1960-06-13

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queen's PRINTER AND CONTROLLER OF STATIONERY OTTAWA, 1960
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Monday, June 13, 1960

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Third report of standing committee on privileges and elections-Mr. Macquarrie.
Third report of standing committee on veterans affairs-Mr. Pugh.

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Mr. W. M. Howe (Wellingion-Huron) presented the eighth and ninth reports of the standing committee on railways, canals and telegraph lines, and moved that the ninth report be concurred in.
Motion agreed to.


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, on Friday last the Leader of the Opposition asked me about the course which might be taken in connection with the private bill respecting capital punishment, and on an earlier occasion he asked me to give a statement outlining in general the legislative program for the balance of this session. I undertook to provide these two answers today.
Further discussion and consideration has been taking place between the house leader and the respective representatives of the other parties, and with leave of the house I simply point out that I will make my statement tomorrow.



CANADA ELECTIONS ACT


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On the orders of the day:
Hon. J. W. Pickersgill (Bonavisla-Twillin-gate):: Mr. Speaker, I wonder if I could ask the Acting Secretary of State how soon he expects to be in a position to introduce the amendments to the Canada Elections Act?


Hon. Leon Balcer (Acting Secretary of State):: Mr. Speaker, I think tomorrow in giving the program for the balance of the session the Prime Minister will cover this question.
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CIVIL SERVICE ACT


Hon. Donald M. Fleming (Minister of Finance) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure respecting the civil service of Canada to amend, revise and consolidate the Civil Service Act, chapter 48 of the revised statutes of Canada, 1952.


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Motion agreed to.


Hon. E. D. Fulton (Minister of Justice) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to amend the Judges Act to provide salaries for four additional puisne judges of the superior court of Quebec; for the grant of annuities to judges upon attaining the age of 75 years; to remove anomalies in the present law relating to the grant of annuities under the act; and to alter the method of payment of travelling allowances to judges.


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Motion agreed to.

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WHARF CONSTRUCTION, MALARTIC RIVER, QUE. Motion No. 83-Mr. Dumas:
For a copy of all payrolls showing the names of those employed, the period of employment and the amount paid to each person, in connection with the reconstruction, during 1959, of a wharf located on the west bank of the Malartic river, range 4, in the township of Malartic, Quebec.
Hon. D. J. Walker (Minister of Public Works):: Mr. Speaker, I am going to ask the hon. member if he will be good enough to have this motion removed temporarily from the order paper until the Royal Canadian Mounted Police investigation is completed. When that is done I would be delighted to tell the hon. member immediately so the motion can be put on the order paper again.


Mr. Dumas:: In view of what has been said by the minister, and by leave of the house, I am willing to withdraw this notice of motion
for the time being.

Motions for Papers


Mr. Speaker:: Is it agreed that this notice of motion be withdrawn as suggested?


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



QUETICO PARK, ONT.-USE BY U.S. TOURISTS AND OUTFITTERS

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Motion No. 117-Mr. Fisher:
For a copy of all letters, correspondence, and reports originated and exchanged by any government department since January 1,	1958 with
individuals, associations, the Ontario government, and the United States government and Minnesota State government, on the use of Quetico park by American tourists and outfitters.
Hon. George C. Nowlan (Minister of National Revenue):: This is acceptable, Mr. Speaker, subject to the usual reservations.


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


Some hon. Members:: Agreed.


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Motion agreed to.

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Motion No. 118-Mr. Robichaud (for Mr. Crestohl):
For a copy of the immigration regulations and all amendments to date; the orders in council approving same; all departmental rulings which are being used in determining the admissibility of immigrants under general and special circumstances and conditions.
Hon. Ellen L. Fairclough (Minisier of Citizenship and Immigration):: Mr. Speaker, in the absence of the hon. member possibly this should stand, because the second part of the motion asks for material which cannot be produced.


Mr. Speaker:: Is it agreed that this notice of motion should stand?


Some hon. Members:: Agreed.
Motion stands.



CHIPPEWA INDIAN RESERVE, SARNIA

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Motion No. 119-Mr. Pickersgill (for Mr. Hellyer):
For a copy of all papers and other documents, filed by Dimensional Investments Limited with the Department of Citizenship and Immigration prior to its purchase of part of the Chippewa Indian reserve for the purpose of demonstrating its financial ability to undertake the proposed transaction.
Ellen Louks Fairclough: Mr. Speaker, all the information requested in this order was tabled on July 16, 1959, and there has been nothing since.


John Whitney Pickersgill: In that case, sir, perhaps the motion might stand until the hon. member returns.


Mr. Speaker:: Is it agreed that this motion should stand?


Some hon. Members:: Agreed.
Motion stands.



INDIAN AFFAIRS


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On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, I wonder if I can ask the Minister of Citizenship and Immigration whether she has received any representations on behalf of Mr. Kenneth Plain, a locatee on the Sarnia Indian reserve, who is alleged to be threatened with dispossession from his land? If so, what action has the minister taken?


Ellen Louks Fairclough: Mr. Speaker, the matter has not come to my personal attention. It may be in the department. I shall make inquiries.


John Whitney Pickersgill: Will the minister make inquiries and report to the house, because I am advised this dispossession of property is to take place in the very near future.



INQUIRY AS TO FINAL PAYMENTS FOR

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1958-59 CROP
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: I should like to address a question to the Minister of Trade and Commerce. In view of the urgent need to supplement the incomes of western grain producers, is the minister in a position now to tell the house when the final payments on the 1958-59 crop year will be made, and the amount of such payment?


Hon. Gordon Churchill (Minisier of Trade and Commerce):: During the unavoidable absence of the hon. member for Assiniboia-


Hazen Robert Argue: Successful absence.


Gordon Minto Churchill: -this question was asked and answered. The payments should be made almost any day now.


Hazen Robert Argue: A further supplementary question, Mr. Speaker. Since the minister has promised these payments within the first or second week of June, is he able to say more precisely now when the payments will be made?


Gordon Minto Churchill: I will ask the wheat board today and make sure.


Hazen Robert Argue: You should not make those statements until you are sure.



REQUEST FOR ANNOUNCEMENT OF FLOOR PRICE ON ONTARIO WHEAT

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On the orders of the day:
Hon. Paul Martin (Essex East):: Mr. Speaker, I should like to ask the Minister of Agriculture whether he is now in a position to announce a floor price under the Agricultural Prices Support Act on Ontario grown wheat.


Hon. D. S. Harkness (Minister of Agriculture):: No, Mr. Speaker. That is usually announced shortly before the end of the crop year, July 31. I expect we will be able to make an announcement on it fairly soon.



DOMINION-PROVINCIAL CONFERENCE INQUIRY AS TO AGENDA FOR JULY MEETING

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On the orders of the day:
Mr. J. P. Deschatelets (Maisonneuve-Rose-mont):: Mr. Speaker, I should like to ask the Minister of Finance whether there is any agenda prepared for the federal-provincial conference to be held next July?


Donald Methuen Fleming: No agenda has yet been settled, Mr. Speaker. It is intended in a few days to have exchanges with the provinces in regard to what would be an acceptable agenda for all governments concerned.



HEALTH AND WELFARE


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On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to direct a question to the Minister of National Health and Welfare. It is a very appropriate one before the holidays, and I am sure it will concern most of the members of the house.
In view of the fact that an investigation was undertaken by the United States food and drug administration to determine whether certain of the colours used by the lipstick industry are cancer-causing agents and that as a result certain doubts were raised; and in view of the possible peril which now menaces our fair sex, to say nothing of the imminent danger hovering over the entire unsuspecting male population of Canada, will the minister inform the house of any precaution his department is taking to protect the people of Canada from suffering the "kiss of death".
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Inquiries of the Ministry


Hon. J. W. Monleiih (Minister of National Health and Welfare):: I should like to thank the hon. member for having given me notice of his intention to ask this question. As far as the colours now being used in lipsticks are concerned, there is no evidence that amounts normally getting into the system could create any risk to health. Accordingly I am glad to be able to assure the hon. member that my department sees no danger in the use of lipsticks, either to those wearing them or to those with whom they might, so to speak, come in contact.


Mr. Pearson:: Would the minister make a personal investigation into this matter?


Mr. Pearkes:: He did yesterday.



BOY SCOUTS ASSOCIATION


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On the orders of the day:
Léon Balcer: Mr. Speaker, on Friday last the hon. member for Trinity-Conception asked if I had received an application from the Boy Scouts Association to change the name of the Canadian general council of the Boy Scouts Association to the Boy Scouts of Canada and, if so, what action had been taken.
The answer is that no such application has been received by myself or the department, and that I do not have the power under the Companies Act to change the name of the Canadian general council of the Boy Scouts Association, inasmuch as this is a corporation created by a private act of parliament and only parliament can change the name of the corporation.



HARBOURS


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On the orders of the day:
Mr. E. J. Broome (Vancouver South):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Has the minister's attention been drawn to a recent article in the Vancouver Province which claims that the national harbours board, although the biggest property owner on the Vancouver waterfront, has refused to follow the federal and provincial government policy of making grants equal to taxes on its property, and would the minister comment on the suggestion that the national harbours board should share the construction and operating costs of fire boats in Vancouver harbour?


Hon. George H. Hees (Minister of Transport):: Mr. Speaker, I should like to thank the hon. member for giving me notice of his

Inquiries of the Ministry intention to ask this question. National harbours board's payment of grants in lieu of services to the city of Vancouver is based on a formula identical to that used at other major cities where there are national harbours. In Vancouver a substantial portion of the facilities owned by the national harbours board is leased, and the information given to me is that upward of $555,000 of taxes is paid to the city by their tenants.
The national harbours board informs me that it makes an annual grant for the upkeep of the fire boat. Last year it amounted to $33,000. The cost of construction of fire boats in national harbours is borne by the municipality.



HEALTH INSURANCE


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On the orders of the day:
Mr. H. F. Jones (Saskatoon):: Mr. Speaker, I should like to ask the Minister of Finance whether the premier of Saskatchewan has yet approached him for federal assistance to help pay for the Saskatchewan medical care program?


Donald Methuen Fleming: No, Mr. Speaker, he has not.


Paul Joseph James Martin: Mr. Speaker, I should like to direct a supplementary question to the Minister of National Health and Welfare. Has the minister or have his officials had any consultations of any kind with their opposite numbers in the province of Saskatchewan with regard to the medical care program proposed by the government of that province?


Jay Waldo Monteith: No, Mr. Speaker.



LABOUR CONDITIONS


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On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, may I ask the Minister of Trade and Commerce whether he is in a position to make an interim report on the work of the committee which has been set up to look into the question of assistance to Elliot Lake and other uranium communities?


Gordon Minto Churchill: Not at this stage, Mr. Speaker.



CUSTOMS TARIFF

Donald Methuen Fleming: the second reading of Bill No. C-74, to amend the Customs Tariff.


Mr. W. M. Benidickson (Kenora-Rainy River):: Is the minister going to make a statement, in view of the many matters of current interest that affect our Customs Tariff, such as the Russian trade possibilities, the Japanese quotas that are referred to in the resolutions and some other items, such as the GATT possibilities next fall?


Donald Methuen Fleming: No, Mr. Speaker.
To embark on a statement in relation to those subjects would, I think, be quite out of order. We are here dealing with Bill No. C-74, to amend the Customs Tariff. All the contents of this bill were indicated in the resolution which preceded the bill and which was given a very thorough review last week, on June 8, in the committee of ways and means.
This is one of those bills, like the Excise Tax Act, in which the resolutions set forth in detail the amendments that are to appear in the bill to follow, and the house will have observed that all the provisions of Bill No. C-74 have already been set forth in the resolutions which were approved last week. Therefore, Mr. Speaker, under the procedures of the house we are simply reviewing today, for the second time, what was already covered on June 8. I respectfully suggest that perhaps the best place for that review to be carried out would be in committee of the whole after second reading of the bill.


Paul Joseph James Martin: I wonder if I might ask the Minister of Finance on this bill if he would not find it within our procedures to give some indication of his reaction, and that of his colleagues, to the representations that were made recently by the mayor of Windsor and the municipalities concerned about the plight of the automobile industry. I ask this realizing full well, of course, that the government will be giving further consideration to these matters in the light of meetings which I understand are to take place this week between the members of the government and representatives of the automobile industry and, later in the following week, between members of the united automobile workers and the government. Would the minister consider whether this is the appropriate opportunity for him to indicate something which concerns the people in the community from which I come, and other communities, regarding any remedial measures the government has in mind?


Donald Methuen Fleming: This would not be the appropriate time to discuss that subject. The subject is not related to the contents of

this bill at all. There will be opportunities later in the session, if the hon. gentleman wishes to raise the question, when that matter can be discussed. These questions certainly do not relate to the bill now before the house.


Paul Joseph James Martin: This bill may not cover matters that would provide for remedial action, but it certainly is open to the minister or anyone else to re-examine the bill in the light of anything that is not covered and which might, if made applicable to a particular situation, be brought within the context of the measure before the house. However, I take it from the minister's reply that he is not in a position at the moment to make a report about a matter as important as this.


William Moore Benidickson: Mr. Speaker, I was rather disappointed that, in view of the many important negotiations that have taken place and are taking place which have a decided effect on our customs tariff, the minister did not take this opportunity to expand a bit about some of the items dealt with in the resolutions that were introduced on budget night, March 31.
The minister then indicated that we had ahead of us a very important conference in connection with our GATT trade agreements which would be initiated this fall and perhaps carry on for several months. In view of the fact that a good part of the amendments proposed in the bill relate to our GATT trade agreements, the minister should take the house and the country more into his confidence at this time. There was a discussion last week about the publicized offer of the United States government with respect to proposals it would make when the GATT conference convenes this autumn. We were particularly interested, of course, in those items which represent major matters of trade between Canada and the United States.
In that connection the United States government has advanced at this time what is called an "offer". I think the offer we have heard about should have been disclosed to the house. We were told rather abruptly that if it was something that was published in United States newspapers, members of parliament could look to those newspapers for information in this regard. However, as we are discussing a number of changes in the existing tariff schedules under the Customs Tariff Act, some of which may be affected by the negotiations next fall, I think before concluding the debate the minister should take us more into his confidence as to the present status of negotiations between Canada and the United States, the nation with which we principally trade.
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With respect to the proposed changes before us, the minister has indicated that four of the resolutions which preceded the bill related to textile items. I think I am correct in saying that those items, with very minor exceptions, were dealt with by the tariff board, or shall I say that with minor exceptions the proposals put before us represent recommendations of the tariff board which has recently examined the textile tariff schedules. Because, as recommended by the tariff board, an increase in duties was involved, and because of the fact that some of these items were bound under our GATT trading agreement, it was necessary for the government to negotiate with the signatories to the GATT agreement who were affected by the proposed changes. In consequence, the minister indicated that about a score of items in the schedule to the bill involve a reduction in tariff duty because of the trading that took place with the principal suppliers of these commodities after the government reached the decision to increase some of the textile tariff import duties.
The minister indicated that some other reports with respect to textiles were momentarily expected from the tariff board. I think he referred to hosiery and knitted goods, and to woollen clothing. Certain other items were referred to on budget night as being under study by the tariff board, and the minister expected that reports thereon would be received soon. I hope that before closing the debate the minister will bring us up to date as to the studies that are under way.


Donald Methuen Fleming: If my hon. friend will permit, I can say to him at once that there is nothing further to report since I made my statement on budget night.


William Moore Benidickson: Would the minister indicate later how soon he expects the reports of the tariff board on hosiery and knitted goods, woollen clothing and associated items and the others will be brought down? I take it that in many instances the items involved are bound under our GATT trading arrangements and would require negotiation with other countries before the minister could recommend changes in the tariff schedule to the house.
I am pleased to find that some of the recommendations of the organized farm community have received the attention of the government and are incorporated in proposed amendments in the schedule to the bill. However, I think the minister will recall that the interprovincial farm union, having in mind the minister's budget, made representations this year with respect to changes in practice that they believed had developed since this new government took office with regard to heavier

Customs Tariff
imposts of duty involving the importation of used farm machinery. We see nothing in the bill dealing with that matter, which has rereceived the attention not only of this farm organization but of others.
When the minister replies I hope he will also give us some information about the currently worrying problem of trade with Russia. The attention of our country at large has been directed to the report that very soon at some of our eastern ports a substantial quantity of refined gasoline will be received; not the crude product that normally enters through the eastern ports but gasoline ready for sale. I believe that the minister or the cabinet has the authority under this act to alter the status of Russia as a trading partner. Am I not right in thinking that under section 6 of the act, I believe it is, the cabinet has the authority to establish what is a most favoured nation? I wonder whether the proposed importation of Russian gasoline has any relation to any executive change that has taken place since we last debated this measure. Because of the size of the proposed importation I think one would also want to know to what extent Russia has officially approached our government through its ambassador or through other channels in connection with this proposed new trading development.
Before the minister concludes the debate on amendments to the act I hope we will hear from him as to the present situation with respect to Canada's very obvious interest in the trade developments that have been taking place very recently in Europe and even outside Europe. I refer to what is colloquially called the report of the four wise men, about which there was discussion in Washington in April, and the proposal that perhaps Canada and the United States might participate in the trade agreements involving the Six and the Seven in Europe. In other words, perhaps the minister could indicate whether he feels it is imminent that Canada will belong to the European economic forum in conjunction with the United States.


Mr. Speaker:: Order. Does the hon. member not feel he is going rather far afield in connection with a bill that proposes specific amendments to the Customs Act, which does not really bring into debate the whole problem of international trade and tariffs?


William Moore Benidickson: What I had in mind, Mr. Speaker, was this. I think you will recognize that perhaps two thirds of the items that are before us in the schedule to this bill are subject to agreement that has been entered into at a GATT conference. My concern is that if today, we are considering passing legislation that affects these perhaps 125

items that are related to GATT, then what is the effect going to be on them in two or three months by reason of the negotiations that are presently taking place? I think certainly the ministry should indicate if only briefly to us what their present activities are in relation to these many items that are before us in these Customs Act amendments which change so many of these GATT schedules. The GATT conference is imminent. The possibility of discussions with the United States and these European trading units will all come into focus when this GATT conference takes place. This arouses curiosity as to whether there is some real purpose in passing this schedule if it is to be altered within two or three months' time at the GATT conference.
I realize, Mr. Speaker, that these items could be debated at greater length when we consider the estimates of the Minister of Trade and Commerce and the Minister of Finance. However, I would hope that before we are asked to pass some of these items in committee of the whole, the Minister of Finance would report on the present negotiations that are taking place in these arenas that might very materially alter the effect of anything we are asked to do today.
I find, Mr. Speaker, that a number of items that one might have looked for in this schedule are omitted. The minister indicated on budget night that he felt this was not the appropriate time to make an extensive revision of some of these schedules. He was indicating that he was reserving his trading position because of the important conference that was to take place in the autumn under our treaty obligations under GATT. However, I am wondering about the omission of some items which have been the subject of discussion already this session and which are not before us today. I was wondering whether the minister has under review any possibility of revising our tariff arrangements in connection with the importation of drugs. I believe there is great alarm in our country today over the disclosure that the cost of many pharmaceutical items is much higher in Canada than in other countries of the world. I wonder whether the minister has any thought requesting the tariff board to review the situation in this particular industry.
I would hope before the debate is concluded that we would have, in relation to these items, a report from the minister in connection with some of the current developments that have taken place with regard to the recently negotiated Russian trade treaty. What about the quotas with respect to Japan, which are not before us legislatively but



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which you will recognize, Mr. Speaker, do affect items in the schedule, such as the silk item and other things? I should like to know to what extent the percentages that have been agreed upon with Japan with respect to certain trade categories compare with what applied in 1959. What is the proposal for 1960 with respect to some of the textile items?
I do not know of any other way by which we can properly discuss some of these trade agreements that have been made with Japan. We have to pass here the legislation. In this bill we have certain schedules; we arrive at certain rates of duty. Then some of those are altered by negotiation between the minister and for example Japan. I think before the government asks us to pass legislation of this kind the minister should report, as he has not yet done this session, specifically upon the negotiations with a very important trading nation such as Japan.
Mr. C. W. Carter (Burin-Burgeo):: Mr. Speaker, on the second reading of any bill we discuss the principle of the main bill-


Donald Methuen Fleming: Not of the main bill, only the amending bill.


Chesley William Carter: -well, of the amendments, and their application to our economy. The tariff system is a weapon which the government can use to assist our economy and, in particular, certain industries which are having a difficult time to exist. Now, the fishing industry is one which derives two thirds of its dollar income from the foreign market. Of late, prices in the foreign market have not risen fast enough to keep pace with the increased costs of production and marketing. Consequently, if this industry is to survive, the government must do whatever is in its power to offset this disadvantage. I have looked through the schedule and I find on page 10, under item 124b, that the item which was formerly confined to squid has now been extended to include octopus and cuttlefish.


Donald Methuen Fleming: This is a matter which could be raised in committee. If the hon. member wishes to deal with a specific item in the schedule, then the committee is the proper place to do so.


Chesley William Carter: I thank the minister for that remark. I only referred to it because on looking through the schedule it appeared to be the only request made by the fisheries council of Canada to which the government has seen fit to accede. The fisheries council made several other requests, one of which was that some alteration be made in the wording of the item under which fishing
Customs Tariff
vessels are imported. The item now refers to vessels of 100 feet, and the council requested a change to 80 feet.
The purpose of this tariff item is to protect the shipbuilding industry in Canada. These ships, however, are not built in Canada. The basis of the tariff item, the length of a ship, is not actually in accordance with scientific and technological developments that are taking place in this industry, because today a ship is built and designed for a certain purpose. A ship much smaller in length but of different design can very well do the same job and do it better than a ship 100 feet in length. In this connection I should like to draw the minister's attention to a resolution passed at the annual meeting of the Fisheries Council of Canada. It reads as follows:
Whereas some processors of fish are suffering severely from lack of suitable fishing vessels; and
Whereas the federal government restricts the acquisition of the desired craft in the foreign markets through:
(a)	The necessity of having to secure permission from the Department of Transport to import a vessel-a restriction which we do not believe exists in the case of instruments of production in any other Canadian primary industry;
(b)	Heavy duties levied on vessels up to 100 feet in length when imported from most favoured nation countries; and
Whereas experience has shown that larger vessels are going to play a more important part in production in future years;
Therefore be it resolved that the Fisheries Council of Canada request the federal government to remove these hindrances to the adequate building up of the Canadian fishing fleet.
I urge the minister to reconsider the government's policy toward the fishing industry and in particular toward this request made by the Fisheries Council of Canada. Actually any reduction in the length of vessels under this item would be helpful especially if the length could be reduced to 80 feet.
The salt fish industry is the most depressed sector of the fishing industry. In my own province in particular we are trying to develop this industry and particularly to process the fish in our own province in order to give as much employment as possible to our own people. Therefore this 22J per cent levy on salt fish dryers and on the parts which must be imported for the maintenance of these dryers is a heavy burden on this particular sector of the industry. I hope the minister will remove this tariff-and if he cannot do it now I hope he will do it as soon as possible-which I do not think adds a great deal to the revenue of the country but is a very heavy burden indeed on this depressed sector of the industry.
The other articles which the government-

Customs Tariff


Donald Methuen Fleming: Mr. Speaker, the hon. member has been discussing something outside of the bill and has now indicated that he is going to discuss something else which, I take it, is also outside of the bill. This is a debate on a bill to amend the Customs Tariff. In fairness to all hon. members I think I am bound to raise the point which you yourself raised earlier, Mr. Speaker. This is not a wide ranging debate on trade; it is not a wide ranging debate on tariff questions. It is a debate on the principle of a bill to make certain specific changes in the Customs Tariff. That is all it is.
It is not in order to debate items that are outside the scope of this bill which is now before the house, namely Bill No. C-74. Otherwise the thousands of items that appear in the Customs Tariff would all be open to debate as to the proper rates upon them every time a bill to amend the Customs Tariff with respect to certain particular and named items is introduced in the house. We have had the resolution stage. We have had the budget debate. This matter could have been discussed there. We went all over these matters in the debate last week in the committee on ways and means on the resolution that preceded this bill. All these proposed amendments to the Customs Tariff were set out clearly and in extenso in the resolution which was approved. Here we are dealing simply with the most specific kind of amendments to the Customs Tariff which, in my respectful submission, would not give rise to a debate on trade or on the appropriate tariff treatment of commodities that are not embraced within the scope of Bill No. C-74.


Chesley William Carter: On the point of order, Mr. Speaker, may I say that we are discussing the application of certain tariff principles as applied to certain industries. I was only endeavouring to give the minister some suggestions and to support the suggestions made by the Fisheries Council of Canada as to how these principles could be applied to the fishing industry, which is sorely in need of some change in government policy and in tariff policy in order to enable it to survive. I presume it could be done on various tariff items. I presume we might amend various items with respect to certain things, but I do not see what would be gained.


Mr. Speaker:: Basically, what the minister urges on the point of order is correct. It is not in order to discuss in detail matters which are not in the bill; nor is it in order to discuss in detail matters which are in the bill at this stage. That discussion would properly come when the items are called one by one in the committee of the whole.
It is difficult to define exactly the limits of debate on a bill which covers a great many isolated and separate items. However, if the hon. member would limit himself to general principles I think he would be in order. For example, he has objected on the ground that some things might have been done in this bill for the fishing industry. I think it is in order to say in general terms that the bill does not do what ought to have been done. If he keeps his discussion to general terms I think it will be not only expeditious but in order.


Chesley William Carter: You used the word "items", Mr. Speaker; I presume you did not mean tariff items, because this bill and the schedules name a number of tariff items to which I was not referring. I was referring particularly to certain tariff items right at the beginning, particularly to item 124b which is in the bill, but I was going on to indicate to the minister that there are many phases of the fishing industry which can be helped by an extension of the principle embodied in this bill, particularly in the case of life-saving equipment.
We have the Canada Shipping Act, which imposes certain regulations on ship owners. In complying with that act they are put to great expense. That expense today is a real handicap, and sometimes it is a real discouragement to the shipping industry and in particular to the fishing industry. I would think the minister would adopt the principle that in cases where equipment is necessary for lifesaving-a thing like that-the government should give the fullest possible encouragement to ship owners or vessel owners to get the best that is available on the market. The best available at the moment is this rubber life-saving raft which is very expensive and beyond the means of many. A reduction in the tariff or the placing of that item on the free list would be of great help not only to the fishing industry but to the coastal vessel industry and to the shipping industry in general.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Flynn in the chair.
On clause 1-Man-made fibre.
William Moore Benidickson: Mr. Chairman, in connection with the operation by the Department of National Revenue, which will apply if we adopt this bill and the schedules attached to it, what consideration has the minister given to some of the representations of industry to the effect that they do not get adequate consideration with respect to such things as the refund of overpayment of duty when a tariff change takes place? I think the minister will be familiar with the representations made by

the Canadian Chamber of Commerce. I am sure this organization has investigated this matter very thoroughly. Their members report that the Minister of National Revenue has certain privileges of appeal, and so on, and has a long time in which to exercise his discretion. But these things are not reciprocal, and the taxpayer does not get a report from the department automatically where there is a change in ruling or a change by statute. He has to go through the formal process of appealing if the department just do not see fit to recognize that they have made a mistake and that the law is new, and provide a refund.
The minister will remember receiving the Canadian Chamber of Commerce brief on this point. I refer him to page 13 of the brief presented this year to the Minister of Finance and the Minister of National Revenue. I do not see any changes here which affect the matter. I suppose the changes would come perhaps in the Customs Act rather than in the Customs Tariff.


Donald Methuen Fleming: Mr. Chairman, the brief to which the hon. member has referred was, it is true, directed on its face to both my colleague the Minister of National Revenue and myself, but in the presentation the Canadian Chamber of Commerce directed that portion of the brief to my colleague the Minister of National Revenue, to whom it properly belongs. This is not a matter affecting the Customs Tariff; it is a matter affecting rather the Customs Act, and the proper place for any such question to be raised would be on the estimates of my colleague the Minister of National Revenue.


