1960-07-26

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*

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Tuesday, July 26, 1960

Mr, Speaker:: I have the honour to inform the house that consequent upon the notification of vacancies in the representation given in this house on Monday, July 25, 1960 by the hon. member for Welland and by the hon. member for Ottawa West, and pursuant to section 10 of the House of Commons Act, I have addressed my warrants to the chief electoral officer for the issue of new writs for the election of members in the electoral districts of Niagara Falls and Peterborough.


Hon. Lionel Chevrier (Laurier):: Mr. Speaker, may I direct a question to the Acting Prime Minister and ask him when the government is going to make arrangements for representation of the constituency of Labelle, which has been without a representative in this house for upwards of six months?


Hon. Howard C. Green (Secretary of Slate of External Affairs):: Mr. Speaker, it is very interesting to see the great interest being taken by the opposition in these by-elections. Perhaps they might be wise not to be so enthusiastic about them. Action will be taken in due course.



WHEAT BOARD REGULATIONS RESPECTING DELIVERIES TO FEED MILLS

[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: Mr. Speaker, I wish to direct a question to the Minister of Trade and Commerce. Could the minister inform the house whether the Canadian wheat board will continue to enforce grain delivery quotas beginning in the new crop year as they apply to feed mills? In other words, will the past policy be continued by the wheat board rather than the policy contained in the report of the committee?


Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Speaker, I will discuss this matter with the wheat board and give the hon. member an answer with regard to to it later.
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LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Minister of Labour):: Mr. Speaker, on July 22 the hon. member for Vancouver East asked me a question regarding the importation of painters from the United States to do painting at the Vancouver General hospital for Rust Engineering Company. I have made an investigation and the report is as follows.
A foreman and two men were brought in from the United States to do a repairing and cleaning job on the smoke stack of the Vancouver General hospital. They were given work permits on the assurance of the national employment service in Vancouver that no local workmen were available who were qualified to do high stack repair and maintenance work.
When they had finished the Vancouver job they were sent to Port Alberni to do a similar job for MacMillan and Bloedel. This job, in addition to cleaning a 200-foot smoke stack, involved priming with mastic. The national employment service was able to establish that the latter part of the work, that is the painting, could be performed by local workers. Therefore the two United States workmen on the job have now been replaced by Canadians on a trial basis, and if satisfactory they will be retained. The men were originally brought in by Rust Engineering Company to do repair and maintenance. Painting is part of the job. I am informed that the two painters have been instructed to leave the country.



UNITED NATIONS


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On the orders of the day:
Hon. Paul Hellyer (Trinity):: Mr. Speaker, I should like to address a question to the Minister of National Defence. Is the minister in a position to confirm or deny the Canadian Press report to the effect that a Royal Canadian Air Force plane was fired on as it flew over Buta airport in northern Congo?


Hon. G. R. Pearkes (Minister of National Defence):: Yes, Mr. Speaker, I heard this rumour last night and I immediately got in
6948	HOUSE OF
Inquiries of the Ministry touch with the R.C.A.F. at Leopoldville. I am informed this morning that no such incident occurred. No R.C.A.F. plane has been fired upon; no R.C.A.F. personnel have been fired upon; no R.C.A.F. plane was in the Buta district yesterday. The R.C.A.F. are employed now on the ferrying of supplies and equipment to the United Nations force between Pisa and Leopoldville.



DISARMAMENT


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On the orders of the day:
Mr. Harold E. Winch (Vancouver Easi):: Mr. Speaker, I should like to address a question to the Secretary of State for External Affairs. Has the minister's attention been drawn to the report in this morning's Gazette under a London dateline to the effect that Soviet Premier Khruschchev has suggested to Britain and Canada that the next session of the United Nations general assembly should try to break the east-west deadlock on disarmament? I should like to ask the minister whether any official letter has been received, and whether he has any comment to make on the suggestion.


Howard Charles Green: Mr. Speaker, a letter has been received from Premier Khrushchev which is a reply to the reply which had been sent to his first letter by our Prime Minister.



CONGO-REPORTED NEED FOR MEDICAL ASSISTANCE

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Secretary of State for External Affairs based on a news report in yesterday's Globe and Mail which states:
U.N. officials said the health problem throughout the Congo had become extremely grave. They said there was urgent need for 200 physicians. Nearly all Belgian physicians have left the country.
I should like to ask the minister whether consideration is being given to doing what we can in co-operation with the doctors in order to meet this very urgent problem?


Howard Charles Green: Mr. Speaker, in response to a request from the secretary general of the United Nations through the world health organization and the international committee of the Red Cross, the Red Cross societies of a number of countries have agreed to supply medical teams to provide medical attention for civilians in hospitals where the staff has been depleted by the departure of the Europeans. The Canadian Red Cross is preparing to send two teams,
[Mr. Pearkes.l

each consisting of one surgeon, one physician skilled in tropical diseases and three nurses. All will be bilingual. It is expected that these teams will remain for three months and that they will be ready to leave for the Congo before the end of this week.
I am sure all members of the house will join me in commending the Canadian Red Cross and its officers for the prompt and efficient manner in which they have responded to this request for assistance.



SECONDING OF CANADIAN OFFICERS TO UNEF

[Stage Direction]
On the orders of the day:
Howard Charles Green: Mr. Speaker, I should like to inform the house that in response to a request from the secretary general of the United Nations and in accordance with the recommendation of the commander of the United Nations emergency force in Palestine, the government has approved that four Canadian army officers, now serving with UNEF, be seconded to the United Nations force in the Congo for service at General Yon Horne's headquarters. Two of these officers, Captain E. R. Shred and Captain D. M. Youngston, are specialists in movement control. The other two, Captain J. E. Clark and Captain B. P. J. Glow, are specialists in equipment and transport respectively.
These four officers from UNEF have all volunteered. They are in addition to, and in a different category from, the five Canadian officers requested earlier from UNTSO, whose service in the Congo is part of the technical assistance program which the secretary general is implementing in order to reorganize the security forces there.
The four Canadians from UNEF were required as soon as possible, and I understand that early this morning they left Cairo for Leopoldville. They will serve with General Von Horne until alternative arrangements can be made. Similar requests have been made for Danish, Indian and Norwegian officers in UNEF and the response from the governments concerned has been favourable.


Hon. Paul Marlin (Essex East):: May I ask a
supplementary question. Is this the extent of the Canadian contribution up to the present? Further, may I ask if the minister has anything to say about the announcement made yesterday at the United Nations by the prime minister of the Congo, that he proposes to visit Canada seeking technical assistance, particularly among people who speak the French language?


Howard Charles Green: From time to time Mr. Speaker, there have been announcements in the house

as to the Canadians who have been sent to the Congo, including these men from UNEF, and also men from the R.C.A.F., as well as to the supplies that have been furnished. Yesterday I made a statement about the possibility of sending additional men from Canada.
In so far as the second part of the question is concerned, which dealt with the prime minister of the Congo, we have had no official word yet that he is coming to Canada or wishes to come. However, in view of the press reports, I have this morning instructed our permanent representative at the United Nations to communicate with the prime minister to ascertain what he has in mind.


Lionel Chevrier: May I ask
a supplementary question. Has it been decided as a matter of government policy how many men and officers will be sent on this mission to the Congo, and of these how many will be bilingual?


Howard Charles Green: No, Mr. Speaker. I dealt with that the other day.


Lionel Chevrier: The minister dealt with a question from the Leader of the Opposition, but he did not deal with the decision of the government as to the number of troops that were going to be sent. He dealt with the question of whether or not the statement was true that 800 troops would be sent. The question I put to him now is whether, at this time, there has been a determination of the number that will be sent.


Howard Charles Green: No, I am not in a position to give any further details this morning.



LIVESTOCK


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On the orders of the day:
Mr. A. D. Hales (Wellington South):: Mr. Speaker, I should like to address a question to the Minister of Agriculture. Can the minister advise me when the brucellosis test will commence in Wellington county and approximately how long it will take? Will the minister also comment on the general position of the brucellosis control area testing program on a national basis?


Hon. D. S. Harkness (Minister of Agriculture):: Mr. Speaker, with respect to Wellington county, a request for the gazetting of the county was received from the Ontario department of agriculture on January 15, 1960. The county was accepted for test and gazetted through ministerial order on February 10, 1960.
79951-0-439i
Inquiries of the Ministry
The department has arranged to commence the brucellosis testing of the cattle in Wellington county in September, this fall, with the expectation that the work will be completed prior to the cattle going to pasture in the spring of 1961.
With respect to the national position of the brucellosis control area program, since the commencement of the program in 1957 some 452 areas across Canada, with approximately 6,401,000 cattle have been accepted for test. One hundred and eighty of these areas, with 2,342,650 cattle have been completed. Of the 180 areas completed, 138 have been declared brucellosis certified. Testing is under way in an additional 144 areas. There are now approximately 3,720,000 cattle in Canada being dealt with under the brucellosis control area program. This represents 28 per cent of the total cattle population.



INDUSTRY


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On the orders of the day:
Hazen Robert Argue: Mr. Speaker, in the absence of the Prime Minister, and realizing that the Minister of Labour is acquainted with this matter, can the Minister of Labour say whether the government has reached a decision on the request of the united automobile workers for a royal commission to be established to look into the automobile industry in Canada?


Michael Starr: This matter is under active consideration at the moment.


Hazen Robert Argue: Can the minister give some indication when this royal commission may be appointed?


Michael Starr: As soon as a decision is reached by the government a royal commission will be established, if that is the decision.


Paul Joseph James Martin: Mr. Speaker, I should like to ask the Minister of Labour a question. In view of the reply given by the Prime Minister to my query last Thursday, as to when a royal commission to inquire into the automobile industry will be announced, can the Minister of Labour say whether the government has given consideration to any other form of inquiry into the industry?


Michael Starr: Inquiries of the Ministry


Lionel Chevrier: You have not been doing very much.


Paul Joseph James Martin: Will there be an announcement one way or another before the end of the session?


Michael Starr: As soon as a decision is reached an announcement will be made.


Paul Joseph James Martin: That means there will not be anything done.



URANIUM CITY, SASK.    INQUIRY AS TO FEDERAL ASSISTANCE

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On the orders of the day:
Hazen Robert Argue: I wish to direct a question to the Minister of Labour. Has the minister's parliamentary secretary yet reported to him on his trip to Uranium City, Saskatchewan, and his survey of the conditions there which he described as a small-sized Elliot Lake; and has the government decided as a result of this survey and the presentation made by the Saskatchewan government to take any action to relieve this situation?


Michael Starr: There was no necessity for the parliamentary secretary to report to me on this investigation. This matter was not taken up on behalf of the Department of Labour.


Hazen Robert Argue: May I ask whether the government has agreed to take any action to relieve this situation as a result of the submission made to it in recent days by the government of Saskatchewan?


Michael Starr: The matter is still under active consideration, and as the Minister of Trade and Commerce said on previous occasions in answer to questions similar to one the hon. member is asking now, an announcement of government policy will be made at the appropriate time.


Lionel Chevrier: It has been and will be forever and ever.


Hon. L. B. Pearson (Leader of the Opposition):: Is the minister aware that the inquiry into this matter began last November.


Michael Starr: I am well aware of it.



SHIPPING


[Stage Direction]
On the orders of the day:
Hon. George H. Hees (Minister of Transport):: Mr. Speaker, on Saturday last the hon. member for Antigonish-Guysborough asked me a question with regard to the resumption of service formerly carried out by the C. and E. Burke. It is expected that a contract will be signed for the balance of the season with

the Co-operative de Transport Maritime et Aerien of Magdalen islands, using the M.V. Flojald II to carry out the Halifax-Guys-borough service for the balance of the season.
It should be possible by using this vessel to initiate service with the new ship in approximately one week.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
George Harris Hees: Mr. Speaker, yesterday the hon. member for Laurier asked me a question regarding the Canadian National Railways line on which an unfortunate accident occurred over the week end. I am advised by Canadian National Ralways that there is no centralized traffic control in operation at present on the line where the accident occurred.
As to the second part of the hon. member's question, the management state that this line has been under study for some time as a candidate for C.T.C. installation, and that the study has progressed to a point that warranted inclusion of a commitment item in the 1960 capital budget of the railway.



AGRICULTURE


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On the orders of the day:
Lester Bowles Pearson: May I ask the Minister of Agriculture whether arrangements have yet been made to meet with the liaison committee of western grain producers?


Douglas Scott Harkness: I have nothing further to add on this subject to what has been said previously in the house.


Hazen Robert Argue: May I ask
a supplementary question of a different nature. Has the minister or the government replied to the communications from the farmers' union concerning negotiations on acreage payments, the first of which I believe came to the government on May 10? Has any reply whatever been given to those communications?


Douglas Scott Harkness: I do not know to what communications the hon. member is referring, Mr. Speaker.


Hazen Robert Argue: Telegrams and letters.


Douglas Scott Harkness: As I say, I do not know to what communications he is referring, so I am in no position to answer the question. So far as I can recall at the moment, I have had no telegrams or letters from the Saskatchewan farmers' union in connection with this matter during the last month or six weeks.


Hazen Robert Argue: May I ask a further supplementary question. In the absence of the Prime Minister, would the Minister of Agriculture make inquiries to ascertain whether or not three communications have been received from the Saskatchewan and interprovincial farmers' union council on this question, and ascertain why the government has not replied to them?


Paul Joseph James Martin: May I ask a
supplementary question. Is the Minister of Agriculture aware that the Prime Minister acknowledged on June 9 that he had received a request from the western liaison committee for a meeting with the government, and promised a reply at a very early date?


Douglas Scott Harkness: As I indicated on several occasions, and as the Prime Minister also indicated, we received on May 10, I think it was, a brief from the western liaison committee. The hon. member for Assiniboia asked about communications from the Saskatchewan farm union.


Hazen Robert Argue: And the interprovincial farm union.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. J. P. Deschalelels (Maisonneuve-Rose-monl):: I should like to ask the Minister of Justice whether he has any report to make following a question I asked on Saturday, while he was in Washington, with regard to counterfeit $10 bills which are freely circulating in many areas of this country. Is the minister in a position to let us know whether he has a report on this matter from his department, and what steps are being taken to protect the public?


Hon. E. D. Fullon (Minister of Justice):: My
parliamentary secretary, the hon. member for Saint John-Albert (Mr. Bell), brought the hon. member's question to my attention on my return. I am advised that the Royal Canadian Mounted Police were asked about this matter, but it was still under unvestiga-tion, and they were not able to let me have a full report yet.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Lionel Chevrier: May I
direct a question to the Minister of Agriculture. I have not given him notice of this question, and I will have no objections if he
Inquiries of the Ministry
takes it as such. I have received representations from meat inspectors in the city of Montreal who complain that while they have received increases in accordance with the recommendations of the civil service commission, none the less they have been required to work overtime for a considerable period of time and notwithstanding this fact-


Mr. Speaker:: Order. I wonder whether the hon. member has risen in order to give information or to get it. If he has a question I suggest that he put it.


Lionel Chevrier: The question is urgent, Mr. Speaker, for the reasons I was about to give. The question must be prefaced by some information, otherwise I am afraid Your Honour would rule it out of order. However, I feel that, if Your Honour will allow me to do so,
I should put the basis for the question. The basis is this. I think the overtime is paid by the packing houses to the Receiver General, and these men have not received pay for their overtime work for the last three months. Will the minister be good enough to inquire into the situation and let me know why this condition exists?


Douglas Scott Harkness: Mr. Speaker, I have no knowledge as to whether the alleged information provided by the hon. member for Laurier is correct, but I shall be glad to inquire into the situation.


Lionel Chevrier: Thank you.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: I wish to direct a question to the Minister of Transport. Is the minister in a position to advise the house what action is being taken by his department to prevent a proposed strike of crew and personnel on the Yarmouth-Bar Harbor ferry?


George Harris Hees: This is a matter which comes under the jurisdiction of the Canadian National Railways. I have been in touch with the railways this morning asking them to give me a report on the matter. I have not as yet received one.



DEFENCE PRODUCTION


[Stage Direction]
On the orders of the day:
Paul Theodore Hellyer: I should like to direct a question to the Associate Minister

Inquiries of the Ministry of National Defence. Is the minister in a position to answer the question of which he took notice last Saturday in respect to the alleged loss of the prospective sale of CL-44 cargo planes to the United States air force, owing to the unusual and unexplained delay of the Canadian government in reaching a decision with respect to re-equipping its air defence squadrons?


Hon. Pierre Sevigny (Associate Minister of National Defence):: Mr. Speaker, I believe this question was answered by the Secretary of State for External Affairs.


Paul Theodore Hellyer: On a question of privilege, Mr. Speaker, may I say that the question was not answered by the Secretary of State for External Affairs, who just said he was not in a position to answer it. I thought perhaps the associate minister might be in a position to answer it this morning.


Howard Charles Green: The hon. member for Trinity was not here yesterday.


Paul Theodore Hellyer: Yes, I was here.


Howard Charles Green: If he will refer to Hansard I think he will find that I answered that question.


Paul Theodore Hellyer: I should like to direct a question to the Minister of External Affairs arising out of the reply he gave yesterday in answer to the hon. member for Assiniboia. Is the hon. gentleman yet in a position to report on the proposed sale to the United States of CL-44 cargo aircraft? Yesterday the minister was not in a position to make a report on this matter.


Howard Charles Green: No, Mr. Speaker.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Hon. J. W. Pickersgill (Bonavisla-Twillin-gate):: I wonder if I could ask the Minister of Citizenship and Immigration, in view of the fact that the session is apt to go on for several weeks longer, whether she would consider introducing the bill to revamp the Immigration Act so that it could be studied between now and the next session.


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: I am afraid it is not ready to be introduced at the present time.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. John Drysdale (Burnaby-Richmond):: I wonder if the Minister of Transport has a report to make to the house regarding the meeting he had this morning with the mayor and members of the city council of Vancouver regarding negotiations leading to the taking over by the government of the Vancouver airport.


George Harris Hees: Yes, Mr. Speaker. The possibility of the transfer and sale of the city of Vancouver's investment in Vancouver airport to the Department of Transport was discussed today by a delegation representing Vancouver at a meeting with myself and departmental officials. Representing the city of Vancouver were Mayor A. T. Alsbury, Alderman Halford Wilson, chairman of the Vancouver airport board, and Alderman Reg. Atherton.
During the discussion, which Mayor Alsbury termed "most satisfactory", the Department of Transport agreed to undertake an appraisal of the city's interest in the airport, the appraisal to be made by the department's air services branch and an independent appraiser, the latter to be appointed with the approval of the city of Vancouver. The report of the appraisers is to be ready in September.
I have agreed to review the appraisers' report as soon as it is completed, at which time I shall be prepared to make a recommendation to the government as to the amount the department would pay to the city for the acquisition of the airport.



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

[Stage Direction]
The house resumed, from Monday, July 25, consideration in committee of Bill No. C-58 to amend the Combines Investigation Act and the Criminal Code-Mr. Fulton- Mr. Flynn in the chair.
On clause 12-Prohibitions.
Mr. Mcllraiih:: I should like to ask a question at this point for guidance. It has to do with the amendments proposed and adopted in the standing committee on banking and commerce to which this bill was referred. It will be noted that there are several amendments, and one has to do with clause 12. I therefore raise the point at this time.

I should like to ask the minister how he proposes to bring forward for adoption by this committee the amendments to certain clauses which were made in the banking and commerce committee, bearing in mind that we are dealing with a report of the standing committee which has not been adopted by the house. These amendments are not reprinted in the amended bill and it is, I think, desirable that they should be put forward at some early point in the consideration of the appropriate clauses so the committee may know exactly what it has to deal with. This is a small point, nevertheless I think it is one worthy of consideration.


Edmund Davie Fulton: I agree it is desirable that the committee should have the fullest knowledge of the amendments reported by the banking and commerce committee. These amendments will be found in Votes and Proceedings for Tuesday, July 19, and that, of course was available yesterday when we started our consideration in this committee. My understanding of the practice being followed is that the chairman, when he comes to a clause on which the banking and commerce committee reported an amendment, says, "Shall the clause as amended by the banking and commerce committee carry?" That was done, I believe, in respect to clause 1. The present clause, I believe, is the next clause to which the banking and commerce committee made an amendment.
May I point out in addition that there is a reprint of Bill No. C-58 available today with the amendments made by the banking and commerce committee printed in the bill. I will make inquiries to see if it can now be distributed. However, as I say, all the amendments will be found in Votes and Proceedings for July 19.


John Whitney Pickersgill: Is it not necessary, notwithstanding that they have been reported, to have them formally approved by the committee? This is not a big point, but it does raise an interesting question.


Edmund Davie Fulton: The chairman has been adopting the practice of asking "Shall the clause as amended in the banking and commerce committee carry?" I should think that would be sufficient, but if hon. members wish, in addition, that I should have somebody move the adoption of the recommendations of the banking and commerce committee I shall be be glad to follow that course.


Mr. Caron:: I believe it should be brought up in the house, because I have a copy of the new bill and it is marked "As passed by the
Combines Investigation Act House of Commons." The committee on banking and commerce is not the House of Commons, and I think it should come back to the house so we may take cognizance of the report of the committee.


Edmund Davie Fulton: It is true that this does say "As passed by the House of Commons", but if the hon. member will look at the next line he will see that the date is left blank; he will see that that is in anticipation and, I hope, a fair one of the fact that the bill will be finally passed by the house.


George James McIlraith: Since the matter is not without importance, I thought it should properly be raised at this time. Speaking for myself, it is satisfactorily dealt with, but perhaps it would be helpful if when we come to clauses which have been amended by the committee some indication could be given when the clause is called.


Edmund Davie Fulton: I am sure, Mr. Chairman, that you will help the committee, if I may put it that way, by trying to point out which clauses have been so amended, and I shall also try to inform the committee in case that is overlooked.


George James McIlraith: Then I wish to turn very briefly to the amendment proposed in the committee on banking and commerce to clause 12, having to do with appeal. Is the minister satisfied that this gives the right of appeal from all decisions of the courts, including the proceedings indicated in clause 19 of the bill?


Edmund Davie Fulton: Yes, Mr. Chairman. I was just checking to make finally sure that this had been re-examined since the proceedings in the banking and commerce committee. We are satisfied that it covers all the appeals referred to by the hon. member.


Mr. Howard:: As the minister indicated, there is a reprint, and perhaps the minor point I am raising with respect to renumbering the subclauses has been covered in the reprint. At the top of page 5 we find that the black figure 31 indicates that it will be section 31 of the act. Then we have subclause 1 immediately following that. In line 20 we start with subclause 2 and then in line 34 we have another subclause 2. This indicates to me that the bill contains two subclauses numbered 2. The last one is headed "Application". Should that not be subclause 3, or has this been straightened out?


Edmund Davie Fulton: We are dealing here actually with clause 12 of the bill, which starts at the bottom of page 4.


John Whitney Pickersgill: Line 45.


