1960-03-17

[Stage Direction]
On the orders of the day:
Mr. J. A. McGralh (St. John's East):: Mr. Speaker, may I beg the indulgence of the house in order to draw attention to the fact that today is March 17, the feast of the glorious St. Patrick, the day when Irishmen all over the world turn their thoughts to the emerald isle. On behalf of the sons of Ireland who sit in this house, and on behalf of those less fortunate people who also sit in this house, may I wish you, Mr. Speaker, and through you the people of Canada, the top of the morning; and before I resume my seat may I say "Erin go bragh".


Mr. Speaker:: Carried.



ATOMIC ENERGY


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of the Opposition):: I should like to ask a question of the Prime Minister. Will the government consider making representations to the government of the United States that, if that government is to undertake an underground atomic test explosion, as reported, this should be done under international supervision, having regard to the fact that its results might help resolve the major technical issue now standing in the way of agreement on a test ban, namely the possibility of detecting and identifying small underground explosions?


Right Hon. J. G. Diefenbaker (Prime Minister):: This suggestion is similar to one made by the Leader of the Opposition some weeks ago. At that time the Leader of the Opposition was informed that the suggestion was a very interesting one and that study and consideration would be given to it.
That is the position at the moment. There is not any immediate necessity for a final determination in this connection. The idea advanced by the hon. gentleman is similar to that advanced by others recently, and is certainly worthy of serious consideration.


Mr. Hazen Argue (Assiniboia):: I should like to ask a supplementary question. Can the Prime Minister say whether consideration of this same laudable suggestion is being given in so far as it might affect any explosion in the Athabaska tar sands?


John George Diefenbaker: In so far as an explosion in the Athabaska tar sands is concerned, I think it is some two years ago that I spoke on this matter and pointed out that while it was desirable that there should be a suspension of tests, those tests whose purpose was the advancement of the general good should for civil purposes be excepted. In taking that stand, of course, there is nothing to deny the necessity of every consideration being given to the suggestion made by the Leader of the Opposition, and that statement would be equally applicable to the question now asked by the hon. member for Assiniboia.



JAPAN-REPORTED POOR PACKAGING OF POWDERED MILK IMPORTED FROM CANADA

[Stage Direction]
On the orders of the day:
Mr. G. J. Mcllrailh (Ottawa West):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce based upon a press dispatch today from Tokyo to the effect that an education ministry official told a Japanese Diet committee today that poor packaging of powdered milk imported from Canada was responsible for an outbreak of mass sickness among school children in Okayama. I wonder if the minister's attention has been drawn to this statement, and whether he has any information to give the house on this subject.
Hon. Gordon Churchill (Minister of Trade
and Commerce): No, Mr. Speaker, I have not seen the statement, nor has my attention been drawn to it, but it will be investigated immediately.


George James McIlraith: A supplementary question, Mr. Speaker. In view of a possible reflection on the quality of Canadian exported goods involved in this statement, would the minister look fully into the matter and make a statement to the house when he has done so?


Mr. Churchill:: Yes, Mr. Speaker.

Inquiries of the Ministry UNITED NATIONS



REPRESENTATIONS BY CANADIAN WELFARE COUNCIL RESPECTING REFUGEES

[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, on March 3 the hon. member for Bonavista-Twillingate asked me a question relative to the representations made by the Canadian Welfare Council. The question appears in Hansard for March 3 last, at page 1683. In answer thereto I set out the several representations which were made by the welfare council. Subsequently on March 10 the hon. gentleman asked me again about this matter, and I shall now deal with the several questions inherent in the interrogation made by him.
I would advise that, in respect of the various recommendations made, each is receiving consideration by the appropriate department. The recommendation with respect to the expansion of the plan to bring in additional families on the same basis as the 100 tuberculosis cases has already received an answer from the Secretary of State for External Affairs on March 2, and the necessary arrangements are now under way.
Then there were recommendations with reference to sponsorship. The Canadian government has not limited the sponsorship to refugees who are in camps. However, I should point out in that connection that the United Nations high commissioner for refugees has on several occasions expressed the wish that refugee camps would be cleared out during world refugee year, which indeed is the primary objective of the high commissioner for refugees.
In the case of sponsors who apply for refugees after the end of world refugee year, which will conclude on June 30, such applications will receive the same consideration as those given during world refugee year, for as the house knows Canada's policy has been to encourage the admission of refugees.
As was recently stated by the Minister of Citizenship and Immigration, 2,800 refugees were admitted to Canada during the calendar year 1959, of which 1,400 were admitted during the first six months of world refugee year.
There was a further recommendation regarding measures to provide for the legal adoption of refugee children. It should be pointed out that the laws of adoption in Canada are matters of provincial jurisdiction, and in any case the United Nations high commissioner for refugees has informed us that no refugee orphan children in Europe are available for adoption.

I think that is as far as I can properly go at this time, since action on these various recommendations will require extensive consultation with the refugee agencies abroad and with the provincial and municipal authorities.


Hon. J. W. Pickersgill (Bonavisia-Twillin-gaie):: I take it the Prime Minister is not able at this time to say anything about the recommendation with respect to medical care?


John George Diefenbaker: No; that is right.



CAPE BRETON


[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breton North and Victoria):: I should like to address a question to the Prime Minister. In view of the statement made before the Rand royal commission at Sydney yesterday by the Dominion Steel and Coal Company in regard to the probable closing of three coal mines, would the Prime Minister wish to comment at this time?


John George Diefenbaker: I have not read the submission of the coal company, but from the news report it seems, generally, that the submission called attention to the situation. That situation has been of concern to this government for some time. Indeed, the problems outlined are in general the reason for the action taken in appointing the Rand royal commission, which is now holding its hearings.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Could I direct a question to the Minister of Labour, and ask him whether he has seen a news dispatch in this morning's Globe and Mail to the effect that the board of control of Toronto is requesting a month's extension of the winter works program in order to prevent some 530 parks employees from being thrown out of work? If so, would he comment?


Hon. Michael Starr (Minister of Labour):: I have not seen the news dispatch referred to by the hon. member for Skeena, nor have I received any communication to that effect, at least to my knowledge. In any event, if such a representation is made representing municipalities as a whole I am sure it will be given careful consideration.

Inquiries of the Ministry
Quebec-statement by premier as to indicated that he would have something to responsibility for unemployment	say about that matter in due course.
On the orders of the day:


Mr. Augustin Brassard (Lapointe):: I should
like to address a question to the Minister of Labour; I have given notice of my intention. I wonder if the congenial and argumentative minister would care to comment on a statement which was made to the legislative assembly in the province of Quebec this week by the premier of that province-


Some hon. Members:: Order.


Augustin Brassard: -to the effect that unemployment in the province ought to be placed, in its entirety, within the responsibility of the federal government.


Michael Starr: I appreciate the hon. member sending me notice of his intention to ask this question, but I am sure he will realize that I cannot very well offer an opinion on a comment made by a minister of another government. I have the greatest respect for the gentleman mentioned, and I think if the hon. member for Lapointe will study the statements I have made in this connection in this House of Commons he would see that this government has never shirked its responsibilities.



NEWFOUNDLAND


[Stage Direction]
On the orders of the day:
Frank Howard: May I ask the
Prime Minister whether, now that the time has expired, he can indicate to the house what action, if any, the government took with respect to the request for the disallowance of certain pieces of Newfoundland legislation?


John George Diefenbaker: Mr. Speaker, the question of
disallowance was considered and a decision was made not to take any action in this regard. I shall have more to say at length, on another occasion, regarding the extraordinary power, the sweeping power, of disallowance, which was widely used shortly after confederation but which, with the advance in the development of Canada, has been rarely used in recent years.


Frank Howard: May I ask a supplementary question. Can the Prime Minister say whether he will give favourable consideration to eliminating the arrangement which allows the governor in council to so disallow any provincial legislation, except where it may be ultra vires?


Mr. Speaker:: I think the hon. member is asking about a broad question of policy. As I understand the Prime Minister's answer, he
(Translation):



ST. LAWRENCE SEAWAY REPORTED DENIAL OF ACCESS TO SHIPS FOR LAUNDRY PURPOSES

[Stage Direction]
On the orders of the day:
Mr. H. Pit Lessard (St. Henry):: Mr. Speaker, I should like to put a question to the Minister of Transport. Has the minister's attention been drawn to an item in Le Devoir of March 15 to the effect that five Montreal laundries stand to lose some $300,000 if St. Lawrence seaway authorities do not change their minds about prohibiting those laundry concerns from using the approaches to the locks to service the ships?
Can the minister tell us what action he intends to take to remedy the situation?


Hon. George H. Hees (Minister of Transport):: Mr. Speaker, I thank the hon. member for St. Henry for giving me notice of his question.
The St. Lawrence seaway authority states that the primary function of the locks is to allow ships to get through as fast as possible, and that it is not desirable that they serve any other purpose. The matter of security and the control that must be exercised by customs and immigration officials must also be taken into account. The shipping companies are considering the possibility of establishing service and supply depots outside the locks.
(Text):



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. J. R. Taylor (Vancouver-Burrard):: Mr. Speaker, I wish to direct a question to the Minister of National Defence. In view of the active interest in Vancouver aviation circles, and in view of the action taken by the Vancouver city council regarding the provision of a secondary airport for light aircraft, could the minister give the house any information regarding the possible availability of Boundary Bay airport for this purpose?


Hon. G. R. Pearkes (Minister of National Defence):: Yes, Mr. Speaker. When Boundary Bay airport was given up by the R.C.A.F. it was taken into use by the Canadian army

Inquiries of the Ministry as a signals stations. Aerials and other extensive facilities have been erected which in the opinion of the Department of Transport constitute a hazard to flying. Unless these obstructions are removed, the Department of Transport advises the runways cannot be used by light aircraft. The practicability of moving the signals station to another site is being examined, but I see little prospect of this problem being resolved in the near future.


Mr. E. J. Broome (Vancouver South):: supplementary question, Mr. Speaker. Is the minister aware of the concern expressed in Vancouver newspapers and by the Vancouver city council with regard to the increased possibility of air accidents when jet aircraft start using the Vancouver airport, and is he also aware that the Department of Transport is now planning a third airport for Montreal while Vancouver has not yet got started on its first satellite airport?


George Randolph Pearkes: Yes; I am fully aware of those problems, Mr. Speaker.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Azellus Denis (SI. Denis):: Mr. Speaker, I wish to direct a question to the Minister of National Defence. According to this morning's Gazette 2,000 casualties occurred on account of the blasting being done for the construction of the Bomarc base site at North Bay. It has been reported that as a result of that blasting 2,000 hens stopped laying and had to be killed. Is the minister in a position to comment on that report?


George Randolph Pearkes: Mr. Speaker, I think if that report were true the Minister of Agriculture might have some very pointed comments to make.


Azellus Denis: A supplementary question, Mr. Speaker. Does the minister not see in that accident an omen to discontinue the laying of the Bomarc bases?


George Randolph Pearkes: The Bomarc bases are proceeding according to schedule, Mr. Speaker.


Mr. Guy Rouleau (Dollard):: A supplementary question, Mr. Speaker. Will the minister consider the advisability of bringing an end to the hens' end?


George Randolph Pearkes: Mr. Speaker, I am afraid I did not hear the last part of that question, but I understand it was intended to be humourous.


Guy Rouleau: Mr. Speaker, will the Minister of National Defence consider bringing an end to the hens' end?


George Randolph Pearkes: That, Mr. Speaker, no doubt is a predicament facing those particular fowl, but as I have no confirmation that they are suffering any undue pain or discomfort I do not think there will be any change in government policy.


Mr. J. R. Garland (Nipissing):: Mr. Speaker, I wish to direct a supplementary question to the Minister of National Defence. May I take it from the last remarks of the minister that he has not received any representations on behalf of the poultry farmer concerned?


George Randolph Pearkes: The only representations I have received are those which have been announced in the house today.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Samuel Boulanger (Drummond-Arlhabaska):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Has the minister received any representations from importers of black strap final molasses for elimination of the 1 cent a gallon tariff on imports from most favoured nation countries?


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, I do not recall any, but of course at this time of the year there are representations coming in by the scores and scores on items, in relation to both tariff questions and tax questions, and I cannot be positive in my answer for that reason.


Samuel Boulanger: A supplementary question. Since this commodity is used mainly by farmers, will the minister consider the removal of this tax in the near future?


Mr. Speaker:: Order. The hon. member knows it is not the practice at this time to ask budgetary questions or questions which relate to the fiscal policies of the government.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I should like to direct a question to the Minister of Labour. In view of the minister's assurance in this house on February 25 that the unemployment insurance commission office in Rouyn had been directed to cooperate with representatives of an employee

seeking unemployment insurance, has the minister any comment to make on the report in Le Devoir of March 16 which states that Mr. Emile Boudreau made an accusation that this office was failing to co-operate, following the minister's pronouncement?
Hon, Michael Starr (Minister of Labour):
Mr. Speaker, when I received notice of this question from the hon. member for Assiniboia I immediately got in touch this afternoon, with Mr. Levesque, the manager at Rouyn, who gave me his personal assurance that no such delays had occurred as mentioned by the hon. member, or for the reasons mentioned. The manager told me that Mr. Boudreau had been in his office this morning for the first time in a year; that he had asked for certain information and that that information had been accorded to him. He told me also that he had had two letters recently from the gentleman in question relating to certain cases, and that he had given the required information.
I would emphasize again, Mr. Speaker, at this point that the act leaves discretion in this matter to the officials of the commission, but that Mr. Levesque has been most careful to co-operate as much as possible with Mr. Boudreau or with any other union officials, and has definite instructions to do so.
I have also noted, for the information of the hon. member for Assiniboia, this article in Le Devoir, referred to by him and, because of his interest in this matter, I would refer him to an article in another publication, La Frontiere of Rouyn-Noranda of February 11, in which Mr. Emile Boudreau is described as the provincial president of the C.C.F. party and a possible candidate in the next election.
(Translation):



THE MINISTRY


[Stage Direction]
On the orders of the day:
Guy Rouleau: Mr. Speaker,
I should like to put a question to the Associate Minister of National Defence. Has the associate minister any comment to make concerning a statement by the Quebec premier who, during a sitting of the Quebec parliament, is reported to have said about the Associate Minister of National Defence: "I do not know the man."
(Text):


Mr. Speaker:: Order. I hope the remainder of the question was not heard by the reporters any better than it was by me, because it seemed to me to be running contrary to the practice which is proper at this time by
Inquiries of the Ministry asking a minister to comment on a statement made by the prime minister of a province. If there is a matter of the responsibility of a federal minister involved in a statement of a provincial minister, it seems to me the proper course is to ask the question about that matter of the minister responsible, rather than bringing in the other jurisdiction.


Guy Rouleau: It was done in order to help the minister.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Azellus Denis: Mr. Speaker, may I ask a question of the Postmaster General.


Mr. Fulton:: Back on the track.


Azellus Denis: According to the answer the minister gave yesterday, he said that the robbery at Caughnawaga involved a comparatively small loss of money. In this morning's newspaper it is reported that the loss was over $1,000. My question is, what would the Postmaster General consider an important loss?


Mr. Speaker:: That is not one of the administrative responsibilities of the Postmaster General, to define the meaning of the word "important".
(Translation):



INQUIRY AS TO PRACTICE IN LETTING CONTRACTS

[Stage Direction]
On the orders of the day:
Mr. Noel Drouin (Dorchester):: Mr. Speaker, I too should like to put a question to the Postmaster General. I am sorry I failed to notify him of my intention to do so. Here is the question: Aware as he is that the Liberal government, in the past-


Some hon. Members:: Order.


Noël Drouin: One moment, please-used to award its contracts to the highest bidder-


Some hon. Members:: Order.


Noël Drouin: -has the Postmaster General continued-
(Text):


Mr. Speaker:: Order. Would the hon. member repeat his question?
(Translation):


Noël Drouin: Has the Postmaster General continued the previous government's practice of awarding his contracts to the highest rather than the lowest bidder?

Inquiries of the Ministry
(Text):


Hon. W. M. Hamilton (Postmaster General):: This is a broad subject, which might be better dealt with during consideration of our estimates.


Mr. Speaker:: It is, perhaps, not so much a question as an attempt to give some information.



PATENT ACT


[Stage Direction]
On the orders of the day:
Mr. J. T. Richard (Ottawa East):: I should like to direct a question to the Acting Secretary of State. Can he tell us when we may expect the report of the royal commission on patents?


Hon. Leon Balcer (Acting Secretary of State):: I made an investigation a few days ago and find that we can expect the report to be ready around April 1.



DOMINION-PROVINCIAL RELATIONS REQUEST THAT CORRESPONDENCE TABLED BE PRINTED IN &quot;VOTES AND PROCEEDINGS&quot;

[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: I should like to ask the Prime Minister whether, for the convenience of hon. members, he would consider requesting that the two returns that were made yesterday containing correspondence with the provincial governments, with respect to the broad subject of taxation, be appended to Hansard for today so it would be available for reference during debate.


John George Diefenbaker: I have no objection to that. I
would think it could have been appended to Votes and Proceedings, but if the hon. member wants it attached to Hansard there would be no serious objection.


John Whitney Pickersgill: So far as I am concerned personally I do not care one way or the other, but Hansard has a much wider circulation amongst those of the public who are interested in following these things. If the Prime Minister does not mind' I think that would be preferable.


Mr. Speaker:: Is it agreed then-I am not sure what the documents were.


John Whitney Pickersgill: They were two returns tabled yesterday under notices of motions Nos. 39 and 42, referring to correspondence with provincial governments.


John George Diefenbaker: I am informed that this correspondence is quite voluminous, and under those circumstances, and in view of the

general attitude of the hon. gentleman, I should think it would be preferable to have it in Votes and Proceedings.


Mr. Speaker:: Is it agreed' that the returns referred to be printed in Votes and Proceedings for this day?


Some hon. Members:: Agreed.



NATIONAL HOUSING ACT


[Stage Direction]
The house resumed from Wednesday, March 16, consideration in committee of Bill No. C-53 to amend the National Housing Act, 1954-Mr. Walker-Mr. Flynn in the chair.
On clause 1-Aggregate maximum.
Hazen Robert Argue: Mr. Chairman, I have just a very few remarks to make and, although I am tempted, I do not think I should follow the very inadvisable course adopted by the minister the other day in which he resorted to insult and abuse rather than attempting to produce the information the members on this side of the house have been requesting. I have been in this chamber for a number of years and have always had very cordial relations-


The Chairman:: Order. I think the other day during the discussion in the committee it was agreed we would not discuss the attitudes of members, and so forth, but would stick to the facts. If I recall, the other day the hon. member for Bonavista-Twillingate rose to a point of order when the minister started replying. I think the minister thereafter discussed merely the facts relating to the bill, and I would ask the hon. member to do the same.


Hazen Robert Argue: I wish you had been here to rule when the minister used the tactics to which I have been referring. I have been the subject of a personal attack by the minister in which he used most undignified language, and I think it is most appropriate and very much in order that if one rule applies to a cabinet minister the same rule applies to any member of this house in answering. I have not used this kind of personal invective against-


Some hon. Members:: Oh, oh.


Hazen Robert Argue: -members of this house when I have been speaking about them as was used by the Minister of Public Works the other evening. However, I am not going to continue in that line. I think he has a good deal to learn about the position he now holds, and he could learn much from some of his colleagues who have had much longer and, to

date, even more distinguished careers in this house than the hon. gentleman.
Now, some reference has been made by the minister to Saskatchewan. He said, and I quote from page 2130 of Hansard:
-due to the actions of its government, has very little experience in connection with farm loans from Central Mortgage and Housing Corporation. This is by reason of the Saskatchewan farm security act which would make it impossible for Central Mortgage and Housing Corporation, if it made a loan to a farmer in the province, to foreclose in the event of default.
The farm security act in Saskatchewan, Mr. Chairman, provides security to farmers in their homes, security against eviction. This type of security has been repugnant to the federal government; therefore, as I understand it, the provincial government is to introduce or has introduced amendments to remove the provincial protection that has been given to farmers on a comprehensive base, and remove its application so far as this act is concerned.
The information I should like to get from the minister, in order that we can get the importance of this question into perspective, is the number of loans that have been made under Central Mortgage and Housing Corporation to farmers for the construction of homes in Manitoba and Alberta. The information I have-and I do not vouch for its accuracy; that is why I am asking the question-would indicate that very few loans of this type have been made in Alberta and Saskatchewan. I therefore think it is fair to ask what the exact figures are, back for two or three years, shall we say, for the amount of loans that have been made to farmers in Alberta and Manitoba. Then we can judge to what degree the 100,000 farm families in Saskatchewan have been deprived of beneficial legislation by the provincial farm security act.
Then there is another question I should like to refer to, namely the kind of fire insurance coverage that is acceptable to the mortgages under the National Housing Act. I have here some correspondence-and I am quite prepared to send it to the minister for his perusal when I sit down-which points out that a certain company, a mortgagee under the National Housing Act, namely the Investors Syndicate of Canada Limited in the city of Edmonton, Alberta, has rejected a fire insurance policy in the name of Cooperative Fire and Casualty Company. It is stated here that they have rejected such a policy from the co-operative insurance company because they have said that the company should have a million dollars of assets in reserve. My correspondent is Mr. C. Reimer, the well-known Canadian
National Housing Act
director of the oil, chemical and atomic workers international union, who points out that the co-operative insurance company to which he refers is in a very sound position and is giving excellent service, and he feels that the co-operative insurance companies should be placed in the same position as other insurance companies in writing fire insurance coverage on homes that have been built under the National Housing Act.
I might say to the Minister of Public Works that I have had occasion in past years, with different departments, to bring requests of something of the same nature to the attention of other ministers, and I think generally speaking the response has been excellent. I would ask the minister to look into this question and ascertain whether or not it will be possible for home owners in Canada to take out acceptable fire insurance with co-operative fire insurance companies. Those of us who have had experience with the co-operative movement know that co-operative companies, such as the one to which I have referred, are exceedingly sound, do a good service for the public and, in my judgment, are just as sound financially as is any other company. In the interests of fair play I hope some investigation can be made into this subject.
I ask the minister once again whether he has the figures for the number of loans that have been made under this act to farmers in Alberta and Manitoba.


Mr. Walker:: I hope my hon. friend does not mind if I answer him now. He is finished, is he?


Hazen Robert Argue: Yes.


David James Walker: The farm home loans in Alberta in 1958 amounted to $61,200; in Manitoba, nothing for the reasons which I outlined yesterday. In 1959 in Alberta they amounted to $47,580 and in Manitoba, nothing.
With regard to co-operative fire insurance about which my hon. friend speaks, may I say that we should be very happy to entertain any policy of insurance in a good company, and the co-operatives are good companies. We have no regulations barring them at all. We are very glad to have them.


Hazen Robert Argue: I thank the minister for his comments. After having this important statement on the record I would hope that a company like Investors Syndicate of Canada Limited would quit objecting to fire insurance policies written with co-operative companies. I would ask the minister for one further particular. He gave information as to the value of the loans made in the province of Alberta. Can he tell the committee

National Housing Act
the number of loans involved in each case as well as the total dollar value which he has already given?


David James Walker: The hon. member for
Assiniboia will appreciate the fact that we do not control what the approved lenders insist on. They are lending the money. All we do is insure the loan. If they insist on a certain insurance company it would be fairly hard for us to interfere. But I might say this to my hon. friend. As far as we are concerned I can assure him that there will be no discrimination. We have a high regard for co-operatives, as a matter of fact, not only in insurance but in other matters. I should also like to say that we like to have a Canadian company with its assets in Canada.


Hazen Robert Argue: Then the minister does not know the number of loans? That is the question I asked him.


David James Walker: Oh, yes. The number of loans in Alberta for farm housing was six in 1958 and five in 1959 owing to the fact, of course, that I understand there is a farm loan board where a loan can be obtained at a lower rate of interest than 6| per cent.


Hazen Robert Argue: That has nothing to do with this act. That is outside of this act entirely.


David James Walker: There is no question about that fact; it is outside.


Mr. Bourgel:: As reported at page 2112 of Hansard the minister stated:
Now starts will include between 80,000 and 85,000 homes built with the aid of conventional loans in which the Central Mortgage and Housing Corporation does not participate.
Yesterday, in answer to a question asked by the hon. member for Nipissing, he said that figure was arrived at after surveys had been made over Canada. Is the minister in a position to give us a breakdown of those surveys by provinces?


David James Walker: I always want to answer
questions asked by the hon. member for Levis. Was his question about how the figure of 80,000 was made up, or how we arrived at that figure?


Maurice Bourget: Yes.


David James Walker: Or both?


Maurice Bourget: Yes, both; the breakdown.


David James Walker: Does my hon. friend wish to have the breakdown for the five regions of Canada?


Maurice Bourget: The minister does not have
it by provinces?


David James Walker: No; we do it by regions.


Maurice Bourget: Then that is all right.


David James Walker: For the Atlantic region I will give the total of conventional loans, which as my hon. friend knows includes not only life insurance companies, loan companies, and trust companies but private loans and lawyers' loans through lawyers' offices. Some of our firms do nothing except lend money and other financing. In the Atlantic provinces, 204; 1,350; 3,998; my hon. friend can add those up. In Quebec, 8,230; 4,915; 12,115. Ontario, 13,930; 5,930; 4,754. The prairies, 338; 2,158; 3,968. British Columbia, 3,510; 1,283; 5,761. They are the five regions.


Maurice Bourget: Can the minister tell the
house how accurate are those forecasts or figures, if he has analysed the forecasts made either last year or the year before?


David James Walker: My hon. friend has been in the house longer than I and has also been very interested in housing. He will agree with me that it is amazing how close the forecasts have been in the past. In saying that I am not predicting that we will be as accurate this year; I am sure the hon. member for Levis knows there are a great many factors to contend with this year which we did not have before, and it is difficult to make a prediction. But what predictions we have made are on the same basis as in the past, and as the hon. member knows the predictions of Central Mortgage and Housing Corporation in the past have been very good.


Mr. Marlin (Timmins):: Mr. Chairman, I would have liked to contribute these remarks last night, but unfortunately due to the competition I was unable to get the floor.
It has been shown by the facts presented during this debate that the activity of the minister, or at least of his department since he took over, particularly with regard to loans under the National Housing Act, has dropped to 75 per cent below that of his predecessor, the present Secretary of State for External Affairs. Mr. Chairman, I would suggest, and it is with deep regret that I do so, that the performance of the minister last night during this debate is just about on the same level, about 75 per cent below that of his predecessor. I would also suggest, Mr. Chairman, that this house at this time is no place for police court tactics. It may have helped the minister in his distinguished law career and his political career, but-


The Deputy Chairman:: Order. I will have to ask the hon. member to refrain from commenting upon the conduct of an other hon. member. I would ask him to keep to the bill.


Murdo William Martin: Mr. Chairman, we had to sit here last night and listen to the minister presenting his case in this debate. I would like to refer, Mr. Chairman, to page 2145 of Hansard to back up what I have just said. These are a couple of examples. The minister said:
Although the C.C.F. might have liked us to fix an interest rate of 71 per cent or more-
And further down the page these remarks appear:
Three per cent for the leader-
That is of the C.C.F.
-and more than 63 per cent for all the rest of the party.
If we are going to have to submit to this with no opportunity to reply, then I think it is a different procedure from what we have been used to in this house.


Charles Edward Rea: Order. I am sure the hon. member intends nothing personal in mentioning these various figures. Of course if the hon. member does not agree with them he has the privilege of saying so, but he does not have to go into the personal conduct of other hon. members.


John Whitney Pickersgill: Mr. Chairman, surely all the hon. member for Timmins is doing is precisely what the minister did. It would seem to me that if ministers comport themselves in that way, other hon. members should be allowed to reply.


Murdo William Martin: Mr. Chairman, there are only three reasons I can see for this, and only the minister knows which of the three applies. If it was in jest or through loss of temper, then we have to question his sense of responsibility. If it was accidental, then we have to question his intelligence. If it was deliberate, then we have to question his integrity. All in all, Mr. Chairman, I would say it was an indefensible defence of an indefensible position.
At page 2130 of Hansard for yesterday we find that the minister stated:
Thus, for the benefit of the hon. member for Assiniboia, the leader of the C.C.F. group, this debate is on the subject of loans, not expenditure- loans of $150 million to $175 million-
I would like to ask the minister if he can explain how that can be, when this item asks for $500 million, not $150 million to $175 million. Again on the same page, in the second column, we find the minister referring to a question by the hon. member for Burnaby-Coquitlam, and his answer in part is as follows:
In the second place, we are doing so because the government has decided to reduce its borrowing from the capital market of Canada

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That, Mr. Chairman, may explain why he has arrived at the figure of $150 million to $175 million, but it does not explain why he is asking the house now to approve $500 million. That question still remains unanswered.
I had hoped to be able to ask some questions about this last night, but the only conclusion I can draw is that the minister wants to have it both ways; to be able to boast, on the one hand, that the government is putting $500 million into the housing fund; and to be able to brag, on the other hand, that the government has spent only $150 million of those funds. In that case you would have two faces to show to whichever audience you might be talking to at any particular time. I think the minister owes us an answer to these questions.


David James Walker: Mr. Chairman, I am very pleased to explain for the fourth time now why we have asked for $500 million, even though for this year our present plans are to lend between $150 million and $175 million. If my hon. friend would read Hansard he would find the answer. Does he want it put on the record again?


Murdo William Martin: I would very much like that, Mr. Chairman. I thought I had read all the relevant references in Hansard in this debate; I must have missed it.


John Richard Garland: I wonder if the minister's attention has been drawn to a story in today's press that the national house builders' association has called for a "no holds barred" royal commission investigation of mortgage financing in Canada. First of all, has the minister had that matter brought to his attention and, if so, would he care to make any comment at this time?


David James Walker: Mr. Chairman, I want to thank the hon. member for Nipissing for drawing my attention to this report by the Canadian Press. We did have a very helpful conference with the national house builders' association last week. They are a very intelligent and public-spirited body who are principally interested, of course, in building houses as builders. We took into consideration with them all sorts of propositions, including the suggestion that a royal commission be set up.
We have given that matter thought, as we always give every sensible suggestion careful consideration, and if it were felt that for any reason Central Mortgage and Housing Corporation, with their facilities which are dominion wide, are unable to cope with this situation, we would be very glad to go further. I would like to have my hon. friend's opinion-he has been very helpful to me in this debate-as to whether he would himself advise at this time that a royal commission should be set up?

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John Richard Garland: Mr. Chairman, I would like to pursue another matter as well. I notice that according to the dominion bureau of statistics figures released for December with regard to residential construction, the houses under construction at the end of 1959 numbered 81,905 as compared to 88,162 at the end of December the year previous. My question is whether we could have the same figure for the end of February of this year.


David James Walker: No; I am sorry, but we have not those figures. I am asking the department to put in one of those machines where all you need to do is press a button and get the answer. This is a difficult question and I am sorry, but we have not the figures.


John Richard Garland: Perhaps the minister may be able to press a button and get a machine to answer this question. Can he give me any information as to the sale of N.H.A. insured loans abroad during 1959 and 1958? If so, where have they been sold?


David James Walker: We know of no sales abroad in those years.


John Richard Garland: Is it not a fact that the corporation keeps records of N.H.A. insured loans made by the various trust companies and banks, of which disposal may be made?


David James Walker: Yes, we keep records.


John Richard Garland: Well, could I not have the information for which I asked?


David James Walker: The amount of loans made abroad is limited and, off the cuff, we have no knowledge of any sales. The hon. member talked about 1959?


John Richard Garland: 1958 or 1959.


Mr. McCleave:: I have a question or two to ask the minister on the subject of the special insurance fund which is part of the mortgage payment. I understand the fund is now in the area of $60 million and I presume that like any insurance fund it has an actuarial basis; that is, it is related directly to the losses on these mortgages. I wonder whether the minister could indicate whether it would be possible that these premiums could be discontinued if the fund reached a certain point, or that the premium could be cut down.


David James Walker: That is an excellent question, and there is a lot of thought behind it. Quite right; we would. As soon as we felt that this insurance fund was built up substantially, so as really to be an insurance fund against the billions of dollars of loans we insure, we would be very happy to think first of all of cutting the premium. If the fund ever attained sufficient volume we should consider cutting the premium altogether, but that seems to be in the distant future. In the United

States the fund has been accumulated for 20 years, but they are still collecting premiums.


Mr. Benidickson:: I was wondering if the minister had given consideration to some remarks I made in this debate yesterday, when I presented to him the position of the small towns of this country. I think this is a favourable time to ask the minister what may be available to the house builders in these towns as a result of the legislation which is before us, the increased money that may be available for direct loans. I see that the minister has before him not only the president of Central Mortgage and Housing Corporation but a gentleman who used to have supervision in connection with housing loans for the territory that I represent here. I refer to Mr. Hignett.
As a practical exercise, could the minister indicate to me what is likely to result for the individual person say in Kenora, or Fort Frances, or Dryden, or Atikokan, who is anxious to build a house for himself, if we should pass this legislation and provide these funds? We have no big building projects such as they have in the cities, and a great part of this debate has been taken up by the consideration of housing problems on a large multiple basis for the big cities.
I am genuinely concerned, when I hear that the minister has in mind spending about half of what was spent last year in direct loans, about the effect of this change on the small communities of our land, and I wonder if the minister would tell us his conception of what a borrower, say in the town of Kenora or Fort Frances, is likely to be faced with if we pass this legislation, in the light of the ideas the minister has in mind and the policy envisaged for the year ahead.
Since I made a few remarks yesterday I have carried out inquiries, and I find there are almost 5,000 branches of chartered banks in this country. As 1 said yesterday, in so far as recognizing them as approved lenders is concerned we must put them out of the picture. They are not in the picture at all because it is well known, as the minister reported, that in the past month only nine loans have been made from this source.
Faced with such a situation, what is the minister going to do? I personally have been in this house long enough and have been associated with housing problems long enough to know that an attempt was made in the past to encourage the other types of approved lenders for whom a larger interest rate has been provided; insurance companies and mortgage companies, for example. I found that Central Mortgage and Housing Corporation did its best in those days to meet this

situation by appoaching these institutions and saying, "You have a social obligation to get down to Kenora and Fort Frances and Dryden and Atikokan" and these other communities with which I am familiar, "and take them individually as your area of responsibility."
The housing corporation did that. They said Kenora belongs to the Sun Life Insurance Company; the Great West should take responsibility for the needs of Dryden, and so on. To a degree those companies met this request, but they were losing dollars and cents on every accommodation they made. In connection with a small building project their inspectors had to travel several hundred miles in order to look over the proposition; and in relation to the same amount of money they could lend say in the city of Winnipeg, on the basis of several hundred houses, hon. members can see that the companies could not be enthusiastic about this scheme because they were actually losing money on account of the expense of inspection, supervision and so on in respect to houses located very far from the head office of the corporation. The result was that while they made an effort, we found on analysis that the individual house buyer or prospective house builder was brushed off.
I say we are going to have the most horrible snafu in 1960 if the banks with branches totalling almost 5,000 across this country are out of the housing game this year. I would like the minister to indicate to me, if he accepts as a fact that the banks cannot make loans at the present rates of interest, what a citizen in Kenora, Fort Frances or these other places is likely to be faced with if he wants to build a home in 1960. Does he have to go to the banks that are not likely to lend him any money and just get on paper a turndown so he can present that to Central Mortgage and Housing Corporation as a requisite before the corporation will make him a direct loan?
In addition to that, is it clear that he must be a person whose income is less than $5,000? I would say that the average person in my constituency who is likely to build a home to minimum standards, $10,000 to $14,000, is a person employed in a paper mill, on the railroad or in one of our mines. I would venture to say that only a person whose income is over $5,000 is likely to build a house in 1960 costing in excess of $12,000.
Is the picture as bleak as it seems to me it is for individuals in these small towns, not only in my riding but across Canada?


Mr. Herridge:: Mr. Chairman, in order to save the minister's time in answering a doublebarrelled question, I want to say that the 79951-0-136J
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problem raised by the hon. member for Kenora-Rainy River is one about which I am very much concerned. I am thinking not only of the small towns but the smaller communities and in some cases the unincorporated communities. The hon. member for Kenora-Rainy River asked what would be the position of those seeking loans in certain towns in his constituency. I ask the minister what would be the position of certain people in incorporated and unincorporated villages such as Nakusp, Kaslo, Burton, Edgewood, Beaton and other small communities that are found throughout my constituency who are unable, generally speaking, to obtain loans from the central lending institutions for the very reason mentioned by the previous speaker, the cost of administration from the head office, which is usually in Vancouver.
The minister mentioned on Friday last and has since repeated the statement that preference would be given to those having incomes of $5,000 or less. On first hearing that statement it sounds like a worth-while standard, but what I want to know is how applicants' incomes are going to be determined. Are they going to have to fill out a form and take an oath? Does a $5,000 income mean $5,000 in salary or $5,000 interest on $100,000 in investments or a combination of salary and investment income?
It seems to me this is going to be a difficult standard to administer. It will be difficult to find out that a person's income is $5,000 or less for the purposes of this act. In addition to giving us more information on how individuals in the smaller places can obtain loans, would the minister tell us how this ideal yardstick is going to b,e administered?


David James Walker: I want to thank the hon. members for Kenora-Rainy River and Kootenay West for their inquiry. I admit that the situation in Kootenay West would be very difficult to administer, as indeed it would be in parts of Kenora-Rainy River as well. There is no question about that.
In answer to the hon. member for Kenora-Rainy River, may I say that the closest C.M.H.C. office would be Winnipeg. The applicant for a loan would make his application with the plans and specifications. They would wish to see him, look over his plans, see what sort of chap he is and whether he looks responsible.


William Moore Benidickson: Who would; the Winnipeg office?


David James Walker: Yes, the supervisor or manager in the Winnipeg office. It is very difficult, as the hon. member for Kootenay West realizes, to really find out what a person's income is,

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particularly if he is working on his own account. You cannot ask for his income tax return. If he is employed you could obtain the information from his employer and obtain credit reports on him. The usual methods employed to find out an individual's income will be used here.
I appreciate, too, what both hon. gentlemen have said about the difficulty of making the necessary applications for a loan. Common sense has to be applied. In some of these places there is no bank. In the out of the way places we have required only one turndown from an approved lender. Under certain circumstances even that may prove too difficult for the borrower, if not impossible, and all these things will be dealt with reasonably.
I would like to further answer the hon. member for Kenora-Rainy River by saying that this year is going to be a good year for those constituents of his he has in mind on the understanding that their incomes are less than $5,000, because the direct loans will be given only to people in that category. Last year the direct loans made to people in every income group numbered 14,239. If you multiply that by $10,000 a loan, just to get a rough figure, you have an amount of between $140 and $150 million. This year we are planning to loan $150 million to people in this category. Does the hon. member follow me?


William Moore Benidickson: Yes, except that I think the minister said the 14,239 applications accepted for direct loans were in all income groups?


David James Walker: Yes.


William Moore Benidickson: I think the minister should indicate how many of those 14,239 loans were made to people with incomes of less than $5,000.


David James Walker: I will have the chairman of the corporation look that up. My recollection is that 52 per cent were under $5,000.


William Moore Benidickson: That is my very point. If you loaned $142 million last year to people in all income groups on a direct loan basis, I suggest to you that if the record shows that only approximately 50 per cent of those had incomes of $5,000 or less you are not giving this committee an accurate forecast when you suggest you may spend $150 million in this category this year. If you are restricting your lending in 1960 to people with incomes under $5,000 only, I suggest that the experience of 1959 indicates that you will not be lending $150 million but only $75 million.


David James Walker: The situation is that with the banks pretty well out of the market this year, for reasons which are beyond my control as

the Minister of Public Works in charge of the activities of Central Mortgage and Housing Corporation, there will be many people in the income bracket below $5,000 who this year will be applying to us because of their inability to get loans through their banks. The hon. member can appreciate the fact that in many respects the local bank may be the only institution these people can go to. Therefore it is to take care of people who want to be able to get loans from their banks that we have made this arrangement. It is a rule we are going to try to work out, and if it does not work out successfully; if, as my hon. friend suggests, we do not get enough applications, I can assure him we will extend the scope so that $150 million will be applied for.


William Moore Benidickson: The minister has still not indicated to me what I regard as something of importance, namely the mechanics that will have to be followed by the individual applicant for a loan in a community such as I have described. He has indicated that he must be turned down by two approved lenders.


David James Walker: One, in small places.


William Moore Benidickson: What is a small place?


David James Walker: A place like Kenora.


William Moore Benidickson: Kenora has a population of over 10,000. Does that rule apply-


David James Walker: Fort Frances.


William Moore Benidickson: Has the minister not got a population figure to indicate what he refers to as a small place?


David James Walker: I am sorry; I did not appreciate that Kenora and Fort Frances were as large as they are. I apologize to the hon. member. When I was in Kenora it was quite small. Now I understand it has more than
10,000	people. The rule we have is under
5,000.


William Moore Benidickson: Well, now, the communities I have mentioned, Kenora, Fort Frances, Atikokan, Dryden, and so forth, are all over 5,000.


Mr. Fisher:: Not Dryden.


William Moore Benidickson: Yes; it is 5,500, I think. The minister has his officials in front of him. The information I want is this. Is the minister going to insist, when the banks are out of this business, that those people go to two banks to get a turndown before they can enter into any negotiations with his corporation for direct loans in those communities?


Mr. Martel:: Those were your rules.


William Moore Benidickson: Under the former administration?


Jean-Jacques Martel: Yes; it was your rule.