William Moore Benidickson: Well, Mr. Chairman, I
am not completely satisfied about that. Everybody will recognize that we are changing the law here, and in consequence rates of duty are different. I am informed by the brief of the Canadian Chamber of Commerce that law changes somehow do not always come to the knowledge of the local customs collectors. Therefore taxpayers pay the former rate of duty, and the government does not readily make a refund without insisting that the taxpayer make a formal appeal.
The Canadian Chamber of Commerce also says that appeals should not be expensive. It says the appeal procedure should be available through a travelling customs board of appeal similar to what is available in cases of income tax. Therefore if we are going to change these customs rates I hope the Minister of Finance will give consideration to relieving the taxpayers of any unnecessary red tape in connection with getting adjustments which 79951-0-305
Customs Tariff
are consequent upon the changes we may make now to these tariff schedules.


Mr. Regier:: Mr. Chairman, it is a little while since this was before us last. Perhaps the minister might tell the committee how much of an over-all loss or gain in revenue these amendments are expected to produce for the treasury.


Donald Methuen Fleming: It is expected that no substantial change will result to the treasury.


Mr. McMillan:: Mr. Chairman, clause 1 describes man-made fibre. I know that some fibres contain some percentage of rubber. Does this clause mean that if any fraction of rubber is present the fibre would be excluded under the definition?


Donald Methuen Fleming: The proposed definition of man-made fibre is sufficiently broad to include viscose, acetate, nylon, orlon, terylene, acrilan and similar fibres which are cellulose products or true synthetics. Polymers, the expression which is used in line 9 are substances composed of giant molecules which have been formed from union with simple molecules.


William Moore Benidickson: I do not recall whether this definition in this section of the bill specifically comes forward in a report of the tariff board. Frequently the tariff board, in response to a request from the Minister of Finance for investigation, does come up not only with specific recommendations for changes in rates of duty but also recommends certain changes in definition.


Donald Methuen Fleming: The tariff board did recommend this change.


[Stage Direction]
Clause agreed to.
On clause 2-Schedule A amended.
William Moore Benidickson: I take it that with respect to this clause, Mr. Chairman, you would adopt some system of going over the individual items in the schedule seriatim. Last week it was found reasonably satisfactory to take the schedule page by page with a slight pause so that members of the committee could just examine the ten or so items on the page and determine whether or not they had the necessity of inquiring about any item.


The Chairman:: I imagine the committee would have no objection to doing that. We could do it in two ways, possibly by calling the tariff items one by one as we study clause 2, or by going page by page when we come to schedule A.

Customs Tariff


Donald Methuen Fleming: Surely it is sufficient page by page, Mr. Chairman, as suggested by the hon. member for Kenora-Rainy River. That was the practice followed in the committee of ways and means on June 8, and I think it was found to be quite adequate.


Erhart Regier: I would say that page by page would be acceptable provided the Chair is not too quick in accepting something as carried.


William Moore Benidickson: You will recognize, Mr. Chairman, that most of us have prepared our notes on the basis of the budget resolutions, and the items on these pages before us are not identical with the pages in the schedule of the resolution. But I am sure that with that-


Donald Methuen Fleming: The items are identical but the page numbering is not the same in the schedule to the bill as it was in the printed pamphlet of ways and means resolutions.


Jacques Flynn: The only problem is this. If there is any specific amendment it should be made before we carry clause 2. That is why if we are only discussing the items it would be sufficient to call the schedule page by page.


William Moore Benidickson: I wonder if the minister would indicate in connection with the items presented to us in part I of schedule A-and there are many of them-which items might involve a European country which is the principal supplier. I indicated in my remarks on second reading that naturally we should be concerned about Canada's trading position with respect to those countries in Europe which are setting up trading blocs which might adversely affect us. I think our trade with Europe is about 24 per cent of our over-all, total trade, going well above $1 billion. I wonder if the minister would indicate in connection with these items in schedule A whether any of them involve negotiations with European countries which would be the principal suppliers under our GATT trading agreement.


Donald Methuen Fleming: I can do that when we come to schedule A, Mr. Chairman.


Jacques Flynn: Shall clause 2 carry?


William Moore Benidickson: No, Mr. Chairman. I think the understanding was that we were to deal with these page by page.


Donald Methuen Fleming: We have not come to the schedule yet.


Jacques Flynn: Shall clause 2 carry?


[Stage Direction]
Clause agreed to.
[The Chairman.]
On clause 3-Schedule A further amended.
Jacques Flynn: Shall clause 3 carry?


Mr. Badanai:: This clause in paragraph (a) refers to door opening weatherseal retainers. Does that mean weatherseal retainers on automobile doors? It also refers to reclining seat mechanisms. I presume this to mean the automatic seat adjustment in motor cars. Am I correct in that?


Donald Methuen Fleming: This applies to the kind of mechanism which is used in some motor cars to enable the seat to go back and fold into a bed. This change applies only in the case of a class or kind not made in Canada.


Hubert Badanai: Does this mean the tariff is being removed on these particular items?


Donald Methuen Fleming: Only when imported by a manufacturer who meets the requirements in regard to content. I point out that this applies only to mechanisms which are not of a class or kind made in Canada.


Paul Joseph James Martin: This is not a
question of asking for further tariff protection but for the maintenance of what we have. I asked the minister a question a few moments ago, when the bill was presented, whether he had given consideration to the brief presented on behalf of the automobile communities of Canada. The minister said he thought it would be proper to deal with that at some other time; but as this very kind of question in principle is involved in some of the recommendations made, has the minister given careful consideration to whether or not this is the kind of thing that might be avoided at this time in order to provide a healthier economic state in the industry and for the maintenance of a higher level of employment?


Donald Methuen Fleming: I think probably the hon. member is not aware that this change was asked for by the Canadian automotive chamber of commerce and by the Canadian automotive parts manufacturers themselves.


Paul Joseph James Martin: The parts association, too?


Donald Methuen Fleming: Yes.


William Moore Benidickson: What about the employees?


Donald Methuen Fleming: I presume the employees are interested in this because it is designed, with respect to a type of article that is not made in Canada, to enable the manufacturers of a finished product in

Canada to be more competitive either in the Canadian market or in the export market.


Paul Joseph James Martin: The minister's
answer is at least enlightening in part. It indicates that the parts people have been asking for this, but that does not necessarily resolve the matter. For instance, one could refer to the fact that automatic transmissions are made outside of Canada; that a licence has been extended to the automobile manufacturers to have them made outside of Canada for another year. The fact that the manufacturers have agreed to this does not necessarily mean that it is the thing to do. It seems to me that the time has come when automatic transmissions ought to be made in Canada.


Donald Methuen Fleming: This has no application to that.


Paul Joseph James Martin: No; but this is an illustration of what I think is a weakness in the minister's statement. However, I bring it to his attention.


William Moore Benidickson: This clause refers back to the resolutions. It is on page 25 of the ways and means resolutions. I am wondering why the minister did not see fit to present this in the ordinary way; why instead of a separate resolution dealing with words it should not be presented as part of a resolution which would show, as is shown with respect to all these other items, the existing rate and the proposed rate. When we get it in words one has to go back to the library to find out how schedule A of the Customs Tariff of 1959 reads, and it is very complicated.
We have a proposal that those items be included in paragraph (a) 438c of the Customs Tariff schedule. I think the minister would agree with me that this is a long list of automotive parts. But then, after that is all recited, we find that the rate varies substantially according to circumstances. In the first place there would be a tariff rate of 17J per cent on goods from a most favoured nation, such as the United States, if the parts were for use in the manufacture or repair of the goods enumerated in tariff items 410a, subparagraph 3, 424 and 438a or for use in the manufacture of parts thereof.
Will the minister indicate in connection with each of these items just the extent to which they have been manufactured in Canada in the past? If they were manufactured, what was the rate of duty? Will he indicate what change in the rate of duty is likely to follow as a result of the adoption of this clause? What have they been paying up to his introduction of the budget on March 31, 79951-0-305J
Customs Tariff
and what is his information as to the rate of duty that is likely to be paid on these items after April 1, 1960?


Donald Methuen Fleming: So far as the form of this clause is concerned, it is designed to assist the house. The change was set out in complete form in resolution No. 6 under the heading of Customs Tariff. The house was given the fullest information by that means. These changes relate to items that are all of great length in the Customs Tariff, and by setting them forth in this form it is much simpler, much clearer and much easier for the house to follow.


William Moore Benidickson: Maybe for the industry; not for the house.


Donald Methuen Fleming: These items are literally pages in length; therefore this is a much clearer way to set them forth to enable the house to grasp the effect of the changes proposed. Earlier I drew attention to the fact that these changes apply to goods of a class or kind not made in Canada. The imports have not been extensive. For instance, with respect to the door opening weatherseal retainers and the reclining seat mechanisms and swivel seat mechanisms, the imports of those parts in the 1960 model for this year are estimated at only $78,000.
The reference to the parts of the internal combustion engine is a technical amendment. The reference to air cleaners and cast aluminum road wheels applies to things of a class or kind not made in Canada when imported for use in the manufacture of trucks or buses which contain 40 per cent commonwealth content. The imports of these latter products in this present year are estimated at only $40,000, so that these are not large items.
The rates hitherto applicable have been 17J per cent British preferential; 25 per cent most favoured nation. If they conform to the requirements in relation to content, that is to say 60 per cent commonwealth content in the case of those enumerated in subclause (a) and 40 per cent in the case of those in subclause
(c), entry will be free.


Paul Joseph James Martin: Mr. Chairman, what the minister has said illustrates the concern I expressed earlier. I am not so sure that the question of the content required- the commonwealth content or the content required in the case of importations from noncommonwealth countries-cannot be adjusted without in any way increasing the tariff. I am not suggesting that, but this very provision violates one of the requests made in the submission to which I have already directed the committee's attention, where a request is made for an increase in the Canadian content requirement of vehicles

Customs Tariff
manufactured in Canada and for a review of the whole formula respecting content as well as for the encouragement of Canadian content in imported vehicles. This may be a small item, less than $100,000-


William Moore Benidickson: Just part of it. Just one item was $78,000.


Paul Joseph James Martin: Yes, just one. But the accumulation is important. One of the factors producing instability in the automobile industry at the present time, if that is a correct characterization, is the question of importations. If that can be dealt with in a way that will not prejudice tariff policy and so on it ought to be done, and I think it can be done by a change in the content requirement. What we are doing in this bill is going one step further along the lines generally complained of by the industry throughout the country.


Mr. Spencer:: Mr. Chairman, before the minister answers that point I should like him to clear up the point raised earlier by the hon. member for Essex East. I should like the minister to set my own mind at ease on this point. I think perhaps I understand it and that the hon. member for Essex East does not fully comprehend it.
As I understand the purpose of the present amendment it is to admit these specific items which are not made in Canada at a lower rate of duty, in fact duty free, if they are utilized in the manufacture of certain vehicles in Canada. That in no way adversely affects the employment of men in Canada, as I understand it, because these commodities are not made in Canada at the present time.


Mr. Marlin (Essex Easl):: I am suggesting they should be; that is the point.


Norman Leonard Spencer: The hon. member for Essex East has indicated that this amendment will have some bearing upon the point raised in a previous brief, that employment in Canada would be promoted by a change in the Canadian content. It is my understanding that this will have a beneficial effect, because when these items are incorporated into the vehicle-being articles not made in Canada and therefore not of Canadian content- it will mean that in order for the manufacturer to get these articles in duty free he will have to increase the other content of the automobile so as to come within the specified requirements respecting the Canadian content. By virtue of these things being done the manufacturer will have to incorporate into the vehicle a greater quantity of other Canadian-made products. The net result will be, of course, that some other item which at present is being imported will

have to be incorporated into the vehicle, and that will be a Canadian-made commodity. I do not know whether that is the correct understanding, but I believe it is.


Donald Methuen Fleming: Mr. Chairman, that is entirely the correct understanding. This change will have the effect of reducing the cost of production of the Canadian automobile or truck to the extent to which these particular parts are installed in the finished product. What the hon. member has said in regard to content is also entirely correct.


William Moore Benidickson: I can see that point, Mr. Chairman, and have no quarrel with it. Did the minister not say, however, that at the present time the effective protection is 25 per cent? Did he not say it is 17J per cent British preferential and 25 per cent most favoured nation?


Donald Methuen Fleming: Yes, but I think these are imported largely from the United States.


William Moore Benidickson: Yes. Up to the present time these articles have been protected to the extent of 25 per cent. They have paid a duty rate of 25 per cent. They will now come in free if not made in Canada; is that right?


Donald Methuen Fleming: They will become free under the changes now proposed, but this applies only to articles of this description of a class or kind not made in Canada.


William Moore Benidickson: We will assume they are not made in Canada now. I assume there has been an encouragement to Canadian manufacturers to look at the possibility of making them by reason of a tariff of 25 per cent. That is to be taken away, so the encouragement for Canadian industry to look at this possibility is probably going to be considerably less than it was prior to this change.


Donald Methuen Fleming: I think the experience of the Canadian manufacturers is that the volume is so very small that they could not possibly hope to compete, and this is in line with requests that are often received in the case of components that enter into the Canadian manufacture of finished goods. Where there is no Canadian source, therefore request is made that the tariff be removed on these elements in order to assist the Canadian manufacturer to be competitive in relation to his finished product.


William Moore Benidickson: I see the point and am glad of the explanation, but I want to understand what the result will be. Heretofore these articles in 438c and 438d have been subject to a duty on import of 25 per cent. Inasmuch as they are not presently made

in Canada they will come in duty free for the manufacturer of an automobile made in Canada. The next step would be that if at some future date someone started to make these items in Canada the duty would be 174 per cent and not 25 per cent by reason of putting them into this schedule. Is that correct?


Donald Methuen Fleming: That is right only in part. There is provision for the following rates: British preferential, free; most favoured nation, 17J per cent; general tariff, 30 per cent. That applies with respect to some of the items within the description contained in item 438c of the tariff, but only with respect to some.


William Moore Benidickson: Yes, I see a general tariff rate of 30 per cent. We are not importing these particular items under either the British preferential tariff or the general tariff, are we, inasmuch as we manufacture automobiles of the type manfactured in the United States?


Donald Methuen Fleming: Nearly all of these come from the United States. They are imported in small volume and are required now in connection with 1960 production programs.


William Moore Benidickson: Could I ask the minister another question. Has this change in tariff any relationship whatsoever to his negotiations with any country signatory to GATT in consequence of the government's decision to increase textile tariffs and its obligation to make some concessions elsewhere in the tariff schedule?


Donald Methuen Fleming: No, Mr. Chairman, this change was made entirely at the request of the Canadian automotive chamber of commerce and the Canadian automotive parts manufacturers.


Murdo William Martin: I do not think I have misunderstood the situation. I am not satisfied that the interpretation I have placed on this section is not correct in the light of administrative practice. I am certainly not satisfied that the matter of the required content is policed or has been policed to the extent required under the law. I am sure that if only $78,000 worth of goods are involved under this section that is not going to appreciably change the amount of imported parts that now go into the Canadian-made automobile. However, there is another aspect of this problem that was raised by the hon. member for Kenora-Rainy River which I think is important, having in mind my particular concern, and that is the question of the valuation placed on imported vehicles, especially from other than commonwealth countries, particularly those countries where the cost of production is considerably below that
Customs Tariff
of this country or most western countries.
I have in mind particularly the Soviet union. We have a treaty with the Soviet union.


William Moore Benidickson: That is the general tariff, is it?


Murdo William Martin: Yes.


Donald Methuen Fleming: The matter of valuation under the Customs Act has nothing to do with the Customs Tariff.


Murdo William Martin: The hon. member for Kenora-Rainy River raised this question and inquired of the minister-


Donald Methuen Fleming: It is not relevant to this bill at all.


Murdo William Martin: My friend says it is not relevant, but while he does not administer the Department of National Revenue and is not responsible for valuation, surely he can tell us what the policy of the government is with regard to the valuation that would be placed on products made in lower cost countries in competition with our own. I submit with confidence to the minister that under this bill the question put by the hon. member for Kenora-Rainy River and now supported by me is in order.


Donald Methuen Fleming: I am sure the support of the hon. member for Essex East would almost make a question which is out of order in order but not quite. The subject matter of the hon. member's question does not relate to this bill at all. There will be proper occasions when that question can be raised, but this is not one of them.


Murdo William Martin: Well, I think it is, but the minister does not want to answer. All right.


Mr. Pugh:: Mr. Chairman, I should like to clear up one point. Suppose in future people do enter into the manufacture of such products; would the duty then be automatically imposed?


Donald Methuen Fleming: Yes. Once it is manufactured in Canada then it comes out of this provision. This applies only in the case of goods of this description of a class or kind not made in Canada.


David Vaughan Pugh: So there will be no bar to anyone starting manufacturing in Canada at any time if it is a profitable venture.


Donald Methuen Fleming: No; and that applies, of course, to a great many items in the tariff.


William Moore Benidickson: I understand that a declaration would have to be made in the Canada Gazette or something of that kind if someone started to manufacture these items. If that

Customs Tariff
declaration were obtained after the commencement of manufacture, under what section would these articles then be in the tariff schedule?


Mr, Fleming (Eglinton):: The rates?


William Moore Benidickson: The minister said that the items would go out of this section.


Donald Methuen Fleming: The British preferential rate?


William Moore Benidickson: I do not think they go out. I think they are probably covered.


Donald Methuen Fleming: The most favoured nation rate will be 17J per cent then.


Erhart Regier: I should like an explanation of a matter raised by the hon. member for Essex West and replied to by the minister. If these parts are not made in Canada I can understand that by reducing the tariff on them we enable the Canadian manufacturer to be more competitive when he attempts to dispose of his end product. However, if these parts are already imported into Canada, not being made in Canada, as a result of this amendment how would a manufacturer increase the Canadian content in his automobile?


Donald Methuen Fleming: The reference made by the hon. member for Essex West was to point out how this affects the finished product, not how it affects the imported article; because presumably there is no Canadian or commonwealth content in the part that is imported. He had reference to the Canadian or commonwealth content as applied to the finished product; therefore where it becomes a matter of measuring the Canadian or commonwealth content of the finished product it means that the other components in the finished product must make up the extent to which this particular component is not of commonwealth or Canadian content.


Erhart Regier: The minister has not yet answered my question. If these reclining seat mechanisms, swivel seat mechanisms and so on were imported before and importation is now being made a little easier by reducing the tariff as long as they are not manufactured in Canada, how then is the manufacturer under an obligation to increase his Canadian content in the completed automobile or truck?


Donald Methuen Fleming: Mr. Chairman, in the case of the parts or mechanisms referred to in (a), this, as I pointed out, creates free entry for those so described when of a class or kind not made in Canada when imported by a Canadian automobile manufacturer who achieves a specified commonwealth content which in general in this respect is 60 per cent. I point out that due weight must be given to

the words "of a class or kind not made in Canada" as applied to the change now before us.


William Moore Benidickson: We are dealing, of course, with just one alphabetical subsection of general item 438 of the tariff schedule. We are dealing with 438c, and I take it that item 438a deals with an entire automobile. Item 438a deals with importing an entire automobile, and I think we would be interested in relating the tariff rates on a complete unit to the rates that would apply to the importation of a part such as those referred to in clause 3 of the bill. If we are dealing with the importation of a completed automobile there would be free entry from a British commonwealth country, whereas the rate from the United States would be 17J per cent plus, of course, the sales tax of 11 per cent. That would apply in each case, would it not?


Donald Methuen Fleming: Yes, the tariff rates quoted by the hon. member are correct.


William Moore Benidickson: Would the minister indicate what tariff is imposed against the importation of a Canadian automobile into the United Kingdom or into the United States? What would be the rates against a Canadian automobile or a part such as those referred to in this clause if imported into the United Kingdom or the United States?


Donald Methuen Fleming: This goes quite outside the scope of this matter. I wish to be as obliging as I can when information is requested, but this is obviously outside the scope of the bill. I am not going to attempt to do more than give my friend an answer from memory on this point. I understand that the United Kingdom tariff rate under such circumstances is 20 per cent and the United States rate is, I think, 8.5 per cent.


William Moore Benidickson: That pertains to parts?


Donald Methuen Fleming: That is my recollection; again I am speaking only from memory. I wish that clearly understood.


William Moore Benidickson: I thank the minister, but on the point of order I do not want him to indicate to the committee that this is anything in the nature of a favour. We are asked here, under clause 3, to make certain changes to our Customs Act. I say it is an appropriate question, when we are asked to amend our tariff schedule with respect to the United Kingdom, with respect to the United States and with respect to countries that are not under treaty as most favoured nations, to ask what, in return, are their tariff rates; and the minister should not indicate that it is a concession to give the information to the committee. In so far as the proviso about which he is speaking from memory is concerned, certainly

I	accept that, but it is in order to ask what is the reciprocity with respect to these items.


Donald Methuen Fleming: If there were reciprocity the question would be appropriate. However, I have pointed out that there is no question of a concession in this respect. This is a change that was made at the request not of another importer, or in return for concessions made by another country, but of the Canadian manufacturers.


Paul Joseph James Martin: What the minister has said is true, but it depends upon what the foundation of one's question is. Canadian automobile exports to Great Britain are subject to duty, while British exports of automobiles to Canada have free entry. Notwithstanding what has been said, is it a fact that the Canadian government is going to apply at the next GATT meeting in September for a revision of the restriction that would prevent Great Britain from applying to Canadian manufactured automobiles the same rate which British manufactured automobiles have in Canada? It does not seem right, and the minister has not answered, except with a political answer. I am trying to deal with this serious situation in an objective way. It does not seem right that a strong competitor such as Great Britain should enjoy in the automotive field the advantage she now has, particularly when the automobile industry in Canada is facing such serious competition and such a serious situation has resulted.


Donald Methuen Fleming: The United Kingdom enjoys, in this respect, simply those tariff advantages which were introduced by the government of which the hon. member was a member. We have made no change in that respect.


Paul Joseph James Martin: I just acknowledged that. At that time the situation was not serious. We do not always have to say, here is what was done 10 years ago. We are faced now with a serious situation. British competition is very serious in the automobile industry, because 26 per cent of the cars sold in Canada last year were made outside of Canada. This has a serious effect on the employment of thousands and thousands of people in this country.
I	am simply asking the minister whether it is the intention of this government, at the next meeting of GATT, to have consideration given to this aspect of the problem. I have not been vigorous in any denunciation this morning, and the minister is not warranted in embarking upon that kind of debate; because it could be reciprocated. I am simply trying to deal with the minister in an objective way regarding a problem of vital concern to the community from which I come.
Customs Tariff


William Moore Benidickson: I am looking again at this schedule of related articles under item 438, which is the class dealing with automobiles and automobile parts in general. I think it is quite in order, when we are asked to accept these rates, to look at how they might relate to other subsections of the main item 438. Now, would the minister indicate why, if the items in 438b, of a class or kind not made in Canada, enter free under the British preferential tariff as well as under the most favoured nation tariff he proposes a 17 per cent tariff in connection with this item? I know there is a reason for it, but I have forgotten. I am asking why the differentiation between some items of a certain kind not made in Canada and others of a certain kind such as is proposed here in this section, 174 per cent. Has this something to do with a treaty agreement? In particular I would inquire what rate would apply on such an article as the hon. member for Essex East inquired about and to which reference is made in the brief from the united automobile workers, the automatic transmission. What rate of duty is paid on that?


Donald Methuen Fleming: The provisions of item 438b are not involved in the present amending bill, Mr. Chairman. I am told that those rates have been in effect since the tariff board made a report on that subject and effect was given to that report back about 1936. As to whether there are some items in 438b under the provisions of GATT, I am told that some of them are bound.


William Moore Benidickson: On the last question I raised, could the minister say, or one of his officials identify, in this item 438 what we laymen call the automatic transmissions? Apparently they are not made in Canada but are imported largely from the United States. If imported from the United States, what rate of duty is paid on that component?


Donald Methuen Fleming: They are not under 438b at all; they are under 438n.


William Moore Benidickson: I just wanted to know under what section they were.


[Stage Direction]
Clause agreed to.
Clauses 4 and 5 agreed to.
On schedule A.
William Moore Benidickson: I think we have an agreement here, Mr. Chairman, that you will call the schedule page by page rather slowly in case hon. members have any questions beyond those raised on June 8 at the resolution stage.
Items 66b, 142, 160, 187e, 199m, 225c, 343, 347e, 414a, 414e, 463a, 463c, 465a, 465b agreed to.

Customs Tariff
505f: Southern yellow pine lumber, not further manufactured than planed on two sides, for use in the manufacture of flooring for motor trucks: British preferential tariff, free; most favoured nation tariff, free; general tariff, 25 per cent.


Erhart Regier: I wonder whether the minister would explain just what is involved in the change under 505f, southern yellow pine lumber. What was the rate before and what is the proposal?


Donald Methuen Fleming: This is a new item which extends to the lumber in question the same tariff treatment when it is planed on two sides as has all along been applied when it is planed on one side only. This becomes necessary because of a change in practice in United States mills whereby it is difficult to obtain supplies of southern yellow pine planed on one side only.


William Moore Benidickson: I am sure the minister is correct. On the other hand I find it hard to reconcile that with the item as it appears, showing the proposed rate and the old rate on page 10 of the ways and means resolutions. There it was indicated that for an item of this importance, the former rate was British preferential 10 per cent and the proposed rate is free; the most favoured nation rate was 10 per cent and the rate now proposed is free.
I must confess that I was curious about this matter previously but forgot to raise the point when we were discussing it at the resolution stage. Is it simply a matter of planing on two sides as against one side only where we find a difference in rates?


Donald Methuen Fleming: There is no change here in the case of lumber planed on one side only. It fell under these same rates previously. But formerly where it was planed on two sides it fell under item 505 and accordingly carried the rates of 10 per cent, 10 per cent and 25 per cent. This is designed simply to bring lumber that is planed on two sides within the scope of the rates applicable to lumber planed on one side only. This particular lumber is of a special kind which is required in the manufacture of Canadian truck bodies.


William Moore Benidickson: Did this enter in any way
into the concessions? I find it is in the section dealing with concessions.


Donald Methuen Fleming: Yes, this was included within the scope of our negotiations with the United States.


William Moore Benidickson: It is more than just a rewriting of the schedule for the convenience of our government. It was an item of tariff trading when it was decided to increase the rates of duties against certain imports such as textiles.


Donald Methuen Fleming: It had been asked for by the United States. It had also been asked for by our own Canadian truck manufacturers. Therefore it was a logical one to use in the negotiations.


Herbert Wilfred Herridge: In listening to the minister's explanation about the planing of lumber on one side and on two sides, I was wondering whether he was aware of the fact that lumber is surfaced on one side or four sides. That is the custom.


Donald Methuen Fleming: For the purpose of the Customs Tariff I am afraid it is not quite so scientific. It recognizes lumber planed on one side or planed on two sides. It is interesting to have the observation of the hon. member, but here the basis of distinction has been one side or two sides.


Erhart Regier: Can the minister tell us
whether the Canadian lumber producers were consulted about this matter? I had heard previously that the policy of the government was in the first place to protect native Canadian enterprise as far as possible and in addition, if and when importation was necessary, to complete the manufacture within Canada in so far as was at all possible. I notice here an increase in importation and also an opening for labour to be employed outside of the borders of Canada. I wonder whether the minister can explain this matter. I have seen all kinds of floorings in motor trucks. They have been made up of all kinds of Canadian wood. At the moment I do not realize the urgent need for greater importation of southern yellow pine lumber.


Donald Methuen Fleming: I have pointed out that this is a specialty. We are not dealing with it merely as an importation of softwood. It is a specialty used for a particular purpose. The Canadian Lumbermen's Association have been fully acquainted with the proposed change.