Edmund Davie Fulton: Clause 12 is divided into two subclauses, subclause 1 and subclause 2. It

Combines Investigation Act is subclause 1 which re-enacts section 31 of the act. All those provisions under the black 31 at the top of page 5 are part of subclause 1 of clause 12 of the bill. Having amended and re-enacted section 31 of the act, we then go on to subclause 2 of clause 12 of the bill which is the application subclause.


Charles Benjamin Howard: What will be the designation in the act?


Edmund Davie Fulton: My understanding is that it will not occur in the combines act itself. It will stay in the amending bill.


Charles Benjamin Howard: Once it passes and is given royal assent it becomes an act. What will it be called?


Edmund Davie Fulton: That act will be this bill as passed by the House of Commons. That will then be called an act to amend the Combines Investigation Act and the Criminal Code. In that act it will be subclause 2 of clause 12, or subsection 2 of section 12 of the act we are now passing. Subclause 1 of clause 12 amends section 31 of the present act. This subclause will stand on its own. It will be subsection 2 of section 12 of this act.


John Whitney Pickersgill: Is the minister quite correct about that? If he will look at the bill very carefully-I do not think this is a very important point-he will see that the 1 and the 2 are after the 31 which is being put into the act that is being amended. It would seem to me, therefore, that both parts would appear in the consolidated statute.


Edmund Davie Fulton: The question of consolidation is quite different from the one we were just discussing. The consolidation is merely an office consolidation. As the hon. member knows, it does not have the force of law. What happens here is that this act, when passed, will be an act to amend the Combines Investigation Act and the Criminal Code. It will be part of this year's statutes.


John Whitney Pickersgill: Oh, I follow that perfectly.


Edmund Davie Fulton: Clause 12, which will then be section 12, will have two subsections, subsection 1 amending section 31 of the present act-and subsection 1 will have three subsections, 1, 2, and 2(a)-and then having completed the amendment to section 31 of the bill, section 12 of the present act will go on as it now goes on in subsection 2 thereof at the bottom of page 6 of the reprint.


The Chairman:: Shall clause 12 as amended by the banking and commerce committee be adopted?


John Whitney Pickersgill: Before we proceed, Mr. Chairman, I wish to say a word to make clear


that as I indicated last night, it is my intention to ask you to call the yeas and nays; not that we would wish to repeal this whole section of the act as it now stands, but of course if this amendment did not go through it would have the effect of merely leaving section 31 of the act as it is now, which we think is much better than the amendments suggested by the government.
We are doing this for one reason and one reason only, and that is to indicate clearly that the Liberal party stands for the view that there should not be two ways of dealing with the same crime in two different cases. We do not think it is proper for this parliament, having regard to natural justice and all our traditions with respect to the treatment of criminal law, to make a provision that in identical cases, even though the administration might never act, it would even be possible in one case to prosecute and in the other case to follow a civil procedure. That seems to us entirely repugnant to the notion of equal treatment for all our citizens for which we stand.


Mr. Aiken:: Mr. Chairman, before this clause passes I should like to make a comment arising from the remarks made yesterday by the hon. member for Hull, who in referring to the various witnesses who appeared before the committee spoke in praise of the evidence given by Professor Cohen of McGill University. I just wanted to point out that with respect to section 31, with which we are now dealing, Professor Cohen was quite in accord with the proposal the government is advancing with respect to this section. At page 547 of the evidence in the banking and commerce committee Professor Cohen is reported as having said:
In my second point, the problems of the new power under section 31-to restrain or dissolve before conviction, in my opinion, sir, this approach is all to the good. I will strongly support the use of the enjoining power here to restrain parties who are either going to engage in practices which are or are thought to be against the act, or to require them to dissolve situations that already have taken place.
I merely wanted to point out that in a number of situations Professor Cohen was in accord with the provisions of this bill, and this is one of them.


Alexis Pierre Caron: Mr. Chairman, it is a fact that yesterday I quoted that portion of Professor Cohen's evidence to which the hon. member has referred. If the hon. member had gone on a little further he would have seen this in the next to last paragraph. The last three lines read:
I think this is all to the good, and I support it. However, I question whether or not the government will soon face problems of the constitutionality of this measure.

Therefore, even if Professor Cohen supported the idea behind it, he had his doubts as to the constitutionality of the measure, and this was what I wanted to bring forward.


Charles Benjamin Howard: I have one or two thoughts that I wish to express on this. It think we all recall that the Liberal party is the only party on record which, when it comes to the treatment of combines cases, favours two separate sets of circumstances; and the hiding of the flour report is a prime example of where they wanted to take steps which were contrary to the law in order to protect some favoured sons of theirs in the industrial world. The sort of argument put forward just makes one wonder whether we should believe them at all.


George James McIlraith: Mr. Chairman, just one point arising out of the remarks of the hon. member for Parry Sound-Muskoka. I want to point out that the quotation from Professor Cohen's evidence had to do with whether there should be authority for the application of a restraining order in these cases. That is what Professor Cohen approved. The point raised by the hon. member for Bonavista-Twillingate is whether the minister should have the authority to determine what type of proceeding should be taken in these cases, and the point was not dealt with by Professor Cohen whether the minister should have the authority to decide or whether the courts should have the authority. If he will recall what has been said here he will agree that at no point was there any objection taken, or any suggestion that the courts might not properly have the authority merely to issue a restraining order or the other appropriate type of order, instead of applying the usual penalties whether by way of fine or imprisonment.
That was not the point at all. There was no objection to that. The point was that through this amendment, the minister is in effect taking the right, where an offence has been committed, to determine whether proceedings will be by way of criminal prosecution or by way of some civil proceeding, with the appropriate type of order made. That surely is something for the courts and not for the minister.


Edmund Davie Fulton: Well, since the point of principle has been raised, while not wishing to prolong the debate I do, however, wish to point out that there are other authorities with respect to the acceptability and desirability of this flexibility being given in legislation of this type. I refer particularly to the report of the MacQuarrie committee which was set up to study combines legislation. In their report at page 40 they say as follows:
79951-0-440
Combines Investigation Act
The use of a judicial restraining order has been suggested from time to time as a promising addition to remedies. It would be of marked service in certain types of situation, of which the incipient combine-


John Whitney Pickersgill: "Incipient".


Edmund Davie Fulton: Wait; don't be so quick. I
continue:
*-questioned practices in the twilight zone between competition and monopoly where the law is unsettled and the operations of the single-firm monopoly are illustrations. The analogy of the American injunction suggests itself. In the United States it has been widely used and found of value. Especially when employed in the framing of consent decrees it reaches situations where criminal prosecution may be ineffective or unsuitable, and introduces a useful element of flexibility into the administration of the legislation.
Our framing of the clause now under consideration was with the purpose of carrying into effect the full scope of the view of the MacQuarrie committee.


John Whitney Pickersgill: Mr. Chairman, I should like to reply to the minister by just saying the law as it now stands which, of course, was enacted pursuant to the recommendations of the MacQuarrie committee, is in our opinion very good law and should be left alone.


Alexis Pierre Caron: If the minister had continued with the citation he quoted on page 40 he would have seen that the MacQuarrie committee report says:
In this country it is unsettled whether constitutional and other legal obstacles stand in the way of the use of a remedy of this kind.
Therefore, even in the MacQuarrie committee report there is a doubt as to the constitutionality of this provision.


Edmund Davie Fulton: That matter was considered, and we believe we have framed a clause that is not open to constitutional question; that is our view.


Charles Benjamin Howard: At the moment, Mr. Chairman, apart from this particular amendment before us, there are provisions in the act which have been there for almost a donkey's age, as it were, which allow the minister to take different approaches to the same set of circumstances in two different cases. This is an act which was enacted by the Liberal administration, or at least it was not changed by them. The zinc oxide case is a case in point. This was a case in which the minister decided not to proceed to court. The minister has discretion now. I think he used it incorrectly in the zinc oxide case, but that is beside the point. At the moment the minister can determine whether he should proceed to prosecution or drop the whole thing, and he decided to drop it in the zinc oxide case.

Combines Investigation Act This is an extension of the ministerial authority to prosecute or not to prosecute, or to ask for a restraining order.
To avoid being inconsistent the Liberal party should ask for the removal of all the discretionary powers that the minister, the director and the commission have to cease to investigate cases whenever they think it is desirable. The discretionary power of the commission to recommend that the report be not made public should be removed. The discretionary power of the minister to decide whether he shall make the report of the commission public should be removed. All this discretion which the minister has should be removed, and it should be mandatory that once they start the investigation, the proceedings should be carried all the way through to prosecution, regardless of the merits.


John Whitney Pickersgill: The hon. member can talk all day, but he is not going to get away from the fact that last night he and his colleagues voted to treat one criminal in one way in one set of circumstances and another criminal another way in the same set of circumstances. I think he is embarrassed a bit by what he did last night.


Edmund Davie Fulton: Would my hon. friend say that the provision in the Criminal Code to treat criminals in one of two ways in one set of circumstances and another way in another should be removed? Yet the prosecuting authorities decide now whether to proceed by way of summary conviction or by way of indictment.


An hon. Member:: We hope it is a jury.


Charles Benjamin Howard: I point out that the hon. member for Bonavista-Twillingate has made a slanderous accusation against members of our society. He in effect has designated people who might come under the surveillance of this law as criminals.


George James McIlraith: No.


Charles Benjamin Howard: He did. He called those people criminals before. I think this is a slanderous accusation.


Mr. Creslohl:: As the minister no doubt knows, the provisional execution is at all times a remedy which should be exercised with great caution. Here the matter is already before the courts; action has already been commenced. This is different from when a provisional execution is resorted to, when a report is merely submitted to the minister or to his department to commence an investigation. Here we are already before the courts, and we are anticipating too much when we ask that provisional execution should be made while the case is still sub judice.


Edmund Davie Fulton: I do not know that I follow fully the import of the hon. member's question, but as I said in the discussion last night no order could be made under the new procedure unless the facts as contained in the allegation on which the application was based had been proven. So there is no question of issuing an order and leaving the other issues before the court. The issuing of an order would only be done after determination of the question of whether the facts as alleged had been proven.
Clause agreed to: Yeas, 43; nays, 10.
On clause 13-Court may require returns.


Edmund Davie Fulton: Mr. Chairman, on clause 13 may I make a suggestion, which I hope will meet with the approval of the committee, as to how we should deal with this clause. It will be appreciated that it is a lengthy clause covering a number of sections of the act, and incorporating two new sections into the act. It also carries into effect the new division of the act into parts and contains provision for part V.
If it meets with the wishes of the committee may I suggest, therefore, that we deal with this clause by calling the proposed sections of the act such as 31A, then part V, proposed sections 32, 33, 33A and so on. In that way I think we will have a discussion in the most orderly manner. I should like to give an additional reason for doing so, namely that with respect to proposed section 32 I will be asking one of my colleagues to move an amendment dealing with the question of industry engaged in export trade by way of adding two subclauses to subsection 2, and it will be difficult to do that unless we call the proposed sections one at a time instead of the whole clause.


John Whitney Pickersgill: I think that would be perfectly satisfactory. It would really be quite impossible to discuss this clause as a whole clause.


Jacques Flynn: Is the committee agreeable to the suggestion of the minister?


Some hon. Members:: Agreed.


John Whitney Pickersgill: I wonder whether the minister would also consider giving to representatives of the opposition a copy of the amendment he proposes to move so we can be looking at it meanwhile.


Edmund Davie Fulton: It is an important amendment. It is one that was referred to in the committee and an amendment dealing with the subject was moved. I promised to give the matter further consideration to see if we could come up with something. Therefore I am glad to comply with that request.


Jacques Flynn: Shall new section 31A carry? Carried. Shall new section 32 carry?


Charles Benjamin Howard: I should like to make a request. We have just received the proposed amendment to new section 32, which adds two new subsections. I wonder whether it might not be more advantageous to allow the proposed section 32 to stand in order to give us an opportunity to assess the effect of the proposed amendment. Perhaps the minister might have one of his colleagues move the amendment and then ask that the proposed section 32 stand. We could then take it after the lunch hour or later today or on another day, if discussion of the bill lasts that long.


Edmund Davie Fulton: I anticipate there will be quite a lot of discussion on new section 32, subsections 1, 2 and 3, which have been in the bill for some time. As my hon. friend has pointed out, the amendment would add new subsections 4 and 5. In effect they stand by themselves, and I had hoped that we could deal with 1, 2 and 3. It may well be that by the time we have dealt with them there will have been time for consideration of the proposed amendment. If there has not been time and the matter is raised again I would be prepared to consider allowing the matter to stand, but I should like to get on with subsections 1, 2 and 3 at the present time.


Charles Benjamin Howard: I should like to point out that when we proceed to consider and debate subsections 1, 2 and 3, those who are intensely interested in this legislation will be engaged in that consideration and debate and will not have an opportunity to look at the proposed new subsections 4 and 5. At the end of the debate on subsections 1, 2 and 3 I think we will still find ourselves in the position of not having had an opportunity to consider the minister's proposal. I anticipate that this will occur.


Edmund Davie Fulton: Can we see how we stand when we get there? It may well be that the lunch hour will intervene. If at the time we come to the amendment hon. members feel strongly that they have not had time to consider it, I will be quite prepared to deal with the question then.


John Whitney Pickersgill: I see no reason for not going on with the others.


Charles Benjamin Howard: If I may proceed to make some remarks with respect to the proposed section 32, subsections 1, 2 and 3, as every member of the house knows and as every witness who appeared before the banking and commerce committee indicated, this is one of the two major amendments in the bill, the other having to do with the amendments to 79951-0-440}
Combines Investigation Act section 34. They are the ones which aroused the greatest amount of controversy involving support on the part of some interested parties and objections from others.
I do not intend to go extensively into such things as whether or not it is proper to put the word "unduly" in paragraph (d) of subsection 1, a matter which I believe was referred to earlier by the hon. member for Hull in dealing with the evidence of Professor Cohen respecting whether or not the verbs "restrain" and "injure" needed any qualification or were absolute in themselves.
I am concerned at this moment with subsections 2 and 3. The argument has been put forward that at the moment those things contained in subsection 2 are permissive as long as they do not have a detrimental effect or do not lead to any of the effects set out in subsection 1. In other words, at the present time corporations can conspire, combine, agree or arrange one with the other to exchange statistics provided the exchange of statistics does not result in limiting unduly facilities for transportation, manufacturing, production or distribution, or enhances prices, and so on. Corporations can and do make arrangements with respect to the defining of product standards as set out in paragraph (b) of subsection 2. As to the exchange of credit information, they undoubtedly engage in such practices. Then there is mention of the definition of trade terms and co-operation in research and development. The pulp and paper industry is a prime example of cooperation in research and development in which even government agencies participate.
Apparently these things can be done at the moment. They are not considered illegal practices in themselves; but if agreements or arrangements of this nature, at the moment, lead to the undue limiting of facilities, transportation and so on, as I related earlier, then the people engaged in these practices run foul of the law.
Cogent arguments against the inclusion of subsections 2 and 3 in the bill were given by practically every one of the university professors who appeared before the committee. Professor Cohen went into the matter extensively, and without reading his testimony word for word may I say that he made the point that this acts as an incentive to engage in these practices. It would be very easy for a group of businessmen who have legal authority and sanction to exchange statistics to feel a psychological incentive to engage in practices which are contrary to the law. The economists, men of stature and ability in the field, were likewise opposed to the changes that are set out herein.
Again without reading the testimony word for word I should like to indicate in a general

Combines Investigation Act way that they were so opposed. I think many years ago Adam Smith foresaw that businessmen, when they sat down to discuss things with one another, that is their relationship in the economy and whether or not they are able to increase their profits, whether or not they can increase sales, would discuss whether it would be desirable to do this by co-operation rather than by competition. The inclusion here of subsections 2 and 3 will merely allow for the spilling over into the conspiracy field of price arrangement of the degree of arrangement that is permitted in so far as statistics are concerned.
Another point deals with the argument that has been developed in the courts for a number of years concerning specific detriment, an argument which large corporations that have been charged under the Criminal Code say should be considered. Their argument is that the courts should consider the specific detriment of any conspiracy or agreement, but the courts have rejected this argument generally on the ground that it is not possible for them to do this because the law does not permit it. The courts say that if a conspiracy exists then it is, as such, illegal. We still talk in Canada today-this is the amazing thing to me-as if there were some benefit to be derived by society from price conspiracies, as though there were some beneficial results from corporations getting together to fix prices. The situation in the United States is quite different. Many corporations down there, because of the effect of the law, would no more think of entering a price conspiracy than they would think of picking pockets. It is somewhat in the same category today.
Last year, Mr. Chairman, a bill was introduced to amend this act. I cite it as a specific indication of the attitude of the government on this question of specific detriment. I should like to read a part from Bill No. C-59 of last year, section 32, subsection 2, paragraph (b), where it talks about prosecution for an offence under subsection 1, and so far as the accused is concerned states:
(b) also establishes that the conspiracy, combination, agreement or arrangement has not operated and is not likely to operate to the specific detriment of the public, whether consumers, producers or others.
We see here in the bill of last year a reflection of the government's attitude toward injecting this specific detriment argument into the law. The words are there precisely, "specific detriment of the public". Those words are not contained in the bill this year. However, I believe the government's attitude slipped out in the explanatory notes on page 6 of the bill, which read in part as follows:
The purpose of subsection 3 is to make it clear that, notwithstanding that certain practices come


within subsection 2, the accused cannot avail himself of that subsection if these practices are accompanied by effects that are detrimental to the public interest.
The word "effects" is in there. There is a reference earlier in the bill to the things which the restrictive trade practices commission may find, and there is a reference to that in the explanatory notes. In the bill presented last year there was a particular reference in one section to what the commission should find, and again there was a reference to a finding of specific, substantial detriment to the public.
I submit that this is what the government desire to do, and they are so weakening the price conspiracy sections of the Combines Investigation Act through the introduction of these legalistic terms that prosecution will be practically impossible. The courts will be spending all their time, if a case comes to the courts, in listening to the arguments of opposing counsel about specific detriment; listening to such arguments as to what the price level might have been if the price conspiracy had not existed; listening to such arguments as to what the productive capacity might have been if there had not been a conspiracy; what the quality of the goods might have been; what the distributive channels might have been, all these theoretical arguments as to what might have occurred if the price conspiracy had not existed.
In my opinion, and in the opinion of every one of the astute and capable economists, in the opinion of Professor Cohen, who as a lawyer has had considerable experience in the combines field, the introduction of the specific detriment provision would emasculate the present Combines Investigation Act in so far as price conspiracies are concerned. We in the C.C.F. party are completely and unalterably opposed to the inclusion of subsection 2 and 3 in this bill because we believe it will do nothing but emasculate the act. Year after year the private interests of this nation have argued that the courts should look at specific detriment. The inclusion of these subsections is an indication of the influence, power and control these interests have over the government. I say that subsections 2 and 3 have no place whatever in this particular bill.
In so far as subsections 4 and 5 are concerned, as I say I have not had a chance to look at them as yet. If this is a reflection of the arguments used for putting this into the Combines Investigation Act in the first place, then at first glance I would be opposed to subsections 4 and 5. As I say, I have not had a chance to look at those subsections which the minister has just introduced but on the surface, in view of the expressions of opinion

in the committee on this question, I think we would be rather opposed to them also. But that is another matter.
In summing up, I would say that the proposals do nothing but seriously weaken the effectiveness of the law in dealing with price conspiracies, and they will seriously hamper the courts in the determination they may have to make about price conspiracies because they will be spending their time in arguing theoretical concepts and results from the economic point of view. It will mean that we shall be able to have price conspiracies running rampant through this country without much fear of attention. The only people who are going to benefit are private enterprise, and the only people who are going to suffer are the consumers. To that end I move:
That subsections 2 and 3 of section 32 of clause 13 be deleted.


Lester Bowles Pearson: Our proposition with regard to section 32 was made clear on second reading and it has been made clear in the committee. We are strongly opposed to it. The reasons for our opposition, or some of them, were given by my friend who has just preceded me, and I am not going to traverse the same ground. It must be pointed out that subsection 2 of this section 32 (2), which you might call the exemption subsection gives immunity to a conspiracy or a combination in respect of the matters enumerated, even if competition is lessened in matters such as price, production, marketing, distribution-


Edmund Davie Fulton: Even if-?


Lester Bowles Pearson: Even if competition is lessened.


Edmund Davie Fulton: No.


Lester Bowles Pearson: Competition under this wording has to be lessened unduly.


Edmund Davie Fulton: As is the case with every
breach of the combination provisions.


Lester Bowles Pearson: Therefore, as has been pointed out-and it was pointed out in the committee -this provides quite a loophole and will give a field day to the lawyers. Indeed, in reading the committee evidence I recall that the hon. member for Greenwood, I think it was, said that it would make a lawyer's paradise. We think the word "unduly" certainly should be taken out. I do not want to say any more on the subject of this section. We have made our position perfectly clear. This is the heart of the amendments certainly one of the most important parts of the amendments, and will have a very bad effect.