William Moore Benidickson: Under the former administration the banks were making loans. As I have pointed out, in the past month only nine loans were made all across Canada by the commercial banks of this country, and these banks have almost 5,000 branches. I indicated yesterday that in addition the former government, through the governor of the Bank of Canada, assembled a meeting of the chartered banks of this country and in March, 1957 got from them an agreement to lend $150 million for this purpose, which they were not too keen to do. I suggested yesterday that this administration, on a similar basis, because of the connection these banks have with all our small communities, should ask the banks to do the same thing.


Mr. Hellyer:: Mr. Chairman, the minister said a moment ago that he expected Central Mortgage and Housing Corporation would get a considerable number of applications this year from persons who would otherwise have made application to the banks. Can the minister tell us why he thinks it is desirable that Central Mortgage and Housing Corporation should lend those individuals money at 6f per cent rather than the banks?


David James Walker: Is my hon. friend really serious? Does he want me to go into the reasons why the bank rate has not been raised to 6f per cent?


John Whitney Pickersgill: Answer the question asked.


David James Walker: Now, sonny boy, the hon. member for Bonavista-Twillingate, you have been very good in this debate. The fact is that the hon. member knows nothing about the subject. In answer to the hon. member for Trinity, may I say this. If-


Mr. Peters:: On a point of order, I suggest that the minister should be asked to withdraw that remark.


David James Walker: I think the hon. member for Bonavista-Twillingate can take care of himself. Do you mind my suggesting that?
In answer to the hon. member for Trinity, so long as it is the government's over-all policy to respect the Bank Act and leave the rate at 6 per cent, so far as we are concerned we cannot expect the banks to make a large volume of loans at 6 per cent unless they find they have a lot more money than they can use in commercial loans. That being so-it is not that I prefer it-if the banks would come in and lend money amply at 6 per cent I would be delighted, but they do not appear to be doing that yet, as the
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hon. member for Kenora-Rainy River pointed out. Because they are not presently doing it, we still want to take care of the ordinary man, the man with the ordinary income, and that is why we are doing this at the present time. We may change it later on, but that is why we are confining our direct loans to people who would like to build their own houses, people with incomes of less than $5,000.


William Moore Benidickson: Mr. Chairman, obviously the minister is as reconciled as I am to the facts which speak for themselves so eloquently that the banks are out of this picture. Now, my question was, if the banks are out of this picture-and I come back to it-what mechanics, what exercises must a constituent of mine go through to get a direct loan? Am I right in saying that he must go to the same banks and talk to them and bother the manager and get a turn down and then, and only then, can he go to Central Mortgage and Housing Corporation for a direct loan? And is it a fact that he will be rejected even then, in 1960, for a direct loan from Central Mortgage and Housing Corporation if his income is over $5,000?


David James Walker: The hon. member has answered his own question; yes, he would be rejected.


Paul Theodore Hellyer: Does the minister not realize that the government will have to sell its bonds to the banks to raise the money to make those loans at 6| per cent?


David James Walker: I guess the hon. member for Trinity must be somewhat confused. We have treasury bills; we sell treasury bills, but we sell our bonds on the open market.


Paul Theodore Hellyer: Yes, but I think-


David James Walker: So far we have succeeded in that effort.


Paul Theodore Hellyer: As the minister will appreciate, not only do the banks buy treasury bills but from time to time they buy government bonds also, and they hold considerable quantities of them in their portfolios.
I should like to go back to the previous question which is bothering me considerably, namely the method of administration of this restriction of the $5,000 income limit. The hon. member for Kootenay West asked the minister whether this limitation would apply to both earned income and income from investments. The minister has not yet replied. Will he give us the answer to that question?


David James Walker: Oh, we will take both categories, both unearned and earned income, as long as they have an income of less than $5,000.

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Paul Theodore Hellyer: The next question is, how are you going to find out what their investment income is?


David James Walker: All these are details which will have to be administratively worked out. I will be glad to have the hon. member for Trinity join me on a committee at Central Mortgage and Housing Corporation when these details are worked out.


Paul Theodore Hellyer: Yes. The minister told us yesterday that if this bill was passed he would make loans immediately. I should like to know how he would know what people's incomes are?


David James Walker: I think I answered that, and that the hon. member for Kootenay West was satisfied.


Paul Theodore Hellyer: No, the minister has not.


David James Walker: The hon. member for Kootenay West was satisfied. Probably the hon. member for Trinity can never be satisfied. We are going to take the usual credit sources to arrive at a person's income; take a statement from the person, from his employer, and go into the matters in connection with his business and use the usual avenues that a bank manager uses to determine a person's credit rating.


Paul Theodore Hellyer: That system works not too badly where you are trying to establish a minimum because usually, if you get a statement from the employer, you know what his basic income is, and then he can provide supplementary proof that he is receiving money from investments, which is additional information that the person voluntarily provides. But I have been in business for a considerable number of years and I have seen dozens, in fact hundreds, of those credit reports; and believe me, I would never accept one of those as a maximum of what a person's income would be. I have seen my own, as a matter of fact, and I have seen a number of other people's that I know to be -I would not say grossly-inaccurate; far enough out that they would never suffice for the test the minister needs to apply. How could you possibly determine what a person's outside income is from supplementary sources, from investments or from secondary employment, and so on? Surely, the whole scheme he is putting forward does not make any sense at all unless he can tell us precisely how he intends to do this.


David James Walker: This could go on and on, of course, indefinitely. My friend is like Prometheus, he is never satisfied. May I just say that it may not be satisfactory to him, but we have run thousands of limited dividend units, subsidized housing units, and so on, on


the tests I am now describing. We are well acquainted with the methods of ascertaining what is a person's income. I have outlined the procedure in some detail, perhaps not enough to satisfy the hon. member for Trinity, but enough for most other hon. members of the house.


Paul Theodore Hellyer: On this same subject, may I say I am sure the minister's department has conducted dozens of tests on limited dividend projects and so on. Most of these are not too inaccurate, but the same tests will not do the same job in this case, and the minister and his officials know it.
I should like to have two further questions answered on this same subject.


David James Walker: I should like to ask a question of my hon. friend. Can he suggest any further test which we should apply? We are always glad to have the benefit of his knowledge gained as one of the big builders in Toronto.


Paul Theodore Hellyer: I will give the minister some further advice in a few moments. However he is not apparently paying much attention to any advice he has been given. May I ask these questions? Will the wife's income be included in the $5,000 and, also, will the family allowance be included?


David James Walker: No.


Paul Theodore Hellyer: Did that "No" answer apply to both parts of the question?


David James Walker: To both parts of the question.


Paul Theodore Hellyer: Will the same rule apply to purchasers with no children as to those with large families?


David James Walker: Yes.


Paul Theodore Hellyer: Is the minister then saying that a newly married couple earning $4,950 a year will be eligible for National Housing Act loans through Central Mortgage and Housing Corporation, whereas a family with five children earning $5,050 will not?


David James Walker: There are always extraordinary circumstances; that could happen. I suggest that the hon. member might better employ his talents as a member of the public accounts committee.


Paul Theodore Hellyer: I would hate to duplicate the performance put on there by one other hon. member in this house, and particularly in so far as some of the questions and answers are concerned which were as regrettable and far fetched as those we are receiving from the minister today. This is an unbelievable proposition. The minister is calling far fetched a proposition that some Canadians have families and that some families with incomes of just over $5,000 a year are just as

desperately in need of housing accommodation as some families with fewer children who are earning just under $5,000 a year. This is quite unbelievable.
I should like to ask the minister this question in connection with this program of loans by Central Mortgage and Housing Corporation. Would he say it is economic and completely self-liquidating or does he believe there is an element of subsidy involved in it?


David James Walker: Yes, in the subsidized housing under section 36 there is an element of subsidization. We do not get our money back, and as my friend knows those are called federal-provincial projects. We also do not get our money back on urban development when we take a slum area, acquire the land and clear it jointly with the municipality. However, in so far as the limited' dividend project is concerned, yes, it is on a plan whereby we get our money back. We lend 90 per cent of the value of the buildings to be erected and the limited dividend owner puts up 10 per cent. This owner can be either a municipality or an individual. We have arranged that the amount will be amortized over a period of 40 or 50 years. We do get our money back. So far on loans we have arranged that we get our money back, and we have done very well. Does that answer the question of the hon. member?


Paul Theodore Hellyer: No; if the minister would just content himself with answering the questions that are asked, and not hypothetical ones, it would help speed up the passage of this bill.


David James Walker: I cannot please you, can I?


Paul Theodore Hellyer: Now, Mr. Chairman-


David James Walker: Are you angry, are you
serious?


Paul Theodore Hellyer: Are the loans being made to owner-applicants economic and self-liquidating?


David James Walker: You are talking now about loans to build houses?


Paul Theodore Hellyer: Yes.


David James Walker: Yes, they are self-liquidating over a period of 25 years or 30 years, whichever is arranged.


Paul Theodore Hellyer: I am glad to have that assurance from the minister; that is what all of us believed to be the case. If it is the case, the minister is now saying there are two classes of Canadians, one who is entitled to some governmental service and another who is not. If the service being provided has an element of subsidy included, then it is quite right and proper that it should be made
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available to the people who need it most. In this case, the minister has just told us there is no element of government subsidy. This is a governmental service. Surely it should be made available to all Canadians on an equal basis, without discrimination.
We are even told that, not being satisfied with discriminating and making two classes of Canadians, we are going to discriminate between those with small families and those with large families. This is unbelievable, Mr. Chairman, that the minister would come to this committee and put forward such a proposal. Obviously it has not been thought through properly by someone. His proposed method for finding out what the income of the individual is, is alarming. This is a police state tactic. This is the type of thing they do in Russia. It should be put to the test of philosophy. Is this private enterprise? Is this democratic or is it socialism without social justice?
Here you have small families earning $4,950 and they qualify for government loans which are not subsidized, but a large family with $100 of additional income is not able to get accommodation because they are over this arbitrary limit which the minister has pulled out of his socialist hat. I wonder if the minister would give us some assurance that he will reconsider this proposition and make the necessary amendments before the policy is put into effect?


David James Walker: I see the hon. member for Trinity is still angry from yesterday. In answer to him, and a soft answer turneth away wrath, Mr. Chairman, may I say that for the very low income bracket we have subsidized housing; for the next bracket we have limited dividend projects.


Paul Theodore Hellyer: I am not talking about any of those, just the plan under consideration.


An hon. Member:: Quiet.


David James Walker: You cannot make me mad.


Paul Theodore Hellyer: Just talk about one at a time.


David James Walker: I know I could not do it as well as my hon. friend from Trinity, but I will do my best.


Paul Theodore Hellyer: Thank you for the compliment.


David James Walker: Thank you very much, too. As I say, we help those who need it most with subsidized and limited dividend housing. Then for the next bracket, those with incomes of less than $5,000, those with incomes of more than $5,000 do not need our assistance as much as those with incomes of less than $5,000 and consequently we hope that they will look, as they have in the past

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under the Liberal administration, to approved lenders first and then to conventional loans.
(Translation):


Mr. Bruchesi:: Mr. Chairman, since questions are being so readily answered by the Minister of Public Works (Mr. Walker), although so far he has been in that position for only six months, I take the liberty of making a few remarks concerning my riding of Beauharnois-Salaberry located south of Montreal in the Chateauguay district. About 1,500 direct or insured loans have been granted in my riding by the C.M.H.C. since the present government came into power. It means that 1,500 new homes were built there in the last three years.
In this respect, I should like to mention the problem of land for building purposes. A few years ago a building lot could be had for three or four cents a square foot, while today builders have trouble finding a property for less than 25, 30 or 35 cents a square foot.
To do a complete job, why could not the Central Mortgage and Housing Corporation acquire a few farms, in a given district, so as to control speculators and unbridled speculation? Under such a policy, it would be easier to build low cost houses, within the means of people with average earnings of $3,000 to $5,000. Moreover, the corporation could make this land available to builders who would agree to build only houses costing no more than $10,000, and for which the down payment would be $1,000, all expenses included.
In that way, the Central Mortgage and Housing Corporation, could surely be of great help to families with average or even low income. According to advertisements appearing every day in the big Montreal dailies, the down payment on a house costing about $17,000, is from $2,000 to $4,000, exclusive of other costs that the buyer has to pay.
A man who is required to pay $90 a month over a period of 25 years, in addition to municipal taxes of about $25 a month, cannot meet such a heavy obligation for such a long time, because I do not think there are many people who are assured of the same job and a steady income for 25 years.
If the corporation could help in the purchase of farms as a means of checking wild speculation, which raises serious problems

for municipalities, it would be a great service to people with annual incomes of $3,000, $4,000 and less than $5,000. In that case, people would probably be less reluctant to commit themselves for a period of 25 years because of a lower down payment.
Let us, for instance, take the case of a man who buys a home today in a new municipality and who has to make a down payment of $3,000 cash. If he loses his job or is transferred and has to move and sell his property before he buys another one, he runs into something of a problem, because if he wants to move away as soon as he can, he might have a hard time to find a buyer for his house whose value has gone up, as a result of the monthly payments he has made on it, over and above the down payment.
Many builders claim that it's not simple to do business with the Central Mortgage and Housing Corporation. At the present time the C.M.H.C. offices are rather far between and builders sometimes have to travel 40 or 50 miles when they want to have explanations or details on business procedure with the C.M.H.C.
If municipalities of about 5,000 population or more had a local representative to give talks and tell people how to avail themselves of this legislation, I think people would leave the larger centres, and that more of the smaller municipalities would benefit from this act which, for some years, has been very helpful, especially last year when about 30,000 houses were built through direct loans granted by Central Mortgage and Housing Corporation.
If local inspectors could meet with prospective builders and brief them on the requirements of the act, many people would find it useful, because many builders tell us that in	many cases, by the	time	they areable to	take up	the matter	with	C.M.H.C.officials and find out how to go about securing a	loan, the	summer is	over,	the besttime of	the year	to build is	gone,	and they
have to put off their plans until the following year. And then if, in the meantime, land values go up on account of speculation, those people have to decline the offer and finance their house building with conventional loans.
Those, Mr. Chairman, are the few remarks I wanted to bring to the attention of the minister, and I hope they will prove useful to him.



I960

David James Walker: Mr. Chairman, I am delighted with the speech made by the hon. member for Beauharnois-Salaberry (Mr. Bruchesi). It was a very good speech, and the ideas he put forward are very interesting; I shall make it my duty to consider them.
I am glad to learn that, in Chateauguay, 1,500 houses were built thanks to the plan we are submitting.
The hon. member has asked whether there was a plan that would allow people to buy low cost land. I am glad to say we do have such a plan. If the hon. member is really interested in the matter, we shall welcome his suggestions, as well as his requests, and very diligently consider any inquiries made of us.
(Text):


John Richard Garland: On Tuesday evening the
minister, both in the house and on television, attempted to take credit for all the houses that have been built in Canada over the last three years as being the direct result of this government's being in office. I should just like to point out that the figure of 400,000 is not an accurate figure. They are not responsible for 300,000; they are not responsible for 200,000 by any stretch of the imagination. The attempt to read into the record and to put across on television on a national hook-up the idea that 82,000 homes are being built in Canada at the present time as a direct result of the winter works program of the Prime Minister is a real distortion. We cannot help being concerned about the accuracy of the minister's forecast in the light of those remarks.
To summarize our thinking on this legislation may I say that we have tried to point out the inadequacy of the government's housing program for 1960. With the banks now out of the lending field altogether as the result of government action, and with the lending institutions reluctant to tie up substantial funds in long term mortgages, we believe there will be a great need in 1960 for mortgage funds.
With the government's announced intention of cutting in half their lending this year as compared with last year, and with no definite assurance that this half will be lent, the situation will become desperate and housing starts will drop considerably in 1960 unless mortgage funds are found. I believe that at least $200 million should be supplied through Central Mortgage and Housing Corporation in order to avoid a slump in house 79951-0-137
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building, to distribute more widely the obvious benefits of home ownership, and to provide job opportunities for our unemployed.
I should like to suggest that clause 2 be amended by inserting therein after subsection 1 and before subsection 2 of section 22, the following subsection la;
la. The sum of $200 million of the amount specified under subsection 1, shall be committed for the purpose specified under subsection 1 before January 1, 1961.
Mr. Chairman, as I have said I should like to move the above amendment, but I doubt very much if such an amendment would be in order, desirable though it might be. Therefore it is not my intention to so move; but I do hope that these remarks will focus the attention of the government on this serious problem of the continuing scarcity of mortgage money for home construction in 1960 and underline the need for the most careful attention to this matter on the part of the government.


William Arnold Peters: Mr. Chairman, 1 am still concerned with this matter of why we are asking for $500 million when the minister has indicated today he wants to spend only $150 million, although last night he said it might run as high as $175 million. I presume this means that those people in the income group below $5,000 a year are getting the benefit of this estimate to the extent of $150 million. Therefore there must be several aspects of housing legislation to use up the remainder of this amount.
I would ask the minister to explain what other forms of housing legislation he intends to put forward under this particular estimate to use up the balance of this amount. If we want $500 million, I think we should be prepared to spend it. If we are only going to spend $150 million on this low income group below $5,000, then I would like to know why. It may be that the minister has set a minimum on the earnings of people coming under this type of housing, because it is quite obvious that persons earning $2,000, even though they earn less than $5,000, will not be able to build this class of house. Houses in the $12,000 class cannot be built with a minimum income of $2,000 or even less, so therefore there is some new type of housing to be implemented for this kind of person. If that is so, then I would like to ask the minister what it is.


David James Walker: Mr. Chairman, the answer, very briefly, is this. In 1954 the National Housing Act as we have it now was passed by the former administration. That administration voted at that time to Central Mortgage and Housing Corporation an amount not exceeding $250 million. That was done not

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with the idea that the money would be used in any one year; as a matter of fact, after nearly four years only $100 million had been lent.
We are working now on the same principle. We are asking that we should be empowered to lend a total of $500 million more, or to increase the amount which we have already lent from $1 billion to $li billion. They are loans to the corporation from the consolidated revenue fund. This does not mean any more than it did in the case of the former administration. We do not mean to spend it in one year. They did not spend $250 million in nearly four years. We do not know how long it will take to spend it. But it is a mistake, is it not-perhaps the hon. member will agree with this-for us to look into the future and try to calculate with any degree of certainty exactly how much money we will need before we meet here again? Supposing we have occasion to ask for money again. We had no idea this year that it would be delayed until March 17. I am not ascribing any blame to anybody, but nevertheless it has been very embarrassing to Central Mortgage and Housing Corporation to have this long delay in getting further funds.
As a result of asking in the last few years for just the amount we thought we might need in the immediate future we found ourselves last fall, as the hon. member will recall, in the position where we had enough applications to commit the balance of the $1 billion and we are filling those applications even up to the present time. However, we were forced, by reason of having committed the $1 billion, to cease making further loans, and I think the hon. member will appreciate that in having $500 million added to our funds we are not taking up all the money at this time. We only borrow the money from the government as it is required.
Supposing next year the bill which ordinarily might be put through at this time to increase the amount were not reached until April, or even until this time, in March, we would not be embarrassed again by having committed our funds in advance.
I think that is the explanation the hon. member was asking for. Have I answered that first question, or is there another part?


William Arnold Peters: 
David James Walker: Mr. Chairman, I do not blame my hon. friend for not being here all the time. The question I just answered a few minutes ago had been answered three times before, and this answer I have given twice before but I will answer it for the third time.
There is no revolving fund. Nobody appreciates more than my hon. friend, I think, that parliament should remain supreme. Supposing that this money were lent to central mortgage. The return on the principal and interest of all these mortgages would then come back to central mortgage and they would be a very powerful crown corporation clear of any financial responsibility to parliament. Ever since Charles I parliament has been, as my hon. friend knows, very wary of giving up its rights, and the one way to keep an eye on any organization is to make it come to us for money when needed. Therefore parliament controls the purse strings of central mortgage, and all the money which comes back by way of return on principal and interest goes to the Receiver General of Canada to be deposited in the consolidated revenue fund. As time goes on the return will be greater. In 1958 there was paid back to the government by way of principal and interest $71.4 million; in 1959, $85.5 million, and in this year, 1960- we can estimate this with a pretty good degree of accuracy-$110 million.
Does that answer my hon. friend's question?


William Arnold Peters: Yes, Mr. Chairman. While I agree with the history of parliamentary relationship from the time of Charles I, I would think that there is also a relationship between the amount which appears to be growing rapidly of $71.4 million in 1958 and the amount of $110 million in this year. We are asking only for $175 million, so really we are not putting $175 million into central mortgage in fact; we are only putting a little over $60

million of actual taxpayers' money into Central Mortgage and Housing Corporation this year.


David James Walker: There is no question that so far we are putting in by way of loans far more money than we are getting back. But we only get our principal back in instalments, plus the interest.


William Arnold Peters: It seems to me that if we project the figures for another two years we would be getting more out of this than we are putting in. It would appear that this year we are getting an estimated amount of $110 million back and that we are spending $160 million, so this government can only claim to be making a contribution of $60 million for housing.


David James Walker: All the same, of what we got last year for instance, $33.8 million was by way of repayment of principal and $37.8 million by way of interest. It would be interesting to calculate how many years would have to pass before we would be getting back enough money to take care of the total outlay, but that would be a matter for an actuary. If we were to stop lending money right now, or if we could fix a definite amount of future loans, it might be possible to figure it out, but it would be many years yet, I can assure the hon. member.


Paul Theodore Hellyer: I wonder if the minister could tell us if there will be any size limitation on houses built by an owner-applicant?


David James Walker: The hon. member for Trinity will be glad to know that as the result of the limitation placed upon the size of income there will be no continuation of the restriction on the size of the house. This is something which has concerned the hon. member for some time, and he will be pleased to know that the restriction has been removed.


Paul Theodore Hellyer: That is very good news, and I appreciate the fact that this change has been made. I made this suggestion in the house last year, and I am gratified that it has been accepted even though it is a year later. I suggest that if the minister would accept the advice tendered to him the year it is given instead of waiting until a year later he would have a very much better policy.


David James Walker: I appreciate the advice received from the hon. member, and perhaps it is for that reason that the restriction was removed. But I would remind him that I have been in charge of the department for only a year.


Paul Theodore Hellyer: We are certainly not holding the hon. gentleman responsible for what happened more than a year ago, as I said the other night. I think this might well be 79951-0-137i
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a proper time for him to consider the removal of this other restriction on income, because I do not think it will work out very well in practice. I think the minister will find that there are an awful lot of Canadians who believe their incomes are no business of Central Mortgage and Housing. I think a lot of them will feel that they are entitled to apply in the same way as other Canadians, notwithstanding what their private incomes may be. Some of the anomalies have already been pointed out-a man may marry a girl with a million dollars and yet be entitled to apply because his own income is $4,900. Another might marry a girl with $20, yet because he is earning $5,010 he would not be entitled to a loan. Loans will not be available to families with incomes just over the permitted figure, and I foresee that all sorts of difficult problems will arise in the administration. This is not equitable, and it is not in accordance with the principles in which we believe. My own feeling is that the minister could find a better way of doing this, a method which would be of more practical use to those responsible for the administration of N.H.A. and of greater benefit to the people of Canada.
As to the removal of the restrictions upon size, I would like briefly to recall some of the difficulties which were raised by the old regulations, because I think difficulties of the same type will arise under the new regulations. It did not work well in the metropolitan areas because, as I said the other day, a lot might cost $5,000 and a house $10,500. The total cost of the house and lot would be about $16,000. An extra hundred square feet of accommodation could be built on a lot for a very small additional cost, say $400; so for an increase of 2| per cent in the total price, the home purchaser could get approximately 10 per cent additional space. This particular limitation was one which did not work in the interest of the Canadian people, and I thank the minister and his officials for having removed it. I think they would be well advised to anticipate the trouble they are likely to have in the administration of the new regulation with regard to the size of income and remove that, too, without waiting for a whole year to pass.


David James Walker: I do not wish to deprive the hon. gentleman of any credit, but the action for which he is claiming credit was in fact recommended before he came into parliament. I do not remember the hon. member being here in 1957.


An hon. Member:: You were not here.


David James Walker: Yes, I was. I would point out that the regulation did serve a very useful

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purpose, but now the need for it has gone. We were since 1957 trying to serve the ordinary man, and in order to do that we had to put some restriction on the size of houses to prevent houses becoming too big and expensive at the cost of Central Mortgage and Housing Corporation. Now there is no longer any necessity for doing that by restricting the size of houses, because we are regulating it on the basis of borrowing income. Should we find for any reason that this restriction on permitted income is not a satisfactory rule, we may resort once again to the limitation on the size of houses. I appreciate that this does not appeal to the hon. gentleman, because he builds larger houses and is not very interested in houses suitable for those with lower incomes.


Paul Theodore Hellyer: I can only say that if it took the government as long to act on the recommendation as the minister has just told us, I hope he will act much more quickly than his predecessor should any new recommendations of positive value be made.


Mr. Regier:: Are local credit unions regarded as approved lenders?


David James Walker: I think the hon. member is a labour union organizer. We have not received any applications so far. When we do, we shall be glad to consider those applications, as we consider all other applications, on their merits.


Erhart Regier: I certainly hope that the minister will give serious consideration to encouraging the provincial credit union movements to enter this field, because the credit unions are not limited by law to a maximum interest rate of 6 per cent as are the banks, and the difficulty about making loans available to people in the smaller communities might be overcome in part if the credit unions were asked to supply some help to people in meeting their housing needs. By now we have credit unions in thousands of small communities in Canada, and if the chartered banks are unable or unwilling to act and continue to make a major contribution to housing in Canada I would recommend that the possibilities which exist in the evergrowing credit union movement in Canada be explored.
I should like to have a proper understanding as to what took place within the financial field of this whole N.H.A. operation in 1959, and what is the intention of the government this year. As I understood the minister, Central Mortgage and Housing Corporation last year spent $340 million on housing in Canada but in that year the Canadian government received $75 million by way of repayments of principal and interest. In other words, the taxpayer had to
IMr. Walker.]
supply additional net money last year for the purpose of housing under C.M.H.C. in the amount of $265 million. In this year the proposal of the minister is that expenditures shall be limited to $175 million under the act in all its aspects, yet the government expects to collect the sum of $110 million by way of repayments of principal and interest.
In other words, only $65 million of new or additional money will be invested in housing this year over and above the amount received on loans made in past years. Last year $265 million, this year only $65 million, a 75 per cent reduction in the activities of the taxpayer through the government toward the promotion of housing in Canada. Does the minister consider that to be an adequate amount in view of rents and the cost of homes continuing to rise and in view of the grave unemployment problem.


David James Walker: Mr. Chairman, I am glad the hon. member for Burnaby-Coquitlam asked that question because I should say we have still to pay out this year, without any new commitments at all, $317 million, plus $23 million, for a total of $340 million. That is the estimate.


Erhart Regier: Would the minister explain why he still has to pay out $317 million. This is something new to me. What is this all about?


David James Walker: The hon. member will recall that last fall we instituted the Prime Minister's winter program of builders' loans. That is why there are as many as 82,000 homes in process of being built at the present time. There was such a tremendous number of applications we had to make a cut-off and the box office closed. That money still has not been paid out. There remains approximately $200 million to be loaned in 1960. I am glad my hon. friend asked that question because I guess I have not explained that before.
In other words, we still have to pay out $200 million on loans to which we are committed in the year 1960 without taking into consideration any new business which we will accept after today. Does that explain the matter?


Erhart Regier: Yes, but let me get it completely right. Out of the $500 million we are now being asked to vote there will be taken first of all $200 million to which the government is already committed and in addition the government plans to spend this year the sum total of $175 million. In other words, a grand total of $375 million is expected to be spent out of the $500 million we are voting?


David James Walker: No, Mr. Chairman. I thank the hon. member again for questioning this.

His questions are serving to clarify the matter. Of the $1 billion parliament has voted, $200 million has been committed by C.M.H.C. but has not yet been paid out. Therefore in the year 1960, $200 million of the original $1 billion, will be paid out by way of loans and, in addition to that, out of the $500 million that is being voted today, $150 million to $175 million will also be loaned out, making total loans during 1960-


John Richard Garland: Loaned out but not paid out.


David James Walker: Loaned out, that is right.


John Richard Garland: Loaned out but not paid out in 1960.


David James Walker: We hope it will be paid out.


John Richard Garland: How could it be?


David James Walker: It is a question of nomenclature. Perhaps the hon. member for Nipissing would permit me to complete my answer to the hon. member for Burnaby-Coquitlam, but I thank him for his interjection.
In other words, in the year 1960, we will be loaning $370 million, $200 million out of the original sum and $150 million to $175 million out of this sum.
In answer to the hon. member for Nipissing, it may be true that by the end of the year we will not have paid out all the $150 million to $175 million to which we are going to commit ourselves this year.


John Richard Garland: That is right. You could hardly pay it out when you have a carryover of $200 million from last year. This is another attempt at window dressing, at gilding the lily.


David James Walker: Mr. Chairman, I cannot win. I am damned if I do and damned if I don't. However, this is a good baptism and I am enjoying it.
Let me return to the question asked by the hon. member for Burnaby-Coquitlam who seems to be seriously interested in this question and is not merely attempting to confuse a new minister. I confess I feel sorry for myself.
That is why we say this is going to be a substantial year in building. The sum of $200 million which we were committed for by last October will be definitely loaned out. That is included in the 82,000 homes; that is what it is for. In addition to that we hope that most of the $150 million to $175 million which will be borrowed this year will be paid out as well. We hope they will get right along with the building but there is always a carryover.
In reply to the hon. member for Nipissing, let me say that this money will not be paid for a winter program for builders but will be
National Housing Act
put into direct loans for prospective home owners. That constitutes the difference. In other words, we are not waiting until the fall to initiate a winter program to loan this $150 million to $175 million. We are starting tomorrow. Does that satisfactorily explain the situation?


Mr. Batten:: Mr. Chairman, yesterday the minister made reference to the minimum home. Later I asked him if he could provide the number of such homes built in Prince Edward Island, Nova Scotia and New Brunswick. I wonder if he could provide me with that information now. If the information is difficult to obtain, next week or sometime in the future would satisfy me just as well.


David James Walker: I would appreciate a longer opportunity to secure it. It is difficult to obtain the information over night because we do not have a table for that. We have to take the over-all figures and break them down. We do not mind doing it but it does take some time.


William Moore Benidickson: Mr. Chairman, the minister has come back to what I call window dressing with respect to the $150 million that may be spent by way of direct loans in the coming year starting tomorrow, or as soon as the legislation is passed. I am not satisfied that $150 million is likely to be spent this year if the loans on a direct loan basis are restricted to people with incomes of $5,000 or less from now on. I say this because the minister reported to the committee that only 14,239 direct loans were made last year to people at all income levels.
When questioned, the minister said that 52 per cent of those had incomes under $5,000. The minister himself was the one who used a rude monetary yardstick; he has been using lots of rude yardsticks here, but he used one of $10,000 as an average, per loan. The minister said that this would amount to $142 million for direct loans last year. If from now on the direct loans are restricted to people who have incomes under $5,000, and last year they were only approximately 50 per cent of those who received direct loans, how does the minister think he will likely expend in the coming year $150 million or more on direct loans for housing.


David James Walker: I can say to my hon. friend that last year loans were made to people with incomes of less than $5,000 by approved lenders and direct loans from Central Mortgage and Housing Corporation to the number of 24,200. For the reasons that I have explained to my hon. friend, I think we will have a demand for our $150 million from that group; but if the public are beginning to

National Housing Act
think they have enough houses, or if the demand falls off, we will always be able to change the yardstick and increase it to $5,500, and then to $6,000. I can assure the hon. member that we will not have any trouble lending the money; we will see to that.


William Moore Benidickson: Yes, I think the minister will have some trouble lending $150 million under his income rules if he really wishes to maintain housing at anything like a standard quantity of total housing, and particularly for people with modest incomes, in the forthcoming year. I would suggest to him that he make soon the review, which he assures us he is prepared to do. Let us look to the merit of this $5,000 income cutoff. I hope he will make his review before he comes before the House of Commons again with his estimates of his department because, before the House of Commons prorogues, we would like to have another look at this, since I have some very grave apprehensions about the number of people who will be served if he maintains this limit of direct loans to people who have incomes under $5,000.
The other thing I raised yesterday, and which I do not think the minister has commented on, is the reference which I made to what was done in 1957 by the minister in charge of housing at that time who went to the Minister of Finance and they in turn associating themselves with the governor of the Bank of Canada went to the chartered banks of this country, which, as I said, have almost 5,000 branches across the country in close touch with our people. As a result of this meeting, the governor of the Bank of Canada assured the chartered banks of financial backing, and I quote from page 28 of the Bank of Canada report of 1957:
The Bank of Canada indicated that the total resources of the banks as a group could be expected to increase during 1957 by an amount at least great enough to take care of their disbursements on mortgage loans in that year, so that it would not be necessary for the banks to dispose of other assets in order to maintain a flow of funds for insured housing loans.
Did the minister think yesterday that this has no merit today? In 1957, the $150 million was provided at reasonable rates of interest to prospective home owners in this country. Is the minister consulting the governor of the Bank of Canada with respect to this possibility?


Erhart Regier: I have another matter I should like to raise. I was very interested in the reply the minister gave to the hon. member for Assiniboia as to the number of houses that had been built in Alberta and in Manitoba. The minister indicated that in each of

the years 1958 and 1959 no houses had been built in rural Manitoba, no farm houses had been built under the auspices of Central Mortgage and Housing Corporation, and in Alberta only half a dozen houses had been built in each of the years 1958 and 1959, that is on the farms of Alberta, through the auspices of this act. Would the minister now care to agree that no houses were built on Saskatchewan farms under the auspices of this act because of reasons other than the existence of the Saskatchewan farm security act?


David James Walker: Mr. Chairman, I will answer all the questions at the end, because every time I get up I only invite a lot more questions.


William Moore Benidickson: In that case, I have one more comment to make to the minister unless he aggravates us more. I am going to augment only the comment that I have made heretofore about the value of this meeting in 1957 between the governor of the Bank of Canada and the chartered banks, by indicating to the committee that statistics in the bureau of statistics document relating to new residential construction dated December, 1959 clearly demonstrates the value of that meeting. I have indicated that the former meeting took place with the banks, in March of 1957. The new starts in housing in the second quarter of 1957 went from 8,410 in the first quarter to 40,437. I find here that until the second quarter of 1958 the new administration never reached in any quarter new starts to the equivalent of those which had developed as a result of the banks entering into this picture.
In addition to that, I suggest to the minister that while he has had quite a few comments to make so far about the value of the new administration which came in in June, 1957, I think he has overlooked, in so far as housing is concerned, the relationship of new starts and housing development in so far as the change of government is concerned. I have here a copy of the report of the Senate committee on finance, dated June 12, 1958, when the witness was the president of Central Mortgage and Housing Corporation, Mr. Bates, who is sitting before the minister now, and I quote from page 45 of the evidence of that committee, where he is reported as saying:
The present government's program began last summer:-
I have indicated that in March, 1957, $150 million was made available from private sources. We all know that in August, 1957, $150 million was taken by the new government from Liberal legislation that was available for direct government housing loans. In any event, Mr. Bates said this:

The present government's program began last summer; that is, the announcement was made; and starts were made before Christmas.
In other words, these results of the latter part of 1957 were-and I am supported by the chairman of Central Mortgage and Housing Corporation himself-a result of what had been done by the previous administration. I say it is appropriate at the present time for the minister concerned about housing to look after individuals so that they can escape the clutches of interest sharks. I say that he should at the present time call together, through the instrumentality of the governor of the Bank of Canada as was done in the spring of 1957, the chartered bank presidents to try to do something so that the people who are connected with these almost 5000 branches will have some opportunity to obtain housing loans in the immediate future in their own small locality.
(Translation):


Mr. Parizeau:: Mr. Chairman, I should like to make only a few remarks about the bill we are about to pass. The 1957 bill was very welcome in my constituency of Lake St. John, especially in Alma, with its population of 12,500, where more than 300 homes have been built since 1957.
However, it has created a certain problem, and that is why I ask the Minister of Public Works (Mr. Walker) to seriously consider appointing a local inspector, because if we put those figures alongside those of another province, we see in the C.H.M.C. report that in 1958, 275 houses were built in Prince Edward Island, whereas in the city of Alma alone there were 327. With the 45 others built in Naudville and 30 more at Isle Maligne, we find that for an urban population of
22,000	people, there were as many houses built as in all Prince Edward Island. And yet we always have to wait for the inspector's report, since he lives in Chicoutimi, and this delays our contractors in their work.
Since the Lake St. John area is steadily developing, the house may be assured that, as a result of the adoption of this bill, which provides for a sum of 500 million dollars, and of the provincial legislation providing for a 3 per cent refund on all loans, house building will certainly increase, both in my city and throughout the province of Quebec.
At present we have 80 applications pending, and people are waiting for this legislation to go through before they complete their
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homes. If I remember rightly, there were some 30 house starts in Alma during the winter of 1959, and if this bill had been passed earlier, we might have gone ahead completing those houses perhaps last month or early this month.
Again, Mr. Chairman, I would draw the attention of the Minister of Public Works to the fact that we certainly need a resident inspector in our district.
I commend the department for authorizing the Chicoutimi office to pay our contractors locally, which is a great help to them as far as financing is concerned. I take this opportunity of asking that special attention be given to the choice of contractors, so as to protect the subcontractors, because, at a given time, it is the subcontractor who is financing the contractor, and fairly often, in bankruptcy cases, there is nothing left for the subcontractor.
Once again I am happy to tell this house that in my riding there is a considerable increase in building for 1960, and, on behalf of the people in my riding, I ask the department kindly to appoint a resident inspector to help our contractors.
(Text):


Azellus Denis: I wonder if the minister could give me an answer to the question I asked yesterday concerning a breakdown by provinces of the money spent since the inception of this legislation.


David James Walker: Does the hon. member from St. Denis wish the figures for the direct loans-


Azellus Denis: Yes.


David James Walker: -the builders' loans, the bank loans, the life insured loans, the approved lenders' loans or what? It will take me an hour or so to read them all.


Azellus Denis: If the minister has not got my question, [DOT] 1 think his officials must have it. I think I asked for both the insured loans and the direct loans by provinces.


David James Walker: No, I am sorry, we have not before us that detailed information by provinces. However, I would be glad to get it for the hon. member and have it sent to him.


Azellus Denis: I should like to mention to
the minister that back in 1958 there was a large difference between the number of dwellings built with the help of the federal government in the province of Quebec as

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compared with the province of Ontario. In the journal, La Presse, I read:
(Translation) :
Last year, the aggregate amount of mortgage loans granted In Ontario reached almost half a billion dollars, i.e. $451,201,000, which made it possible to build 41,210 new units.
In Quebec, 14,267 housing units were built during the same year.
The article mentions incidentally, that 20 per cent of federal loans were granted in the city of Toronto, whereas Montreal has been awarded only 7 per cent.
I would like to know-
(Text):
I should like to know from the minister what the reason is for the large difference between Quebec and Ontario. It seems to me that so far as dwellings are concerned the needs of the province of Quebec are as acute as those of Ontario. Is it because loans have been granted more freely to Ontario than to Quebec or is it because there were not enough demands in Quebec? I should like to know that because we are asked to vote another $500 million and the minister must know that for many years this large difference in the amount of money supplied to the two provinces by the government has existed. The difference runs as high as three or four times as much in Ontario as in Quebec.
Of course, the hon, member who spoke just before me mentioned that Quebec has amended the provincial law to the effect that now if we borrow from the government we can take advantage of the provision to reimburse us to the extent of 3 per cent of the interest. This National Housing Act has been in existence since 1946, and the provincial law was passed in 1948. A citizen from Quebec-


David James Walker: May I just interrupt the
hon. member to say this: I take it my hon. friend is quite right. The government of Quebec has been very generous in that it has been rebating to anyone building a new house 3 per cent of the interest charged on the mortgage. Unfortunately, and probably the hon. member knows this very well, Quebec made at least one exception. It did not rebate this 3 per cent on any interest charged under the N.H.A. Does my friend follow me? It was felt that the 6 per cent loan, up until last December, was itself a bit of a rebate. As my hon. friend knows and as he has just pointed out, an amendment to this law was before the Quebec legislature this week. It was before the Quebec house this week, I understand. My hon. friend can tell me whether or not it has gone through yet.

As I understand it, the rate of 3 per cent will from now on be applicable to N.H.A. loans as well and you will now see how that N.H.A. loans will rise in the province of Quebec. We have all sorts of officers, personnel and inspectors there and we have done a great job in the province of Quebec, particularly in the subsidized housing field in Montreal.
In connection with these loans, when you can get a rebate from the province of Quebec of 3 per cent on an N.H.A. loan you will find that the figures will probably soar this year.


Azellus Denis: That is just what I wanted to tell the minister. Because of the change in the attitude of the province of Quebec there might be many more requests for federal loans. I do not know whether the province of Quebec is right today or whether it was right previously or why there was a change in their attitude. Nevertheless, because of this 3 per cent reimbursement not being given to those who borrowed from the government, the situation ended up with three or four times more loans being made in the province of Ontario. I live in the province of Quebec. Before I would try to borrow from the government I would try to get a loan from a Quebec organization in order to have reimbursement of the 3 per cent interest. But mind you, while doing that, I am taking away from the province of Quebec money which could be used for some other purpose such as for buildings, additions to buildings and so on which would give work to some people. I suppose that, because of the fact there is no more money available in the province of Quebec from the ordinary sources, borrowers may now be coming to the federal government.
For over 12 years we have been curtailed in respect of the benefit of this federal law. We are glad to vote $500 million. But because we have not been served so generously in the last few years I will ask the minister to consider more favourably than others the requests from the province of Quebec in order that we may get a little bit back from the government or in order that more justice may be achieved, if I may use that word. I understand that the situation is not the fault of the minister; but this 3 per cent reimbursement provided for by the provincial law must be the most important reason why there was not borrowed in the province of Quebec as much as was borrowed in Ontario. There is a large difference there,
41,000	dwellings compared with 14,000 dwellings. I will ask the minister to consider that matter and to be very gentle and very favourable in dealing with every request from the province of Quebec.