[Stage Direction]
Item agreed to.
Customs tariff-236. Surgical dressings, antiseptic or aseptic, including absorbent cotton, lint, lamb's wool, tow, jute, oakum, whether imported singly or in combination one with another, but not stitched or otherwise manufactured; surgical trusses and suspensory bandages of all kinds; sanitary napkins, and abdominal supports: British preferential tariff, 10 per cent; most favoured nation tariff, 20 per cent; general tariff, 35 per cent.
William Hector McMillan: With regard to item 236, surgical dressings, I note that the rates are now 10 per cent, 20 per cent and 35 per cent. Can the minister tell us what the rates are at the present time?


Donald Methuen Fleming: As the hon. member will be aware from the provisions that appeared in the resolution which was before

the committee of ways and means last week, there is no change in the rates. The only change is in the scope of the item, in this case the deletion of the words from the present item: "woven fabric of cotton weighing not more than seven and one half pounds per one hundred square yards". The change was recommended by the tariff board.


[Stage Direction]
Item agreed to.
Customs tariff-410o. (iii) Mine roof and wall supports and support systems, of metal, including yielding props or chocks, but not including roof bolts or washers or nuts therefor, for use underground in mines; parts of the foregoing; British preferential tariff, free; most favoured nation tariff, 12i per cent; general tariff, 35 per cent.
Armand Dumas: Can the minister tell the committee whether item 410o is a new item?


Donald Methuen Fleming: Yes.


William Moore Benidickson: No. 410o is a mining item which was amended, was it not, in the ways and means committee?
Customs Tariff


Donald Methuen Fleming: Yes.


William Moore Benidickson: I have the old rates but not the amendment.


Donald Methuen Fleming: The amendment did not change the rates.


William Moore Benidickson: There has been no change in the rates from the 22! per cent most favoured nation tariff to 12| per cent?


Donald Methuen Fleming: The amendment moved in committee simply added certain words to the resolution.


William Moore Benidickson: You eliminated certain paraphernalia in connection with it.


Donald Methuen Fleming: Yes. It is simply a clarification of intent. That was done by inserting the words "but not including roof bolts or washers or nuts therefor".


[Stage Direction]
Item agreed to.
-	British Preferential Tariff	Most Favoured Nation Tariff	General Tariff
Customs Tariff-			
622 Woven fabrics, wholly of cotton:			
CO Not bleached, mercerized nor coloured, n.o.p	15 p.c.	20 p.c.	30 p.c.(2) Bleached or mercerized, not coloured, n.o.p	17! p.c.	22! p.c.	30 p.c.(3) Coloured, n.o.p	17! p.c.	22J pc.	35 p.c.(4) Composed of yarns of counts of one hundred or more, including all such fabrics in which the average of the count	of warp and weft yarns is one hundred or more	Free	25 p.c.	35 p.c.(6) With cut pile	10 p.c.	25 p.c.	35 p.c.(6) For use in the manufacture of sails for boats or ships	Free	20 p.c.	30 p.c.(7) Bleached, when imported by manufacturers of handkerchiefs for use in the manufacture of handkerchiefs wholly	of cotton	Free	20 p.c.	27! P-c-(8) Weighing not more than seven and one-half pounds per one hundred square yards, not bleached nor coloured	Free	Free	30 p.c.(9) Not coloured, for use in the manufacture of ribbons for	typewriters, calculators, or other office appliances	Free	12| p.c.	15 p.c.
William Moore Benidickson: I note that it is almost one o'clock. Perhaps between now and when we resume the minister might be prepared to give us some information about item 522(3), coloured woven fabrics. Am I right in thinking that this is one of the important items of tariff increase? If so, perhaps the minister could give us an indication of what volume of trade was experienced in 1959 and what would be the next most important textile import item from the United States or
Japan. What was the import in connection with this item from the United States or from various countries? What was the total volume, and is this one of the major changes in the schedule that is presented to us today?


Donald Methuen Fleming: Yes. This item 522, subheading 3, consolidates a number of former items. The new item covers imports valued at approximately $45 million in 1959, substantially more than are covered in any other item in this resolution. The main

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source is the United States. Last year imports from the United States amounted to $36 million. The imports from other countries are relatively small by comparison. The next largest source was Japan, from which the imports amounted to $2,600,000.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
William Moore Benidickson: Mr. Chairman, I think when we adjourned for luncheon we were discussing item 522(3), women fabrics, cotton, coloured. Is this the item which would include the bulk of most cloths which might to into the production of ladies' dresses and things of that kind?


Donald Methuen Fleming: Yes.


William Moore Benidickson: I think I raised the question before the adjournment as to whether the minister would tell the committee what is the next largest item in the schedule in relation to volume of imports. He indicated that this involved imports of about $45 million last year. I wonder if he could even go beyond the second item and give us two or three illustrations so we would be more knowledgeable in the committee about the items which are important.


Donald Methuen Fleming: Item 520a, raw cotton, $52,866,000. Item 523a, $22 million in round figures; that is clothing and manufactures. Item 522(2), bleached cotton fabrics, $4,200,000 in round figures. Then item 522(1), the unbleached cotton fabrics, $10 million.


William Moore Benidickson: So we are dealing with items which in dollar volume of trade are very important in connection with the concessions with which we are presented, which this government has decided to give largely to the United States in reductions of duty. Am I right in thinking that the next item, 523a, clothing, wearing apparel, etc. is a substantial item also because it involves in trade $22 million, if that is what the minister said?


Donald Methuen Fleming: I did mention item 523a, clothing, $22 million. I think the hon. member is not quite right in the conclusion he stated at the opening of his remarks just now. Many of the commodities have not any changed rates here. There are changes in rates as applied to some specific items here as indicated in italics, but many of these items are not changed. In the case of the changes, those which came from the tariff

board-and these are all in that category- show some increases and some decreases, as I pointed out at the time of the budget speech.


William Moore Benidickson: Yes, Mr. Chairman; but on the items we are discussing, with regard to item 522(3), coloured woven fabrics, wholly of cotton, we have had trade with the United States amounting to $45 million. Is the minister not proposing an increase of some 5 per cent in the tariff here? How does that affect the cost, say, of a woman's dress; shall
1	say the average cost, because I know the amount would vary considerably. If this ordinary type of woven cotton fabric was imported and the tariff increase was 5 per cent, what effect might that have on the eventual cost to the consumer in this country who was buying a modestly priced lady's dress?


Donald Methuen Fleming: The increase is not as great as that indicated by the hon. member; it is probably about 3 per cent. The actual comparison appeared in the pamphlet in which the resolutions were put before the committee of ways and means; but as applied to women's dresses in particular, I am told that on a $5 purchase this could make a difference of about 3 cents.


William Moore Benidickson: Is my hon. friend referring to the dress? I take it that he quarrels with me on relating the difference between the old rate of 17J per cent and 3 cents per pound and the new proposed rate of 22J per cent. I can quite understand when he says that does not mean a difference of 5 per cent. I think there is a difference of opinion between the trade and the department as to whether it is what the minister says, namely
2	per cent, or whether it is 3 per cent. Is there any new opinion on this since the dispute arose?


Donald Methuen Fleming: No, Mr. Chairman; the figure, as I mentioned, was 3 per cent. I indicated that this might mean on a woman's dress 3 cents on a $5 purchase. This is the estimate given by the primary textiles institute. The department has given me an estimate of 3.9 cents on an article costing $8.95.


William Moore Benidickson: I assume that is on the cost to the manufacturer, and there is an assumption that the-


Donald Methuen Fleming: That is the retail price.


[Stage Direction]
Item agreed to.
Items 520b, 521, 523a, 523b, 524, 530a, 530b, 530c, 530d, 531a, 531b, 531c, 531d, 532d, 532e,	550,	551a,	551b,	552a,	552b,	553
agreed to.

Customs tariff:-560a. Man-made fibres or glass fibres, not exceeding 12 inches in length: British preferential tariff, 5 per cent; most favoured nation tariff, 12J per cent; general tariff, 15 per cent.
William Moore Benidickson: Is the minister satisfied that last Wednesday, June 8, he gave this committee a proper explanation of this item? There is some controversy in so far as the departure from the tariff board recommendation is concerned.


Donald Methuen Fleming: The 560a item is a new one, which provides for the entry of man-made and glass fibres at 5 per cent British preferential, 12J per cent most favoured nation and 15 per cent general tariff. These are as recommended by the tariff board. These were all included as part of the tariff board's recommendation IX(a). This replaces former item 557c.


William Moore Benidickson: I know it has been
reported by the Financial Post that this item departs from the tariff board recommendation, in that the tariff board recommended 7i per cent and the minister recommends 12 i per cent.


Donald Methuen Fleming: The tariff board recommendation was 5 per cent British preferential and 12J per cent most favoured nation. For technical reasons advanced by the Canadian industry following publication of the report by the tariff board on reference No. 125-this is the report on silks, manmade fibres and products-the wording recommended by the tariff board has been amended by deleting the words "not containing wool or hair" and by subdividing the recommended item IX into this item and the three following. This item and all those which follow throughout the part of the schedule relating to synthetics have been formulated on the basis of the definition of man-made fibres recommended by the tariff board and implemented by resolution No. 1. Resolution No. 1 is reproduced in clause 1 of the bill.


Mr. Winch:: By man-made fibres do you mean synthetics as differentiated from cotton, wool, or something like that?


Donald Methuen Fleming: Yes. It has application to what we commonly call synthetics.


Paul Joseph James Martin: Without referring to his official or to his book, will the minister satisfy my curiosity as to the real diversification of his knowledge by telling me what is meant in item 559e by nubs, slugs, slubs, neps or kemps?


Donald Methuen Fleming: These are textile products. They are not nasty names.


[Stage Direction]
Item agreed to.
Customs Tariff
Items 559a, 559b, 559c, 559d, 559e, 559f, 560b,	560c	560d, 560e,	561b,	561c,	561d
agreed to.
Customs tariff-561a. Yarns and rovings, wholly of man-made fibres or filaments or of glass fibres or filaments, not more advanced than singles, not coloured, with not more than seven turns to the inch: British preferential tariff, 20 per cent; most favoured nation tariff, 225 per cent but not less than 22 cents per pound; general tariff, 35 per cent but not less than 28 cents per pound.
William Moore Benidickson: May I refer to item 561a? By reference back to the ways and means resolutions one notes an increase in the British preferential tariff from 5 per cent to 20 per cent in certain circumstances under this item. What is the reason for this when we are trying to increase our trade with the commonwealth? The same question would apply to the next item, 561b, where the increase on paper seems to be 7i per cent to 22J per cent with respect to some items referred to in this paragraph.


Donald Methuen Fleming: A roving, as hon. members are no doubt aware, is an attenuated strand of fibres from which yarn is spun. The increase here simply follows the recommendation of the tariff board, and I understand that the tariff board in making this recommendation took into account a very considerable change in the competitive situation since the original item with the 5 per cent British preferential rate was first written into the tariff.


[Stage Direction]
Item agreed to.
Jacques Flynn: We continue with the next group of items.


Harold Edward Winch: I have not been able to find the item on which I should like to ask a question. I understood from the recent visit of the Australian trade commission that they expect in the near future to be able to export to Canada a type of wool fabric or garment which will enable them to compete with the modern washable non-ironing fabrics such as we have in our shirts today. This was announced in the newspapers. Is there any special duty on that type of fabric, or will it come in under any special provision of the Customs Tariff. I understand that Australia is the only country that has yet developed this system of treating wool, and its introduction would be most welcome.


William Moore Benidickson: May I address a question to the hon. member who has put the question to the minister? Is it not his understanding that this particular development is free from copyright or any other restriction so far as world trade is concerned? Canadians will be able to make the same fabrics though the Australian government, through its financial assistance, developed the product.

Customs Tariff


Harold Edward Winch: I do not know that. All I know is that I was most interested when I was in Australia last year to be told about the research and the work they were doing on the production of wool fabrics which would enable people to have garments such as we have in Canada today. An example is the shirt which is washable and does not need to be ironed.
I was told they were nearing the end of their research. I read in the papers last week a statement by a member of the Australian trade commission that they were now engaged in production of this material. Will this come under the tariff, or since it has been developed in a part of the commonwealth will it come in duty free?


Donald Methuen Fleming: Mr. Chairman, I have not the information the hon. member has about this particular product. I have heard nothing of the announcement to which he refers; consequently my answer must be somewhat reserved for that reason. If the product is entirely of wool then these items we are now dealing with in Bill No. C-74 would have no application whatever. It would be under a different item altogether in the tariff dealing with woollens. Beyond that it would not be wise for me to attempt to go until we know more about the particular product and the ingredients of it.
Items 561e, 562a, 562b, 562c, 562d, 562e, 562f, 562g, 562h, 563, 563a, 564 and 565 agreed to.
Customs tariff-573. Enamelled carriage, shelf and table oilcloth, and cork matting or carpets. British preferential tariff, 15 per cent; most favoured nation tariff, 27J per cent; general tariff, 35 per cent and 4 cents per pound.


William Moore Benidickson: Mr. Chairman, with respect to item 573 what change is involved in this schedule?


Donald Methuen Fleming: With reference to the item there is no change whatever in rates. The item itself continues without change that part of item 573 which relates to oilcloth and cork matting or carpets. Linoleum which formerly was included in item 573 is dealt with now in 573a. That is the change that has been made in 573.


[Stage Direction]
Item agreed to.
Customs tariff-573a. Linoleum; felt base floor covering not including such materials in which are incorporated synthetic resin sheets or cellulose plastic sheets. British preferential tariff, 15 per cent; most favoured nation tariff, 25 per cent; general tariff, 35 per cent and 4 cents per pound.
William Moore Benidickson: I see a reduction of 24 per cent in the tariff under item 573a from 274 per cent most favoured nation to 25 per

cent, with respect to linoleum. What industry have we in Canada that is affected by this change?


Donald Methuen Fleming: There are factories in Canada, Mr. Chairman, that produce linoleum. This is a very modest change indeed; it is only 24 per cent. The new rates proposed will still provide for a very substantial level of protection to Canadian linoleum producers and a very substantial margin of preference for commonwealth imports.


[Stage Direction]
Item agreed to.
Customs tariff-586. Anthracite coal; anthracite coal screenings and dust: British preferential tariff, free; most favoured nation tariff, free; general tariff, 50 cents per ton.
Harold Edward Winch: Mr. Chairman, would the minister give us an explanation of 586 relating to anthracite coal screenings and dust?


Donald Methuen Fleming: Mr. Chairman, I gave a full explanation of this item when we were in the committee of ways and means. The hon. member will find it in Hansard of June 8 at page 4687, in the second column.


William Moore Benidickson: Did the minister at that time explain clearly what type of anthracite coal paid entry 50 cents per ton on most favoured nation?


Donald Methuen Fleming: I thought I did, Mr. Chairman. This applies to the screenings and the dust.


Harold Edward Winch: Is the 50 cents per ton on coal coming from the United States to Nova Scotia, a coal mining area of Canada?


Donald Methuen Fleming: The general tariff rate of 50 cents per ton did apply to screenings and dust coming into Canada from the United States, but under this item the import will now be free for the reasons which I gave. This matter has been discussed with the dominion coal board, and we have been assured that this tariff change will have no adverse effect on Canadian coal production.


William Moore Benidickson: In his reports from his officials perhaps the minister has information I have not as to the end use of anthracite coal screenings and dust in Canada. What is the purpose of the import? What largely is the product devoted to once it arrives?


Donald Methuen Fleming: It is of particular interest in the production of pig iron, titanium and other products such as electric battery boxes.


William Moore Benidickson: Are some of the industries producing these products located in the maritimes?


Donald Methuen Fleming: I do not know that any of these industries are located in the maritime provinces. There are various Canadian industries that are interested in this. The point on which I put some emphasis when the subject was before the committee of ways and means on June 8 was that this had been studied by the dominion coal board and the board had satisfied itself and satisfied us that this change would have no adverse effect on Canadian producers.


Harold Edward Winch: That is the point I do not understand, and I was not present at the time. I recently visited Nova Scotia and am interested in the coal mining industry. I understand the use of this commodity is for heat, and that it is largely used on an industrial basis. Is the minister telling us that the report of the board, accepted by the government, was to the effect that the coal of the maritimes is not of such a nature that when made into screenings or dust it can be used for heat purposes, domestic or commercial? I am more interested in the commercial aspect, of course.


Donald Methuen Fleming: The report does not go that far. There are geographical factors involved here and questions of marketing, I presume. The coal board, which after all has always before it the problem of markets for Nova Scotia coal, has studied this matter and reported to us that this change in the tariff rates on the screenings and dust would have no adverse effect on Canadian production.


William Moore Benidickson: Is this a public document? Has the report been made public?


Harold Edward Winch: Would the minister explain why a document of this importance has not been made public so we can see the basis on which the recommendation was made and accepted?


Donald Methuen Fleming: A great deal of information of a departmental nature comes to ministers which is used in giving statements to the house when the original information, in whatever form it may come, is not producible. That happens all the time.


Harold Edward Winch: Yes, but-


Donald Methuen Fleming: The hon. member realizes, I am sure, that when a proposal comes forward with respect to a matter of this kind, for a change in the tariff on coal in any form, we would not think of bringing it to the house without first having consulted the coal board. We consulted the coal board about this, and I have given the house the answer that the coal board has given us in relation to the inquiry we made of them.
Customs Tariff


Harold Edward Winch: The point that stumps me is that a change in the tariff is being recommended, as the minister admits, on the basis of information from the coal board, yet we cannot find out anything about the reasoning or purpose of the recommendation of the coal board which will permit the importation into the maritime provinces, a coal mining area, of anthracite coal screenings and dust. We do not understand how it can be said that it will have no effect on the coal mining industry. Surely it is reasonable for a member to ask the minister to tell us just on what basis the coal board says this change will have no effect. Surely we are entitled to know on what basis this finding was made. How can we accept or reject this change without knowing the basis upon which it is being made?


Donald Methuen Fleming: I hope the hon. member is not going to go off on a tangent on this subject. I have made the sequence of events with respect to how this comes about quite clear. This is not a matter that arises from the coal board in the first place. The coal board did not initiate this matter by writing a formal report and sending it to us. We had representations from a number of Canadian producers who are interested in products in the production of which anthracite screenings and dust are employed. They asked for the removal of the tariff of 50 cents per ton. We examined the matter. Obviously there was some merit in the proposal, but before we took any action we consulted the coal board to ascertain whether, having regard to all the factors in the situation, the removal of the tariff of 50 cents per ton on anthracite screenings and dust would have any adverse effect whatsoever on Canadian production. After giving the matter due consideration their report to us was that it would not have any adverse effect on Canadian production. That is the whole story.


William Moore Benidickson: Is there any possibility of the committee obtaining a copy of the report, in view of the fact-


Donald Methuen Fleming: No, Mr. Chairman. It was a specific inquiry which was directed by my department to the coal board, and they have given a specific reply. It is not a case, as I pointed out, of some formal written report. It is not a communication of that nature. We would not think of moving in a situation like this without consulting the coal board in relation to the interests of Canadian producers, and nobody in the country is in closer contact with this situation than the dominion coal board.


William Moore Benidickson: I think the minister's words were that this change in the tariff did

Customs Tariff
not originate with the dominion coal board. I can well understand that that goes without saying. However, it appears to be in the package of trade concessions that were made because the government decided that they wanted to hike the tariff rates on the import of certain textiles. Is that a fact? Is this one of the items that the government made use of to trade with some other GATT trading partner in order to increase the rates of duty on textiles?


Donald Methuen Fleming: The hon. member is partly right. He is right to this extent, that this was one of the items that formed part of the package deal made with the United States; but after all in these negotiations we are looking about for opportunities to make use of situations where it is to Canada's advantage to have a reduction and to use that concession as a bargaining factor in the negotiations. It happened that this was one of those cases. It was fortunate that this was a case where we had an opportunity to use what was regarded by the United States as a concession without doing any harm to Canadian production, and at the same time assist certain Canadian producers of the products to which I have referred in a manner that might help them to reduce their costs of production and make them more competitive.


William Moore Benidickson: We do not know whether any harm has been done. The minister has the report and he does not make it available to anybody else. Perhaps he would tell us what the most recent statistics indicate as to the volume of imports at the 50 cents per ton rate or under the free rate from the United States.


Donald Methuen Fleming: In the fiscal year 1958-59 imports were about 7,500 tons. We expect that figure will increase.


William Moore Benidickson: What would be the dollar value? Could the minister hazard a guess?


Donald Methuen Fleming: No, I do not have that information.


Harold Edward Winch: I think this only affects the maritime provinces, and I should like to ask the minister what Canadian producers feel they can reduce their production costs if they do not have to pay a tariff of 50 cents per ton.


Donald Methuen Fleming: We have no precise information on that but, as in all these cases, the representations are that if the tariff comes off their competitive position is improved in fabricating the finished product.


Harold Edward Winch: From what source did these representations come? What type of Canadian producers said this would help to reduce their costs?


Donald Methuen Fleming: Manufacturers. I referred to the types of products, Mr. Chairman; pig iron, titanium and other products such as electric battery boxes.


[Stage Direction]
Item agreed to.
Items 624a and 663f agreed to.
William Moore Benidickson: The committee will
recognize that part II on page 8 has reference to another resolution that we dealt with in the committee of ways and means. I hope the minister will reassure us-I think he so indicated in committee of ways and means- that all these items, with the exception of the amendment presented to 538g, are simply rewording items and are not changes of consequence.


Donald Methuen Fleming: They are not even rewording; they are simply renumbering.


Chesley William Carter: Can the minister say how these double rates work out, n.o.p. and so much per pound? Are both rates applied to every article, or can they be modified? There are notes here in certain cases that the total duty leviable shall not be in excess of 60 cents per pound. Is that the ceiling for the combined rates?


Donald Methuen Fleming: These are cumulative. You will see tariff rates expressed in percentage terms, which is ad valorem, and then you have certain specific rates that are applied, and the specific rate is expressed in cents. In the case to which the hon. member refers you have a ceiling applied in terms of a specific duty of 60 cents per pound. That establishes a ceiling on the combined application of the ad valorem and specific rates.


Chesley William Carter: That is the combined rates; the two rates apply?


Donald Methuen Fleming: Yes; where there is a rate expressed in both ad valorem and specific terms, both apply. You see the word "and" in each case.
Items 532a, 532b and 532c agreed to.
Customs tariff-538a. Cotton yarns, wholly covered with a double layer of metallic strip in single strand only, when imported by manufacturers for use exclusively in the manufacture of electrical conductors, in their own factories: British preferential tariff, 10 per cent; most favoured nation tariff, 10 per cent; general tariff, 25 per cent and 4 cents per pound.


Harold Edward Winch: There is one question I should like to ask in connection with this item. I hope the minister can give some information on this. I have always thought that Canada.

as a copper and lead producing nation, could have a greater industry than she has at the present time, good as it is. Item 538a refers to cotton yarns, wholly covered with a double layer of metallic strip in single strand only for use exclusively in the manufacture of electrical conductors. Do certain manufacturers in Canada apply that type of covering to electrical conductors? I am wondering whether it is something of an infinitesimal nature of whether, as a lead and copper producing nation, it is something we could manufacture instead of importing.


Donald Methuen Fleming: I cannot be certain whether there is any of that particular type of metal strip involved here. Item 538a refers to cotton yarns wholly covered with a double layer of metallic strip in single strand only. I presume anything that corresponds with that will bring the commodity within the description of the item.


Harold Edward Winch: That is what I had in mind. I do not know whether or not anything of that type is being manufactured in Canada. If it is part of the cable industry, why is there any change in the tariff?


Donald Methuen Fleming: There is no change in the tariff created by this item. All we are doing is renumbering the item.


William Moore Benidickson: My hon. friend from Vancouver East referred to this copper item which may be bound with fabric. Could the minister indicate whether any proposals have been made by the United States to this country, which he will not divulge to the committee but which apparently have been publicized in Washington, include any offer of more lenient tariff relations between this country and the United States in so far as copper and some other products are concerned?


Donald Methuen Fleming: I must correct at once the impression left by the hon. member's remarks. The United States has not as yet made any offer at all, and presumably an offer will not be made until the GATT conference is convened later in the year. All that has happened so far has been that, in keeping with the practice of the United States, where the United States administration either of its own accord has considered using certain items for discussion purposes or has been asked to reduce the tariff on certain items in the United States, the administration puts out a notice of these particular items and any person in the United States who is interested in them has an opportunity of making representations to the United States tariff authorities. The mere
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publication of this list should not be interpreted as an offer made by the United States to Canada or any other country.


William Moore Benidickson: The minister has referred to this offer-


Donald Methuen Fleming: No, I said it was not an offer.


William Moore Benidickson: Well, it is a notice of some kind. Would the minister indicate to us, because we are so vitally interested in this matter, what steps any member of the cabinet or any of our ambassadors or any of our officials abroad take when they see this type of thing? What is the machinery that gets into operation? If the minister says it is not an offer could he indicate, after it is publicized, how it comes to his attention? Has he seen it? Perhaps he has not seen it. Last week the opposition made reference to the fact that they had seen it.


Donald Methuen Fleming: I must point out that this has nothing to do with the matters now under consideration. All we are dealing with here is the matter of an amendment to certain items in the tariff, simply renumbering some of them. This matter that the hon. member wishes to raise can be raised on some other occasion, under the proper circumstances, but it has no application to the matter now before us.


William Moore Benidickson: You will recall, Mr. Chairman, that some explanation was made by the minister in connection with this particular procedure on the part of one of our partners in the GATT trade agreement. Surely if the minister puts on the record one side of the story, from then on it is open to other members of this committee to discuss the item.


Jacques Flynn: If, as the minister points out, it is only a question of renumbering the items, it seems to me that at this point there could hardly be any relevant discussion.


William Moore Benidickson: Then could I assert that the minister was out of order in making the extensive remarks he did about the procedures under GATT in so far as our trading partner, the United States, was concerned?


Jacques Flynn: If I understand correctly, at this point we are dealing with part II of Schedule A.


Harold Edward Winch: May I ask the minister a question. At least half a dozen times he has stated that things which are not covered by the bill before us can be raised on some other occasion. He always uses that phrase "some other occasion". There are two matters not covered here which I should like to

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raise. Would he mind indicating what the "some other occasion" is, under which we can raise these matters?


Donald Methuen Fleming: If the hon. member will speak to me privately I shall be glad to discuss with him the matters he wishes to raise and indicate to him where
1	think they may be raised in the course of the business during the remainder of this session. Usually the estimates are the proper place to bring up such matters.


[Stage Direction]
Item agreed to.
Items 538b, 538c, 538d, 538e, 538g, 538h, 538i, 538j, 538k, 538m, 538n, 538p and 90e agreed to.
Customs tariff-124b. Squid, octopus and cuttlefish: British preferential tariff, free; most favoured nation tariff, free; general tariff, free.
William Moore Benidickson: This item relates to the importation of squid, octopus and cuttlefish. What does that mean in volume?


Donald Methuen Fleming: The imports of squid, octopus and cuttlefish, which are used as bait by commercial fishermen on the Atlantic and Pacific coasts, amount to about
2	million pounds annually.


[Stage Direction]
Item agreed to.
Items 180a, 399d, 403, 409e and 437b agreed to.
Customs tariff-438f. Parts, n.o.p., electro-plated or not, whether finished or not, for automobiles, motor vehicles, electric trackless trolley buses, firefighting vehicles, ambulances and hearses, or chassis enumerated in tariff items 424 and 438a, including engines, but not including ball or roller bearings, wireless receiving sets, die castings of zinc, electric storage batteries, parts of wood, tires and tubes or parts of which the component material of chief value is rubber: British preferential tariff, free; most favoured nation tariff, 25 per cent; general tariff, 35 per cent.
Murdo William Martin: Has the minister any comment to make on item 438f or 438g, which of course affect a number of important parts that go to make up an automobile?


Donald Methuen Fleming: In so far as item
438f is concerned the comment can be brief, because the only change in that item is the number. The previous number was 438f(l).
In so far as 438g is concerned, the purpose of the amendment involved here is to ensure that only brake linings and clutch facings are subject to the rates formerly applied under item 438f. The rates are as indicated there, free or 15 per cent British preferential, depending upon whether the linings are made wholly or in part from crude asbestos of British commonwealth origin or foreign asbestos, and 25 per cent under the most favoured nation tariff.