Alexis Pierre Caron: We are quite in agreement
with the hon. member for Skeena, because
Combines Investigation Act we had the same amendment to propose this morning. The reason we felt obliged to propose this amendment is that we believe this section will create a loophole which will permit a greater defence for those who might use this section not for the purpose of just helping to exchange statistics and product standards and other things, but to use these things in order to control or organize mergers outside the law, to organize certain monopolies outside the law and more especially to engage in price fixing.
This is not new. It was raised in 1950 before the MacQuarrie committee. The Canadian Manufacturers' Association at that time, in their brief at page 5, stated as follows:
It is submitted that it should be possible to specify a number of things which are not to the detriment of the public and which businessmen may consequently do without being liable to prosecution under the act.
The only thing they seemed to be afraid of were prosecutions.
To the extent that this could be done, it would reduce the area of uncertainty which at present covers practically the whole field, so far as joint action with competitors is concerned and would be a real forward step.
This matter was brought forward and their brief was most generally dealing with this matter. But at the time there was a book entitled "Monopoly and Free Enterprise" by George W. Stocking and Myron W. Watkins, in which they describe exactly the dangers of the proposed amendment. They say this:
Trade associations frequently engage in a variety of activities some of which are perhaps innocent or even wholesome when considered separately but which together tend to curb competition and restrain trade. Standardization of products and cost accounting methods, for example, may eliminate waste and lower costs, but it also helps insure uniform prices among trade rivals. Exchange of information on the credit of customers may help reduce bad debts, but it may also serve as a basis for boycotting "undesirable" customers. Statistical reporting on prices, output, sales, shipment, stocks and the like may aid producers in independently formulating sound price and production policies but it may also afford a basis for a tacit understanding to stabilize prices and curtail output. The compiling of freight rates from basing points to shipping destinations may serve the convenience of producers who customarily sell at delivered prices. But it is also an important, if not an essential, element in any plan to stabilize prices among widely scattered producers turning out standardized products with an inelastic demand heavy transportation charges, large fixed costs of manufacture and relatively constant variable costs when operating below capacity.
It goes on in this vein at considerable length. I will spare the committee the reading of that portion and will go on to another matter, namely the existence of an agreement and the degree of control. With the new bill the task of our courts will become much more complicated. They will have, as in the

Combines Investigation Act past, to make findings as to the existence of an agreement and the degree of control involved, but in addition, when the arrangement is related only to such things as the exchange of statistics, the defining of product standards and the other practices mentioned above, the courts will have to appraise the effects of such arrangements on prices, production, markets, distribution and the number of units in an industry, and find whether those practices have the result of lessening competition unduly in those respects.
When I turn to the evidence which was given in the committee, Mr. Chairman, I note that Professor Cohen, speaking on section 32 (2), as reported at page 556 of the minutes of proceedings, stated as follows:
This proposes the most striking, or one of the most striking features of this bill, I could spend a great deal of time on it.
Further on he said:
Year after year responsible leaders of industry have come forward, C.M.A., and others, and have put forward what certainly to them, and to many other people, seem responsible points of view. This legislation now, it seems to me, accepts the proposition that it is worth while to cast in terms of law these, what may be called, innocent areas of business co-operation and not merely to leave it to the courts to discover the innocence, but to give the courts specific guidance as to innocence. The best case that can be made for this, therefore-I will come to the other side of the point- but the best point that can be made for this very important policy change, is that it is already sufficiently imbedded in legal ideas about these matters to hold them licit, to hold them legal. Therefore, all we are doing is declaring what in fact is something which the courts would regard as legal.
On page 557 Mr. Cohen is reported as saying:
So the section already is aware of the possibility that although businessmen may get together for purposes only of advertising, or only for information, or only on research, it may lead to fixing prices: it may lead to restrictions on production. At that point then the defences of subsection 2 will not operate.
Now let us consider some other evidence given on page 434 of report No. 7 by Dr. Skeoch, professor of economics of Queen's University. Speaking on section 32 he said:
This is the basic section of the proposed legislation is so far as agreements restricting competition are concerned.
Further on he continues:
This may merely reflect the character of the established jurisprudence, although, if this is the case, it is not clear why it was necessary to alter the legislation.
The professor had this to say, as may be found at page 435:
If it is desired to maintain the same tests of restrictive agreements as are now in effect, the simplest and most direct means of doing so would be to omit subsections 2 and 3 from the proposed amendments. A somewhat similar result could be achieved by deleting everything after "unduly" in line 43 of page 6.

I think it is sufficiently established that these professors of economics and law seem to be of the same opinion that the opposition holds today. Again, I call the attention of the committee to the letter signed by Professor G. E. Britnell, head of the department of economics and political science of the University of Saskatchewan, which appears on page 15 of the appendix to the proceedings of the banking and commerce committee. Mr. Britnell has this to say in the second paragraph of the letter:
The amendments to section 32 listing permissible forms of co-operation between companies are still subject to the dangers which we indicated in our submission. Furthermore, the amended bill is still likely to result in a significant weakening of the ban on resale price maintenance. Finally, our concluding suggestion that the application of the legislation to the service industries be examined have been completely ignored.
Then again, we might well consider the testimony given by Mr. Hannam, which can be found at page 594 of report No. 10:
As far as we can see, the new section 32 in the bill is intended to make it clear that certain practices that are not detrimental to the public interest may be followed provided they are not accompanied by harmful effects. This section seems to us to create real dangers.
He goes on, then, to explain the danger. Thus we are not alone in thinking as we do. We share our opinions with an economist of recognized ability. We share them with a professor of law who knows perfectly well the background of legislation of this kind. He has made a profound study of all the matters which are the concern of this bill, and both he and other distinguished professional men have come to the same conclusion, namely that it would be a lot better to leave the legislation the way it was or to delete subsections 2 and 3 of section 32.
For these reasons we have to go along with the hon. member for Skeena in supporting the amendment. We think the minister should have second thoughts and recognize the weight of the important objections which have been brought up by almost everybody who has considered this question, and especially by those most concerned with the welfare of the consumer in Canada. By persisting in his present course he is granting to the manufacturers association exactly what they were trying to get in 1932 and have been trying to get ever since, namely to turn the law around and do exactly what the law now forbids.
I hope the minister will study this amendment very carefully and accept the fact that his new proposals have been condemned by people who have no political interest in the question, people who are interested in the subject as economists or as lawyers; and I must tell the hon. gentleman that if he does

not wish to change this clause we shall have no alternative but to vote in favour of the amendment.


Edmund Davie Fulton: This question has, of course, been very carefully considered. It was considered in every stage of the drafting of the bill, when we had the debate on second reading, and again in the banking and commerce committee.
In my view, the hon. member who has just spoken and all others who have expressed the same opinions are in error when they say this section does not take account of the interest of the consumer. I maintain that it does take account of the interest of the consumer and it does so by preventing the commission of practices in restraint of trade by combination to exactly the same extent as is the case under the present law.
All this section does is to make clear what is now the situation, namely that if without entering into a conspiracy to restrict competition with respect to the prices or quantity or quality of products or channels or methods of distribution, industry engages in certain practices which are set out in subsection 2 which will be beneficial to the economy, these things may be done without fear of prosecution and conviction.
It is surely an incorrect and misconceived position to say that if this section will make it possible for industry, without conspiring with regard to restriction of prices, and so on, to get together to pool resources with regard to research, the defining of product standards and other matters which will benefit the economy and produce benefits which will be passed on to consumers, the section operates against the interest of consumers.
It seems to me that the only criticism which can really be made of it is that it is a section which accomplishes nothing, because it only states what the law is today. That criticism was made by those who referred to the evidence of Professor Cohen. The hon. member for Hull just read a portion from page 556, and I think it is important to repeat it:
The best case that can be made for this, therefore -I will come to the other side of the point-but the best point that can be made for this very important policy change, is that it is already sufficiently imbedded in legal ideas about these matters to hold them licit, to hold them legal. Therefore, all we are doing is declaring what in fact is something which the courts would regard as legal.
I quite accept that criticism. We have said from the outset that this was our intention. It was made clear to us that without this clarification in the law, practices which would produce positive benefits to the economy in general and to consumers in particular would not be followed by industry because they
Combines Investigation Act felt the law was unclear; so if by clarifying the law, not by changing it, you can produce benefits which will be of direct help to consumers and to the state of the Canadian economy generally, I think it would be a weak, unwise and unjustifiable course on the part of a government to refuse to make that change simply for fear of criticism, misunderstanding and misinterpretation.
Our approach is a valid and sound one. It first preserves the existing jurisprudence by retaining the existing definitions, and thus preserving all the force and effect of the law as it now stands. Second, it makes clear what may be done, provided it is done without bringing about a combination. Third, for the purposes of greater clarity we go on to say, "Here are the things which you must not accomplish".
That it is a sound approach is shown by the fact that it makes possible the introduction of the amendment to deal with the position of the export industry, which amendment will be moved a little later in this committee. That amendment is based on the same approach; that there are things that may be done which are not harmful to the domestic economy, which improve the situation of the export trade and which improve therefore the strength of the Canadian economy generally, and which it is agreed are beneficial, and which it is also agreed it is desirable to make clear that the law permits. The approach to be followed in the export amendment is exactly the approach that is being followed in the amendment referring to the effect of certain domestic activities. In both cases it is made as clear as it can be made that whether it be in the export field or in the field of co-operation in Canada, nothing may be done under the guise of that clarification which would in fact have a harmful effect domestically. That this approach has made possible an amendment to deal with the export field, is as I say, additional proof of its validity and of its benefit to the country rather than its detriment.


Charles Benjamin Howard: Mr. Chairman-


John Whitney Pickersgill: Mr. Chairman, if I could
just say a word-


Jacques Flynn: I recognize the hon. member for Skeena.


John Whitney Pickersgill: Oh, I see; he is making another speech.


Edmund Davie Fulton: Are you suggesting that you would not have made another one?


Charles Benjamin Howard: I caught that snide remark-


Mr. Winkler:: It was not very snide by your standards.

Combines Investigation Act


Charles Benjamin Howard: -of the honourable and unemployed privy councillor who I understand has never had a job for very long because he keeps changing-


Some hon. Members:: Withdraw.


John Whitney Pickersgill: I would not think of asking the hon. member to withdraw.


Paul Theodore Hellyer: No, that type of remark is typical of the hon. gentleman.


Charles Benjamin Howard: Since the minister has selected portions of the evidence to read-


Edmund Davie Fulton: My friend the hon. member for Hull appears intent on putting all the evidence on the record eventually, so I did not see why I should have been merely repetitious.


Charles Benjamin Howard: That is a point to argue with him, not with me. In fact Mr. Cohen did not fully agree-


Edmund Davie Fulton: I admitted that Professor Cohen was not uniformly favourable. I was not trying to create that impression. I merely emphasized that he had some good things to say about the bill.


Charles Benjamin Howard: That is just fine and dandy, but if the minister would be silent perhaps I could be allowed to continue my remarks.


An hon. Member:: Take 40 minutes.


John Whitney Pickersgill: He can only take 30.


An hon. Member:: Thank heaven.


Charles Benjamin Howard: I am attempting to proceed but there are many interjections, and if I were to describe them by using the phrase that comes to my mind I would be accused of being unparliamentary.


Eric Alfred Winkler: Most of your remarks are.


Charles Benjamin Howard: Most of them are truthful, and that is why they are not acceptable to the hon. gentleman. The truth hurts. I propose to read from the remarks of Mr. Cohen at page 557 with respect to the proposed amendments to section 32, in order to even up the balance sheet to which Professor Cohen referred and to which the minister also referred last evening:
Now, what we have to ask ourselves is this: what is the extent to which experience teaches us that this kind of encouragement will or will not lead to abuse. The real problem is not the juridical aspect so much, because one can argue with some, I think, clarity and force, Mr. Chairman, that clause 2 (a), (b), (c), (d), (e), (f) and (g) includes matters that most of us already regard as licit and as legal. What is important in subsection 2, however, is this: does it provide psychological encouragement to go further? This is the question.
The next words are not germane so I omit them. I continue:

So, I say, Mr. Chairman, again, without, by any means being dogmatic, that I think this language is a temptation. I think its importance is not so much legal: it is psychological. I think it is a danger. The point of view of all of us is that we share the same interest, the interest of preserving as much a free and workable competitive economy as we can, in the face of the pressure of a welfare state. That is the main objective we all have in common. Does this, in terms of our common goal,-you and I have here-does this lend itself to it? Will this give the businessman a kind of feeling of legality that in my opinion he already has with these activities, or will it perhaps induce some of them to go a great deal further than they ought to go? My view is that this particular formulation is a flag of temptation, not a rule of legal importance. This temptation may lead to illegalities.
So much for my views on that section.
I think this is by far perhaps the most important, with one exception, the most important single policy change in this bill. I would, therefore, sir, certainly oppose this particular change. I see no important contribution it could make at this time without much deeper thinking.
On the one hand Professor Cohen said these activities are permitted at the moment and have been imbedded in the law for some time, and on the other hand he opposed the changes because they might lead to abuse. The minister selected only the good things Mr. Cohen had to say. In fact Mr. Cohen said only that these things exist, and he expressed opposition to the changes pointing out the detrimental effects that could result. I raise this only to correct the balance sheet.


John Whitney Pickersgill: Mr. Chairman, the minister has said that this is another bill of rights-


Edmund Davie Fulton: Your words, not mine.


John Whitney Pickersgill: -in which he is asking this parliament to spell out some things that are not against the law now in order to reassure people that they may do things that it is lawful to do. If I am misinterpreting the hon. gentleman I should like him to correct me at once.


Edmund Davie Fulton: Except that I did not apply the term "bill of rights".


John Whitney Pickersgill: The minister did not use the term "bill of rights", no. What this is saying, according to the minister, is that these things have always been lawful, but for greater certainty we are going to put them in because Canadian business is so timorous it is afraid to do what is lawful unless parliament spells out that it is lawful to do it. I do not think so ill of Canadian business as that, sir; I do not myself think that most Canadian businessmen are afraid to do what is lawful even though parliament does not spell out what is lawful.
It does seem to me that if we want this legislation to be as clear and precise as possible, we should content ourselves with saying what is unlawful and have the good

old British presumption that anything that is not specifically unlawful is lawful in a free country. But our objection to it is not on the ground that it is declaratory. If it were merely declaratory, if it were merely unnecessary verbiage, as the minister implied, in the statute, our attitude might be different. Our objection is that we do think this is apt to result in litigation and its use as a cloak or a screen for activities which are unlawful.
We are not alone in thinking that, even in the house. The hon. member for Greenwood is not here, but his words have been plainly printed in the proceedings of the committee. They have already been referred to by the Leader of the Opposition. But in view of the eminence of the hon. member for Greenwood, of his long experience in business, of his long experience in parliament, of his unhappily rather short experience in government, it does seem to me that the committee would wish to pay special respect to that hon. member's words, and I therefore think they ought to be put on the record again as they were uttered in the committee. They will be found in the proceedings at page 698, as follows:


Mr. Macdonnell:: I want to ask a question which. I am afraid, would be mainly a rhetorical question.
Well, the hon. member supports the government; I suppose that is why he put it that way. Perhaps I had better go on and read it:


James MacKerras Macdonnell: I want to ask a question which, I am afraid, would be mainly a rhetorical question. The more we talk about section 32 the more I am convinced that it is going to be a lawyers' paradise. It is difficult, if things are not gone at directly by retaining the old wording; and I suggest it is difficult to question that the benefit of retaining the old wording is very great. Does there come a time when you pay a penalty for it? Is it possible in this case it might have been approached directly instead of indirectly?
Of course it is a very conservative attitude that we should retain the old wording; that we should stick to something that has on the whole worked pretty satisfactorily; but I come back again to what the hon. member for Greenwood said, namely that he was convinced that this was going to become a lawyers' paradise, sir, if it was used in pleadings, in charges under the main section. I do not think so ill myself of the combines branch, of the director and of the commission, as to think they are going to engage in frivolous prosecutions about any of the matters enumerated in this section, because I understand we were told in evidence that on no occasion had any of those practices which are stated to be perfectly legal ever arisen in connection with any prosecutions. Whether sections 2 and 3 are unnecessary, we think they are apt to prolong proceedings under the act, to make the law less enforceable and possibly to provide a cloak or screen for activities that are not lawful. For that reason
Combines Investigation Act I intend to vote for the amendment moved by the hon. member for Skeena.


George James McIlraith: In his remarks on this clause the minister made reference to something he said on second reading of the bill, which is to be found at page 4340 of Hansard, where he went on to indicate:
The effect and intention of legislation must be clear, both in order that those who are affected by it may know what their position is, and in order that another very important principle may be maintained, namely that it should not be the government which from day to day determines by private decision what are the rules governing business and society generally, but that the rules governing business and society should be laid down in legislation which speaks clearly and which is capable of fair and immediate application.
I think I am quoting correctly in saying that that is his main defence in bringing forward this clause in the form in which it is found. This is his purpose. Well, I can only say that if this is his purpose it surely is a most indirect and devious route to pursue in achieving this wholly laudable purpose. The form of the new clause 32 is certainly an indirect method of spelling out clearly what is illegal under this particular phase of the legislation.
The minister made some reference to the export provision which he proposes to move later. With deference, I say it has no bearing on the point at issue now being discussed in committee. The export provision could be dealt with under this clause or under two or three other appropriate clauses in the legislation. But the minister also made clear-and indeed it is indicated in the explanatory notes of the bill-that he desired to preserve the existing jurisprudence. Indeed, subclause 1 of the new clause 32 is an attempt to do that, and subject to something I will have to say later as to one small point in clause 32 it does indeed take the former section virtually in toto and attempt to link it up so that we shall have the benefit of existing jurisprudence and many years of experience and administration.
Perhaps hon. members will bear with me for a moment if I seek to go through the section as it now stands to judge the method of approach to this problem. Perhaps you will call it one o'clock, Mr. Chairman, and I shall continue my discussion later.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2 p.m.
George James McIlraith: Mr. Chairman, when the committee rose for the noon adjournment I was seeking to show the dangers in the

Combines Investigation Act method of approach to the drafting of new section 32 as contained in clause 13 of the bill. I had started to indicate my argument by referring to section 32 (1) which contains a statement of the offence. If I may paraphrase the subsection, everyone who conspires, combines, agrees or arranges with another person to prevent, limit or lessen unduly competition in the production, manufacture and so on of articles, or to restrain or injure trade or commerce is guilty of an indictable offence and liable to imprisonment for two years. In other words, 32 (1) is an attempt to preserve the existing jurisprudence and to restate the offence in terms almost identical with the existing law. Then follows subsection 2 which I think I ought to read. It is in these terms:
Subject to subsection 3, in a prosecution under subsection 1 the court shall not convict the accused if the conspiracy, combination, agreement or arrangement relates only to one or more of the following-
Then there are seven subheadings, the first six of which refer to such things as the exchange of statistics, defining of product standards and so on. As to the first six of the enumerated items, so far as I am aware, and I would ask the minister to correct me if I am not wholly accurate, there has never been any investigation or prosecution under the act. But my concern is with the seventh of the items enumerated in subsection 2, which is in these words:
(g) some other matter not enumerated in subsection 3.
Therefore there is a good defence if the combination relates to some other matter riot enumerated in subsection 3. At that point we have defined the offence in subsection 1, and we have then said that there is a good defence to any prosecution under subsection 1 if the combination relates to some other matter not enumerated in subsection 3. Subsection 3 goes on to say:
Subsection 2 does not apply if the conspiracy, combination, agreement or arrangement has lessened or is likely to lessen competition unduly in respect of one of the following:
(a)	prices,
(b)	quantity or quality of production,
(c)	markets or customers, or,
(d)	channels or methods of distribution-
Then these words follow:
-or if the conspiracy, combination, agreement or arrangement has restricted or is likely to restrict any person from entering into or expanding a business in a trade or industry.
I want to indicate what an indirect route is taken to achieve clarification in this section. The offence is set out clearly in subsection 1, as it was in the earlier legislation, and we have some 50 years of jurisprudence determining what constitutes the


offence. Subsection 2, for reasons that were indicated in the banking and commerce committee, enumerates certain types of combinations that have never been considered to be an offence, and therefore at least as to the first six paragraphs in subsection 2 it has no meaning or effect at all. But the seventh paragraph then goes on to say that there is a good defence unless the charge deals with some other matter not enumerated in subsection 3. Subsection 3 then goes on and applies a limitation. It will be seen that the whole scheme of subclause 3 is by way of limitation of the offence, and not even applied directly but applied indirectly by way of enlargement of the defences to subclause 2.
Subclause 3 is not taken in its present form from any of the existing legislation and is not, as such, the subject of any court decision. It is an attempt to repeat, I suppose the minister would say for greater clarity but I would say for dangerous, ultra-cautious reasons, what is already contained in the other subsections. This raises the whole question of how much of the offence set out in the first subclause is discarded by the combined effect of subsections 2 and 3 or the combined effect of subparagraph (g) of subclause 2 in bringing subclause 3 into effect.
I feel that this is a dangerous type of draftsmanship, and the question must remain outstanding as to how much the offence is cut down by this new method, particularly by incorporating subclauses 2 and 3 in the form in which they exist and with particular reference to subparagraph (g) of subclause 2. That is the point I wish to raise. I do not want to belabour the point and I do not want to repeat any of the arguments heretofore advanced. It seems to me, in view of that real danger, that we are unintentionally cutting down on the offence, and for no clear reasons; therefore I would support the amendment.
Amendment (Mr. Howard) negatived: Yeas, 10; nays, 25.


The Deputy Chairman:: I declare the
amendment lost.


George James McIlraith: I have one other matter that I wanted to raise, Mr. Chairman, in connection with subclause 1 of section 32. It is stated in the explanatory notes, as the minister indicated in his earlier remarks on the bill, that subsection 1 of the new section 32 incorporates section 411 of the Criminal Code. He went on to say that it was there merely to preserve the existing jurisprudence. I want to confine my argument to that narrow point. Section 411 of the Criminal Code is set out opposite page 11 of the bill, and I want to draw attention to an addition in subparagraph

(d) of subsection 1 of section 32. There is the addition of the word "unduly". The section in the Criminal Code does not contain that word, but the corresponding reference in subparagraph (d) adds the word "unduly" after the word "commerce".
It seems to me this is adding something new by way of limitation of the offence that is not warranted by any explanation given by the minister. Indeed, there has been no indication of the reason for this other than that the subclause was an attempt to preserve the existing jurisprudence. Without elaborating at length on the argument, I think it has been made clear, or at least it has been argued by the minister, that there has been no attempt to cut down the offence by the new definition. If that is so I respectfully submit the word "unduly" should be deleted.
I therefore move:
That clause 13 be amended as follows:
That the word "unduly" be deleted from paragraph 1 (d) of section 32.
Perhaps the minister would answer the point.


Edmund Davie Fulton: The purpose of inserting the word "unduly" in subparagraph (d) of 32 (1), which I believe is the point my hon. friend is dealing with now-it has been hard to follow him and to know exactly to which subsection he has been referring. Is it subparagraph (d) (1) of 32?


George James McIlraith: Yes.


Edmund Davie Fulton: The purpose of inserting the word "unduly" is threefold. It was felt that the courts would read the subparagraph as though the word "unduly" were there, because the word "unduly" is an inherent part of the definition of every offence in combination except this one. It was not there before, but we certainly felt the subparagraph would be read as though it were there. Second, we thought that for the purpose of uniformity and to make it quite clear that it is the undue interference with competition or trade and commerce that parliament is considering, it should be there. Then, third, we felt it should be there because of the effect of the container materials case, one of the important pronouncements of the Supreme Court of Canada in the field of combinations.
These seemed to us to be good reasons why the word should be inserted. I recognize that, having said that in our view the courts would construe the section as though the word were there anyway, it could be argued that if that were the case then why bother to put it in the statute. I do not believe that is a strong argument. I think our position is the better position, but I am quite frank to say that if
Combines Investigation Act my hon. friends opposite attach great importance to this and think it really changes the law, then because I cannot see any great potential harm in doing so I would be prepared to accept the amendment to (SebajSj}' the word. If my hon. friend presses the point I would be prepared to accept the amendment.


John Whitney Pickersgill: I should like to say a word on the point, if I may. It depends a little on which verb you take. It is conceivable that you could restrict trade and commerce duly, which is the opposite of unduly. But it is hard for me to see how you could injure trade and commerce duly or how you could, by putting in the word "unduly" if you read it as "injure", injure trade and commerce unduly. It really suggests that there is a change in the meaning. For that reason I hope that my friend the hon. member for Ottawa West will insist upon his amendment. I might say that I think the minister's attitude is reasonable.