John Richard Garland: I have one brief question to ask the minister. I know we have discussed several times during the debate this matter of compulsory insurance levied by Central Mortgage and Housing Corporation. I know that the minister on one occasion indicated that some $61 million had been collected from this compulsory insurance. I should like to know to what use that money in the amount of $61 million is being put at the present time.


David James Walker: I am glad to be able to assure the hon. member for Nipissing that the money is invested in Dominion of Canada bonds.


Jacques Flynn: Shall clause 1 carry?


Azellus Denis: Before we carry the clause, perhaps the minister can give the committee at some time tomorrow or a later date a breakdown by provinces of the number of federal-provincial projects by virtue of section 36: how many projects there were since the inception of this housing act and the respective amounts of money supplied by the federal government by virtue of section 36?


David James Walker: I have only the figures on the subsidized housing. Jeanne Mance is the great project. The Jeanne Mance development, 796 units; that is for Quebec. Do you want the other provinces?


Azellus Denis: Yes.


David James Walker: Only some of them have subsidized housing. Newfoundland, 484; Nova Scotia, 509; New Brunswick, 488; Quebec, 796; Ontario, 31,046; Saskatchewan, 215 and British Columbia, 393. Those are projects of subsidized housing under section 36 of the act by which the province and the dominion band together in a partnership and the dominion lends 75 per cent of the money or rather not lends but contributes it, and the province 25 per cent. Under this we get the Jeanne Mance development in Montreal. I am safe in saying that was the first request we received from the province of Quebec, arranged through the city of Montreal.


Azellus Denis: The minister must have among the records the amounts of money for each year for every province; I refer to the exact amount. 1 just asked him to give it by provinces. I am not especially interested in such projects as the Regent park project or the Jeanne Mance project. I want the number of projects and the amount of money supplied, provided or given by the government in virtue of this section 36. Surely the minister must have a record year by year since the inception of this act of the exact amount spent by the government under that act or under that section. If he cannot
National Housing Act
give me those figures right now, I suppose at the next meeting of the committee he could do so. We are interested in having those figures.


David James Walker: My hon. friend is talking about something that has nothing to do with the bill before the committee. We are here discussing lending under section 22 and the prospect of borrowing $500 million. This subsidized housing to which my hon. friend refers has nothing to do with this bill before the committee. It is a separate matter where we spend money under section 36. Here we are just talking about lending money. I am very happy to answer any questions, but all my friend's questions have been on another subject. However, just because he is so good-natured and is on another subject than the post office, I thought I would make a point of trying to reply.


Azellus Denis: Of course, the question could be asked on the estimates. The minister is aware that we are going to ask him that question.


David James Walker: I wish you would do so.


Azellus Denis: He might get himself prepared and be ready to give the exact figures.


David James Walker: I shall be very glad to do that. We are not prepared today to deal with supplementary estimates on subsidized housing. We are just dealing with the bill today and those are the only figures we have available. My hon. friend will appreciate that fact.


Azellus Denis: Yes. I hope that does not stop the minister from giving me an answer to another question which I asked previously and which relates to this bill.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the said bill be read a third time?


Some hon. Members:: Now.


Mr. Deputy Speaker:: Now by leave?


Some hon. Members:: Now.


David James Walker: the third reading of the bill.


John Whitney Pickersgill: Just before the motion carries, Mr. Speaker, I would like to draw attention to the fact that my hon. friend from Kenora-Rainy River (Mr. Benidickson) made it quite clear in committee from the extract he read from the Senate minutes that of the 400,000

National Defence Committee houses which the minister attributed to his administration, 100,000 in 1957 were the direct result of the activities taken by the previous administration.


David James Walker: Mr. Speaker-


John Whitney Pickersgill: Mr. Speaker, I might point out, moreover, that the minister having spoken has not the right to speak again.


David James Walker: I am speaking to a question of privilege.


John Whitney Pickersgill: Mr. Speaker, I rise on a point of order.


Some hon. Members:: Oh, oh.


Mr. Deputy Speaker:: Order.


John Whitney Pickersgill: Mr. Speaker, it is a well understood rule of the house that on third reading no member, not even the mover of the motion, has the right to speak more than once, and the minister in moving the motion has made his speech.


David James Walker: On a question of privilege, as the figures which went in yesterday indicated, in the first half of 1957-


Lester Bowles Pearson: That is not a question of privilege.


Mr. Deputy Speaker:: Order. The point raised by the hon. member for Bonavista-Twillingate (Mr. Pickersgill) is well taken and I cannot hear the minister.


David James Walker: Thank you, Mr. Speaker. As I was saying-


Some hon. Members:: Order.


Mr. Deputy Speaker:: Order. I indicated to the minister I could not recognize him. Is it the pleasure of the house to adopt the motion?


Some hon. Members:: Agreed.
Motion agreed to and bill read the third time and passed.



NATIONAL DEFENCE


George Randolph Pearkes: That a special committee be appointed to examine all expenditure of public moneys for national defence and all commitments for expenditure for national defence since April 1, 1958, as reported in public accounts, and to report from time to time their observations and opinions thereon, and in particular what, if any, economies consistent with the execution of the policy decided by the government may be effected therein, with power to

send for persons, papers and records and to examine witnesses; and that in accordance with standing order 67, the committee shall consist of not more than fifteen (15) members to be designated by the house at a later date.
He said: Mr. Speaker, this motion calls for the establishment of a special committee to look into the expenditures of the Department of National Defence. As hon. members know, the Prime Minister (Mr. Diefenbaker) announced the intention of the government to recommend this action when he was speaking in the house on January 20 last, when he said, as reported on page 143 of Hansard of that date:
-it is my intention to move the setting up of a special select committee on defence expenditures.
Later on the same day he said:
It will review-
That is the committee.
-the expenditures to the end that the ability, the training and the capability of members in every part of the house may be used for the purpose of examining this most important problem.
On February 5 he made further references to the committee when replying to a question asked by the hon. member for Trinity (Mr. Hellyer). On that occasion the Prime Minister said, as reported on page 773 of Hansard of that date:
This committee is not to be set up to consider policy. Its function will be to consider expenditures.
The Prime Minister has, I think, made it quite clear therefore that the committee is not being set up to consider policy.
Under our constitutional system of government, decisions concerning defence policy must remain the responsibility of the government of the day, and such responsibility cannot be delegated. There is a great deal of evidence to support that contention, and I might quote an extract from a speech made by the Right Hon. Louis St. Laurent when he was prime minister of Canada and was speaking to a motion moved by the opposition of the day to set up various types of committees. On February 1, 1951, as reported on page 28 of Hansard, when referring to the fact that the government is responsible for defence policy, he said, in part:
-that is the way in which constitutional government is carried out under traditional British practice. The government takes the responsibility, under that practice, of formulating policy and of exposing it to parliament. If parliament is not satisfied, then it is the privilege of parliament to dismiss that government and to get a different one.
Later on during the course of the same speech he said:
-full information as to how every cent of every dollar appropriated for national defence is being expended-

And might be investigated by the committee. Then he went on to say on November 13, 1951, as reported at page 971 of Hansard, for that date, when referring to the same committee:
But it would be wrong to think that this committee is being set up to replace the government or to replace parliament in determining the policies of this government in the international atmosphere that exists at the present time.
A little later he said:
It is a committee set up for the purpose of doing what the leaders of the three groups have said to be very essential, that is to see to it that, within the policies recommended by the government and accepted by parliament, the country is getting full value for the appropriations that have been provided.
Finally, in comparing the type of committees which are set up under the British or Canadian system of government with those set up under the United States form of government-and they are quite different in principle-after having referred to what the United States committees undertake in the way of preparing estimates and determining the budget he said, as reported on page 972 of Hansard for November 13, 1951:
Those are matters to be recommended to the house by the government, and to be determined by parliament itself. Parliament having decided what moneys will be available to the Department of National Defence, I believe it is essential that there should be the closest possible check upon the way in which those moneys are expended. I am sure it is the desire of every hon. member in this house to have that money properly expended, and expended in the manner that will produce the greatest possible value for our defence purposes.
Mr. Speaker, those are the conditions under which similar committees to the one now being proposed to be set up have been established in the past. But I may say that despite those limitations I am convinced that salutary results can be expected from an examination of the defence expenditures by this committee.
I can assure the house that any suggestions which will result in economies consistent with policy will be appreciated. They will be appreciated by myself, and I hope we will be able to take cognizance of them and to benefit by the suggestions which are made. Those which are of advantage to the services and indicate economies within the policy of the government will be acted upon in much the same way as the recommendations of the committee on estimates of two years ago have been acted upon in bringing about certain changes of benefit in the administration of the Department of National Defence.
This motion as defined in the orders of the day sets out that the committee is to report its operations and, in particular, to report upon what, if any, economies consistent with
National Defence Committee the execution of the policy decided by the government may be affected. I feel, therefore, that in order that the committee may be conversant with the policy which has been followed by the government it is necessary for me to outline for the benefit of the house the defence policy which has been followed in the past.
I believe that this will meet the wishes of the opposition, because they have for some time indicated that they would welcome the opportunity to discuss defence policies. I notice in the Ottawa Citizen yesterday that a reporter indicated that the opposition was experiencing a feeling of frustration because they had not had an opportunity this session to inquire into defence policies except for casual questions which have been asked from time to time. Really, Mr. Speaker, I did not see any great desire on the part of the opposition to discuss defence policies during the debate on the address, except very briefly, and mainly by the Leader of the Opposition (Mr. Pearson). Nor has the opposition taken any opportunity to move an amendment to the supply motions on this subject. I presume, therefore, that if hon. members opposite are feeling frustrated it may be due partly to their own failure in not having introduced this subject before. Nevertheless, I welcome the opportunity now of explaining the policy which the government has been following in the past in connection with defence matters.


Lester Bowles Pearson: May I ask the minister a question at this point? I should like to ask the hon. gentleman whether in his remarks he will be initiating a general debate on defence policies, although this particular resolution talks only about expenditure in a given 12-months' period?


George Randolph Pearkes: As I said, this resolution confines the committee to the examination of defence spending from the first of April, 1958, I think it is. I am trying to say that since the committee is called upon to consider economies consistent with the policies laid down, I am now about to explain some of the aspects of defence policy in the past in order that the committee might be in a position to realize the basis upon which it might make recommendations.


Lester Bowles Pearson: Is the minister suggesting, then, that having stated policy to us, this committee, when set up, will be able to discuss that policy.


George Randolph Pearkes: The terms of reference are quite clear. The committee is to discuss expenditures within those years and to make recommendations consistent with the policy which has been established. Unless that policy is explained, how is the committee

National Defence Committee to find it possible to make its recommendations? If the committee requires any amplification of the policy which I am about to describe, there will be opportunities given to them to hear amplification of that policy. To discuss that policy would not be within the competence of the committee.


Mr. Speaker:: The minister has indicated, if I have understood him correctly, that in outlining what are in fact the defence policies of the government, so that they will be known to hon. members, he considers he is thereby introducing a general debate on defence matters. I would like to be sure before he proceeds that that is in accordance with the wishes of the house, because the motion is a narrower motion than that. It is a motion to set up a committee, and would not normally introduce a general debate on the defence policies of the government and bring those policies under review and under criticism, thereby constituting a general debate on defence and defence matters.
If the minister intends to proceed on that basis, and the house is content with that, then it is a corollary that the opposition will be free not only to discuss the immediate purpose of setting up the committee but to discuss the defence policies of the government.


Lester Bowles Pearson: I hope we will not be restricting the minister in any way if he wishes to discuss defence policy. That is the way we on this side feel about it. But the minister has made it quite clear that while he is going to discuss defence policy the committee which this resolution sets up is not to be allowed to discuss that policy.


Herbert Wilfred Herridge: I may say that our speaker on the subject, the hon. member for Vancouver East (Mr. Winch), intends to confine himself to the terms of the resolution precisely. I must say that if the minister is going to speak on policy, and if the committee when set up is to have no opportunity to discuss that policy, he is only tempting the devil.


John George Diefenbaker: We can be very clear on this: if Your Honour takes the stand that the only question that may be discussed is the setting up of the committee, we are perfectly satisfied. There will be no argument about that. Then we would ask that in dealing with any criticisms which are made thereafter, Your Honour be very strict and maintain the rules to the utmost extent and assure that there be no discussion other than on the setting up of the committee. If that is so, I know the minister will be very willing to discontinue any discussion in so
[Mr. Pearkes.)

far as the policies of the past are concerned, the examination of which will be restricted in the committee within the ambit of this resolution to expenditures and any suggestions for economies consistent with policy.


Mr. Speaker:: The reason I rose, as the house will appreciate, is that in looking at this resolution it appears to me that it is like other resolutions to set up a committee, a relatively narrow subject, which would not as it stands open a debate on the defence policies of the government. It would not make those policies the subject of general debate at this time. The issue would be whether it is desirable to set up this committee with these terms of reference.
That was why I rose when the hon. minister began to indicate what course he was going to follow because we must do either one thing or the other. We must debate the motion in accordance with the rules or we must agree that we have a debate on defence policies in general which would open the door to prolonged discussion of the government's policies in a critical vein and an assessment of those policies. Perhaps it is for the minister to say which course he wishes to follow. He can only follow the course of general debate with the consent of the house because it is my duty to restrict it under the rules.


Lester Bowles Pearson: Mr. Speaker, as far as we are concerned we are quite happy if the minister follows the course of initiating a general debate on defence policies. We do that on the understanding that we will have exactly the same right to debate if we care to take advantage of it at this time. We do it also with the knowledge that while the minister may introduce defence policies in this debate the committee that is proposed to be set up will not be able to discuss defence policies.


Mr. Speaker:: That point is not involved at this moment.


John George Diefenbaker: Mr. Speaker, that point has already been made clear. It is very clear that the committee shall not discuss defence policies. That was made very clear in the debate on the speech from the throne and was also made clear by Mr. St. Laurent at the time the previous committee was set up. That is in accordance with the practice of the British parliamentary system.


Mr. Speaker:: I would ask the minister to indicate which of the two courses he proposes to follow and if he wishes to initiate a general debate then I must ask the house for its consent to that course.


George Randolph Pearkes: Mr. Speaker, if it is not the desire of the house for me to explain the defence policies, then I will have to confine my remarks entirely to the subject of setting up the committee. I have covered a good deal of the matters regarding the scope of the committee at the present time. I am quite satisfied to leave it at that, to move to set up the committee and not to discuss the background which leads up to the defence expenditures of the past.
I do hope, Mr. Speaker, that if I am limited and not permitted to discuss any matters of policy leading up to these expenditures and am restricted solely to the subject of the setting up of this committee, no other hon. member in this house will be permitted to discuss defence policies and that they will be strictly limited to the subject of the setting up of this committee. If that is your ruling, sir, I can finish in a very few minutes and the committee will be set up.


Mr. Speaker:: May I interrupt the minister to make this suggestion. Unless the minister asks me to ask the house to initiate a general debate I shall apply the usual procedure which is to limit this debate now to the setting up of the committee. In doing so I point out that although the motion appears to involve what the policies of defence of the government are, as a matter of fact, so that the committee can then consider economies consistent with those policies, the extent and character of those policies can be explained in the committee. It does not have to be done here on the motion that is being made.


Lester Bowles Pearson: On that point, Mr. Speaker, if the debate is to be a narrow one within the strict limits of the resolution, I take it that even within that limitation we will be able to discuss what we think should be submitted to a committee of this kind for consideration. I also wish to call your attention to the fact that when a debate took place in this house in 1951 on a motion which is almost exactly the same as this-with three or four important words left out, I admit, but almost exactly the same

the then leader of the opposition, Mr. Drew, spoke on general defence policies. The question being raised at that time whether or not he was in order, he brought his remarks in order on that occasion by suggesting that these were things that should or should not be discussed by the committee in question.


John George Diefenbaker: If I may speak to that point, Mr. Speaker, the Leader of the Opposition (Mr. Pearson) has pretty well boxed the compass now. The Minister of National
National Defence Committee Defence (Mr. Pearkes) started to explain what policies existed in the year covered by the particular motion and if I understand the Leader of the Opposition correctly he was raising objections to that.


Lester Bowles Pearson: Mr. Speaker, I rise on a question of privilege. The Prime Minister (Mr. Diefenbaker) obviously did not understand me correctly because I have not raised an objection. On the contrary I wanted to find out exactly what the minister proposed to do and I said twice that if he proposed to make a general defence policy speech that was quite satisfactory to this side.


John George Diefenbaker: Mr. Speaker, the Leader of the Opposition not having boxed the compass but now having taken both sides of this question, whatever course the minister may follow it will be the course, I presume, that the house will decide to follow.


Herbert Wilfred Herridge: This group always remaining on a steady course as usual, Mr. Speaker, and knowing the minister will have an opportunity to make this statement before the committee, is of the opinion that under these circumstances we should abide by the rules of the house and discuss the resolution as on the order paper.


Mr. Speaker:: That would be a matter for the Chair to interpret, I suppose, with the advice of the house.
The point has not arisen yet but I take it that the minister will proceed and debate the matter in accordance with the rules of the house without any special arrangements being made.


George Randolph Pearkes: Mr. Speaker, I have already explained the background for the setting up of this committee, what the Prime Minister said when he introduced the subject during the throne speech debate, the scope which he allowed the committee in order to discuss the expenditures which have taken place during the period since 1958.
I am still very much at a loss to know what the house wishes. I thought I could follow one or other of the two courses that Your Honour suggested, namely keeping strictly to the scope of the motion or giving a general background.
I understand that the leader of the C.C.P. group indicated quite clearly that his group does not wish to have an extended discussion on matters of policy. I am not at all clear as to what the Leader of the Opposition is indicating he would like. It seems to me his suggestion that I be restricted purely to a discussion-


Lester Bowles Pearson: Mr. Speaker, I rise on a point of order. This is the third time I have denied

National Defence Committee that I made any suggestion. We would be quite happy to hear the minister talk about defence policies as long as he wants to and there will be no objection on this side, so perhaps that matter can be made clear now in the minister's mind and he will refrain from making statements that are contrary to the facts.


George Randolph Pearkes: That is splendid. The Leader of the Opposition has cleared up the matter now as far as his party is concerned, but the C.C.F. party have given a clear indication that they feel that the scope of this discussion should be restricted purely to the matter that is confined in the resolution, and that we should not deviate from it; nor should I explain the background policies of the department; but that those might be explained during the first meeting of the committee, when the background could be given, and that there would then be ample opportunity to get information on the matter.
It is also my understanding that when my estimates are brought forward the leader of the house will move that they be referred to this committee. That would give this committee an opportunity to examine the estimates for the next year and to discuss therefore the policy that is being followed.


Lester Bowles Pearson: May I ask the minister a question on that point? Will he inform the house how that can be done within the terms of this particular resolution?


George Randolph Pearkes: It cannot be done within the terms of the present resolution. Surely, the leader of the house can move a resolution to suggest that the estimates be referred to this, or to any other committee which has been set up. If hon. members do not approve of that, well, they can indicate their displeasure at such a motion; but it was to try to meet the wishes which we thought the Leader of the Opposition had indicated when he was speaking in the throne speech debate that we decided we would give him every opportunity to carry out the examination that he wishes of defence policy. I have nothing to fear. I can stand four square on our defence policy; I am not ashamed of it, one iota.
As for the examination of expenditures, I ask you to make the most critical examination of those expenditures. There has been nothing wrong in the administration and in the endeavours of my department to save money in every possible way and to expend the moneys during the very difficult times under which they have been working. I think every hon. member knows perfectly well that there is a very distinct change in the whole concept of war at the present time; that we are entering into a new era,


an era in which there are great changes taking place and, therefore, it has been necessary not only for Canada but for every power in the west to follow a policy of great caution in expenditure of money, and many of the projects which were favoured only a few years ago had to be abandoned and changes had to be introduced. Those are the difficult times and the difficult conditions under which we have been struggling for some time in the past. And what help have we got from members on the other side? They have been running all over the country saying we have no policy.


Mr. Speaker:: Order.


Lester Bowles Pearson: Are we not allowed to say that?


Mr. Speaker:: I apologize for interrupting the minister again, but we are in this position in this debate. At the beginning, as the minister said, the opposition indicated that it wished to observe the proprieties. The leader of the official opposition who cannot, of course, speak for all of the opposition, indicates that he is not concerned with limiting the debate but, in those circumstances, I ask the minister to observe the rules and not initiate a debate, as he appears to be beginning to do, by discussing policy generally.


Lester Bowles Pearson: The minister, I am sure, is trying to be helpful. He says he wants to meet our wishes in the work of this committee. I wonder whether he would let me ask a question after what he has just said? He has indicated that when his estimates are up for consideration the leader of the house would move at that time that the current estimates be submitted to this particular committee for examination, and he used the phrase "examination of policy". I ask the minister, I ask the leader of the house, if we pass this resolution within those terms of reference, how can that be done?


Mr. Winch:: Bring in another resolution.


Lester Bowles Pearson: If the minister feels it should be done, why not change the resolution now to make it possible to do it?


George Randolph Pearkes: One reason that it cannot be changed now, I believe, is that my estimates have not been called yet and they cannot be called until there is a suitable supply motion.


John Whitney Pickersgill: I wonder whether the minister would permit me to raise a point of order? The minister's estimates are before the house; they have been tabled by the Minister of Finance. I am sure Your Honour would agree that it would be quite competent

for the government to change its resolution right now to make it possible, in addition to what is now in the terms of the motion, for the current estimates to be referred at such time as they have been called. I admit they have not been called yet, but they are before the house; all the estimates are, and to empower this committee to receive them at a later date would surely be quite within the rules. If the motion were drafted in that way it would meet the wishes expressed by the Leader of the Opposition.


John George Diefenbaker: Mr. Speaker, we are not going to come to a decision by way of anticipation. The house has no right at this time to pass any such motion. The estimates are not before the house in the manner that they require to be in order to permit the course being followed that the minister referred to.
The only motion before the house is the one that is now being discussed. In view of all the circumstances and the fact that there is no unanimity in the house to a discussion beyond the ambit of the motion we are perfectly willing to adhere to the suggestion made by Your Honour that no discussion other than the submission of the motion itself shall be acceptable.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
George Randolph Pearkes: Mr. Speaker, it was quite evident before six o'clock that there was no unanimity in the house to a discussion that would permit me to explain what the policy of the government was in order that I might present a background to the expenditures during the period embraced by this motion. I thought I would be in order to do so, and I was somewhat surprised by the attitude of hon. members opposite. I gathered, Mr. Speaker, from your remarks before six o'clock that you were in some doubt as to whether the course I was pursuing was in accordance with the wishes of the house. Subsequent remarks by hon. members opposite would indicate that you were right. In consequence, I shall restrict my remarks directly to the terms of reference of the committee, namely an examination of defence expenditures since April, 1958.
No doubt, Mr. Speaker, you will exercise the same restrictions upon other members. I, therefore, move that concurrence be now given to the motion standing in my name.
National Defence Committee
Hon. L. 5. Pearson (Leader of the Opposition): Mr. Speaker, lest there should be any doubt in the mind of any hon. member of this house as to what the attitude of the official opposition was before six o'clock as to the form that the discussion of this resolution should take, let me once more make it quite clear. The minister, apparently, expected to make a statement on government defence policy, and he came here prepared to make such a statement. Speaking on behalf of the official opposition, I made it quite clear that so far as we were concerned we would not object to that but we would expect exactly the same opportunity to talk about defence policy. There was no doubt about this, and the record will show that there was no doubt as to where we stood on the matter.
There is a great doubt, however, in the light of what happened before six o'clock, as to what the government has in mind in proposing this resolution, as to the terms of the resolution as to the limits that are to be placed on the discussion before this proposed committee. Before six o'clock, the Minister of National Defence (Mr. Pearkes), said this, and I think I am not misquoting him: "The committee"-that is the committee proposed in this resolution which is now before us- "is to make recommendations consistent with the policies which have been established." He went on to say that the discussion of policy, that is defence policy, would not be within the competence of the committee. The Prime Minister (Mr. Diefenbaker) confirmed that interpretation of the function of this committee when he said in his intervention: It is very clear that the committee shall not discuss defence policy.
Then the Minister of National Defence, subsequent to the Prime Minister's intervention, had this to say: "It is my understanding that when my estimates are brought forward the leader of the house will move that they be referred to this committee". This particular committee which, in its terms of reference, is to discuss nothing but these public accounts which have been submitted to it for a particular 12-month period. The minister went on to say that the reference of the estimates-I am sure he was trying to be helpful in making these suggestions to widen the basis of discussion before the proposed committee-would give this committee an opportunity to examine the estimates for the next year and to discuss, therefore, the policy that is to be followed.
The Prime Minister says we cannot discuss defence policy in this committee. The minister says if we refer estimates to this committee we could, in the committee, discuss the policy that is to be followed. If there is, therefore, any confusion in the minds of hon.

National Defence Committee members as to what this committee can or cannot do that confusion has certainly been increased by the statements which were made by the Prime Minister and the minister before six o'clock.


George Randolph Pearkes: Mr. Speaker, there is no confusion here. This committee will carry out a task which is set for it, to examine the expenditures in a certain given period, from April, 1958, and having completed that task then, provided the house approves, the house leader is prepared to submit the coming estimates to this committee. Whenever estimates are submitted, either to a committee or to the house in committee of the whole, policy can always be discussed.


Lester Bowles Pearson: I think that is a very interesting and important statement made by the minister, that at this committee, if estimates for the current year or for the coming year are to be submitted to it, defence policy can be discussed.


Harold Edward Winch: Do not talk him out of it.


Lester Bowles Pearson: No, I will be delighted, if it works. However, the Prime Minister has already talked him out of it by saying that policy cannot be discussed, and I will make quite clear what the Prime Minister has said, not only before six o'clock but earlier.


George Randolph Pearkes: I am quite certain that if the Leader of the Opposition does not want these estimates submitted to this committee, the leader of the house will not do that.


Lester Bowles Pearson: The submission of the estimates to this committee has nothing whatever to do with the resolution before us. This resolution deals with the submission of the public accounts for the year April, 1958 to April, 1959 to this committee. The government drew up a resolution in these terms and put it on the order paper. We are restricted by the terms of that resolution and when the minister says now that later on the government might do something else which would give us some opportunity for further discussion, how can he expect us not to be confused as to what actually is involved in this resolution?
Let us stick to the resolution we have before us. If later on the government wishes to alter this resolution or alter its policy; if the government wishes to make it possible to discuss defence policy before this or any other committee, that will be fine with us. But that is not within the terms of this resolution. It is not within the terms of what the Prime Minister has said already in this house, as I shall be able to show, I think, without any possible shadow of doubt.


John George Diefenbaker: Following what Mr. St. Laurent said.


Lester Bowles Pearson: I will deal with that matter. This resolution has nothing whatever to do with what Mr. St. Laurent said, notwithstanding what the Prime Minister has tried to point out. Anyway, we have this particular resolution before us. The government mountain has laboured now for some time and has produced this mouse of a resolution or, as one member of the press gallery has called it, this runt among committees of parliament. What an apt description of this particular resolution as I shall do my best to show.


John George Diefenbaker: Who was that?


Lester Bowles Pearson: A member of the press gallery.


John George Diefenbaker: Let us know who it was.


Lester Bowles Pearson: Yes. I shall be very glad to read it. I have the clipping here.


John George Diefenbaker: That is good.


Lester Bowles Pearson: This very apt description, as it will be my purpose to show, was given by Mr. Tom Gould who is a member of the press gallery.


John George Diefenbaker: Oh, oh.


Lester Bowles Pearson: The Prime Minister is amused. He asked for it and I will give it to him. Here is what Mr. Gould said about this committee:
This great defence committee is going to be so hamstrung it will never get off the ground.
We shall be able to show that quite easily a little later on. Then he went on to say this:
What the Liberals were after was a committee that could look into the whole foundation of our defence policy; one that could, after hearing professional witnesses, attempt to guide government thinking on the basic philosophy behind our defence expenditures.
They got-
That is, parliament will get it if this resolution passes.
-what must be described as something of a runt among committees of the house.
Lest anyone think that this is the kind of committee we on this side of the house have been asking for, let me go through the record. Before this session of parliament began I made several statements outside of parliament to which the Minister of National Defence has taken apparent exception and said that we should not criticize defence policy.


George Randolph Pearkes: No.


Lester Bowles Pearson: Yes; just before six o'clock.


George Randolph Pearkes: No.


Lester Bowles Pearson: In these statements I pleaded before parliament met in January for the

setting up of a defence committee of this house or for some other mechanism, if the government so desired-a royal commission, if you like-which should go into the whole basis, the whole subject of defence in this changing nuclear age. As the minister pointed out before six o'clock, conditions are changing and those things which may have been appropriate a few years ago for the defence of this country and for the defence of peace may no longer be appropriate. We asked for that kind of an investigation before the house assembled. When the house assembled the first question that was asked by the opposition-the very first question that was asked on January 15 of this year as reported at page 7 of Hansard-was asked by me of the Prime Minister when I said this:
I should like to ask the Prime Minister whether the government proposes to provide during the present session for an examination of defence policy through the appointment of a small special committee for that purpose.
Not for the examination of defence expenditures which have been made in some past period but for the examination of defence policy at the present time. The Prime Minister replied-and this was on the opening day-as follows:
-when the debate opens on Monday the government's views in general will be discussed, and defence policies will be one of those matters that will be dealt with. In the meantime I suggest that the question remain until Monday, at which time, having regard to press references, I take it, that the hon. gentleman is going to have something to say on this subject.
I had something to say on that Monday. On January 18, in my opening statement in the throne speech debate I asked this question:
Has the time not come to examine from the very foundation our whole defence policy through a small committee-*
Not a defence expenditures committee.
[DOT]-in order to find out where we should be going and how we can best get there, and to work it out if we can on a non-partisan basis so as to do everything we can to make defence policy national policy.
I went on to say this:
It may not be possible to do that. There may be strong differences of opinion and indeed there are at this time-but perhaps a committee of this kind would serve a purpose not only in getting the information before the country but in resolving the differences in parliament in this important matter. A parliamentary standing committee of more than 50 members which has been told by the Prime Minister himself that it must not discuss policy questions is not in my view suitable for this kind of examination.
The Prime Minister intervened at that point and said this:
Does the hon. gentleman suggest that any committee under our system should discuss policy?
National Defence Committee
He has suggested it more than once since that time. My reply was:
It certainly could, Mr. Speaker, if it were set up for this purpose. It could bring in recommendations, get advice on policy and ask the minister about policy questions. It certainly could discuss policy.


John George Diefenbaker: Will the hon. gentleman read the very next line?


Lester Bowles Pearson: Yes. Then the Prime Minister said:
That is not what Mr. St. Laurent said.
I shall be very glad to deal with that matter. Then the next reference to a committee was made by the Prime Minister in replying to this speech as reported at page 143 of Hansard of January 20. This is what the Prime Minister said on this occasion:
I am therefore going to advise the house that it is my intention to move for the setting up of a special select committee on defence expenditures.
Not even the kind of committee we have mentioned in this resolution which is just a committee to discuss expenditures which have been made. The Prime Minister said on this occasion that he would move that there be set up a special select committee on defence expenditures. Then as reported on the same page he went on to say this:
I am prepared to accept, as is the government, the views of hon. members in this house as to the numbers in that committee, to the end that there will be available a body which will determine the course it will take as to what meetings shall or shall not be open or closed.
What would be the purpose of having a closed meeting to discuss expenditures which have been made in the year that has gone by?


John George Diefenbaker: Read the next sentence.


Lester Bowles Pearson: Yes; I shall be glad to read the next sentence.


John George Diefenbaker: Read it.


Lester Bowles Pearson: It reads as follows:
But in the light of all the circumstances-
This is the Prime Minister speaking.
-it will review the expenditures to the end that the ability, the training and the capacity of members in every part of the house may be used for the purpose of examining this most important problem.
There was no suggestion then by the Prime Minister that this would be sent to the public accounts committee to discuss expenditures that had been made. Surely if he meant anything at all by this statement, and this did not go very far; it did not go as far as to admit that policy matters could be discussed but it did say that current expenditures and current estimates could be discussed; this resolution does not even go so far as that. Then on the same day-

National Defence Committee


John George Diefenbaker: May I interrupt the hon. gentleman? He just made the statement that I had stated that this particular committee would be the public accounts committee. Will he read the resolution? I think he will realize that it states that a special committee be appointed to examine all expenditures of public moneys for national defence and all commitments for expenditures for national defence since April 1, 1958 as reported in the public accounts.


Lester Bowles Pearson: I shall be glad to do so.


John George Diefenbaker: I am very happy. Let us get the truth.


Lester Bowles Pearson: Let me quote what the Prime Minister said on the same day, January 20, when I intervened and welcomed the suggestion that there should be a committee to discuss defence policy. Apparently I was a little premature in my optimism because the Prime Minister said as reported on page 144:
I suggest to the hon. member that he did not follow that course in the latter part of his statement. While I appreciate the spirit of co-operation, may I point out the words of qualification which the former prime minister, the Right Hon. Mr. St. Laurent, gave as to the course that such a committee can take under our form of government.
Then later, Mr. Speaker, on March 7, a little more than a week ago, in answer to a question by me the Prime Minister had this to say, as reported on page 1788 of Hansard:
The question as to what is to be discussed in the defence committee is, of course, for the determination of the defence committee, except for the limitation that questions of policy, as the hon. gentleman will agree-
Well, I do not agree.
-having regard to the stand always taken by his colleagues in the last government, are not subjects for consideration by any committee.
In other words, the Prime Minister rests his case on parliamentary experience and practice and convention that considerations of policy are not to be discussed by any committee of the House of Commons. I submit that there is no evidence to support that case.
What have we got in this resolution? The Prime Minister asked me to read it, and I will indeed be glad to do so. The resolution is as follows:
That a special committee be appointed to examine all expenditure of public moneys for national defence and all commitments for expenditure for national defence since April 1, 1958, as reported in public accounts-
I repeat, "all expenditure . . . since April 1, 1958, as reported in public accounts."
-and to report from time to time their observations and opinions thereon, and in particular what, if any, economies consistent with the execution of the policy decided by the government may be effected therein, with power to send for persons,

papers and records and to examine witnesses: and that in accordance with standing order 67, the committee shall consist of not more than fifteen (15) members to be designated by the house at a later date.
This committee envisaged by this resolution is to deal only with expenditure as reported in the public accounts, and the public accounts expenditures go up only until the end of March, 1959.
Does the Prime Minister for one minute think that this committee goes even as far in regard to the examination of expenditures as the committee he suggested on January 20? This investigation stops with the public accounts report, and that puts the cut-off date with regard to the investigation of expenditures at March 31, 1959. This particular resolution would set up a committee which would be even more restricted in its investigation of expenditures than that which the Prime Minister in January said he was going to recommend to the house. It would be completely inadequate for discussion of defence matters. It would be a mockery of any investigation of defence policies and defence questions; if this is the only committee machinery to be set up at this session to go into the whole question of defence.
That is the view taken by practically every newspaper in this country which has ventured to comment, not on this resolution so much as on the earlier statement of the Prime Minister which went further than the committee envisaged in this resolution. Let me quote one or two editorial comments to show how inadequate this committee would be for the purposes we have in mind, and which confirm us in our view that this kind of investigation would be a mockery of the sort of thing we think parliament should be looking into at this very critical stage of defence policy.
The Calgary Herald of January 22, in referring to the Prime Minister's policy statement, said:
Surely the time has come for an honest, thorough bi-partisan effort to face the facts of Canada's defence position squarely and try to arrive at some basis for a policy which will inspire reasonable public confidence.
It goes on:
Such a policy can be determined for external affairs. Such a policy has been undertaken in times of national crisis. Defence today is a crisis of the greatest importance to our security and to our economy.
Then the Montreal Gazette of January 22, in an editorial dealing with the proposal to set up a defence committee on expenditures, indicated one or two of the advantages such a committee might have and went on to say this:
Then comes the third usefulness of such a defence committee. In examining expenditures the committee may open up, not merely to parliament, but



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to the public the problems, perplexities and purposes of defence in a bewildering age. While this may sharpen criticism, it may also widen understanding.
The Gazette concluded this editorial with the following paragraph:
Government, parliament and people must all know what they are facing. They must have the feeling of facing it together. In proposing a House of Commons defence committee Prime Minister Die-fenbaker will be opening the way to a stronger, not a weaker, defence for this country. For it could lead to a greater feeling of partnership.
So it could if we had the right kind of committee, and we were permitted in that committee to go into the questions of policy.
John George Diefenbaker: What questions? Of policy?


Lester Bowles Pearson: Indeed, questions of policy. The Montreal Star had this to say on January 22:
A select parliamentary committee will soon be set up to examine defence expenditures and related topics. That vague phrase "related topics" is used because there is some doubt about how far the committee may pursue its studies. The announcement was hardly out of Mr. Diefenbaker's mouth before the opposition leader was measuring inches in terms of miles. Mr. Pearson said he would be happy to co-operate in working for "national policy on defence on the broadest possible basis."
There was a quick cry of "Whoa!" from the prime ministerial bench. The committee would discuss expenditures, not policy. That was the law that Louis St. Laurent had laid down In 1951 when a similar committee was set up, and he would follow precedent.
The editorial goes on:
Precedent or not, it is a unrealistic limitation to impose on the new committee. There is certainly no argument that the government alone is responsible for defence policy.
And of course, Mr. Speaker, there is no argument about that. The editorial goes on:
To draw a hard line between discussing defence spending and discussing the reasons behind this defence spending would frustrate the potential value of the committee.
Then the Hamilton Spectator had this to say on January 25:
Prime Minister Diefenbaker is in danger of scuttling his own ship and before it is even launched.
Then the Vancouver Sun said this:
Parliament's proposed committee on defence must be allowed to explore government policy on this vital issue. Otherwise there is no point in setting it up.
The Vancouver Province referred to this earlier committee-and that committee would have gone further than this particular committee proposed in this resolution-as "a pitiful substitute". The Prime Minister says that defence policy, or any policy, cannot be discussed by a committee of this house. He takes his stand on the fact, as he puts it,
National Defence Committee that this was the policy of the previous government. The right hon. gentleman has mentioned more than once the committee of 1951 and the attitude of the prime minister of the day, Mr. St. Laurent, toward that committee.
Of course, there can be no possible doubt that responsibility for government policy for defence or for any other aspect of government remains with the government. Nobody questions this under our parliamentary system; nobody on this side is suggesting that we should set up a committee to operate in this field in the way that congressional committees operate in Washington where they do have the power to make recommendations to government which determine government policy, both with regard to expenditure and otherwise. There is no difference of opinion on that score. But there is a very great difference of opinion between us and the government when the Prime Minister says that no committee of this house can discuss, examine or make recommendations on policy, and he will have a very difficult time indeed in supporting that contention from the precedents.
However, that is the argument: the Liberals never allowed it. Even if that argument were a valid one in respect of the past, what an attitude to take now-to say that because the Liberals never allowed it we must never allow it in the future. This is, of course, a stand which is very often taken by the government when they do not wish to do anything. They say: the Liberals did not do it, so why should we do it? Or else: the Liberals did it in one way, and we would not dream of departing from that procedure. Does the government not realize how flattering it is to the previous government to say that because the government of that day did not agree that a committee should be set up to discuss defence policy, this should be an inflexible guide to what should be done in the future? It is a very flattering stand to take to say that everything we did was right, or that everything we refrained from doing was right, and therefore there is no intention to abandon our procedures.
In the same way, the Prime Minister has referred more than once to the precedent of Mr. St. Laurent in setting up the committee in 1951. The resolution in the House of Commons setting up that committee was exactly the same, as the minister or his advisers must know, as the resolution which is on the order paper today, with the exception of one very important change. That earlier resolution did not restrict examination of expenditures to those items reported in the public accounts; that resolution was wider

National Defence Committee in its scope in that it allowed the committee to go into all expenditure, not merely expenditure reported in the public accounts. That resolution in 1951-and this is another contrast between what was done then and what is being done today-was worked out after consultation between the prime minister of that day and the leaders of the other two parties as, indeed, the Prime Minister indicated would be the case on this occasion, although it did not happen. When the leader of the opposition, discussing this particular resolution in 1951, spoke as reported in Hansard on page 955 on November 13, 1951, he had this to say:
I do not propose to discuss the terms of reference because I am satisfied that so long as the committee or the majority of the committee carry forward the intentions expressed by the prime minister the terms of reference will be adequate. I think it is appropriate to say that they are the result of discussions which took place between the prime minister and the leaders of the other parties in the house and myself.
That is how the prime minister of that day worked out, by agreement, a resolution dealing with defence. Mr. St. Laurent said himself as reported on page 972 of November 13, 1951:
They (the other leaders) discussed with me and determined the terms of reference which would provide for a full examination of the expenditures and commitments for expenditure.
Not the commitments in the public accounts report, but the commitments for public defence expenditures generally. That was done following consultation, and when the resolution was introduced into the house, the leader of the opposition of that day was allowed, without anyone raising a point of order, to make a far-reaching and allembracing speech. Mr. St. Laurent also spoke on that occasion.
Today, the Prime Minister has made reference to that speech by taking selected sentences from it, but if the right hon. gentleman would read that speech from beginning to end, as perhaps he has done, such an examination of it will not bear out his contention that there exists any constitutional barrier in our system which would hinder our asking a committee to examine policy and make its views on policy known. When Mr. St. Laurent was speaking on that occasion in 1951 he was speaking throughout in relation to the terms of reference of a particular committee which had been worked out by agreement between the leaders of the three parties. Perhaps the key sentence of his speech on that occasion was this, and I quote from page 971 of Hansard of that year. He said:
But it would be wrong to think that this committee is being set up to replace the government

or to replace parliament in determining the policies of this country in the international atmosphere which exists at the present time.
We agree with that. Mr. St. Laurent was right then, and he would be right today if he were saying that in this house. But this does not mean that a committee of this house cannot discuss policy or that it cannot make recommendations to the government of the day with regard to policy. Indeed, Mr. St. Laurent made that quite clear at the time he was speaking on November 13, 1951. He did object at that time to an extension of the terms of reference of this committee as suggested by the hon. member for Cape Breton South, Mr. Gillis, who wanted to have this committee go into all sorts of related fields such as decentralization of heavy industry. Mr. St. Laurent pointed out that this committee could not do that sort of thing under its terms of reference, but he went on to say that it would be allowed to make recommendations or observations on any matters that might arise out of its investigations.
If anyone should think that a committee of this house cannot make recommendations on policy, that this would be contrary to our British parliamentary practice, as is apparently the view taken by the Prime Minister, what has he to say about a classic case in which such recommendations were, in fact, made? I refer to the occasion when this house set up a joint committee on old age security in 1950. That committee made recommendations to the government of the day in regard to policy, and its recommendations became the basis of government and parliamentary policy. This has been done in the past many times, and it can be done now in regard to national defence if the government so desires.
The right of a committee to discuss policy and make recommendations on policy has many precedents in our parliamentary practice. It even has precedents in this particular parliament. What about the estimates committee in 1958? Did that committee make recommendations to this government on policy?


