to be dealing with an offence committed a long time ago. As the hon. member has pointed out, when dealing with an offence which we believe is about to be committed, obviously we are not in a position to prosecute and convict and then get an order. So we have to be in a position to apply for an injunction or a restraining order on an information; but the proof will be of the same order.
In addition to the possibility of a past case of the type to which I have referred, you may be dealing with a situation which is produced as the result of a merger or non-per se combination offence involving pretty fine judgment as to whether an offence has actually
Combines Investigation Act been committed. It did seem to us inappropriate in such circumstances to leave the only method of procedure by way of a prosecution leading to conviction.


Charles Benjamin Howard: It appears to me that while generally the amendment of the minister is an acceptable course to take, there are some inconsistencies between this course which is advocated and other courses which have been rejected by the minister as involving something which requires a great deal of study. It does not appear to me that the automatic end of an offence is a conviction and a fine, but that there could be and there should be other alternatives, especially in the field of mergers or proposed mergers and the functions and operations of monopolies.
We have argued the question earlier about mergers and the effect they have on the economy, and also the operation of monopolies and the need to take a different look at the problem and develop different procedures. The minister has rejected these out of hand almost by saying that there is no case law that one could rely on for a safe development of judicial opinion as to what is a merger and when it is operating to the detriment of the public interest. I believe he said there is one case presently being studied by the restrictive trades practices commission in the field of mergers, and that we must wait until such time as we get a sufficient amount of decisions from the court on the effect of mergers and a sufficient amount of results from studies by the restrictive trades practices commission on the effects of mergers and the growth of concentration in industry before we move to deal with the question of mergers and the growth and absorption of one company by another.
However, here he takes a different course and says that we should take an alternative approach to prosecution, and in the case of a merger or a monopoly we should direct that person or any other person to do such of the things necessary in order to dissolve the merger or monopoly in such manner as the court directs. This, I submit is a new course to be following and is not consistent with the attitude of the minister as expressed earlier with respect to the effect of mergers upon the economy.
On the one hand the minister says that we want to make no alteration in the definition of merger until we have a sufficient amount of study material behind us either from the commission or from decisions of the courts in order to give an indication as to in which direction we should go. On the other hand we want the right to proceed to
6942	HOUSE OF
Combines Investigation Act court without convicting any merger but asking that an order for dissolution be instituted. That is a different course and is not consistent with the minister's first approach to mergers.
The hon. member for Port Arthur on second reading of the bill placed a number of instances on the record of knowledge of mergers in his own constituency and the growth of concentration, what we should do about it, and should we not be looking toward this as some problem which should be tackled by the combines legislation? Those of us who are from British Columbia are familiar to a degree with the development and the growth of concentration of control in the forest industry in the coastal areas which has taken place within the last few years. We used to have a number of large outfits, large logging and milling companies, which were in effect in competition one with the other. In fact, we had the two arch-enemies, as it were, in the lumber industry, Bloedel, Stewart and Welch and the H. R. MacMillan Corporation. These two bitter enemies, some time around 1952 I believe, undertook to merge and become MacMillan and Bloedel, and they became a huge concern.
Just last year an announcement was made that another huge lumber company on the west coast, the Powell River Company, was considering merging with MacMillan and Bloedel. So we have three formerly large concerns, a lumber, pulp and paper company and a milling concern, integrated and merged into one group, MacMillan, Bloedel and Powell River.
We have also seen the same thing with respect to the Alaska Pine Company, where Rayonier is now involved. Abitibi Pulp and Paper Company was involved in mergers. The British Columbia Pulp and Paper Company when it obtained a forest management licence no sooner had the ink dry on the licence than it sold out to other interests. Then we had another case in Crown Zeller -bach. Gradually there has been a concentration of control in the hands of Crown Zeller-bach as well as the Alaska Pine Company on the west coast. So that we now have on the west coast perhaps four or five major concerns which, by the process of merging and absorbing other companies, now control the entire lumber industry in British Columbia.
This is a situation which has been developing over the years and a situation toward which we should be directing our activities, and toward which we should be trying to gear our legislation so that we can properly deal with the circumstances.
I think that perhaps in this field, dealing with mergers, it is not necessary to enter