Charles Benjamin Howard: In view of the brief reference that was made earlier to the placing in paragraph (d) of the word "unduly", may I say this. The word "unduly" has appeared all the way through in relation to the verb in paragraphs (a), (b), (c) and (d), namely to limit, prevent or lessen. Those are not absolute terms. Lessening something can be done to slight degrees and so on. But when it comes to injury, this verb is more absolute and definite and the word "unduly" in connection with the verb "injure" implies that there is in the act something which should not be there. I think the wisest course is that indicated by the hon. member for Ottawa West. The minister indicated if the matter were pressed he would accept the amendment. Perhaps it would be better all the way round to remove the word "unduly". To me it appears that is the better course to take.
I do not think the hon. member for Ottawa West formally moved that the word "unduly" be deleted therefrom, although he indicated that was his intention. I hope he will persist and that the course the minister suggested will be followed, namely that the word will be removed.


George James McIlraith: I think the attitude of the minister is quite fair on this point. In order that there will be no doubt in anyone's mind, may I say that the motion I had intended to move refers to the word "unduly" in line 26 on page 6 of the bill; that is to say, it restores the subparagraph exactly to the form in which it was.


John Whitney Pickersgill: No, it is page 6, line 21.

Combines Investigation Act


Edmund Davie Fulton: That is of the reprinted bill. I think my friend the hon. member for Ottawa West is referring to the original one.


John Whitney Pickersgill: Which is the bill before us.


Edmund Davie Fulton: Yes, the original bill.


George James McIlraith: Line 26.


Edmund Davie Fulton: Line 26 on page 6.


George James McIlraith: Yes. The effect is to leave that subparagraph in the exact language used in section 411 of the Criminal Code. I think this motion achieves that purpose. I move:
That clause 13 be amended as follows, that the word "unduly" be deleted from paragraph 1 (d) of section 32.


Edmund Davie Fulton: Under the circumstances outlined, Mr. Chairman, and in the light of the discussion, that amendment is acceptable to the government.


Charles Edward Rea: Is it the pleasure of the committee to accept the motion?


[Stage Direction]
Amendment agreed to.
Charles Benjamin Howard: I should like to say a word or two about this matter, after listening to the discussion. Now that subsections 2 and 3 are in effect to be retained, while I do not want to cover the same ground again in so far as formal motions are concerned, it appears to me that there is some conflict between subsection 3 and subsection 1. Because there is an insistence on retaining the provisions of subsection 2, it would seem to me that perhaps the better course-


Leon David Crestohl: Would the hon. member mind if I have something to say on section 2 before he goes on to section 3? I think he took it for granted that subsection 2 is also lost.


Charles Benjamin Howard: I took it for granted that the motion of my hon. friend had been defeated and it would not be possible to move a similar motion; and that if subsection 2 is to remain, as it apparently is now because of the decision of the committee in the way it has been taken, it does appear that there is a conflict between subsection 3 and subsection 1. It would seem to me that the better course would be not to draft subsection 3 so that it made reference to specific things as it does, as in paragraph (a) to prices, in (b) to quantity or quality of the products, in (c) to markets or customers or in (d) to channels or methods of distribution, or preventing or restricting from entering into or expanding any business. I would think the better course would have been to phrase the subsection somewhat along these


lines. "Subsection 2 does not apply if a conspiracy or combination or agreement or arrangement contravenes subsection 1" or has lessened or is likely to lessen competition unduly, and leave it at that. In terms of phraseology this may not be the way the draftsman would do it, but the intent is there. I think this connects subsection 3 with the parts in subsection 1 which are deemed to be improper or illegal. I submit that if we connect the two we would have perhaps less chance of the so-called specific detriment argument being developed in court if any prosecution should be entered upon under this section. I think perhaps I should say this. Following along those lines and to insure that there is some connection between them I move:
That subsection 3 of section 32 of clause 13 be deleted and the following substituted therefor:
I will read it, and it will be seen that this proposed amendment I have in mind and am about to read inserts three or four words, and I will make reference to them.
(3) Subsection 2 does not apply if the conspiracy, combination, agreement or arrangement contravenes subsection 1 or has lessened or is likely to lessen competition unduly in respect of one of the following :
(a)	prices,
(b)	quantity or quality of production,
(c)	markets or customers, or
(d)	channels or methods of distribution,
or if the conspiracy, combination, agreement or arrangement has restricted or is likely to restrict any person from entering into or expanding a business in a trade or industry.
The added parts I have underlined, I believe, in each of the flimsy copies that are available. The added words are "contravenes subsection 1" which are inserted between the words "arrange" and "as" in line 42. It seems to me that something of this nature is perhaps a better course to follow, to deal with a case where in the first instance under subsection 2 a person is charged, and then under subsection 2 he says, "Oh, we were only exchanging statistics or defining products" and by that argument seeks to avail himself of this sanction or authorization in order that he may not be convicted. I think we then ensure that his defence is connected so that he also must show that the activity of exchanging statistics or whatever it was they were doing does not do and result in any of the things prevented or prohibited by subsection 1.
It was for this purpose that I put in the words "contravenes subsection 1". Perhaps the better course would have been to eliminate all the references in subsection 3 so it just reads that subsection 2 does not apply to conspiracies, combinations or arrangements that contravene subsection 1, and place a period there. I undertake merely to insert

them and to leave it for the minister to make some reference in subsection 3 which would, if necessary, bring its provisions into accord with those of subsection 1. The main point is that there should be some relationship between the two subsections.


Edmund Davie Fulton: I must say that the wording of the proposed amendment seems to be following the policy of chasing your tail, because in the light of the amendment suggested subsections 2 and 3 would not only have no purpose but would have no meaning by way of clarification or otherwise. The effect of the amendment is to do indirectly exactly what was suggested directly by the hon. member a little earlier, namely, to delete subsections 2 and 3.
I really cannot say much in amplification of what I said in explanation of the scheme upon which the present section was drawn. This is a clarification proposal based first on the retention of the present jurisprudence under subsection 1. Second, if it is a delineation of those courses of conduct which, if followed exclusively and not amounting to a combination as defined, can be followed without fear of prosecution and conviction. Third, subsection 3, provides further explanation, if you like, in order to make it perfectly clear what it is that parliament intends the combination section to cover so that those who read it may know what it is they may do and what it is they may not do. No one in the committee, in the debate on second reading, or here, has been able to suggest to me any way in which the amplification in subsection 3 of what is meant by a combination in restraint of trade is incomplete or defective in any way. That was the purpose of subsection 3.
To include the words of the hon. member for Skeena would make subsections 2 and 3 of no effect; they might as well not be there at all, because they would accomplish nothing by way of clarification. So I am not able to accept the amendment.


Charles Benjamin Howard: I feel that despite the explanation given by the minister that the purpose of these subsections is to add clarification, the provisions are designed to have a somewhat different effect. The minister said that some of the corporations were doubtful as to whether they had the right to engage in any agreement to define standards, exchange information and so on, and they did not want to do so because they felt they might run foul of the law as expressed in the provision set out in subsection 1. This was the purpose as stated by the minister on second reading.
Combines Investigation Act
If it is for any other purpose, that purpose is something which the minister did not indicate, and I think, perhaps, that what the minister and the government desire to do is to inject the principle of specific detriment into this section. That is why the minister wants to retain these apparently innocuous phrases such as prices, quantity and quality of the product, and so on. I suggest that the purpose is not simply that of defining the intent so that there should be no contravention of the legislation set out in subsection 1. I submit that in a roundabout way the hon. gentleman is hoping that the argument as to specific detriment can be used in the courts in connection with this legislation. When he used the words "specific detriment" in Bill No. C-59 last year it was developed as an argument which the courts consistently rejected, an argument which counsel for defending corporations has consistently maintained should be allowed. By rejecting this proposal the minister is now dragging in this matter of specific detriment in one way or another.
Amendment (Mr. Howard) negatived: Yeas, 19; nays, 50.


Leon David Crestohl: Mr. Chairman, I wish to address myself to subsection 2 and draw the attention of the committee to the words "shall not convict the accused". I find this language strange and somewhat offensive. We are now giving a judge sitting in a case a command- indeed almost a royal command-that he shall not convict. This does not allow the judge the latitude of discretion that is customarily allowed to a judge in finding whether there are grounds for defence leading to an acquittal or allowing for the benefit of the doubt. The words presently read "shall not convict the accused if" and I feel it would be more considerate language and more in line with the practice before the courts if the language read:
-the court may consider it a defence if the conspiracy, combination, agreement or arrangement relates-
And so on. The minister has a keen legal mind. I anticipate that he can appreciate the difference in that language. I have rarely seen any section of the Criminal Code or any statute that contains a command to the judge that he shall-and I emphasize the word "shall"-convict. In the present form the wording does not allow the judge the customary discretion as to whether he should convict or consider that there is a defence if certain things are done. The language I suggest would be more consistent with the

Combines Investigation Act language in use in the law of our land, in the Criminal Code and in criminal matters. I therefore move:
That the words "shall not convict the accused" in line 6 on page 7 in subsection 2 of section 32 be deleted and be replaced by the words, "may consider it a defence if," etc.
The section would then read:
-the courts may consider it a defence if the conspiracy, combination, agreement or arrangement relates only to one or more of the following-
The Minister of Justice is familiar with the terminology customarily used in statutes and should, I think, support a motion that removes a command of this kind. A command not to convict is an unusual command to give in our jurisprudence.


Edmund Davie Fulton: Mr. Chairman, I am afraid I cannot accept or agree with the point of view of the hon. member who moved this amendment when he says that the effect of these words is unusual. The desirable feature of all legislation of this type is to make it clear what is the offence on the one hand and to make it clear what actions do not constitute an offence and will not result in conviction on the other. I therefore do not agree with the hon. member's interpretation when he says that these are unusual words. May I refer the hon. gentleman to one example that I have been able to turn up quickly, subsection 3 of section 246 of the Criminal Code, which reads:
No person shall be convicted of an offence under this section for expressing in good faith-
And so on. I am unable to see any difference in effect and hardly any in detail between those words and the words we use here, "the court shall not convict," so my hon. friend's point is not well taken in the first place.
In the second place the effect of his amendment I think, would be to establish a principle that no one would want to follow and that is the principle of saying in effect that the court can consider only this one defence. In other words, you would be depriving an accused person of all other defences because you would have said in effect that in a charge under the combination section "the court shall consider it a defence if the accused establishes so and so". That, it seems to me, would certainly open the danger that the courts would say, "Well, since parliament has provided for just one defence then by necessary implication there are no other defences", and the effect of this would be to make a change in the law and in the principles with regard to trial that I certainly would not be able to accept.


Leon David Crestohl: If my amendment did nothing else but draw to the minister's attention that


only one defence might be open to an accused, and if he thinks he can remedy that, I see no reason why the minister, if he cannot accept the amendment, should not express his appreciation for having had drawn to his attention a loophole which he may be able to plug even though he rejects the amendment.


Edmund Davie Fulton: I do not think that point follows at all because it is not the minister who has established the defence. The courts have entertained defences to charges under the combines legislation on the basis of their interpretation of the statutes. What you would be doing would not be preserving the existing jurisprudence as we have all agreed it would be desirable to do, but with respect to the defence side of it you would be narrowing down all the jurisprudence in one fell swoop to just one possible defence.


Leon David Crestohl: But does the minister not appreciate the fact that if the court hearing the evidence finds there is room for defence its hands are completely tied notwithstanding subsection 3 of the act? The court may find any one of the offences listed in the other sections of the act that are brought before it. As long as any of the items enumerated in subsection 2 are proved then it must acquit even though there may have been proof before it than an offence had been committed.


Edmund Davie Fulton: That, Mr. Chairman, is a complete misconception of the effect of our amendment. I do not know how many times we are going to have to cover the same ground. Our amendment does not say the court must acquit if the accused establishes any one of these points. The amendment taken as a whole says that the court shall not convict if the accused shows that the arrangement related only to one of these points; and it goes on to say that notwithstanding that the accused was able to show that his arrangement embraced one of these points if in fact the arrangement went further than that and amounted to the creation of a combination having these disadvantageous effects then there might still be a conviction despite the fact that one of the incidental features was one of the purposes enumerated in subsection 2.
I am afraid that the trouble with my hon. friends opposite, Mr. Chairman, is that they have persisted in their misconception of the whole scheme upon which these amendments have been founded.


Leon David Crestohl: I point out that it is not a misconception.


Edmund Davie Fulton: It certainly is.


Leon David Crestohl: Here is the classic clash between the producer and the consumer, and we see in this section the widest form of loophole for the offender to be able to escape through when you enjoin the judge and virtually compel him or suggest to him that he must acquit the offender. I feel that saying to the judge, "You shall not convict the accused" is rather tipping the hand of the government in this classic position between the producer and the consumer, in trying to legislate in a way that would produce the greatest good for the greatest number. This has been Liberal policy and that is why we feel these loopholes should be blocked up.


Edmund Davie Fulton: Would my hon. friend not agree that the offence of blasphemous libel is a serious offence? The section of the code says:
No person shall be convicted of an offence under this section for expressing in good faith and in decent language-
And so on. Would my hon. friend suggest that parliament has tipped its hands to the court in a manner which indicates that parliament is really in favour of blasphemous libel? Nor do we do anything of that sort in the amendment which is now before us.


Charles Benjamin Howard: I am afraid I have not been able to follow the amendment of the hon. member for Cartier. Perhaps the Chair would like to read it again.


Charles Edward Rea: The amendment reads:
That the words "shall not convict the accused" in line 6 on page 7 in subsection 2 of section 32 be deleted and be replaced by the words, "may consider it a defence if,"


John Whitney Pickersgill: I think the amendment of the hon. member for Cartier illustrates very clearly how difficult it is to draft criminal legislation that does not create offences. To try to define what are not criminal offences is a rather new departure which, of course, I cannot enter into now because the committee has made a decision.


Edmund Davie Fulton: It is not a new departure. I was able to turn up a section of the code without any trouble where this was done before.


John Whitney Pickersgill: The minister was referring to mitigating circumstances set out in the Criminal Code. The whole point is that it does not really seem to me that the wording would make very much real difference in this case because it is only enumerating things which are not against the law, anyway. Everybody agrees that these things are not against the law and the courts could not convict because they are not against the law. Perhaps in the circumstances the hon. member for Cartier, having illustrated very well what a confused kind of situation is being created by the
Combines Investigation Act legislation, would feel that he had served his purpose if he did not particularly press the amendment further.


Leon David Crestohl: In the light of the explanation by both the minister and the hon. member for Bonavista-Twillingate, and with the permission of the committee, I should like to withdraw the proposed amendment.


Charles Edward Rea: Does the committee give permission to the hon. member for Cartier to withdraw his amendment?


Some hon. Members:: Agreed.
Amendment withdrawn.


Charles Edward Rea: I understand that the minister has an amendment to section 32?


Edmund Davie Fulton: If the discussion on subsections 1, 2 and 3 is finished; if not, we should wait until it is over.


Charles Benjamin Howard: I have a few remarks to make on subsection 1 and they relate to the actions of the court or the authority of the court to impose penalties if a person is convicted under this section of conspiring to do certain things. During the discussion on second reading a difficulty arose which I do not think is quite the same problem that we have at the moment. It is contended that if there is a conspiracy to enhance prices the courts would have some authority or discretion to adjust the amount of the fine so that it will bear some relationship to the profit picture of the corporation or corporations involved, and so that the penalty will be imposed for an infraction of the law and so that society will be able to recoup to a degree the additional amount, for argument's sake, that it had to pay during the time that such conspiracy was in existence. Perhaps the best way to get at the point at this stage is to move an amendment which relates to certain words in lines 28 and 29 of subparagraph (d) of the original bill. The amendment reads:
That subsection 1 of section 32 in clause 13 be amended by deleting therefrom the words "is guilty of an indictable offence and is liable to imprisonment for two years" in lines 28 and 29 and substituting therefor the following:
"Is guilty of an indictable offence and liable on conviction to a fine which shall not be less than 5 per cent of the total net profits of his business for the five years immediately preceding the year in which the fine was imposed, or if the conspiracy, combination, agreement or arrangement existed for less than five years the fine shall relate to the lesser period of time, or should such total net profits, if any, not total twenty five thousand dollars, then to a fine in the discretion of the court, or to imprisonment for a term not exceeding two years or to both fine and imprisonment.
That, I should think, sums up pretty well the arguments already put forward in answer to the point raised in objection to the proposal.

Combines Investigation Act


Mr. Woolliams:: I should like to hear the last speaker define what he means by "net profit", and what he is to do if no net profit is shown, because net profit is a pretty illusive thing when it comes to a balance sheet. I am not surprised that this should come from the C.C.F. because they are probably not aware what a business balance sheet looks like.


Hazen Robert Argue: You are not so bright.


Eldon Mattison Woolliams: I will leave that for the decision of the house, not the leader of the opposition.


Some hon. Members:: Oh, oh.


Edmund Davie Fulton: I think I should say a word about this amendment, Mr. Chairman. There is, I admit, an attraction that is more than superficial in an attempt to create a mandatory penalty commensurate with the advantage that may have been achieved as the result of an offence. Unfortunately, however, this is not always possible and certainly not possible within the limitations laid down within the amendment because a combination may well have effects other than an increase in profits. It may well be the intent of those entering into such an arrangement not necessarily to increase their profits but to accomplish other things. Indeed, it is my view and has been uniformly the view of parliament, I think, that combination arrangements are not necessarily more efficient and do not necessarily-indeed, by no means necessarily-result in an increase in profits. They have other effects, all of them undesirable.
In fact, it may well be that as a result of loss of efficiency by the elimination of competition you may have a reduction in profits. There are all sorts of other undesirable effects and results of combinations unrelated entirely to the question of profits. If, therefore, the discretion of the judge with respect to the imposition of the penalty was exclusively limited to the matter of the profits which the company had made over the years, I think you would find that judges' hands would be tied and that activities which should be punished much more severely would have the penalty limited in an undesirable fashion from the point of view of the hon. member for Skeena and, indeed, generally.
Therefore, notwithstanding the criticism which is made of the courts and of the extent of the fines they have been imposing, I think the desirable principle to follow is to leave the punishment in the discretion of the court. Then there is no limitation on the authority of the judge to impose a heavy penalty where he feels there was a deliberate and anti-social-for want of a better expression-anti-social conspiracy on

the part of those engaged in industry to do that which the law prohibits. If you start imposing limitations of this sort, what you are actually doing is limiting the capacity of the courts to make the punishment fit the crime.
I know, as I say, that there may be criticisms that in this case or that case judges have not imposed adequate fines. Many of these criticisms arose out of the fact that until recently there was a limitation on the total fine that could be imposed. But even if the criticisms were justified and judges were not yet educated, if you like, to the point where they imposed adequate fines, I do not think the way to cure that evil is by introducing greater restriction. Surely the way to cure that evil, if there be any evil, is by a process of public discussion, education, if you like, and public information as to what it is that parliament and the country desire the courts to do-


George James McIlraith: And the hiring of good counsel.


Edmund Davie Fulton: And the hiring of good counsel, yes-in the way of making the punishment fit the crime.


George James McIlraith: Mr. Chairman, however desirable the objectives indicated by the hon. member who moved the amendment may be, I think the amendment put forward by him does not achieve those objectives, not only for the reasons indicated by the minister but for another reason. The hon. member would set up a whole new procedure for a trial after conviction to determine the matter of sentence, and there is a great deal of obscurity about the criteria to be used in some of the phrases in his amendment.
It seems to me that we can achieve a much sounder administration of justice if we leave the imposition of penalties to the judges who are charged with the responsibility under our law of imposing such penalties and that the amendment the hon. member for Skeena has put forward might very well defeat the purpose he has in mind. For these reasons, which I admit are purely legal, I feel that for my part at least I will have to oppose the amendment.


Charles Benjamin Howard: Mr. Chairman, I think the attitude of both the Minister of Justice and the member for Ottawa West is commendable from the point of view of the expression of their appreciation of the failure of the courts to take into account the full impact of the anti-social, as the minister put it, actions of some of the corporations that have engaged in these illicit practices and have been found guilty and fined. Rather than to insist that wording of this sort be contained in the

legislation, it was my primary purpose to have some base upon which to found a brief discussion of the attitude of the courts on these matters.
I appreciate, Mr. Chairman, that we are skating on pretty thin ice when we undertake to be critical of the judiciary or the courts because this is contrary to the rules of the house. If I had embarked upon critical comment as to the attitude of the courts in levying fines in past cases I would be contravening the rules and would be out of order and so would others. Therefore I preferred to draft an amendment around which a discussion could be centred in order to point up the fact that in my opinion the courts have been overly lenient in past years and have had a tendency to follow the $10,000 limit that used to exist even in respect of cases that have arisen after the change was made with respect to the fine. I think their attitude warrants some criticism.
I do not intend to press this matter to a vote. 1 thought I might provoke some discussion at this stage. I would be prepared to withdraw the amendment if that is agreeable. It does not matter one way or the other to me. If I cannot withdraw it I naturally intend to vote for it, but my primary purpose was to evoke a discussion of this nature. I think the Minister of Justice and the hon. member for Ottawa West more or less agree that there must be a change in the attitude of the courts with regard to infractions of this kind. Penalties should be more restrictive than they have been in the past thus providing a greater deterrent to illicit practices. It may be that our discussion of this matter will tend to influence the attitude of some of the otherwise reluctant judges.


Charles Edward Rea: Will the committee give unanimous consent to the hon. member to withdraw his amendment?


Some hon. Members:: Agreed.
Amendment withdrawn.


George James McIlraith: I wish to ask one question for clarification having to do with the penal part of section 32 (1). I have particular reference to lines 28 and 29 where it says that every one is guilty of an indictable offence and is liable to imprisonment for two years who conspires, combines, and so on. That subsection is taken from section 411 of the Criminal Code, but as section 411 of the Criminal Code is now repealed by this bill we therefore have to rely on this legislation for the penal provisions. My question is this:	Most of these offences are
committed by corporations and the Criminal
Combines Investigation Act Code deals with the matter of imprisonment and, where imprisonment cannot be imposed, fines in lieu thereof. Is the minister satisfied that the provisions mentioned merely for imprisonment are sufficient in a statute that is not part of the Criminal Code? I must say I am not familiar with the relative sections of the Criminal Code and I have not had an opportunity of looking them up since noticing this point. Perhaps if the minister wishes he could let that stand for later check.