George Randolph Pearkes: No.


Lester Bowles Pearson: Of course it did.


George Randolph Pearkes: It did not make recommendations on policy. It made recommendations on administration. Does the hon. member not know the difference between policy and administration?


Lester Bowles Pearson: I will read some of the recommendations made by committees on policy since this government took over. Perhaps I know a little more about this than does my hon. friend the Minister of National

Defence. The minister has suggested that I do not know the difference between recommendations on administration and on policy. Has the minister read the recommendations made by the estimates committee on defence in 1958? I will quote one sentence from that report:
While the committee concurs in the necessity of this expenditure, having regard to the terms of reference, it does not feel authorized to comment at this time on future action with respect to future development of this portion of the defence program. Having made that point, however, and in view of the heavy financial burden, the committee does express its concern in the government entering into any subsequent weapons program of this magnitude-
They were talking about the Arrow program which surely was a question of government policy.


George Randolph Pearkes: No.


Lester Bowles Pearson: I continue:
-without first negotiating for some cost-sharing agreement with either NATO member countries or the United States under the NORAD agreement.
Is that a recommendation regarding government policy?


Mr. Chambers:: That is expenditure, purely.


Lester Bowles Pearson: I will let the words speak for themselves, Mr. Speaker.
Does the committee on external affairs which has been meeting during this government's term of office-for three years now- make any recommendations of policy? Does it discuss questions of policy? We have been discussing questions of policy in that committee for the last two weeks. Does the Prime Minister suggest that is contrary to British parliamentary practice? If we can do that in the committee on external affairs will the Prime Minister tell me why we cannot do it in the committee on national defence? He cannot tell us because there is no argument for that except that the government does not want us to do it.
What about the committee in 1958 on mines, forests and waters? Read the report of that committee at page 491. Read the recommendations it made. Read the recommendation No. 16 of that committee dealing with the necessity for increased production of coal in this country. Read recommendation No. 17 of that committee dealing with the necessity for greater research by the government. Read recommendation No. 18 advising the government to send a selling mission to the oriental market. Are these matters dealing with government policy in a committee set up by this government? Of course they are, and if it could be done in those committees it could also be done in this committee on national defence if the government were willing to make that possible.
National Defence Committee
Even if this were unprecedented in regard to national defence-and perhaps it is-is that any argument why it should not be done this year? The minister himself said before six o'clock that the circumstances in this country and in the world regarding defence have changed completely in the last few years. Up to 1957 we were following traditional patterns and traditional concepts, as the minister has pointed out more than once, even though we had new weapons. Then about three years ago the whole concept of national defence changed as completely as it changed centuries ago when gunpowder was invented. It changed when the first satellite, the first rocket, went into outer space, and the intercontinental missile became a reality in attack even though defence against it has not yet become a reality.
The minister himself put this very clearly in the debate in the House of Commons on April 1, 1957 as reported at page 2913. I intend to quote his own words. He spoke then not as minister but as the hon. member for Esquimalt-Saanich. If this is not adequate justification for an examination of national defence policy, I do not know what more justification could be required. On that occasion the hon. member said:
If we are entering the atomic age, as indeed we are, we must approach the problem of defence from a new angle. There must be an honest searching for the truth. It is now time to take a new look at the jobs to be done and the forces and weapons with which to do them. We need to make a most critical investigation to find out the kind of defence we must have. Other countries are reorganizing their forces, and if our organization requires revamping we should not hesitate to take it in hand.
What are we being asked to do in the committee set up by this resolution? We are being asked to investigate defence expenditures which have already been made. I state that these changes to which the minister has referred and to which I have just referred render many of our defence expenditures at the present time meaningless and indeed a waste of money. Because of that fact I believe that a re-examination in the proper kind of committee of the very basis of defence policy would be valuable to the defence of this country. I do not believe that this kind of examination would be possible in the committee which is envisaged in this resolution.
We visualize a very different committee, one that would discuss defence policy, one that would make recommendations on defence policy, just as the committee on external affairs makes recommendations on a subject very closely related to defence policy which is foreign policy.

National Defence Committee
We visualize a committee which would question the minister on defence policy matters, a committee which when necessary for security reasons-and it would not be necessary very often-would meet in camera; a committee which would not examine serving officers because that is contrary to our parliamentary traditions and I do not think it would be wise to do that, but a committee which could examine experts in the field of defence in this country and outside this country and get their views; a committee which could find out the facts on which policy might be based; a committee which could make recommendations which would help the government in working out future defence policy without interfering in any way with the government's sole responsibility for policy itself.
Another reason why in our view a committee of this kind is essential at the present time is that the statements of spokesmen for the government on defence matters have been so confused and contradictory. I suggest that this confusion and contradiction cannot be cleared up in a committee which is merely going to look into expenditures made in 1958-59.
Take one example as something which might possibly be cleared up in a committee of this kind and which could not even be dealt with by the committee envisaged in this resolution because it is something that has happened since March 31, 1959. I am referring to the use of nuclear weapons by Canadian forces. Whether or not it is a good thing to have nuclear weapons in the possession of Canadian forces is something on which there has been cast every kind of doubt and concerning which there has been every kind of confusion created.


Gordon Minto Churchill: Mr. Speaker, on a point of order, I believe the Leader of the Opposition (Mr. Pearson) is wandering afar now from the subject under discussion which is the setting up of a committee on national defence. He is referring to statements with regard to policy.


Mr. Speaker:: I think if the hon. member who has the floor pursued that line he would undoubtedly be doing that. I understood him to say that he cited one example by way of illustration and did not intend to follow that line other than to complete the illustration. If that is the case I would not think the hon. member has gone too far.


Lester Bowles Pearson: Mr. Speaker, I think it is well established in our procedure that when we are discussing the setting up of a committee, and when hon. members of this house are
dissatisfied with the terms of the reference of this committee, dissatisfied with the limitations that are imposed on the work of that committee, they can make suggestions as to how the work of that committee should be broadened and as to the subjects that might be submitted to that committee that are impossible in the existing resolution. That has been done on many occasions, especially when we set up the atomic energy committee of this house, when debate on the whole question of atomic energy was permitted.
I am not going to go nearly as far as the leader of the opposition did in 1951, when he was discussing a committee which was embodied in a resolution very much in these terms, but I had hoped that I would be in order in suggesting certain matters which are now in a state of confusion and uncertainty, and I think should be cleared up by examination in a committee but which could not be examined in the particular committee which would be set up by this resolution. One of these matters, of course, is whether we should or should not permit Canadian forces to use nuclear weapons. There are four or five other subjects which I think should go to a committee of this kind which could not be discussed because of the limitation of the resolution and the committee visualized in that resolution. Therefore, I hope I am in order in doing this.


Mr. Speaker:: Since the hon. member has asked me I will express my view for his guidance. I do not think it is safe to follow many of the precedents of motions to set up committees because by arrangement the house has often debated the whole subject matter which is referred to a committee. In this case the same choice was suggested but not followed, and we therefore have to consider what rules are appropriate, what are the rules of relevance in a debate of a motion to set up a committee for a specific purpose. It is fair debate, as I see it, to complain about the terms of reference, which the hon. member is doing, and to illustrate his complaint by an example as he has just done; but I would think if he introduced all sorts of examples which were in effect a discussion of defence policy, he would be out of order.


Lester Bowles Pearson: Mr. Speaker, I will try to keep within your ruling. I was suggesting- indeed, I was stating-that under the terms of this resolution there are certain vitally important matters of defence policy which could not be discussed. It is my contention that a committee on defence should be in a position to discuss those matters, whether the Canadian forces, for instance, would or

would not be armed with nuclear weapons, especially as the Minister of National Defence has taken one stand-and an unequivocal one-in this matter and the Secretary of State for External Affairs (Mr. Green) has taken another.


George Randolph Pearkes: That is not correct. There has been no difference in stands taken. The Prime Minister (Mr. Diefenbaker) made the position quite clear as far as the arming of the Canadian defence forces was concerned with nuclear warheads, nuclear weapons. He said very definitely last session and I think again this session that the full potential could not be obtained without the nuclear equipment.


Lester Bowles Pearson: Yes, indeed, that is exactly what the Prime Minister did say and the Minister of National Defence has confirmed that.


George Randolph Pearkes: No other minister has said anything different.


Lester Bowles Pearson: The Secretary of State for External Affairs has given a contrary impression in meetings of the committee on external affairs.
There is another question. The Minister of National Defence said that those weapons-


George Randolph Pearkes: On a point of order, Mr. Speaker, please; the Secretary of State for External Affairs would not discuss this matter in the external affairs committee. He said it was a matter to be discussed with the Minister of National Defence.


Lester Bowles Pearson: This is exactly the kind of thing that should be discussed in a committee on defence. There are a good many other things. There is the question of Bomarc missiles that are to replace interceptors, in which there is a great deal of uncertainty and confusion at the present time; indeed, uncertainty as to who is to be responsible for the expenditures on those squadrons of Bomarcs. The minister himself said on March 10, 1959, at page 1776 of Hansard:
Both the Prime Minister and myself have on several occasions stated that there will be two squadrons of Bomarcs ... These will be separate units with complete establishments of personnel, missiles and launching apparatus.


Mr. Speaker:: I think the Leader of the Opposition is now getting into a no-man's-land, if I may put it that way, which I at least had hoped he would not be entering in this debate because I do not think it is relevant.


Lester Bowles Pearson: Mr. Speaker, all I will do is just mention the kind of thing which I think should be discussed, and I am not going into the pros and cons of policy involved in the discussion. What kind of missiles should we
National Defence Committee use? What should be our policy in regard to continental air defence? Should we maintain interceptor squadrons of CF-lOO's which were obsolete, according to the minister, in 1957? Are they to be replaced or disbanded? What is the role of the Canadian air division in NATO? What is the attitude of the minister toward integration of the services? This is the kind of thing which surely should be discussed in a committee and a great many others, but which cannot be discussed in the committee which is visualized in this particular resolution.
If these matters are not to be discussed in a committee of this house-and the government says they are not-that in this committee all we can discuss are expenditures made between March 31, 1958 and April 1, 1959; if that is all we can discuss in this committee, when are we to discuss those questions of defence policy? Are we going to be given the opportunity in any committee, in any small committee of this house, which could summon expert witnesses; are we going to be given the opportunity to discuss these matters or in any other committee?


John George Diefenbaker: I seem to hear something about calling expert witnesses. Who are the witnesses the hon. gentlemen has in mind whom he would call before this committee?


Lester Bowles Pearson: Well,-


John George Diefenbaker: I am interested in that.


Lester Bowles Pearson: I mentioned that a few minutes ago; I doubt whether the Prime Minister was listening.


John George Diefenbaker: I have been listening. Who are the experts?


Lester Bowles Pearson: Does the Prime Minister want me now to give the names of all the expert people who would be summoned to a committee of defence which he says cannot be set up? It is quite obvious-


John George Diefenbaker: Mr. Speaker, I do not want the hon. gentleman to name them; I want to know the nature of those experts he has in mind because this is exactly-


George James McIlraith: The leader of the Opposition has the floor.


John George Diefenbaker: -the point. I had not raised a point of order previously but I raise the point now that what the hon. gentleman is doing is deliberately flouting the order that you made.


Lester Bowles Pearson: Mr. Speaker, you are still the custodian of the rules of this house, without any help from the Prime Minister. If I am flouting the rules of this house the Speaker will take me to task, and not the Prime Minister.

National Defence Committee


Mr. Speaker:: Is the Prime Minister raising a point of order?


John George Diefenbaker: Mr. Speaker, I ask you to make your ruling on this matter.


Mr. Speaker:: I am not quite clear as to the precise matter to which the Prime Minister is referring, because at the moment it seemed to me that he had asked the Leader of the Opposition a question and that was the matter being discussed.


Lester Bowles Pearson: Yes, the Prime Minister asked me what witnesses I would summon to a committee-


John George Diefenbaker: As expert witnesses.


Lester Bowles Pearson: -if it were set up by the government. The Prime Minister feels there is nobody in this country, in Great Britain or in the United States, in the field of defence who can give this parliament any expert advice. So, he asks me to give him the names of expert witnesses to be called before a committee which the government will not permit to be set up.
If we do not get this kind of examination of defence policy which I have mentioned, where is this examination to be given? It cannot be given in this particular committee for reasons which are quite obvious and must have been much in the minds of the people who drew up this resolution because it effectively precludes the discussion of any subject except expenditures which ended on April 1, 1959. What kind of committee is that?


Gordon Minto Churchill: The same as yours in 1952 and 1953.


Lester Bowles Pearson: I tried to point out to my hon. friend that the committee in 1951 was set up by agreement among the three parties after consultation between the prime minister of that day and the leaders of the other two parties for a purpose for which they were all agreed. As Mr. St. Laurent said at the time, it could examine matters and make reports-


Gordon Minto Churchill: But it could not discuss policy.


Lester Bowles Pearson: Even if it could not, does my hon. friend think that what was done then must be followed by this and every subsequent parliament? Was everything which the Liberal government did in 22 years so correct that this government, which was going to change everything, does not dare depart from it?
We have not apparently got our committee under this resolution. What then, can take the place of this kind of examination? Perhaps an occasional, casual reply by the minister or Prime Minister to a question-


George Randolph Pearkes: My replies are never casual; they are well thought out.


Lester Bowles Pearson: I acknowledge the minister's courtesy in replying to the best of his ability to every question that is asked of him in this house.


Gordon Minto Churchill: And very competently, too.


Lester Bowles Pearson: I have no quarrel on that score. Surely, the minister himself will agree that that does not take the place of an examination of defence policy by a committee.
Mr. Pallet!: What are you supposed to do over there as Leader of the Opposition?


An hon. Member:: Keep quiet.


Lester Bowles Pearson: Or is this kind of discussion in committee, where we get to the root of these matters to be replaced by a long statement by the minister when his estimates are introduced, followed by statements from this side. We have not even had a debate on defence; we have not yet had a white paper on defence.
What is happening in other countries which are not more concerned with defence policy and defence questions than we are? What is going on in the United Kingdom in its facing up to this problem of defence? They have not been meeting as long as we have, but they have had 12J hours of discussion on defence in the month of March, based on a white paper they had been given on defence policy. What is going on in Washington? We cannot, of course, follow the procedure of congress because the parliamentary system is not the same as the congressional system. There are, however, congressional committees examining defence policy from its very foundations every day of the week. We get most of our information on continental defence, about changes in defence concept and strategy, from the reports of these committees and not through anything we get from this government in Canada. In this parliament, in this government, all we have is a fog of silence penetrated occasionally by a ministerial platitude.
Therefore, Mr. Speaker, in order to do our best to convert this resolution into one which will make possible the establishment of the kind of committee which will perform the functions which I have outlined and which I believe very strongly would be in the best interests of government, parliament and the country, I move, seconded by the hon. member for Trinity (Mr. Hellyer):
That the motion be amended by the deletion of the words "as reported in public accounts", and by the insertion of the phrase "and the effectiveness of our defence system for the security of Canada".


Mr. Speaker:: Have hon. members copies of this proposal?


Some hon. Members:: No.


Mr. Speaker:: Perhaps I should read it for their information, not by way of putting it, because before doing so I should like some assistance in determining whether the amendment, is sufficiently relevant.
As read by the Leader of the Opposition it was that the motion be amended by the deletion of the words "as reported in public accounts" in the third line of the resolution as I have it, and by the insertion of the phrase "and the effectiveness of our defence system for the security of Canada".
Mr. Pallet!: Would you read that again, please, Mr. Speaker?


Mr. Speaker:: As proposed it would strike out the words "as reported in public accounts", and then the second proposed change after the words "the government may be effected therein", to insert the words "and the effectiveness of our defence system for the security of Canada". It would, therefore, read:
-and in particular what, if any, economies consistent with the execution of policy decided by the government may be effected therein, and the effectiveness of our defence system for the security of Canada-


Lester Bowles Pearson: May I apologize, particularly to the Prime Minister and to the leader of the C.C.F. party, and to other members for not having additional copies to circulate. When I got to my amendment I thought I had five copies but I found there was only one. I do apologize.


John George Diefenbaker: That happens.


Mr. Speaker:: May I say that I have no doubt that the first proposed amendment would be relevant, that is, "as reported in public accounts". It seems to me that is within the ambit of the resolution as it is stated in the notice.
My difficulty is with the other part of the proposed resolution which adds very substantially to the terms of reference. The terms of reference now are to examine the accounts and to report. This would add explicitly the right to report on the effectiveness of our defence system for the security of Canada which, in general terms, is an authorization to consider defence policy. I think, having regard to what the Leader of the Opposition stated during the debate, that that what he has in mind is broadening the scope of the reference from one of a reference into accounts and expenditures made and a report thereon having regard to economies which might be made and so on, into a reference on the substance of defence policy and a report on that.
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National Defence Committee
I would say, that would be out of line with precedents which I shall be glad to put before the house for its consideration, and I note particularly citations 291 and 293 of Beauchesne's fourth edition. An amendment to a resolution which introduces something new and different in kind into the terms of reference which the motion sets up for the committee goes too far and would require notice of motion itself before it could appear on the order paper. But before finally disposing of the matter I should be glad to hear one or two hon. members who might give some assistance on the point.


Gordon Minto Churchill: Your Honour made reference to citations 291 and 293. Perhaps you intended citation 203 at page 171 of Beauchesne's fourth edition which reads as follows:
203. (1) It is an imperative rule that every amendment must be relevant to the question on which the amendment is proposed.
It goes on to say this:
The law on the relevancy of amendments is that if they are on the same subject matter with the original motion, they are admissible, but not when foreign thereto.
As you pointed out, Mr. Speaker, the original motion is to investigate the expenditure of public money for national defence and there is nothing about the suggestion raised in the amendment about the effectiveness of our defence system for the security of Canada, which is an entirely different proposition. Subsection 3 of citation 203 reads as follows:
(3) An amendment setting forth a proposition dealing with a matter which is foreign to the proposition involved in the main motion is not relevant and cannot be moved.


Erhart Regier: If I may speak on this point of order, Mr. Speaker, I should like to say that I believe the amendment proposed by the leader of the official opposition makes the resolution in order because, as I look at it, the resolution is not only an insult to the public accounts committee but contains nothing that is not already open to our public accounts committee and therefore is unacceptable as it appears on the order paper. I feel that the supplying of an assignment other than that regularly assigned to the public accounts committee makes out of order the government resolution as it appears on the order paper at the present time.


Lester Bowles Pearson: May I say a word on that point which has occurred to me? This resolution in its present form refers to the committee on public accounts certain public accounts dealing with defence. But only yesterday we passed a resolution referring these same public accounts to the committee on public accounts. It therefore seems to me that alteration of the resolution in this way would

National Defence Committee bring it into order rather than out of order. How can this parliament refer to two separate committees of this house the same public accounts, with orders to those committees to report back?


Egan Chambers: May I refer Your Honour to citation 203 of Beauchesne's fourth edition, subsection 5, which reads as follows:
(5) An amendment was ruled out because It raised a new question which could only be considered on a distinct motion after notice.
Certainly the motion before us is one with regard to expenditures. Policy is a new question.


Mr. Speaker:: I think this point has been considered from time to time and I believe is reasonably well settled and explained by Beauchesne in citation 291. I begin quoting from the second paragraph:
When the house is considering a motion, of which notice has been given, for the appointment of a select committee-
That is substantially what we are doing.
-a member cannot move in amendment that the committee be given wider powers than those which were set down in the notice. On the 13th March 1938, a minister moved that a special committee be appointed to study the question of redistribution of electoral districts and to enquire into the methods whereby the source of campaign funds may be traceable. Two amendments were moved:-
And they were ruled out of order. I do not need to go into the details of the cases because I have already stated the principle. The amendments were ruled out of order
-on the ground that they raised new questions not contemplated in the notice of motion and proposed to extend the committee's powers far beyond those set down in the notice, and also that the necessity of giving notice will be nullified if such notice is not used as a guidance for the decision of the house.
Then citation 293, reading from the second sentence in that paragraph:
It is against all parliamentary usage to refer questions of policy to a fact finding committee. I find that the great Speaker Denison decided in 1877, and his decision still holds good, that "it is not competent, without notice to add a distinct question to a motion or to combine in one two distinct propositions."
On the principle that an amendment must not introduce new and different subjects to be referred to the committee, I must find that the second part of this amendment goes beyond what would be acceptable. If I might paraphrase it, in its effect it would authorize the committee to report from time to time on the effectiveness of our defence system for the security of Canada. It makes a very different reference to the committee from the one that is proposed by the government. I therefore rule that the amendment is not in order.


Lester Bowles Pearson: You have ruled, Mr. Speaker, and of course we accept your ruling, that the second part of this amendment is out of order. As I understand it, you have ruled that the first part dealing with the elimination of the words "as reported in the public accounts" is in order. Is it in order to make an amendment to that first part?


Mr. Speaker:: If the house allowed the hon. member to amend his amendment, that matter could be discussed. But if one part of an amendment is out of order, the whole amendment must be refused.


Lester Bowles Pearson: I do not know whether the house is agreeable to the amendment in the way you have suggested.


Mr. Bell (Carlelon):: The hon. gentleman has left the floor.


Lester Bowles Pearson: If the house is not agreeable to the amendment in that form, Mr. Speaker, then may I ask for your ruling on the point that, with these words included, this whole resolution is out of order because it deals with the matter which has already been referred to a committee of this house, and the purpose of our amendment is to put this resolution in order by eliminating those words.


Mr. Speaker:: The hon. member is raising his point of order after he has already spoken. He should have dene it before he began his address. I do not think it would be proper for me to consider that point at this stage in the debate.


Mr. Bell (Carleton):: It is purely hypothetical.


Erhart Regier: I rise on a point of order.


Mr. Speaker:: Which point of order?


Erhart Regier: On the point of order raised just now by the official Leader of the Opposition.


Some hon. Members:: Oh, oh.


Erhart Regier: May I ask this question? How can the house refer the same matters to two distinct and separate committees of this house?


Mr. Speaker:: I have indicated that I do not think it appropriate to raise that point of order after we have entered upon debate to this degree. It should have been raised before we started.


Mr. Nesbili:: I was going to ask the Leader of the Opposition a question, if I may, before the hon. member for Vancouver East speaks.


Mr. Speaker:: I think the Leader of the Opposition has concluded his speech.


Wallace Bickford (Wally) Nesbitt: I had a question I wished to ask the Leader of the Opposition but I did not wish to interrupt his speech.


Mr. Speaker:: In effect, I would be giving the Leader of the Opposition the right to speak twice. I recognized the hon. member for Vancouver East.


Harold Edward Winch: National Defence Committee have any such knowledge. Indeed we have been told by the Minister of National Defence that it is the intention of the government to have the leader of the house refer the estimates to this committee after we have got through the motion to go into supply. I have already heard comments from some that they do not believe it, but I will take the word of the Minister of National Defence that the estimates will be referred. Then at least we will be more up to date. We can then deal with the intended expenditures of the government.
1 do not know how you can discuss the intended expenditures of the government through the medium of estimates without discussing policy, because you would have to know what the money is being spent on and whether it should be spent. That means policy, and must mean policy. If you do not do that, then what is the use of referring the estimates at all?
As has been pointed out by the Leader of the Opposition, there is no question that every committee I, at least, have ever sat on does discuss policy as related to the matters before it. It does make recommendations on policy understandings which it gets from the various ministers, and makes decisions on those understandings. I presume that procedure will be followed when this committee is established.
I want to say that as this resolution stands before us at present it is no answer to the questions in the minds of the people and in the minds of many members in the House of Commons. It will not be able to function in a manner which will give information or a clear understanding on defence policies and where our money is going, whether it is going down the drain or whether it is serving any useful purpose. As the resolution stands now it will not give any indication as to what is in the minds of the government as to defence policy and their understanding of the rapidly changing picture in the realm of both offence and defence in international spheres. I have no hesitation in saying-and I think I speak as far as this party is concerned-that this resolution at the present time is useless. It would be a waste of time of hon. members. It would not give anything to the general public or to the house, and I would have no hesitation in voting against this resolution because it will not serve any useful purpose.
However, I feel certain that it can be made into something. So without having anything more to say, if the committee is appointed something can be done if it has the estimates before it, or we can do something when the committee makes its report and we have the

estimates before the committee of this House of Commons itself. There I feel certain the minister will not be able to evade discussion of defence policy. Therefore I will not go into this matter now and take up the time of the house.
In order to try and make something out of this weird and wonderful resolution which has been introduced by the government I would like to move the following amendment, seconded by the hon. member for Burnaby-Coquitlam (Mr. Regier):
That the motion be amended by deleting therefrom the following words:
"since April 1st, 1958, as reported in public accounts"; and
"consistent with the execution of the policy decided by the government".
So that the motion will now read;
That a special committee be appointed to examine all expenditure of public moneys for national defence and all commitments for expenditure for national defence and to report from time to time their observations and opinions thereon, and in particular what, if any, economies may be effected therein, with power to send for persons, papers and records and to examine witnesses; and that in accordance with standing order 67, the committee shall consist of not more than fifteen (15) members to be designated by the house at a later date.
Mr. Speaker, I feel that as we have been very careful, in dealing just with words already in the resolution, the deletion of the words we suggest will give at least some sense to an otherwise worthless and meaningless resolution.


Mr. Lambert:: On this particular point, may I again draw to your attention citation 291 of Beauchesne. I submit to Your Honour that the present amendment founders on the same rocks as did the amendment proposed by the Leader of the Opposition (Mr. Pearson). Notwithstanding the language used, the end is the same. Whether by the trickery of deleting words or adding words, the end is the same, and the purpose of the hon. member's amendment is to give this committee wider powers than were set down in the resolution. I would refer particularly to the four lines of the second paragraph of citation 291. They are quite clear, and the motion itself is quite clear and there is, I submit, no power in these circumstances to widen the powers of the committee beyond those set out specifically in the notice of motion.


Erhart Regier: On that point of order, I will not resort to the insults to which the hon. member for Edmonton West resorted, inasmuch as I shall not accuse hon. members opposite of attempting to engage in trickery. However, Mr. Speaker, I ask you to note that our amendment does not introduce any

new policy into the resolution as it appears on the order paper. All it does, in effect, is to remove a number of the dates. I submit there is no new principle, no additional power sought for the committee except the removal of a few restrictions which are imposed by the resolution of the government, one as to the dates and the other as to the relation of the committee's examination to announced government policy.


Gordon Minto Churchill: On that point, whether or not the committee is given wider powers by this amendment which is intended to strike out the date, it would give the committee a much wider area of investigation than is intended by the original motion. The date could then go back to the inception of national defence from 1867 onward, which is not what was intended at all. If you strike out the date there is no limitation whatsoever with regard to examining expenditures on national defence in the past.


Mr. Speaker:: I start from the proposition that it is possible to amend a motion of this kind. That is clear, provided the amendment does not change the principle of the motion. To my mind it would be in order to move an amendment to substitute March for April, for example, in the period of time covered by the accounts which are referred to the committee. If that is so, this amendment is no different in principle from such a change It is a change in the period of time covered by the accounts which it is proposed to refer to the committee.
I am a little concerned about what the Minister of Trade and Commerce said when he indicated that the amended motion would permit the committee to go back to the year one. However, I think that since the amendment does not change the character of the reference-it is still a reference for the examination of expenditure of public moneys for national defence-and merely changes the period with respect to which inquiries may be made, I would accept the amendment as being in order.


Marcel Joseph Aimé Lambert: With the greatest respect, Your Honour, I would again ask you to note the words "wider powers". If power is given to examine what took place within a period of 12 months, that power must be wider with respect to 12 months and wider still with respect to 15 months or 18 months.


Mr. Speaker:: I did consider that, but I do not consider that "wider" in a motion of this kind has reference to the time covered by the accounts but, rather, to the character of the inquiry which is permitted, and I think, moreover, if there is any doubt I should err
National Defence Committee on the side of giving the house the opportunity to settle the issue by voting, which it can easily do.


Hazen Robert Argue: I believe that the motion now before the house in its amended form is an excellent motion. The motion as now proposed would read as follows:
That a special committee be appointed to examine all expenditure of public moneys for national defence and all commitments for expenditure for national defence and to report from time to time its observations and opinions thereon and in particular what, if any, economies may be effected therein, with power to send for persons, papers and records-
This motion will allow the committee to examine the economies that might be effected and it would delete that part of the motion which confines the committee to an inquiry into economies that may be affected without any change or alteration in the policies of the government. In other words, this would enable the committee to make inquiries into necessary or desirable economies in the Department of National Defence, and for that reason we think that this amendment should commend itself to the house.
In the view of this party the estimates of the Department of National Defence cry out for examination and alteration and we are confident that a large part of the moneys now being spent on national defence are completely wasted; that they have not and are not bringing about any effective defence of this nation. We believe, further, that because they remove certain resources from productive use they are in fact doing damage to our national economy.


Donald Methuen Fleming: Would the hon. member permit a question? On the basis of what experience does the hon. member come to that conclusion?


Hazen Robert Argue: The Bomarc-seven tries and seven failures; an expenditure on national defence which does not provide within our arsenal a single modern weapon to deter the attack of an aggressive power.


Some hon. Members:: Rubbish.


Hazen Robert Argue: It has been stated-


Some hon. Members:: Order.


Egan Chambers: Is the hon. gentleman suggesting that we should have offensive atomic weapons? These are the deterrent weapons?


Hazen Robert Argue: Not at all. That is a very excellent question, and I thank the hon. member for having asked it-


Mr. Speaker:: I am sorry, but I must intervene in the line which this debate has taken. The question of what kind of weapons we should have is not involved in this motion.

National Defence Committee


Hazen Robert Argue: I appreciate your ruling, Mr. Speaker. You have been exceedingly fair. I do not want to transgress your ruling but since the question has been asked, I think I should be allowed to say that we think the best deterrent-


Mr. Speaker:: The question was ruled out of order and it would be out of order to answer it in accordance with what I have already said.


Hazen Robert Argue: Since you have made it abundantly clear that there is no intention on my part to avoid this very important question I shall not endeavour to answer it since you have already twice ruled it out of order.
We believe that a committee based on this amended motion would serve an excellent purpose. It would inquire into whether or not we are building a defence establishment based on conventional weapons only-and I have no objection to that-or a defence establishment-


George Randolph Pearkes: Mr. Speaker, I rise on a point of order. I think the hon. member is discussing policy. I was not permitted to discuss policy myself because of the attitude taken by hon. members of that group.


Mr. Speaker:: I think the hon. member who has the floor is verging in that direction. He is referring to expenditures on conventional weapons which will undoubtedly appear in the items with which the committee will deal. If he does not go beyond that he is in order but I understood him to be going further than that.


Hazen Robert Argue: Since the motion has been so vastly improved by the removal of the shackles put on the resolution by the government, it is perfectly obvious now that this must be the kind of committee the Prime Minister (Mr. Diefenbaker) would really wish parliament to have the right to establish, one that could perform a useful function. As the resolution now reads, it would not restrict the committee to going back merely to April 1, 1958-


Gordon Minto Churchill: No, it would go back to the Boer war.


Hazen Robert Argue: If the Minister of Trade and Commerce (Mr. Churchill) were on the committee I suspect that is where he would want its investigation to go. He would not want any inquiry into economies that might be made in the government's modern defence policy.


Gordon Minto Churchill: At least the Minister of Trade and Commerce has shown the hon. member how foolish the hon. member is.


Hazen Robert Argue: The minister may be lacking in certain respects but undoubtedly he would

take advantage in that committee of an opportunity to avoid any discussion of defence policy or expenditures which he knows could not be substantiated.
I should think the Prime Minister would be the first to support this amendment which would allow the committee to examine into general economies that might be made. It would allow a committee of this house to serve Canada usefully at this time by examining into the expenditures of the Department of National Defence and show what tremendous economies might be made without in any way reducing the degree of defence now provided by that department.


Mr. L. D. Creslohl (Cartier):: Mr. Speaker, I should like to make one observation. Exactly a week ago today in committee of the whole the chairman ruled that an amendment was out of order because it was redundant. In other words it was not necessary because the law already provided that which the amendment intended to provide.
There are standing committees of the house with functions they must perform. I would like the Prime Minister (Mr. Diefenbaker) or the Minister of Trade and Commerce (Mr. Churchill) to point out what there is requested in this resolution that a committee do that is not already assigned to one of the existing standing committees of this house. The committee on estimates and certainly the committee on public accounts have complete latitude to deal precisely with what this resolution seeks to have done. I therefore suggest that the resolution in its entirety is redundant, unnecessary and thus out of order, basing myself on a ruling made in this house by the chairman of committees a week ago tonight.


Marcel Joseph Aimé Lambert: Mr. Speaker, with all due respect may I point out that the speech of the leader of the C.C.F. group is complete justification of the point I originally advanced to Your Honour that the intent of the amendment advanced by hon. members of that group is precisely to widen the power of this committee under this proposed motion.


Lester Bowles Pearson: Mr. Speaker, in one word, I should like to say that we will support this amendment because it at least gives the committee set up by the resolution some chance of discussing national defence policies, expenditures and other questions. The original resolution did not do that. This amendment improves the resolution and in the event it carries there will be provided an opportunity to discuss national defence generally. We will be glad to support it.


John Whitney Pickersgill: Mr. Speaker, I rise on a question of privilege. I believe that my vote was wrongly attributed to another member.


Mr. Speaker:: The correction has been
made on the Clerk's record.
And the result of the vote having been announced:


Mr. Speaker:: I declare the amendment lost.


Paul Theodore Hellyer: May I adjourn the debate?



BUSINESS OF THE HOUSE

John Whitney Pickersgill: May I ask the house leader what the procedure will be for tomorrow?


Gordon Minto Churchill: Tomorrow, Mr. Speaker, we will continue with this debate. Upon its conclusion we will take the resolution in the name of the Minister of Finance dealing with the Federal-Provincial Tax-Sharing Arrangements Act.


John Whitney Pickersgill: Is this a change from what was announced during the last two days as the business for the rest of the week?


Gordon Minto Churchill: To accommodate the members on the other side of the house I put in the resolution in the name of the Minister of Transport and the resolution in the name of the Minister of Public Works for Wednesday and Thursday, but I held open the business for Friday by announcing last night that it would be dependent on the progress we made today. In the week's program that I outlined I had this particular resolution in the name of the Minister of Finance listed as the item to follow this debate to set up the committee on defence expenditures.


[Stage Direction]
It being 12 minutes after 10 o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Questions

[Stage Direction]
The following answers, deposited with the Clerk of the house, are printed in the official report of debates pursuant to standing order 39:

Mr. Fisher: 1.	Did the Department of Transport issue a publication in 1959 called "Information policy and regulations for ships, pilots, Port Weller-Sarnia area"?
2.	If so, did it state a period of employment and rate of pay per month or season, and, if so, what period and what rate of pay?
3.	How many pilots from the pilots' force in this area received the full rate of pay for the full working period?
Answer by: Hon. George H. Hees (Minister of
Transport):
1.	Yes.
2.	It showed the standard period of employment as April 1 to December 1, and the rate of pay as $950 per month.
3.	Dates of engagement of pilots ranged from April 25 to July 27, all paid at full rate of pay effective from respective dates of engagement for period of active employment and period of leave earned during period of active employment. Those with maximum leave have received pay to noon December 15.


PEACE RIVER AIRPORT
Mr. Benidickson: 1.	What work is scheduled to be done for improvements and construction at the Peace river airport during the 1960-61 fiscal year?
2.	How much money has been allocated for same in the estimates for the fiscal year 1960-61?
Answer by: Hon. George H. Hees (Minister of
Transport):
1. It is proposed to start to construct a runway 5000' x 150', an aircraft parking
apron and taxiways. The new runway will be equipped with medium intensity lighting.
2. No funds have been specifically provided in estimates in fiscal year 1960-61 for this work. It is proposed to obtain funds in the amount of $524,250 by allotment transfer within the construction vote.


FARM CREDIT ACT LOANS
Mr. Racine: 1.	How many loans have been made by the farm credit corporation (a) under part II; (b) under part III of the Farm Credit Act In each province?
2.	How many farmers have borrowed over $15,000 under part H of the said act in each province?
Answer by: Hon. D. S. Harkness (Minister of Agriculture):
1.
(a) under (b) under part II part III
British Columbia	
81	NoneAlberta	
446	"Saskatchewan	
556Manitoba	
46	"Ontario	
583	"Quebec	
71	"New Brunswick	
16	"Nova Scotia	
11	"Prince Edward Island ..	32	"Newfoundland	
Nil	"
2.
Under part II
British Columbia	 8
Alberta	 28
Saskatchewan	 37
Manitoba	 None
Ontario	 102
Quebec	 5
New Brunswick	 1
Nova Scotia	 2
Prince Edward Island .. None Newfoundland	 None.

Friday, March 18, 1960
The no use met at 11 a.m.


MISCELLANEOUS PRIVATE BILLS
[Stage Direction]
Fifth report of standing committee on miscellaneous private bills-Mr. McCleave.

[Stage Direction]
On the order: government notices of motion:
March 16-The Minister of Transport-The following proposed motion:-That a sessional committee on railways, air lines and shipping owned and controlled by the government, be appointed to consider the accounts, estimates and hills relating to the Canadian National Railways, the Canadian National (West Indies) Steamships, and Trans-Canada Air Lines, saving always the powers of the committee of supply in relation to the voting of public moneys; and that the said committee be empowered to send for persons, papers and records, and to report from time to time; and that, notwithstanding standing order 67 in relation to the limitation of the number of members, the said committee shall consist of Messrs. Badanai, Bour-bonnais, Brassard (Lapointe), Broome, Campeau, Carter, Chevrier, Chown, Creaghan, Drysdale, Fisher, Fraser, Granger, Grills, Horner (Jasper-Edson), Kennedy, Martini, McPhillips, McWilliam, Mitchell, Monteith (Verdun), Pascoe, Robinson, Rowe, Smallwood, Smith (Simcoe North).
Mr. Speaker:: Pursuant to section 2 of standing order 21 this government notice of motion stands transferred to and ordered for consideration under government orders at the next sitting of the house.



CRIMINAL LAW


[Stage Direction]
On the orders of the day:
Hon. Paul Marlin (Essex East):: Mr. Speaker, may I ask the Minister of Justice whether he has any comment to make on the statement by the hon. member for Winnipeg North Centre, as reported in the Ottawa Journal of March 17, to the effect that the government plans to propose legislation limiting hanging to certain types of murder. Is that to be the policy of the government of Canada? Does the government not think that the policy of-


Mr. Speaker:: Order. I raise the question whether the hon. member is not infringing upon a debate which is now before the house on the same subject matter.
79951-0-139


Paul Joseph James Martin: Mr. Speaker, I have before me a statement of the hon. member for Winnipeg North Centre as reported in the Ottawa Journal. That statement reads as follows-


Some hon. Members:: Order.


Paul Joseph James Martin: May I read the statement?


Mr. Speaker:: Yes.


Paul Joseph James Martin: It states:
John MacLean, Conservative member of parliament for Winnipeg North Centre, says he understands the federal government plans to propose legislation limiting hanging to certain types of murder. Mr. MacLean made the remark in an address to the Winnipeg North Centre Conservative association-


Mr. Speaker:: I understand the question, but my point is that the house is engaged in a debate on this very subject. To ask the government to declare some policy before the house has made its decision in the matter seems to me to be out of order. After all, the question is what is the policy of the government. That is the substance of the question, and the hon. member is asking the government to declare its policy with respect to a matter which is before the house and is being debated.


Hon. Lionel Chevrier (Laurier):: Mr. Speaker, there is a question of privilege also involved which is tied up with the question asked by my hon. friend the hon. member for Essex East. It is this. How far, and to what extent, can a member of parliament go in discussing matters that are before a committee outside the house? These are matters which have come up in the house from time to time, and it is a question of privilege as to whether an hon. member may discuss matters that are under consideration here. I submit with deference that the question asked by my hon. friend was in order.


Mr. Speaker:: I accept the view offered by the hon. member for Laurier -that there may be a question of privilege here. To my mind it is a question of privilege, rather than the subject a matter of a question such as that put by the hon. member for Essex East.