directly upon a prosecution. I am of the view that there are a number of alternatives to straight prosecution which could be developed. Perhaps a review commission could be set up on the lines of that which exists in Britain or something similar to the federal trade commission of the United States which carries out studies of this sort of thing and makes recommendations as to the course to follow. Perhaps more power could be given to the present restrictive practices commission to study and deal with these things.
To this end we should be bending our efforts, because the concentration of industry in fewer and fewer hands has accelerated tremendously in the last few years. I gave one example, the lumber and milling industry on the west coast of British Columbia which has become concentrated into four or five hands. It is the same in other fields. On one hand, the government has no policy with respect to dealing with the growth and concentration of industry and is unwilling to take any steps in this regard until it understands the situation better either as a result of court decisions or reports from the restrictive trade practices commission. Then, on the other hand, the government says it does wish to deal with the situation as far as prosecution or dissolution orders are concerned, which seems to me to be inconsistent. The minister has been in office for three or four years and he tells us that soon after he took up his duties he directed his attention toward this legislation. If he had bent his efforts to dealing with this question of the concentration of industry and how that might be effectively dealt with perhaps he would have a much better bill to place before the committee than the one which we are now discussing. I do think it is inconsistent to say, on the one hand, that he wants no change in the approach to monopoly because he does not know enough about the effects on the economy while saying, on the other hand, that he wants to take action and get a dissolution without recourse to prosecution instead of having the prosecution first as a means of getting an order.
Though this may be getting away from the subject of the amendment proposed by the hon. member for Bonavista-Twillingate it is, nevertheless, relevant to mergers and monopolies and I think this is as good a place as any at which to make the suggestion I have put before the committee.


Mr. Lambert:: Would the hon. member permit a question? Is he of the opinion that the mere size of a corporation is wrong per se?


Charles Benjamin Howard: I merely pointed out what has been occurring. We have not yet been

able to get near to finding an answer to the question: how big is big, or how much is much. Bigness in itself is not to be regarded as wrong. It is the operation of the business and the effect which it has on the economy which must be considered. The same is true of a monopoly. A monopoly per se is not a bad thing to have in existence; it is the manner in which the monopoly functions, and its effect on the economy and on society that requires attention. The same is true of merger. Perhaps the corporate structure of Bloedel, Stewart and Welch was a bad thing in itself and, accordingly should have been broken up. That is the organization to which I made reference some while ago.
I merely say that these problems are developing particularly in the last eight or ten years, and our combines investigation machinery has not kept pace with these developments. The efforts of the people in the combines branch have unfortunately not been directed to finding a solution of these growing problems in this changing economic situation. This is partly because the combines investigation branch is under-staffed; there are too many lawyers and not enough economists in the branch; the staff are too busy doing case studies and investigating specific situations to engage in any work of the nature which I have suggested which, perhaps, should properly be the subject matter for a committee or a commission to investigate.
Amendment (Mr. Pickersgill) negatived: yeas, 15; nays, 53.


John Whitney Pickersgill: I feel so strongly about this clause which is now, because of the defeat of the amendment, going to contain the provision that some persons committing offences will be prosecuted although other persons committing offences need not be prosecuted, which seems to us to be so offensive to our conception of equal justice and equal treatment for all that I feel that when you come to call the clause I shall have to ask for the yeas and nays to be counted.


Charles Benjamin Howard: Perhaps it is necessary for us to put our attitude on the records. It is true that this leaves a differentiation to be made in that in one set of circumstances a corporation may be prosecuted while in another set of circumstances-


John Whitney Pickersgill: In the same set of circumstances.