Edmund Davie Fulton: No, I think the relevant provision of the Criminal Code is section 622 which provides that where a person is convicted of an offence punishable with imprisonment for five years or less, he may be fined in addition to or in lieu of any other punishment that is authorized. If this section is taken together with the relevant provision of the Interpretation Act, plus clause 22 of this bill which has the effect-no, I am advised that perhaps I am not on sound ground in citing clause 22-but if section 622 and the subsequent sections of the Criminal Code are taken together with section 28 of the Interpretation Act, they have the effect of taking care of the matter with which the hon. member is concerned.
Mr. Chairman, I had in mind discussing briefly the question of the amendment with regard to export trade. Since I take it that the committee has at this time exhausted the questions it wanted to ask with respect to subsections 1, 2 and 3 of this section, perhaps I could go on now and discuss that matter briefly. Members of this committee will recall that many of the submissions before the banking and commerce committee concerned themselves with the present position of industry in Canada engaged in export trade. I believe that we have all received representations to the effect that, in the light of the current position in international trade, the situation of Canadian industry is declining and that there is the necessity of making some change in this legislation to allow industry to arrest that decline and to restore and improve its position.
It was represented to us that the concert of Canadian industry arises from a number of factors. The fact that we are a high cost economy is probably one of the less important in this context, although it was mentioned and certainly must be borne in mind in any assessment of the position of Canadian exports. More important, and I think more realistic in this context, are two other facts. First, whether we like it or not, in international trade there is a tendency toward association or cartelization, and whether we like it or not this is
6972	HOUSE OF
Combines Investigation Act the situation within which our industry must compete for markets in international trade.
Second, and even more imponderable but I think even more serious, is the fact that in international trade we are now coming into a situation where we are faced with the massive communist organization, represented by the Union of Soviet Socialist Republics, as a competitor and increasingly this great force is entering into international trade with the whole weight of the state behind it. This state organization is prepared to do anything to obtain markets for its exports and to eliminate markets for exports from other countries, particularly the western world with which, ideologically, the soviets are in conflict.
Our industry has demonstrated, I think to the satisfaction of most members of this committee, that the combination of these various factors has produced for them in the export field a situation in which they are increasingly unable to be successful unless they are also given an opportunity for organization in that field. They have represented to us that if laws are retained in all their rigidity which certainly raise a very real question about, the legality of the right to organize in export trade, then they are going to be at an increasing and permanent disadvantage. I do not believe, that anyone who listened to those representations, and especially any member of the committee who seriously coinsiders the matter, would quarrel very gravely with the general effect of what was said. I doubt if anyone would question that there is a real, serious and difficult problem for our industry in the export markets.
The problem, rather, is one of disagreement on the desirability of doing something to remedy the situation, one of finding some method of amending our legislation so as to make it clear that what may be done in the export field may be legitimate but must not be allowed to spill over and have adverse effects on the domestic economy. However concerned we may be about the welfare of our industry in the export field, it still remains the primary concern of all of us to protect the interests of the Canadian consumer at home. The problem has been, therefore, to find an amendment which would take care of the situation in the export field and yet not open the door under that umbrella, as it were-there is a mixture of metaphors-to abuses in the domestic field.
In the course of the discussion before the committee I indicated this concern. I indicated that we were studying the problem. I made reference also to the fact that there is before the restrictive trade practices commission at the present time an inquiry into a situation in British Columbia in which this very problem was before the commission. I felt it might


be wiser to wait until we received the report of the commission because I felt that they must address their minds to the very problem I have outlined of how to reconcile these two possibly conflicting tendencies. However, representations were made with increasing urgency and the committee members were obviously very much concerned about it and impressed by those representations.
The hon. member for Bonavista-Twillingate, when we were considering the bill clause by clause in the committee, moved an amendment designed to have the effect of directing the attention of the court to a possible defence on a charge under this act that what was done was done with primary concern and effect in the export field. I asked the committee to bear with me in my position, stating that I was unable to accept the amendment because I had not had a chance of assessing its implications. I felt it was too general in its terms and might have the very effect about which I know the hon. member would be concerned, as well as I, and that is opening the door too wide and permitting abuses domestically under a provision which we had intended to have effect in the export field.
The hon. member for Bonavista-Twillingate indicated he appreciated my position but was unable to agree that he should withdraw the amendment. He, therefore, pressed it to a vote in committee and it was rejected by the committee. It was rejected, however, on the basis of my undertaking to give this matter further study in the interim between that time and the time when the bill would be reported back to the house, to see if notwithstanding my concern about our action being possibly premature until we had received the report of the commission, I could nevertheless in discussion with my officials and my colleagues find an amendment which we felt would be safe.
The result of this discussion has been that we have been able to devise an amendment which I believe will accomplish the result of making it clear that arrangements entered into by Canadian industry, having effect exclusively with relation to their activities in the export markets, may be exempted from the operation of this act, provided again that they do not have the indirect result, whether intentional or unintentional, of producing a disadvantage to Canadian consumers.
The scheme of the amendment is as I have indicated previously, in line with the scheme of subsections 1, 2 and 3 of the section we are at present discussing and it will become clear, I think, if I read the amendment which I am going to ask my friend, the hon. member for Burnaby-Richmond to move, if he will be kind enough to do so. It is:

That clause 13 be amended by adding the following subsections as subsections 4 and 5 of section 32:
(4)	Subject to subsection 5, in a prosecution under subsection 1 the court shall not convict the accused if the conspiracy, combination, agreement or arrangement relates only to the export of articles from Canada.
(5)	Subsection 4 does not apply if the conspiracy, combination, agreement or arrangement
(a)	has resulted or is likely to result in a reduction or limitation of the volume of exports of an article;
(b)	has restrained or injured or is likely to restrain or injure the export business of any domestic competitor who is not a party to the conspiracy, combination, agreement or arrangement;
(c)	has restricted or is likely to restrict any person from entering into the business of exporting articles from Canada; or
(d)	has lessened or is likely to lessen competition unduly in relation to an article in the domestic market.
I think that the amendment which has been previously circulated to several hon. members of the committee will speak for itself without too much amplification from me. However, I should like to refer briefly to the content of subsection 5. Having, as I said, by subsection 4 of the proposed amendment made it clear that in general a charge under this act may be defended if it relates to activity or arrangements concerned with the export of articles from Canada, we have then thought it necessary to ensure that the possible ways in which this might spill over and have an effect domestically be outlined so that it could be made clear that if it did have those effects then the defence that this arrangement related to exports is no longer open or is not successful.
So we have said that the defence does not apply if the arrangement results in any reduction or limitation in the volume of exports of an article.
The reason for this is that since industry says,-and we accept this basis of their case- that they are concerned in increasing their success and increasing the volume of Canada's export trade, we think it would be most unsound for us to leave them an umbrella under which they might in fact make merely a comfortable arrangement by which they establish their position based upon present demand for sales in the export market but do not bother to compete for an increased share in it. That is the reason for (a). The arrangement must not be allowed to freeze or decrease the volume of exports from Canada.
Under (b) the defence will not be open if the arrangement injures or is likely to injure or restrain the export business of any competitor of those who are parties to the arrangement. If we do not provide that, it might be the case that unscrupulous persons
Combines Investigation Act would be able to make their own arrangements in the export field, under the protection of subclause 4, and then having worked out a comfortable arrangement say this: We are not going to have competition; we do not like you so you must stay outside. Then ultimately they would be able to drive that person out of competition at least in the export field if not indeed in the domestic field.
In the third place, the arrangement must not be allowed to operate if it restricts or is likely to restrict any person from entering into the business of exporting articles from Canada. Again, the object of this protection is to encourage industry in export and to enable them to improve their position. Therefore it must not be allowed to be used by them to prevent somebody else from getting into this field because that would have the opposite effect to the purpose for which the protection was designed.
Finally, it must not be allowed to operate or they must not be able to get protection under it if in fact the result of their arrangement is to lessen or is likely to lessen competition unduly in relation to an article in the domestic market. I think that last paragraph speaks for itself. I do not think there is really much necessity for me to elaborate further on the need for such an amendment or the justification for it.
If I have seemed reluctant so far to commit myself to an amendment in this field, it is for the reason I gave earlier in the committee and elsewhere, namely that it is a complicated field and the reconciliation of the conflicting interests in export and domestic fields is difficult. We have a commission working on the matter now. It could be argued that we might be wiser to wait until we have the assistance of their report. But in view of the urgency with which the problem has been presented to us-and I think I would be right in saying the degree of unanimity of hon. members on all sides in recognizing the problem and urging a solution-for these reasons I felt I could take the risk or was justified in taking the risk of recommending to the committee this amendment under which we believe the position of our industries in the export trade can be greatly improved and their competitive position put on a basis of greater equality with the forces present in the world today with which they must compete.
I should like to express appreciation to all hon. members who have spoken on the subject and have made a contribution in suggesting solutions. I am happy now to have an opportunity of asking the hon. member

Combines Investigation Act for Burnaby-Richmond to move the amendment formally because he has worked quietly, I know, but most effectively, consistently and conscientiously on this committee. I say again, finally, that he has kept up a fairly steady pressure along the lines that surely it is not beyond the ingenuity of the government and its advisers to find a solution to this important problem.


John Andrew W. Drysdale: Before moving the amendment, I should like the opportunity to supplement perhaps and to underline some of the remarks made by the Minister of Justice. Of all the amendments we have considered in connection with this bill I think this amendment concerning the export trade is the most important one to come before the committee. In order to underline the importance of it and to put the matter in accurate perspective I hope the committee will forgive me for elaborating a little bit on at least some of the argument that was covered in the committee.
I should like to refer to monthly letter No. 5 of May 16, 1960, of the Canadian Bank of Commerce. I feel that this letter puts forward succinctly the problem of industry. On page 3 in an article under the heading "The nature of Canada's Trade", the following is stated:
The outstanding features of Canadian trade are its immense importance to the economy and its specialized nature. By any accounts Canada is a great trading nation. Notwithstanding a relatively small population, Canada ranks by value as the fourth largest trading nation in the world, following such giants as the United States, the United Kingdom, and West Germany. On a per capita basis, of course, Canada relies more heavily than even these nations on foreign trade. Although the importance of foreign trade has diminished with more broadly based development, commodity exports still account for 15 per cent of the gross national product, equivalent to $292 per head of the population.
In the same article it is further stated as follows:
Exports still primarily consist of a relatively few staple products from the lands, forests, and mines, while imports cover a whole range of consumer, industrial and capital goods.
The Minister of Justice has emphasized the problem of competition from the U.S.S.R. There is also to be considered the factor of various regional trading blocs throughout the world. There is also to be considered the development by Japan and western Europe or the re-establishment of many of the markets they formerly had in North America and the re-establishment of these markets has resulted in a decline in the North American export trade.
Coming from British Columbia may I say that the matter of exports is of prime importance to me. We had briefs from three organizations, namely fisheries, forests and

mines. The fisheries industries export two thirds of its products which is produced in British Columbia. The forest industry exports an average of 70 per cent of its products. In 1959, of total exports of $5,100 million, one third of those exports were from the forest industry. British Columbia contributed one-third of that amount, or some $650 million. As a matter of fact, out of every dollar earned in British Columbia some 50 cents comes from the export industry. The mining industry contributes about 40 per cent of the export trade, a total of about $1.9 billion.
The question may be asked: what was the reason for this amendment. I think it is primarily a matter of clarifying what is the situation regarding the export trade. I think doubt was raised, first of all, by the fish inquiry in British Columbia taken in conjunction with the statements made in the Howard Smith Paper case. Observations were made at that time by Mr. Justice Taschereau and Mr. Justice Cartwright that once it had been established that a conspiracy had been undertaken there was no power to proceed to determine whether or not it was to the economic detriment of the public. I feel that in view of these doubts and in view of the strong briefs put forward by industry it is important that this amendment should be inserted for the purpose of clarification.
I feel that economic competition is more insidious and more dangerous, perhaps, than the threat of nuclear war, because economic competition can destroy a nation without any physical evidence. I feel that at the present time Canada is on the verge of a tremendous economic struggle and I think it is important we should clarify the position of our exporters who are facing the competition of international cartels so as to enable them to fight this economic battle on the same basis as their competitors.
In the United Kingdom, in corresponding legislation, the public interest is taken as the keynote. But it has also been considered to be in the public interest to make sure that export traders do not compete with each other to the detriment of the export situation in which they are involved merely to facilitate the situation with regard to the domestic market. I feel that this amendment permits the export trade to make arrangements to meet the competition of international cartels. The public interest is also the keynote here, and I feel that domestically both the producer and consumer are protected by the amendment. I therefore move the amendment to which the Minister of Justice has referred.


John Whitney Pickersgill: I was interested to hear the Minister of Justice say that the hon. member for Burnaby-Richmond who has

6975 moved this amendment had been persistent and conscientious. I do not remember all the adjectives which the hon. gentleman used, but they were all complimentary. But there was one adjective he used which strained my credulity to the breaking point, and that was when he said that the hon. member had done this quietly. Anyone with experience of the hon. member for Burnaby-Richmond knows that quietness is not one of his outstanding characteristics, though we do not like him the less for that.
1 want to say that, notwithstanding the credit given to the hon. member for Burnaby-Richmond by the minister for achieving what has been achieved so far as this matter is concerned, with my accustomed modesty, I take a little credit to myself for it, because I, too, was very persistent at the very last meeting of the committee. I want to thank the members of the committee and the chairman-and I have not thanked the chairman for much-for postponing the final session to enable me to get back to Ottawa from an urgent engagement elsewhere so that I could put forward an amendment which, I think, finally brought this matter into focus in the committee and ultimately in this chamber. I should like to put the terms of this amendment on record so that they may be compared with the terms of the amendment which is now before us. It reads as follows:
That clause 15 be amended by inserting "(1)" after "35", and adding the following subsection:
"(2) In determining whether any offence under section 32 or 33 has been or is being committed, the court shall consider the best utilization of Canadian resources to meet the requirements of the export trade and the development of markets outside Canada."
Before I moved that amendment I considered the possibility of moving an amendment to section 32 and the only reason I did not do that was that one of my hon. friends intended here in committee of the whole to move that subsections 2 and 3 be struck out of section 32. It seemed to me that in order to avoid confusion it would be better to amend section 15. However, since the government has persisted over our opposition and over the opposition of the C.C.F. in retaining subsections 2 and 3 it seems to me there is no reason why these other two subsections should not be included.
Here I wish to tell the Minister of Justice that I do not regard the amendment he has brought forward today as being on all fours with subsection 2 at all. Subsection 2 purports to declare that certain things which never have been against the law are still not against the law. But I think there was a genuine doubt in the case of certain combinations to promote exports, and I think we are really legislating, if we adopt this amendment, in
Combines Investigation Act a substantive way. It is true, I think, that in the history of prosecutions under the act no combination entered into solely for the purpose of promoting exports has ever been the subject of prosecution. I am not certain, but that is my understanding. The only case that has arisen is the one which is before the commission at the present time where perhaps some other factor is involved. I do not believe I should prejudge that by expressing an opinion; I am merely seeking to identify it.
I must say at once that I think the amendment which has been drafted by the minister and his officials is a much better amendment than the one I offered in the banking and commerce committee. However, to use a phrase which appears in this bill, I am not disparaging myself when I say that, because I did not have the technical assistance that the minister had in this matter. I have looked at this amendment carefully and while it would be easy to pick holes in it, as it would in almost any legislation, I think that generally it does do what we were seeking to do in the committee. I think it does avoid the pitfalls which the minister thought existed in attempting to do what we were seeking to do in the committee.
I am gratified, as I am sure my hon. friends who were in the committee will be, that the government has seen fit to act now instead of waiting to see what might happen in this case before the restrictive trade practices commission because I think, as the hon. member for Burnaby-Richmond has said, that we are not only just now but at least as far ahead as we can reasonably foresee in human events facing very great difficulties in our export trade of a kind that have not been faced to any extent since the war. There has been a shift in the world economy from a shortage to what may perhaps be described as a superabundance of supply in many lines. I think, too, that the methods of trading not merely of Soviet Russia and red China but of many other countries in addition to the communist countries are undergoing profound structural changes that are going to make our problems very much more difficult.
I believe we are going to require all the ingenuity and skill that we possibly can exert if we are to keep the place in the export field that we have to keep if we are going to continue to live with a Canadian standard of living. If this amendment is adopted, as I feel sure it will be, I think it will be one thing that we in parliament- not just on one side or the other but we in parliament-have done to recognize and do what we can in the law to meet a very urgent and critical problem for our national future.
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Combines Investigation Act
We heard the representations of the associations before us representing three of the great exporting industries that export in a so-called private way. I refer to the fishery, the forest industry and the metal mining industry. The hon. member for Burnaby-Richmond has emphasized their importance to British Columbia. Of course, they are important to British Columbia which next to Newfoundland, 1 believe, derives a higher proportion of its total income from exports than does any other province. Of course, Newfoundland has to export everything it produces except what is consumed within the province because people on the mainland of Canada have not yet been educated to buy and use our products. For anyone who has a real familiarity with the export business-and what Canadian who keeps his eyes open has not-its importance is clear. Where would Ontario be without its paper mills, it mines and its other export industries?
I am glad to note one deficiency in the minister's amendment about which someone might complain although I am not. I noticed that (d) part of the proposed subsection 5 states:
-has lessened or is likely to lessen competition unduly.
It does not say "has lessened or is likely to lessen supplies unduly". I am very glad the minister left that out and I hope he did so consciously. I think there may be times when it is in the real interest of Canada and even in the long term interests of Canadian consumers to do without something temporarily, perhaps, in order that we can maintain an export market the loss of which would have the effect of reducing the general standard of living and perhaps extinguishing the income of great numbers of Canadians.
While I am sure there will be, as there always is in human affairs, difficulties found in this amendment in some ways, it seems to me that on the whole-and I wish I could say this about the legislation generally, but I am afraid I cannot-in this particular operation, spurred on by the representations of Canadians outside parliament, by members of the opposition and by the hon. member for Burnaby-Richmond, the government has done a competent job.


Charles Benjamin Howard: I am reluctant to throw cold water on this idea in view of the highly charged emotional atmosphere but I renew my request to have the minister consider whether this proposal should stand over.
I do not know whether we will finish our consideration of this bill today. Despite the one-hour luncheon recess there has not been sufficient time for hon. members who are
[Mr. Pickersgill.I

interested in the matter to thoroughly study the proposals of the minister. I had an opportunity to briefly examine the amendment during the lunch hour and while sitting in committee but it is difficult because of my participation in the debate and I am sure the hon. members for Bonavista-Twil-lingate and Ottawa West are in the same position.
The hon. member for Bonavista-Twillin-gate said it is easy to find loopholes in any amendment or piece of legislation but I propose to point some out, not to be critical but to illustrate conflicts between the amendments and other portions of the bill, and this may add weight to my request that the matter stand over.
A small conflict exists in paragraph (a) of section 5 and I raise this for the purpose of uniformity. Instead of referring to "volume of export" why not refer to "quantity and quality" because those words are used elsewhere in the bill and elsewhere in this section in relation to production. Why must we make reference to the business of any domestic competitor in paragraph (b)? We have no jurisdiction over competitors outside Canada but why are the words used? There is a conflict in paragraph (c). Why not follow the same wording used in subsection 3 of section 32 where reference is made to entering into or expanding a business in trade or industry.
The amendment does not make clear the position of a Canadian company that has an arrangement with an international cartel, let us say for argument's sake, that allows the entry into Canada of articles produced by a competitor of the person who is a party to the cartel and through which it could injure others. This outlines my original thought in so far as subclause 3 is concerned.
I point out there is another clause which is going to require a consequential amendment. I refer to clause 9 of the bill, which has been stood over. This clause has to do with the restrictive trade practices commission and provides that it shall find certain things, namely whether a conspiracy, combination, agreement or arrangement has lessened or is likely to lessen competition unduly in respect of one of the matters specified in paragraphs (a) to (d) of subsection 3 of section 32. Would it not be necessary to give the restrictive trade practices commission authority to find whether the activities of such an arrangement had any relationship to, or effect on subsection 5 as proposed?
But this is not a consequential amendment. Therefore, apart from arguing the validity of this amendment at the moment,

I think, Mr. Chairman, in view of the wording which has just been introduced and hon. members not having had the time or the opportunity to study its full implications, the better course to follow would be for the minister to indicate, now that he has moved the amendment and we have had a general expression of opinion on it, that this proposal might be held over until hon. members in all parties have had an opportunity thoroughly to study the possible implications and effects of the proposal.


John Whitney Pickersgill: I should like to second the suggestion made by the hon. member for Skeena. I think it is a reasonable one. I think we shall make better progress if the minister would be willing to stand over the proposed section 32 for the time being and go ahead with section 33.


Edmund Davie Fulton: Mr. Chairman, I certainly do not like to be un-co-operative with the committee which has been very co-operative so far. However, I make the observation that the comments of the hon. member for Skeena, and indeed those of the hon. member for Bonavista-Twillingate, do not indicate to me that they have not yet had the opportunity to make a thorough study of this proposed amendment and its implications. I have been asked a number of quite detailed and searching questions to which I think I can give satisfactory answers at the moment. I think both hon. members are being too modest both on their own behalf and on behalf of their colleagues; but still it is an important amendment and the request is not an unusual one. I think I would be glad enough to accede to it. Would hon. members like to carry subsections 1, 2 and 3 of section 32, leaving this to stand?


John Whitney Pickersgill: As far as we are concerned I give an undertaking that we will not reopen this section at all. If the minister will allow the matter to stand it will be only for the purpose of discussing the new amendment.


Charles Benjamin Howard: It is not our purpose to reopen discussion on sections 1, 2 and 3, if this is allowed to stand. I merely desire to indicate that we may have something to say on section 32 in its entirety or we may have a review of the proposed subsections 4 and 5, but we do not intend to reopen subsections 1, 2 and 3.


Edmund Davie Fulton: On that understanding, I would be quite happy to have the whole clause stand, including the amendment now before the committee.
Combines Investigation Act


Charles Edward Rea: Shall section 32 stand?
Clause stands.


Charles Edward Rea: On section 33, mergers and monopolies; shall the section carry?


John Whitney Pickersgill: Not for a moment because there is something about it that I think the minister ought to explain. As nearly as I have been able to do, I have examined the parent section, if I may put it that way, from which this comes, and there does appear to be a change. This section reads:
Every person who is a party or privy to or knowingly assists in, or in the formation of, a merger or monopoly-
In the old legislation it read, "in the formation or operation of". I wondered why the words "or operation" had been taken out?


Edmund Davie Fulton: Because we think they are covered by the words "every person who is a party or privy to or knowingly assists in, or in the formation of, a merger or monopoly". There are alternatives: "assists in a merger or monopoly" or "assists in the formation of a merger or monopoly"; therefore, we think "operation" is covered by the first alternative.


John Whitney Pickersgill: I think probably the minister is right about that. This is the only query that bothered me.


Charles Edward Rea: This section is
carried. On section 33A, illegal trade practices. Shall this section carry?


Charles Benjamin Howard: There were amendments
made in the banking and commerce committee that had to do with the grammatical construction of this section. The discussions we had in the committee and the amendments cleared up satisfactorily the point raised by the hon. member for Bonavista-Twillingate and expanded upon by my colleague from Port Arthur. I must admit that once they got involved in a detailed discussion of the grammatical structure of the sentences I gave up; it was a little beyond my capacity to appreciate the fine points of grammar, although now when one reads the amended section and the original, perhaps the amended section makes more sense.
However, there is another matter which I should like to talk about and it is the price discrimination section, which we dealt with quite extensively in the banking and commerce committee and to which I moved an amendment which was defeated. I intend to follow the same course here and to move a similar amendment in order to get a better opportunity perhaps to make my arguments and to get additional opinions.