[Stage Direction]
Item agreed to.

Customs tariff-237a. Deuterium oxide or heavy water; uranium in the form of pigs, ingots, billets or bars:	British preferential tariff, free; most
favoured nation tariff, free; general tariff, 25 per cent; on and after July 1, 1962: British preferential tariff, free; most favoured nation tariff, 15 per cent; general tariff, 25 per cent.
Harold Edward Winch: May I ask the minister to explain item 237a. I understood that Canada was a big producer of heavy water. We have a lot of uranium. We have heard a lot about it. I wonder if we do, at any time, import heavy water and, since we are a uranium producer, I am wondering why there is any question of importation in connection with this matter.


Donald Methuen Fleming: Mr. Chairman, I gave an explanation of this item in committee of ways and means on June 8, which the hon. member will find at page 4689 of Hansard, second column.


William Moore Benidickson: This is a rather important item in view of the industrial reverses of recent months. Perhaps the minister would condescend to put it on Hansard here for the benefit of those who do not read Hansard consecutively.


Donald Methuen Fleming: On that occasion I gave all the information that is available on the item. It was a full statement. All I would be doing now would be simply repeating word for word the self-same explanation.


William Moore Benidickson: The minister has done that on other occasions.


Harold Edward Winch: May I say that I am afraid we cannot always be in the House of Commons. We may be in a committee or in another place. This is exactly what happens.


Lester Bowles Pearson: Is it anticipated that under this item there will be any imports of uranium in that form? Has there been any importation of uranium in the past? If there has been none and none is anticipated, then why this item?


Harold Edward Winch: And heavy water too.


Donald Methuen Fleming: The imports that we have had were as I pointed out on June 8. If I remember rightly I think it was the Leader of the Opposition who asked the question. Yes; as reported at page 4689 of Hansard he asked me to explain the changes, and at the conclusion of the statement I said:
In 1959 imports of heavy water amounted to $2,700,000. There were no imports of uranium metal.


Harold Edward Winch: May I ask the reason for the imports of heavy water? I seem to remember that in British Columbia during the last war a great many millions of dollars were spent

to build a new Consolidated Mining and Smelting Company plant for the development of heavy water. I believe that the uranium studies being undertaken in Canada are on the use of heavy water. Therefore why do we now have the importation of heavy water when, if my understanding is correct, Canada is not only one of the largest producers but one of the greatest experimenters in heavy water? Why do we import heavy water?


Donald Methuen Fleming: The importing is done by Atomic Energy of Canada Limited. It was at their request that we provided for the extension of this item, which would have expired on July 1, 1960. It is to be extended to July 1,	1962. They found it necessary to make importations of heavy water from elsewhere.


Harold Edward Winch: During the last war I believe it was C.M. and S. that produced heavy water. Are they still producing heavy water? I am just now told that after the war that plant was closed down, so that Canada no longer produces heavy water, or C.M. and S. no longer produces heavy water. It is no longer produced in Canada.


Donald Methuen Fleming: I do not know for a fact whether Atomic Energy of Canada is producing any heavy water, but I know they have assured the government that they require to import heavy water. These importations in 1959 to which I have referred were importations on the part of Atomic Energy of Canada Limited, and they have asked for this extension in order to obviate an increase in their cost of production.


Lester Bowles Pearson: May I ask the minister whether, under our present regulations, it is possible for any individual or any private corporation to import uranium in any form into this country?


Donald Methuen Fleming: I would not wish to give a positive answer on that matter. The fact is that there is no occasion for anybody to import uranium into Canada because Canada, after all, is a major producer of uranium. As I pointed out, there have been no imports and there is no reason to expect any. But this item is put forward in this form because of the fact that Canada is a substantial producer and this might be of assistance to us in our dealings with other countries.


Harold Edward Winch: May I ask one more question on this phase of the matter, as it is of great interest to me. I know for a fact that during the last war and for some time thereafter Canada was a big producer of heavy water. I am certain that my memory is correct that it was C.M. and S. that produced it. However, they have not been doing so now for
Customs Tariff
a number of years. Now that Canada has been undertaking-and here again I am certain that my argument is correct-in this field of atomic energy research studies which other countries have not been doing, namely in the use of heavy water in some phase of that research, and as Canada no longer produces heavy water or has ceased to produce heavy water and inasmuch as we require it-as the minister said, it was on request that our research and studies on this should be continued-may I ask then why it is that for our own research, undertaken at the expense of the federal government, heavy water no longer being produced in Canada, we put a 25 per cent general tariff on the importation of something that we no longer produce ourselves? Just what is the answer to that question?


Donald Methuen Fleming: I am afraid the hon. member has misapprehended the effect of this item. The item merely renews for a further two-year period the free entry under the most favoured nation tariff of heavy water and uranium imports in the form specified.


Harold Edward Winch: Where else can you get it outside of the most favoured nation countries?


Donald Methuen Fleming: I am referring to the most favoured nation tariff. This will allow free entry under the most favoured nation tariff.


[Stage Direction]
Item agreed to.
Jacques Flynn: Shall part III carry?


William Moore Benidickson: No. This morning I referred to a brief from the interprovincial farm union which was presented to the goven-ment with respect to used farm machinery. Before we carry this page perhaps the minister should make a comment.


Donald Methuen Fleming: Let me say this. There is nothing on this page or indeed in this bill that refers to used farm machinery. If the hon. member wishes to ask any questions about the importation of used farm machinery, the proper minister to whom to direct that question would be my colleague the Minister of National Revenue at the appropriate time.


William Moore Benidickson: As you know, Mr. Chairman, we are amending basic tariff item No. 409 of the Customs Tariff. This is the item which deals with a great many agricultural products. Certain important industries in this country have made representations suggesting that certain amendments would be appropriate when this parliament is considering, as we are now doing, amendments to the schedule to this particular statute.

Customs Tariff


Donald Methuen Fleming: If my hon. friend will permit me to do so, may I point out that the only change created by item 409e(l) relates to magnets for veterinary use. There is no other change.


William Moore Benidickson: Quite so, but I think the agricultural industry feels that the minister has not gone far enough, and that there are proposals with respect to item 409 that could have been considered by the minister and could have been presented to this parliament today for amending this schedule.


Donald Methuen Fleming: On the point we are discussing I should like to say this if I may, Mr. Chairman. As you know, there are well over 1,000 items in the Customs Tariff, and they apply to thousands of commodities. We are dealing here with one change and one only, namely magnets for veterinary use, for insertion in the stomach of cattle in order to withdraw pieces of wire or other metal that cattle may have swallowed. That is all we are dealing with here. Surely this is not an occasion upon which to embark at length on questions of what somebody may have thought ought to be the subject of amendments. Otherwise we could have thousands of them raised here.


William Moore Benidickson: I do not propose to talk about a thousand items, Mr. Chairman, on the schedule to the Customs Tariff. I propose to address myself only to section 409, of the Customs Tariff which deals with matters of import which are of interest to the Canadian agricultural community.
The minister has indicated to you and to this committee that he wants you to believe that we are only concerned with magnets for veterinary use. I suggest to you, Mr. Chairman, that it would be quite appropriate to discuss at this time omissions from this proposed amendment, otherwise I think we are prohibited in opposition from proposing an amendment to this section which, although it does not mean anything in dollars and cents, might conceivably reduce the revenues of the crown. But we can see that the Minister of Finance is not prepared to allow this committee to discuss when this comes up annually for debate some of the items which are referred to always by the Canadian Federation of Agriculture in their representations as items which should be changed in connection with tariff revisions affecting item 409. I was referring to farm machinery and I was referring also to used farm machinery. I am sorry that the Minister of Finance sees fit to cut off this discussion.


Donald Methuen Fleming: Mr. Chairman, it is not a question of cutting off discussion at all. It has been pointed out before, and I am

sure the hon. member is well aware of this, that questions pertaining to the importation of used farm machinery revolve round the questions of value for duty, and the Department of Finance has nothing to do with that. This bill has nothing whatever to do with that subject. That is a matter which should be raised with the Department of National Revenue and there will be an opportunity for raising any proper question related to the administration of that department when its estimates are before the committee of supply.


William Moore Benidickson: The Minister of Finance has not readily understood what I had in mind in connection with the proposed discussion under tariff item 409. The Canadian Federation of Agriculture has contended, and this is within the domain-


Jacques Flynn: Order. I did not see fit to rule on the point of order raised by the minister because I understood the hon. member agreed it was well taken. As the only new wording of this section is "magnets for veterinary use" I do not think it would be relevant to discuss anything else.


William Moore Benidickson: Mr. Chairman, certainly you must agree that when we are looking at item 409e(l) we must have regard to the entire language in this large paragraph. The presentation of the Canadian Federation of Agriculture suggests that the ministry is not giving adequate regard to their needs when they have restrictive language in a section such as this, because-


Jacques Flynn: Order. I cannot allow the hon. member to continue along this line. I think I made it clear that the only point which could be discussed is the item which added the words "magnets for veterinary use".


William Moore Benidickson: Mr. Chairman, I protest in the most vehement fashion over your suggestion that discussion must be related solely to four words in a paragraph which contains some 11 or 12 lines and which could be amended by this committee. I will accept your ruling for the moment but I do not agree with it, and I simply want the Canadian Federation of Agriculture to realize what has happened in this committee.


Mr. Bell (Carleton):: After the rules of the house have been applied.


[Stage Direction]
Item agreed to.
Items 90e, 124b, 180a, 237a, 399a, 403, 409e, 437b, 438f, 438g, and 438h agreed to.
Customs tariff-440m. Aircraft, not including engines, under such regulations as the minister may prescribe:
1. When of types or sizes not made in Canada: British preferential tariff, free; most favoured nation tariff, free; general tariff, 27[ per cent. On

and after July 1, 1962: British preferential tariff, free: most-favoured-nation tariff, 15 per cent; general tariff, 27J per cent.
2. When of types and sizes made in Canada: British preferential tariff, free; most favoured nation tariff, 15 per cent; general tariff, 27 J per cent.
William Moore Benidickson: Mr. Chairman, on page 11 we have item 440m, aircraft not including engines. I wonder if the minister would explain to the committee what the present regulations are either when aircraft of this type are made in Canada or not made in Canada.


Donald Methuen Fleming: Mr. Chairman, it will be observed that the only change made here is in the effective date of the item. This provision will lapse on July 1, 1960 unless it is extended. The duty free privilege on aircraft and aircraft engines of types or sizes not made in Canada under these items will thus be extended for a period of two years. Items 440m and 440n were introduced in the 1952 budget and contained provision for the free entry of aircraft and aircraft engines of types or sizes not made in Canada for a three-year period. The free entry privilege on types or sizes not made in Canada was extended for a three-year period, from 1955 to 1958, and subsequently for a two-year period which, as I have said, expires on July 1, 1960. The limitation on the duty free entry privilege was included as a means of providing a basis for future tariff negotiation.


Paul Joseph James Martin: What are the regulations which the minister has prescribed under this item? He has not prescribed any.


William Moore Benidickson: That was my question. I was quite well aware-


Donald Methuen Fleming: The minister referred to in this item is not the Minister of Finance but the Minister of National Revenue. These are national revenue regulations entirely.


Paul Joseph James Martin: Surely that does not free the minister from telling the house what the regulations are?


Donald Methuen Fleming: They are precisely the same as they were when the hon. member was a minister.


Paul Joseph James Martin: What were they then?


William Moore Benidickson: Our memories are sometimes not too good. We are asked to extend a certain legislative item, I quite realize that. But I think in summary form the minister might indicate to us what are the conditions under which aircraft are admitted to this country under these duty rates either when made in Canada or when not made in Canada.
Excise Tax Act


Donald Methuen Fleming: I will be glad to ask my colleague the Minister of National Revenue to furnish a copy of these regulations to the hon. member for Kenora-Rainy River.


Murdo William Martin: Perhaps I may be included in that.


[Stage Direction]
Item agreed to.
Item 440n agreed to.
Schedule B agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall the bill be read the third time?


William Moore Benidickson: Next sitting of the house.



EXCISE TAX ACT

Donald Methuen Fleming: the second reading of Bill No. C-73, to amend the Excise Tax Act.


Mr. Chevrier:: Is the minister going to make a statement?


Donald Methuen Fleming: I do not think a statement can be usefully made at this time, Mr. Speaker. This is a bill to bring about certain specific amendments to the Excise Tax Act. It is not a bill of general import; it is a bill containing specific amendments. All of those amendments were set out in full in the resolution and that resolution received careful review in the committee of ways and means on June 7 and June 8.


Hubert Badanai: Mr. Speaker, the proposed amendments to the Excise Tax which provide exemptions for coverings or containers for packaging and crating of eggs, butter and cheese, ice cream, paper boxes for bread, flour bags, milk and cream bottles and cream cans and other minor items are commendable, but in the over-all picture of the excise tax the amendments do not give relief to toilet goods which are basic health and beauty products and which, in all fairness, should have been considered in the amendments.
The women of Canada who are the principal users of these products have a real grievance against the government for continuing a 10 per cent tax on what is considered by all people of every civilized nation in the world as necessary as food and clothing.
This tax was imposed as an emergency measure in 1933, during the depths of the depression. Subsequently the tax has been sometimes raised and sometimes lowered. During this period the excise tax was removed from cameras, films and luggage and

Excise Tax Act
from golf clubs and golf balls. Even the excise tax on firearms and ammunition has been removed. I wonder what the people are thinking of a government which will remove the excise tax on guns or revolvers and keep it on lipstick.
I wish to bring to the attention of the Minister of Finance (Mr. Fleming) what has already been repeated in this house over and over again, namely the 7J per cent tax on automobiles, the presence of which is discriminatory, in addition to being a threat to the already shaky employment situation in the industry.


Donald Methuen Fleming: Mr. Speaker, on a point of order, the hon. member has indicated that he proposes to discuss the so-called special excise tax on automobiles. There is nothing in this bill that relates to that subject in any way, shape or form.


Paul Joseph James Martin: This objection raised by the Minister of Finance is a most unusual one. Of course, we are getting accustomed to these constant procedural objections. He now raises the objection that because this Excise Tax Act does not remove the excise tax on a particular commodity one is precluded from discussing it for the simple reason that it is not referred to in the bill. What the hon. gentleman is seeking to do is to show that whereas certain commodities are given direct attention in the bill, he is of the opinion that automobiles should likewise be given that attention. Surely, we are not to be restricted in debate to the extent suggested by the Minister of Finance.
I might warn him that I, too, have something extensive to say on this subject. I am eager on that account to join my hon. friend who is seeking to speak on this matter.


Mr. Speaker:: I wonder whether the hon. member has the authority to support as broad an interpretation of the rules relevant to debate on second reading as he is proposing. This will is founded on a resolution which has been adopted by the house, and which appears on page 4663 of Hansard. It is in specific terms. The house having given authority to a bill being brought in on that resolution in specific terms, it would seem to me to have limited its consideration to matters which are contained in the bill. Although I have not felt that on second reading of a bill to make some changes in an act it was irrelevant to express in general terms that other things had not been done, I am sure I have no precedent to authorize me to recognize a debate on matters which are not in the bill and not relevant in the sense that an amendment could not be moved on the matters proposed to be discussed.


Paul Joseph James Martin: Mr. Speaker, I did not come prepared to deal with the procedural argument. I must say I regret I did not listen to what Your Honour had to say because I had just received a note about the death of a very distinguished gentleman who is not now a member of this house, a former colleague of mine. At the time my attention was diverted and I was not listening to the precedent Your Honour was giving. It does seem to me to be elementary common sense that one should be allowed to discuss on a bill that provides a positive remedy the question of whether that remedy should apply to other particular subject matters not referred to in the bill. I just cannot believe that there can be any other interpretation. However, I regret I was not listening to Your Honour.


Donald Methuen Fleming: May I just point out that there is ample opportunity afforded to all hon. members in the budget debate to criticize what they regard as omissions in the budget proposals. For that purpose the house, under its rules, sets aside eight days of the session. That is the occasion where any hon. member can attack broadly, if he wishes, the budgetary proposals. If any hon. members wishes to say that the budget ought to have dealt in some way with this special tax, then that was the occasion on which that point should have been raised. Now hon. members are in effect seeking to turn the debate on second reading of this bill into another budget debate and, with great respect, they are not entitled to do that.
The resolutions which were approved by the committee of ways and means and which are embodied in the precise terms of this bill affect only the application of the sales tax to certain commodities. The bill has no reference whatever to the special excise tax. Nothing in this bill has any relation to that at all; it is an entirely different tax. There is nothing in this bill whatever, Mr. Speaker, that has any relationship to the special excise tax, or to the application of it to motor vehicles. Therefore, Mr. Speaker, I think it is perfectly plain that what is being attempted here is not a discussion pertinent to the principle of this bill but pertinent to something that lies entirely outside the scope of the bill and for which there was ample opportunity afforded to all hon. members to air their views in the budget debate two months ago.


Lionel Chevrier: Mr. Speaker, I do not want to prolong this debate on the point of order, but I think the point which the hon. member for Essex East (Mr. Martin) has made is well taken. It seems to me that the object of second reading is not so much to discuss the matters which are included in the various clauses of

the bill but matters of a general nature which are affected by the bill. An example of that is the matter which the hon. member for Fort William (Mr. Badanai) desires to discuss. I believe the hon. member has a right to do that.
The point which the Minister of Finance makes is that this opportunity has already been granted. It may be that it has been granted on more than one occasion, but in the interval it may happen that matters have arisen which did not make it possible at the time for the hon. member to raise the matters which he intends to raise now. I too, am in the same position as other hon. members. I have not in the few minutes at my disposal been able to lay my hands upon the citation in Beauchesne's Parliamentary Rules and Forms which covers the point. It seems to me that the general discussion at least to which these two members want to limit themselves is one that should be allowed at this time.


Mr. Speaker:: Perhaps the hon. member could continue with his observations. There is no doubt that an amending bill does not open up for discussion the whole of the act which is to be amended. That, I think, must be observed. Therefore it is not in order to deal with other excise taxes with respect to which there is not an amendment. That has been well settled. The principle of the debate, it seems to me, involves comment in general terms on the policy of the government in selecting these particular items for amendment. To that extent I think that criticism of the bill in general terms would be a proper discussion of the principle of the bill but I would not think it would be in order to pursue any specific deficiency in the bill such as the hon. member for Fort William had in mind; that is, the complaint that there is no change in the tax on cosmetics, I think it was-


Donald Methuen Fleming: Automobiles.


Mr. Speaker:: Automobiles was the immediate item under discussion. However, I would not rule out a general statement that the government might have more properly turned its attention to something else. I would not think it would be in order to pursue that in any detailed or extended way.


Lionel Chevrier: May I draw Your Honour's attention to citation No. 381 in Beauchesne's fourth edition which is not entirely pertinent but which does have some bearing on the subject before us. It reads:
The second reading of a bill is that stage when it is proper to enter into a discussion and propose a motion relative to the principle of the measure.
Excise Tax Act
I think that would allow the hon. member to discuss the principle in that it affects in one way or another automobiles in his constituency.


Mr. Speaker:: As the hon. member says, that is not particularly relevant. There are relevant rulings and I will give one or two at this moment just for the guidance of the hon. member who has the floor. The first is a quotation from Mr. Speaker Macdonald reported at page 237 of the Journals of the House of Commons for November 14, 1949:
On the second reading of an amending bill-it is the principle of the amending bill, and not the principle of the act to be amended, which is the "business under consideration". The discussion must therefore relate exclusively to the principle of the amending bill.
It seems to me that if you permit discussion of the taxes in the act as a whole which are not dealt with by this amendment you are getting into the principle of the bill itself and not the amending bill.
On December 13, 1957 while the house was considering a motion for the second reading of Bill No. 232, to amend the Income Tax Act, the Speaker, as reported at page 2313 of Hansard, said:
This is an act to amend the Income Tax Act and it is relevant, as I understand the precedents, to discuss the sections of the Income Tax Act which are to be amended by this bill but not to review the act as a whole.
There are a number of other quotations I could cite. Perhaps the hon. member would proceed with that in mind.


Paul Joseph James Martin: Mr. Speaker, may I just intervene at this point. I hope your Honour will not mind my pointing out the following. I have been looking through some of the provisions of the bill. While I appreciate Your Honour's concern in the matter I notice that the bill contains reference to the following:
Fire truck chassis for the permanent attachment thereon of fire fighting equipment to be used directly in fire fighting.
A fire truck chassis may be a formal fire truck or an ordinary truck. Then I notice there is reference to gasoline-powered and diesel-powered self-propelled trucks, etc. I am sure in this instance when the minister is proposing a removal of the tax on equipment of this kind we would the right to discuss its application to other kinds of trucks. Is that kind of debate not permitted under our rules? I cannot believe that Mr. Speaker Macdonald meant to say that.


Donald Methuen Fleming: Mr. Speaker, it is unfortunate that the hon. member is not acquainted with the terms of the bill or the resolution that preceded it. This bill is not

Excise Tax Act
making any change whatever in the excise tax as applied to trucks or chassis, diesel locomotives or diesel engines or anything of the kind. The only changes are those that are underlined in the bill. The practice in these cases is simply to reproduce the entire schedule in the bill showing the changes that are made. The changes in this case are all underlined. There is no change whatever made by this bill in the tax applied under the Excise Tax Act to all those articles referred to by the hon. member for Essex East.


William Moore Benidickson: Mr. Speaker, may I speak to the point of order. I have no reason to believe that we should treat any of these bills any differently on second reading from the treatment accorded any other bill presented to the house. I think the same field for discussion of the principles involved in the bill should be available. The sponsor of these bills in recent years has been the present Minister of Finance (Mr. Fleming) who is exceptionally ticklish.
I wish to refer Your Honour to the debate on second reading with respect to an amendment to the Income Tax Act on July 3, 1956 as reported at page 5621 of Hansard. The first opposition speaker at that time was the present Minister of Finance who with respect to discussion of a budget bill said:
This cannot be a repetition of the budget debate nor, as the Speaker said on June 29, 1955, can the debate on second reading of the income tax amending bill be in itself a miniature budget debate. Had the rule been otherwise, there are many things that one would have wished to discuss at this time including questions as to the credit restrictions and other matters of a financial or fiscal nature which are calling for attention on the part of the house at this present time.


Richard Albert Bell: Is that not clear?


William Moore Benidickson: The present Minister of Finance went on to say:
It is not always easy, Mr. Speaker, to define the principle of the annual income tax amending bill.
I say the same would apply to excise tax amendments. I continue:
It is an annual bill and, in this respect, it presents an annual problem. In fact, the income tax amending bill is almost always just a collection of individual amendments, some related to each other and some quite heterogeneous.
We have here a collection of individual amendments. The minister then went on to say:
It is desirable that there would be a periodical parliamentary review not only of what the government may consider each year to be necessary amendments to the Income Tax Act but of the Income Tax Act as a whole.


Donald Methuen Fleming: Mr. Speaker, I certainly did not say that the second reading

of a bill containing certain specific amendments was the place for that although I certainly argued that it was desirable to have a periodical review of the whole act. The hon. member has no right to wrench those words from their context and apply them as though they had reference to second reading of a bill to make specific amendments to the act.


Mr. Speaker:: I think the hon. member for Fort William could proceed bearing in mind that this is not a resumption of the budget debate but a discussion of the bill which is before the house.


Hubert Badanai: Mr. Speaker, I have not been in the habit of flouting the rules of the Chair. I regret very much being unable to point out some of the omissions in the Excise Tax Act. I am particularly concerned about the automobile industry, one of the major industries in the country.
There is no mention of the automobile industry in this act, that is quite true. But I should merely like to point out to the minister the great importance of this if we are to foster and promote an industry which has given much to the development of Canada and to employment. That is one of the reasons why I wanted to bring this subject to the attention of the house. I know that the minister has heard arguments for and against for a long time. Probably he is very tired of hearing this question brought up periodically. In the bill to amend the Excise Tax Act he has made provision, for example, that portrait photographs of individuals shall be exempt from sales tax. That is a very insignificant matter. It does not mean very much to individual members of the community and it does not really mean very much so far as employment is concerned.
The minister has also introduced a change with respect to perforated pipe for drainage purposes not exceeding four inches in inside diameter. Why there is a limitation to four inches I do not know. I cannot fathom some of these changes in the Excise Tax Act. There are other insignificant changes relating to ducts for warm air systems for heating buildings and laryngeal speaking aids. The latter change is a very good thing with which I agree wholeheartedly. In fact, so far as all the amendments are concerned which have been introduced by the Minister of Finance I would not be opposed to removing the tax entirely.
But there is one important omission from the bill which would provide a lot of employment and give the industry concerned a great lift. I should like to remind the minister of some of the things he said about the

excise tax when he was in the opposition. I trust, Mr. Speaker, that you will allow me to refer to what the minister said on June 2, 1955, the occasion being the introduction of amendments to the Excise Tax Act which among other things provided for a reduction in the excise tax on automobiles from 15 to 10 per cent.


Paul Joseph James Martin: What year was this?


Hubert Badanai: June 2, 1955.


Paul Joseph James Martin: The excise tax, the very same type of bill that is now before the house.


Hubert Badanai: As found on page 4373 of Hansard the minister made the following statement at that time when he was in the opposition:
There are several aspects of the resolution and of the excise and sales taxes broadly that I should like to comment upon briefly this evening. I suppose the leading feature of the proposal now under discussion is the proposed reduction in the excise tax on passenger automobiles from 15 to 10 per cent and the repeal of the excise tax on tires and tubes for automotive vehicles. The reduction in the excise tax on automobiles from 15 to 10 per cent is indeed welcome, but I should like to submit to the minister and to the committee that this tax is still too heavy.
This tax was applied in the first instance and presumably continued today as a luxury tax; it was introduced under that guise.


Donald Methuen Fleming: Mr. Speaker, the hon. member is not even discussing the sales tax which is the only tax dealt with by this bill. He is discussing another tax entirely.


Mr. Speaker:: I think that what the hon. member is reading is not related to the bill before the house. It deals with an amendment which was in that particular bill but not in this bill.


Hubert Badanai: Thank you, Mr. Speaker. I thought I might be permitted to proceed with the quotation which to my mind is very pertinent to excise tax changes, and in my opinion this was one of the changes which would come under the act. Just because it is not listed in the measure I am not allowed to proceed with that particular feature. If I may be permitted to do so, however, I should like to refer to another omission. Perhaps the Speaker will not allow me to continue with this, but the omission I refer to is the fact that the tax on the soft drink industry has not been reduced. There is a sales tax levied-


Donald Methuen Fleming: Mr. Speaker, the hon. member is talking about the sales tax as applied to something that does not fall within the scope of this bill in any manner whatsoever. What he is seeking to do is to revive the budget debate. We are away past the budget debate now.
Excise Tax Act


Mr. Speaker:: If the hon. member is dealing with the restrictiveness of the bill I would not prevent him from making general references to other items to illustrate his point but to pursue any particular item with respect to which there is no amendment would appear to be going beyond the scope of proper debate.


William Moore Benidickson: May I speak to the point of order? Since the change of government I think there have been some new rules introduced with respect to the enforcement of relevancy in the debate on budget resolutions and on second readings of bills. I want to indicate that leniency on these occasions is historic. May I point out that on June 2, 1955, when we were at the resolution stage of discussion of legislation identical with that now under debate on second reading, the present Minister of Finance said, as found at page 4373 of Hansard:
There are several aspects of the resolution and of the excise and sales taxes broadly that I should like to comment upon briefly this evening.
He went ahead and did so and no member of the government of that day objected, nor did the chairman.


Donald Methuen Fleming: Evidently the
remarks were quite in order.