Paul Joseph James Martin: I am sure there could be no objection to asking the Minister of Justice whether he has any comment to

Inquiries of the Ministry make on this statement by a member of his party outside this house on a matter of government policy.


Edmund Davie Fulton: think it would be quite inappropriate for me to comment on what was said on this matter by a private member outside this house. As to government policy, that will be announced in due course. I agree with you Mr. Speaker, that it would be very improper for any discussion of this sort to be allowed to develop on the orders of the day when the matter is before the house in an actual debate.


Paul Joseph James Martin: Does the Minister of Justice regard the remarks of the hon. member for Winnipeg North Centre as improper?


Mr. Speaker:: I have not been satisfied that the hon. member for Essex East is pursuing a proper line of questioning. I think the viewpoint expressed by his colleague, the hon. member for Laurier, that if anything is involved it is a matter of privilege, is the correct one, and I would ask the hon. member not to pursue his question.


Paul Joseph James Martin: With respect to you, Mr. Speaker, the Minister of Justice has said that he regards as improper any comment on government policy in this house with regard to this matter-


Edmund Davie Fulton: That is not what I said.


Paul Joseph James Martin: This is not a point of order. The minister can correct me after I have finished.


Edmund Davie Fulton: That will be difficult, because there will be so many corrections to make.


Mr. Speaker:: The hon. member is speaking either on a point of order or on a question of privilege-


Paul Joseph James Martin: I am speaking on the observations made by Your Honour.


Mr. Speaker:: Then the hon. member is speaking on a point of order, because I raised the propriety of his question as a point of order, and I say I am not satisfied that it is a proper question to ask. I think there is no point in discussing it further. If the hon. member wants to raise the same question as a matter of privilege I will hear him.


Paul Joseph James Martin: No, I am speaking to the point of order, and I call Your Honour's attention to the statement made by the Minister of Justice. If Your Honour thinks that it is not proper to ask the

Minister of Justice as to the propriety of remarks made by a member of this house outside the house of course I will not persist, but I want to make sure that that is your direction.


Mr. Speaker:: That is with regard to the subject matter of the statement made outside, because it affects a matter which is before the house for decision, and it does not lie with an hon. minister to declare policy on a question which is before the house for decision.



BILL OF RIGHTS


[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I had intended to put this question to the Prime Minister, but in his absence I will address it to the Minister of Justice. Could I ask the Minister of Justice whether he has any comment to make on a report in this morning's Montreal Gazette that Mr. Justice J. T. Thorson, speaking as the honourary president of the international commission of jurists, said that the proposed bill of rights will be "merely a declaratory legislative enactment and not a constitution guarantee of rights" and that the three fundamental political freedoms of speech, assembly and association should be embedded in the Canadian constitution by amendment to the British North America Act?


Mr. Speaker:: The hon. member is again, I think, in difficulty with that question, because it is really anticipating a debate which is to take place. What he is asking the Minister of Justice to do is express his opinion on a matter which this house will debate, and which is on the order paper.


Harold Edward Winch: There is nothing on the order paper at all.


Mr. Speaker:: Perhaps I am mistaken about that. I thought there was a resolution.


Edmund Davie Fulton: Mr. Speaker, I should like, however, to raise a point of order as to the propriety of hon. members asking for comments on statements reported in the newspapers, reading at length from a newspaper a report of something that was said outside the house and then asking a minister not to answer a question but to make a comment on something that is thus reported to have been said elsewhere. It is my clear understanding that the rules expressly prohibit a question in that form. It is for that reason that I take objection to the question.


Harold Edward Winch: On the point of order, I did not make any comment. I asked whether the Minister of Justice had anything to say on the statement made-


Some hon. Members:: Order.


Edmund Davie Fulton: Mr. Speaker, I am convinced that the purpose of the rule is to prohibit just that form of question. If an hon. member has a question to ask, the question should be his own; so the rules expressly provide that it is not in order, under the guise of a question, to read something someone else has said outside the house and ask a minister to comment on it, because debate in this house and questions and answers in this house, as I apprehend the intent of the rules, should be on the basis of discussion between hon. members and ministers and not between ministers and someone outside the house.


John Whitney Pickersgill: Mr. Speaker, on the point of order, I should like to draw Your Honour's attention to the fact that, from the year 1945, when the present Minister of Justice was elected to this house, until the year 1957, a custom developed very widely in this house of asking the precise kind of question that the Minister of Justice is now objecting to, and that no one indulged in this practice more frequently than did the present Minister of Justice.


Edmund Davie Fulton: No.


Mr. Speaker:: The hon. member in rising to speak to the point of order has raised an argument ad personam.


Edmund Davie Fulton: And completely inaccurate, unfounded and untrue.


John Whitney Pickersgill: As Your Honour would, I am sure, recognize custom-


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


John Whitney Pickersgill: I am speaking on a point of order-


Mr. Speaker:: Order. I recognize the Minister of Justice.


Edmund Davie Fulton: Mr. Speaker, the comment
made by the hon. member for Bonavista-Twillingate is not only inaccurate and untrue but it sets at defiance what is in the rules. If the hon. member will read Beauchesne's fourth edition he will find that the rules and the citations there set forth, which are the latest authority for the House of Commons -not the hon. member for Bonavista-Twillin-gate-clearly state the rule to the effect as I have summarized it.
I had and have too much regard for the rules to have been guilty or to have attempted
79951-0-1394
Inquiries of the Ministry to be guilty of the conduct the hon. member for Bonavista-Twillingate imputes to me; and even if I had not that regard, I recall that whenever attempts of that nature were made, Speakers between 1945 and now did exactly as Your Honour is doing, and called hon. members to order and insisted on the application of the rules.


Mr. Speaker:: The point of order will not be settled on the issue of whether the Minister of Justice always observed the rules.


John Whitney Pickersgill: I wonder if Your Honour would permit me just a word.


Mr. Speaker:: If the hon. member would like to discuss this point of order I should like to hear him, because questions in this house for some years have very frequently taken the exact form of that asked by the hon. member for Vancouver East. I have had my doubts about carrying it to the degree hon. members do. Before hearing the hon. member I express the preliminary view that to found a question by referring to a statement in the press is permissible only to lay a factual foundation on which to ask a question which seeks information and not to ask a question which in effect proposes an argument based on statements in the press.


John Whitney Pickersgill: Mr. Speaker, I intended, of course, no offence whatever to the Minister of Justice. I was simply seeking to use an illustration of what was the custom, and I am sure Your Honour would be the first to recognize that a very large part of the practice in all British political institutions, including this House of Commons, is based on custom and usage and not on a strict, literal interpretation of the rules, which would make almost all debates impossible.


Mr. Fulion:: But not on the abuse of custom and usage.


John Whitney Pickersgill: If the Minister of Justice would like to reply to me when I am finished I would be delighted to hear him. I am not defending the indiscriminate use of long extracts from the press, but it is often the easiest and simplest way to get from a minister an opinion on a matter, or a statement on a matter of fact, which has to do with the business of this house.
I must say, speaking personally, that I am not much addicted to this kind of question but I can see that it is often a great saving of the time of the house, and it does seem to me that when statements are made outside the house having directly to do with the conduct of the government, which is responsible to this house, this then is a device on which

Inquiries of the Ministry there should not be too strict an interpretation of the literal wording of the rules, in view of the long custom of the house.


Edmund Davie Fulton: I think something further
should be said on this matter. It is quite true that the rules do require an intelligent and flexible application if there is to be freedom of debate, and debate germane to the issues before the house; but an intelligent application of the rules also carries with it, as I see it, the avoidance of the abuse of custom and precedent. One of the important purposes of the rules of this house, as I apprehend them- and I believe I state it correctly-is to see that debate is carried on here between members of this House of Commons and not between members of the house and persons outside the house. Therefore the rule against reading reports of statements made by others and then asking whether ministers agree with them is to ensure that abuse will not take place, that the debate will not take the form of a minister or member of the house being drawn into a controversy with somebody outside, when that debate or controversy should take place in the house.
It is tempting, I know, to members to try to draw ministers into controversy with people outside the house, and to get the controversy going on those grounds. Nothing would be more attractive to the opposition than if they could, for instance, get a controversy going between the Minister of Justice and the president of the exchequer court; and that was, whether intentional or not, certainly the effect of the question asked. That would be a very improper thing, and it was to avoid that very sort of situation and to keep the debate within the house, that the salutary rule and precedent have grown up which say that questions may not be asked which take the form of the reading of statements made by somebody outside the house and asking ministers whether they have any comment to make thereon.
Whether or not the hon. member for Bonavista-Twillingate desires, not to use that custom but to abuse any flexibility that has been given in the application of that rule, I submit, Mr. Speaker, that this particular instance is indeed an illustration of the way in which any flexibility that has been allowed is beginning to be abused. It was because I objected to the abuse of the flexibility that I raised the point of order with regard to this particular question.
I come back to what seems to me to be a very simple proposition. If I were to comply with the hon. gentleman's request for a comment I would very probably be drawn into controversy with the president of the

Exchequer court instead of with the member for Vancouver East, and that is a situation into which I refuse to be drawn, Mr. Speaker.


Paul Joseph James Martin: Mr. Speaker, I should like to say something in view of the long lecture we have just received from the Minister of Justice; indeed, not only a lecture directed against the hon. member for Bonavista-Twillingate who, in his desire to see the rules of this house observed-


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: -took issue with the Minister of Justice-


George Harris Hees: Now I have heard everything.


Paul Joseph James Martin: Hon. gentlemen are giving evidence of their reluctance to hear any point of view expressed on this side, their reluctance to see parliament function as on one occasion they said it should.


Some hon. Members:: Oh, oh.


George Harris Hees: Get out the crying towel.


Mr. Speaker:: I would ask the hon. member to speak to the point of order. I have followed the remarks of the Minister of Justice. He may have made some personal allusions, but basically he was dealing with a point that I am much interested in deciding.


Paul Joseph James Martin: I was seeking to do that very thing, but as soon as I make the effort hon. gentlemen opposite with their big majority make it impossible for me to do so.


Mr. Speaker:: Order. I am sure hon. members will hear the hon. member for Essex East with proper decorum.


Paul Joseph James Martin: I can only say that if hon. members do not want to listen I am prepared to take all the time necessary, because as a private member of the house I propose to express my view as to the arrogance and the arrogant statement just made by the Minister of Justice.


Mr. Speaker:: The hon. member is proceeding in the wrong direction. What he has the floor for is to discuss the point of order and not the arrogance of some other member of the house.


Paul Joseph James Martin: Well, Mr. Speaker, may I say with great respect that if the Minister of Justice had been reminded that he has certain responsibilities in this house it would not have been necessary for me to use what I think in the circumstances was a very apt description of the speech made by the Minister of Justice.


Mr. Palleil:: We know you are back, Paul.


Paul Joseph James Martin: The Minister of Justice has said that the purpose of questions at this particular point in our proceedings is to encourage the eliciting of information by a member of the house from a minister. I would say if that is not to be the interpretation, then parliament would be taking a step that would result in a serious abridgement of its functions and its opportunities. Pursuant to our custom, surely it is open to any member of the house on the orders of the day to ask a member of the government for comment with respect to something that may have been said outside the house on matters of public interest with regard to the operations of the government of Canada. If we are to take the position which the Minister of Justice has asserted, then there will be an abridgement of free speech in this parliament such as in my experience has never been suggested before.
Let us say that the president of the institute of international affairs made a comment with regard to foreign policy. Would it not be proper for any member of the house to rise and ask the Secretary of State for External Affairs for his comment one way or the other?


Some hon. Members:: No.


Paul Joseph James Martin: The Minister of Justice, indicating the absurdity of the position he has taken in this argument, now says that he must not be drawn into an argument between the president of the exchequer court and himself as a member of the executive. Since when must there be acceptance of that enunciation of that position? Surely if the president of the exchequer court, in a capacity other than his judicial capacity makes an observation of public concern and interest, it is proper for a member of the house to ask for the opinion of the Minister of Justice. The latter need not, under the traditions of the house, give an answer, but certainly a member is not to be precluded from putting the question.
Nor would a member be precluded from asking the Minister of Justice to comment on a statement of national interest made by the president of the exchequer court in his judicial capacity. Prime ministers and home secretaries in the parliament of the United Kingdom have not hesitated to comment on statements of Her Majesty's judges in matters of public concern. Therefore if we were to follow the hastily considered argument of the Minister of Justice we would be destroying one of the important instruments of free discussion in this house; and I would urge Your Honour, if you are at all tempted to
Inquiries of the Ministry accept the weak argument put forward by the Minister of Justice, that it might be better for Your Honour, in view of the importance of this matter, to give it further consideration later this day or on some other day.
In my opinion it would be a serious abridgement of our rights if we were to be denied the opportunity which the minister is now seeking to deny us. I would suggest to you, Mr. Speaker, that day by day during the course of this session we have had increasing evidence of the desire of the administration to curb free debate in this house.


Some hon. Members:: Oh, oh.


Mr. Speaker:: The hon. member is now going beyond discussion of the point of order. If the hon. member is finished, I shall be glad to deal with the point.


Mr. Grant Campbell (Stormont):: May I
respectfully refer you, Mr. Speaker, to Beau-chesne's fourth edition, citation 178 at page 152, as authority for the proposition that attention may only be drawn to articles in newspapers if the hon. member drawing attention to the article is prepared to vouch for the accuracy of the statement in the newspaper. I doubt very much whether this house is prepared to accept the opinion of the hon. member as to the accuracy of this statement. I humbly submit that in the circumstances no exception should be made in this instance in contravention of the rules.


Mr. Speaker:: Was it citation 178 to which the hon. member mentioned?


Grant Campbell: Yes.


Harold Edward Winch: I just want to say a few words on the point of order. On many occasions, Mr. Speaker, it has been pointed out by yourself that procedure in this house is governed by standing orders of the house, by precedent and by custom. As you will recall, you have often pointed out that custom supercedes precedent.
I draw the attention of Your Honour to this fact, which is borne out not only by your own long experience here but may I say by my own experience in the seven years I have been in this house. In the questioning on the orders of the day I would say, as an approximation, that over 50 per cent of all questions are based on newspaper reports and quotations, and that very rarely are they ruled out on that basis. In this present session in particular I would say that almost 75 per cent of the questions have been preceded by the words "Has the minister any comment to make or any view to express"; then there is direct reference

Inquiries of the Ministry to something in the Globe and Mail or Gazette or some other newspaper.
On the basis of that situation I am asking whether this is not in order. I should like to add, if I may, to the Minister of Justice that I was particularly careful not to make any reference to Mr. Thorson as president of the exchequer court, because he was speaking not as such but as the president of the international commission of jurists.


Edmund Davie Fulton: May I have the opportunity, Mr. Speaker, to make one further comment?


Mr. Speaker:: Has the minister something further to add?


Edmund Davie Fulton: Yes, I have this comment to add. We are referred to custom and precedent, and then it is suggested that it has become established custom and precedent for questions to be asked based upon reports in newspapers. The comment I would make there is that it is true that this has been a growing tendency, during this session particularly and perhaps during last session. But my point now is this. If we do not raise the question now, if it goes without observation and without objection, it will become an established custom. The point of order I raised was that it is not permitted under our rule. It is true that on occasion, in order to apply the rule flexibly, it has been permitted; but it is not permitted by the rule, and I am simply seeking the application of the rule.
It is because I am concerned that if the custom is allowed to grow unchecked it will then be taken as a rule that I am raising the matter now. The rule is clear. Beau-chesne's fourth edition is the latest authoritative statement. It was published in 1958; it is not an old or outdated publication. May I just refer Your Honour to two passages. The first is found at page 148, citation 171, which states:
A question oral or written must not:
- (z) refer to speeches made outside the house;
The second citation is 177, which states:
177. Reading telegrams, letters or extracts from newspapers as an opening to a question when the orders of the day are called is an abuse of the rules of the house.
Hence I think the situation is quite clear.


Paul Joseph James Martin: Bead the whole paragraph (z).


Edmund Davie Fulton: I will read the next sentence, which is as follows:
It is not good parliamentary practice to communicate written allegations to the house and then to ask ministers either to confirm or deny them.


Paul Joseph James Martin: I was referring to paragraph (z).


Edmund Davie Fulton: The hon. member can read the citation he wishes to read.


Paul Joseph James Martin: If the minister does not want to read it, we will do so.


Edmund Davie Fulton: It is clear that the rule there is that the question must be the member's own question. That is the basic principle. It is true that sometimes, in order to give a member an opportunity to make his question clear, reference to newspapers reporting statements made outside the house is permitted. But my recollection is perfectly clear also that Speakers have always been properly concerned to avoid abuse of this flexibility and to avoid a situation where a member, instead of making a question his own- instead of asking his own question-uses a statement reported to be made in a newspaper and then asks a minister to comment on it. The basic rule of debate is that speeches must be the speeches of the member himself, and that questions must be the questions of the member himself.
Contrary to what the hon. member for Essex East has said, I have not taken the position directly or by implication that such matters as are raised here cannot be raised. Certainly the Minister of Justice can be asked whether his view on a certain proposal is this way or that way. However, my point is that no minister should be asked by a member whether he agrees with a statement on a matter of government policy which is made by someone else and for which the member does not take responsibility. The question should be a question raised by the member of parliament, not a question raised by somebody else however eminent that other person may be. That is my purpose in raising the matter this morning.


Mr. Speaker:: I have taken an undue amount of the time of the house to hear the views of hon. members, as I think this is an important matter. As was suggested, I should like to give some more reflective thought to it and try to express what is contained in the citations to which I have been referred and the practice of the house in perhaps more considered terms. Undoubtedly it has been decided on many occasions, for example, as stated in Beauchesne's fourth edition in citation 177:
177. Reading telegrams, letters or extracts from newspapers as an opening to a question when the orders of the day are called is an abuse of the rules of the house.
The point raised by the minister was that the question which may arise from such a reading very often can properly be asked as a request for information or a question as to the intentions of the government. But to introduce it as a request for comment on an

opinion of somebody else may not be the proper approach to seeking information which the house is entitled to obtain from the administration. Basically, this is not a time for debate or argument. It is a time in which to get information on current matters of urgent public interest.
To get back to the matter in point, I think the question asked by the hon. member is objectionable in the form in which he has presented it. Therefore, without concluding this discussion-as I say, I should like to take the matter under advisement-I suggest that in asking the Minister of Justice to express an opinion on an opinion which somebody else has expressed outside the house as reported, in a newspaper, particularly on the subject matter which he raises, is asking for an opinion on policy of the government expressed as a comment on someone's opinion outside the house; and in that form the minister is correct in objecting to this specific question.



COMMONWEALTH RELATIONS


[Stage Direction]
On the orders of the day:
Harold Edward Winch: I would like to direct a question to the Secretary of State for External Affairs. I hope this is in order in view of the previous discussion. Is the Secretary of State for External Affairs giving any consideration to the views expressed by Mr. Justice J. T. Thorson, as reported in this morning's Montreal Gazette in speaking as the honorary president of the international commission of jurists, that South Africa's racial policy of apartheid "deserves the condemnation of the civilized world", and is any further action, in view of the action already taken by the government, contemplated by his department in this respect?


Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker, the government's position on this question has already been made very clear to this house as well as in the external affairs committee.


Harold Edward Winch: Is any further action contemplated by the minister's department?


Howard Charles Green: I can only repeat my former answer.


Lester Bowles Pearson: Would the minister inform the house when the matter was discussed in the external affairs committee? My memory is that it has not been discussed at all.


Howard Charles Green: I think it was discussed when I appeared as a witness. If not, then I am
Inquiries of the Ministry surprised that the Leader of the Opposition did not have the courage to raise it.


Lester Bowles Pearson: The fact of the matter is that it has not been discussed in that committee, and it is also a fact that the minister has not been present this week so we could raise it.


Paul Joseph James Martin: A supplementary question. Is the Secretary of State for External Affairs not aware that the Prime Minister said during the course of this session that he refused to make any comment as to whether Canada would initiate discussion of this question at the prime ministers' conference, and is the Secretary of State for External Affairs also not aware that as a result of that answer and other responses given by the Prime Minister, this government has made no announcement whatever about its policy on apartheid?


Howard Charles Green: Mr. Speaker, this is another in the series of speeches by my old friend the hon. member for Essex East, which he is making on orders of the day. He, like the Leader of the Opposition, is a member of the standing committee on external affairs, and I am doubly surprised that he too did not have the courage to raise this question.


Mr. Speaker:: If the minister makes
replies of that kind which, even if they are factual, are improper, and if they are not factual they should not be made at all, he invites reprisals. I see that the hon. member for Essex East is straining at the leash at this moment, and I hope he will restrain himself and let us pass on to some relevant questions.


Paul Joseph James Martin: Mr. Speaker, I will succumb to a matter of great relevancy and not deal with the charge which has been made. I would like to ask the Secretary of State for External Affairs, assuming that the courage of which he complained was lacking in the case of the member for Essex East, this question. Will the Secretary of State for External Affairs, for whom I have the greatest affection, tell the house what is the government of Canada's policy with regard to South Africa and racial discrimination?


Howard Charles Green: Mr. Speaker, I am also verj much amazed at the number of times the hon. member for Essex East follows the lead given by the hon. member for Vancouver East.


Paul Joseph James Martin: No answer.

Inquiries of the Ministry COMMONWEALTH CONFERENCE



INQUIRY AS TO DATE OF MEETING OF PRIME MINISTERS

[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, in the absence of the Prime Minister may I ask the Secretary of State for External Affairs, for whom my affection is unequalled, whether he has anything to report about the date of the forthcoming commonwealth prime ministers' conference, which date has appeared in the press; or the items which might be discussed at that conference, which have also appeared in the press?


Howard Charles Green: Mr. Speaker, I would be very glad to bring that question to the attention of the Prime Minister. I think it is one that he would wish to answer.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to direct a question to the Minister of Citizenship and Immigration, and I have a feeling of a lack of gallantry in failing to send her notice; but being human I cannot resist the temptation. The minister was reported in this morning's press, when speaking in Chicago, as extending an invitation to United States citizens to emigrate to Canada. Would the minister mind extending the same invitation to all citizens of the British commonwealth?


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: Mr. Speaker, the door is always open to qualified immigrants from the British commonwealth.


Herbert Wilfred Herridge: A supplementary question. Does that mean all citizens of the British commonwealth?


Ellen Louks Fairclough: Qualified to enter.


Herbert Wilfred Herridge: Mr. Speaker, I have a supplementary question. Does the invitation to United States citizens include all United States citizens?


Ellen Louks Fairclough: I shall send the hon. gentleman a copy of my speech, Mr. Speaker, where the matter is fully explained.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Gordon Chown (Winnipeg South):: Mr. Speaker, I would like to direct a question to


the Minister of Transport. It was announced over the radio this morning that four of my constituents in Winnipeg South had been killed in the crash of a Northwest jet air liner en route from Minneapolis and Chicago to Miami, Florida. Owing to anonymous and threatening phone calls received at the Chicago airport before this flight took off there is a suspicion that this crash, which killed 63 people, was the result of an air explosion caused by a bomb planted on this air passenger transport.
Would the minister tell the house what steps have been taken by his department to date to set up safety measures to prevent this sort of tragedy occurring on Canadian air passenger carriers?


George Harris Hees: Mr. Speaker, as I have stated before on several occasions in this house, the matter of air explosions is under investigation by my department and Trans-Canada Air Lines. The responsibility for the unfortunate accident referred to rests with the United States authorities, who will keep us advised of their investigation procedure.



NATIONAL REVENUE


[Stage Direction]
On the orders of the day:
Mr. Hubert Badanai (Fort William):: Mr. Speaker, I would like to direct a question to the Minister of National Revenue, but in his absence I will direct my question to his parliamentary secretary. Notice of my intention to ask this question was sent to the minister's office. Has the government made any attempt to evaluate the impact that the selling of duty and tax free goods by International Facilities Limited to United States tourists at border points is going to have on retail merchants who derive their livelihood from the tourist trade?


Marcel Joseph Aimé Lambert: I wish to thank the hon. member for having sent notice to the minister's office, but I think the hon. member will agree that the nature of his question demands more consideration, and I will take it as notice.


Hubert Badanai: A supplementary question. Will-


Mr. Speaker:: Order. I do not know how it is possible to ask a supplementary question to one which has been taken as notice.


Hubert Badanai: No, it is a new question. Will International Resort Facilities-


Mr. Speaker:: Is the hon. member pursuing a supplementary question?


Hubert Badanai: No, it is a new question. Will International Resort Facilities operate under a federal charter?


Marcel Joseph Aimé Lambert: The same comment applies to this question, Mr. Speaker.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Erhart Regier: would like to ask the Minister of National Health and Welfare whether at any time the federal government has received for consideration and possible approval from the government of British Columbia any plan or plans for the establishment of chronic hospitals, either for their operation or construction?


Hon. J. W. Monteilh (Minister of National Health and Welfare):: Not as of my latest knowledge, Mr. Speaker. If there has been anything recently on this matter I will check and let the hon. member know.


Erhart Regier: Might I ask the minister
whether the federal government has at any time received a request from the British Columbia government for assistance in either the operation or the construction of these hospitals?


Jay Waldo Monteith: My answer will still stand, Mr. Speaker; to my most recent knowledge, no.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Douglas Jung (Vancouver Centre):: Mr. Speaker, may I ask the Minister of National Defence whether he is in a position to comment on reports of a Are which originated this morning in the Stanley park armouries in Vancouver, and also whether he is in a position to comment upon whether alternative accommodation has been provided.


George Randolph Pearkes: Mr. Speaker, the fire occurred at 7.30 eastern standard time this morning, and I have had a report to the effect that the building, which is a leased building, was completely destroyed. There has been no opportunity up to this time to make any estimate of the loss.
Inquiries oj the Ministry



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, in the absence of the Prime Minister may I direct a question to the house leader and ask him when the house may expect an announcement as to the Easter recess, which seems already to have been given to the press.


Gordon Minto Churchill: That announcement will be made when the Prime Minister returns.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Samuel Boulanger: I should like to direct a question to the Minister of Agriculture. As the stabilization assistance program for lamb is ending on March 31, can the minister make a statement as to the policy after that date?


Hon. D. S. Harkness (Minister of Agriculture):: I suggest to the hon. member that he should read the stabilization act. If he does so he will find that lamb is one of the mandatory commodities under support at all times, and thus the program cannot end at the end of March.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Douglas Mason Fisher: I should like to direct a question to the Postmaster General, concerned not with his attempts to prevent robberies in the rural parts of Ontario and Quebec but rather with his efforts to protect the Canadian people from the results of the bad British practice of playing the football pools.
Has the minister noticed the practice of the largest Toronto newspaper of publishing weekly the results of the Vernon's football pool, with its indication of an interested clientele, and can the hon. gentleman indicate how effective are the steps he is taking to prevent any use of the mails in this regard?


William McLean Hamilton: The Post Office Department does not take exception to the transmission through the mails of newspapers which publish the results of sporting events, even though pools may be based on the results of these sporting events which in themselves, are certainly news.

Inquiries of the Ministry


Douglas Mason Fisher: These are not sporting events at all. They are the results of the actual pools, together with the money paid, and I would like to know if this can pass through the mails.


Mr. Hamilton (Noire Dame de Grace):: We
return to the point I made before, which is that the newspaper is not a participant in these pools but is merely reporting items which are news.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Harold Edward Winch: wish to direct a question to the Minister of Labour. Is the minister now in a position to report on the consideration and the advice given by the unemployment insurance advisory board on the question of the regulations covering pay and gratuities which, I understand, have been reported upon.


Michael Starr: The unemployment insurance commission have not advised me that they have received that report as yet.


Paul Joseph James Martin: Since the meeting took place on March 4, notwithstanding a request that it should take place earlier, could the minister not ascertain by his own initiative whether or not the advisory committee has come to a conclusion?


Michael Starr: I expect that when the chairman and members of the committee have come to a conclusion and are prepared to make their report they will do so.


Harold Edward Winch: In view of the urgency of the matter could not the Minister of Labour make inquiries to ascertain whether or not a report has already been received?


Michael Starr: I make inquiries on this matter each and every day, and what I said earlier is the information I receive.



INQUIRIES FOR RETURNS


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Following the advice given me the other day by the Minister of Finance, I should like to ask the Acting Secretary of State whether he is now in a position to comply with the order of the house made in response to a question of mine passed on July 1, 1959.


Léon Balcer: I will inquire.


John Whitney Pickersgill: Perhaps I could take this opportunity to ask the minister of northern affairs whether he has yet been able to persuade his colleagues to give consent to Manitoba, and reciprocally to get the consent of the Manitoba government so he can comply with the order of the house with respect to the correspondence regarding flood control on the Red river.


Francis Alvin George Hamilton: I have looked into the matter, and I think the papers will be tabled shortly.



JAPAN-REPORTED POOR PACKAGING OF POWDERED MILK IMPORTED FROM CANADA

[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: May I ask
the Minister of Trade and Commerce if he can tell us now whether it is true that Japan has banned the further importation of Canadian powdered milk because of illness suffered by Japanese children? This is with regard to some 90,000 bags of Canadian powdered milk which were recently shipped to Kobe in Japan.


Douglas Scott Harkness: This happens to be a matter which comes more within my province than that of the Minister of Trade and Commerce. On hearing this report we immediately took steps to have the matter investigated to see whether there was any truth in the report. This is being done by members of the embassy staff in Tokyo. We have not yet received a reply from them.
However, the high quality of Canadian milk is very well known. If there was anything wrong with this particular milk it must have been due to one of two things; either it was left in contact with some other substance which affected it or contaminated it, or it was held for a very long time before being put out for consumption.


George James McIlraith: In view of the possible implications of this report with regard to trade generally, would the minister consider making the contents of the report available to the house?


Douglas Scott Harkness: I would be very glad to do that.



NATIONAL DEFENCE


[Stage Direction]
The house resumed from Thursday, March 17, consideration of the motion of Mr. Pearkes for the appointment of a special committee to examine defence expenditures.

Paul Theodore Hellyer: Mr. Speaker, the most important consideration in connection with this proposed resolution is simply whether or not it will permit the task which must be accomplished. The answer to that question, in our opinion, is that it will not.
The reasoning behind the request for this special committee on the part of the leader of the Liberal party was that in his opinion, and in the opinion of all hon. members on this side of the house, the change in the situation in the last few years has been so dramatic and so marked that only by a full and frank discussion of all the information available can this house and the Canadian people be satisfied with respect to the direction of defence matters.
My hon. leader felt that some of the money being spent on defence is not being well spent, and his view is shared by many Canadians. This concern is not so much for those small items of waste and extravagance about which hon. members opposite talked so much when they were on this side of the house, and which there is no reason to believe are any less evident at the present time than they were then, but rather with respect to big items of expenditure which are within the framework of the government's present policy. Are these the correct expenditures for Canada to be making, and can the government gives us any information not previously disclosed to justify its position?
Defence problems today are very complex, and this cannot be denied. The change since 1951 has been fundamental, and from the period of 1957, when the first sputnik was fired, the rapidity with which new inventions and new weapons have been disclosed is almost beyond our comprehension. The latest Soviet and United States shots of intercontinental ballistic missiles over ranges of thousands of miles, with an accuracy within a radius of one and a half or two miles, is of so startling a character that they cannot longer be ignored by thinking Canadians.
Anyone in charge of Canadian defence policy at the present time has a very difficult task. No one denies that. We must take into account, at the same time, the defence policy of the western world. We are members of an alliance, the North Atlantic Treaty Organization, and our policies-


George Randolph Pearkes: Mr. Speaker, on a point of
order, if the hon. member is going to discuss the defence policy either of Canada or of the western alliance, as he appears to be doing, I suggest he is out of order.


Mr. Speaker:: Yes. I remind the hon.
member for Trinity that I stopped the minister when he began his statement on this
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motion when he was proceeding in the same direction as the hon. member is going, and I request him to keep within the limits that have been set by our rules and observed so far.


Paul Theodore Hellyer: I am happy to abide by
that decision, Mr. Speaker. Actually I am convinced that there is nothing in my notes which could be considered as relating strictly to the nature of defence policy as such. I have made reference to a bit of background information and the scope and breadth of the problem which I feel is relevant to this resolution because it is the basis for the resolution and the only reason why the committee was asked for at the outset. I shall be very careful, however, not to depart from this general framework. I have no intention of discussing defence policy at this time but will do so on a later occasion.
As I say our policies have to be complementary to those of our allies and particularly to those of our United States neighbour, because unless they are-


Egan Chambers: Mr. Speaker, on the point of order, the hon. member has just said that he proposes to do what the minister was prevented from doing last night. The minister's point was that since the committee was discussing expenditures in line with the government's policy, he would outline the policy. It was a decision of Your Honour on the advice of hon. members opposite that this should not be done. I do not believe it would be correct for the hon. member now to do exactly the same thing, based on the same argument.


Mr. Speaker:: As I understood the last remarks of the hon. member who has the floor, he was proceeding to say what our policy had to be in these days, and it seems to me that in doing so he is going beyond the scope of the debate.


Paul Theodore Hellyer: Thank you, Mr. Speaker. I do not share the view expressed by the parliamentary secretary to the Minister of National Defence (Mr. Chambers). I do not believe I have transgressed, but if you feel that I do from this point on I am sure you will draw it to my attention.
Anyone who has followed the debate in Washington realizes the tremendous difference of opinion which exists in the world at the present time in respect to these matters. This cannot be denied. There is a tremendous variation of opinion both in this country and throughout the western world. Indeed, the Prime Minister on January 20, when speaking in this house, referred to General Maxwell

National Defence
Taylor's book. This, I feel, is required reading for all who are interested in the subject.


Mr. Speaker:: I am sorry to interrupt the hon. member, but I think he should revise his thinking about what is relevant. The resolution is one to set up a committee to consider the expenditures of the Department of National Defence. It is relevant to the debate to indicate the desirability of setting up that committee and to discuss in general terms that principle. The principle is whether a committee should be set up to consider expenditures. The principle is not that of whether the committee should be set up to consider the policy of Canada with respect to national defence.
It seems to me the hon. member is attempting to discuss a matter beyond the scope of this resolution. I have already allowed the Leader of the Opposition, in his remarks yesterday, to say that he felt the resolution should include that subject, defence policy, but in allowing that latitude it does not permit a discussion of what policies should be referred to the committee and why they should be referred, which is what the hon. member is basically referring to.


Paul Theodore Hellyer: Surely, Mr. Speaker, the corollary of an inadequate resolution is an adequate one. The whole purpose of asking for this committee to be set up was to discuss defence policy in its fullest and most comprehensive form. That is what the Leader of the Opposition asked for, that is what we thought we were getting, and that is what we want. Anything else is, in our opinion, completely inadequate. Surely some reference to what we feel should be discussed in this committee and what we feel is relevant, is appropriate to the subject under discussion, and relates to the reasons why we feel the present resolution is completely inadequate.
It was because of this dependence and interdependence, the differences of opinion and the increasing complexity of defence that we felt a more comprehensive and general discussion should take place. When the Prime Minister mentioned that this committee would be set up, as reported at page 143 of Hansard of January 20, 1960 he said:
But in the light of all the circumstances, it will review the expenditures to the end that the ability, the training and the capacity of members in every part of the house may be used for the purpose of examining this most important problem.
Those were the Prime Minister's words. That is what we expected we were going to get when the Prime Minister told us he would accept our suggestion. It sounded like a genuine desire to set up a committee to work out for this country a bipartisan defence

policy. It was so interpreted by us and indeed it was so interpreted by many people in the country, including much of the press; because there were reports at the time to the effect that here at last was an opportunity being presented to parliament and to the Canadian people to come to grips with this important problem and to work it out in such a way that the Canadian people would know whether or not they were getting value for the money being spent, whether or not they were getting protection, or indeed whether or not any protection is possible in this day.
It was this type of full debate that we on this side of the house asked for and to which we felt we were entitled, one where all the facts could be presented. We feel it is not good enough to have the facts simply up to April, 1959. This house has not been given any body of facts on the subject of defence great enough on which to base intelligent judgment, probably less than in any other democratic parliament in the world.
We feel that although there are some places where perhaps too much information is given, certainly in this country we are being given much too litle. We interpreted the Prime Minister's concurrence to mean that the facts would be given and that the policies would be discussed in full, not just the expenditures for the fiscal period April, 1958 to April, 1959, as included in the public accounts and as set out in the resolution before us.
A wide discussion would not be an abdication of the government's responsibility. It is still part of the government's responsibility to get the widest possible discussion to confirm its own collective mind in respect to its policies. That is part of the business of policy making. That is how decisions are arrived at.
We in the official opposition have been criticized in the press and in the country because our criticisms of the defence policy of Canada were too much directed to single articles of military hardware, and in some respects that is a valid criticism of us. But how can we discuss the greater problems of the Canadian defence policy in the framework of NATO defence policy unless we have greater access to the facts, a fuller and more complete disclosure of the various background material available to the government and to the Minister of National Defence?


Wallace Bickford (Wally) Nesbitt: Mr. Speaker, would the hon. member accept a question?


Paul Theodore Hellyer: Certainly.


Wallace Bickford (Wally) Nesbitt: When the hon. member refers to having access to a greater volume of material, I presume of course he refers to classified material?


Paul Theodore Hellyer: Not necessarily, Mr. Speaker. I know from experience that the information we are getting is a very small proportion of the non-classified material. I think there is some material which is classified which could be made available to hon. members at no security risk whatever. You will recall, Mr. Speaker, if you will allow me this much indulgence, that recently a dispatch from Washington surprised us when we learned that a bow and arrow had been classified as top secret. There are quite a few secrets in the defence department which are not really secrets at all. They are secrets only to the Canadian people. They are certainly not secrets to the Russians. They are not secrets to the Americans, who have a very frank and full disclosure.


Egan Chambers: Will the hon. member permit a question?


Paul Theodore Hellyer: Yes.


Egan Chambers: Is he not aware that Canada threw out its last bow and arrow shortly after he left the department?


Paul Theodore Hellyer: I am aware-


John Whitney Pickersgill: They threw out the Arrow.


Paul Theodore Hellyer: I am aware that they scrapped their best Arrow and I am sure they now have second thoughts, particularly since the government are being requested to replace it with inferior weapons from elsewhere.


Wallace Bickford (Wally) Nesbitt: How do you know?


Lester Bowles Pearson: Because it does not work.


Paul Theodore Hellyer: Mr. Speaker, we do not get the facts from our own government, but we do manage to get some from other, more friendly governments. I can assure you we are very grateful that some of those other sources are available to us. We are, as a consequence, very disappointed to read this motion. We could scarcely believe our eyes when it was printed in Votes and Proceedings, a motion with precisely the same scope and breadth as if it were setting up the public accounts committee, or referring this matter to the public accounts committee. As a matter of fact, Mr. Speaker, it is an insult to the public accounts committee, as was stated last night, because it is a duplication; it allows no more freedom of latitude than would be permitted to the public accounts committee except, of course, that probably there will
National Defence
be a supporter of the government as chairman of this particular committee, which would not be so in the public accounts committee.
This particular resolution, Mr. Speaker, is also not so broad as would be a reference of the current estimates to the estimates committee. This is, I say, most disturbing because we were clearly under the impression, the Canadian people were clearly under the impression, that something more was being given, something more was being proposed; not something less, not something which was already available to us. All this will do is permit us to examine the expenditures for the period April, 1958 to April, 1959, and to recommend suggestions as to economies that can be effected within the framework of the government policy existing at that time. These are retroactive savings in respect of money already spent. This is an academic point, really, at this stage, and I am sure is of small comfort to this house and to the Canadian people. What is the government afraid of?


George Randolph Pearkes: Nothing.


Paul Theodore Hellyer: Nothing; the government has nothing to fear but fear itself. It should welcome a full discussion. The Prime Minister keeps referring back to 1951. The world is not the same as it was in 1951; things have changed. Perhaps the government wishes it could turn back the clock, but it cannot. Consideration of today's problems in terms of 1951 is futile. In 1951 some military experts were saying they would not live to see the day when an intercontinental ballistic missile would be operational. To talk today in terms of 1951 only underscores the government's head in the sand attitude toward defence matters.
As a matter of fact, a basic difference between Conservatives and Liberals is apparent. The Conservatives are looking back to 1951 and using the precedents of that day as appropriate to this day, while the Liberals are looking forward, at least to 1965, to try to find out what policies would be suitable in the middle of the 1960's, as far as can be projected at the present time. Some people in this house would call that planning; others would call it vision, and still others would call it good management.


Mr. Graffley:: I call it just so many words.