Combines Investigation Act
This section was formerly section 412 of the Criminal Code and so far as we were able to determine no cases whatsoever had been instituted under this particular price discrimination section. Substantially what section 412 of the Criminal Code and this proposed 33A purport to do it to prevent one person from discriminating against a purchaser of his article by selling it at a lower price to one person than to another. Put in an uncomplicated way that is what it means. As I say, the intent of the words and the ideas behind them perhaps have more validity and sound pleasant. In my opinion there are two words in subparagraph (a), namely "and quantity" which permit price discrimination to be practised, and yet do not fall within the prohibition of this particular section. It reads:
Every one engaged in a business who
(a) is a party or privy to, or assists in, any sale that discriminates to his knowledge, directly or indirectly, against competitors of a purchaser of articles from him in that any discount, rebate, allowance, price concession or other advantage is granted to the purchaser over and above any discount, rebate, allowance, price concession or other advantage that, at the time the articles are sold to such purchaser, is available to such competitors in respect of a sale of articles of like quality and quantity.
This, of course, indicates that if a person allows a 10 per cent discount to one purchaser, then for the like quality and quantity of articles sold be must allow a 10 per cent discount to any other purchaser. If he gives a rebate to one of the dealers to whom he supplies articles, then for like quality and quantity he must allow the same rebate to another purchaser or to a competitor of the person who made the first purchase. These prohibitions are to ensure that manufacturers, wholesalers or distributors cannot and should not be allowed to pick and choose among retailers who sell their products and give one a price advantage over another in order that the one person will be driven out of business to the advantage of the one who is the favourite of the wholesaler or manufacturer.
I submit, though, that the words "and quantity" in paragraph (a) are the salient words in the case of a person who wants to engage in price discrimination. If the quantity of the product in the sale is different, it is very easy for a person to discriminate with respect to rebates, discounts, allowances or price concessions. The matter hinges on the different quantity of articles sold and thus there can be discrimination and the section can be evaded.
There is a similar provision in the United States law which was enacted about the same time as our statute but there is a difference in the United States law compared with ours. The United States law is commonly referred


to as the Robinson-Patman act or amendment and it is found on page 75 of a book entitled, "Anti-Trust Laws and Amendments, 1890-1959", which is published by the United States government printing office. It contains the Sherman act, the Clayton act, the federal trade commission act and amendments, the export trade act and so on which compare with our Combines Investigation Act.
There is one section in their price discrimination law which I think should commend itself for consideration by the committee. I will not read the entire section because it is rather lengthy. Substantially it is the same as that part of our section 412 which I have just read and which will now be 33A. It provides that price discrimination shall not be engaged in and then it goes on to say:
Provided, that nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the different methods or quantities in which such commodities are to such purposes sold or delivered.
The United States law provides that you shall not discriminate between competitors by way of price concessions, rebates, discounts or by giving any other advantage but it also says that if there has been a saving in cost in producing a different quantity of the article there can be discrimination through reflection of that saving in cost in the selling price to the individual.
For argument's sake, and I think this is quite correct, if a manufacturer has an order for the production of 100,000 articles he can produce them at a lower cost per unit than he can produce 5,000 articles of the same type. Normally that is so as far as distribution and packaging are concerned. A larger quantity of goods packaged and distributed results in a lower unit cost for packaging and distribution than for a small quantity.
The Robinson-Patman act of the United States says-I think it is called the cost justification factor-that under such circumstances you can reflect the saving in the cost of manufacture, production or distribution in the price at which you sell this quantity of goods. The saving you make in producing a larger quantity of goods can be reflected in the price at which you sell those goods. The United States law is to that extent different from our law.
We inquired about this matter in the committee when the minister and Mr. MacDonald, the director of investigation and research, were there as witnesses. As found on page 709 of the proceedings of the committee, No. 12, there is some discussion of this matter. Perhaps I should read it in its entirety to show what I am getting at. I hope

I will not misinterpret Mr. MacDonald's remarks. As found on page 709 there is the following passage:


Charles Benjamin Howard: May I ask if Mr. MacDonald knows what the activity has been under the Robinson-Patman act of the United States, which covers this same sort of ground in its price discrimination section-I think it is 3; may I ask if he knows what the activity has been in the United States under the anti-discrimination section, the present section?


Mr. MacDonald:: There has been quite a lot of activity in the United States under that section of the Clayton act which is familiarly known as the Robinson-Patman act.


Charles Benjamin Howard: Do you know why this might be so? Is their legislation different to ours?


John Augustine Macdonald: There is a difference between the two pieces of legislation, yes.


Charles Benjamin Howard: If our act clearly followed the wording of the Robinson-Patman act do you think we would perhaps be in a better position to pursue this problem here, or might there be more complaints arise?


John Augustine Macdonald: What is that?


Charles Benjamin Howard: Do you know whether there might be more complaints arise?
Mr MacDonald: I am inclined to think there would be more complaints.
As I say, I hope I am not misconstruing or misinterpreting what Mr. MacDonald meant, but I took that to mean that we have had no prosecutions under our price discrimination section and that some complaints have been brought to the attention of the director. I do not know how many. Perhaps the minister can ascertain how many there have been and whether there has been a relatively large or small number of complaints about price discrimination activities. It would seem that in Canada there has been relatively little activity under this section whereas under the Robinson-Patman act there has been quite a bit of activity.
I submit that the reason for the greater activity	and the more effective manner in which the United States law deals with this question is that the cost justification factor is reflected in the United States law. It is notable that we say that a person shall not discriminate between competitors as to price with regard to like quality and quantity whereas the Robinson-Patman act says substantially the same thing except that it provides that there can be discrimination as to quantity but that discrimination must reflect savings resulting from producing or distributing a larger quantity of goods.
I am of the opinion that this is one of the reasons why there is some complaint on the part of small businessmen with respect to loss leaders. I submit that many retailers, because they see a competitor selling goods at a price lower than they are able to sell them think that the competitor is thereby loss leadering and selling below the invoice 79951-0-441
Combines Investigation Act price. But in many cases it could well be that the second person has received special discounts or rebates from the supplier, thus permitting him to sell at a lower price and a price which is, in fact, above that individual's own invoice price, but his invoice price is lower because of the price discrimination than the invoice price of his competitor across the street. This is where some confusion arises. The fact that this price discrimination is taking place and does take place has not been taken into account by the words "and quantity".
I am of the opinion we should make an alteration in that regard. I feel we should import from the act in the United States the reference to cost justification, and word it so that it is in compliance with the various parts of our own act. This only requires a very slight change from the wording of the Robinson-Patman Act, which uses the word "provided". We, in drafting our legislation, have used the word "except" in place of that and there are one or two other alterations that would have to be made. Otherwise, the wording of the amendment I am about to move is the same as the wording of the Robinson-Patman Act. I move:
That paragraph (a) of subsection 1 of section 33A of clause 13 be amended, by deleting in line 21 thereof-
This reference is to the old bill, Mr. Chairman, and it may not be the same line in the new bill.
-the words "and quantity;" and substituting therefor the following:
"except that nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such articles are sold or delivered to such purchasers;"
When this amendment was moved in committee there was some discussion as to whether it did, in fact, get to the core of the problem and whether or not some other words might be more acceptable. I looked over the arguments which were advanced in committee in opposition to this particular amendment, but was not able to draft an amendment that was worded more succinctly than the one I originally moved, and which I copied from the United States law. I still believe that this is the way to tackle this question of price discrimination. I know the minister has had far more experience in this field than I, and in addition he is an experienced member of the legal profession. He has within his branch a staff which has spent years and years in drafting amendments to legislation. Perhaps if the amendment in its present wording is not acceptable, although I am sure the principle is acceptable, the minister might indicate whether or not
6980	HOUSE OF
Combines Investigation Act the question might be tackled in somewhat the same way as the export question. If the wording is acceptable, it gets to the core of the problem which I know exists, which I am sure the minister knows exists as does everyone engaged in business. Then we will have a much more effective piece of legislation in the field of price discrimination than we have at the moment.


Edmund Davie Fulton: Mr. Chairman, this point was discussed quite fully in the other committee. It was considered on two occasions there, and I am not really sure of the extent to which it is appropriate for me to go in this committee in dealing with points which were fully discussed in the other committee. If there are new points or variations of points I feel it is my duty, without question, to assist the committee so far as I can by discussing them fully. There have been several such instances of merely considering what was fully considered and decided in the banking and commerce committee. I really believe we should begin to review the situation. I am reluctant to spend a great deal of time on such points.
However, I am aware of the keenness with which my hon. friend from Skeena entertains this point of view. I am certainly not going to brush this matter aside by saying it was decided in the other committee, and leave it at that. I have to say that I have not been able to bring myself to change my point of view since the problem was discussed in committee, at which time I said this was a far-reaching change, having consquences in a very large area of Canadian industrial and economic life which I would not consider it appropriate to import into our legislation at this stage in the consideration of the bill, without a further detailed study and discussion with all those concerned.
In addition to this question of whether it is prudent and wise to do so at the present time without further consideration, I feel I should remind the hon. member that, although it is true that in the United States they do have this cost justification principle, it is criticized there by some who hold very strongly to the view that its effect is to introduce price rigidity, in the whole system and that as a result of this rigidity, consumers in some areas of activity are deprived of price reductions they might otherwise have. This is by no means a one-sided argument. I know there are arguments such as those that the hon. member has made to the effect that the principle in our legislation is not complete, not adequate, but there are very strong arguments that are made that the principle in the United States legislation goes too far and produces results which are undesirable.


In addition to that, may I remind the hon. member for Skeena and the committee that in the report on discrimination pricing practices by the restrictive trade practices commission they found that the largest area of discrimination was in the field of special allowances, such as promotional allowances, rather than in the field of price discounts.
This is a summary, I realize, but I do not believe I could do anything more than merely amplify what I have said if I took more time. It is for these reasons that I oppose the inclusion of the amendment suggested by the hon. member for Skeena.


Mr. Small:: I should like to say a few words on this subject, not necessarily in support of the amendment but more in the way of obtaining clarification and interpretation. During the last week or so I have had discussions with an organization in my riding called New Era electrical appliances. They are also in the furniture business and are a retail outlet for the selling and servicing of electrical appliances. This firm is greatly disturbed by the situation which confronts it. This situation has to do with the setting of prices, and the matter about which they complain comes under the heading of promotion. It is not just undue competition from other people in business. Other firms in this retail business have the same complaint.
This organization being a large organization is running into a considerable amount of unfair competition as a result of the practice of contractors being given certain prices which other people are not given. I have been telling these people that there is a provision in the law that will give them relief from this situation, but the firm's legal advisers say that is not the case. The situation about which they complain does not arise from competitors in the same business but from special discounts given to builders and contractors, subdividers and builders of apartments. These people get special prices on refrigerators, electric stoves and other appliances, sometimes as much as $40 below the regular price to the retail merchant. They are not complaining about that if the consumer gets the benefit. But they themselves cannot get a lower price. They buy the same quantities or the same amount, as contractors, yet the price that the manufacturer gives-not necessarily one because they are different manufacturers-was equally in their favour.
But when they find that they cannot buy at the price a builder or a contractor pays, they are rather disturbed about it.
One of the individuals made a good explanation of what he had in mind but because he was quite upset about it, it was an obsession with him. The conduct of the

manufacturers, if it is not unethical, it is unfair. It is unjust to the merchants who are selling these appliances and are giving service on them. It is unfortunate for them that they did not bring this before the combines committee when they were discussing these matters. However, I told them I would probably have an opportunity to bring their case before the house.
The situation that they are complaining about is this. The builders and contractors are able to buy at a level at which they are unable to buy; they are able to buy at a much cheaper price. They want to know why they cannot be extended the same advantage so that they can pass it on to the consumer.
It is not a question of raising the price or of loss leaders. It is a question of ethics and unfairness. I do not think the manufacturers would be very proud of the situation. As was pointed out by the hon. member for Skeena, what they have established is another level at which to sell and which is unfair. It is not a matter of giving a competitor a lower price but it is a matter of establishing another level altogether with the builders and the contractors. Even though there is a difference of some $40 they do not complain about that. They say that is perfectly all right as long as they have the same opportunity to get the same price to be able to enter into competition with them. They claim that they cannot go to court over it because they have established these different sales levels that they claim are unfair. I should like the minister, if he can, to give a clarification in interpretation of the matter.


Edmund Davie Fulton: The hon. member mentioned this case to me briefly a few days ago. At that time I said to him that without having the full facts I would not care to express an opinion one way or another. I suggested that he might get those who were complaining to him to bring their complaints to the attention of the director of the combines branch and that with all the facts available to them we could see whether there is an offence or whether there is an indication of an offence under the existing legislation or, if there is not an offence covered by the existing legislation, then we could see precisely and in detail the implications of what he has outlined and discuss whether we should take the opportunity of suggesting an amendment.
At the present time all I can say in addition is that our legislation does make it an offence for a person to sell goods to competitive purchasers at different prices or with differing price discounts for sales of the same quantity and quality of goods, as a practice. These are the facts that would have 79951-0-441J
Combines Investigation Act to be established. If they are established there is a prima facie case of an offence under the section. I am not able to say and I would be very unwise to try to say whether on the basis of the necessarily brief outline with which I have been supplied so far there is an indication of such an offence. I can only try to indicate what the section in general provides and then suggest that those complaining that they are victims of an offence should send full information to the branch.


Robert Hardy Small: I might add that they were so greatly concerned about this matter that they went to another city. They had an option on some land such as a subdivision and they called on manufacturers. I will not name them. They are all in the same category. He did not say very much because he did not have time to go into detail. But he did indicate that he was a builder and that he had just recently gone into business, that he had purchased so many of these units, not from the one company but from different ones, 50 here, 20 there and 2 or 3 some place else, established different categories. He purchased them at very low rates because it was going out to the contractor but they had to be delivered to a lot. That was a simple matter. He had them delivered to the lot and he took them to his place.
But he did establish that there was a different level on the sale from what you would call the price to the one that was purchasing electrical appliances. That was the basis of it. I thought he had a good case. The legal advisers claim they thought he would not have a clear case or a prima facie case to go before the courts. I forgot to submit this to the minister but I will submit a statement of the case if that is necessary. I told them that as far as the law was concerned, I would have the matter clarified. Fortunately this just happened in a conversation with them yesterday. I said I would have a chance to bring the matter before the house but I did not think it would be this soon.


John Whitney Pickersgill: I am sure that we are all
interested in the clarification of the problem that has been given to us by the hon. member for Danforth. It just shows how valuable it is to have a practical man speaking once in a while in these committees.


Jacques Flynn: Is the committee ready for the question?


Some hon. Members:: Question.
Amendment (Mr. Howard) negatived: Yeas, 1; nays, 47.


Jacques Flynn: Shall 33A as amended carry?


Some hon. Members:: Carried.

Combines Investigation Act


Jacques Flynn: Shall clause 33B carry?


George James McIlraith: This is a new clause. It is not just a reintroduction of a clause from other parts of the existing legislation. According to the explanatory note and to the evidence given in committee, the basis of it is the 1959 report of the royal commission on price spreads of food products. Without elaborating on the matter unduly I may say that the evidence in committee seemed to indicate that the basis for the creation of the new clause is the evidence that had come to the department from the grocery trade or the food trade. The difficulty is that the legislation is of general application to all the trade outlets and is not confined to one branch, namely the grocery trade or the practices in the grocery trade.
The difficulty in which I find myself here is in relating the general provisions of this section to all facets and types of the retail trade. It simply does not relate to some types of trade. In that connection I think I ought to place on record briefly two references made to the committee. I refer to page 27 of the appendix to the committee reports. That page contains a letter dated June 27, 1960 from the Canadian retail federation to the chairman of the committee and the part of the letter I wish to read is this:
A number of our member-companies have told us that after consulting with their solicitors they have failed to obtain a satisfactory interpretation of the language of section 33B which would direct them as to what course of action they must follow should this section become law. It would appear that it is not possible for a retailer to know what course of action he should follow or under what circumstances he may properly receive an allowance from the manufacturing supplier.
Again at page 39 of the same report there appears a letter from the grocery products manufacturers of Canada dated July 4, 1960. The letter is signed by the chairman of the board and by one of the directors, and the sentence to which I wish to draw the attention of the committee is the last but one of the letter. After referring to the bill generally, the letter goes on to say:
-the manner in which section 33B in particular is written creates so many difficulties in interpretation, implication and application, that it is most undesirable in its present form.
In the light of the objections expressed there I wonder if the minister has been able to give further consideration to the draughtsmanship of this particular section. I would think that this is perhaps the section to which the remarks of the hon. member for Davenport applied, as well as to other sections of the act. In any event it seems to me that a confusing situation arises with regard to the interpretation of this section, particularly
[The Chairman.]
when it is borne in mind that the cost of advertising in newspapers in different parts of the country differs so greatly, along with the methods used in different lines of trade.
I think there is no background, no criteria against which the things can be judged. No such information has been gathered as far as I know by the commission with regard to any of these practices except in the food industry. I wonder if the minister could enlighten the committee in view of what I have said and the statements which I have quoted.


Edmund Davie Fulton: I recognize that in the committee various criticisms were made of our proposed section 33(b). These critcisms were twofold, first that the section was uncertain in its application and, second, that since the reasons given in the bill refer to the findings of two commissions which had made studies specifically, it is true, in the grocery field, those findings were not applicable to the field of trade generally and that therefore our legislation should not be made applicable to the field of trade generally.
With respect, I am not able to agree with either of those views, at least not to the extent that I think the legislation is unsound or that it should not be proceeded with. It is a fact that it will be said of any new legislation that it is full of uncertainties. The original combines legislation was full of uncertainties, and so was the British North America Act. As long as lawyers exist there will be disagreement about the effects of statutes. As a lawyer myself I say that if there were no differences of agreement with regard to the interpretation of statutes there would be no need for lawyers-


An hon. Member:: A good thing.


Edmund Davie Fulton: But to make that as a criticism, and to say that legislation should not be enacted because its effects are not certain is to apply a particular argument to a general situation. It does not apply at all. Really what these people are saying is this: "We do not like this legislation. We think it is going to affect ourselves, and therefore we are going to criticize it on the ground that it is uncertain." With respect, I think this is the actual effect of the criticism.
With respect to the other branch of the criticism that this was drafted after looking merely at reports in the grocery field and that the legislation should not therefore be made applicable to trade generally, again I do not think this argument is a valid one. Certainly the two reports referred to-the report of the Stewart royal commission on price spreads of food products and the report of the restrictive trade practices commission on discriminatory pricing practices in the grocery

trade-were concerned primarily with the food trade, but I suggest that the reading of these reports and an analysis of the situations outlined in the reports leads to the conclusion that none of the findings is applicable only to one particular field of trade or industry alone. On the contrary, I suggest that the findings and conclusions are as valid with respect to the field of hardware distribution, or fountain pen distribution, as in the field of the grocery trade. Let me read some of the conclusions of the Stewart commission, volume 1 at page 36:
While we think that efforts to assure informative advertising should be intensified we also attach importance to the issue of opportunity for choice and particularly the opportunity for choice offered by a reduction in price. In many instances, promotional expenditures are undertaken as an alternative to a reduction in price. The significant feature of a reduction in price is that the buyer can, if she chooses, reduce her expenditure on the particular commodity and turn the released expenditure to other things. (It is true that in some cases a reduction in price would not reduce and might even increase consumer expenditure on the commodity.) Reduction of price gives the consumer the widest possible extension of choice among the things on which she will spend the income released. In our opinion, forms of non-price promotion which substitute for price reductions are detrimental to the welfare of consumers. The extent of this activity is evidence of an increasing reluctance on the part of business firms to offer reduction in prices.
I submit that there is not a word there which is not of general application to the field of trade generally. Again, I should like to refer to one passage in volume 2 of the Stewart commission report where it is said on page 59:
The corporate and voluntary chains have been able to draw heavily on suppliers for advertising allowances. In this way the chains have been able to pass back to suppliers part of the costs of advertising and thus to reduce the extent of these costs which must be borne by themselves: the division of costs is shifted even if total advertising costs are not reduced. The competitive position of the unattached independent store is affected in so far as these stores or the wholesaler supplying them are unable to extract the same terms from their suppliers.
I submit to you again, Mr. Chairman, that there is not a word there which is not of general application to the field of trade generally. In that light we came to the conclusion that the findings of the royal commission and the restrictive trade practices commission both supported the proposal that legislation should be introduced to deal with this kind of promotional allowance which had been found to be an unfair form of competitive device. May I also read this passage from the report of the restrictive trade practices commission's study at page 5:
Finally, the issues which were raised by complainants in wholesale and retail trade in the grocery field were in many respects the same as
Combines Investigation Act
those raised by complainants, primarily retailers and wholesalers, in other fields; hence the analysis that follows will deal with general problems that are common to a number of fields even though the problems may differ in magnitude and in detail from field to field.
I conclude that there is no real validity in the suggestion that this amendment is not capable of general application and should not be made of general application to industry and distributive trades generally.
I said in the committee, and I think it is proper to repeat here, that I feel that a great many of the complaints of uncertainty can be met, first, by the statement that there is some uncertainty in all legislation; second, but perhaps more importantly, by the suggestion that if people are uncertain how they are going to work out the system of making promotional allowances proportionate-which simply means fair as between those who purchase from them-well, then, it is not a bad thing to end the system of promotional allowances. I think what they are really saying is that they are uncertain how they can make it fair. If they are uncertain in that respect I suggest that the best possible course would be to refrain from granting promotional allowances so as not to be guilty of an infraction of the law.
While this might ordinarily be urged against me by way of argument as interfering with a trade practice, I would answer that at once by saying that here we have two reports, one of our standing commission on restrictive trade practices and one of a special royal commission, both of which found that the practice has in it inherent elements of unfairness and that in addition to that it had the undesirable feature that it tended to prevent genuine price reductions which would be passed on to and thus benefit the consumer.
This legislation, as I see it, will have one of two effects and possibly both. In the first place it will force those who make promotional allowances to give them fairly and thus restore the competitive position-the proportionate competitive equality-of those to whom they are granted. If it does not have that effect, then it may have the effect of discouraging the granting of promotional allowances, thus opening the door at least a little wider to the possibility of price reductions. In either or in both of those ways it will be of benefit to competition, the consumer and the economy generally.


Charles Edward Rea: On clause 33C.


George James McIlraith: Mr. Chairman, this clause deals with misrepresentations as to ordinary price. It seems to me there is no apparent reason why misrepresentations as to ordinary

Combines Investigation Act price should be made an offence. I am curious to know why that limitation was imposed with respect to misrepresentations as to ordinary price of the article. So that we can bring the matter into focus for discussion I should like to suggest an amendment that would have the effect of striking out certain words in lines 31 and 32. The clause as amended would then read:
Every one who, for the purpose of promoting the sale or use of an article, makes any materially misleading representation to the public, by any means whatever, concerning such or like articles, is guilty of an offence punishable on summary conviction.
In other words, once a person makes a materially misleading representation to the public concerning an article, the offence is committed. It seems to me that this wording would go farthest to protect the small retailers and would more directly meet the difficulty with which we are concerned and at which this clause is aimed. Perhaps I should now formally introduce my amendment. I move:
That subsection 1 of section 33C of clause 13 be amended as follows: that the words "the price at which" and "have" in line 31, and the words "been, are, or will be, ordinarily sold" in line 32, be deleted.