William Moore Benidickson: Was there anything in any of those resolutions relating to reductions in sales taxes on clothing, boots and shoes, household furniture, and drugs and so on? Is there anything in the bill before us relating to these things? Is there anything there saying that the tax should not be imposed at the manufacturer's level because, in consequence of the the retailer's profit margin, it is increased to 20 per cent? Was there anything at that time to suggest that purchases by municipalities and school boards should be exempt from taxation?
I go to 1956 to show that the same speaker at that time was extended a leniency for which I appeal today. I refer to page 7145 of Hansard for August 7, 1956, at which time he said that he had comments he wished to make with respect to the sales tax in general. He said that he wanted to refer to the Canadian tax foundation recommendations and to refer the house to the study and report made by the Carter committee. He took a column of Hansard for that purpose. He went on to discuss the decision of the supreme court with respect to retailers' own brands. This, Mr. Speaker, was all at the resolution stage. I suggest that while there has not been closure a new rule has been adopted since the present government came into power in so far as discussion at the resolution stage is concerned.

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Mr. Bell (Carleion):: That is a reflection on the Speaker.


William Moore Benidickson: That has been respected by this side of the house. But now we come to the second stage of debate, and on grounds of principle it has always been the historic practice of the house, as I have indicated, to have a fairly wide discussion on second reading of items not covered by the bill. I think that this side of the house has been very respectful of the rule concerning relevancy in so far as resolutions are concerned. However, I say that a new type of closure is being introduced at the suggestion of the Minister of Finance (Mr. Fleming).


Richard Albert Bell: That is a reflection on the Speaker.


Paul Joseph James Martin: No, it is not.


William Moore Benidickson: We will see whether or not it carries. I suggest, Mr. Speaker, that all through the years this has been the practice, and I believe I could quote some remarks of yours with respect to the second reading of a taxation bill. I want to say that in my view there is no reference to a rule on the part of the previous administration, either by the Speaker or by objection from a member of the ministry, that would cut off a debate such as is being undertaken here with respect to things that should be in this bill and are not in it.


Paul Joseph James Martin: A moment ago when you raised the question of precedent, Mr. Speaker, I frankly confessed I could not meet Your Honour's argument, and for the reason I stated at the time. However, I did say that I found it difficult to believe that Mr. Speaker Macdonald was drawing the conclusion which Your Honour was attaching to his decision. I have, however, come across a very interesting precedent. The hon. member for Fort William (Mr. Badanai) was referring to the debate which had taken place in this house in June, 1955 on an amendment to the Excise Tax Act but not particularly referring as he said, to automobiles. I find at page 4373 of Hansard for June 2, 1955 that no less a person than the present Minister of Finance, speaking for the opposition and addressing himself to a particular amendment, did not confine himself to that point, except to point out that the amendment was long overdue, just as one might now say that the abolition of the excise tax on automobiles was long overdue in view of the assurance given by my hon. friend and the government.
What my hon. friend did was to go on and talk about matters that were not included in the proposed amendments to the Excise Tax Act. Here is what he said, for instance:

When the government is announcing a reduction in the excise tax it is easy enough to content ourselves with welcoming it, but I ask the house to observe the commodities upon which it is proposed that the tax be reduced. All of these are commodities upon which a reduction in the taxes is justified and indeed overdue. But let us remind ourselves at the same time, Mr. Chairman, that there is a long list of commodities more closely and intimately related to the necessities of life than any of those on the list before us now, upon which no reduction of indirect taxes is proposed by the government. Do hon. members of this house keep adequately in their minds and on their consciences the fact that this government goes on levying under the Excise Tax Act taxes upon the very necessities of life, upon our clothing, our boots and shoes and household furniture, certain prepared foods, and indeed on many drugs and medicines that are essential to those who require them?
He goes on to discuss items that are not included in the amendments.


Mr. Speaker:: May I ask the hon. member, was that during the debate on the resolution?


Richard Albert Bell: It was on the resolution.


Mr. Speaker:: May I say this, in an effort to dispose of this matter and get on with the debate. I did not stop the hon. member for Fort William. He is free to proceed. However, I have already indicated that I do not feel the limitation on discussion extends to the point of restricting the criticism of the bill because it does not go farther than it does or because it does not deal with other items. What I have said is that I would consider it improper to debate any particular section of the act which is not touched, on the basis that one would if moving an amendment to that section, which would be out of order. I think we can proceed on the basis of a general observation, such as the hon. member for Essex East (Mr. Martin) has just read, with respect to the scope of the bill; that would be in order on second reading.


Hubert Badanai: Then I assume that I may continue, Mr. Speaker, and touch upon some of the aspects of this act which have been overlooked by the minister. I am particularly interested in this measure because it could have been the means by which a considerable amount of employment could have been provided. I refer, of course, to an amendment to the Excise Tax Act which, of course, would affect the automobile industry. There are other businesses in addition to the automobile business, but I am particularly interested in the automobile business because it is one of the largest industries we have in Canada, employing a great number of people, and it is an industry from which the government derives a tremendous amount of money through taxes.

I understand that the amount of revenue which the government derives directly and indirectly from the automobile business is astronomical. Everyone knows that the average cost in taxes, licences and so on, to the owner of a motor vehicle is around $107. This data was collected in 1958, and I expect it applies equally in 1960. When you consider that the total registration of automobiles is around five million in Canada, that represents a total of $535 million which the operators of these motor vehicles pay the government annually for the privilege of driving. I am not taking into account all the taxes that are included in the retail price of the automobile.
The excise tax is a form of tax which the government levies in order to derive revenue for the purpose of carrying on the business of the nation. We all understand the necessity for taxation. It is here to stay as long as we live. In fact, we pay taxes not only when we are born but when we die. One needs only to inquire into the cost of a funeral to find out what it costs to die. In any event, Mr. Speaker, I hope you will let me say that the excise tax on automobiles is not only discriminatory because the automobile is the only major commodity subject to special tax but also because the employees of the automobile industry are the losers.


Mr. Speaker:: Perhaps the hon. member misunderstood me. I indicated that it did not appear to me to be beyond the proper scope of debate to complain that this bill should have included other taxes. However, if the hon. member proposes to debate one specific tax, for instance the sales tax on automobiles, he would then, in effect, be discussing a section of the bill that relates to that tax and would not be illustrating the restrictiveness of this bill.
I appreciate that there is some difficulty in applying a rule of that kind but it can be applied and it has been applied; and it is left to the good sense of the hon. members of the house to make sure that remarks in that category-that is, remarks about matters which have been left out of the bill-are general ones. It seems to me that the hon. member is using the privilege of procedure at this time by going into detail on this specific item. I would ask him to come back to the general discussion of it.


Hubert Badanai: Thank you, Mr. Speaker. I am not thinking of doing anything except to respect your ruling. Therefore in a general way I say that the Excise Tax Act amendments as presented by the Minister of Finance (Mr. Fleming) are, in my judgment, inadequate. They will not meet the requirements of the Canadian people at the moment. May I give this as an example? I am not now 79951-0-306
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referring to the automobile business because I have already said something about that matter. But inasmuch as the act mentions indirectly bottling works, may I say that we have in Canada bottling manufacturers who at the present moment are handicapped by the sales tax of 11 per cent. It is estimated that if relieved of the sales tax each of the approximately 575 bottling plants in Canada might employ three or four additional persons, making a total of between 1,600 and 2,200 men who could be lifted from the unemployment rolls by this particular industry. The removal of this particular tax is not included. In other words, I am merely suggesting a beneficial move that could be made by the government and which it has the power to make, in order to relieve the Canadian people from some unjust action and at the same time to make it possible for a number of employers to give employment to a greater number of people who are now on the relief rolls or are drawing unemployment insurance. I am sure the Minister of Labour (Mr. Starr) will be only too glad to know that certain excise tax changes would bring about a beneficial result in connection with the entire unemployment situation.
There are a number of things about which I should like to speak in connection with the Excise Tax Act amendment which are not included in this bill unfortunately but conclusions can be drawn from the fact that they are absent. That is one of the reasons why it was my intention to point out the omission. It is not always fair just to point out what is in. Sometimes it is important to know what the omissions are and what they could mean to the communities across Canada. I should like to ask the minister, if and when he considers it appropriate to do so, to bring in some amendments which are not included in this bill to amend the Excise Tax Act and which would reduce or eliminate the tax on automobiles. That is one of the things that is really of great importance to the automobile industry in general and to the people in Canada, in particular those who are working in the automobile plants. I have no doubt that the minister is acquainted with the submission made by the greater Windsor industrial commission in a brief prepared for consumption-


Mr. Speaker:: It seems to me that the hon. member is disregarding entirely the direction I have given to him. If he has not some other submission to make which is relevant, I suggest that he resume his seat.


Hubert Badanai: I shall conclude, Mr. Speaker, by merely expressing a hope that the minister will take to heart some of the things that I have been attempting to say notwithstanding

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the interjections and objections that have been made. I know that he means well. However, I cannot help feeling that there are some things that can be done and that the government has the power to do. I am glad to see the Prime Minister (Mr. Die-fenbaker) now sitting beside his Minister of Finance. They have the power to do these things that would be beneficial to the country. The country expects them to do these things. The country expects the excise tax on automobiles to be removed as soon as possible.


Paul Joseph James Martin: Only because this matter is of the greatest importance, Mr. Speaker, do I run the risk of incurring displeasure. Because this matter is important and because one has a duty to perform, one must perform it in accordance with one's conscience and one's sense of obligation.


Donald Methuen Fleming: And in accordance with the rules of the house.


Paul Joseph James Martin: In so far as the
rules of the house are concerned, Mr. Speaker, may I say that I shall try to do exactly what my friend the Minister of Finance did as a private member when he addressed himself not to the amendment to the Excise Tax Act but to those things which he thought should have been embraced by way of amendment to that act.
On the occasion to which I directed the attention of the house earlier when the hon. member for Fort William (Mr. Badanai) was speaking, the hon. member had been speaking to the introduction of amendments to the Excise Tax Act which were being moved to the resolution thereon; I refer to the resolution for leave to introduce Bill No. 418 to amend the Excise Tax Act. That last observation of mine is in answer to the question to which Your Honour directed my attention some few moments ago and to which I was unable to give an answer, Mr. Speaker. But I find that the Minister of Finance directed his attention for a very minor portion of the time to the amendment and then he went on to complain about excise taxes generally. However, he did not confine himself to excise taxes only. He talked also about the sales tax. He talked about hon. members of this house not being in order. My hon. friend is perhaps the best authority we have for going much further than anyone today has sought to go. I think it would be well to remind my hon. friend of some of the things he said about excise taxes generally. As reported at page 4375 of Hansard of June 2, 1955 he said this:
It is well that we should remind ourselves also that these taxes are levied at the manufacturer's or producer's level and, as everyone knows, as

these goods pass from hand to hand, to the wholesaler, to the jobber, to the retailer, and finally to the consumer, they attract mark-ups. Concrete cases have been given to the house on similar occasions without number in the past, to demonstrate beyond all challenge or question that a tax that begins as a 10 per cent tax at the manufacturer's level will in most cases become a tax of 20 per cent or more when the goods are sold by the retailer to the consumer.


William Moore Benidickson: That is what he said in 1956.


Paul Joseph James Martin: It is interesting, by the way, that the hon. member for Kenora-Rainy River was piloting that legislation but he does not seem to have given the kind of difficulty to the opposition which almost at every turn today and in other debates the Minister of Finance gives. The Minister of Finance says that the particular matter of the excise tax on automobiles could have been raised on the budget. If it had the Minister of Finance would have found some pretext to raise some procedural objection which would include even mention in that debate, forgetting, of course, that events have taken place since the budget which well warrant the present discussion. If we were to try and raise this matter on the minister's departmental estimates he would rise in his place with righteous indignation and complain that this was a matter which did not involve administration.
Mr. Speaker, this is a matter which concerns thousands of people in this country and this is the only opportunity we have to raise it. I am not now dealing with a particular subject; I am dealing with the hon. minister's concept of the Excise Tax Act as enunciated by the former administration. What the hon. member said on that occasion still applies, but he has now given us an opportunity to remind him that the very objections which he raised to the Excise Tax Act of the previous administration continue to be adopted by him and this government. They were going to change everything, including the tax structure and the provision of tax relief as well.


William Moore Benidickson: And they have been three years in office.


Paul Joseph James Martin: Three years in office, as the hon. member says. The consumer, as in the case of these direct taxes, is never told what portion of the price he pays for goods goes to taxes. Is the situation improved in that particular by the government of the right hon. gentleman who now sits with the Minister of Finance and who undoubtedly has come in to help the Minister of Finance in his present difficulties?

The minister went on:
They are hidden; and because they are hidden they are popular with a government that chooses to go on levying these taxes and avoiding as far as it can the wrath of the taxpaying public, by not letting the taxpaying public know what portion of the price is collected by the government in taxes.
That still applies. Then the minister went on in these memorable words, and it is well he be reminded of them. Incidentally, all of this illustrates how apt and adept the Minister of Finance is in the passage of items which he brings into this house. I would suggest to him that if he would show a little more patience in these procedural obstructions which he raises so constantly he would find that his measures would get through the house much more rapidly than they do now. If any minister of this house has prolonged this session of parliament it is the Minister of Finance. However, he served a great purpose today in allowing us to remind him of some of the mischiefs of this kind of tax-


Mr. Speaker:: Order. I do not now whether the hon. member for Essex East is under the apprehension that a point of order is being discussed, but he seems not yet to have got to the subject matter of the debate.


Paul Joseph James Martin: Mr. Speaker, I must respectfully take issue with you on that. I am now dealing with the principle of this bill, not discussing what I particularly propose to come to. I am dealing with the principle of this bill and this is certainly in order; there can be no question about that.


Mr. Speaker:: What I wish to comment on particularly is that the hon. member seems to be reverting to discussion of the point of order raised prior to his having risen to speak. Surely that has been disposed of and it is in order now to proceed.


Paul Joseph James Martin: Then I will proceed and I do not think I have said anything yet which could be regarded as properly out of order. The Minister of Finance went on:
A tax of that kind as applied to the type of commodity of which I am speaking is doubly iniquitous.
What is the minister doing in this bill to amend the Excise Tax Act which could be regarded as a change of attitude from the former administration? What is there in this bill which is less iniquitous than the former excise tax amendments? Let the Minister of Finance admit that when he introduced this bill-and he gave us a very abbreviated statement today about its purposes and its 79951-0-306J
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intents-he was wrong when he made these famous observations in June of 1955. The minister continued:
It is bad enough that there should be taxes upon these basic necessities of life, but far worse that they should be applied in such a manner as to go on attracting mark-ups, mark-ups on markups, and mark-ups on mark-ups on mark-ups, all at the expense of the consumer.
There is nothing in this bill which changes that.


Donald Methuen Fleming: Yes, there is. The whole scope of the tax is reduced.


Murdo William Martin: The minister says yes, there is. If he would look at the underlined sections he will see a whole series of commodities which are not touched by these amendments at all. He will see cast iron soil pipes, on the next page structural steel for buildings, and so on, which has not been covered at all. Yet the minister says that by this bill he is doing something that is consistent with his denunciations of 1955. The minister continued:
That is another feature of this tax which in my submission this house can no longer tolerate.
If the minister could no longer tolerate it in 1955, how does he tolerate it now when as a minister of the crown he has had the opportunity to do something about it? He continued:
The government is not going to remove these taxes from the necessities of life, nor substitute a fairer system of collecting taxes than through the medium of indirect taxes in the way I have described, unless hon. mmebers of this house aroused and indignant, make that demand. '
That was the language of the minister.


Thomas Miller Bell: That is the best speech the hon. member has made in a long time.


Murdo William Martin: The parliamentary secretary who assists his minister by making these little hush-hush observations from time to time might well use his time more advantageously by reminding his chief of these eloquent words used on another occasion and which apply now in such great measure to the bill before the house.
This reflects the whole attitude of this government which has been in office now for three years, confronted day by day with their former declarations but which makes no changes whatsoever, notwithstanding the fact that the minister said that this situation was one which should arouse hon. members, make them indignant and cause them to enforce their demands on the government of the day.
The fact is that this bill is not only deficient for many reasons, including, to use the context of the hon. member's thinking, the very argument which I have quoted which the

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hon. member addressed to a former administration when discussing former legislation, but it is deficient because it fails to comply with promises made by hon. members opposite to the Canadian people. Now when one particular industry finds itself face to face with a serious economic situation, competition and very high unemployment, and when they are told on all fronts that if there was a removal of the excise tax there would be some improvement in that industry, the hon. minister, notwithstanding the assurances and the promises of the Prime Minister, sits in his seat in his third year of office and ignores these promises.
That is the gist of the complaint of the hon. member for Fort William. As one who represents the constituency where these automobile companies are situated, using the general application that the minister did when he was discussing amendments to the Excise Tax Act in 1955, I say in a general way, why is the excise tax on automobiles not completely removed? That was a promise given by the Prime Minister of this country to the people of Canada.
The minister and I have had an exchange of letters in this regard and only because I am afraid that he would object do I fail at this time to put this exchange of letters on the record. It is an exchange wherein he addressed me in the friendliest terms in the first letter but addressed me in the most distant manner in the third letter.


Donald Methuen Fleming: Wait for the fourth now.


Paul Joseph James Martin: This exchange
would, I am sure, be most edifying. Notwithstanding what the minister has failed to do in this particular bill now before the house, my hon. friend cannot get away from these words of the Prime Minister (Mr. Diefenbaker) uttered in my city on May 10, 1957:
The present 10 per cent excise or "luxury" tax on new cars is discriminatory to automobile producing centres. Its continuance brings unjustified unemployment and should have been removed by the Liberal government at the last session of parliament.
It will be no answer to say that the previous administration should have done it.


Donald Methuen Fleming: Why not?


Paul Joseph James Martin: Because unemployment was not then anything like as serious as it is today.
Hon. gentlemen receive delegations; they give all kinds of assurances. But the way to assure a delegation representing a community that feels it suffers from a serious economic situation is not by general words that give

evidence of diplomatic skill; the way to prove one's sincerity in this matter is by concrete action.
The Minister of Finance can now bring in a bill abolishing the excise tax on automobiles. While that in itself would not correct the situation, it would go a long way toward doing it and in closing I regret that my hon. friends greet my remarks with laughter.


Mr. Speaker:: Is the house ready for the question?


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Flynn in the chair.
On clause 1-Bond.
William Moore Benidickson: The regulations hitherto have been confined to a bond from a fidelity company, or something of that nature. Is not that so?


Donald Methuen Fleming: The terms of the present act are set forth in the explanatory note, Mr. Chairman. This particular clause corresponds with paragraph 14 of the resolution.


Herbert Wilfred Herridge: Section 35(4) of the present act reads as follows, according to the explanatory note;
The security shall be by a chartered bank or by bond of an incorporated guarantee company authorized to do business in Canada, acceptable to the government of Canada, or by deposit of Dominion of Canada bonds.
The clause in the present bill reads:
The security shall be by a chartered bank or by bond of an incorporated guarantee company authorized to do business in Canada, acceptable to the minister, or by deposit of bonds or other securities of or guaranteed by the government of Canada.
Can the minister explain why there is that change in wording, and why the wording now reads "acceptable to the minister", language which is not now in the present act?


Donald Methuen Fleming: I may say, Mr. Chairman, this provision widens the scope of the securities which are acceptable. When providing bonds in this particular case some minister has to take the responsibility of passing on the acceptability of certain securities other than those of the Dominion of Canada. This duty is placed on the shoulders of the minister. The following words indicate that bonds or other securities of or guaranteed by the Dominion of Canada shall in all cases be acceptable.


[Stage Direction]
Clause agreed to.

On clause 2-Schedule III amended.
William Moore Benidickson: I assume we shall get to the schedule subsequently and call it page by page.


[Stage Direction]
Clause agreed to.
Clause 3 agreed to.
On the schedule.
Jacques Flynn: Shall the schedule carry?


William Moore Benidickson: On the first page of the schedule we find certain underlined items such as drainage, waste, and vent copper tubing. Will the minister not acknowledge that the construction industry finds this rather a handicap; that they think it would be better to amend this schedule in a way which would provide a general exemption for tubes and pipes that had relation to irrigation, sewage and supply of water to homes, and so on?


Donald Methuen Fleming: This new exemption has been welcomed by the industry.


William Moore Benidickson: We were a bit careless last Wednesday in looking at the resolution item that referred to the articles and materials to be used exclusively in the manufacture or production of building materials except hardware for doors and sash, and the words "except hardware for doors and sash" are underlined. I think the parliamentary secretary was piloting the legislation at the time. I do not blame him at all, but on reflection I find that this item did not exempt these items from sales tax but rather narrowed the opportunity for exemption from sales tax. Part of the paragraph reads "except hardware for doors and sash". If one looks at the main statute he finds that such things as locks and a number of other things that might appear on doors would normally be exempt. In our debate it was indicated that except for manufacture and production those other items would be normally exempt. I ask the minister to have a look at this paragraph. I am sure he recalls the debate of last week. What about the items that go into the manufacture of doors and sash that are in this specific item of the schedule? I think of locks, and so on. Are they still exempt.


Thomas Miller Bell: Mr. Chairman, as I endeavoured to indicate last Wednesday, the purpose of this amendment is really to bring about uniformity and to make certain that however the hardware is used in doors and sashes it will be in the same status. In order to ascertain the tax status of the particular hardware one must look elsewhere in the particular schedule. What had been happening was that when hardware was in
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fact attached to a door or sash it was in a different tax status from when it was not so attached. This particular amendment brings about uniformity, puts all the hardware in the same status and thereby prevents the discriminations which heretofore existed.


William Moore Benidickson: I may be dense, Mr. Chairman, but I am not quite satisfied. In schedule 3 to the Excise Tax Act there is an item under the "building materials" section which refers to door and window screens and some other items related to doors.


Richard Albert Bell: Yes, they continue.


William Moore Benidickson: I understood that the government had found that some articles were being added to doors that is felt should not be exempt from a sales tax. Be that as it may, is this doing what is intended. I assume that these items under "building materials" will be in the schedule:
Articles and materials to be used exclusively in the manufacture or production of the foregoing building materials, except hardware for doors and sash.
That is on page 3 of schedule 3. Some years ago-I believe in 1956 or 1957-we as a parliament extended the sales tax exemptions to quite a number of things including locks, and so on.


Richard Albert Bell: Yes.


William Moore Benidickson: Even if they are an article that is to be used in the manufacture or production of a door, are they to be exempt?


Richard Albert Bell: Yes, Mr. Chairman, I think I can assure my hon. friend that the items to which he refers-door and window screens, lock and latch sets and hinges, the type of thing which might be regarded as the basic hardware for doors and windows- will continue to be exempt and are not in any way affected by the proposed amendment.


William Moore Benidickson: Despite this peculiar language-
-except hardware for doors and sash?


Richard Albert Bell: The language which my hon. friend finds peculiar only takes over into another section of the schedule the particular exemptions. In other words, the exemptions must be found and will be found elsewhere in the schedule. The hon. gentleman, for example, will find on page 2, some of the things to which I have referred, the latch sets, the lock sets, the hinges, sash, doors, and so on. This is simply a drafting technique of putting them over into other exempting sections of the schedule.

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William Moore Benidickson: On the same page, Mr. Chairman, we are asked to deal with exemptions of a charitable nature and those relating to health, and other things. What has been the recent experience of the government with respect to appeals relating to drugs? I recall we got quite a number in the past relating to some drugs that were close to cortisone. I believe they were refinements of that drug but because they were not called cortisone, although very expensive and used widely in the cure of arthritis particularly, they were not exempt. I think of meticorten and things of that kind.


Paul Joseph James Martin: ACTH?


William Moore Benidickson: ACTH is specifically
named in the appendix. I was thinking of meticorten and some other drugs close to cortisone. I know that if the hon. member for Sudbury were present he would deal generally with this item and say it is narrow and restricted. There are a great number of essential drugs prescribed today for some of our more prevalent diseases that are exceedingly expensive and should be added to this list. Would the minister comment?


Donald Methuen Fleming: Mr. Chairman, I think it is perfectly clear that at the present time the act taxes drugs except those that are made specifically exempt by enumeration in the schedule. Those that are exempted are now specifically enumerated in the schedule.


William Moore Benidickson: I take it the minister is not considering any extensions even up to date to include some of the new designations of these drugs?
Last week the hon. member for Nickel Belt dealt very effectively with the question of coverings. We have here a change of definition which I want to remind the committee will bring into tax for the first time under a new principle-not an old one as the minister referred to last week but under his new idea of what should be taxed-certain containers that have not heretofore borne a tax. This, in some instances, will be of considerable significance. This is also contrary to a ruling made by the tariff board, I believe, between now and the last time we had an opportunity to consider the language of the Excise Tax Act.
The minister referred to anomalies. The anomalies are in his mind. Some of these containers and coverings never bore a tax before but in the view of the present minister they should now bear a tax and he is proposing the amending language in the amendment to the act in order to gather tax upon these items which in the past have not been subject to tax.


David Vaughan Pugh: Mr. Chairman, I want to clear up one point under the heading of coverings. In the Okanagan we have a new method of handling fruit including apples in the orchard. The system is known as the bulk-bin method of handling. These bins are large in construction and hold approximately 50 bushels of apples. I understand that they have been used extensively in New Zealand and are in use here on an exprimental basis. I am wondering if the bins will come under the heading of coverings and be included in the exemption for boxes for fruit and vegetables.
I should also say with regard to the construction of the bins that they are a heavy box made of plywood with reinforced corners and have no covers. They hold many boxes of apples. The bins are taken to the orchard and are placed there by the packing houses. They are filled with apples and then taken back to the packing houses where they are emptied. The apples are run over the grader. In the alternative, the apples are left in the bins for storage purposes in cold storage until such time as they are taken out and run over the grader or processed in some other way.
The bins have proved to result in a substantial saving for the farmer. I know that prior to this they did not come under the exemptions in the act but because it has resulted in a saving to the farmer whose costs have been rising I am wondering if on that basis alone or on any other basis the bins could be included as an exemption under the act.


Donald Methuen Fleming: Mr. Chairman, if I have correctly apprehended the description of the particular box or container to which the hon. member refers it has not been exempt from taxation hitherto but it will be under this amendment.


William Moore Benidickson: We are glad to hear that indication from the minister. We remember, however, that this is not the original proposal for taxation change the minister intended to present to parliament. The original proposal was quite different. I am wondering if such a thing as a box for gathering apples or other agricultural produce would have been taxable under the proposition the minister presented on budget night, March 31? I am thinking of the boxes, baskets, crates, etc. that may not be used to actually deliver the product but are used to gather fruit from the orchard, and so on.


Donald Methuen Fleming: I believe not.


Herbert Wilfred Herridge: What about the fruit grower who makes his own orchard boxes? There are

quite a number who do that in our district. They are made on the property and not purchased.


Donald Methuen Fleming: There is no difference in that case.


William Moore Benidickson: When the minister made his budget speech on March 31 and gave notice of certain budget resolutions consequent upon his proposed tax changes he made some references. Would he indicate what change has been effected by the amendment passed by the committee of ways and means the other day in which the wording was much different from that in the resolution presented by him on budget night?


Donald Methuen Fleming: The amendment which was approved in the committee of ways and means and which now is embodied in the bill accomplished the twofold purpose of clarifying the amendment and widening the exemptions.


William Moore Benidickson: What items would have been taxable under the proposal on budget night that are not now covered under the amended wording as presented to us in this schedule?


Donald Methuen Fleming: The original budget resolution contained the expression "and sold with the goods". There is a detailed enumeration here as applied to coverings used with respect to a number of foods which have been made specifically exempt. This clarifying amendment puts the question beyond all doubt and accomplishes, as has already been indicated today, a widening of the exemption.


William Moore Benidickson: What articles might not be exempt that would have been exempt from taxation under the ruling of the tariff board with respect to representations by the bread industry that their containers perhaps were covered by the former legislation? What items will not be exempt now and will bear the 11 per cent tax which would not have borne the tax before amendment of the act?


Donald Methuen Fleming: Some containers that are capable of repeated use might have been affected by the resolution as originally introduced.


William Moore Benidickson: Could the minister give some examples?