Paul Theodore Hellyer: In 1951 the United States had not yet exploded its first megaton bomb and the Russians did not do so until 1953, and the situation in the 1951-1953 era was still understandable in terms of world war II conventional knowledge and understanding. It is not so today. The situation has changed

National Defence
to such an extent that developments in the meantime, and those going on at the present time, tax the imagination of even those people who follow the matter closely and who have some technical background with which to interpret it.
It is futile to consider expenditures from April, 1958 to April, 1959 to the exclusion of those more recent developments and the projection of future developments. Why, then, will the government not permit a broader discussion? It will have a majority on the committee. Its followers will undoubtedly dominate the committee. The committee will not report or make suggestions which are not compatible with the beliefs or have not the support of the government majority on that committee, and even if it should make recommendations which the government is not inclined to implement, the government does not have to accept this advice. The government is not bound by this advice; the government can take it or leave it, but at least it would have the benefit of the advice and consideration of members on all sides of this house.
Why should the minister not answer policy matters in committee? He has to do so in this house when there is a debate on national defence matters; he has to do so in committee of the whole house when his estimates are before us. Why is it any different with respect to answering policy matters before a special select committee? As a matter of fact the atmosphere there is more conducive to a non-partisan discussion; the mere physical appointments are more conducive to intelligent, easy study of very important and far-reaching problems. In addition, there the minister can allow his officials, if he wishes to do so, to make direct answers to questions. This speeds up the proceedings and gives members the benefit of a greater amount of technical and other advice. There are many advantages in having a full and complete discussion in committee, and I cannot understand why the minister and the government are afraid to allow this type of discussion.
When in opposition many of the present members of the government asked for just this kind of committee. The Minister of Finance (Mr. Fleming), the Minister of Trade and Commerce (Mr. Churchill), the Minister of National Defence (Mr. Pearkes), the Prime Minister (Mr. Diefenbaker), and others all asked for this same kind of comprehensive discussion which we are now asking for. They are all on record, Mr. Speaker.
I will not take the trouble to read their remarks into the record, but they are in the books and available to anyone who wishes to read them. I am sure at the moment the

ministers are perhaps trying to forget them, but if they felt strongly-and we must assume they did; they would not have spoken if they were not speaking sincerely-if they felt that a full and complete discussion of defence matters was appropriate at that time when defence matters were much less complicated than they are today, why in the name of logic and consistency would they feel differently now? Why would they not feel the same now? Why would they not welcome and encourage this type of full and free discussion that the Leader of the Opposition and the Liberal party have been asking for?
Last night the government tried to make the point that committees should not discuss policy. The Leader of the Opposition cited a case-he cited more than one case, as a matter of fact-where policy has been discussed, such as the committee on external affairs. There are other examples.


Wallace Bickford (Wally) Nesbitt: Will the hon. member permit another question?


Paul Theodore Hellyer: Yes.


Wallace Bickford (Wally) Nesbitt: Will the hon. member give us an example in the last few years when a committee on external affairs recommended on policy matters to the government?


Paul Theodore Hellyer: Mr. Speaker, I have no knowledge offhand of whether it has made recommendations, but we are talking about discussion. We do not feel that the committee necessarily has to tell the government what to do; but the government, after listening, can make up its own mind and act on its own responsibility, which is its constitutional duty. All we are asking for is an opportunity to have the discussion so the government will be able to benefit from it. Will the hon. member who has interjected deny that there has been discussion of policy in the committee on external affairs?


Lester Bowles Pearson: The minister was complaining this morning that we had not brought up certain policy questions.


Paul Theodore Hellyer: As the Leader of the Opposition has just said, the minister was complaining this morning because policy matters had not been brought up. There are other examples. Here is one. On today's order paper we have item No. 8, which reads as follows:
The following proposed motion: (1) That a select committee be appointed to consider the policy, operations and expenditures of the national research council, Atomic Energy of Canada Limited and Eldorado Mining and Refining Limited, and to report from time to time their observations and opinions thereon.
It is to be appointed to consider policy, not to consider past expenditures which are of more or less academic interest. There are

18, I860
other examples. Here is one. In the Journals of the House of Commons for 1959 we find the following at page 359:
Mrs. Fairclough, seconded by Mr. Nowlan, moved, -That a joint committee of the Senate and House of Commons be appointed to examine and consider the Indian Act, chapter 149,	R.S.C., 1952, and
amendments thereto, and to suggest such amendments as they may deem advisable, with authority to investigate and report upon Indian administration in general and, in particular, on the social and economic status of the Indians.
Here is an example of a government invitation to a committee, in this case of both houses, to consider policy, to examine into questions of substance and to make recommendations in respect thereof.


Wallace Bickford (Wally) Nesbitt: That is not dealing with classified material.


Paul Theodore Hellyer: Mr. Speaker, I am sure the committee would not make recommendations which disclosed classified material. Any classified material which the government felt it could produce could be produced in camera, as is done when the subcommittee of congress on appropriations is holding its hearings. We do not wish to make public any material which would jeopardize our security, but I can assure the hon. member that a great amount of the classified material in the defence department could be made available to the Canadian public without any detriment whatsoever to national security. As a matter of fact the Canadian people would have a better idea of what is going on if that did happen, and I for one think much of it could be made public, and that it would be in the public interest to do so.
I have given examples of committees that have been invited and allowed to discuss policy matters, and there are other examples. It is obvious that a committee can, that committees have and that committees will discuss policy when it is expedient or convenient for the government of the day to allow them so to do.
The resolution in its present form is an affront to parliament. Even more important, it is an affront to the Canadian people. Many Canadians are confused and bewildered by the sparse and conflicting information available, and surely a discussion which would help to clarify the situation is indeed in order. Surely the question of national survival and the expenditure of $1.6 billion of the taxpayers' money is of such overwhelming importance that those of us who have been elected to hold the public trust must do everything possible to satisfy ourselves and the public in this regard.
Consequently, Mr. Speaker, we implore the government to change the resolution. We
National Defence
implore the government even at this late stage to amend the resolution on its own initiative and make it the kind of resolution which will permit the type of committee that hon. members opposite sought when they were on this side of the house, and which is so much more appropriate and urgent at the present time than it was then.
We hope they will do this. We urge them to do it in the name of the Canadian people whose trust we hold. If the government will not do so then the official opposition, which believes that the resolution in its present form, permitting as it does only a discussion of expenditures which took place between April, 1958 and 1959, which is completely and hopelessly inadequate, will be duty bound to vote against it.


Egan Chambers: Mr. Speaker, the Leader of the Opposition last night and the hon. member for Trinity today have both asked for a committee on defence policy. In fact the Leader of the Opposition moved an amendment calling for just that last night. It seems to me that what in fact they are calling for is a United States type of committee.


Lester Bowles Pearson: Nonsense.


Egan Chambers: I know the Leader of the Opposition denied that last night-


Lester Bowles Pearson: I am denying it again this morning.


Egan Chambers: -but just today the hon. member for Trinity made comparisons with the appropriations committee of congress. We do not want to disparage the system whereby the United States arrives at their defence policy. That is their business. A great deal of their policy is dictated in committees of the House of Representatives and the Senate. That, as I say, is their system. Our system is different. We too have a system for arriving at defence policy. The system is clearly known to hon. members opposite. Responsible officers and chiefs of staff make their recommendations to the government through the Minister of National Defence. Those recommendations are then brought to parliament and parliament decides policy. It either approves or disapproves-


Paul Theodore Hellyer: That is a strange doctrine.


Egan Chambers: -the policies that are put forward by the government. It does this on a number of occasions, particularly at the time the estimates of the department are brought forward. This has been our practice since parliament has sat. It is the practice in the parliament of Great Britain, from

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which we take so many of our traditions. What the opposition has in fact suggested is a change in the entire system of arriving at policy.


Paul Theodore Hellyer: That is not so at all.


Egan Chambers: The Leader of the Opposition suggested that experts should be called before the committee to testify on policy. He did not say at that time what experts he wanted but he said he did not want, and I am perfectly delighted to agree with him, serving officers called before the committee. Perhaps the expert he had in mind was the hon. member for Trinity.


Paul Joseph James Martin: He is a very good one.


Egan Chambers: As a matter of fact, I do not disagree with either the Leader of the Opposition or the hon. member for Trinity that defence policy should be discussed. We have been waiting anxiously in the house through 10 days of the throne speech debate and through two supply motions to hear the views of hon. members opposite.


Lester Bowles Pearson: You promised then to set up a committee.


Egan Chambers: We offered last night to institute a debate on defence policy.


Paul Theodore Hellyer: On a question of privilege, the parliamentary secretary has just said that they waited with bated breath through the throne speech. I made a speech on defence in that debate, and the Minister of National Defence did not when he had the opportunity to do so.


Lester Bowles Pearson: He did not even speak in the throne speech debate.


Paul Joseph James Martin: The Leader of the Opposition also spoke.


Egan Chambers: I will have to plead guilty, because the splash made by the speech of my hon. friend was not loud enough for me to hear.


Lester Bowles Pearson: Not one speech was made on that side.


Egan Chambers: Certainly we were advised through the press before the house met in January that the opposition had tremendous criticisms to make of our defence policy, and had valuable ideas to put forward. This, of course, is a very serious matter. It is a matter concerning which everybody who has a point of view should make that point of view known. But so far, as I say, I am afraid that the policy changes the opposition would like to have made have not seen the light of day. Perhaps they cannot stand the light of day.

Last night, when the Minister of National Defence announced that he had secured the agreement of the house leader to have the current estimates of the department referred to this committee when they come up for consideration, this announcement caused a great deal of alarm and despondency, and I personally was very much surprised.


Lester Bowles Pearson: It cannot be done under the rules.


Egan Chambers: There was no obligation on the part of the government to disclose that this would be done. However, the government thought it would be fair to tell the house, and particularly the opposition, that in future the deliberations of this committee would be widened so they would have before them not merely the public accounts that are mentioned in this resolution but would also have the expenditures proposed for the coming year.


Lester Bowles Pearson: Why did you vote down the amendment?


Egan Chambers: May I point out that this would be a broader term of reference than that of any defence committee that was set up when my hon. friends were sitting on this side of the house.


Lester Bowles Pearson: Why did you vote down the amendment?


Egan Chambers: I should like to quote from the prime minister of that day. In 1951 Mr. St. Laurent, as reported at page 971 of Hansard of that year, had this to say. I do not need to go into the terms of reference of that committee. As the Leader of the Opposition said last night, they are greatly similar.


Lester Bowles Pearson: It was broader than this one.


Egan Chambers: Mr. St. Laurent said this:
I do not believe there will be any generosity of interpretation of the terms of reference required because they are very specific.
I could quote at some length, but time after time in that address the prime minister of that day mentioned things which the committee could not talk about. They could not talk about allowances to widows and dependants. They could not talk about policy. They would not have serving officers before them, and so on. In fact it was a speech of restriction.
The resolution we have before us to set up the committee will enable hon. members opposite to examine the expenditures which have been made by the Department of National Defence, and when the estimates are referred to it that will enable the committee

to examine the current and proposed expenditures on national defence. When the estimates come back before the house or, if hon. members opposite so desire, during debate on a supply motion, Canada's policy on national defence can be debated exhaustively where it should be debated, namely in the House of Commons where it always has been debated.
I think it is also important to notice what happened during a good deal of the period to which the hon. member for Trinity was referring, namely 1953 until the present. He picks out 1953 as a particularly important date, because it was then that the Soviet union divulged the fact that it had atomic weapons. During the period from 1953 to 1957 there was no committee on defence of any sort, notwithstanding the continual requests from the opposition of the day that there should be an examination in the light of the new developments.


Lester Bowles Pearson: Now you have a chance.


Egan Chambers: There was no committee on expenditures. There was no committee of any sort. Already since 1958 we have referred the 1958 estimates of the Department of National Defence to the estimates committee, where a thorough investigation was made. But in all that period during which the whole fundamental change in defence strategy took place, as the hon. member has pointed out, no committee was permitted even though in 1951, when the committee of that day was set up, the then prime minister said "I think now this should be a continuing committee."
When hon. members opposite suggest that this government denies information to members, that this government stifles discussion, may I say that the opposite is the truth. Since this government came into power there has been more examination of the workings of government, through the committee system, than happened during the whole period when hon. members opposite were in office. The committee system had almost fallen into disuse, in that many special committees which were indicated were not set up, and that references of such things as estimates, public accounts and so on to committees were few and far between.
I was going to mention the fact that last night the Leader of the Opposition suggested that the committee on external affairs make recommendations on policy. That matter was raised this morning, and I think it has been established that such is not the case. There are excellent debates on external affairs policy. There was one in this house not long ago. The Leader of the Opposition gave his views. No doubt in due time, when
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they have had a chance to formulate some ideas on this subject, hon. members opposite will speak in the House of Commons and give their ideas on defence policy. But the place to do that is in the House of Commons. We in this country believe that, as part of our constitutional system, government policy should be established by the government and should be brought before parliament, where the government takes responsibility before parliament and the people for that policy. It is not our intention to slough off this responsibility on any committee. The responsibility for policy lies with the government and parliament. That is where it should be and where it should remain.


Paul Theodore Hellyer: You have not accepted your responsibility. That is the reason we are so greatly concerned. You have no policy at the present time. We expected to hear it earlier than this.


Egan Chambers: We have an interruption from the other side of the house, and I absolve the Liberal party. I am not permitted at this time to explain exactly the changes and the improvements made and the general housecleaning that had to be done and was done by this government when it came into power, changing the defence policy from what it was in those days.


John Whitney Pickersgill: Will the hon. member permit a question?


Egan Chambers: I am a little bit worried about you.


John Whitney Pickersgill: The hon. gentleman talks about the housecleaning that had to be done. Does the hon. gentleman recall that the present Minister of National Defence, shortly after he took office, said that he found everything in excellent order?


Mr. Speakman:: They got the horses off the payroll before then.


Egan Chambers: Thank you very much. Everything was in order from the point of view of the personnel-and the very fine personnel, I might say-who serve in Canada's armed forces. But from the point of view of administration and policy, I do not think anyone can deny the fact that great changes were necessary, in fact were overdue at that time; and they were made.


Paul Theodore Hellyer: We can hardly wait to hear what they were.


Mr. Speaker:: The hon. member is getting a little bit off the track.


Egan Chambers: Someone held the carrot in front of me, Mr. Speaker. I have little more to say. I have pointed out to the house that this committee with its present terms of

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reference, and when in due course the estimates of the department are referred to it, will have a wider field for investigation in matters of defence than any defence committee that has been set up previously in this house. This committee will examine and report on the expenditures that have been made and are proposed to be made. In the House of Commons itself policy may be discussed, and between those two procedures the whole field of national defence will be covered.


Paul Theodore Hellyer: Would the hon. member permit a question? When making that statement is he referring to the present resolution or to the proposed one referred to last night?


Egan Chambers: I thought I made it clear that I referred to both.


Paul Theodore Hellyer: Under the circumstances,
would you move the amendment today to broaden the resolution to cover both references?


Egan Chambers: Unfortunately the rules do not permit it.


An hon. Member:: We will give unanimous consent.


Erhart Regier: Mr. Speaker, I want to reiterate our contention that this resolution ought not to be supported, and in doing so give my reasons so there will be no misrepresentation when the members of our group rise in their places to cast their votes against this resolution.
We have for years called for the establishment of a committee to inquire into the policies of the government in relation to national defence. We feel that the government in a country such as ours, and governments in other democratic parts of the world, in order to provide really effective defence must have a broad understanding with its taxpayers with regard to defence policy, as broadly spread among the people as possible. We are weakening our defence if we fail to take the public into our confidence to the greatest possible extent consistent with the security needs of the nation.
We are therefore extremely disappointed at the limitations contained within this resolution, and I had hoped that after the debate yesterday evening the government would not have insisted upon continuing this debate today. Rather I had hoped that the government would take this matter under advisement and come up with another proposal.
We have been told in this house by the minister that the estimates may be referred to this committee; and we all know the minister well enough and accept his word,

as we have to accept his word. It is because of this announcement by the minister that we fail to understand why the government insists in leaving in the resolution the words "as reported in public accounts". If it is intending to refer the estimates to this committee, why does the government insist upon the retention of those words? The retention of those words certainly limits the activities of the committee which is proposed.
I had also hoped that overnight the government would have looked at another part of the resolution and given real consideration to a revision of that part. The resolution, in part, says:
-and in particular what, if any, economies consistent with the execution of the policy decided by the government may be effected therein-
I would like to underline what the hon. member for Vancouver East said last night, because I had hoped the government would take his remarks under advisement. I hope even now that we may be informed as to how it is possible to recommend economies on expenditures that have already been made. You cannot possibly recommend a saving of money which has already been spent, and in that respect the resolution is rather inconsistent in that any recommendation calling for economies is just impossible as long as the limitation in the earlier part of the resolution remains.
The parliamentary secretary to the Minister of National Defence emphasized that the place to discuss policy is in this House of Commons, and I have to agree with him. However, he also knows that one is able in a committee, which has power to call for the production of persons, papers and records and to examine witnesses, to obtain much more information than one is able to obtain in the house itself. It is for that reason that for many years we have urged that a committee be established to look into national defence policy.
Mr. Speaker, I cannot understand the reason for a resolution of this kind appearing on the order paper. The government is aware that this is one of our major national problems, of growing concern to a growing number of Canadian taxpayers. People in all political parties and in all walks of life are beginning to demand in a louder voice each year that there be a real examination of government defence policy. However, I am afraid that the terms of this resolution are going to be very disappointing to the Canadian people.
This resolution appears to me as a beautifully wrapped gift box containing nothing. It seems to be rather in line with the government's approach to other major national

problems, such as the unemployment question and its teeny winter works program. On major national problems with which this government is charged, it presents to the Canadian people what is in fact a beautifully wrapped gift box containing nothing.
We cannot sustain this kind of farce. We cannot help the government to mislead the Canadian people into believing that there is going to be this examination of national defence policy, which examination we feel is so vital and so urgent. Mr. Speaker, because we cannot support the government in its efforts to pull the wool over the taxpayers' eyes, we in this group intend to vote against this resolution.


Mr. Lucien Cardin (Richelieu-Vercheres):: Mr. Speaker, I did not intend to take part in this debate, nor will I be very long in my remarks. However I, as other hon. members in the house, cannot quite see why the government is so reluctant to discuss this vital question of defence policy.


Gordon Minto Churchill: It is not reluctant at all.


Louis-Joseph-Lucien Cardin: Every hon. member who has
spoken has made mention of the fact that in this era of intercontinental ballistic missiles our whole system of defence has been changed. It is because it has become such a technical question that we feel that the fullest and freest discussion should be held at this time.
One of the reasons why I rise to make a few short remarks is that I found in Hansard for November 13, 1951, a statement made by the leader of the opposition of that day. I think it is quite fitting that this statement should be read into the record now. I also believe it expresses a realism which the then leader of the opposition had at that time which should now be adopted by the members of the Conservative party in their attitude toward this new era of national defence. Mr. Drew had this to say, as reported on page 961 of Hansard for November 13, 1951:
I made it clear that the reason I was discussing the defence situation and the threat abroad was that we might know how important it is that when this committee meets it be given the widest powers, such powers as have been defined by the Prime Minister (Mr. St. Laurent).
I believe, Mr. Speaker, that everyone is in agreement that the powers which should be given to the committee should be such that we can go into all the difficult angles of our national defence policy in this new era. Anything less than the powers for which the Leader of the Opposition (Mr. Pearson) asked would be completely unrealistic.


Gordon Minto Churchill: Did you agree with Mr. Drew then?
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Louis-Joseph-Lucien Cardin: I stated that I agree, and I
think everyone in this house has stated it, that what we want is to be able to discuss the government's policy on defence with all its implications.


Gordon Minto Churchill: The hon. member did not answer my question.


Louis-Joseph-Lucien Cardin: Further in the course of the debate there were suggestions that the opposition had not taken the opportunity of bringing the subject of national defence forward for discussion. As has already been mentioned, the hon. member for Trinity spoke on this subject during the debate on the address and so did the Leader of the Opposition, although the Minister of National Defence unfortunately did not speak. If indeed the government was anxious to have this subject debated in the house I should like to ask this question, and perhaps the minister will reply. Why was it that the government chose to bring forward the estimates of the Department of Agriculture rather than the estimates of the Department of National Defence, if it had really been the wish of the government that the house should debate defence matters without delay? It seems to me the government could have brought forward the estimates of the Department of National Defence before those of the Department of Agriculture.


George Randolph Pearkes: Mr. Speaker-


Mr. Speaker:: I must inform the house that if the minister speaks now he will close the debate.


George Randolph Pearkes: This rather wide-ranging debate on the setting up of this committee to investigate the expenditures of the Department of National Defence and to give such advice in connection with economies as the com-mitteee may see fit, within the policy of the government, has centred very largely on the question of the enlargement of the terms of reference of this committee. It has been suggested that the committee should discuss the policies of the government. The Leader of the Opposition, referring to this proposed committee on January 20, said:
-so that we may assist in working out a national committee on defence on the broadest possible basis.
The hon. member for Trinity also referred to a bipartisan policy which could be introduced. Now, it is a British tradition which has been accepted by Canada for many, many years that our parliamentary system is divided into a government with its supporters and an opposition. The whole point of this system is that there may be

National Defence
the expression of different opinions, that the opposition has the right to criticize government policy. Except in times of the gravest emergency, such as in time of war, it has not been the policy of Canadian governments to have a union government; it has not been the policy to accept the idea of a bipartisan policy. If we did that, discussion would be stifled in this house.
One can see that there are many urgent matters with regard to which it might be said that it would be desirable for a unified policy to be adopted; not only in the field of defence but perhaps in the field of transportation, which today presents many very difficult problems. Perhaps there should be a bipartisan policy in connection with agriculture. There has been a lot of discussion regarding agricultural policy from time to time. But that is not the policy; that is not the system under which we operate in this country. It is traditional that any government must take responsibility for policy in respect to defence matters or any other matter.
It is interesting to see that there is really no unified policy so far as hon. members of the opposition are concerned. In 1958 the hon. member for Bonavista-Twillingate (Mr. Pickersgill) had this to say when the estimates committee was being set up:
I was extremely pleased to hear-and as my leader was, I too am very much in accord with it- what the Prime Minister said about ministerial responsibility and the obligation of keeping the responsibility for policy in the ministry and excepting policy questions from the purview of the committee. This is the view which I took when I first appeared before the committee at its very first session at the beginning of the proceedings in 1955. I set out the position of ministerial responsibility that was then taken, and I am happy to say that there was no real dissent in the committee from that position.
That would indicate a certain variation of opinion as between hon. members opposite.
When we have set up the committee I hope the closest examination will be given to these expenditures, not only the minor expenditures which have been made but also some of the very heavy expenditures which have to be made in the Department of National Defence. We have seen vast sums of money committed to various projects. I hope those expenditures will be examined. Some of these projects are still continuing. We have commitments made to the future, and that is why it is important that there should be an examination of the expenditures made in the past.


An hon. Member:: One o'clock.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
George Randolph Pearkes: Mr. Speaker, when the house rose at one o'clock I was endeavouring to point out to the hon. member for Burnaby-Coquitiam (Mr. Regier) the reasons why this committee could be helpful in examining the expenditures which have been made during the period into which this committee is called upon to examine. I was pointing out that there were a certain number of projects which had been initiated during that period and that money had been spent on those projects but that the expenditures had not been completed because the projects were continued and therefore an examination by this committee might be very helpful. If there are any unnecessary expenditures which have been undertaken in those years and are being reflected in the future, suggestions will be appreciated by the government if they can point the way to reducing those expenditures.
May I merely point out the fact that the construction of naval vessels takes a number of years. The original allotments of money have to be made long before construction starts because long leads have to be obtained. This is also true of a great deal of electronic equipment, aircraft and so forth. Therefore I believe that an examination of the expenditures which have been made in the past would be helpful when the reasons for those expenditures are explained to the committee and the expenditures are examined in the light of the background of the reasons given. Any suggestions that would result in economies being effected would be greatly appreciated.
As I said in my opening remarks, I am sure that salutary effects can be achieved and will accrue from this examination in exactly the same way as beneficial and helpful recommendations have been made by previous committees and have been accepted after examination and review by my department. We are sincere in our efforts to cut down the amount of money which is being spent on national defence. I am very conscious of the burden which is placed on the taxpayer by these big national defence expenditures. There is nobody more anxious than I am to see the elimination of any waste, extravagance or duplication from defence expenditures.
It is quite impossible for a minister of national defence to be able to examine every item of expenditure there is and every item of administration. He has to concern himself very largely with general policy and, as all hon. members know, there are other duties he must attend. He must attend the regular

sittings of this house. He must also attend discussions and cabinet meetings affecting a wide range of subjects and therefore he is not able to devote his full time to the administration of his department.


Paul Joseph James Martin: Mr. Speaker, will my hon. friend permit a question?


George Randolph Pearkes: No, Mr. Speaker, I do not think there is any point in accepting interruptions at this point. I will not accept a question at this stage.
We have a deputy minister who is there to assist and look after the general administration. Let me say I welcome the setting up of this committee and look forward to valuable advice being given by the hon. members who will constitute that committee.
A question was raised regarding classified material. It is true that certain information is classified and there are various degrees of classification starting with what is described as top secret information all the way down to confidendial information. Much of that can be given to the committee. A lot of that classified information, I know, has been published in the press. It is a very different matter, for example, to read information in the press, no matter how reliable the journal may be, and to have this information confirmed by a minister of the crown officially. That is why one has to be very careful regarding classified information.
Much of the classified information which affects the department concerns the arrangements which are being made by other countries to meet their contribution to our agreements which might have been reached for mutual defence. It would not be right for the minister of another country to give out information about the forces, ships, aircraft and details of that kind which are being carried out by another country although that country hay have allowed what appears to be extremely reliable information to be published in the press. At the top of the range of classified information there is information of a highly secret nature which I have no right to give out to anybody who is not on the authorized list.
Some questions were asked about the gap which might exist in the information to be supplied on expenditures, it being claimed that because we were limited to those expenditures which had been declared in the public accounts the examination would be allowed to cover a period only up to March of 1959. Unless that information has been published and examined by public accounts it must still be regarded as of an interim nature. It is incomplete and has not been audited. When
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my estimates are presented either to the committee that is being set up or to the committee of the whole any hon. member can ask how much money has been spent on any particular item during the last year. That is done continually. Hon. members rise and inquire how much money was spent last year on construction or purchasing of equipment and that information is always available.
There was some query as to the dividing line between policy and administration. There is no hard and fast line drawn as between what is policy and what is administration. Broad policies connected with our external affairs, which the Department of National Defence must implement, have all been announced time and time again; but there are matters which are of a fringe or borderline nature which might perhaps be described as the policy of administration, such as the acquirement perhaps of some weapons, or something of that sort well. The Prime Minister (Mr. Diefenbaker) made quite clear that those expenditures were to be considered in relation to the general policy, but that the general policy was not to be discussed. It is entirely up to the committee itself to decide where that line is drawn. I have explained several times that we are anxious to have this committee. We want this committee to do a job, and we shall not put any limitation on it except the general, broad limitation which is explained in the motion which we are placing before the house today, which is quite broad, quite clear. It will be up to the committee itself to decide where the dividing line between administration and policy is drawn.
With these remarks, Mr. Speaker, it only remains for me to express surprise and profound disappointment that hon. members on the other side of the house have indicated they will not co-operate with us and that they want to have this committee done away with, not to have this committee set up. They are like a bunch of spoiled children. They came out feeling that they were going to have something which they had no reason to expect, but when they find that we have gone a very long way to satisfy their request they whine and blubber because they have not got the whole thing they expected. It is, I say, with profound regret that I see this lack of co-operation on the part of the opposition.
We are going to go ahead with this committee and if the members of the opposition do not want to co-operate, we have enough talent on this side to be able to advise the minister and he will be able to draw the benefits from their advice. I repeat, I am sorry because there is limited talent on the other

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side which we could have used. I am sorry that they have expressed a determination to try and block the setting up of this committee. I again move, Mr. Speaker, that this committee be now established.


Paul Joseph James Martin: I am sorry that I interrupted the hon. member when he was speaking. Will he now permit me to ask him a question?


George Randolph Pearkes: As long as you do not make a speech.


Paul Joseph James Martin: The minister has said that he could not possibly be responsible for all expenditures in the department of which he is the senior minister. In view of this extraordinary statement, will he explain to the house why he does not assign that function to the Associate Minister of National Defence (Mr. Sevigny), who by training perhaps can undertake that responsibility?


George Randolph Pearkes: Mr. Speaker, I have already explained in the house what are the responsibilities of the Associate Minister of National Defence. I explained how pleased I was that he has been appointed. He has been a great help, and his particular sphere has been that of administration, as I explained to the house not very many days ago. I am sorry that the hon. member for Essex East was not here at that time, or had turned his deaf ear to the explanation I gave.


Harold Edward Winch: May I ask a question?


John Whitney Pickersgill: Does the hon. gentleman wish to ask a question?


Harold Edward Winch: I desire to ask a question of the minister.


George Randolph Pearkes: Mr. Speaker, I do not know
whether the house wants to assume the responsibilities of a committee. It seems to me these are the type of questions which could be asked in the committee.


Lester Bowles Pearson: Under these terms of reference it would not be allowed in the committee.


Mr. Speaker:: Order. If the minister says he is not willing to accept the question, I am afraid it cannot be asked.


Harold Edward Winch: Do I understand the minister will not accept the question?


John Whitney Pickersgill: Mr. Speaker, I am rising to take exception to a statement-


Some hon. Members:: Order.


John Whitney Pickersgill: I am rising, sir, as is my right under the rules, to take exception to what I consider to be a misrepresentation of my-


Some hon. Members:: Order.


Mr. Speaker:: If the hon. member feels that he has been misinterpreted, he is quite at liberty at this stage, rather than in the middle of the speech, to make a correction.


John Whitney Pickersgill: That is what I was doing. I did not feel that I wanted to be discourteous to the minister because I did not feel he was deliberately seeking to misrepresent, but I think he did misrepresent the position I took in the estimates committee at the time it was set up when we were in office. He read certain passages from my statement at that time and applied them to this debate. The reason I felt I was misrepresented is this and I will try to put it as briefly as possible. There was agreement in the house that the estimates committee would deal only with factual matters; there was that agreement on both sides of the house before the committee was set up, and there is no such agreement in this case, and it does not seem to me there is any parallel whatever.


John Cameron Pallett: There was no expressed agreement at that time, either.



FEDERAL-PROVINCIAL TAX-SHARING ARRANGEMENTS ACT ALTERNATIVE ARRANGEMENTS FOR UNIVERSITY GRANTS  EXTENSION OF INDIVIDUAL INCOME TAX RATE

Donald Methuen Fleming: that the house go into committee to consider the following resolution: That it is expedient to introduce a measure to amend the Federal-Provincial Tax-Sharing Arrangements Act to provide certain alternative arrangements for payment, either by Canada through the Canadian universities foundation or directly by a province, of the grants to institutions of higher learning presently paid under the authority of the Appropriation Act; and also to extend for a further period of two years the rate of 13 per cent for standard individual income tax for the purpose of calculating the tax equalization payments to the provinces and the amounts payable to the provinces under the tax rental agreements.
Dominion-Provincial Relations
Motion agreed to and the house went into committee, Mr. Flynn in the chair.


Donald Methuen Fleming: This resolution contemplates two amendments to the Federal-Provincial Tax-Sharing Arrangements Act, one to provide alternative arrangements with respect to federal grants to universities and the other to extend for a further period of two years the increase which was introduced in 1958 in the provincial share of the yield from the personal income tax. I should like to deal first with the amendment involving the standard rate of personal income tax.
The committee will recall that when the present government took office the standard rates specified in the Federal-Provincial TaxSharing Arrangements Act and on which the tax rental and equalization payments were based were as follows: corporation tax, 9 per cent; individual income tax, 10 per cent;: succession duty, 50 per cent.
Following the dominion-provincial conference of November 25 and 26, 1957, and with a view to assisting the provinces to meet their financial problems, parliament at the 1958 session amended the Federal-Provincial Tax-Sharing Arrangements Act to raise from 10 per cent to 13 per cent the provincial share of the yield from the personal income tax for the 1958 taxation year. A similar amendment was passed at the 1959 session with respect to the 1959 taxation year. This increase from 10 per cent to 13 per cent in the standard rate of individual income tax has provided very substantial additional revenues to the provinces for the fiscal years 1958-59 and 1959-60. The purpose of the proposed continuation of the higher rate of standard' individual income tax at 13 per cent is to continue to assure to the provinces the benefits of this increased revenue for the fiscal years 1960-61 and 1961-62.
I have had prepared a table showing the value of the payments and abatements for the three fiscal years 1958-59, 1959-60 and 1960-61 at the respective standard rates of 10 per cent, 9 per cent and 50 per cent on the one hand and 13 per cent, 9 per cent and 50 per cent on the other. May I have leave to put that table on the record of Hansard at this point?


Jacques Flynn: Is the committee agreeable to having this table printed in Hansard at this point?


Some hon. Members:: Agreed.
IEditor's note: The table referred to is as follows:]
[The Chairman.]
to

to
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EFFECT ON TAX-SHAEXNG ARRANGEMENTS WITH THE PROVINCES OF THE 3 PER CENT INCREASE IN THE STANDARD INDIVIDUAL

[Stage Direction]
INCOME TAX INCLUDING TAX ABATEMENTS (in thousands of dollars)
1958-59	Preliminary 1959-60	Estimated 1960-6113-9-50	10-9-50	Increase	13-9-50 10-9-50 Increase	13-9-50 10-9-50 Increase1. Newfoundland	17,572	16,552	1,020	19,103	17,261	1,842	20,527	18,577	1,9502. Prince Edward Island	4,269	4,269	-	4,340	4,311	29	4,675	4,675	-3. Nova Scotia	28,488	25,843	2,645	30,469	27,526	2,943	32,212	29,155	3,0574. New Brunswick	23,151	21,102	2,049	25,102	22,679	2,423	26,905	24,349	2,5565. Quebec	195,943	177,782	18,161	212,704	192,177	20,527	228,162	206,516	21,646(61,490)	(53,919)	(7,571)	(67,586)	(59,038	(8,548)	(70,624)	(63,465)	(7,159)6. Ontario	241,454	219,527	21,927	261,837	237,033	24,804	278,038	252,089	25,949(95,016)	(73,089)	(21,927)	(107,481)	(82,677)	(24,804)	(112,441)	(86,492)	(25,949)7. Manitoba	34,902	32,541	2,361	37,655	34,023	3,632	40,161	36,339	3,8228. Saskatchewan	35,628	32,320	3,308	38,3S3	34,674	3,709	40,876	36,985	3,8919. Alberta	48,181	43,718	4,463	52,894	47,785	5,109	57,335	51,888	5,44710. British Columbia	64,762	64,762	-	67,182	67,182	-	71,975	71,975	-Total including abatements	694,350	638,416	55,934	749,669	684,651	65,018	800,866	732,548	68,318Total excluding abatements	(413,459)	(368,115)	(45,344)	(450,195)	(397,156)	(53,039)	(477,731)	(423,900)	(53,831)
The calculations for 1958-59 are based on the final calculation of standard taxes, equalization and stabilization payments for the fiscal year 1958-59 dated Dec. 24, 1959; for 1959-60 on the fourth estimate of standard taxes, equalization and stabilization for fiscal year 1959-60 dated Jan. 8, 1960 and for 1960-61 on the estimates for the fiscal year ending March 31, 1901. The Atlantic provinces adjustment grant and the deduction on account of Quebec special corporations taxes are excluded.
The figures in brackets exclude the amount of the abatements.
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[Stage Direction]


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[Stage Direction]


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Dominion-Provincial Relations
John Whitney Pickersgill: Before the minister proceeds may I ask him whether the 1960-61 figure is more than an estimate?


Donald Methuen Fleming: Necessarily it must be an estimate at this point. It will be seen from the table that the increase from 10 to 13 per cent in the standard rate of individual income tax increased the value of payments and abatements to the provinces, and of course correspondingly increased the cost to the federal treasury by $55.9 million in 1958-59, $65 million in 1959-60, and it is estimated will increase payments and abatements by $68.3 million in 1960-61. The distribution of these amounts by provinces is shown in the table I have just presented.
For the year 1960-61 it is estimated- and I stress the word "estimated'-that the increase in the standard rate of individual income tax will mean additional payments to the provinces as follows:	Newfoundland,
$1,950,000; Nova Scotia, $3,057,000; New Brunswick, $2,556,000; to Quebec in payments, $7,159,000, and in abatements to Quebec taxpayers, $14,487,000, for a total of $21,646,000; to Ontario, $25,949,000; to Manitoba, $3,822, 000; to Saskatchewan $3,891,000; to Alberta, $5,447,000.
Prince Edward Island and British Columbia derive their benefits under the stabilization formula and are the only provinces to do so. This circumstance results from the provisions of section 5 of the Federal-Provincial Tax-Sharing Arrangements Act which provides for payments based on what is called the "projected tax rental payment". The projected tax rental payment is simply the amount a province would have received if the payment were calculated as though the provisions of the Tax Rental Agreements Act of 1952 were still in effect. If the projected tax rental payment as calculated is greater than the amount that a province would receive from tax rental and equalization, the province is entitled to a stabilization payment to make up the difference. For Prince Edward Island the projected tax rental payment for 1960-61 is $4,675,000 or $124,000 higher than the estimated total of tax rental and equalization payments based on a standard rate of individual income tax of 13 per cent. For British Columbia the projected tax rental payment for 1960-61 is $71,975,000 or $754,000 higher than the estimated total of tax rental and equalization.
Thus far, I have spoken of the first of the amendments to the act that is contemplated in the resolution now before the committee. The other amendment proposed is completely new as far as the Federal-Provincial TaxSharing Arrangements Act is concerned and it relates to federal payments to institutions of higher learning. Unlike the proposed in-79951-0-140
Dominion-Provincial Relations crease in the standard rate of individual income tax which represents substantial additional costs to the federal treasury, the amendment which will be proposed with respect to university grants involves no additional cost at all to the federal treasury or to the provinces. The amendment proposed will simply provide alternative arrangements so that grants now paid by the federal government to institutions of higher learning under the authority of the annual Appropriation Act can be paid out of the federal treasury through the Canadian Universities Foundation under the authority of the Federal-Provincial Tax-Sharing Arrangements Act or, under certain circumstances, when a province so desires directly, by that province.
Federal grants to the universities have been paid over the last nine years commencing in the fiscal year 1951-52. For the first five of these years they were paid on the basis of 50 cents per capita. For the next two years they were paid on the basis of $1 per capita; and for the last two years on the basis of $1.50 per capita of population. To the end of the present month the payments in these nine years total * the formidable sum of $112,509,238. The payments from April 1, 1952 to June 21, 1957 total $44,316,738; those from June 21, 1957 to March 31, 1960 total $68,192,500.
The grants have been allocated among the provinces strictly on the basis of population. Within each province distribution has been made among the universities on the basis of full time, intra-mural student enrolment in courses leading to degrees. Commencing in the fiscal year 1956-57 the distribution was made by the national conference of Canadian universities, and this year by its successor, the recently incorporated Canadian Universities Foundation under the terms of an agreement dated January 18, 1960 with the Minister of Finance, authorized by the Appropriation Act of 1959. Parliament has made the provision each year by an item in the estimates which accordingly found its place in the Appropriation Act. It has never before been placed on a continuing basis beyond the year to which the particular Appropriation Act applied.
At this time, Mr. Chairman, may I ask permission to insert in Hansard a table showing the amounts broken down by provinces provided by the federal government for university grants since the inception of the program?


Jacques Flynn: Does the committee agree to have this table printed at this point in Hansard?


Some hon. Members:: Agreed.
lEditor's note: Table referred to above is as follows:1
[The Chairman.]