Charles Benjamin Howard: Having prepared an amendment designed to achieve somewhat the same effect I feel it necessary to formally indicate support of the amendment moved by the hon. member for Ottawa West and for the reason he mentioned, that the offence should arise from materially misleading representations as opposed to such representations relating only to the price of an article. Perhaps I have said sufficient to indicate that this is a commendable amendment that will command our support.


Edmund Davie Fulton: Mr. Chairman, this is a new point. Perhaps I should not comment any further than to say I am sorry it was not raised before when I might have had an opportunity to deal with it so as to dispel some of the misconceptions that there appear to be regarding this section. But it seems to me that if the amendment were accepted we would have something that really goes no further than the present provision in the Criminal Code dealing with the publication of false advertisements.
It was our intention here to go a little further than the Criminal Code goes but in one particular field only, the field of misrepresentation by misleading advertising with respect to pricing. We wanted to cover that as a special and separate field, as one of those provisions which we are now introducing to improve the situation of the independent merchant because this is one of the respects


in which he is particularly vulnerable to unscrupulous practices especially by those who use the power of the purse as one of the main devices against their weaker competitors.
Thus it is frequently alleged in advertisements that if you come to my store you can get an article at such and such a price, and that the ordinary retail price is, let us say, a sum two or three times as much. It has been found on investigation-I have not had the opportunity to put this on record before -that in many of these cases the price advertised as the ordinary or average price bears not the slightest relation to reality, or is a grossly inflated statement of what is the ordinary or average retail price at which those articles are sold. Such advertisements, blown up as they are, usually have articles in them for which there would be a tremendous consumer demand if the impression was created that you could get them at one third of the ordinary retail price. So, you see, they have an attractive effect and on that basis the volume of sales of the merchant who makes use of this misleading and dishonest device is increased at the expense of those who do not resort to such misleading and dishonest practices.
It will be appreciated, I think, that this is a special type of misleading advertising; it is misleading advertising related to price alone; and so we have felt it was proper to have a provision in the combines legislation dealing with the matter, because of its relation to other subjects with which this legislation now deals, namely the provision designed to protect and improve the position of the independent merchant.
Another reason for having it in here in this form is that we do not police the Criminal Code; that is the ordinary provisions of the Criminal Code are not normally the responsibility of the combines branch to supervise or to enforce, and I think that it would be the subject of criticism if we took the ordinary provisions of the Criminal Code and put our officers in charge of supervision and enforcement. There would be a change in the normal division of responsibility for enforcement of the ordinary Criminal Code provisions. That is why we put it especially in here. As I say, I think the effect of the hon. member's amendment would simply be to make the section go no farther than the present provision of the Criminal Code, so that it would have really no special place in the combines legislation; it should be left to the operation of the ordinary section of the Criminal Code.
There are one or two additional technical arguments that I could make, but these are the basic arguments why we think it

should be in here in its present form, which does give it specific relation to pricing.


Lester Bowles Pearson: Would the minister not agree that those misrepresentations, and what he calls blow-ups and exaggerations in a dishonest sense, are not confined, of course, to prices as pointed out by my hon. friend, and therefore by mentioning prices only is he not in danger of minimizing the offence in relation to other forms of misrepresentation and dishonest advertising?


Edmund Davie Fulton: I should not really think so, Mr. Chairman. The other matters are covered in the Criminal Code sections; there have been some prosecutions under them. I am not at all sure actually, whether if you simply left the section, as this amendment would, to deal with misrepresentation generally, there might be some question whether the courts would hold that a false statement as to the price at which such article is sold in ordinary retail sales is actually a misrepresentation as to the article itself. It is certainly misrepresentation as to the price of the article, but when you are asking the court to hold that this is misrepresentation of the article itself, as you have to do if this amendment carried, there might be some question there. We felt that it was appropriate to include a section that specifically related to misleading price advertising.
Amendment (Mr. Mcllraith) negatived: Yeas, 10; nays, 47.


Charles Benjamin Howard: Mr. Chairman, it seems to me that this is the decent course to take in so far as the elimination of false and untrue advertising is concerned; but it is qualified somewhat; it implies that a person can be a little bit dishonest or misleading or quite a bit, maybe half way misleading or dishonest before he runs afoul of the provisions of the law. I am making reference to the word "materially". The clause reads:
Every one who, for the purpose of promoting the sale or use of an article, makes any materially misleading representation to the public-
I wonder whether it is necessary to have the word "materially" in here since it is a qualifying phrase of "misleading" and indicates that "materially" could have a number of connotations. I take it from this it means that a large degree, or more than just a slight amount of misleading must take place. I take it the word is synonymous with the word "substantial", or that it relates to the definition or degrees of misleading rather than to the definition of the word "materially". Before I go any further can the minister indicate just what it means? Perhaps I should stop, since it is five o'clock.
Combines Investigation Act


Charles Edward Rea: Order. It being five o'clock, it is my duty, pursuant to section 3 of standing order 15, to leave the chair in order for the house to proceed to the consideration of private and public bills.
Progress reported.



PRIVATE BILLS

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


Mr. McCleave:: I think there is agreement among all parties that private bills are to be dispensed with and the house will resume the business which was interrupted at five o'clock.


John Whitney Pickersgill: I may say it is agreeable to us, sir.


Mr. Speaker:: Does the house give unanimous consent to waive the hour for private bills?


Some hon. Members:: Agreed.


Mr. Speaker:: The house will resume the business which was interrupted at five o'clock.



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

[Stage Direction]
The house resumed consideration in committee of Bill No. C-58, to amend the Combines Investigation Act and the Criminal Code-Mr. Fulton-Mr. Rea in the chair.
Charles Benjamin Howard: At five o'clock I was asking the minister what was meant by the word "materially".


Edmund Davie Fulton: The word "materially" here is not intended to have the effect, and I do not think has the effect, that the hon. member for Skeena attributed to it. It does not have the effect of saying that it has to be a great big misrepresentation and that a small misrepresentation would go scot-free. What is intended, and I am certain the effect it does have, is to say that it must materially mislead somebody. The effect must be to mislead somebody in a material manner so that they form an erroneous conclusion which is material to them and without which they would not have gone in to buy the article or would not have taken the action they took. It is so that the person who complains that they were misled cannot make a case out of some trifling effect on them that the misrepresentation may have. The misrepresentation has to have the effect of misleading them in a material way.
6S86

Combines Investigation Act


Leon David Crestohl: Could the minister give a practical example?


Edmund Davie Fulton: I would say if a person felt they were going to get a bargain at about one third of the ordinary retail price and found they were only getting it at five cents less than the ordinary retail price that would be misleading them in a material fashion. But if it was merely said that there was a saving and the saving was five cents I think it would be questionable whether that was a material misrepresentation. To clarify, if somebody merely said there was a saving and if the person forms his own conclusion on that basis that there was a material saving, whereas the saving was only five cents, he would not have been materially misled because there was a saving.


Charles Benjamin Howard: If that is the intent of the word, would it not follow that the section is perhaps phrased somewhat incorrectly and would lead someone to form another conclusion? Here is the misleading representation to the public that is qualified as being material and the minister has just said that the effect upon the public from the point of view of being material is the connotation rather than the misleading representation being material. I wonder whether a readjustment of the words would not make it more clear.


Edmund Davie Fulton: I think that this section compared, for instance, with section 303 of the Criminal Code, which deals with false pretences, makes it clear in what sense and with what effect the word is used, and it must be that the misrepresentation has a material effect.


Charles Benjamin Howard: Does the section of the Criminal Code to which the minister has referred have the same relationship between words as this one?


Edmund Davie Fulton: No, in a sense this was an attempt to find a word which would be consistent with the general provision of the Criminal Code regarding false pretences. We did not want to go into the long provision of the Criminal Code which outlines what false pretences means. We felt that in this context the use of the word "materially" would convey to the courts the same import as is contained in the section dealing with false pretences in the Criminal Code.


Charles Edward Rea: Shall section 33C carry? Carried.


[Stage Direction]
Clause agreed to.
On clause 14-Defences.
Lester Bowles Pearson: Mr. Chairman, this, of course, is a very important clause in the amendments. It deals with resale price maintenance

and concerns also the practice of loss leaders as well as other business practices. On second reading and in the committee we explained at some length our objection to this clause. We noted that section 34 of the act prohibiting resale price maintenance was maintained. Perhaps that is a little surprising in view of the stand taken by my hon. friends opposite in the 1951 discussion of this subject. However, although it is retained, we feel that this particular clause, which amends section 34 of the act, would result in resale price maintenance coming in again through the back door by a system of private law enforced privately with private sanctions and really establishing a form of private resale price maintenance. When I was discussing this matter on second reading, Mr. Chairman, I had this to say, as found on page 4354 of Hansard:
If the government feels that some of the practices it is asking the manufacturer to prevent, asking the supplier to prevent, are really undesirable from the point of view of the public interest, then surely the only fair and honourable course of action to take is to make those practices illegal and let the courts decide when an offence has been committed. A system of private law, even if it is to be governed under the supervision of the courts, is not acceptable.
So far as we are concerned, it remains unacceptable. I appreciate, of course, the difficulty of legislating against loss leaders. The report of the MacQuarrie commission had a good deal to say about these difficulties and the report I have in my hand, the 1955 report of the restrictive trade practices commission, containing some 260 pages, is devoted to a large extent to explaining the undesirable results of loss leaders but also to explaining the difficulty in legislating against them. However, it seems to us that if the government is determined to have a section of this type in the act, if it is determined to amend the act in this way, it would be much preferable to have the section deal directly with loss leaders and include in it as effective a provision as can be made to make this practice illegal. I am not going to repeat all the arguments that were advanced in the committee and on second reading with respect to this subject. I will content myself at this stage by moving:
That all the words after " (5) " in line 39 of clause 14 be deleted and the following substituted therefor:
"(a) Every one who makes a practice of selling an article at a price below his cost of acquisition is guilty of an offence punishable on summary conviction.
(b) It is not an offence under paragraph (a) of this subsection to sell below the price mentioned therein in the case of end of season clearances, sales of broken lines, sales of an overstocked article, sales of a perishable article and in other similar cases where the purpose is also primarily to dispose of the article."


Edmund Davie Fulton: Mr. Chairman, I think my first comment must be that in a matter of this importance, relating to a portion of the act on which my hon. friends have indicated in the past they are most concerned and with respect to which they have made their most vehement criticisms, it is unfortunate that an amendment of this type comes at this time when there was an opportunity given by the reference of this bill to the standing committee for detailed suggestions of this type to be discussed in an atmosphere and in a place where discussion would have been useful. The committee of the whole would not then have been confronted with the immediate necessity of taking a decision. I must say that I find it remarkable that we have been confronted with amendment after amendment at this stage which was not suggested in committee. I have refrained from commenting before because the circumstances were not as remarkable as these circumstances.
We have an amendment here which deals with a section of the legislation about which my hon. friends have in the past expressed the greatest concern. One would have thought that they would have found it appropriate to make such a specific suggestion as this in the banking and commerce committee. However, that was not done and I am not going to protest about the fact it is actually done here. My hon. friends are quite within their rights, whether or not it had been done in the other place, to move the amendment here and I merely draw attention to the fact that it was not done there.
We are, however, confronted with an amendment which would have a very far-reaching effect, and it is my responsibility to indicate, on short notice it is true, what my position is with regard to the amendment.


John Whitney Pickersgill: Will the minister permit a question? Would the minister rather go on to the other sections of the act and come back to this after having had a little time to reflect upon it? This course would be quite agreeable to us.


Edmund Davie Fulton: No, I do not believe it is necessary because I feel this amendment is so far-reaching that it has the effect of destroying the content of the legislation. I do not feel, really, that I have much difficulty in making up my mind with respect to the desirability of defining loss leaders. I am in entire agreement that that might be a desirable thing to do. I would suggest that those who have made a study of it so far have suggested it is a difficult, if not impossible, task to find the kind of definition which you would put into a statute making it a criminal offence to indulge in a practice such as this.
79951-0-442
Combines Investigation Act It is extraordinarily difficult to define this practice and there is a danger that whatever words you use you may be embracing a practice which, on reflection, you would wish you had not covered at all.
My first comment is that what this amendment seeks to do is to wipe out the legislation which has been before the house on second reading, which has been before the banking and commerce committee for a month, and totally eliminate the proposed amendment to section 34, and substitute for that a provision merely defining "loss leader".
Then, when you come to considering that amendment itself, the definition of loss leader, I find it would be very difficult to accept. It makes the sweeping assertion that a loss leader is confined to the practice of selling an article at a price below the cost of acquisition. It makes this an offence punishable on summary conviction. It is true the amendment goes on to set out what are not offences, and incidentally the form of words used is just as objectionable as the form of words we had in the draft bill of last year which came in for such criticism. However, it is not on that point really that my concern would rest because I was never in agreement with all the strictures that were heaped on us for having used this form of words last year.
What I would be concerned about would be subparagraph (b) of this amendment which provides that it is not an offence if the sales complained of occur in the course of end of the season clearance or sales of broken lines or sales of over-stocked articles or sales of perishable articles or in other similar cases when the purpose is primarily to dispose of the articles. I have very grave doubt as to whether this is valid criminal or quasicriminal law. Who is to say what is the end of season clearance? That is not defined. Who is to say what is a broken line? How are you to establish that it was definitely a broken line or one that the person selling it merely wished to discontinue? Who is to define what is an over-stocked article? There may be many different impressions of what is an over-stocked article. We must remember that in order to avoid a conviction for a sale which he might not have regarded as a loss leader at all but genuinely the sale of an over-stocked article a merchant would have to establish that it was an over-stocked article. There is no criterion by which that may be established, so he may be convicted although he may have had a genuine apprehension that he was over-stocked. If the court comes to the opposite conclusion, then the court convicts him if he sells the article below the cost of acquisition.

Combines Investigation Act
One could make similar points on every one of these purported exceptions which, if established, would render a merchant safe from a conviction of having been guilty of loss leader selling. They are all matters of opinion, and in that sense I question very seriously whether it is fair to attempt to create a new definition of a practice with the certainty that anyone convicted of that practice is going to be found guilty of a criminal offence, an offence punishable on summary conviction. The whole thing is in the area of opinion. There are no criteria which are capable of being reduced to legal language by which you could measure the definition of loss leader.
I have come to the conclusion, as have the experts who have worked in this field before including the MacQuarrie committee, that it is not a subject which is capable of precise definition of a nature which would make it a proper matter for enactment in criminal legislation. It is not capable of that kind of definition which would warrant one in making it a crime. It is because we came to that conclusion, that there was really the greatest difficulty in the way of defining loss leader so as to make it a crime, that we were forced into the position of coming at it by this inverse approach which is contained in our amendment to section 34.
We are not making anyone guilty of a crime under this, nor are we restoring the practice of resale price maintenance. We simply say that if a supplier discontinues the supply, for any of the reasons outlined in the section, then if that is his reason he is not, on that ground alone, to be found guilty of the other crime which was created by the former government, namely that of resale price maintenance. We have not, therefore, created any crime because we are recognizing that in this field it is not possible to create such a precise definition that it would be appropriate to make the conduct complained of a criminal offence.
Now it does seem to me, finally, that what is done by this amendment really falls not so much within the realm of criminal law as it does within the realm of an attempt to regulate trade and business. This is exactly what it is. I have always felt that it is not proper for parliament to make detailed regulations with respect to looking into a merchant's stock to see whether he was overstocked or whether he had broken lines or whether it was a real end of season clearance, and so on, or a perishable article. I have always felt that kind of intrusion into the detailed running of an individual's business is not good criminal law. While I appreciate the intent or motive with which


this amendment has been designed, I must conclude with my customary modesty that it does not prevent any better definition of the loss leader practice than do any of those which we have had under consideration from time to time. We felt that none of those were proper matters to present to parliament. I have come to the conclusion that this is not an acceptable amendment. Under the circumstances I have outlined, we believe that our approach is the only feasible one by means of which the interests of the small merchant can effectively be protected.


John Whitney Pickersgill: The minister complained or, if he does not like the word "complain", may I say that the minister observed that this amendment was brought in at the last moment when there might have been an opportunity for bringing it in in the committee. I have not looked up the matter, but I am sure the minister will recall that there was one occasion in the committee when we felt we had good ground to complain because the elections act was under consideration here in this place, when the hon. member for Kenora-Rainy River pointed out in committee that it was going to be simply impossible for us to put forward all the views we wished to put forward in that committee because we were constantly having to appear in the house when we wanted to be in the committee. He served notice on the committee and on the minister at that time that precisely this sort of thing was bound to happen because of the way in which this matter was being proceeded with.
But that is not the reason why this amendment was not brought forward in the committee. The reason this amendment was not brought forward in the committee was that we were concerned to get rid of this, as we think, iniquitous legislation altogether. Until further study is made of this problem and until a thoroughly satisfactory way of dealing with this loss leader problem-and I admitted this problem-can be found, we think the best course would be to leave section 34 alone. But since the government is going to persist in trying to make private law, we felt it was our duty as legislators to accept the facts, as the Leader of the Opposition said, or to accept the realistic situation in which we find ourselves and to do our utmost in order to see that if an attempt is going to be made to deal with this problem of loss leaders it should be dealt with positively and directly by public law enforced in the courts and not enforced by the private ukases of manufacturers.
The minister talks about some of the things in my leader's amendment as being

matters of opinion. But what is to let suspected offenders off in the minister's proposals? It is "reasonable cause to believe". If a private individual has reasonable cause to believe, he can take against some businessman punitive action which may put him out of business and that will be perfectly legal under the minister's amendment. If that is the case, we think it preferable, or to put it the other way, it is less objectionable to proceed in this way and make the best attempt we can make-and we do not think it is such a bad attempt after all- to define a loss leader. Of course, the extraordinary thing is that, although the minister says it is impossible to define "loss leader" he nevertheless uses the word "loss leader" in the legislation, in line 47 on page 8 of the bill as it was given second reading, the bill that is before us without the amendments printed in it:
(a) that the other person was making a practice of using articles supplied by the person charged as loss leaders,-
In other words, the courts are to decide without any guidance that someone believed or had cause to believe that loss leaders were in use and as a result some person might be denied supplies by private action.


Edmund Davie Fulton: Might I just interrupt at that point?


John Whitney Pickersgill: Yes.


Edmund Davie Fulton: I think my hon. friend has missed the point. I said we did not think it was possible to define "loss leader" with sufficient clarity and precision so as to make it proper to make it a criminal offence.


John Whitney Pickersgill: I quite agree.


Edmund Davie Fulton: We have defined "loss leader" here. We have not left the court without guidance. However, it is not made a criminal offence.


John Whitney Pickersgill: The minister is quite right. The situation is exactly as he says. This parliament in 1951, over violent objection from the minister and his colleagues when they were over here on this side of the chamber, made resale price maintenance a crime. Now by a vague "cause to believe" clause the minister is saying that you can get out of guilt for this crime if you have cause to believe something or other happened that he does not think can be defined as a crime, although it may be defined in some other way. In other words, what this legislation does is this, and it seems to me that the minister's intervention helped my argument because it indicated quite clearly that the minister really is intending to do precisely what we have said all along he was 79951-0-442J
Combines Investigation Act intending to do, namely to provide an escape hatch for resale price maintenance and to make this crime no longer a crime in any practical sense. As I say, if this is really what the minister has in mind, may I suggest that the minister is still thinking along lines that are not much different from those along which he was thinking in 1951. I have been looking through this interesting volume of the debates of the House of Commons for the second session of 1951. On December 28, as reported at page 2450, in the debate on the bill to ban resale price maintenance, the minister said this:
There is, however, ample evidence to the effect that the small retailer will be hurt if the practice of resale price maintenance is eliminated. In the light of that evidence, we are left with the question, why is the government in such a hurry to hurt the small retailer?
I draw attention to these words. The opposition were complaining bitterly because this legislation was being put through by the government at that time.
Why are they in such a hurry to remove the only protection-
And I would ask you to bear those words in mind, Mr. Chairman.
-which the small retailer has against the power of the big interests, the monopolies and the large chain stores, and leave him at the mercy of cutthroat competition? No satisfactory answer to that question has yet been given; yet the Prime Minister, in taking part in this debate yesterday, said that the government was not willing to leave this matter over for any further or fuller investigation; that they were going to remove the protection from the small retailer and leave him to stand on his own feet. It is a callous, ill-considered and ill-advised course to follow, with much harm to be done to independent Canadian business.
If, in fact, what the minister said about resale price maintenance eight and a half years ago was justified-and I do not think for a minute that it was justified-it is hard to see why the minister has been three years in office without doing anything about it; and why now, after three years in office, he is refusing to do what he wanted the government of that day to do, namely to take direct action to deal with this problem of loss leaders but instead is trying to deal with it by a device which we believe will only have the effect of undermining that legislation and of making it virtually inoperative. Why is he seeking to do that?
We say that rather than let that happen it would be better for the government to do what the Minister of Finance, the Prime Minister and the Minister of Justice himself said should be done when they were sitting on this side of the house. They said that if resale price maintenance was to be banned there should be legislation to prevent loss leader selling. But obviously all this legislation is going to do is to allow a private law

Combines Investigation Act to be established in this particular regard. Rather than do that we think it would be a less objectionable course for parliament to adopt the amendment which my friend the Leader of the Opposition has put forward.
I should like to say one other thing. The minister ended his objections by talking about concern for small business. Everybody who takes his duties in this house seriously is concerned for small business as he is for all other sections of the population. But there is one common characteristic of all Canadians, whether small or big: we are all consumers and, our first concern should be for consumers especially those who belong to the least protected section of this community, especially in the export industries where producers are unable to protect themselves against the movements of the world market. To weep crocodile tears about small business when in fact what is going to be done will very likely have the effect of increasing the prices which fishermen and farmers must pay for the necessities of life is something which does not appeal to us. It is for this reason that the St. Laurent government banned resale price maintenance, and we have enough evidence to know that this action did have some effect in keeping prices down at a time of inflation, and that it is having some effect now in reducing prices to the consumer.
I had a clipping from the Financial Post handed to me by the hon. member for Kenora-Rainy River-I have lost it now-which referred to the fact that the day after General Motors in the United Kingdom had taken the ban off resale price maintenance in connection with the Vauxhall car the price went down $400 or $500. That was in England. There is no doubt whatsoever that if by the front door or by the back door resale price maintenance is reintroduced the consumer is the one who is going to pay.


Gordon Harvey Aiken: I wonder if in view of the amendment he is now supporting the hon. member would agree that the practice of loss leader selling is a serious problem to retailers?


John Whitney Pickersgill: I am not sure that it is, but I am sure that most small businessmen think it is, and if we can do anything reasonable and proper which is not going to soak the consumer to remove that kind of grievance we ought to do it.