Donald Methuen Fleming: Perhaps the hon. member might read the amendment approved in the committee of ways and means. We are not going back now to discuss the original resolution that was amended in committee of ways and means and reported to the house. The present bill is based upon the resolution as amended in the committee of ways and
Excise Tax Act
means. With great respect, I think it is completely unprofitable to go back and ask what might have been the case if the resolution had not been amended in committee of ways and means. We have the amendment.


William Moore Benidickson: I do not know whether the minister said "unprofitable" or "improper" but if he said "improper" I would certainly take issue with him. I think that at any stage of the debate members of the House of Commons are entitled to get from the ministry some explanation on the basis of the technical knowledge that is available to them about the bases for changes that they propose in legislation. This is one instance and I thought that the minister was perhaps not advocating this change in a haughty way. I thought he had perhaps discussed the matter with his officials and knew just which trades and articles of trade might be affected. I thought he would condescend to give that information to the committee.


Herbert Wilfred Herridge: Is it not correct to say that the minister introduced the amendment exempting containers that would be used over and over again as a result of representations on the part of opposition members?


Donald Methuen Fleming: No, Mr. Chairman. The amendment was introduced as a result of representations we had had from some industries and the further study of the language that had been employed in the resolution as originally introduced.


Jacques Flynn: Shall page 3 carry? Carried. Shall page 4 carry? Carried. Shall page 5 carry? Carried.


Richard Albert Bell: Mr. Chairman, may I draw to the attention of the committee and particularly to the attention of the hon. member for Kenora-Rainy River an error of which I was inadvertently guilty in the committee of ways and means. I refer to Hansard of June 8, page 4674. At that time the hon. member for Kenora-Rainy River asked if the resolution would drop the restrictive words, "whose pelts have commercial value", and to that I gave the answer "yes".
I have to say that it was originally intended that these words would be dropped when the various exemptions in the schedule for feeds and feed supplements for livestock and fur-bearing animals were consolidated. However, it was apparently thought by the draftsman that it would not be proper to drop these words without a specific provision in the resolution itself.
I am advised, however, that the presence of these words in the bill in fact imposes no restriction on the exemption. The only furbearing animals one can think of whose pelts

Excise Tax Act
might be considered not to have commercial value would be household pets or perhaps some wild animals and rodents. Prepared cat and dog foods have been ruled to be exempt under one or more of the other exemptions for foodstuffs such as "fish and edible products thereof" or under the exemption for meats. Any other feed for fur-bearing animals would also be covered by the items listed under the heading "foodstuffs". Therefore, while my answer was erroneous the net effect is the same and in fact there is no real restriction on the exemption by the continuation of the particular words.


William Moore Benidickson: I thank the parliamentary secretary for his explanation. When I saw the bill I was a bit alarmed in that it seemed to be in conflict with what I thought was a fairly positive assertion made by the hon. member last week. I was not aware that dog and cat foods were already exempted in some other way. May I say quickly that I have some doubts that the phrase "whose pelts have commercial value" is necessary, but I know that the parliamentary secretary has had the benefit of the advice of the law officers of the crown and I would certainly abide by the advice he has received. From the point of view of doubt, however, I think that consideration should be given on another occasion to the possibility of removing these words to which I referred last week.


Herbert Wilfred Herridge: Mr. Chairman, there is reference on this page to forest products when produced and sold by the individual settler or farmer. Does that include lumber?


Donald Methuen Fleming: That is not part of the amendment. We are only amending in respect of the words underlined.


Herbert Wilfred Herridge: I realize that but I wanted to ask the question while this matter was before us. Does that include lumber and in what quantity?


Donald Methuen Fleming: Lumber is made exempt by the schedule as applied to building materials. The hon. member will see that on page 2 about nine lines from the bottom of the page.


Jacques Flynn: Shall page 5 carry? Carried. Shall page 6 carry? Carried. Shall page 7 carry?


William Moore Benidickson: Mr. Chairman, I confess I have not done adequate research here. One item, item 692a, in the list of goods enumerated in customs tariff items is underlined. I have forgotten the significance of that.


Donald Methuen Fleming: This is the item that applies to presentations from abroad in recognition of the saving of human life.


Jacques Flynn: Shall page 7 carry? Carried. Shall page 8 carry?


William Moore Benidickson: I asked last week, on June 8, I believe, about an item at the bottom of page 8 which is underlined. The words are, "Materials for use only in the equipment and repair of ships over ten tons net register tonnage". The minister was kind enough to give an explanation at that time but after reviewing the explanation I was not completely satisfied. I found that the minister was clear when he said that the equipment or construction or anything relating to a ship sold for export would not be subject to the 11 per cent sales tax. However, I was not satisfied, in connection with the explanation given, that all items connected with the building of a ship in Canada for a Canadian customer had been in the past exempt and would in the future be exempt. I think the largest purchaser of ships in this country is actually the Canadian government. I hope we are not embarking on a rigmarole in which we impose a tax on the construction of ships of a very high value which, in turn, are purchased largely by the Canadian government and it is the sort of situation in which we take money from one pocket and put it into another.


Donald Methuen Fleming: So far as the ships purchased by the federal government are concerned, the federal government pays sales tax just like any other purchaser.


William Moore Benidickson: No, that is not the answer. Have we always imposed the sales tax on the construction of ships over ten tons being built for a Canadian purchaser, government or otherwise?


Donald Methuen Fleming: Yes, Mr. Chairman, except fishing boats or ships licensed for the Canadian coasting trade. The words are to be found on page 8, about three lines from the bottom of the page.


Herbert Wilfred Herridge: With respect to this section, I may say there has been an increase in the use of diesel engines which makes it possible to use a smaller tug for towing purposes than was possible when steam power was used. Does this mean that if an individual interested in the lumber business built a tug of 9.5 tons he would escape this tax which is imposed in connection with the equipment and repair of such ships?


Donald Methuen Fleming: If the ship is
licensed to engage in the coasting trade, it is exempt. The hon. member will find the words at the bottom of page 8. Similarly,

48S5
there is a provision in the first item, under marine and fisheries, about halfway down the page, which reads:
Boats bona fide purchased by fishermen for use in the fisheries, and articles and materials to be used exclusively in the manufacture, equipment or repair of such boats;


Herbert Wilfred Herridge: This boat would be for use on inland and minor waters for towing purposes and not for fishing. My question was, if it were built of a tonnage of 9.5 tons, would it escape taxation under this section of the act?


William Moore Benidickson: This brings up a question which intrigues some of us. If a ship were one purchased by the Ontario Hydro, would it be subject to sales tax?


Donald Methuen Fleming: Yes, if the ship was otherwise taxable.


William Moore Benidickson: What do you mean by "otherwise taxable"?


Donald Methuen Fleming: If it were not licensed to engage in the Canadian coasting trade and is not purchased for use by fishermen.


William Moore Benidickson: Let us say that the ship was to be used for inspection or for various purposes which I will not define by a department of the government of a province, would it escape taxation on the general ground that you do not impose taxation on the provincial government departments?


Donald Methuen Fleming: All purchases by provincial governments are exempt.


William Moore Benidickson: What is the situation-I think this is a situation about which we are all curious-


Donald Methuen Fleming: Section 46, subsection 2 of the act says:
A refund of taxes paid under Part IV, V or VI may be granted to a manufacturer, producer, wholesaler, jobber or other dealer on goods sold to Her Majesty in right of any province of Canada if the said goods are purchased by Her Majesty for any purpose other than-
Then some other provisions are mentioned. Section 46 is the governing provision.


William Moore Benidickson: If a ship were to be constructed for a crown company or a provincial entity would it be subject to a tax? I am thinking of Ontario Hydro, for instance.


Donald Methuen Fleming: I am told that the case put by the hon. member has not directly arisen. We do not know of a ship built in the way he mentions, so I think in the absence of something concrete I should not attempt to be specific in the interpretation of section 46.
79951-0-307
Excise Tax Act


William Moore Benidickson: In the territory which I represent, sometimes access to Ontario Hydro facilities representing many millions of dollars can be gained only by water and this requires the construction of a ship. I think analogous to that is the question of whether or not a province has the right to impose, under an act like this Excise Tax Act, a sales tax on a crown company, an entity of the federal government. Can the minister indicate whether or not a province which imposes- say British Columbia where they have a sales tax-such a tax has imposed the tax on a crown company out there?


Donald Methuen Fleming: I am not aware of any particular case where British Columbia has sought to impose its sales tax on federal purchases or purchases by crown corporations. We have had a problem with respect to some provinces, and the matter is one under discussion at the present time.


Herbert Wilfred Herridge: The hon. member for Kenora-Rainy River did not give the minister an opportunity to answer my question, so I will repeat it. Will a vessel with a tonnage of 9.5 tons used for towing purposes in the lumber industry in minor or inland waters be exempt from the tax under this clause?


Donald Methuen Fleming: Mr. Chairman, it will depend entirely on whether the case can be brought under the clause here. I have made reference to ships licensed to engage in the Canadian coasting trade. Let us return to the amendment with which we are dealing now. We are, Mr. Chairman, getting very far away from the amendment that is being made here. Here we are getting into the whole scope of this whole part of the schedule to the act whereas all that is involved in the amendment is this expression:
Materials for use only in the equipment and repair of ships over ten tons net register tonnage;
This amendment has application to materials. If the hon. member has a question as applied broadly to something outside of the amendment, if he will speak to me about it or give me the particular facts we shall be glad to get him a ruling on the particular case. However, I do not think it would be prudent on my part to attempt to make rulings right and left on matters that are not raised by this amendment.


Herbert Wilfred Herridge: To put it more simply, my question is this. Does this amendment apply to ships or tugs used in inland or minor waters for towing purposes?


Donald Methuen Fleming: No, the amendment has no bearing on that situation.


William Moore Benidickson: I do not want to tread on the sensitive corns of the minister-

Excise Tax Act


Donald Methuen Fleming: Fortunately, the minister has no corns.


William Moore Benidickson: -but I know there have been some sensitive spots of taxation as between the provinces and the federal government. I wonder whether this is another area in which, if we pass this particular item, there might be an element of further annoyance on the part of the province of Ontario and in particular on the part of the crown entity Ontario Hydro. Does a crown company like Polymer or Eldorado operating in Ontario pay taxes such as a gasoline tax imposed by the province of Ontario? Do they pay that tax? I think the matter has some relevance to the question of whether we should impose a tax on a ship that might be purchased by or built to the order of Ontario Hydro.


Donald Methuen Fleming: I think the hon. member has overlooked the fact that there has been a provision in the act all along. The only change this amendment makes is to delete the word "construction" from the present exemption. On June 8 I gave at some considerable length the reasons for the removal of the word "construction". They are to be found at pages 4681 and 4682 of Hansard of June 8. That is the one change that is involved here, namely taking out the word "construction".


William Moore Benidickson: On June 8 I was grateful for the minister's explanation in this regard. Now I have a new question, and it is this. If we accept this amendment, would a ship constructed at the instance of Ontario Hydro be subject to the 11 per cent sales tax?


Donald Methuen Fleming: The situation would be just the same as it was before the amendment was introduced.


William Moore Benidickson: I quite agree; but what are the facts? I am ignorant of the facts. I think the minister is much better informed than am I. He has in front of him two very knowledgeable officials who are in the taxing department. I wonder whether he would indicate just what are the facts.


Donald Methuen Fleming: I think I have already pointed out that in that case sales tax would be levied unless the ship was to be used in the coastal trade or was acquired for the use of fishermen.


William Moore Benidickson: In other words, it is possible for the federal government to impose an 11 per cent sales tax on a crown company that is an entity of a province. In order to decide whether or not this procedure is fair or whether or not this provision should be amended to prohibit that procedure, perhaps the minister might indicate whether or not,

on the other side, our federal crown companies such as those I have indicated-let us say Eldorado which operates in Ontario or Polymer which operates in Ontario-are assessed and pay a provincial tax such as a gasoline tax?


Donald Methuen Fleming: The hon. member is aware of the fact that the provincial gasoline tax is a different type of tax altogether. It is not a tax that involves an assessment at all. So far as crown corporations are concerned, the only ones from which any attempt could be made to collect such a tax would be those that operate vehicles on the highways of the province in question. I do not wish to speak too generally concerning all the crown corporations. Some crown corporations undoubtedly have been affected by the sales tax but others obviously are not affected.


William Moore Benidickson: I think this is a matter of some consequence. We sometimes hear from the minister in other debates that everything is peace and harmony between the Conservative government at Ottawa and the Conservative government at Toronto. Then we read that, on the contrary, there is a real conflict in that there is a great dispute between these two governments as to which has the right to impose taxes on crown companies pertaining to the other. Here for instance, is a case in which the Ontario Hydro might be commandeering or building a ship. I want to know whether they would be taxed or whether the minister wants to tax them. I understand that the treasurer of Ontario takes very strong objection to paying certain sales taxes in connection with Ontario Hydro in respect of other purchases that Ontario Hydro has been making in recent years. I understand that similarly some of our federal crown companies think they should not pay the gasoline tax. I wonder whether this matter is being resolved and should like to get some information before we pass this schedule which, without amendment, might apply to the purchase of a ship by a province as much as by an individual.


Chesley William Carter: I was going to express gratitude to the minister for this amendment but when he explained to the hon. member for Kenora-Rainy River that the only change in the wording is that the word "construction" has been dropped I am at a loss to know whether or not I should be grateful to him. It looks as though this legislation is now taking a bigger crumb and giving us a smaller one in return.
First of all, I want to point out to the minister the difference in the way in which

the fishing industry is treated as compared with the assistance given to other industries in this schedule. For example, on page 3 we have mentioned barrels and boxes for fruits and vegetables but we have nothing comparable for the fishing industry. On page 4 we have mentioned internal combustion traction engines. We use a great many of these in manufacturing and processing in connection with the fishing industry but there is nothing comparable for the fishing industry. Then on page 8 we find the heading "machinery and apparatus to be used in manufacture or production" and down near the bottom of that paragraph we find an item which reads as follows:
Gasoline-powered and diesel-powered self-propelled trucks mounted on rubber-tired wheels for off-highway use exclusively at mines and quarries;
Here is a special concession given to the mining industry. In the fishing industry we have similar types of vehicles employed but they do not enjoy this same concession or an equivalent one. We have here a particular paragraph which reads in part as follows:
Rope and cordage of cotton, hemp, manila or other vegetable fibre,-
And so on. The Fisheries Council of Canada request that in this particular item there should be included rope with wire strands which is essential and which is very costly. The minister has not seen fit to grant even that small request. Then on page 5 steel pens are mentioned; they are under farm and forest. We have aluminum pens in the fishing industry but no equivalent consideration is given to items like that.
In this particular amendment materials for use only in the equipment and repair of ships over ten tons net register tonnage, I would like the minister to explain just what is comprised in the term "materials". Does it include articles of equipment? I cannot think of many materials which could be used for equipping a ship. I can see that in repairing a ship you would need paint, sheathing, metalwork and other materials of that kind, but when you come to equip a ship you use articles. I wonder if the word "materials" can be interpreted as articles such as anchors, sails, compasses, and other equipment a ship would require?


Donald Methuen Fleming: Mr. Chairman, the question obviously goes far beyond the scope of the amendment. The word "materials" has its ordinary meaning. Materials are being scrutinized under this act every day as applied to all manner of use. Much of the answer to the hon. member's question is to be found in the first clause under the heading "marine and fisheries". I would invite him 79951-0-3071
Excise Tax Act
to read that and I ask that discussion be confined to the changes being made here.


William Moore Benidickson: On this particular item which I referred to a few minutes ago I know that Ontario Hydro do require the construction of boats of this kind in my territory. I want to know whether the minister thinks they would pay a tax on them. They are a crown company provincially incorporated; they serve the province. I understand the provincial treasurer of Ontario has rebelled against paying taxes of this nature to the federal government and he thinks the same exemption should apply to the provincial crown company as applies under the British North America Act, I think it is, with respect to taxation from one level of government toward another.
I think it is material to the passing of this amendment to decide whether this is going to aggravate a field in which we have difficulty with the provinces. The minister is always inclined to say that everything is hunky-dory between the administration in Toronto and the Ottawa administration. I believe there is a real conflict. There is some withholding of taxes between the governments. It is a very nasty business and I think it might aggravate the situation-


Jacques Flynn: Order. I did not intervene before but it seems to me the hon. member is really going too far in discussing such a big problem as one concerning the relations of the federal and provincial governments in the matter of taxation. I might point out to the hon. member that the only change which is brought forward by the schedule here relates to materials for use in the equipment and repair of ships over ten tons register tonnage. It does not refer to the purchase of boats by the Ontario Hydro or by a crown corporation in a provincial or federal field.


William Moore Benidickson: I am respectful of your ruling, Mr. Chairman, of course, but this is a matter which I indicated could conceivably be purchased by a crown company sponsored by a provincial government. I will overlook some of the broad issues, such as the withholding of taxes between one government and another and the standing off and ill will which seems to have been generated in consequence. But my question is whether, if we pass this, we are getting into a new arena of ill will because Ontario Hydro might be taxed under this section. I am asking the minister whether or not a ship or materials for a ship which might be purchased by a crown company of one of our provinces would, in the judgment of the officials sitting in front of him, be brought into taxation by the federal government and, if so, does the

Excise Tax Act
minister think under the present mood of the provincial government of Ontario that they would pay the tax?


Donald Methuen Fleming: The answer is the same as when I answered it for the third time and it is the same when I answer it for the fourth time.


Chesley William Carter: I would like to ask the minister if it would not be clearer if articles and materials were included and underlined so as to bring it into line with the first paragraph? The first paragraph does say "Boats bona fide purchased by fishermen for use in the fisheries, and articles and materials to be used exclusively in the manufacture, equipment or repair of such boats". But when we get down to the amendment, "articles" is left out and we only have "materials for use only in the equipment and repair of ships over ten tons net register tonnage". Offhand I cannot think of any material which you use in equipping a boat. I can think of all kinds of articles, and I would like the minister to give me an illustration of the use of materials, if he can.


Donald Methuen Fleming: The hon. member insists on asking about things not involved in the amendment. I have already replied as to the meaning of "materials", the word contained in the amendment. It will continue to have the same meaning as it has had in the act in years past.


Jacques Flynn: Shall page 8 carry? Carried. Shall page 9 carry?


William Moore Benidickson: May I refer to the new
item, perforated pipe for drainage purposes not exceeding four inches in inside diameter. It is a little late to request an amendment at this stage, but I would urge the minister very strongly to look at this for amendment next year, because I think our definitions are sometimes too confined and unnecessary. I think generally we could exempt a building material that was for drainage purposes, for house construction, for irrigation and for sewage and matters of that kind and have a little broader definition which would make it easier for those that deal in these materials and supply them. I think there have been representations from the Canadian Chamber of Commerce along these lines and I wonder if the department could not agree to something like that. I understand they would have some difficulty on the production side, but I think we have many precedents along this line of end purposes being the determining factor and I would hope that instead of having these amendments every year or every two years of dimensions of pipe, and so on, we might

be a little wider in our description of the uses for which exemption would apply.


Jacques Flynn: Shall page 9 carry? Carried Shall page 10 carry? Carried. Shall page 11 carry?


William Moore Benidickson: On page 11, Mr. Chairman, am I perfectly correct in my understanding that in connection with protrait photographs of individuals, which is bringing about this amendment to our traditional pattern of taxation of sales in the photographic industry, no tax will be imposed on the process or the value of the process of photofinishing without some new presentation at another time to this parliament?


Donald Methuen Fleming: I dealt with that subject very fully when we were in committee of ways and means. The hon. member will find the reference on page 4672 of Hansard in the second column.


William Moore Benidickson: In other words, I can be assured that the efforts of the officers of the Department of National Revenue will cease now. They have approached the Department of Justice and endeavoured to get a ruling on this subject. I do not say they were endeavouring to get a ruling one way or the other, but they have been wondering whether the present law did not permit them to impose a sales tax on the value of photofinishing as a production. I take it we have a definite assurance from this government that while it is in office there will not be an administrative change unless some new amendment is presented to this parliament to bring it about.


Donald Methuen Fleming: I direct the attention of the hon. gentleman to the statement I referred to, Mr. Chairman.


[Stage Direction]
Schedule agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall the bill be read the third time?


William Moore Benidickson: Next sitting of the house.



ESTATE TAX ACT

Donald Methuen Fleming: the second reading of Bill No. C-65, to amend the Estate Tax Act.


William Moore Benidickson: I had hoped that perhaps we would have an introductory statement from the minister explaining the purpose of some of the amendments.


Donald Methuen Fleming: The house is already well aware of the purpose of the amendments to this bill. The resolution was

reviewed by the committee of ways and means on May 9 and May 26. These are specific amendments, Mr. Speaker, to the Estate Tax Act.


William Moore Benidickson: Mr. Speaker, this is, of course, the first amendment that we have had to the Estate Tax Act, which is a new act involving a number of new principles which became effective on July 1, 1959. We on this side complained previously that when the proposed legislation was presented in 1958, and referred to the banking and commerce committee, we were pressed unduly in a hasty fashion for passage of the bill, and with our small numbers we were not able to give the attention that we would have liked to certain sections that were not popular.
I wonder whether the minister would consider referring these amendments to the banking and commerce committee? They are the first amendments to the new basic act since it was introduced in 1958. My reason for asking that the bill be sent to the banking and commerce committee is not the contents of the amendments. I must confess that people familiar with this type of thing have in the interim given a great deal of study to the basic legislation. They have considered the effect of the legislation since it became the successor to the succession duty act on January 1, 1959. I think the accountants, the legal fraternity and the trust companies who have experience with beneficiaries under the new law would like perhaps to make some recommendations to this house after we have had this experience of some 18 months with a completely new principle of taxation following death.
The minister might indicate what his intentions are in that respect. I wish to say that on examining this amending bill I found a great deal of help in perusing something that I do not think is too usual in so far as our federal statutes and our federal administration are concerned. I refer to a statement made by the administrator of the Estate Tax Act, Mr. Linton, which was presented to the Canadian Tax Foundation. It is a very frank statement of what he expected was in the original legislation, and he indicated some of the problems in connection with it. It was a great help not only to us as legislators but to those who have reason to be interested in the Estate Tax Act. This is a very useful thing. On the income tax side perhaps some of our officials have not fraternized sufficiently with those who in practice have to deal with the Income Tax Act and similarly with the Excise Tax Act. All of us should be very grateful for Mr. Linton's review
Estate Tax Act
and analysis of the new act which was presented in the session of 1958 and became law in 1959.
I can recognize that some of the amendments presented to us in the amending bill are closely related to Mr. Linton's analysis because they seem to refer to some of the arenas which he indicated were perhaps new and in law may be doubtful arenas, and perhaps the original intentions of the government might in practice not be given effect to. To the extent that there was a bona fide and proper intent announced in our committee and in our legislative discussions of 1958 I do not think there will be very much quarrel about the amendments that clarify that intent or those intentions.
With respect to some other items, I am sure that all hon. members of the committee will want to examine them very carefully because I felt that in 1958 we had all too little time to examine this important measure which was a substitution of one style of taxation in the event of death for another. Since the opposition was inadequately manned at that time, I would hope that perhaps we might have another review in the committee on banking and commerce.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Flynn in the chair.
On clause 1-Insurance proceeds as death benefit.
William Moore Benidickson: Mr. Chairman, perhaps the minister would advise the committee of his intention with respect to this clause. Am I right in thinking that this does not involve a new principle but rather clarifies an intent the minister had when he introduced the original measure?
I referred at an earlier stage in a complimentary way to information that had been given to the country at large by the chief administrator of this tax legislation, Mr. Linton. I find that with respect to the original section 3 (1) (k) referred to in this clause Mr. Linton rather indicated that he thought this was covered by the original legislation.
On page 5 of the booklet published by the Canadian Tax Foundation entitled "A Review of the Estate Tax Act" with reference to section 3 (11 (k) of the original statute of 1958, Mr. Linton said:
We hope that under these two paragraphs all kinds of benefits payable by way of superannuation, retirement, death benefit, pensions of any kind (whether voluntary or otherwise, enforceable or otherwise, contributory or otherwise,) are taxable.
I take it that perhaps the administration found some difficulty in the intervening period. I wonder if that is the reason for this

Estate Tax Act
clause. It will apparently bring into taxation benefits to the estate of a deceased under an insurance policy even if the policy was taken out by an employer of the deceased. This seems to be a reasonable conclusion but I wonder why the amendment is necessary. What is the conflict between the original law and this proposal?


Donald Methuen Fleming: Mr. Chairman, the purpose of this clause is to ensure that death benefits arising out of employment which are now generally subject to estate tax will be taxable when they are in the form of life insurance payable to a beneficiary of the deceased. Although life insurance owned by the deceased at the time of his death is taxable, life insurance owned by the employer on the life of the deceased-for example under a company group insurance scheme- may at present escape tax even if payable to a beneficiary of the deceased. The proposed amendment will rectify this anomaly and in this respect will close what is a very obvious loophole.


[Stage Direction]
Clause agreed to.
On clause 2-Devise or bequest subject to provision against lapse.
William Moore Benidickson: Mr. Chairman, there is a reference here to something with which I confess I am not familiar. It refers to the regulations. Before we undertake debate on this clause would the minister indicate to the committee what the regulations are that are applicable to this clause?


Donald Methuen Fleming: Those are the regulations, Mr. Chairman, which apply to the calculation of present value of future periodic payments and are based upon the tables in relation to expectation of life.


William Moore Benidickson: I believe this relates to the subject of partial consideration, in other words an agreement prior to death to transfer certain assets in consideration of an agreement that an annuity will be paid. Am I right? What in effect is the difference? Is the difference mainly that the existing law omits reference to interest on the value of the payments that may have been received prior to death and that henceforth there will be regard not only to an arbitrary 5 per cent valuation on the annuity but also regard to the use of the amount of money that was received as an annuity?


Donald Methuen Fleming: It is more than the interpretation placed upon it by the hon. member. The difference that the clause creates is clearly stated in the explanatory note, particularly the earlier portion of it. The explanatory note reads as follows:

This amendment changes the method of determining the value of the consideration for property disposed of by the deceased during his lifetime in consideration of an annuity where the present value of the annuity at the date of the disposition exceeds the present value at the same date of a notional annuity computed on the basis of 5 per cent of the value of the property disposed of.


William Moore Benidickson: May I interrupt the minister to ask if the notional value is a 5 per cent interest calculation?


Donald Methuen Fleming: It is the following words that illustrate the difference:
Under the existing method the consideration is the present value of the excess.
In other words the difference between the two calculations mentioned in the first sentence is that under the new method the consideration, as the explanatory note states: -is the sum of the amounts of the excess of the actual payment made to the deceased over the notional annuity each year from the date of the commencement of the annuity to the date of his death, plus interest on those amounts.
The interest is a factor but that is not the entire difference between the two methods of calculation.


William Moore Benidickson: Mr. Chairman, may I cal] it six o'clock?


Jacques Flynn: Shall clause 2 carry?


William Moore Benidickson: I shall probably have some further remarks to make, Mr. Chairman.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
Jacques Flynn: Shall clause 2 carry?


[Stage Direction]
Clause agreed to.
Clause 3 agreed to.
On clause 4-Gifts subject to power to appoint or appropriate.
Donald Methuen Fleming: Mr. Chairman, there is a slight amendment to clause 4 of which I have given notice to hon. gentlemen opposite. I would ask my colleague, the Minister of Mines and Technical Surveys, to move the amendment. It is in these words:
That Bill C-65, an act to amend the Estate Tax Act, be amended by striking out lines five and six on page 3 thereof and substituting therefor the following:
"all of the resources of which, if any, were devoted to charitable activities carried on or to be carried on by it or to the".


Mr. Comiois:: I so move.


Donald Methuen Fleming: Briefly, Mr. Chairman, the amendment would insert in line five the words "if any" after the word

"which" and in line six after the words "carried on" the words "or to be carried on".