APPENDIX


[Stage Direction]
1951-52	1952-53	1953-54	1954-55	1955-56	1956-57	1957-58	1958-59	1959-60	Total$	$	$	$	$	$	$	$	$	$1. Grant per capita	
.50	.50	.50	.50	.50	1.00	1.00	1.50	1.50	2. Newfoundland	
180,700	187,000	191,500	199,000	206,000	415,074	426,000	657,000	673,500	3,135,7743. Prince Edward Island	
49,200	51,500	53,000	52,500	54,000	99,285	99,000	150,000	153,000	761,4854. Nova Scotia	
321,250	326,500	331,500	336,500	341,500	694,717	702,000	1,065,000	1,074,000	5,192,9675. New Brunswick	
257,800	263,000	268,000	273,500	279,000	554,616	565,000	865,500	885,000	4,211,4166. Quebec	
2,027,800	-	-	-	-	4,628,378	4,758,000	7,326,000	7,498,500	26,238,6787. Ontario	
2,298,750	2,383,000	2,448,500	2,523,000	2,591,500	5,404,933	5,622,000	8,704,500	8,928,000	40,904,1838. Manitoba	
388,250	399,000	404,500	414,000	424,500	850,040	860,000	1,305,000	1,327,500	6,372,7909. Saskatchewan	
415,850	421,500	430,500	439,000	444,500	880,665	879,000	1,332,000	1,353,000	6,596,01510. Alberta	
469,750	485,000	501,000	519,500	533,000	1,123,116	1,160,000	1,801,500	1,864,500	8,457,36611. British Columbia	
582,600	599,000	615,000	633,000	652,500	1,398,464	1,487,000	2,316,000	2,355,000	10,638,564TOTAL	
6,991,950	5,115,500	5,243,500	5,390,000	5,526,500	16,049,288	16,558,000	25,522,500	26,112,000	112,509,238
Commencing in fiscal year 1956-57, the national conference of Canadian universities undertook the distribution of the grants.
The amounts made available to the universities of Quebec but not accepted amounted in 1952-53 to $2,087,000; in 1953-54 $2,134,500; in 1954-55 $2,194,000 and in 1955-56 $2,260,000. These amounts lapsed at the conclusion of the relevant fiscal year. Subsequent to 1955-56 the amounts for Quebec universities have been held in trust by the national conference of Canadian universities.
[Stage Direction]
o
3
o
5S
[Stage Direction]
Dominion-Provincial Relations
Donald Methuen Fleming: The federal grants are paid by the Canadian Universities Foundation only on application by the particular university. They have been welcomed by all recipient universities. They have greatly aided these institutions in their efforts to meet their financial problems in the face of the huge increase in the number of young Canadians seeking the benefit of higher education to equip them for life. Moreover, the system of grants has been accepted without challenge by the governments of the nine Englishspeaking provinces. There have been requests from the universities of Nova Scotia for a greater measure of equalization in the grants as between the universities of the different provinces, having regard to the much larger proportion of students in the population of that province than in others; but otherwise the system has met with wide approbation in nine provinces.
A very different view, however, has been taken in the province of Quebec. In the first year the grants were made available, 195152, the grants amounting to $2,027,800 were accepted by the universities of that province. In the succeeding eight years, of the qualifying educational institutions in the province of Quebec only two colleges have accepted the grants. So far as the universities and other qualifying colleges are concerned, the grants have gone unclaimed. For the four years 1952-53 to 1955-56 inclusive, they lapsed. Commencing in 1956-57 the unclaimed grants did not lapse, but under a change in the law accumulated in the hands of the national conference of Canadian universities and now the Canadian Universities Foundation. By February 29 the accumulation aggregated over $25 million. The reasons the grants were not accepted by the universities of Quebec are well known. Quebec regarded the scheme as a trespass upon the exclusive jurisdiction of the provinces over education.
In the face of this situation I stated the views of the government in this house on September 6, 1958, as reported on page 4726 of Hansard as follows:
Let me make it abundantly clear, Mr. Chairman, that this government will always scrupulously respect the terms of the Canadian constitution. It is plainly recognized that education is a field of jurisdiction exclusively assigned to the provinces under the British North America Act. As long as this government is in office there will never be any attempt made to trespass on that jurisdiction exclusively vested in the provinces.
I further stated:
18, 1960
Dominion-Provincial Relations
And lastly I stated:
Now I say, Mr. Chairman, of this agreement in relation to the attitude of the present government, that while the formula contained in the present agreement has not so far been such as to be viewed with favour in the province of Quebec, if there is any formula or modification of the present agreement which anyone cares to put forward which would permit the institutions of higher learning in the province of Quebec to participate, and which is in keeping with the national interest, we as a government are prepared to give it serious consideration.
I closed with these words:
(Translation):
This government scrupulously respects the terms of the Canadian constitution and will always do. It is plainly recognized that education is a field of jurisdiction exclusively assigned to the provinces. The increased grants proposed by the government are merely a needed assistance to universities without any interference in any provincial field intended by the government. As long as this government is in office, there will never be any attempt made to trespass on that jurisdiction exclusively vested in the provinces.
When the similar item in the 1959 estimates came before the committee of supply on July 18, 1959, I endeavoured to put the views of the government in these words, as reported at page 6393 of Hansard. Referring to what I had just read from the remarks of the previous year, I observed:
This is still the position of the government. I add to what I said last year that as this situation develops, if there is no change of attitude, no change in the basis on which these university grants are payable, it must be recognized by all that the present situation cannot continue. In other words, some way acceptable to the jurisdiction that controls universities in Quebec, some method must be worked out that will make those sums intended for the province of Quebec available to the institutions in that province in some form or other.
Further, I stated:
I can say, Mr. Chairman, I shall certainly devote the best efforts of which I am capable in trying to evolve some modification of this present provision that will make the grants available to all parts of Canada in a way that will be fair and equitable. I say without reservation that the committee cannot contemplate with equanimity a situation under which a large portion of this grant that is earmarked for the institutions of higher learning m Quebec is simply accumulating and is not being made available to be used for the purpose for which parliament intended it.	V
I closed with the words:
Mr. Chairman, having regard to the fact that nearly all of the universities of one province of this country are not receiving their share of these grants, before such an item or any item on this subject is presented to the house in another year a most intensive effort must be made to grapple with this very great difficulty. For my part, I Jhe comniittee my personal assurance that anything I can do to help resolve this difficulty will certainly be done if effort and understanding can do it.
I emphasize, Mr. Chairman, that in reference to this subject of the basis of distribution this present government makes no rigid approach. We adopt no take it or leave it attitude in regard to this basis of distribution.
79951-0-140i
I hope the committee will agree that that promise has been fulfilled.
Last October 15, during the course of the dominion-provincial conference of ministers

Dominion-Provincial Relations of finance and provincial treasurers, the late Premier Paul Sauve of Quebec opened talks with the federal government on this question. Out of the extended discussions which ensued have emerged proposals by the federal government to all the provinces. These were set forth by the Prime Minister in identical letters to all provincial premiers on December 9 and made public on December 10. They are now embodied in this resolution and the legislation to follow.
Briefly, an alternative to the present system is made available to every province, whether or not it has rented the corporation tax field to the federal government. To place itself in a position to choose the new alternative system, a province which has rented this tax field to the federal government may revise its tax rental agreement and resume the collection of its own corporation tax.
Where any province which collects its own corporation tax chooses to pay additional grants to its institutions of higher learning on the basis of student enrolment on a scale equivalent to $1.50 per capita of its population, its corporate taxpayers will receive an additional abatement of 1 per cent under the Income Tax Act, raising that abatement from 9 to 10 per cent. This option will be available for the taxation years 1960 and 1961 provided a province requests amendment of its agreement with respect to the taxation year 1960 by April 30, 1960, and with respect to the taxation year 1961 by December 31, 1960.
An additional abatement of 1 per cent to corporate taxpayers has a different value in each province. In no case will it be the precise equivalent of $1.50 per capita. In some provinces the value of such an abatement is much greater than the $1.50 per capita presently paid to the Canadian Universities Foundation for institutions of higher learning, and in other provinces the yield from an additional 1 per cent tax on corporate income would be quite inadequate to finance university grants of $1.50 per capita based on total population.
At this point, I should like to ask leave to have printed in Hansard a table showing a comparison of the grants of $1.50 per capita with the yields of a 1 per cent corporation tax for the fiscal year 1960-61 for all provinces.


John Whitney Pickersgill: Before the minister surrenders the table, I wonder if he could give the committee the differences for each province.


Donald Methuen Fleming: There is a great deal of information on this table which, I am sure, it will be the desire of hon. members to have as a matter of record. The statement

is extensive, and we have gone to some considerable effort to give the committee what I think will be regarded as exhaustive information on this subject. This table treats the subject in the different provinces under six headings-


John Whitney Pickersgill: Perhaps I did not make myself clear. I agree that this will be useful, but what I think we need at the moment in order to go on with the debate is the difference between the $1.50 per capita yield and the estimated yield of the 1 per cent; just that one figure in the case of each province.


Donald Methuen Fleming: The total of all the provinces?


John Whitney Pickersgill: No. For each province.


Donald Methuen Fleming: That will mean giving 20 figures. I think it would be more convenient for the committee if this were on record.


John Whitney Pickersgill: It is only ten figures, surely.


Donald Methuen Fleming: Perhaps I may be permitted to put this on the record now. I have another copy of this table among my papers, and in order to save time I will give it to the hon. gentleman.


Mr. Caron:: Whenever a table is presented in this way, we have no objection to it being placed on the record, but I think any minister should have copies ready to give to members of the opposition.


Donald Methuen Fleming: That is a practice which has never been followed in the past. It would be impracticable to bring into the house 265 copies of tables of this kind. That suggestion has never been made before. If hon. members opposite do not want this table, I do not wish to force it on them.


Alexis Pierre Caron: I do not object in any way to it being tabled, but we have the right to know what it is, if the debate is going ahead right after the minister has finished speaking.


Donald Methuen Fleming: As I understand the purpose of having resolutions in committee preceding money bills, it is that information of this kind and other information which may be required can be put on the record so as to facilitate the debate on second reading, and this information, I had assumed, would be of value and interest to hon. members. However, it is in the hands of the committee. I will not force it upon them.


Jacques Flynn: 
Lester Bowles Pearson: It is agreeable to us, of course, to have it on the record and we appreciate having it there. The only point we are making is that if this is important for the debate it would be helpful for the other two party spokesmen to have a copy at once so that they could use it when speaking in reply to the minister. But we are happy to have it on the record, of course.


Some hon. Members:: Agreed.
[Editor's note: The table referred to will be found on page 2230:]


Donald Methuen Fleming: This table indicates that there are five provinces where the yield of a 1 per cent tax on corporation income would be more than $1.50 per capita, and five provinces where it would be less. Because of these variations, and to equalize the value of this alternative, it is proposed that where a province which is collecting its own corporation income tax desires to pay the additional grants to its universities and its corporate tax payers receive in consequence a further abatement of 1 per cent on the rate of federal income tax, the amount by which the value of this abatement in the province exceeds $1.50 per capita will be deducted from and the amount by which it falls short of $1.50 per capita will be added to any other payments made to the province under the provisions of the Federal-Provincial Tax-Sharing Arrangements Act. The cost of the additional abatement granted under the Income Tax Act is by means of these proposed deductions or additions brought to the equivalent of $1.50 per capita in each province, which is the cost of the present grants to universities. There is therefore no additional cost to the federal treasury and at the same time no additional net cost to any province availing itself of the alternative.
Under the proposed amendments, the university grants will either be paid directly by a province or they will be paid as a statutory item under the new provisions of the Federal-Provincial Tax-Sharing Arrangements Act. There will therefore be no further need under these proposed arrangements for the present provision for university grants under vote No. 125 of the 1960-61 estimates and this item will accordingly be withdrawn. Similarly, no such item will be required in the 1961-62 estimates.
I have referred to the consequential amendment to the Income Tax Act which will be necessary to provide an additional abatement of 1 per cent in those provinces which desire to pay university grants directly. That amendment to the Income Tax Act will be introduced in due course at a later stage of the session.
18, 1960	2229
Dominion-Provincial Relations
I cannot conclude these remarks without paying tribute to the memory of a very great Canadian.
(Translation):
I cannot conclude these remarks without paying tribute to the memory of a very great Canadian, the late Hon. Paul Sauve. Though he was spared to be the prime minister of his province for but three short months, he had established himself as a leading figure in the country's public life and had made a lasting mark upon the course of Canadian history in these times. Rarely has a man called to a position of leadership in political life so quickly made his impress on the public mind or imparted such a stimulus to political thought and action.
He was a man of honour and principle. His outstanding qualities were sincerity, courage, understanding and sagacity. He thought wisely, spoke with candour, and acted with directness and vigour. He had an intense loyalty to his country and to his province. His shining patriotism had been expressed in a lifetime of service to his country, both in peace and war. He had the highest sense of dedication to public duty. Had he lived to enjoy a normal span of years he would have left a host of achievements behind him.
I have a deep sense of personal loss in his passing. We had known each other for some years but in those months our responsibilities drew us closely together in a warm friendship which to me will always be a cherished memory. Our last talk was just before Christmas when he gave expression to personal feelings which I shall always treasure. Like many others in this house I have lost a true friend for whom I had a profound and enduring administration and affection.
Mr. Sauve's untimely death was a grievous loss to the public life of Canada. It is a matter for the deepest regret that he did not live to witness the present legislative consummation of a project which he helped greatly to initiate.
(Text):
In conclusion may I endeavour to summarize the effect of the legislation now proposed. In addition to assuring to the provinces till March 31, 1962 the benefit of the increase from 10 to 13 per cent in their share of the yield from the personal income tax, this measure will
(a) offer all provinces equally an alternative to the present system of federal assistance to universities in the knowledge



GRANTS TO UNIVERSITIES

[Stage Direction]
Comparison of grants of $1.50 per capita with yield of a 1 per cent corporation income Tax for fiscal year 1960-oi
Nfld. P.E.I. N.S.	N.B.	Que.	Ont.	Man.	Sask. Alta.	B.C. Total
1. Population 1959 D.B.S. estimate	
$ 449,000	102,000	716,000	590,000	4,999,000	5,952,000	885,000	902,000	1,243,000	1,570,000 17,408,0002. Amount available to institutions of higher learning in each province (provincial population X SI.50).	$ 673,500	153,000	1,074,000	885,000	7,498,500	8,928,000	1,327,500	1,353,000	1,864,500	2,355,000 26,112,0003. One ninth of standard corporation income tax based on the first estimate of standard taxes, equalization and stabilization for fiscal year 1960-61 d. Jan. 8, 1960	
Ui
[Stage Direction]


*1
$ 354,000	55,000	729,000	517,000	9,849,000 15,706,000	1,380,000	1,020,000	2,554,000	3,416,000 35,580,000 g
4. One ninth of standard corporation income tax (= 1 per cent corporation taxable income)
equivalent per capita to. S .79	. 54	1.02	. 88	1.97	2.64	1.56	1.13	2.05	2.185. Amount by which the federal government would have to augment the 1 per cent corporation income tax abatement... $ 319,500	98,000	345,000	368,000	-
333,000
1,463,500
6. a mount ofthel per cent corporation income tax abatement which the federal government would have to recover	 S
2,350,500	6,778,000	52,500	-	689,500	1,061,000 10,931,500
Dominion-Provincial Relations

Dominion-Provincial Relations
that none of them will suffer any diminution in consequence of the adoption by its province of the alternative plan;
(b) place both the present system and the new alternative system on a firm statutory basis for the next two years conterminous with the period of the Federal-Provincial Tax-Sharing Arrangements Act.
It will, in the belief of the government, provide a solution to an issue which has been a long standing source of controversy, division and disunity in Canada. It is our hope that it will make an effective and constructive contribution to harmonious, co-operative dominion-provincial relations in Canada.
John Whitney Pickersgill: Mr. Chairman, we have just listened to an eloquent tribute from the Minister of Finance to a gentleman of great promise who is no longer with us, and I am sure that all hon. members on this side would wish to join in the tribute to the memory of a public man who devoted all his life to the public service in one way or another. But I, sir, would like to pay tribute to a great Canadian who is still living, the great Canadian who started these university grants all across Canada because he believed in the destiny of Canada and in the importance of having trained and educated Canadians to realize that destiny.
He carried on with this proposal notwithstanding the intransigence of certain persons in one part of the country. Whatever the precise merits of the proposal the minister has made this afternoon may be-and my friend the hon. member for Laurier will be dealing with that later, we are all glad that that intransigeance seems to have disappeared and we can now hope that in this field, as in practically every other field where Louis St. Laurent operated in this country, the university grants will be another mark of his contribution to the unity of Canada.
I am now going to deal-and the minister will perhaps not be too surprised at this- with the hardy annual of the Minister of Finance, the 3 per cent increment to Walter Harris' tax-equalization plan. We in this party are more satisfied with each year that passes that this government, which on every occasion in this session that it has risen to defend itself has quoted precedents from the days when we were in office, is finally in a position where it admits it has nothing better to offer in any of these fields. With respect to this field of tax sharing all the government has been able to do-and that without the consent or approval of any province but by unilateral telegrams, sent on that day in
1958 which the minister no doubt remembers-is add a little additional money precisely on the scheme which was formulated by the former minister of finance and the former prime minister, and brought into this house by Mr. Harris and opposed by the hon. gentleman who is now the Minister of Finance and described by him as incomprehensible.
We are glad that after all these years he has begun to comprehend it and to realize how very difficult it is to provide anything in this field that will satisfy everyone. But, of course, this is not what the new era was supposed to have brought in at all. I have been looking back at the prospectuses of the new era, the prospectuses that were given us by the Prime Minister in those great days of the vision in 1957. I read from the opening campaign speech at Massey Hall in Toronto on April 25, 1957:
We believe there can be no national unity in this nation until there is a realization that the federal-provincial matters have handcuffed the provinces of this nation; have denied the municipalities adequate sources of revenue; have placed the provinces and the municipalities in a position where they cannot discharge their constitutional responsibilities or permitting the necessary development in their own territorial confines of the natural resources that there are. We believe the provinces and the municipalities must have the final resources to carry out those responsibilities. We believe in the federal system of government. We believe that its preservation is essential to Canadian unity. We believe the federal system is today being challenged by the centralization complex of the St. Laurent government and that a healthy division and balance of revenues as between the federal and provincial governments must be assured.
We intend to form a government to immediately convene a dominion-provincial conference to bring about a settlement of these problems, not in the spirit of arrogant domination as displayed by the present government, but in the spirit of unity and amity and with mutual tolerance and respect.
That was the promise; that was the vision; that was the prospectus. Like many another prospectus from Bay street, the realization did not live up to the expectations; for what did we have? We had the federal-provincial conference which was called not as soon as they formed the government but in November of 1957. We had a federal-provincial conference called, and we all remember what the premier of Ontario said at that conference about Mr. St. Laurent. He did not talk about Mr. St. Laurent having any centralizing complex, or anything of that sort; he paid tribute to the courtesy and consideration which Mr. St. Laurent had shown to representatives of the provinces on every occasion on which they had ever come to Ottawa. And what is more, there were no fewer than four separate meetings, with a good many modifications made in the proposals as a result of discussions before Mr. Harris came into this house in 1956

Dominion-Provincial Relations and introduced the tax-sharing arrangements act, which we are now being asked to amend in a very minor particular. That is what was called a centralizing measure.
But where is this new federal system, this new system of unity and amity that the Prime Minister talked about, where is it? They had one meeting. They promised another in January, 1958, but what did they get in January? They got those famous telegrams with the mistakes in arithmetic that were made by the Minister of Finance. That is what they got and they were told they could take it or leave it. They were going to get a little more money, yes. Why were they going to get a little more money? I suggest that if there had been a Conservative majority in this house after the election of 1957 the provinces would not be getting any more money now than they were getting under the agreements of 1957, but there was another election coming up and something had to be done to sweeten things up for the next election. We said at that time that that was all that would ever happen. I could quote my words, and I said them again last year-


William Heward Grafftey: It was colossal cynicism.


John Whitney Pickersgill: It was pretty cynical, I agree with the hon. gentleman; it was not the kind of honest, straightforward talk that the people got from Mr. St. Laurent and Mr. Harris.


William Heward Grafftey: I am speaking of the hon. member's colossal cynicism.


John Whitney Pickersgill: We had this change from 10 per cent to 13 per cent, nothing else, for one year and the minister led us to believe at that time in that last parliament that the conference would meet later in the year. They could not meet at that time because parliament was also meeting. We remember that. Incidentally, the first time they finally got around to having a meeting with the provinces by an odd coincidence was when parliament was meeting. Why it was possible for them to meet when parliament was meeting in 1959 and not in 1958 is something that I will leave to the minister to explain. But that is what happened, a unilateral decision without any kind of consultation whatsoever, and no change since, no change whatsoever. Last year-I could read it for the minister if he would like me to; I have looked up the Hansard references; I know the minister likes me to read my old speeches over again-


Donald Methuen Fleming: Not to me.


John Whitney Pickersgill: -but I prefer to save the rest of the house that imposition. Many members said last year that a lot of the


time of this parliament could be saved if the minister would just bring in a bill for the whole remaining three years because he never intended to do anything else about it, anyway, but he did not accept that invitation, and this year he has brought it in for the remaining two years. It has been made quite apparent to the provincial governments that up until 1962 this is all they are going to get and all they can expect, and that the vision of 1957 has completely faded. That is really all there is in the proposal before the committee today. But there are some aspects of this matter that I do feel the minister, before the committee concludes its deliberations, should give us some information about. In the first place I personally would like-and I think there are many other hon. members who would also like-to have not merely the information about these unconditional payments but, in order to make the decision we are being asked to make in this motion-and these motions all begin in the same way, of course:
Resolved, that it is expedient to introduce a measure to amend the Federal-Provincial Tax-Sharing Arrangements Act-
I will read only the second part of it because that is all I am speaking about:

to extend for a further period of two years the rate of 13 per cent for standard individual income tax for the purpose of calculating the tax equalization payments to the provinces and the amounts payable to the provinces under the tax rental agreements.
I think, in order to decide whether it is expedient, whether it is something we should be doing now in this particular way, there is certain information that the minister ought to provide to us. The minister should let us know clearly, not only what additional amounts, as he has done today in one of the tables I understood him to table, will accrue to the provinces-he has given us an estimate only for 1960-61 and it would not be reasonable to ask him what he thinks is going to happen in 1961-62, although perhaps some of us would like to know what his views were. I think he has given us on this particular point all the information that it is reasonable to ask for at this stage.


Paul Joseph James Martin: Or is prudent for the minister to give.


John Whitney Pickersgill: As my hon. friend from Essex East has said, or prudent for the minister to give; but I do think that we ought also to be told how much is being paid in addition to the provinces, and how much the estimate is for the years 1960 and 1961 in unconditional payments, because very large claims have been made outside the house about the tremendous increase in the payments made as a result of action taken

by the present government since it came into office. I refer to the amounts paid to the provinces. I put my questions in a very convenient form the other day, in a starred question which the minister chose to ask to have made an order for return and which I suggested to him yesterday, or the day before, it would be very desirable to have available to us in this debate.
When all is said and done, though the government is responsible to the house, we in turn are responsible to the country and the country as a whole is entitled to know precisely what is the origin of these things. There have been very large claims-the minister will be quite familiar with what I am talking about-made outside the house about what this government has done for the provinces. I think we are entitled to have that information in precise form here in the house. I endeavoured in the question as I framed it to get that information, and it does seem to me that we should have it before we are asked finally to make our judgment whether it is expedient to do what we are being asked to do here. I am not saying this is my view because it is not, but it may be the view of some that if the government's claims to generosity are justified and in view of the minister's budgetary problems, he may even be going too far from his own point of view. Nevertheless we ought to have the information, whatever it is, and it should be made available in this committee and in a form in which it can be readily understood both by members of the committee and the country generally.
Since the minister has now told us, by introducing this resolution that the government, so far as the present currency of the Federal-Provincial Tax-Sharing Arrangements Act is concerned, has given up any thought of putting anything in its place and that Walter Harris' law is to be the law until 1962, which is what the minister has told us today, I think the minister should give us some prognostication, perhaps a new vision, perhaps another prospectus. We know that there have been meetings with the provincial governments. We know that the meetings were related directly to this subject and I think we ought to be told what progress has been made in working out that famous scheme for allocation of taxes which not only the Prime Minister but many of his supporters when they were on this side of the house promised would be given top priority when they became the government.
It seems to me, that we ought to have the results of that famous seminar made available to us. The minister on one occasion, I believe as was the wont of this government when we 79951-0-141
Dominion-Provincial Relations referred to it on other occasions as a seminar, said that it was established by the previous government. It is true that the previous government did establish a continuing committee to act within the terms of the broad policies laid down by their respective governments but as nearly as we could gather from the rather confused and confusing statements made by the minister about his famous seminar it was expected to generate ideas itself, to produce a new policy which would bring about that state of harmony that the Prime Minister forecast when he spoke in Massey Hall on that great occasion when he opened his triumphant campaign in 1957.
I say that we should be told whether the government really thinks that it is going to find something to substitute for the taxsharing arrangements act before 1962 or whether in fact the minister, as a result of the maturity and wisdom that he has developed in nearly three years of office, has now come to the conclusion that there was a good deal of wisdom in the views expressed in 1956 by those people who had had the longest experience in this field, who had discussed the matter for years and discussed it on a basis, as Mr. Frost said, of the greatest courtesy and consideration, with the provincial governments.
This is, I suppose, in a fundamental way, the basic problem of our country. It may not be the most important immediate problem. I am not going to continue in this vein, Mr. Chairman, so you do not need to look anxious. I think the most immediate current problem is, of course, the unemployment problem, but of the basic fundamental problems of the country, surely, the most important is finding the kind of financial basis which will, in the words, of the Prime Minister, ensure what we all want, the maintenance of a federal and not a unitary system of government.
That was, of course, precisely what Mr. Mackenzie King and Mr. Ilsley started out to do at the end of the war when the legislation was proposed and discussed in a conference which was the parent and precursor of the legislation that the minister is now asking us to amend. At all stages throughout all of that period the purpose was to put the provincial governments in a position where they could carry out their functions themselves and would have enough financial capacity to do so because, as Mr. Bracken, who I am sure will be regarded by the Minister of Finance as a great authority, said at the famous federal-provincial conference in 1941, provincial autonomy without the means to support it is an arid and empty thing. I lived on the prairies in the 30's when we had provincial autonomy without the means

Dominion-Provincial Relations to support it and I can assure you, Mr. Chairman, that everything about the prairies in those days was pretty arid.
It was this great problem that the Liberal party set out to solve as soon as they came into office in 1935, and we cannot help taking some satisfaction from the fact that, after three years of office, the present administration has not been able to find a single deviation from that solution. We are very glad that they feel so flush that they can pay a little more money but that has not changed the formula. That has not changed that situation which the Prime Minister described in Massey Hall as this centralizing complex of the St. Laurent government. The same law is here. It was never a centralizing law at all; it was a decentralizing law.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: Why are hon. gentlemen keeping it on the statute books if they do not agree? Why do they not vote against it? The plain fact is that they know perfectly well why Mr. Duplessis agreed to take the equalization payment after the amendment of 1956. Why did he take it? Because that very large sum of about $60 million paid from the federal treasury into the treasury of Quebec without any conditions attached was what enabled the provincial government to carry on, and without it they could not have carried on. Without it their autonomy in 1958 would have been as sterile as the autonomy of the prairies was in the 30's. It was saved by that $60 million which they started to take and which they are still taking and which I am very glad they are taking.
I think it was tragic that after so many years there was not equalization right across the country. I think it was the greatest of all the great achievements of the St. Laurent government in the domestic field to establish a system of tax sharing which does give to the provincial governments, regardless of their tax base, a sufficient assured income to maintain provincial services without having to surrender any of their functions to the federal government.
In 1936 and 1937 when the Rowell commission was beginning its work there were two possible ways of dealing with the problem. One was to transfer many of the functions of the provinces to parliament here and finance them that way and the other was to put the provinces in a position to finance them themselves.
The government of Mr. Mackenzie King, the government of Ernest Lapointe and the government of P. J. A. Cardin made the basic decision that they were for provincial rights

and that what they would do was to work out some scheme to put the provinces in a position to do their own financing for themselves and treat the people equally from one end of this country to the other. That is something that should never be forgotten.
It would have been very easy to go in the other direction. In fact, the Bennett government started in the other direction. By some of that legislation which the courts found to be ultra vires they had started in the direction of centralization, in the direction of trying to gather up provincial functions here in Ottawa. Incidentally, I may say that one of the members of that Bennett government was a gentleman who, for many years, was provincial treasurer in the government of Mr. Duplessis.
I just recall this past history because we have had so much distortion of it over the last few years and only as recently as yesterday in the main editorial in the Ottawa Journal, which perhaps may have been the mainspring of what I am saying this afternoon. But the plain fact is, Mr. Chairman, that this tax sharing plan which the minister is now asking us to amend in order to make it a little bit more generous to the provinces was a great achievement in three ways. It was a great contribution to provincial autonomy in this country; it was a great contribution to equality of opportunity and to equality of service for all Canadians, no matter in what province they live. For those two reasons it is proving to be a great contribution to the unity of Canada.
As to approving the extra 3 per cent that is being offered for two more years by the present government or will be offered in the bill it proposes to introduce, we are of course in favour of that provision. We supported it in 1958 and in 1959 and we support it again. But before we reach a final decision on this matter I think we should have before us the kind of factual information that I indicated earlier it would desirable to have in order to give this matter the kind of consideration which it seems to me it is necessary for us to give in a responsible way.
I am not saying that I shall not have something more to say before the committee has completed its deliberations but I want to say once again, in order to emphasize the point, that we on this side of the chamber are extremely proud of two things. We are extremely proud of the fact that the taxsharing arrangements act is standing the test of time and is standing it very well. We are also proud indeed that the great vision of Louis St. Laurent in connection with

the university grants is now going to come to fruition from one end of Canada to the other.


Mr. Ricard:: Under a Conservative government.


Herbert Wilfred Herridge: First of all, Mr. Chairman,
I must say that I enjoyed the extremely interesting speech made by the hon. member for Bonavista-Twillingate. 1 think everyone will agree that his speech gave evidence of his particular training in three fields. From listening to him carefully-and I say this seriously-I think we had evidence of his training as an historian, as a barrister and solicitor and, shall I say, of his work as chief propagandist for the Liberal party. However, other than that, I thought it was a most interesting speech and an informative one.
In pursuing the few remarks I wish to make on behalf of this group, I want to say that I join with the hon. member for Bonavista-Twillingate and the minister in their tribute to the former premier of Quebec whose death unfortunately came so soon. I think he made a great contribution to this good work during the short time he was able to act as premier of his province.
We in this group try to be fair. We recognize the good work that was done by the former prime minister, namely Right Hon. Louis St. Laurent, in strengthening and developing national unity in Canada and in giving effect to pieces of legislation that were the first steps toward grants to universities and that provided the funds necessary for Canadian provinces, shall I say, to experience the reality of Canadian autonomy because they were able to do so under proper financial circumstances.
However, I must bring to the attention of the committee the fact that these grants to universities are only a partial implementation of the policy that has been advocated by members of this party since its formation in 1932. That policy is federal aid to education on a broadly based scale so that every child in Canada, regardless of where it lives or of the economic circumstances of its parents, should have an equal opportunity to secure the education of which it is capable of taking full advantage.
This payment is one aspect of that policy, and we trust that it will be of such assistance to the universities in Quebec that it will benefit young men and young women in the province of Quebec who would not otherwise benefit were this arrangement not completed. We are delighted to know that the universities in Quebec are to enjoy the benefits of this resolution, which benefits have been enjoyed 79951-0-141J
18, 1960	2235
Dominion-Provincial Relations by other provinces for a number of years. It is fortunate-and I say this frankly in passing-that the former government made arrangements so that the funds would accumulate and that they would be held in reserve. This is a very substantial fund which will be received by the universities in Quebec. I am sure it is welcome from what we have read in the papers in recent years concerning their financial difficulties, the protests of students in certain institutions and so on. I say with all sincerity that we are delighted to know that this arrangement has been made and that Quebec is going to join in this assistance from the federal government with the other provinces in Canada. I have no hesitation in congratulating all those who made any contribution to reaching the agreement or solution which is evidenced in the proposal put forward by the Minister of Finance. It is for the welfare of a good number of our fellow Canadians in the province of Quebec. For that reason we are extremely happy indeed.
I listened carefully while the Minister of Finance was speaking on the other aspect of this resolution. I am one who treads rather warily when it comes to the question of figures or commenting on documents that I have not had an opportunity to read. I am therefore not going to say any more at this time until I have had an opportunity to read the minister's speech and to read the documents that were tabled and, with the rest of our group, have been able to give some consideration to them. On second reading we will say what we wish to say about the matters brought to the attention of the committee this afternoon by the minister. (Translation):


Mr. English:: Mr. Chairman, I am indeed delighted with the opportunity to take part in this debate, not only as a member of parliament but as a former teacher.
The matter we are now considering has long made headlines, not only in the province of Quebec but throughout Canada.
This is the most significant issue we have had to face in this house. It is a problem which is vital for the survival of our universities, for our young people of today and also vital for the safeguard of our rights and prerogatives.
In saying that the problem is a vital one for our young people, I should like to endorse a statement made in 1878 by the Hon. Mr. Parent, when he said:
It would be a grievous mistake to assume that peace can be restored to mankind by purely economic methods, just by feeding the poor if, at the same time, we do not provide for the needs and the rights of the mind.

Dominion-Provincial Relations
As I said just now, Mr. Chairman, I believe the problem is of the utmost significance, and I am sorry I was unable to prepare myself to deal with it adequately. I shall, nevertheless, try to explain to the house the quite justified and legitimate feeling of Quebec.
There has been for many years a struggle between Ottawa and Quebec. Each proclaimed its rights and if we read some excerpts of a brief submitted by the Montreal chamber of commerce, we will find this:
As far as corporate income tax is concerned, the chamber of commerce of the Montreal district feels it is its duty to confirm the recommendations made with regard to individual income tax. The corporation, like the individual, should be left a minimum necessary to its expansion and survival, and equality of sacrifice should in all cases be observed.
The chamber of commerce of the district of Montreal believes that these principles should be recognized by setting up progressive rates once the basic exemptions are established.
The chamber of commerce of the district of Montreal also believes for instance, that any corporation aware of its responsibilities to society, should be granted the privilege of contributing of its own free will, and according to its wishes and means, to various social, charitable and educational organizations.
The chamber of commerce also said the following:
In the view of the chamber of commerce of the district of Montreal, it is generally agreed that educational and cultural institutions should be able to count on the state to supplement their budgets.
However, the chamber of commerce of the district of Montreal cannot admit that, disregarding the Canadian constitution, the federal state should subsidize cultural and educational institutions by means of direct grants, though it may and does indeed recognize that they are under provincial jurisdiction.
Federal authorities do not seem to have found my other solution to this permanent provincial problem than financial aid by the central government.
Such a solution can definitely be only a temporary one and, in spite of all the precautions that were taken to safeguard constitutional integrity, it cannot be approved.
In this field as in all others, the chamber of commerce of the district of Montreal cannot accept any solution directly or indirectly implying any subordination of the provincial governments to the federal government in those fields where its jurisdiction is exclusive.
Before dealing any further with this resolution, I want to make a few retrospective remarks with regard to events since 1952.
A few moments ago, I noted the words of praise spoken by the Minister of Finance (Mr. Fleming) for our great man the late Paul Sauve.
I also heard the hon. member for Bona-vista-Twillingate (Mr. Pickersgill), speak-

ing of Mr. St. Laurent, whom I greatly respect but whose principles I cannot share.
Indeed Quebec cannot be deprived of its rights and prerogatives, and when the then prime minister, Mr. St. Laurent, advocated an extreme form of federalism, he acted in opposition to the very letter of the constitution which protects Quebec provincial rights and prerogatives.
Mr. Chairman, I also have to pay tribute to to a great man who is no more, one never much appreciated or loved by our opponents because they were not successful against him. I am referring to the hon. Mr. Maurice Du-plessis, who, all his life, fought for his province of Quebec and devoted himself to the safeguard and maintenance of our rights and prerogatives. It was here in Ottawa, I believe, that he said, during the 1955 conference:
Co-operation with the Ottawa government, yes; assimilation, never.
And that is what he did. He never wanted to be party to a policy whose purpose was to surrender to Ottawa the rights and privileges which were given us by the fathers of confederation.
Surely I cannot congratulate a government which has sacrificed everything, but I must pay tribute to the one who, in keeping with his vocation, has defended the rights which are recognized by the constitution. And if we can now enjoy those rights, it is due to the man who always refused to accept the proposals of the federal government in office at that time. That must not be forgotten, and it must be recognized that he was, both for the province of Quebec and for Canada as a whole, a great Canadian, a great patriot.
Mr. Chairman, also recalled during those conferences, were the words of a great Canadian who was, I admit, a member of the Liberal party, a party which has included men of principles, men who would never have agreed to grasp anything belonging to the provinces. Indeed, there were people of that type, and I could name some of them.
Mr. Chairman, I could mention the name of a great patriot, a Liberal, the hon. Sir Wilfrid Laurier, who said, in 1887:
It Is an absolutely false principle which claims that one government can collect revenue while another one spends it.
More than forty years later, the fundamental truth appeared even more obvious, when the hon. Mr. MacKenzie King, heir of Mr. Laurier's policy, stated in 1929, in the House of Commons, that rights belonging to provinces should not be tampered with.

And earlier, in 1884, there was also the Hon. Honore Mercier who stated:
The provinces existed before the dominion (Canada), and it is from them that the dominion got its powers. The provinces are sovereign within the limits of their attributes, and any interference with that sovereignty is a violation of the federal pact.
Well, Mr. Chairman, those men belonged to the Liberal party, to the great Liberal party of days gone by, for which I had great admiration. I would have liked its successors to follow in the footsteps of those great patriots like Laurier, King and Mercier. But such was not the case.


Mr. Pigeon:: Sir Wilfrid Laurier was born in L'Assomption, in my constituency.


Roland Léo English: How can we explain then, that the federal government, only a few years ago, interfered in the field of education, despite protests from the province of Quebec? For what motive did the then Liberal government interfere in that field, which is perhaps the most precious, because, if there was ever a fundamental right which the Canadian constitution did definitely establish, it was certainly the one about education?
Mr. Chairman, what were then the hidden intentions of the then government? I am still wondering, and when the minister for Bon-avista-Twillingate took the floor a moment ago-excuse me, the hon. member for Bon-avista-Twillingate (Mr. Pickersgill) -


Joseph Aimé Roger Parizeau: Don't worry, he'll never be a minister.


Roland Léo English: Mr. Chairman, the hon. member for Bonavista-Twillingate said a moment ago that there were other ways of settling that problem. I shall tell him what was the best answer to this problem: refusal at all times to infringe on the rights of the provinces; then it would not have been necessary to find a formula, or a solution.
The Quebec government paid money to Ottawa and never got anything in return. It was also obliged to resort to taxation to provide for the needs of our universities.
Since 1952, our universities have refused to accept federal grants; therefore, Quebec universities, as well as universities in other provinces, are glad today of what has just been achieved, which is a step toward the recovery of our taxation rights and powers.
The province of Quebec is also proud of having had the leadership of outstanding men to defend its rights.
Dominion-Provincial Relations
It had among others-and I was glad to hear the Minister of Finance speak in praise of him-the late lamented Hon. Paul Sauve.
He is another great leader whom the province of Quebec did not find in Ottawa, but in the ranks of the Union Nationale.


Louis-Joseph Pigeon: That is true.


Roland Léo English: Paul Sauve, who got down to work right from the time he was sworn in and lost no time in going into the most urgent of questions, that concerning universities. He met with the Minister of Finance and during that meeting where there was harmony and cordiality, they reached an agreement.
This great patriot has passed away. He was replaced by another great patriot who also contributed to the solution of that problem, the Hon. Antonio Barrette, another leader that the Quebec government did not find in Ottawa, but also in the ranks of the Union Nationale.


Mr. Johnson:: We didn't have to go to Stormont to pick him.


Roland Léo English: Well, Mr. Chairman, I am glad you also met the hon. Mr. Barrette, the premier of Quebec.


Louis-Joseph Pigeon: The great leader.


Roland Léo English: -and I am glad he was able to settle the matter. I have been reading newspaper editorials which indicate that all the universities are happy. So again, I wish to thank the Minister of Finance.
I wanted to give some of the background, particularly since 1952, because I have so often heard the opposition say to Quebec members in this house-they never missed an opportunity: tell us something of the Union Nationale. Well, gentlemen, I let you talk, because I learned from my very earliest days to show respect for other people, and never to interrupt. That is why I kept silent but today I am proud to rise and defend the people you attacked.


Maurice Bourget: We didn't attack them.


Roland Léo English: Today, the hon. member for St. Denis may feel confident, but he will have an opportunity to see what the hon. Mr. Barrette can do when election time comes along in the province of Quebec. We can talk about it after the elections.


Maurice Bourget: This is the time to do it, not later.

Dominion-Provincial Relations


Azellus Denis: You should not talk too much, you are in Ottawa.


Joseph Aimé Roger Parizeau: You don't even know whether or not you are in Ottawa.


Roland Léo English: I have learned two things. First, I was taught to show respect for authority, and I was also taught to love my neighbour. In my younger days, I used to go to the fair, and I found out-


Azellus Denis: Did you win prizes?


Roland Léo English: No, but at the fair, I learned to recognize a clown when I saw one.


Louis-Joseph Pigeon: Mr. Lesage would certainly get first prize.
(Text):


Charles Edward Rea: Order. I am sure the hon. member for Gaspe realizes the nature of the resolution which is before us, and I would request him to return to the subject under discussion.
(Translation):


Louis-Joseph Pigeon: When you talk about Mr. Lesage, you talk about agricultural fairs.


Roland Léo English: Thank you, Mr. Chairman, for calling me to order. I shall gladly submit to your decision. However, the hon. member for St. Denis should probably have been called to order at the same time, because without his intervention, I would not have been out of order. In any event, I shall revert to the matter we are discussing.


Paul Léo Maurice Johnson: The St. Denis expert on procedure.


Roland Léo English: Before resuming my seat, and at the risk of displeasing my hon. friends opposite, who dislike hearing the truth, may I remind once again this honourable house that there has been and will be in Canada's political history two governments. There will also be a great minister of finance. I said two governments, one which sells our property and another one which returns it, that is to say which surrenders what has been taken away unfairly, and it is the Conservative government which is returning to the province of Quebec what was taken away from it in the past.
There is also, and there will be also in history a great minister, and it will be the Minister of Finance, who will have been instrumental in returning their dues to the provinces.


Lionel Chevrier: Mr. Chairman, I believe that after the speech we have just heard, it would be in order for me to read again to the committee the resolution which is now before the house. It reads as follows:


That it is expedient to introduce a measure to amend the Federal-Provincial Tax-Sharing Arrangements Act to provide certain alternative arrangements for payment, either by Canada through the Canadian Universities Foundation or directly by a province, of the grants to institutions of higher learning presently paid under the authority of the Appropriation Act; and also to extend for a further period of two years the rate of 13 per cent for standard individual income tax for the purpose of calculating the tax equalization payments to the provinces and the amounts payable to the provinces under the tax rental agreements.
I agree with the Minister of Finance, that this resolution can be considered from two different angles, the first one deals with the extension for a period of two years of the arrangements as they exist today; the second one dealing with new arrangements that the minister has explained and about which I would like to say a word.
However, Mr. Chairman, like my friend the hon. member for Bonavista-Twillingate (Mr. Pickersgill), and the minister himself, I would like to tell the house that we, in the opposition, agree with him about the great qualities of the late Hon. Paul Sauve, the great former premier of the province of Quebec. We believe that had Providence not taken his life, he would have brought along, I am sure, a greater unity between the various provinces which form our country. Personally, Mr. Chairman, I think so and for more than one reason. I am convinced of it. I believe his idea of politics was similar to that of the Right Hon. Louis St. Laurent and that in many regards his conduct appeared to be based on and patterned after that of the former prime minister of Canada.
I believe also that it was his intention, at least according to the letters he wrote and to his policy during the short period he was premier of the province of Quebec, to take his province out of the isolation in which the Union Nationale had placed it, in order to give it greater expansion within the Canadian confederation. That is why I say, as did the Minister of Finance, that the Hon. Paul Sauve, the former premier of Quebec, wanted to give his province greater expansion within the Canadian confederation, and had he lived, no doubt he would have achieved this.
Mr. Chairman we have just heard the speech of the hon. member for Gaspe (Mr. English), who, in his remarks not only played politics, but appeared to have no knowledge of the basis on which provincial relations have been established under the government of the Right Hon. Louis St. Laurent.