Charles Benjamin Howard: Well, let me make my point- while in another set of circumstances they may not be prosecuted. Conceivably it could be that the circumstances would be identical in each case and the minister or the attorney general of a province, because of some peculiar attachment to one company or one group
Combines Investigation Act of companies as opposed to another, may decide to prosecute in one case or simply to seek an order of prohibition or dissolution in the other. In this sense I think there would be discrimination.
However, basically the approach we have taken to combines legislation is that we should not proceed automatically to prosecution and a fine or imprisonment in every instance. This is the circumstance that exists at the present time. Apart from such remedies as were dealt with under section 29, such as deduction of customs duty, apart from that and the question of patent rights and the other things I mentioned, prosecution must take place before a situation can be corrected. The amendments proposed by the minister are inconsistent with his attitude that no action should be taken with respect to mergers until we have evidence as to the effect of them. I believe this is a better change in the long run than no change at all.
I wish the minister had the courage, foresight and understanding to have tackled this problem when he took office and dealt with it in a proper manner so we would have before us an up-to-date approach to combines activities and mergers in particular. Inasmuch as the minister has not done this, and inasmuch as it is unlikely that either a Liberal or Conservative administration will adopt the proper approach until they are forced into it by the pressure of circumstance, and because we feel this does represent an improvement, when the yeas and nays are called we will support it.


Edmund Davie Fulton: Mr. Chairman, since we are on the merits of this clause I should like to make a comment in reply to what has been said. I appreciate the interest of the hon. member for Skeena in this matter. I will not take offence at what he said about my apparent disinterest in the matter or my unwillingness to produce an answer on the merger problem. I explained previously the main reason why we decided not to do that. It is because we do not know how effective the present legislation is to deal with the merger problem. It is only recently that substantial merger cases have come before the courts. There has been only one substantial case in which we have had a decision and a decision has not yet been handed down with respect to the other one. We are in the position of having one merger case before the courts, at least three before the restrictive trade practices commission and others under preliminary study.
In the absence of jurisprudence which would establish how far the present legislation enables us to deal with the situation, which would establish whether it is adequate or inadequate to control the merger problem
6944	HOUSE OF
Combines Investigation Act in the light of the situation and the circumstances the hon. member has in mind-we felt it would be unwise to bring in legislation, as it were, on our own reasoning because this legislation and its interpretation by the courts is of primary importance. It is of primary importance to have a clear understanding of what the legislation means before you start tinkering with it. It is different when you come to deal with procedures and remedies. The merger problem is under study. It is not being ignored and forgotten. But as a matter of legislative practicability and responsibility we felt it was not wise to introduce legislation at this time.
Referring to the comment made by the hon. member for Bonavista-Twillingate that he feels so strongly that it is undesirable that the administration should have any power to determine with respect to those who have committed offences under this legislation whether they should be prosecuted with a view to conviction or whether we should apply for an order, I suggest to the hon. gentleman that his stand is based upon emotion rather than research and reason.


John Whitney Pickersgill: It is based on fundamental principle.


Edmund Davie Fulton: It is generally agreed that the United States has one of the strongest anticombines or anti-trust administrations in the world but the United States anti-combines authority have, and have had for a long time, the power to determine whether to proceed against a person who has committed an offence against their statutes by way of criminal prosecution or by way of a civil procedure and an application for an order.
No one to whom I have ever spoken about anti-combines matters has even remotely suggested that this option available to the United States administration has made them soft in their dealings with anti-trust problems and activities.


John Whitney Pickersgill: It has nothing to do with softness; it has to do with principle.


Edmund Davie Fulton: We are seeking to assimilate our approach and our position in respect of our anti-trust administration to that of the United States anti-trust administration in that one respect, the respect of having the freedom to decide whether the appropriate course is to prosecute and convict or to apply for an order and in that way bring about the end of a situation which is believed to be detrimental to the public.


John Whitney Pickersgill: Mr. Chairman, I have a few observations to make on this matter. I first want to say to the minister that I never said anything about this matter being soft 