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
On clause 5-Idem.
William Moore Benidickson: I suppose this amendment is for clarification only. Since the original measure we have had an understanding that 50 per cent of the aggregate net value of an estate is free from taxation. Is this just for greater assurance?


Donald Methuen Fleming: The hon. member said 50 per cent; I think he meant to say $50,000.


William Moore Benidickson: Yes.


Donald Methuen Fleming: The purpose of this amendment is clarification. As the note says, it explicitly provides an exemption for an estate whose aggregate value does not exceed $50,000. On examination it has been found that the existing provision in the act does require clarification.


[Stage Direction]
Clause agreed to.
On clause 6-Situs of property.
William Moore Benidickson: I understand this interesting revision relates to property for which a situs might not have been determined up to the passing of the legislation. Is it correct that the chief point is that henceforth the situs of property, for which a situs has not been determined, will be determined under subclause 3?


Donald Methuen Fleming: The effect of subclause 3 is that where hitherto there has been no specific rule for determining the situs this paragraph will now provide a residuary rule of general application.


[Stage Direction]
Clause agreed to.
Clauses 7 to 11 inclusive agreed to.
On clause 12-Consent to transfer.
William Moore Benidickson: My impression was that these transfers would normally be from a corporation. I suppose the change relates to the amendments we made previously where we used the word "corporation" instead of "person" in connection with these . matters.


Donald Methuen Fleming: No, this change goes much further than that. This introduces quite an extension to the existing provisions of the act in relation to the consent to transfer and also those situations in which transfer may be made without waiting for consent.


William Moore Benidickson: In connection with clause 12 it has been my feeling that some corporations such as banks have not been as lenient
Canadian National Railways as I think the law permits them to be when a person dies and has a deposit in a bank. The present limitations are that without notice to the minister certain transfers can be made. I think the banking fraternity in general should look at this section and consider their opportunities for making transfers with notice to the minister, thus saving estates a great deal of expense. This probably will not appeal to the parliamentary secretary who practices in Ottawa. However,
I have had some experience with this matter and I think that trust companies, banks and so on have not properly understood their opportunities here. I think they do not know that with notice to the minister they could be more generous in releasing moneys on deposit in their institutions and thus save the heirs to an estate the necessity of having probate which is sometimes unnecessarily insisted upon, I think.


[Stage Direction]
Clause agreed to.
On clause 13-Ignorance of death or interest of deceased.
William Moore Benidickson: In connection with clause 13, has the government had, up to date, any experience in which the Canada Council was named in a bequest on which the law hitherto has not made it possible to have an allowance?


Donald Methuen Fleming: I understand not.


[Stage Direction]
Clause agreed to.
Title agreed to.
Bill reported.


Donald Methuen Fleming: the second reading of Bill No. C-69, to authorize the provision of moneys to meet certain expenditures of the Canadian National Railways system.
(Translation):


Lionel Chevrier: Mr. Speaker, concerning the motion introduced by the Minister of Finance (Mr. Fleming), proposing the second reading of Bill C-69, I should like to deal with a project, referred to the other evening, when the estimates of the Department of Transport were under consideration. I should like to say a few words about the speech made in the house by the hon. member for Gaspe (Mr. English), as well as about the question of a railway in the Gaspe peninsula, a subject that has been talked about for years. I gave notice to the hon. member for Gaspe that I intended to deal with this matter tonight.

Canadian National Railways
Mr. Speaker, if I do so tonight, it is because the subject has been discussed for several years, and because I should like to remind the house of the eight proposed routes that were considered by the government of the time, and therefore by the Department of Transport. We considered that project, and more particularly the possibility of buying the Canada Gulf and Terminal railway, in 1927, 1930, 1943, 1946 and 1949. Of course, the government of the time did seriously consider the matter, and I should like here to put on the record the eight proposed routes that were considered at the time.
First of all, we had to consider the purchase, by the Canadian National Railways, of the Canada Gulf and Terminal, that is the railway linking Mont Joli with Matane.
Extension of the railway from Matane to Ste. Anne des Monts was also considered, as well as the building of a line which would go from Ste. Anne des Monts to Gaspe Copper Mines on the one side, and on the other side to the property of the Federal Metals Corporation.
We also considered a route which would extend from Sayabec to the property of the Federal Metals Corporation. Another route extended from Amqui to the same property.
Also considered was the possibility of building a railway line extending from Gaspe Copper Mines, to Gaspe, along the York river, and another one which would also extend from Gaspe to the property of Gaspe Copper mines, but along the St. John river.
Finally, a route was also considered that would extend from the C.N.R. Cascapedia to the property of the Federal Metals Corporation.
Mr. Speaker, that clearly indicates that we did, at the time, make a serious study of proposed routes for a railway line in the Gaspe peninsula.
I also recall that we had carefully considered the possibility of having the Canada Gulf and Terminal purchased by the Canadian National Railways but the difference between the price asked for the Canada Gulf and Terminal and the price suggested by the Canadian National Railways was to considerable that it was impossible to come to any agreement.
So that, the government did have the matter considered from every angle. Unfortunately, eight or ten years later, I am unable to remember all that happened at that time. However, I did get a map of the Gaspe peninsula and with this, added to the circumstances that I do recall, I can remember to a certain extent what took place at the time.
If my memory does not betray me, a member of parliament was particularly inter-
[Mr. Chevrler.l
ested in that matter. It was the former hon. member for Gaspe, Mr. Leopold Langlois, who was parliamentary assistant to the postmaster general and then to the minister of transport. He tried, on various occasions, to get some agreement between the mine owners who, at that time, were to settle in the Murdochville area, and the officials of the Canadian National Railways with whom he had several talks, which have prepared the way for this government if it should decide to settle the matter.
At that time, the government built many railroads and branch lines throughout Canada, including several in the province of Quebec. We might mention, among others, the Barraute-Kiask Falls line, which the Canadian National built to service the timber limits, which, according to what the president of the C.N.R. told us recently, at a committee sitting, is a very profitable proposition. There was also the railway from Beattyville to Chibougamau, and the one from Chibougamau to St. Felicien, both built under the former government and now in operation. There was also a short line of some 50 miles, from Sherridon to Lynn Lake, in Manitoba. There has been another one of the same length in British Columbia, without mentioning several small lines in New Brunswick and Ontario. Having undertaken to build those lines at that time the government was unable to give closer attention to the required railroad in the Gaspe peninsula.
But in the meantime, circumstances have changed as the hon. member for Gaspe (Mr. English) said in his remarks in this house, as may be seen on page 4476 of the official record. As a matter of fact, he pointed out to hon. members that the development of ore deposits and national resources now going on in that area might very well change the financial picture of a railroad. I was more particularly interested by what the hon. member said, as appears on page 4476 of Hansard dated June 2, 1960, and I quote:
Ever since 1957, when I was first elected to represent the constituency of Gaspe, 1 have been asking that a railroad be built between Matane and Ste. Anne des Monts. I raised the matter in 1958 and 1959, and I raise It again in 1960.
With all due respect for the hon. member, I want to tell him that there are many members from the province of Quebec, on both sides of this house, who have requested this railway for many years. Now, not only must the hon. member request it, he must do more than that: he must act. He must convince the government that the circumstances have changed because of mining operations, because of the natural resources development in the

peninsula, and because the volume of traffic has increased to such a degree that the government must build it now. When he made a speech here on June 2 last, he quoted, according to page 4478 of the English Hansard, the words of the Minister of Transport, as well as those of Mr. Gordon, president of the Canadian National Railways. Here is what the Minister of Transport said:


Donald Methuen Fleming: At what page?


Lionel Chevrier: At page 4478 of the English text of Hansard of June 2, 1960. I quote:
Railways are a prerequisite to and not a consequence of progress, because railways are indeed a factor of progress.
Later on, he quoted Mr. Gordon who had made a statement on the occasion of the official opening of the Chibougamau-Beatty-ville and Chibougamau-St. Felicien railway:
"In a country such as this, where distance is a vital factor in the cost of goods, you cannot think of developing natural resources without thinking of railroads."
And the hon. member endorsed those two statements which, I agree, are excellent. The conclusion he came to was as follows:
Mr. Chairman, I am most surprised. I wonder if really Mr. Gordon was serious when he made that statement. If he really was, why did he refuse that to the Liberal party for so many years, even at the time when my hon. friend the member for Laurier (Mr. Chevrier) was Minister of Transport? Why did he refuse it, and why does he still refuse it?
Those are the words on which I want to make a few comments now.
I do not know what Mr. Gordon's attitude is today, because I left the department several years ago.
I do not know v/hether he has reconsidered the various locations, the least costly of which was $27 million at the time. But representations should be directed not so much to Mr. Gordon as to the government, and that is exactly what the hon. member for Gaspe (Mr. English) seems to overlook entirely.
There is a tremendous difference between Canadian National policy and government policy. Usually, though not always, the Canadian National considers a project from a budget or financial angle, and looks at the profits and particularly the volume of traffic to be expected on the suggested railway line.
That is exactly why the Canadian National decided to build the line I mentioned a moment ago between Barraute and Kiask
Canadian National Railways Falls, in Quebec, namely because the government-owned railway thought such a line would be profitable.
As Mr. Gordon indicated recently in the railway committee, the line has been highly profitable and since its establishment, has reaped handy profits for the government railway.
However, Mr. Speaker, the government too has its say. If the government, in the public interest and to promote the development of natural resources in a particular area reaches the conclusion that a railway is justified, all it has to do is to pay it a subsidy. That, in fact, is what the government did when it decided to build the line between Chibouga-mau and St. Felicien.
At that time, the Canadian National Railways told the government something like this: We are ready to build the railroad, but we know that we shall need some help during the first years and we urge the federal government to grant us subsidies. The government then decided to grant the railway an amount of $25,000 per mile. Therefore, I say to the government members, and particularly to the ministers who are now at their places and are listening to me that if they really mean to build a railway in the Gaspe peninsula, they have only to do it because there are already seven proposed routes ready for use. They are there. The government can go on and study them right now. That is the first thing I wanted to say.
The second is that since those routes were laid out-the last one was made in 1949, I think-two events took place in the peninsula: first, a great development of natural resources and second, a remarkable rise in the mining industry.
There is no need to go into details, since the hon. member for Gaspe, who is more familiar with the subject than I am, has already dealt with it.
There is also another reason that I wish to put forward. Following the development of the St. Lawrence seaway, traffic has increased between the ports on the north shore of the Gaspe peninsula, and those of Seven Islands, Baie Comeau and elsewhere. Traffic is heavier than in 1949, Conditions are therefore different in 1960, and financially they have changed to such an extent that the government now feels justified in building that particular railroad.

Canadian National Railways
Personally, I am not fully informed on the matter, and I do not know what exactly has occurred since that time, nor have I seen the flies. However, I should like to refresh the memory of my hon. friends who, of course, promised in the 1957 and 1958 elections to reconsider this railway line project.
I have no doubt that if they will pay a subsidy to the Canadian National in view of the industrial development going on in the peninsula and of the increased volume of shipping between the north and south shore, a favourable decision could certainly be reached with regard to this railway line.
What prompted me tonight is that the hon. member for Gaspe directed his remarks only to the government owned corporation, apparently in the belief that the decision rested only with that corporation.
The government owned corporation, namely the Canadian National, can make recommendations to the government, but it is not responsible for taking a decision on the matter. It is the government, with its ministers, it is the cabinet which considers proposed locations and reaches a conclusion.
For all those reasons, I thought I was justified in discussing the bill on second reading, and in reminding hon. members on the government side of their election promises with regard to this proposed railway.
Again may I emphasize that conditions have changed over the 11-year period.
Finally, I would ask them, in view of the fact that they have been in power for three years, not only to consider existing locations, and complete them if necessary, but also to make a thorough study of the scheme, if necessary-though I feel the studies have already gone far enough-and to reach a decision which would meet the wishes of the people who have been asking for this railway line for many years.
(Text):


Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, we in this group support the bill. On the previous stage of the bill we all had our particular innings and I personally am glad to see it pass.


William Moore Benidickson: Mr. Speaker, when we discussed the resolution prior to receiving this bill I indicated to the Minister of Finance (Mr. Fleming) that perhaps we might inquire whether or not these capital expenditures in their forbidding entirety would be necessary. I asked that question inasmuch as last year, just within a few days of our approval of a similar bill involving substantial sums for the capital expenditures of Canadian National


Railways, Canadian National Railways by approval, I think, of its small directorate decided that some $20 million odd were not necessary.
We have a large sum of money involved in the implications of the clauses of this bill before us. I think it involves an expenditure on the part of Canadian National Railways of about $200 million and another $86 million in capital expenditures for a subsidiary wholly owned by Canadian National Railways, namely our well known Trans-Canada Air Lines.
I am not going to repeat what I said at the resolution stage. We are not proposing in 1960 to spend on capital expenditures sums which could in any way be related to these tremendous sums which are involved in this bill. I think that as disclosed in the annual report of the Canadian Pacific railway, inclusive of expenditures that the competing road proposed to make for its air line the capital expenditure for 1960 for the Canadian Pacific railway was the sum of about $83 million. I indicated that I thought that the executive-and I meant the cabinet-should at some stage examine these matters and that when the cabinet presented to us as legislation a bill such as this bill it should be prepared to indicate that it had taken the responsibility beyond what we gathered was the responsibility taken when we discussed these matters at the resolution stage. I indicated then that there had been considerable paring with respect to the total requirements at various stages within the Canadian National railways organization. I also indicated in that debate that the paring seemed to stop at that point.
Apparently the cabinet-and the Minister of Finance is representing the cabinet in this instance-have the feeling that when this crown company presents a requirement for capital expenditures of this magnitude-and I have indicated it is about $200 million for the railway and $86 million for the subsidiary, Trans-Canada Air Lines-there is no paring after it arrives at the public's level of executive consideration, namely the cabinet. When I suggested that the minister might refer back to the experience of 1959 when even the crown company a few days after parliamentary consideration of the matter decided that they did not need some $23 million, the amount involved in last year's bill, the minister was a bit haughty at the suggestion that he should go back to the crown company and ask whether any such paring on the part of the crown company was likely within a few days or a few weeks of our

consideration of the statute. The minister promised that eventually he would make some report to the house in that regard.
When we were discussing the resolution I indicated that unless there was some change in pattern either of budgeting or in custom and business done by the road the first four months operating experience of 1960 would show that the Minister of Finance would find that his budget calculations would be upset to the extent of $41 million. I related that to his very slender budget prospect of a surplus of $12 million and that, of course, was not picked out of the cocked hat.
At the resolution stage I pointed out that this was only one bill for capital requirements that would be presented this year on behalf of the crown company. I also pointed out that after our committee had given considerable study to the capital budget of Canadian National Railways we were presented by the government with another bill which involved a capital expenditure on behalf of the Canadian public of about $100 million for the Toronto terminal and for, I think, access facilities to the terminal. When I raised these points last week I did not get much satisfaction on the question why most of the expenditures for the Toronto terminal were not presented to parliament in a bill such as we have tonight. I asked why there was a difference in terminal costs of a capital nature in Toronto as compared with capital costs for terminals at Montreal, Moncton, Winnipeg and at other points that had hitherto always been taken care of in a bill similar to the one we have before us at the present time.
One of the reasons why I was curious about this was that a parliamentary committee was set up to examine the capital requirements of Canadian National Railways, its operating budget and, as I say, its capital expenditures and after it had finished its business we received from this government with respect to terminal requirements at Toronto a new bill altogether, something that we did not hear about when we had the opportunity to examine the officers of Canadian National Railways in a less formal manner in a committee of this house. An explanation of that has not yet been advanced. I think it should be.
I must indicate to all my colleagues that in the debate on the resolution stage prior to the introduction of this bill I had showed that the officers of Canadian National Railways were rather anxious to terminate their services before the parliamentary committee and get back to head office in Montreal. I have not the page references in Hansard before me but I recall that I was interrupted
Canadian National Railways in my remarks by some hon. member who said, "Oh, oh". I said that perhaps in this respect I am understating the anxiety and desire of the executives of Canadian National Railways to be relieved of this inquiry and get back to Montreal.
I do not want to retract too much with respect to this statement, Mr. Speaker. I think it is well known that this examination of the accounts of this important crown company is all too hasty. It has always been that way. I do not say it is any different under the new regime from what it was under the old; but when I emphasize the aspect of understatement I feel I owe an apology to the vice president of Canadian National Railways, Mr. Dingle. At the committee meetings this session I raised the effect that certain capital expenditures had on the employees of Canadian National Railways in certain divisional points in the riding of Kenora-Rainy River. I want to say that while the committee itself was not prepared to receive evidence from the national and regional offices of the employees affected by this form of capital expenditure or automation, or whatever you wish to call it, when I reflect upon what I said last week at the resolution stage I think it was unfair perhaps to the vice president of the road, Mr. Dingle.
The committee would not listen to the union representatives or to the representatives from the community of Sioux Lookout, but I must say it was unfair because Mr. Dingle, vice president, was quite willing and anxious to stay over another day after our discussions had concluded. He saved the time of those delegations by staying here in Ottawa rather than going to Montreal, or asking them to come to Montreal. In fairness, I think I should make that statement, because Mr. Dingle's services and willingness to meet those people after the committee consideration was concluded were very much appreciated by all concerned.
I believe that we have here one or two items in clauses of the bill which are not similar to items that we normally have. The minister referred to one when he gave an explanation on the resolution stage.
We have here also a reference to certain adjustments which apparently are necessary in connection with relations between this crown company and the government in the government accounts. It relates away back to the 1957 operations. We should have an explanation of that. The minister should indicate whether or not the annual statements of Canadian National Railways for the year concerned, either 1957, 1958 or 1959, make

Canadian National Railways proper reference to this item or whether it is something that we are in a sense being advised of by surprise.
I recall there was a depreciation item in the 1958 annual statement that I questioned last year in the 1959 committee sittings. X imagine that this even has an effect on the minister's budget. I feel that the fullest possible explanation should be given with respect to an item that relates as far back as 1957 when a change in government accounts is to be authorized by this bill.


Mr. Speaker:: Is the house ready for the question?


William Moore Benidickson: Is the minister not going to reply?


Mr. Speaker:: If the minister speaks now he will close the debate.


Donald Methuen Fleming: Mr. Speaker, the last subject raised by the hon, member for Kenora-Rainy River (Mr. Benidickson) was discussed very fully on a similar measure a year ago and I trust we will not have to exhume that debate and spend more of the time of the house in repeating it here tonight.
The hon. member attached considerable importance to what he had to say about the calculation of the deficit of Canadian National Railways. I do not wish to repeat what I said on the subject at the resolution stage on June 7. So far as the capital budget of the C.N.R. is concerned the management operates on the assumption that the capital budget will not be exceeded without further authorization from the government and the record shows that the management has never over-expended its authorized capital budget. The operating budget, that is the net position of deficit or surplus after all charges, is, of course, an entirely different matter.
Before the budget of the company was submitted to the government in February the management had conducted a detailed investigation of all economic indicators which would enable it to estimate the revenue and traffic volumes. The operating budget prepared at that time, that is to say, in February 1960, was the best forecast that could be made as of that time. If, however, actual traffic results prove to be disappointing as the year proceeds it is not possible nor practical to reduce the expense side of the operating forecast every week or every month as many of the major expense items are spread over the year, so that sudden stoppages or changes in work in hand would be imprudent and uneconomic.
To put it another way, the railway revenues are highly variable whereas its expenses

tend to be much less variable when spread out over the period of a year. After the first quarter of a year if it becomes apparent that revenue and traffic volumes are at a materially lower rate than what had been forecast then management through its headquarters budget committee begins an intensive reexamination of all traffic, revenue and expense factors. If a downward trend persists during the second quarter then management again through its budget committee begins the process of reviewing the operating budget and year-end position. Of course, this becomes in effect virtually a continuous operation and that can be expected of the company this year.
I think all the other items that were raised by the hon. member for Kenora-Rainy River were discussed, and I may say discussed at some length, at the resolution stage of this measure on June 7 and I believe there would be no advantage in repeating what was then said.


William Moore Benidickson: Mr. Speaker, may I ask the minister a question? The minister indicated that there would be a natural revision at the end of the first quarter of the operating year. We are now five months rather than three months advanced into 1960 with respect to information about the C.N.R. Does the minister still think that the deficit of the company will be $21 million or $23 million as indicated in his budget?


Donald Methuen Fleming: Mr. Speaker, what I said was that it was the best estimate that could be made at that time. It naturally will be subject to revision as the year proceeds. The management does as well as anybody can do in that respect. I do not think anyone can be infallible in the matter of an estimate.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Flynn in the chair.
Clauses 1 and 2 agreed to.
On clause 3-Capital expenditures authorized.
Lionel Chevrier: Mr. Chairman, referring to clause 3(b) I should like to repeat briefly what I said earlier in connection with Trans-Canada Air Lines. It was indicated in the committee on railways and shipping that the year 1960 may not be a good one for T.C.A. in so far as its financial operations are concerned. I would think the main reason for this is the competition that the government has decided to allow foreign air carriers to enter into in so far as T.C.A. is concerned. I discussed this on a previous occasion in this chamber and will not repeat what I said then. Briefly, I think it should be brought

to the attention of the minister because he is the Minister of Finance and responsible in large part for the discussions which are entered into between Canadian National Railways-through	his	officers-and Trans-
Canada Air Lines in relation to the budgetary position of the railway company and its subsidiary, T.C.A.
It would strike me that two, if not three, of the bilaterals that have been entered into between Canada and foreign countries are creating a serious hardship upon T.C.A. In the first place, three foreign carriers now travel non-stop from Montreal to Chicago in competition with T.C.A. which is not able to go to Chicago without coming down at Toronto. In other words, because of the bilateral between Canada and the United States, T.C.A. does not have fifth freedom rights between Montreal and Chicago whereas the three foreign carriers-Alitalia, Lufthansa and Air France-possess those onward rights.
Then again, there is the position of T.C.A. vis-a-vis B.O.A.C. B.O.A.C. has been given by the Canadian government stop-off privileges at Toronto in competition with T.C.A. I believe that has worsened the financial position of T.C.A. to such an extent that T.C.A. has found it necessary to enter into a pooling arrangement with B.O.A.C. for the trans-Atlantic services.
I ask the minister in his conversations with his officers-who in turn will be speaking to the officers of these two national companies -to discuss the position outlined by hon. members of the opposition as we see it. If this is not rectified either by a curtailment of the privileges given foreign carriers or by renegotiation of the bilateral air agreement with the United States, then I am afraid the profit and loss position of T.C.A. for 1960 will be far more serious than it was in 1959.
The other day I asked the Prime Minister on the orders of the day if in his discussions with the President of the United States the question was raised of T.C.A. entering into the lucrative Florida market by way of stop-off and onward privileges at Miami. He replied that no discussion had been had between himself and the President of the United States. It seems to me that those members of the government who are responsible, the chief one in my opinion being the Secretary of State for External Affairs, for the renegotiation of bilaterals should do everything they can to convince the United States authorities that T.C.A. has been placed in an awkward position because of rights which are being given foreign carriers and refused to Canadian carriers. How is it that these foreign carriers, Air France, Alitalia, Lufthansa, can travel from Montreal to Chicago, Montreal to San Francisco,
Canadian National Railways Montreal to Los Angeles, whereas the same privileges are not given to the Canadian carrier?
I think I have said enough to convince the minister that serious consideration should be given to what we on this side of the house think is a very important problem. We think that the principle of competition, which seems to have been engendered by the government since it has been in office, is causing our own carriers to be placed in an awkward and impossible position vis-a-vis other carriers from the point of view of financial results. With that in mind I would ask the minister to give the matter of these bilaterals his careful consideration.


Donald Methuen Fleming: Mr. Chairman, we have just been treated to what is virtually a repeat performance on the part of the hon. member for Laurier. He gave us the same speech in the house on March 7 on a motion to resolve the house into committee of supply. He introduced an amendment to give effect to the views he then expressed and the house negatived that amendment on March 8. But if the hon. member thinks this is worth repeating I am sure the committee is glad to hear what he has to say.


William Moore Benidickson: Mr. Chairman, as usual the Minister of Finance is rather contemptuous of suggestions that come from this side of the house, but may I point out to some of the backbenchers of the Conservative party that there are very large figures involved in clause 3. I talk to some of these gentlemen in the halls of the House of Commons and there they express some misgivings about advances such as are provided in clause 3 of the bill. The treasurer representing all the taxpayers of Canada is the Minister of Finance who is sitting in the house opposite us. I think he should indicate to us whether or not in three years he has seen fit to pare in any way any of the proposed capital expenditures for which authorization has been given to this crown company and, if so, when and to what extent.
I think we would like to hear from the minister what his projection is as to the possible earnings of the subsidiary of Canadian National Railways, Trans-Canada Air Lines; what they are likely to earn through betterment by virtue of the expenditure proposed in subclause 1 (b) of clause 3. The amount of $86 million by way of capital expenditures is forecast here. What is the minister's advice from this crown company as to its possible earnings and possible profit or loss for the year 1960?
In addition, with respect to subclause 1 (a) we find an item that I do not think is ordinarily found in a bill of this kind, a provision

Canadian National Railways for working capital. In this case the requirement is $10 million. Would the minister indicate how frequently, historically speaking, Canadian National Railways has asked parliament to provide additional working capital, when this has occurred and the amount involved? Is this simply an item that goes into the debt structure? Otherwise, what rate of interest is paid on an advance of working capital of $10 million?
In connection with the apparent requirement for working capital there is a reference to the Victoria bridge and the St. Lawrence seaway. As I recall, when the committee on railways and shipping, government owned, considered this matter there was some question whether or not this amount would be refunded to Canadian National Railways and when. The Minister of Finance of all people surely knows whether the St. Lawrence seaway authority is likely to refund this money or whether some other source is likely to refund it and how soon it will be refunded. If it is going to be refunded in the near future there is a possibility that perhaps this sum would not be necessary.
I go back to a request I made when we were at the resolution stage. I asked the Minister of Finance very specifically, because I thought it was his duty, to go to Canadian National Railways and inquire whether there was any possibility of amendment with respect to these immense sums. I indicated it was my understanding that the figures that are the basis of this bill were prepared by them many months ago. Many millions of dollars are involved and perhaps in some instances the directorate and management have decided that as of June 13 these funds will not be expanded in 1960. In accordance with my request of last week, did the minister make these inquiries and, if so, what has he heard from the management? Can he assure the house that every dollar of these immense requirements is likely to be spent in 1960 and therefore these clauses of the bill should be passed without amendment? If there is any possibility that these items are not required in full, why should parliament be asked to be simply a rubber stamp for capital proposals made by Canadian National Railways five or six months ago which are not valid today?


Donald Methuen Fleming: Mr. Chairman, apparently the hon. member wishes me to present my credentials to the committee of the whole in relation to close supervision of the budgets of Canadian National Railways. All I can say to him is that I understand that the president and management of Canadian National Railways consider that the Minister

of Finance has given their budget close scrutiny. Perhaps I need say no more than that on that score.
As to the various other matters that were touched upon by the hon. member, I think I might suggest to him, Mr. Chairman, that a lot of the information he seeks on the floor of this house is information which should have been obtained by him in the committee when the officials of the Canadian National Railways were there; that is the purpose of having such a committee. It is not for this committee to go into the details of the operating functions and financing of Canadian National Railways. I am happy to give to the committee any information that it is within my power to obtain, but I do think, Mr. Chairman-


William Moore Benidickson: On a question of privilege, Mr. Chairman-


Donald Methuen Fleming: -it is a waste of the time of this committee to ask for information that should have been requested in the railway committee.


William Moore Benidickson: On a question of privilege, Mr. Chairman: It is true I was a member of that committee. However, I want to say that the rules are very clear that the committee of the whole has jurisdiction above and beyond any committee of the house, and when we are dealing in sums like $300 million it is quite proper to ask the Minister of Finance for Canada about his examination of the need for expenditures under some of these headings.