I believe it is important, at this time, to remind the house that in 1956, an agreement was reached between the federal and provincial governments, which came into force in 1957, and which gave the provinces the choice between leasing or not leasing their taxation powers to the federal government, as they wished. They had the choice in three fields: (1) in the field of personal income tax; (2) in the field of corporation tax; (3) in the field of succession duties. Under this agreement, eight provinces of Canada decided to rent their powers. The province of Ontario leased its powers with regard to personal income tax, but retained taxation powers on corporation and estate income tax. The province of Quebec did not lease anything. Therefore, it was free to impose taxes under those arrangements. Thus, there was no interference at all in the provincial field, contrary to what was stated a moment ago by the hon. member for Gaspe. An important feature of this arrangement is that whether the provinces lease their taxation fields or not, they are not granted any privileges and suffer no discrimination. They suffered no detriment. They themselves collect what others get as the price of rental. Like the others they also receive equalization payments.
But the St. Laurent formula, a unique formula, the 13-9-50 formula, which the minister has mentioned earlier is obviously not a perfect one but no other party, no other government has been able to find a better one.


Some hon. Members:: Hear, hear.


Lionel Chevrier: That is the formula which, after having been many a time considered seriously and conscientiously by the former prime minister, the Right Hon. Louis St. Laurent and by the previous government, was found to be the best in the circumstances. So far, as was said a moment ago by my good friend, the hon. member for Bonavista-Twillingate, it has not been possible to find a better formula. All that has been done to this day has been to take the formula, and to extend its provisions to include a further 3 per cent.
Therefore, I say again that, under that formula which the hon. member for Gaspe claims is unfair-if he did not say so directly, he implied it-the province of Quebec has received between $50 million and $60 million in equalization payments. Furthermore in the estimates which the Minister of Finance
Dominion-Provincial Relations introduced in this house for the fiscal year 1960-61, it is indicated that the province of Quebec will receive some $66 million under those equalization payments. It therefore follows that the formula is not so bad, but, on the contrary, a good one. May I briefly tell you what the formula means, in order to prove once more that it involves no invasion of the provincial field.
Under that formula, the federal government says three things: "First of all, if you rent your powers, I shall give you in return the yield of those three taxation rates. Second, if you do not rent them, I shall reduce my federal taxes by those three percentages in your province. Third, as I know that the yield of those three taxes per capita varies considerably from one province to another, and that, in the poorest provinces, they are a source of discrimination, I shall offer you without any strings attached grants that will equalize the revenues from those taxes in the various provinces, taking as a basis the two wealthiest provinces, that is, Ontario and British Columbia.
That formula, therefore, does not involve any interference; each party remains on its positions, and keeps its powers. Then, how can we say, in all sincerity, in all fairness, that there is interference in the provincial field. Besides, those who claim that there is interference, why do they not prove it? How is it that they did not submit the matter to the courts to prove that there is interference? They did not do so. And if they did not do so, we are perfectly right in saying emphatically that the formula is fair, that it is the best formula which could have been developed under the circumstances. I have therefore no hesitation in saying that this formula does not involve any interference in the provincial field.
Mr. Chairman, I have no intention of dealing with the second part of this resolution, because my hon. friend the member for Bonavista-Twillingate handled that very well.
However, in relation to the first part of the resolution which the Minister of Finance emphasized, in order to give us a few details -not all of them, of course, because we shall get them, no doubt, when the bill is submitted to the house-I should like to call the attention of the house to a letter written by the Prime Minister of Canada (Mr. Diefen-baker) to the then premier of the province of Quebec. That letter was tabled in the house after an inquiry for return by mem-

Dominion-Provincial Relations bers of the opposition. At this stage, I should like to quote a part only of that letter, which is dated December 22, 1959:
Should the Quebec legislature decide to accept the new formula, and should the federal act be amended by parliament as proposed by the government, the result will be that in the next two fiscal years, that is from April 1, 1960 to March 31, 1962, the following provisions will take effect.
Mr. Chairman, here are the three provisions to which I wish to call the house's particular attention:
(a)	Should the Quebec legislature decide to raise the provincial corporation tax to 10 per cent or more of corporate profits, there shall be granted to corporations affected by that tax a 10 per cent exemption in lieu of the present 9 per cent on the federal tax on corporate profits;
(b)	The $1.50 per capita grant paid to universities by the federal government, with the authorization of parliament shall be cut off with respect to universities in the province of Quebec.
(c)	The difference between the yield of the additional tax exemption of 1 per cent and the $1.50 per capita exemption for your province shall be adjusted, so that the tax position of the federal government will remain unchanged. In other words, should the 1 per cent tax exemption be greater than an amount equal to $1.50 per capita, as will be the case, the federal government will deduct the amount in excess of the equalization payment which is now being paid to the province of Quebec out of federal funds under the Federal-Provincial Tax-Sharing Arrangements Act. As an example, assuming the new formula were applied on the basis of 1959 figures, the federal treasury would lose and the provincial treasury gain approximately $9,250,000 as a result of the change in corporation tax rates. On the other hand, grants to universities based on the figure of $1.50 per capita would amount to $7,500,000 in the case of the province of Quebec; the difference of $1,750,000 would be deducted from the equalization payment for the province of Quebec, which in 1959 will amount to approximately $67,000,000.
Mr. Chairman, this letter which was sent to the former premier of the province of Quebec by the Prime Minister of Canada prompts me to ask a number of questions of the Minister of Finance.
In view of the three paragraphs I just read, would the province of Quebec have to distribute the yield on the basis of $1.50 per capita?
Would the province of Quebec have to refund the excess of that tax to the federal government, if the yield were greater than $1.50 per capita?
Moreover, should there be a deficit, as I understand from the letter written by the Prime Minister of Canada, will the payment made by the federal government not represent a federal subsidy for education purposes.


Mr. Chairman, those are questions which I think the Minister of Finance ought to deal with either in the resolution stage, or when the bill comes up for second reading.
Finally, if the minister agrees to answer these questions, would he tell us also if, under these circumstances, the province of Quebec would not become the fiscal agent, for its own purposes, of the federal government? In short, the question I ask the Minister of Finance is this: Does he think that the new formula-which, unfortunately, we will not know entirely before reading the bill-is better than the one which existed under the arrangements that the minister is seeking to amend now?
Mr. Chairman, I believe we have a right to such answers. Obviously, we, the members of the opposition, cannot at this time consider wholly and fairly the results of these amendments before we have read the bill. However, we are happy to hear that a formula has been found. In fact, we believe, as Mr. St. Laurent believed at the time, that in the present circumstances, the universities are increasingly in need of financial aid. The universities of the province of Quebec, like those of the other provinces, need capital to realize the technical, scientific and other developments they wish to undertake in their institutions, just as the classical colleges of the province of Quebec also need it.
That is why I can say in this house that we, of the Liberal party, shall support the principles of the resolution in order to be able, at the second reading, to get all the details of the formula.
Mr. Chairman, I come back to the questions that I put a moment ago to the Minister of Finance. I feel that it is his duty to answer those questions prompted by the Prime Minister's letter to the then premier of the province of Quebec. If those questions are answered, then when I have the opportunity to do so, I shall be able to take a more definite stand at the second reading of the bill.


Mr. Dorion:: Mr. Chairman, allow me at the outset to say that I share entirely the views of previous speakers, including the Minister of Finance (Mr. Fleming) with regard to the Hon. Paul Sauve, whom we all remember so vividly.
I knew him personally for a long time. I was on very friendly terms with him, and the

last time I saw him, it was about a month before his death. He talked with me for an hour of various problems of concern to him, and of the matter under consideration at present.
He had an acute sense of realism and a deep respect for the constitution.
He was also very eager to co-operate and the measure introduced today by the Minister of Finance proves it to a degree.
In my turn, I want to say how very much affected I was by his death, and that we shall forever remember his imperishable achievements in our province.
Mr. Chairman, the legislation now before us is, as all will easily understand, of vital interest for the province of Quebec. Of course, it is meant for all provinces, but having to face the facts, it is of special interest to Quebec, because, in 1951, the Liberal government thought it appropriate to subsidize universities. Since then the province of Quebec did not take advantage of those grants, for reasons to which I shall probably refer again in the course of the few remarks I intend to make.
The proposed legislation therefore gives the provinces a choice between the present state of affairs, or a deduction from corporation taxes which will be raised from 9 to 10 per cent in the case of provinces that prefer to subsidize our Canadian universities on their own.
To my mind, Mr. Chairman, the deduction principle is a very happy one.
Last year, I had the opportunity-as I also did during my election campaign-to say how much I had admired the gesture of the Right Hon. Louis St. Laurent who, after having found opposition in Quebec, and being aware that this opposition was due to a firm wish to observe the constitution, agreed, after a meeting with the Hon. Maurice Duplessis, to increase from 5 to 10 per cent the individual income tax deduction, so that provinces wishing to do so, and more particularly the province of Quebec, might exercise their own jurisdiction in the taxation field.
It is the same principle which is now at the basis of this resolution, a principle according to which Quebec will itself get the money which it needs to finance its universities. These, I repeat, come under the exclusive jurisdiction of each province of Canada.
Private Bills
Last year, that statement was questioned. I recall in particular a speech made by the hon. member for Megantic (Mr. Roberge) where he stated that, in 1867, the fathers of confederation, due to the state of education at that time, are said to have given no consideration whatever to universities, when the provision on education was inserted in section 92 of the British North America Act.
Now, Mr. Chairman, if we look at appendix 4 of that act of 1867-
(Text):


Charles Edward Rea: Order. It being five o'clock, it is my duty to rise, report progress and request leave to sit again later this day or at the next sitting of the house as the case may be.


Donald Methuen Fleming: Mr. Chairman, I wonder whether it would meet the wish of the hon. member to allow the resolution to pass so that the bill might be introduced and he could then make his speech on second reading.


Some hon. Members:: Yes.


Some hon. Members:: No.
Progress reported.


Mr. Speaker:: It being five o'clock, the house will now proceed to the consideration of private and public bills, the former having precedence, pursuant to section 3 of standing order 15.



PRIVATE BILLS

Robert Jardine McCleave: Mr. Speaker, before you leave the chair, I think it has been agreed by all members and perhaps it can now be agreed by the house that we will turn first to the consideration of orders Nos. 70, 71 and 72, the house in committee on certain non-divorce bills. I think that meets with the approval of the three parties. I was going to ask that three orders which are divorce bills which were considered and not passed before six o'clock on three different occasions, be restored to order No. 69, house again in committee of the whole on the following divorce bills. The orders I have in mind are Nos. 113, 114 and 163.


John Whitney Pickersgill: Before any decision is made, Mr. Speaker, may I say that I am afraid we cannot agree to any change in the normal priorities.

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EVELYN ANNIE MACLEOD VAILLANCOURT

[Stage Direction]
The house in committee on Bill No. SD-29, for the relief of Evelyn Annie Macleod Vaillancourt-Mr. McCleave-Mr. Rea in the chair.
Charles Edward Rea: Does the committee agree to take the bills all in one motion?


Frank Howard: I want to make some comment on Bill No. SD-29. From the evidence taken in the committee in the other house-


Thomas Miller Bell: The hon. member for Bonavista-Twillingate refuses agreement and then leaves the house.


Frank Howard: 1 beg your pardon.


Thomas Miller Bell: I was talking about the hon. member for Bonavista-Twillingate.


Frank Howard: I hope the record will show that we are quite agreeable to the procedure which was asked for by the hon. member for Halifax so far as the other private bills are concerned.


John Cameron Pallett: I think it should go on record the fact that the hon. member for Bonavista-Twillingate objected-


Charles Edward Rea: Order.


John Whitney Pickersgill: I happen to be in the chamber.


Thomas Miller Bell: You were in the chamber and went out. They called you back. You should stay here.


Charles Edward Rea: Order.


John Whitney Pickersgill: I rise on a question of personal privilege.


An hon. Member:: You are not in your place.


John Whitney Pickersgill: You do not have to be in your place in committee.


Charles Edward Rea: Order.


John Whitney Pickersgill: I am rising on a question of privilege. A personal and quite uncalled for attack was made on me by the hon. member for Saint John-Albert. I went out behind the curtain to go around to see my friend the hon. member for Halifax with whom I wish to have a private communication which is not unusual in the committee. I hope the hon. gentleman will be a gentleman and apologize.


John Cameron Pallett: I hope the hon. member will wait until six o'clock.


Frank Howard: The report of the subcommittee of the committee of the other place in connection with this particular case has a great number of oddities in it and strange circumstances which I think bear relating before the committee comes to a decision as to whether or not to report the bill.
I will start at the outset and say that in this instance it is one of those cases in which children are involved. Apparently there are two children in their teens or something of that nature, although their ages are not given, and one of a younger age. It is also the type of case in which investigators, so-called, are witnesses before the committee, even though they are not called investigators. They classify themselves, one as an administrator and one as a salesman. In this instance the husband, according to the evidence, deserted his wife in 1947.
I think a reference or two to this matter is in order because I think it has quite a substantial bearing upon the consideration that should be given by this committee to the granting of this particular divorce or the petition. In order to have this matter clear, I am referring to page 10 of the Senate committee evidence. The question is asked of the petitioner by Mr. Ralph A. Cohen, a lawyer in the city of Montreal. Mr. Cohen asks the petitioner a number of other questions then he asks this one:
Q. And then your husband deserted you in 1947. Did you hear from him after that?
A. No.
Q. Did you hear from him from time to time?
A. Just from Christmas until about March.
Q. Of 1948?
A. 1948, yes.
There are a couple of other incidental questions following that relating to the parents of the respondent and so on but another subsequent question is as follows:
Q. Since the time of your husband's desertion have you ever seen him since let us say 1947 until today?
A. No.
I submit that while adultery is supposed to be the ground for divorce or perhaps I should qualify that statement and say circumstances that would reasonably lead one to assume that adultery might take place is normally considered as ground for divorce, in this particular adultery had nothing to do with it whatsoever. These are not the grounds that were considered or given weight but other grounds and other circumstances were given more consideration-and I think properly so-and I think this committee should give more consideration to those things than it does to the question of adultery.
I am of the opinion that in this instance more consideration or more weight was attached to the question of desertion having

been in existence for some 12 years or 13 years now and to cruelty. In my opinion those were the things that were given consideration and I think this committee should give them some consideration. Incidentally, I think our general law as it applies to divorce should be extended so that divorce can be based on such grounds as desertion or cruelty. I suggest that in this instance those are factors which should be considered. From the evidence found at pages 10 and 11 there is reference to the question of the attitude of the husband toward his wife during the years prior to their splitting up or prior to his desertion. I submit that if we read the evidence carefully here we shall discover that cruelty is one factor to which we can properly give some weight. The question is asked again by Mr. Cohen of the petitioner:
Q. Could you tell this committee some of the reasons why you are petitioning for a divorce?
That is a fairly clear question. We all know there is only one reason why you petition for a divorce or one basis upon which you place it and that is adultery or circumstances which would allow one to come to the conclusion that adultery might take place. Mr. Cohen asks this question:
Q. Could you tell this committee some of the reasons why you are petitioning for a divorce? I understand you lived with your husband for about 10 or 12 years?
A. Because of his drinking, gambling, running around, coming home and throwing things around.
Q. Did he ever leave for periods of time?
A. Yes.
Q. Did he ever tell you where he had gone?
A. No.
Q. Did he ever show any interest in your three daughters?
A. Very little.
Q. Did he from the time he deserted you until today send any money for your support?
A. No.
Q. How do you get along?
A. Needing mothers' allowance.
Following that there are some questions by Senator Bradley on page 11 directed toward the same thing. The questions by the senator are as follows:
Q. Did he ever use violence towards you, or anything of that kind?
A. Yes.
Q. What did he do?
A. Well, he hit me. Is that what you mean?
Q. Yes.
A. Threw things at me, and came home and threw electric lamps around through the house.
I submit that is another instance of cruelty, the admission that he hit her and the admission in her statement in the earlier part of her evidence that he was throwing things around, drinking, gambling and so on which are part of the question of cruelty. It is to these grounds that the committee of the other house probably gave a great deal of consideration,
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I think, more so than to the question of adultery. I think we must do this to because, even though there are some three pages of evidence by the administrator and the salesman who were witnesses on behalf of the petitioner as to what they had discovered, there is no reference to adultery.
Mr. Chairman, I submit that on reading it through carefully you will find the evidence is very vague and loose; and if they were to have appeared before a court I am sure the court would have inquired in much more detail as to what they had discovered.
I might add at this point that the respondent was in Winnipeg and the petitioner lived in, I think it was, the city of Quebec. In any event she lived in the province of Quebec and the respondent was in Winnipeg. I think that allows for some other comments which we will engage in in just a moment.
To show that there was not too much consideration on the part of the investigators as to whether adultery took place I think we can make reference to the evidence on page 13. The committee will recall, I am sure, that in other cases it is quite the practice for the investigator or the witness on behalf of the petitioner to give an explanation in evidence to the committee to show that there were a certain number of bedrooms, or that only one bed had been used apparently by two people, and to make reference to the number of beds, and so on. In this particular evidence even though, as I say, it runs to some three pages, which is more than in the majority of these cases, there is no reference,	not	only	to whetherthere were any	beds	but	also	as to howmany bedrooms	there	were, or	how manycouches, and so	on, in	the	particular apartment the investigators visited and within which they discovered the respondent and the co-respondent.
Quoting from the evidence to indicate what they said with respect to this particular apartment, apparently they went to the address, they then stated the address and then this question was asked:
Q. Who answered the door?
A. He answered the door.
I assume that means the respondent.
Q. Was there anyone else present in that apartment?
A. He is the one that answered the phone, but actually we walked in, and he introduced her as his wife.
-with no immediate reference before that as to anybody else being there.
Q. Did you go into that apartment?
A. Yes, we went in.
Q. Could you describe to this committee what Mr. Vaillancourt looks like, what would be his age?

Private Bills-Divorce
Then they give a description of his weight, the colour of his hair, and so on.
Q. How was he dressed?
A. He had striped pyjamas, and a blue housecoat, sort of dark bluish housecoat.
Q. Who else was present in the apartment?
A. There was another lady with him. He said, "I would like you to meet Mrs. Vaillancourt."
So apparently the respondent introduced the lady who was there as his wife.
Q. That woman he said was Mrs. Vaillancourt, was she the petitioner?
A. No.
Then he describes the corespondent, her approximate weight and height, and things of that nature. The evidence continues:
Q. How was she dressed?
A. Bluish housecoat, sort of double-breasted thing.
I assume he is making reference to the housecoat there. Here is the important and relevant part I submit, Mr. Chairman:
Q. Did you make a survey of the apartment?
A. Yes. I asked him very politely where the bathroom was, and he showed me-and a nice living room; and I asked him the price he paid for rent there because I was interested in real estate and he showed me around, and there she was in the bathroom at the time combing her hair; she came out afterwards.
Q. Did you ask her her name?
A. Yes, I asked her her name.
Q. What was her name?
A. She said her name was Marion Caswell or Casselman or something like that.
This is an important factor to which I intend to make reference later on when we consider whether or not any arrangement was made in this particular case. Because in one instance she is introduced as a person having one name, and the next moment she says, in effect, no, that is not her name, it is something else. You will see from reading this particular reference that this is all about -the apartment itself. The rest is about what they did when they left and when they came back, and so on. There is no reference whatsoever in the evidence submitted about the couple in Winnipeg as to whether, even though they said they were man and wife, there were a number of bedrooms in the apartment, whether they slept in different beds, the same beds, or what. There is not one shred of evidence to the slightest degree.
I say that they are stretching the point a great deal in saying from the evidence given that adultery took place or could have taken place. There is no indication that this lady actually lived in that apartment with the respondent. There is no indication that she might not have lived in another apartment across the hall and was over visiting, combing her hair in the bathroom. This could well occur, we do not know. It is not clear from here what the circumstances were.
	.
The only circumstances are that two people were in an apartment dressed in dark bluish housecoats, and things of that nature. I submit it is quite common in apartment houses to see people wandering about in housecoats. They feel properly dressed when wearing them. Many of them wear them to protect their good dress clothes which they have on underneath, or for doing housework around the home. Wearing a housecoat does not mean you have just got out of bed or intend to get into bed. There is not one shred of evidence at all of adultery and only the loosest indication-


Robert Jardine McCleave: Would my hon. friend permit a question?


Frank Howard: Certainly.


Robert Jardine McCleave: If he reads a little further down on page 13, he will see the following:
Q. Who else was present in the apartment?
A. There was another lady with him. He said, "I would like you to meet Mrs.-
-giving his last name. Would not that be the evidence my hon. friend is looking for?


Frank Howard: I read that evidence and pointed out, as my hon. friend has just said, that he introduced this person as his wife. But later on there is some reference, and I may as well deal with this now, as to whether she accepted that name or objected to it. It is contradictory evidence. On the last page, page 15, this question is asked of the other witness by Senator Bradley:
Q. He Introduced her as Mrs. Vaillancourt and she accepted that name?
A. She did.
But we find on page 13, about half way down, a question by Mr. Cohen to another Mr. Cohen, who is the investigator-they had the same names-to this effect:
Q. Did you ask her her name?
A. Yes, I asked her her name.
Q. What was her name?
A. She said her name was Marion Caswell or Casselman or something like that.
That is no indication that because one person introduced another as Mrs. Vaillancourt that she was. One could come to the conclusion it is quite possible that this situation did exist, that they were living together as man and wife. But apart from this there is not the least bit of evidence as to bedrooms, beds, or anything like that, except that they did put scotch tape over the door, and as a result of placing it there and seeing it there next morning they came to the conclusion that the couple did not leave the apartment on that day.
Another question which I submit should be considered is that of payment. In many cases we find that the petitioner was asked to say

who is paying for the divorce, because apparently that has some bearing on whether or not a divorce would be granted. In this instance it appears that no such question was asked, and the committee is entitled to wonder where the money in respect of this payment comes from. We are entitled to assume that more costs are involved here with respect to the remuneration of the investigators than would normally be involved. Usually the investigators have these things so well organized that they can discover their evidence within a day or two. In this case, however, the investigators spent a great deal of time and made many inquiries before they were successful. According to the evidence as it appears half way down page 12, Mr. Cohen stated:
Previous to that we searched for Mr. Vaillan-court all summer practically, and had a hard time finding him. We called on his father on St. Denis Street, Montreal, and his brother on Delorimier Ave., Montreal, and they wouldn't tell us the address, but we pestered them for so long and so often, we went to the Stewart Biscuit company-
Eventually the investigators got the address in Winnipeg. It is a fact that the more time the investigators spend on a case the higher is the cost. I would point out, also, that there are two return air trips from Montreal to Winnipeg on the part of the investigators I believe they flew out to Winnipeg aboard a Canadian Pacific Air Lines plane. It does not say here how they came back, so I think we can assume that they flew back. Even if they did not fly back, but returned by train, it would still be an expensive journey. All these costs are reflected in the charges paid by the petitioner who is asking for the divorce.
I do not like to be facetious about this, but I would gather from reading the evidence that the province of Quebec paid for the divorce in this particular case, because the petitioner was getting along on mothers' allowance. She was not working, but out of her mothers' allowance the expenses of the divorce were met. So, in effect, it was the province who paid those expenses. That is the assumption. However, I submit that this mothers' allowance could not be sufficient to defray the expenses of two investigators on an air trip from Montreal to Winnipeg and, in this case, spending the summer looking for somebody and interviewing people in order to obtain an address. These services are not provided gratis. This is a costly process, so we are entitled to ask the question: who is paying for this divorce. If the question of who pays for a divorce is an important factor, we need to know who is paying the fees and expenses of these investigators and the private bill fees in the other place. If the wrong
Private Bills-Divorce
person pays these charges and makes arrangements for them, the committee is entitled to know about it.
I am going to suggest that there was some arrangement made in this case in this respect. I am going to suggest that the respondent and the investigators were probably a party to it, because when they got to Winnipeg they went across the street and had a cup of coffee in a drug store and then-I am quoting from the evidence of William Cohen:
I phoned Mr. Vaillancourt's number and there was no answer. I phoned about an hour later and there was an answer, and I asked if we could see him, and he asked what it was for. I said it was rather private, I would like to discuss it myself if we could call on him. He didn't mind, he said. He was very nice about it.
Then after getting into this apartment to discuss this very private matter they spent almost an hour there; they "sat around for almost an hour and talked about the weather and how we liked Winnipeg." That is stretching things quite a bit. If two people fly from Montreal to Winnipeg and telephone a person whom they do not know with regard to a very private matter which they then discuss with him in private, I suggest it is asking the committee to accept a good deal of nonsense to expect it to believe that they just sat around and talked about the weather for an hour. I submit that if they sat around for an hour they talked about what arrangements they had made and how the divorce was going to go through so well, and that as soon as they got back the divorce would be obtained without too much difficulty.
I have already mentioned the mix-up in the names. One moment this lady is introduced as Mrs. Vaillancourt and the next moment she is introduced under some other name. This, again, is strange because you do not introduce a person to strangers as having one name, when they want to come up to ask about something in private, and then say a moment later that she has another name, and that you are living clandestinely. If that were done, I suggest it was because the lady knew who the investigators were and because they were probably no more strangers to her than you and I.
Though I submit there is no grounds for granting this divorce on the basis of adultery, I do think-and this certainly as far as I am concerned should be the law, anyway-that there is ample grounds for granting one on the basis of desertion and cruelty, both of which have been admitted, both of which are in evidence and both of which occurred. I suppose that strictly speaking we should not pass this bill on grounds on which legally we have no right to consider

Private Bills-Divorce
it, but I think we should give due weight to these matters. I believe there are ample grounds-ample moral grounds-for a divorce in this case, and I add that this is to be regretted, even if the evidence has been manufactured in order to prove something which did not take place-should this have occurred-and I submit that is the situation in this particular case.
There are some other factors in this case which could be discussed, but I see that my 30 minutes have come close to an end, and I had better leave my comments at that.


William Arnold Peters: I would assume that hon. members are very interested in some of the aspects of this divorce application, because I think it is unique. Certainly, it is unique in my understanding of divorce bills passing through this house.
The hon. member for Skeena has pointed out that there are a number of statements attached to this case which cannot possibly be true. He also pointed out that in this case the federal parliament is being asked to pass a private bill which is being financed by the province of Quebec. That seems to be a very odd state of affairs, to say the least. If the province of Quebec is going to continue to finance divorce cases in Ottawa the province could set up its own court and would probably find it cheaper to do so than supplying money to deserted women in that jurisdiction through the welfare branch. The money paid to the Senate for this divorce could be returned to the province of Quebec. We do not have to take money from the province which it could spend in a better way.
The hon. member for Halifax said that no adultery was proved in this case. We are therefore asked to grant the divorce solely on the grounds of desertion. I believe desertion should be one of the grounds on which divorce is granted-


Charles Edward Rea: Order. We are not
discussing methods of granting divorce but are discussing this bill.


William Arnold Peters: Adultery has not been proved so I assume the divorce if granted will be granted on the grounds of desertion. I am in favour of granting divorce on those grounds but those grounds are not usually acceptable in these cases. The Senate feels that adultery should be indicated if not proved. In this case an attempt was made to show a common law relationship but no adultery was proved.
The question of domicile arises in this case. Because some of us are not lawyers it is necessary for us to find out what these terms mean. The third item of the petitioner's prayer reads as follows:

3. That at the time of the said marriage your petitioner and the said Charles Edward Vail-lancourt were domiciled in Canada, and have ever since continued to be and are now domiciled in Canada, in the province of Quebec.
We all know from the evidence they are not domiciled in the province of Quebec. They must be domiciled there for the divorce to be granted. It is argued that a married woman takes the domicile of her husband.
Let me refer to a book entitled "The Law of Divorce in Canada" by W. Kent Power. He defines general principles not all of them relating to divorce and states:
A person's domicile in the legal sense, except where for some particular purpose the term is defined by statute, is that "country" in which he actually has his permanent home or in which under those principles of private international law which are applied by our courts as part of our law he is deemed to have his permanent home. In respect to domicile in relation to marriage and divorce the nine provinces of Canada are distinct "countries", there is no such thing for the purposes of divorce or the determination of matrimonial status as domicile at large in Canada.
The author then refers to the case of Cook v. Cook, an Alberta case, which he considers to have departed from normal domicile laws. A divorce was granted overlooking certain factors applicable in that province. He then went on to say:
Practical reasons for adopting, by legislation, a Canadian-wide domicile in divorce are the conditions of modern life.
He then says that employees of big corporations who are moved around cannot legitimately claim residence in any province because they may be moved elsewhere at a moment's notice.


Robert Jardine McCleave: Would my hon. friend permit a question. His observations are generally true but does he know of the act passed in 1930 which takes care of cases where women have been deserted by their husbands for more than two years which is true in the present instance?


William Arnold Peters: I will come to that.


Marcel Joseph Aimé Lambert: What the hon. gentleman is talking about is not applicable.


William Arnold Peters: The hon. member is making a speech from his seat. If he rises I will be seated and listen to him; otherwise I would appreciate his being quiet. The author of this book goes on to say:
If, at some future time which apparently is not yet near, a Canadian divorce law is to be enacted, a statutory change in this rule as to domicile, in so far as it applies to at least eight of the provinces would seem to be logical and desirable.


Charles Edward Rea: Order. We cannot discuss the merits of the divorce act. We



18, I960

[Stage Direction]
must restrict our discussion to the bill before us. What the hon. member is saying has nothing to do with this bill.
William Arnold Peters: We are not really discussing acts but certain legal terms. The word "domicile" as used in this bill does not relate to any statute.


Charles Edward Rea: The only thing we can discuss is what is before us.


Frank Howard: May I submit this for consideration. The petition is part of the basis of the bills just as the evidence is part of it. The hon. member seeks to have cleared up the question of domicile. Point No. 3 of the prayer of the petitioner on which the bill is based reads as follows:
3. That at the time of the said marriage your petitioner and the said Charles Edward Vaillan-court were domiciled in Canada, and have ever since continued to be and are now domiciled in Canada, in the province of Quebec.
The fourth paragraph states that the petitioner is residing in the province of Quebec and that the respondent is residing at an address in the city of Winnipeg, Manitoba. We should keep the question of domicile in mind and relate it to the petition which is the reason why we have the bill.


Charles Edward Rea: I agree that the hon. member may refer to the question of domicile as it relates to this case but we cannot have a general discussion on divorce legislation.


William Arnold Peters: Mr. Chairman, it is not possible for me to quote the law from memory because I did not study it. I want to point out only that these things have been done in the past, but we do not appear to have jurisdiction to make changes in what is considered to be a mere definition of the statute of domicile. We are now obviously departing from what is considered to be regular domicile. I was going to point out that on occasion courts have made some difference, and one of them was in the passing of the Divorce Jurisdiction Act of 1930. If we are not allowed to go into that, then we wish to say that normally the domicile of the husband is the domicile of the wife. If the wife is living in Quebec and the husband is living in Manitoba, then under the normal domicile procedure she is domiciled in the province of Manitoba although she is actually resident in Quebec. Her domicile will be that of her husband in Manitoba, although she has not seen him for a number of years.
With respect to divorce jurisdiction law, in the case of Cook v. Cook it was said that this principle did not apply to other things than desertion, and that a person
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could sue for maintenance although the domicile of the wife might be different from the domicile of the husband. If we allow this it will create a great number of problems. I would like to quote from "Fourth (Cumulative) Supplement to Power on Divorce", which was published in 1957. At page 91 under section 73, "Change of Domicile", the following is recited:
P. 297 (e) (Man.) in White v. White, ante, sec. 70, the court held that it was relevant to consider that the plaintiff had left his domicile of origin (Ontario) to avoid complying with an order for maintenance, to evade arrest for such failure, and to seek a divorce where, for lack of funds, his wife would probably be unable to defend the action: White v. White (No. 2) (1950) 2 WWR 687, 59 Man R 181 (1950 ) 4 DLR-[DOT]
I wish they would write these legal documents in English rather than in a lot of other languages.


Mr. Smith (Calgary South):: That is the best remark you have made all day.


William Arnold Peters: I will not cite the rest of it; I do not want to discuss the case, anyway.


Mr. Cardiff:: What is the hon. gentleman trying to prove?


William Arnold Peters: I am trying to prove that normally this divorce could not be granted because of the two statements that are completely contradictory. In the prayer it is stated that the domicile-and I will read it again:
That at the time of the said marriage your petitioner and the said Charles Edward Vaillancourt were domiciled in Canada, and have ever since continued to be and are now domiciled in Canada, in the province of Quebec.
I maintain this statement in the prayer is absolutely untrue. I was informed by the sponsor the other day that if the various sections of the prayer were not correct then, by law, the divorce could not be granted.


Robert Jardine McCleave: Excuse me; I do not want to take violent exception to that, but I suppose I should raise a question of privilege here. I cannot recall ever making a statement such as that to my hon. friend, but I think he has made some excellent points and probably this petition should have been amended to clear them up. I cannot allow him to say that I told him that if the petition was defective the divorce could not be granted.


William Arnold Peters: I certainly do not want to do any injustice to my hon. friend and I will accept that correction. I would point out that I did ask about a particular section in the petition of a previous bill of a similar nature, and I believe I was told at that time that if the section of the petition and of the prayer

Private Bills-Divorce
was not as stated, then the divorce should not be granted. I believe that is correct.


Robert Jardine McCleave: Mr. Chairman, I believe the practice in the other place has been that when there is evidence of the bill being at variance with the petition there has been a requirement that the petition be amended and re-served on the respondent and the corespondent.
With regard to this particular case, there is no clear evidence to show that the husband is domiciled in Manitoba, except the fact that he is living there. There is a difference between residence and legal status of domicile; but none the less it should undoubtedly have been made more definite, and I think the petition should have been amended and reserved.


William Arnold Peters: Mr. Chairman, I brought in a copy of the Quebec law reports, because there is a case in those reports that applies; it shows that the Quebec courts have ruled on the matter of domicile as it affects them, but unfortunately it is in French and I cannot read it. We have another argument that was presented-


Robert Jardine McCleave: Will my hon. friend permit a question? If he read it in French he could listen to the simultaneous translation.


William Arnold Peters: Since this is a serious matter, I would not want to experiment, but I hope to be able to do it in the near future. I hold in my hand a sheet from Chitty's "Law Journal". It contains an article on divorce under the heading of "Random Notes". It involves a case that was heard in the territorial court of the Northwest Territories. It was the case of Voghell v. Yoghell (1959), and reported at page 290, 30 W.W.R., whatever that means. It refers to one particular case, Mr. Chairman, that I think is important and it says:
The question of domicil bothers him a little but after reviewing a number of the well-known cases on the point he decides that the rule as to jurisdiction lying only in the court of the domicil is judge-made law developed in England and the provinces after 1870 and so not applicable to the Northwest Territories. In any event, he considers that for jurisdiction to vest in the territories court, a Canadian domicil is sufficient because the territories are not an independent and sovereign authority such as a province, and therefore Canadian domicil is all that is necessary.
Mr. Chairman, this may be the way of handling divorces, and we may not have to go under the Napoleonic code in the province of Quebec in the matter of civil action; we may not have to give any consideration to the matter of domicile; but, Mr. Chairman, if we do not, then I would suggest that we must send this back to the Senate to have it amended to make it a correct and factual document. If we want to accept Canadian domicile to be

just that, then we have an obligation to refer this back to the Senate to make it correct.
If we do not it will mean that people will be able to take up domicile wherever they wish and the farther away the better and respondents in these cases will not be able to defend themselves because they will not have the means to travel across the country. A case could arise in the province of Quebec where the husband had gone to British Columbia and the wife would not be able to go to British Columbia to bring action but would be able to bring the case to the House of Commons. There would be too much money involved to warrant her going out to British Columbia.
In this case the husband has gone to Manitoba. I suggest that this is working a hardship on other people in Canada because I am quite sure that some people in Ontario would like to get a nice quiet divorce in the House of Commons.


Charles Edward Rea: Order. We are straying away again. May I ask the hon. member for Timiskaming to come back to the bill. I think we have had quite a full discussion of the question of domicile, to which I said he could refer, and I am sure he has made his point.


Robert Jardine McCleave: I wonder whether I could make a very brief observation? The points are very well presented and I can see that the C.C.F. will soon have its own junior lawyer just as the Liberals have in the hon. member for Bonavista-Twillingate. The point is that divorce is a matter of federal jurisdiction under the British North America Act, which has been almost lost sight of in the last couple of weeks, and that it is the practice for the clerks in the other place and the members in the other place to limit cases for hearing to persons whose domicile is shown to be in the province of Newfoundland or the province of Quebec.
This is a rather difficult type of case because the husband deserted the wife and moved to another province. It brought into play, I would think, the federal act of 1930. But I think it should be known that under the law we can deal with cases from any part of Canada we wish. However, it has become the practice to confine cases to these two particular provinces. This is one of these more or less borderline cases that are rather difficult to explain.


Harold Edward Winch: This is rather important and I should like to ask a question. The law on divorce is federal but other provinces, with the exception of Newfoundland and Quebec, have accepted jurisdiction in the handling of divorce cases. I could not quite get the point

of the hon. member. The divorce law is federal but in this instance the jurisdiction is federal because two provinces will not accept their jurisdictional responsibilities. What was the point? I am sorry, but I did not get it.


Robert Jardine McCleave: I simply pointed out that under the British North America Act divorce and marriage are matters of federal jurisdiction and the solemnization of marriage is a matter of provincial jurisdiction. If the hon. member wants further information, the authority to grant divorce is exercised-


Charles Edward Rea: Order. I think this discussion has gone quite far afield. I should like to remind hon. members again that we have Bill No. SD-29 before us and I would suggest that they keep their remarks relevant to it.


William Arnold Peters: Mr. Chairman, I should like to comment on your ruling because it seems to me that most of the bills that come before us as members of parliament are not bills on which we have to express a judicial point of view. But in this case we are all going to have to become lawyers because our set-up is not such that these bills are subjected to the same legal requirements as other bills coming before the house. I submit that all this information is very necessary because we are going to hear a great deal more about these divorces. We are actually dealing with bills that have not had the normal judicial examination. We are really handling court cases.


Charles Edward Rea: Order. I must remind the hon. member that I do not make legal rulings.


William Arnold Peters: You will have to.


Charles Edward Rea: I am sorry, but I do not make legal rulings. I merely follow the rules set down by this house. This, of course, brings me to standing order 59, subsection 4 of which reads as follows:
The chairman Shalt maintain order in the committees of the whole house, deciding all questions of order subject to an appeal to the house.
Subsection 2 reads as follows:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.
The Chair cannot go any further than that.


Harold Edward Winch: Do you accept divorce bills as being in the same position as any other private bill and open to the same discussion?


Charles Edward Rea: Anything can be discussed on a private bill that is relevant to the bill. The question of the evidence has been discussed, and I am not too sure
Business of the House
that everything in the evidence would be relevant to the bill. That is for this committee to decide. But these bills can be discussed individually. It does not make any difference as long as the discussion is relevant to the bill.


Harold Edward Winch: This is the point I am trying to get at. The evidence we have on each one of these bills, and I refer particularly now to the bill before us, is evidence taken before the Senate committee and that evidence can be used in the discussion of these bills.


James Stanley Speakman: May I call it six o'clock, Mr. Chairman?
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I inquire what the business is for next week?


Gordon Minto Churchill: Next week we will start off on Monday and Tuesday with a supply motion.


Harold Edward Winch: May I ask if the minister has any information as to the subject of the supply motion?


Gordon Minto Churchill: I would not mind hearing what it will be myself. Then I have a list of eight items of business, the order of which will be determined as the week progresses. I am referring to business for Wednesday, Thursday and Friday. Three of these are motions which refer certain matters to committees and if they are passed quickly by the house it will assist the committees to carry on their studies. One is a motion in the name of the Acting Secretary of State to refer the Canada Elections Act and other matters-


Lionel Chevrier: What number?


Gordon Minto Churchill: -to the committee on privileges and elections. It is No. 18 on the order paper. Then there is a motion which is under government notices of motion today in the name of the Minister of Transport to establish a committee on railways, air lines and shipping. It is important that this committee be set up because the heads of the organizations, the C.N.R., Trans-Canada Air Lines and so on, will be in Ottawa on Tuesday, the 29th, I believe, to appear before the committee.
Third on the list is a motion in my own name, which is found in Votes and Proceedings and will be on the order paper on Monday, to refer to the committee on agriculture and colonization a study of the delivery of grain to feed mills. This will give that committee some work which they

Business of the House
are urgently asking for. I hope to have before the house next week certain amendments affecting the national energy board and if they are on the order paper I would ask the house to consider them before the end of the week.


Lionel Chevrier: Would that be No. 4?


Gordon Minto Churchill: That would be No. 4 but they will not necessarily be taken up in this order. We have as a fifth item interim supply which will come before the house on Wednesday of next week. As a sixth item we have final supplementary estimates. In case those matters are all concluded before the end of the week, we shall have again before us the resolution in the name of the Minister of Transport concerning amendments to the Railway Act which has been announced previously and has been taken up previously. There is also a resolution in the name of the Minister of Public Works concerning the Trans-Canada Highway Act.


Lionel Chevrier: From this list it does not appear as though we shall come back to the tax-sharing agreement next week.


Gordon Minto Churchill: I doubt very much whether we would be able to get to that matter but I will put it as No. 9 in case some of these things are passed rather quickly by the house. The order in which these items will appear I will endeavour to place before the house on Monday night.


Harold Edward Winch: May I ask the house leader whether there is any arrangement between the government and the official opposition that on motions of reference there shall be a wide-open debate or whether it shall be restricted to the terms of the resolutions themselves.


Gordon Minto Churchill: No arrangement has been made.


[Stage Direction]
It being three minutes after six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, March 21, 1960