or being hard. To me it is a matter of fundamental principle and in criminal legislation which this is-and this is the only way we can deal with this problem-it is entirely repugnant to my rather primitive ideas of justice and of equity that it should be open to the attorney general to decide in exactly similar circumstances to prosecute in one case and to ask for an injunction in another. To me that is wrong. For that reason it would not be possible for me to support this clause of the bill.
The hon. member for Skeena in that rather laboured attempt to get out of the pit into which he had fallen by supporting this bad legislation of the government sought to suggest that since the government had, as he said, no law to deal with mergers-which of course is not correct-there was some procedure here that would enable the government to take some kind of action different from that.
I might remind the hon. gentleman that the minister was careful to point out to me in reply to the first observation I made even before moving my amendment that you would have to satisfy the court in exactly the same way that the act had been done under subclause 2 as under subclause 1. In other words you have to give the court all the evidence that would be necessary to get a conviction before you could get an injunction in the case of the thing having been done. Therefore if that is the case, and if the minister has correctly informed me, it would appear that any argument to the effect that in some way or another the government should deal with mergers under subclause 2 and should not deal with them by prosecution under subclause 1 falls completely to the ground. If you have to make exactly the same proofs to satisfy the courts in exactly the same way it is absolutely impossible for me to see why there should be any relief from prosecution in one case as opposed to another.
As I have a few other observations to make and as one or two other hon. gentlemen wish to say something about this clause it would appear to me that it is eleven o'clock.


Jacques Flynn: Does the committee wish to vote on this?


John Whitney Pickersgill: No, Mr. Chairman, I have some other observations to make and from looking at the clock it appears to me that it is eleven o'clock.
Progress reported.



BUSINESS OF THE HOUSE

John Whitney Pickersgill: Mr. Speaker, perhaps the house leader could indicate to us what we

would be going on with tomorrow in the case of the completion of this legislation. Perhaps it would be convenient for some hon. members if the house leader would also put on the record again the order of the departments whose estimates would be taken.


Mr. Churchill:: I shall be glad to do that, Mr. Speaker. Tomorrow this debate will continue. If brought to a conclusion we might find it possible to deal with the report of the committee on rules and procedures. I think that report might become available later tomorrow.


John Whitney Pickersgill: If I may be permitted to interrupt, does the house leader think it would be quite reasonable to ask hon. members to deal with the report affecting our rules before all hon. members have had time to read and consider the report. I think it
Business of the House
would be far better to follow the ordinary rules.


Gordon Minto Churchill: I just throw it out as a
suggestion. As the hon. member knows the proposals are advanced as an experiment. It was just a suggestion.
On Wednesday we will proceed with the estimates of the following departments in the order in which I shall name them: northern affairs, secretary of state, defence production, legislation and labour. That leaves us with only four departments-defence, trade and commerce, finance and privy council-to complete the business of the session although those departments will not necessarily be taken up in that order.


[Stage Direction]
It being five minutes past eleven o'clock the house adjourned, without question put, pursuant to special order.


[Stage Direction]
The representatives of the governments of	
Having regard to the resolution of 25th May, 1960, on the reorganization of the organization for European economic co-operation;
Having regard to the report by the working party established on 25th, May, 1960, and its addenda;
DECIDE:
1.	The preparatory committee provided for in the resolution of 25th May, 1960, referred to above, is established. The secretary general designate shall act as its chairman. It shall perform its work in conformity with the other resolutions and decisions adopted by this ministerial meeting.
2.	The preparatory committee is instructed:
(a)	to complete the draft convention on the O.E.C.D.;
(b)	to carry further the review of the acts of the O.E.C.C.; to determine which acts
should be recommended to the council of the reconstituted organization for approval; and to propose, where necessary, the modifications required in order to adapt these acts to the functions of the reconstituted organization as currently agreed by governments;
(c)	to define the structure of the reconstituted organization and to draw up the terms of reference of the main organs necessary for the accomplishment of the tasks currently agreed for the reconstituted organization;
(d)	to draft the instrument provided for in the resolution relating to article 15 of that convention adopted by this ministerial meeting;
(e)	to prepare a list and summary description of all agreements and contracts of the O.E.E.C. which will remain in force after 30th June, 1961;
(f)	to prepare a report on its work by 10th November, 1960;
(g)	to arrange for a ministerial meeting to consider the report of the preparatory committee and reach agreement on the articles of the convention before the end of 1960.
0L.


[Stage Direction]
Thursday, July 7, 1960

[Stage Direction]
First report of select committee on procedure of the house-Mr. Speaker.