Donald Methuen Fleming: Certainly it is quite proper to ask the Minister of Finance about his examination of these figures. We are not discussing that at the moment. What I was referring to was the attempt made here to ask for operating details pertaining to the functions of management of Canadian National Railways. I think the function of the committee, when it has the officials before it, is to obtain all information on that score. It is quite proper in this committee to ask the Minister of Finance for an accounting in relation to his functions and responsibilities, and I hope I shall be able to give that.
We were asked again, Mr. Chairman, about the $10 million of working capital to finance the temporary alterations of Victoria bridge to co-ordinate with the St. Lawrence seaway. Again I was asked about the matter of the claim in relation to the seaway. We were over this in the committee last week. I could repeat what I said then on this subject, but I feel it would be completely unprofitable to do so. It would be straight repetition because I dealt with this subject fully at that time.

Then we were asked questions about the anticipated operating results of Trans-Canada Air Lines this year. The hon. member must be aware that no net income is anticipated from Trans-Canada Air Lines this year. It had an operating net income in 1958 of approximately $550,000; that dropped in 1959 to approximately $152,000, and no net income from Trans-Canada Air Lines is anticipated by Canadian National Railways in 1960.


William Moore Benidickson: Do they expect a deficit and, if so, how much?


Donald Methuen Fleming: That information was all available in the committee. Apparently the hon. member dit not see fit even to ask for the tabling of the budget. I was amazed to find that-


William Moore Benidickson: There are many members of this committee who were not members of the other committee, and I am sure they would be interested.


Donald Methuen Fleming: There is no occasion for the hon. member to stand up and interrupt. I was surprised to find that the budget of Trans-Canada Air Lines had not been requested in the committee and was apparently not put on the record of the committee. I dealt with the requirements of Trans-Canada Air Lines for this coming year in the committee on June 7. The clause under consideration is 3 (a) which indicates that the investment of the national system in Trans-Canada Air Lines during this calendar year, 1960, is $82,350,000. Subclause (b) indicates also that the capital expenditures for the calendar year 1961, prior to July 1, to be authorized amount to $86 million.
I reviewed in the committee of ways and means last week the reasons for these very large requirements. They relate to new equipment which Trans-Canada Air Lines has acquired. It is ordered and delivery is expected within these next few months. This is an existing commitment and must be met. It is regrettable, as I pointed out on June 7, that the requirements of Trans-Canada Air Lines in this respect are not more evenly distributed from year to year. But that is the way the particular situation was met. Trans-Canada Air Lines considered that they required equipment and that equipment was authorized to keep the company in a position to give effective service and to meet competition.
In the last place, the hon. member asked about the possibility that some of the money to be authorized in this clause might not be required. I indicated on June 7 that most of the amount provided for equipment is to meet existing commitments. I drew attention, in
Canadian National Railways line 5, to the fact that equipment will account for $34,977,000 of gross capital expenditure for the calendar year 1960. Of that amount, $20,707,000 represents the equipment which has already been authorized under financing and guarantee acts in prior years. This included 140 locomotives, 9 passenger train cars, 300 freight cars and 5 work equipment units. There is an additional amount of $5,638,000 for anticipated deliveries in 1960 consisting of a portion of the 1,366 freight cars and 5 work equipment units.
The hon. member for Kenora-Rainy River spent some time at the last meeting discussing the 40 diesels. I pointed out to him then that the diesels were already authorized; indeed, they were part of a larger group of diesels that had already been authorized and some of the units had been delivered. The cost of the anticipated deliveries of equipment already authorized, as I have already indicated, is estimated at $20,707,000, leaving a balance of $12,200,000 to be paid out after 1960 on equipment purchased and authorized by prior acts. Of this $12,200,000, between $7 million and $8 million represents the cost of the 40 diesel units already authorized but not yet ordered. These sums form part of the total of $86 million provided for in clause 3(1) (b) now under discussion.
The president of Canadian National Railways, Mr. Gordon, told the special committee when he appeared before it in the last week of March that he did not know whether the 40 diesel units would in fact be ordered at that time. There is still no absolute certainty that they will be ordered. However, it is considered advisable to authorize the provision of funds for the purchase in case they should be needed. Should later surveys indicate that traffic would not warrant the purchase of these units at this time the orders will not be placed and the amount involved will lapse.


Mr. Drysdale:: I should like to make one or two remarks on this particular item. On June 7 I spoke during the resolution stage in connection with the money that had been allocated to the Canadian National for trucking, the sum of $5 million. I should point out to the Minister of Finance that I laid the foundation for these remarks in the committee and established that I could not get the information at that particular time. The hon. member for Vancouver-Kingsway also spoke in the committee. On June 8 there was a press release issued from Winnipeg by the Canadian National indicating the acquisition of some five truck lines. However, the press release did not indicate what proportion of the $5 million had been used by the Canadian

Canadian National Railways National, nor did the press release indicate the long range plans of the Canadian National.
In fairness to Mr. Gordon, the president, I should indicate to the minister that I have written him today. The press release just came to my attention over the week end. I have written to Mr. Gordon inquiring about the expenditure of $5 million and the proportion. But I was wondering, since this matter has come before the committee, whether the Minister of Finance is in a position to indicate what proportion of the $5 million was spent in acquiring these five trucking lines?


Donald Methuen Fleming: No. Just today I received a copy of the release issued by Canadian National Railways in connection with the acquisition of these lines.


Lionel Chevrier: All members of the comit-tee received the letter.


William Moore Benidickson: Mine was not signed but I received it.


Donald Methuen Fleming: Then I do not need to delay the committee by referring to the contents of this press release in relation to the acquisition of four trucking firms and the acquisition of an option on the fifth. The purpose of the Canadian National system in acquiring these trucking lines was indicated in the release.


William Moore Benidickson: The Minister of Finance was rather scolding the members of this committee which, I thought, worked fairly diligently under a rather heavy handicap of three or four meetings a day. He scolded the committee for not asking for the budget of Trans-Canada Air Lines which he suggests was available if asked for. If it was not asked for at the last sittings of the committee, the committee was perhaps exhausted. I have no doubt that the minister is well aware of all these items. In this larger assembly of the committee of the whole of the House of Commons perhaps he might indicate what the budget of Trans-Canada Air Lines would have disclosed if we had been smarter and had asked for it. He perhaps has it. I should like to know now, belatedly, what the budget disclosed for Trans-Canada Air Lines with regard to a profit or loss in 1960.


Jacques Flynn: Shall clause 3 carry?


Some hon. Members:: Carried.


William Moore Benidickson: No, Mr. Chairman. When the minister saw fit to cast these aspersions upon the diligence of the committee I am sure he must be well informed on this point.


Donald Methuen Fleming: I have not brought that budget to this committee, Mr. Chairman.

If the hon. member wishes further information in detail on it, I will obtain it for him. So far as Trans-Canada Air Lines are concerned, we are dealing here with the capital requirements and the financing requirements they are making on Canadian National Railways. I have given the detailed information in that respect. If the hon. member wishes to go further and to ask with regard to the detailed operations of Trans-Canada Air Lines, I will obtain for him what information he indicates he wishes to have and will send it to him.


William Moore Benidickson: That is not the point, Mr. Chairman. We are asked here for the substantial sum of $86 million for capital expenditures related to Trans-Canada Air Lines, and I think all of us would want to know how that would be reflected upon the earnings position of this subsidiary of Canadian National Railways. I think it is fairly obvious to all members of the committee that the minister does not know. He apparently has not asked, before he asks the House of Commons to pass this bill, just how this will be translated into profit or loss with respect to Trans-Canada Air Lines. However, he gratuitously decided to say that the committee had been careless in not asking for this information when they had an opportunity to do so last March.


Donald Methuen Fleming: Of course the hon. gentleman is quite wrong. The capital budget of Trans-Canada Air Lines, which is the only budget of Trans-Canada Air Lines upon which the Minister of Finance is called upon to pass, as I thought the hon. member was well aware, shows the following: application of funds, property and equipment, $83,485,000; refinancing of loans-these are loans by the C.N.R.-$4 million; increased materials and supplies, $10,015,000; or a total of $97,500,000. The source of the funds is as follows: net income, nil, as I pointed out earlier; depreciation provision, $15,150,000. Deducting that sum from the earlier sum of $97,500,000, we have the requirement of $82,350,000 to be financed through Canadian National Railways and that is the amount appearing in clause 3 (l)(a).


William Moore Benidickson: The minister has indicated that the net income for Trans-Canada Air Lines is reported to him as nil. I am sure he must have made inquiry beyond that point. It is not just nil. There perhaps is a deficit. If there is a deficit, how much is expected in 1960 and how will it be provided for? Will it be done by the parent company, namely Canadian National Railways? Will we be obliged to provide for it in a clause in a bill similar to this one in a subsequent session or will it be provided

for in an item in the estimates? Canadian National Railways have already indicated that they expect their deficit will be something about $20 million for 1960. I have suggested that unless they change their course it will be another $40 million beyond that figure. On these gigantic matters surely the Minister of Finance is taken into the confidence of these crown companies and he must have some estimate as to the expected operating results of Trans-Canada Air Lines, on a basis similar to that of the Canadian National Railways when many months ago they suggested to him that they would require the payment of a deficit of approximately $20 million. After four months of operation, as I say, we have found, that unless there is a change of trend, it will be some $40 million beyond that figure. Trans-Canada Air Lines is another big crown company. Surely they also have indicated to the Minister of Finance, even some months ago, what their forecast of profit or loss would be for the calendar year 1960.


Donald Methuen Fleming: I have already reported to the committee several times that Trans-Canada Air Lines anticipate no net income this year. That means that where they show what would appear to be an operating deficit, that deficit will have to be provided for out of depreciation allowance. Therefore there is no net income. The Minister of Finance does not pass on the operating deficit or the operating budget of Trans-Canada Air Lines. He passes only on the capital budget. I have already given that capital budget and have placed in on the record. The total requirement provided by this bill in respect to Trans-Canada Air Lines is the figure to which we have already referred, namely the figure of $82,350,000 which is included in the gross capital expenditures.


William Moore Benidickson: We all see that figure, but I think we are all interested in knowing whether or not that amount, if voted, would improve the profit position of Trans-Canada Air Lines and, in particular, what reference it has to 1960 operations. I am astounded to find that apparently the Minister of Finance has not inquired into these matters and is not able to inform the house about them regardless of their magnitude.


Jacques Flynn: Shall clause 3 carry?


Some hon. Members:: Carried.


[Stage Direction]
Clause agreed to.
Clauses 4 to 9 inclusive agreed to.
On clause 10-Trans-Canada Air Lines.
William Moore Benidickson: On this clause we are back to Trans-Canada Air Lines. Is the minister after reflection not able to indicate to
Canadian National Railways parliament that he does get some forecast of operating results for a calendar year, such as 1960, from an important crown company like Trans-Canada Air Lines?


Donald Methuen Fleming: I think I have already answered that about four or five times, Mr. Chairman.


[Stage Direction]
Clause agreed to.
On clause 11.
Lionel Chevrier: I wonder if the minister
would give some indication of whether consideration has been given to revising de novo the capital revision act of the Canadian National Railways. As the minister knows, it was revised by act of parliament some years ago; I have forgotten exactly what the date of the legislation was.


Donald Methuen Fleming: It came into effect in 1952.


Lionel Chevrier: The minister says 1952. There was a deterioration of the budgetary operation of the Canadian National Railways in 1959 and I know that Canadian National Railways would not make any representations to the minister, but it is a matter which has to be determined by the government.
I remember when the legislation was passed earlier that it took a great deal of time before it was approved. A subcommittee of the cabinet was established composed of several ministers and many other officers of various departments, and it was after a careful and long study that the matter was finally determined and legislation introduced. I wonder if any consideration has been given to a revision of the capital structure of Canadian National Railways since that time?


Donald Methuen Fleming: Mr. Chairman, at the resolution stage on June 7 I pointed out that this provision in the bill is new as compared with the annual similar bill of other years. The effect of this clause is to extend the authority of the Minister of Finance to purchase the 4 per cent preferred stock for one year. It will expire under the Canadian National Railways Capital Revision Act, to which reference has been made, on December 31, 1960. This is to extend it to 1961 so that it will be coterminous in that respect with the conclusion of the period within which the 20-year interest free obligation delivered to the minister by Canadian National Railways extends.
Obviously before December 31, 1961 plans will require to be made in relation to the future of the financial operations and financial structure in this respect of Canadian National Railways. This present provision will carry the present plan up to December 31, 1961

Canadian National Railways and before that date plans will have to be made as a result of the review of the whole picture.


Lionel Chevrier: Is the cabinet, either directly or indirectly through a subcommittee, giving study and consideration to the problem of capital revision?


Donald Methuen Fleming: Mr. Chairman, as to the particular method, I do not think I should be asked to disclose that. But I have indicated that before December 31, 1961 some provision will have to be made for the period following that date, and that will require action on the part of parliament, of course.


Lionel Chevrier: I am not too sure that I follow the minister. I can understand why he cannot indicate what method is being followed as to the consideration of this problem, and I have no fault to find with that. I am not too sure if I heard him aright, but I take it from what he has said that consideration in some form or other is being given to the capital structure after 1961, and may I go a step further, to the capital revision of the financial structure of the Canadian National Railways.


Donald Methuen Fleming: I can assure the hon. member that this subject is not absent from my thoughts.


William Moore Benidickson: When we discussed these proposals at the resolution stage last week I made some calculations. I have not my notes in front of me but I pointed out to the committee that there had been a write-off of certain debts to the government in 1951, I think it was, of some substance. I think they amounted to about $800 million. I made a calculation that following the write-off of this debt of $800 million odd there were subsequently obligations incurred by Canadian National Railways such as referred to in this section, that is, purchases of preferred stock.
My recollection is that over the years since 1951, or shall I say January 1, 1952, it was less than $200 million. I think it was less than $200 million, but the minister will correct me if I am wrong. None the less the over-all obligation of Canadian National Railways in that period of eight years after revision and write-down of its debts still showed an increase of over-all debt, either to the government or to the public, by deficits or otherwise, of about $1 billion. Am I very far wrong in my rather rough figures which I am offering without notes?


Donald Methuen Fleming: At the time of the capital revision, which went into effect in 1952, the preferred stock acquired by the

minister as at that time was $736,385,405. At May, 1961 the balance was $913,480,714.


William Moore Benidickson: May, 1960, you mean?


Donald Methuen Fleming: I am sorry, May, 1960. As at May, 1960 it is estimated to have reached $913,480,714.


William Moore Benidickson: That is helpful but I think the minister should also give the figure as to the over-all obligations outside of preferred stock of the road after the write-ofl in 1959, and the forecast proposed, as he has indicated, for a certain date in 1961, and will the total not approximate an increase of about $1 billion, as I have suggested?


Donald Methuen Fleming: In connection with the preferred stock I think I should give this figure to complete my statement. The figure at March 31, 1960, the close of that fiscal year, was $909,849,274. The principal amount outstanding on December 31, 1959 was $1,341,058,970.


William Moore Benidickson: What was it after the reorganization?


Donald Methuen Fleming: On December 31, 1952 it was $605,494,829.


William Moore Benidickson: What happens to the annual deficits, if incurred? Are they simply written off? They are assumed by the crown and do not go into the capital structure?


Donald Methuen Fleming: They are provided for as usual, in the final supplementary estimates which are passed in March of each year.


William Moore Benidickson: Once they are paid by the taxpayers they do not get into the figures such as the minister has given.


Donald Methuen Fleming: They go into the figures of the net debt.


William Moore Benidickson: Are they considered a lia bility?


Donald Methuen Fleming: That is an interesting question to ask of a company whose relations with the government are such as those between Canadian National Railways and the government. When you talk about debt, these are all matters of accumulation, as the hon. gentleman can see by referring to page 39 of the printed annual statement of the Canadian National system.


[Stage Direction]
Clause agreed to.
Clause 12 agreed to.
Title agreed to.
Bill reported.


Hon. Paul Comlois (Minister of Mines and Technical Surveys) moved: the second reading of Bill No. C-64, to amend the Emergency Gold Mining Assistance Act.
(Translation):


Armand Dumas: Mr. Speaker, I had thought the hon. minister would add something to the statement he made the other day, at the resolution stage. However, I intend to be very brief, because I would not want to hold up the adoption of this bill.
At the resolution stage, I called the attention of the Minister of Mines and Technical Surveys (Mr. Comtois) on the possibility of amending the act so as to increase the rate of assistance to gold mines. The fact that it was considered proper to increase the subsidy by 25 per cent, and that the part of the act related thereto has not been amended, constitutes, in my opinion, an anomaly.
At present, the rate of assistance to gold mines is determined by taking two thirds of the surplus differential between $26.50 and the cost price, the maximum being set up at $12.33. That is, in my opinion, the anomalous part of the act. If it was considered proper to amend the act, by increasing the subsidy by 25 per cent, I think an increase in the maximum rate should also have been considered. The subsidy was increased because it was believed that operation costs had increased, and that, in all fairness, things had to be arranged in such a way that our gold mines might be kept in production. It was felt that since the rate was increased, the subsidy should be increased by 25 per cent. However, mines whose operation costs reach $45 an ounce will not benefit from that subsidy in the same proportion as those whose production costs are less.
I hope the Minister of Mines and Technical Surveys will consider the matter so as to do justice to some of those mines which may perhaps be compelled to close down if they do not get an increase in the maximum rate. It is true that there are perhaps only one or two, three at the most, of those mines throughout the country; however I know two of them which employ from 150 to 200 men, and if they had to close down tomorrow, some difficulties might ensue, most particularly because a good many miners are now out of work. I know the government does not wish to bring about a situation which might increase the number of unemployed.
13,	1960	4873
Emergency Gold Mining Assistance Act
Mr. Speaker, this piece of legislation we are now considering would also, I am told, include another anomaly, but one resulting instead from the enforcement of the regulation-my information is perhaps inaccurate. However, at the committee stage, or when he takes the floor to wind up the debate, perhaps the minister could give us some definite information about that.
I note that, for the year 1959, the total amount of subsidies will reach $11.7 million. This figure is taken from the statement made by the Minister on May 25, 1960, at the resolution stage. The total amount of the grants for the year 1958 was $11,138,000.
I also find, according to the report, that for 1958, a total amount of $6,884,000 had been paid in the form of assistance as of March 31, 1959, which means approximately 54 per cent of the whole amount-whereas a proportion of 80 per cent could have been expected. In fact, according to regulations, the government agrees immediately after the mines have reported on their production, to pay 80 per cent of the total amount of ounces produced, and the production costs.
I realize that it takes some time before the government is able to pay those 80 per cent. Nevertheless, I am astonished to find that, on March 31, 1959, only $6,884,000 had been paid out of a total of $11,138,000.
Therefore, the minister might perhaps, when we come to discuss article 1 of this bill, give us information which would throw some light on the picture.
Everybody agrees, Mr. Speaker, that this legislation has been of great benefit to the industry. For that reason, I have no intention of detaining hon. members any longer, because I believe that everyone here tonight wants the legislation to pass as soon as possible. I therefore am closing my remarks at this point.
(Text):


Douglas Mason Fisher: Mr. Speaker, we indicated our support of this measure at the resolution stage. There has been some criticism of the stand taken by myself and my colleagues, the hon. members for Timi-skaming (Mr. Peters) and Timmins (Mr. Martin). The criticism has taken such an extreme form that I feel called upon not only to qualify it but to explain and to a certain extent attack the interpretation placed upon our remarks on this measure at the resolution stage.

Emergency Gold Mining Assistance Act
In the June 2, 1960 issue of the Northern Miner an editorial entitled "Masters of Innuendo" appears. The editorial begins by saying:
Socialists Peters and Fisher, C.C.F. members representing Timiskaming and Port Arthur respectively are up to their old tricks again. Two years ago when the Emergency Gold Mining Assistance Act was up for renewal they indulged in an amazing display of innuendo. Now that E.G.M.A. is once more before the house, and they can hide behind the cloak of parliamentary immunity, they are at it again, doing their best to smear the gold mining industry by spreading false information.


An hon. Member:: Is that true?


Douglas Mason Fisher: I should like to make it perfectly clear that I am not hiding behind the cloak of parliamentary immunity in any remarks I make and if the Northern Miner wishes to give me a platform free from parliamentary immunity I will repeat anything I have said to date about gold mining.
This newspaper had some interesting things to say about the argument we presented some two years ago. At that time I wrote a letter to the editor of the newspaper setting a forth my position and suggesting he publish the letter. It was not published and I did not have the courtesy of a reply. I think it is an abomination when a member of parliament is accused of hiding behind a cloak of parliamentary immunity when he is only trying to underline the fact that the sum of $112 million, I believe-


An hon. Member:: $131 million.


Douglas Mason Fisher: My hon. friend says $131 million -will have been paid out this year in emergency aid to gold mines in Canada. In view of that amount it is our duty to be suspicious of the administration and the way things are going. If it is any consolation to the Northern Miner I am suspicious of many government departments and the way they spend their money as I am sure many hon. members are and should be. Surely it is our responsibility to check matters closely.
Our point throughout has been that we have not been completely satisfied with the checks carried on by the minister's officials in this regard. It is stated right in the act that the inspectors of the department have the right to go down into the mines and examine them. The minister's evidence is that they hardly ever do, that it is not considered necessary. In other words, the mines can be trusted and it is simply an accounting operation. Perhaps it is but I would feel much better if the provision in the act under which they can go down into the mines and inspect them was carried out.
It is not my purpose to smear the gold mines although I think I would have the right to do so from my past experience. After

the war I returned and attempted to get a job in a mine but discovered that I was on the blacklist in northern Ontario for what were supposed to be some bunkhouse activities in a mine in which I formerly worked. I had only tried to see that we did not have money lopped off our pay without our consent and approval but for this I was put on the blacklist of all the mines in the Pickle lake and Red lake camps. I have some reason to be suspicious of the activities of gold mine management, but that is beside the point. Anyone who has travelled through northern Ontario or camped, portaged or canoed there will realize that there are thousands of mining prospects in gold that went through speculators and stock purchasers and collapsed. It has been said that only one out of approximately 1,000 mines in Ontario ever goes into production after the formation of a company. I say that to point out that there is every reason for us to be properly suspicious of the industry and of any group that receives $131 million out of the public treasury in order to keep the industry going. The article continues:
These two are masters of innuendo. Mr. Fisher, in particular, is adept in the use of the ploy whereby he attempts to evade responsibility for what he says and tries to put the onus on somebody else. For instance, in charging the gold mines with "low grading" Mr. Fisher is cute enough to avoid making a direct accusation. He puts it in the mouth of other people by saying "every miner I have talked to . . . believes that low grading is going on."
I will repeat that every miner I have talked to thinks that low grading is going on. Last week I spoke to the electrical superintendent of a large mine. This man has worked in half a dozen large mines in northern Ontario. He says it is the easiest thing in the world for them to do.


An hon. Member:: That is done to extend the life of the mine.


Douglas Mason Fisher: I do not quarrel with that. I do not blame them for determining their ore grade. However, we should check to see that they are not low grading in the sense we mean. After all, when $131 million are being paid out of the public pocket we have every right to be suspicious. The editorial continues:
Here's another example of the Fisher method of the false innuendo. Again, he tries to shift responsibility by saying, "the point was brought up by some people who correspond with me".
I took the case of one person who corresponded with me to the Minister of Justice (Mr. Fulton! and the Minister of Mines and Technical Surveys (Mr. Comtois) will recall that I took up the case presented in another letter with his department. It related to this

very matter. What is a member of parliament to do? The editorial goes on:
This time he's concerned about the shareholders of the companies who get cost-aid. He says these companies take advantage of the act and yet never pay any dividends. The great example here, he says, is Little Long Lac. Now, is Mr. Fisher so ignorant of what goes on in his own riding that he doesn't know that the Little Long Lac mine closed seven years ago and, naturally, has not received cost-aid since. We think not. In fact, after having aired this bare-faced misstatement, Mr. Fisher later on reveals that he knows differently when he remarks that Little Long Lac receives cost-aid through some other subsidiaries.
This is simply a problem of semantics. I advanced the argument last year and again this year that Little Long Lac has become a large corporation, that is to say a management concern. The mine may have closed down seven years ago but it has built up a number of other mines which it manages in essence. One of these is the McLeod-Cockshutt mine. If you know anything about it, Mr. Speaker, you will be aware that it is a mine that is receiving cost-aid. It is in my constituency and a number of my constituents own stock in the mine. Since Little Long Lac took it over it has not paid a dividend. Before that dividends were paid regularly. The annual report of the company reveals no costs of exploration. The argument advanced by the management of Little Long Lac is that the shareholders really do not want the dividends but are interested in the value of the stock.
Mr. Speaker, may I call it ten o'clock?


Gordon Minto Churchill: Mr. Speaker, I rise on a point of order. I did not want to interrupt the hon. member during the course of his remarks but it is contrary to the rules to debate in this house with the editor of a newspaper outside the house and I believe that is exactly what the hon. member was doing. The hon. gentleman might have risen on a question of privilege in dealing with an editorial but he should not use that material as an exchange of opinion between himself and someone outside the house. I hope this will not stand as a precedent for debate.


Mr. Speaker:: We had a similar point raised the other day. I think it is contrary to the rules of the house to introduce editorial opinion to support your argument but I am
Business of the House
not sure it is a breach of the rules to refute opinions expressed outside the house. However, I shall look at the point the minister raises in case the hon. member who calls it ten o'clock wishes to pursue the editorial he has mentioned.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I inquire what the business is for tomorrow?


Gordon Minto Churchill: For tomorrow the first item will be No. 8 on today's order paper, the resolution in the name of the Prime Minister, which we have called to the attention of the house before, dealing with the tenure of office of judges. The second will be No. 9 on today's order paper, the motion in the name of the Minister of National Revenue to set up a select committee on broadcasting. The third item will be the bill we have just been considering having to do with the Emergency Gold Mining Assistance Act. The fourth will be the second reading of Bill No. S-32, No. 1 on today's order paper, dealing with a bridge across the St. Lawrence river. If required, No. 5 will be No. 10 on today's order paper, the resolution in the name of the Minister of Finance concerning amendments to the Public Service Superannuation Act.


Lionel Chevrier: Can the house leader indicate what we will be doing on Wednesday?


Gordon Minto Churchill: If these legislative items proceed satisfactorily, on Wednesday we will go on with estimates starting with the continuation of the estimates of the Department of Citizenship and Immigration followed by post office and mines and technical surveys.


Lionel Chevrier: That is only in case we dispose of the items that have been named?


Gordon Minto Churchill: I was thinking chiefly in terms of the setting up of a committee on broadcasting. Should that not be finished tomorrow we might carry on that debate on Wednesday, but we are hoping we will finish the five items I have mentioned.


[Stage Direction]
It being five minutes after ten 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. Tucker: 1.	On what date was the contract let for the construction of the airport terminals at Halifax and Ottawa?
2.	On what date is it expected that the terminals will be completed at each of these airports?
Answer by: Hon. Georges H. Hees (Minister of Transport):
1.	Halifax, awarded March 28,	1958;
Ottawa, awarded April 5, 1957.
2.	Halifax, building to be fully operational about July I, 1960; Ottawa, building to be fully operational about June 15, 1960.



SMALL BUSINESS BRANCH


Mr. Dupuis: 1.	How many persons are employed in the small business branch of the Department of Trade and Commerce?
2.	Of those employees, how many are French speaking and who are they?
3.	On what dates were the abovementioned French speaking employees admitted to the said branch, and what duties do they perform?
Answer by: Hon. Gordon Churchill (Minister of Trade and Commerce):
1. 8.
2.	1-Miss Frances Torontow.
3. December 17,	1958-statistical	and
clerical.

Tuesday, June 14, 1960



COMMITTEES OF THE HOUSE

[Stage Direction]
Third report of standing committee on privileges and elections-Mr. Macquarrie.
Third report of standing committee on veterans affairs-Mr. Pugh.

[Stage Direction]
Mr. W. M. Howe (Wellingion-Huron) presented the eighth and ninth reports of the standing committee on railways, canals and telegraph lines, and moved that the ninth report be concurred in.
Motion agreed to.