Edmund Davie Fulton: That is exactly what we have done.


Charles Benjamin Howard: I think our objections to the proposed section 34, which were made clear during the second reading of this bill and developed further in the committee, apply at this stage also, because only one slight alteration has been made by the government, and regardless of that alteration we consider that

our criticisms are still valid. I am speaking now of the bill as put forward by the government with the addition of subsection 5 to section 34. This confirms our impression that the government just has not got enough courage to put forward its own ideas in the proper form; it has to hide behind some loopholes and pretend it wants to do one thing while really doing another. This government wants to reintroduce price maintenance. This is a campaign which they carried on day after day while in opposition eight or nine years ago. I do not recall this personally, but I remember reading reports of the debate in the House of Commons at that time and the hysterical opposition which was voiced by government supporters, then on the other side of the house, to the then Liberal government's ban on price maintenance. All these feelings are in evidence here again, and it would have been much nicer, much cleaner and more decent if the Minister of Justice had introduced an amendment to repeal section 34. This is what he wants to do in one way or another.
We can only look at this new subsection from one point of view and that is that it should be rejected out of hand. It does nothing more than attempt to legalize price discrimination by private manufacturers because they would now have authority of a legal nature to pick and choose and discriminate against and exercise control over their products from the time they are manufactured until the time the consumer gets them. Manufacturer after manufacturer has either appeared before the committee or made submissions to the minister indicating that what was wanted was a return to resale price maintenance; that they wanted the right to have price control not only at manufacturing level but also at wholesale and retail levels. Of course, this would lead not only to price control but, inevitably, to an increase in prices.
It is very easy to see what will occur in Canada under this particular amendment put forward by the minister. This sob stuff about wanting to help small businessmen cope with the problem of loss leaders is simply window dressing to cover up the real intentions of the government. If the government wished to deal with the problems of small businessmen-and there is no statistical evidence of the degree of severity of this particular problem-then measures could have been taken in one of the other sections of the act, such as the section on price discrimination. If we have a free enterprise economy, if that is what people believe in and if that is the type of economy which we desire, then surely the consumer should have the right to pick and choose between, for argument's sake, an article in one store which has a certain price and in connection with which there is a certain degree of service, if

we wish to bring service into it, and a similar article in another store at a lower price where such service may not be provided.
I heard references made in the committee to a firm in Ottawa called Abseil which was described as a discount house or a store that sells a lot of loss leaders. Of course, I do not know if that is the case. However, some hon. members of the present government are among the clientele of Abseil. They have been known to enter and make purchases. Certainly they want to exercise the freedom of selection as does anyone else. I also understand that the Minister of Citizenship and Immigration has made purchases there.


Ellen Louks Fairclough: On a point of order, Mr. Chairman, that statement is not true.


Charles Benjamin Howard: Oh, that is perfectly all right. In any event, that was what was said. The amendments offered by the minister deserve complete and outright rejection. Inasmuch as the amendment introduced by the Leader of the Opposition attempts to meet a bad situation foisted on us by the government it is deserving of support.


Gordon Harvey Aiken: Mr. Chairman, the amendment just moved by the Leader of the Opposition represents the most amazing about face I have witnessed in a long time. Throughout second reading of the bill and throughout the meetings of the committee the attitude of the official opposition was that loss leadering is not causing any difficulty, that it cannot be defined, that small business only thinks it is being mistreated through loss leadering and that in fact this entire piece of legislation being introduced by the government is bad. Every witness who stated that there was nothing particularly wrong with loss leadering was supported by hon. members of the Liberal party and every witness who said that loss leadering was causing trouble was opposed.
The opposition of the Liberals occurred right up until yesterday and this morning, but now there has been a reversal of attitude. The evidence of Mr. Gilbert of the retail merchants association was castigated throughout the hearings of the committee because he said that loss leadering was a problem and deserved to be dealt with. Mr. Gilbert who has been maligned, to say the least, by hon. members of the opposition, in his evidence proposed that he would much prefer to see the outright repeal of section 34 which is almost entirely the same proposition that is being made now. It is most difficult to understand the reversal of the position of the Liberal party.
The Leader of the Opposition in his introductory remarks said he felt that if the government was going to insist on something
Combines Investigation Act being done it should be gone into to the full extent. Throughout the whole argument on loss leadering the government has managed to show that some balance is required in this difficult situation. In 1952 the Liberal party brought in legislation which outlawed retail price maintenance. We feel that the absolute outlawing of it was wrong, that it went too far and that it created other difficulties. We believe that the legislation now introduced will have some leavening effect on the whole situation. To absolutely outlaw loss leadering in my opinion would be to swing entirely the opposite way.
It appears as though the Liberals want to swing the whole way, one way or the other, depending on which side they support. They appeared to be on one side in 1952. They appeared to be one one side yesterday and this morning, but this afternoon at 5.15 they appear to have swung right over to the extreme opposite side of the position they formerly took.
I believe the legislation now being introduced is good legislation. As far as loss leadering is concerned it is no offence now under the law for a person to put goods on sale in an effort to sell them. It is no offence to put cheap goods or non-brand name products on sale. It is no offence to use such products for low price sales, even to the point of their being loss leaders. To do so is not an offence under the present law nor should it be. When a product is being used to the detriment of the manufacturer a person can have action taken against him under certain conditions.
Certainly a manufacturer who has spent much money on the research and development of a product and on advertising it, does not want the product put on the market to be sold as a loss leader or as a cheap product nor do the other retailers want this. This is the crux of the whole situation. A retailer selling a brand at a price which is fair and which provides a reasonable profit can surely expect that his competitors will sell the same brand at a reasonable price. If a product costing $1.25 is being sold for $1.59 in one store and for 59 cents in an adjacent store it is certainly of no benefit to small business or the other retailers. It gives the public the impression that the man charging the higher price is making an unduly high profit which is not the case.
I feel that the amendment proposed by the Leader of the Opposition would go too far the other way. I do not know how a loss leader could be defined. I think the effect of this would be to hurt the consumer. I say no more at the moment except that I would oppose the amendment and again I express amazement at the way it was introduced.

Combines Investigation Act


Mr.   Morion@: Mr. Chairman, I cannot refrain from making some comments along the line of those made by the hon. member for Parry Sound-Muskoka. It is surprising that the Liberals should have taken the position represented in this amendment after the long arguments in the committee, after what was said there by the economists to the effect that the problem of loss leadering did not exist; after even Professor Cohen expressed doubts about the extent to which the problem did exist and especially after the disparaging remarks made by the hon. member for Bon-avista-Twillingate not only about Mr. Gilbert but the group he represents because the group was so bold as to bring forward the fact that there was a loss leader problem.
My hon. friends opposite apparently now have seen the light perhaps as a result of the urging of some hon. members in their own party who are involved in small business. We can assume indirectly by implication from this amendment that hon. gentlemen opposite have now realized there is a problem with respect to loss leaders. If you recall the various arguments they were to the effect that perhaps it would be better in the circumstances to let the manufacturer decide whether the loss leader is disparaging his goods.


John Whitney Pickersgill: That has been taken out.


Mr.   Morion@: That part has, yes. As to whether the loss leader is in fact a problem, the manufacturer himself, who knows the situation, in conjunction with retailers who will speak to him about it, would be a good judge of the effect it is having on trade.
The question of whether this is a better method of settling it or having the courts settle it on the basis of the definition of loss leader given in the amendment which perhaps is another definition that is in the clouds. I refer to whether it is a loss leader or not. Perhaps we should leave it as it is and let the matter work itself out, because in all the discussions in the committee very few of the experts could tell us of the effect with respect to the matter of the loss leader in the present situation where the supply is greater than at the time the present act was put into effect, since the manufacturer is not the only manufacturer of the specific goods concerned, and they are not going to destroy their outlets by arbitrarily withholding the right of people to sell their goods. Therefore, for business reasons, they are going to try to get as many outlets as possible. For this reason they would not use this method unless they took a great deal of caution with respect to the effect on themselves.

Of course, we were criticized over the fact that we had not done away with the theory of price maintenance. On the other hand, there are those who feel that we are doing away with price maintenance in the present suggestions. I urge, Mr. Chairman, on this basis that an amendment such as the Leader of the Opposition suggests would not meet the entire problem, and therefore it would be better to go along with the method which is proposed in clause 14.


John Whitney Pickersgill: I want to make a couple of observations about the speeches of the two hon. members, the hon. member for Davenport and the hon. member for Parry Sound-Muskoka, since both of them did me the compliment of referring to me. Both of these hon. gentlemen have been great champions, of course, of the cause of the small merchant and are really anxious that something should be done for him with respect to loss leaders. But I notice that they seem to have greeted our so-called conversion to their views not with the enthusiasm one would expect, but with anguish, because they realize the difference between what the Leader of the Opposition is putting forward and what they were seeking to do is the difference between a straightforward, simple way of doing this thing and something that would create a kind of private law.
I rather think that the hon. member for Davenport gave the whole case away when he said, "There are manufacturers who are-" I forget what he said after that; but he was suggesting, perhaps unconsciously, what he was really thinking about when he referred to "manufacturers" and that it reflected his way of thinking. He also suggested we were not concerned until today about loss leaders. That is not, of course, true, as anyone who has taken the trouble, as I have, to look through the debates of 1951, or the speech of the Leader of the Opposition on the second reading, or the remarks that I made yesterday on this subject which I am not going to repeat but which are contained in the second column of Hansard at page 6901.
There is obviously a problem here, a very difficult one. We think the problem has been greatly exaggerated, as I said earlier. We think it would be better to leave the law as it is. But if something is going to be done about this, we think this is the preferable method to the other and 1 hope the committee is now ready to decide on the amendment.


Mr. Morton:: Will the hon. member permit a question?


John Whitney Pickersgill: Yes.


Mr.   Morion@: In his amendment the hon. member would not carry on the remedies that are set out in paragraph (c) and (d) of clause 14?


John Whitney Pickersgill: No.


Mr.   Morion@: You refer to loss leaders only; you forget the other difficulties.


Mr. Nugeni:: I have been listening to the hon. member for Bonavista-Twillingate and I think I should straighten him out on the Conservative reactions to this apparent Liberal change in position and assure him the change was viewed not with caution but with suspicion.


Gordon Harvey Aiken: Not a real convert.


Terence James (Terry) Nugent: However, a cursory examination of the amendment proposed by the Leader of the Opposition brings to mind immediately a couple of contradictions. They purport to give protection against loss leader selling, and then promptly they say that this loss leader selling is an offence. Then they give some examples which say that it is not an offence to carry out loss leader selling, and one of these examples is the sales of an over-stocked article. I myself am not a storekeeper or merchant but for the life of me I cannot understand how a loss leader campaign or sale can be carried on without involving an over-stocked article. As a matter of fact, the usual practice is for a merchant to get hold of a large quantity of a particular kind of merchandise that is very low priced and sell it at a loss or at cost and absorb the loss as a good advertising scheme. In other words, it is cheap advertising. He gets a better return on his money than he would get in any other way.
So long as they say that the sale of an over-stocked article is not loss leader selling, how can it possibly give protection? I cannot understand this. An article is over-stocked, in my view-and I cannot arrive at any other sensible conclusion on it-if the merchant has more on his shelves than he would normally carry or his business would normally be expected to handle, or circumstances should change and it would be a good reason, he felt, to get rid of the article. If he wants to take a loss, and if he gets some advertising profit, then he is going to feel that he is over-stocked. Therefore, there is no protection at all and no offence possible under this definition.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
Terence James (Terry) Nugent: Mr. Chairman, I had been dealing with the amendment to this section
Combines Investigation Act moved by the Leader of the Opposition, and at the risk of repeating myself I should like to say that I take particular exception to that part of his amendment which deletes from loss leader selling sales of an over-stocked article on the basis that sales of an overstocked article are usually carried out in circumstances where the merchant finds it unprofitable to try to get rid of the merchandise in the normal course of events. By using the article as a loss leader he hopes to get his value out of it as a result of the advertising benefit he receives. In essence what the amendment does, therefore, is to purport to make an offence of loss leader selling but the definition used by the Leader of the Opposition makes it certain that no one would ever be convicted of such an offence.
My reasoning in this regard is much strengthened by the remarks of the hon. member for Bonavista-Twillingate who has tipped us off as to exactly what the official opposition intends to do. That hon. gentleman referred to these people as those who fear that loss leader selling is going to do them some harm. He made it plain in his remarks that he was not at all convinced there was any harm in it but admitted there were those who felt it would harm them and suggested that if we can do anything in a legislative way to allay their fears we should do so. I suggest that is exactly what his leader is attempting to do by this amendment. He is putting in something which will look like it was intended to give such protection but since they are not really against loss leader selling the amendment will not deter it in the least. He says that these people see a shadow and they fear it. Therefore he has moved an amendment which is window dressing but no more than a shadow to fight the shadow of these people's fears.
I am not perhaps the most astute politician in the house but I do think that when we have an amendment which on its face and with only a cursory examination by members of the house can be seen to be so ineffectual that it really would accomplish not one thing, and when we have had the hon. member for Bonavista-Twillingate apologize for it in case they should be thought stupid instead of merely politically astute, it really is going a little too far to take up all the time of the committee that discussion of the amendment has.
I am one of those who feel it would be nice if our legislation was not only good but looked good. However, I certainly think it is vastly more important that our legislation should do something rather than merely be window dressing such as they ask us to accept in their amendment. Having said that, 1 think we have

Combines Investigation Act had enough of such amendments, and I trust that the next time an amendment is brought in it will at least attempt to do something, and that if the hon. member for Bonavista-Twillingate thinks that people are hanging on his every word and reading all his speeches he will not so much further insult the intelligence of members of the house as well as the people of the country by making it obvious that they really do not intend any harm to loss leader selling.


John Whitney Pickersgill: Mr. Chairman, before the vote is taken, may I say I do not think I can let that savage attack by the hon. member for Edmonton-Strathcona pass without pointing out that our amendment does create a very clearly defined offence, an offence which is precisely of the character that the star witness for the government, Mr. Gilbert, said he wanted, that is to say, that nobody should be allowed to make a practice of selling things below the cost of acquisition. It is a clear and definite offence.
We recognize the practicalities of the situation, that there are certain circumstances in which people should be allowed to sell things below the cost of acquisition, as I am sure the hon. member for Edmonton-Strathcona and every other hon. member on the other side recognizes, but we take the view that if there is a problem and something is to be done about it then this amendment would be effective. If there is no problem, then of course the amendment could not be effective, but there are those who allege there is a problem. At any rate, we would see this happen directly and clearly. There would be prosecutions in the courts of the persons who were guilty of using loss leaders and they would not be subject to punitive action by manufacturers who could get around the existing law by reason of the loopholes provided in the legislation that the government is putting forward.
I repeat that the best thing of all would be to leave section 34 alone until something really thoroughly satisfactory can be devised, but since the government will not do that, since the government is putting forward something that we think is completely objectionable, we feel it is our duty as legislators to try as far as we can within the rules of the house to put something forward that is at least somewhat better, and that is what we are trying to do.


Terence James (Terry) Nugent: Mr. Chairman, I do not want to be repetitious but I am afraid the hon. member has missed the gist of my argument against his leader's amendment. It is true they have purported to create an offence but the only manner in which the offence could

be committed has. been so covered up by their definitions that it would be impossible to convict anyone of such an offence.


John Whitney Pickersgill: I should like to ask the hon. member a question. Would he say which of the exceptions he would take out if he were drafting the legislation?


Terence James (Terry) Nugent: Which of the exceptions in the bill?


John Whitney Pickersgill: No, which of the exceptions in my leader's amendment?


Terence James (Terry) Nugent: I do not have a copy of it in front of me but it seems to me that most of the exceptions are covered by the remarks I have made. The amendment refers to seasonal clearances. Who is to say what is a seasonal clearance except the storekeeper? It is impossible of true definition or to get it down fine enough so that any crown prosecutor I am acquainted with would care to stick his neck out and try to get a conviction. Certaintly one particular clause to which I object most strongly and which I think is most obvious has to do with sales of an over-stocked article. As I have pointed out, the essence of loss leader selling is that the merchant always uses an article on which he was probably going to take a loss anyway, and in order to get his value out of it he uses it as an advertising gimmick or loss leader. I think that is very obvious.


Edmund Davie Fulton: I think before the committee
votes on the amendment moved by the Leader of the Opposition I should endeavour to place it in its proper perspective by comparing it with the proposal put forward by the government, which this amendment would delete. I referred this afternoon to some of the objections to the amendment which I saw upon an immediate examination, and upon reflection have not been removed. Indeed, they have been reinforced by what I have been able to perceive as I studied the amendment. I think a brief survey of what would be done by the amendment, as contrasted with what would be done by the government's proposal, would be helpful.
I indicated that one of the reasons I could not accept the amendment was that I felt it was not possible to place in the criminal law a section defining loss leader selling in a way that should make that practice the subject of a criminal prosecution and conviction. I pointed out just how open to objection the amendment is on that point. Since that time I have been looking at the report of the restrictive trade practices commission on its inquiry into loss leader selling, and refreshing my memory about what they had found with respect to this matter of defining loss leader selling. I find that they made

some very interesting observations in the section of their report dealing with this subject. I direct the attention of the committee particularly to the passage beginning on page 230, where it states:
It has already been indicated that, in the case of practically all those appearing before the commission, whether representatives of manufacturing or trade groups, or of consumer, farmer or co-operative associations, the view was generally held that it would be undesirable to have legislation which would attempt to define loss leader selling. In some cases the objections were directed specifically to legislation which would establish a minimum mark-up over cost in the sale of any article. While this was the position most commonly taken, the Retail Merchants Association of Canada Inc. did make a suggestion for amendment to the Criminal Code to make it an offence to sell merchandise below a stated cost.
Having noted that the retail merchants association had submitted a draft in this respect they went on to deal with it and to point out the objections that they felt concerning it. In this context, and at this moment, I should like to say we have also made it quite clear to the retail merchants association from the inception of our discussions with them as a government that we doubted very much the feasibility of their proposal; then later, in the course of the discussion we indicated that our doubts had been resolved and that we were certain we could not create a definition of loss leader selling which would be appropriate to insert in this bill to make it a criminal offence. We came to that conclusion on much the same reasoning as is given in the report of the restrictive trade practices commission, because they go on to say, as reported at the bottom of page 231, after having dealt with the suggestion of the retail merchants association:
The necessity, which the Retail Merchants Association of Canada Inc. clearly recognized, of guarding against the use of any formula or definition in a way which would interfere with the normal competitive conduct of business, is pointed up by the fact that those who made the proposal immediately saw that exceptions and qualifications were required. This emphasizes the views of many others appearing before the commission, to which reference has already been made, that any attempt to define sales below some stated level of costs as loss leader selling would have to provide for so many exceptions that practical working of the measure would be impossible. It will be noted that in the definition proposed by the Retail Merchants Association of Canada Inc. an attempt was made to get away from the actual acquisition cost to an individual retailer and use instead "the manufacturer's lowest selling invoice price" to any member of the trade.
Then they go on to point out how impossible it is, ho<w undesirable it is to resort to this method of giving protection to the independent merchant against whom the practice is used. So, Mr. Chairman, it is a fact that the restrictive trade practices commission,
Combines Investigation Act
while recognizing as they do the undesirability of the loss leader device, and in this field of course they are reinforced by the findings of the MacQuarrie committee itself, have nevertheless concluded that making it a criminal offence is not a practical method of dealing with this problem. I refer to the attempt to define it and to write that definition into the Criminal Code, because of the multiplicity of exceptions which would have to be introduced in such a provision.
On the basis of that conclusion, which this government shares, one is then faced with the necessity of finding some other method of meeting the problem confronting independent merchants, and it is our view that we have resolved that problem satisfactorily and in the only method possible by the amendment suggested in clause 14 of this bill. At this point I have to remind the committee that the amendment suggested by the Leader of the Opposition would completely delete our proposal. When members of the opposition say that their proposal is desirable as against the undesirable government proposal-I will not attempt to review all the opprobrious terms they have applied to it-let us look at what this government's proposal does.
I should like to examine our proposal in the light of what they say, and in the light of what would still be open to be done by way of an inquiry if a charge or complaint is made that resale price maintenance has been introduced by the back door, as my hon. friends say would be the case under our amendment. Starting on the basis that resale price maintenance is made illegal and is an offence under the act, we have not in any sense weakened or amended the operative portions of section 34 which have that result. But we do say that there are certain practices carried on by some large retailers which are damaging to the interests not only of other merchants but of consumers. We say that no one in his right senses would argue that if these practices could be defined and isolated a supplier should not have the right to discontinue supplies because of these practices. Let us look at what our amendment says. It reads:
Where, in a prosecution under this section, it is proved that the person charged refused or counselled the refusal to sell or supply an article to any other person, no inference unfavourable to the person charged shall be drawn from such evidence if he satisfies the court that he and anyone upon whose report he depended had reasonable cause to believe and did believe-
Let me remind you, Mr. Chairman, that the supplier has to have reasonable cause to believe and has to believe, first:
-that the other person was making a practice of using articles supplied by the person charged

Combines Investigation Act as loss leaders, that is to say, not for the purpose of making a profit thereon but for purposes of advertising;
My hon. friends have recognized by their amendment now before the committee that they also agree that the practice of loss lead-ering is an undesirable and damaging practice. It is not open to them, therefore, to say that it is unreasonable for a supplier to discontinue supplies if the person supplied is using those articles for loss leadering. We are on common ground there. My hon. friends must agree that it is quite appropriate for the supplier to discontinue supplies under those circumstances.


George James McIlraith: Surely the minister would agree that the amendment offered by the Leader of the Opposition provides that the courts should enforce a penalty on a person who practices loss leadering, whereas the amendment with which he is dealing enables the supplier to enforce the penalty against that person.


Edmund Davie Fulton: Not at all. I shall come to that matter when we relate this back to what happens when an inquiry is launched on the basis of a complaint that resale price maintenance has been indulged in. But the point I am making here is that my hon. friends, by their amendment, agree that this loss leadering is an undesirable practice and should be eliminated. If they agree with that suggestion then they cannot say that it is unreasonable for us to provide for the discontinuance of supplies because of this practice of loss leadering.


John Whitney Pickersgill: What a non sequitur.


Edmund Davie Fulton: My hon. friend says "What a non sequitur". The only inference to be drawn from that remark is that they were not sincere when they introduced their amendment which says that a company which engages in the practice of loss leadering, as they defined it, is committing a criminal offence.


John Whitney Pickersgill: I wonder whether the minister would permit a question?


Edmund Davie Fulton: Yes.


John Whitney Pickersgill: Does the minister really think that every practice that he considers undesirable should be made illegal?


Edmund Davie Fulton: No, indeed. That is precisely my objection to the amendment of the Leader of the Opposition. This happens to be one practice that I consider undesirable, but I recognize that it cannot define with sufficient preciseness in order for one to be warranted in trying to make it a criminal offence.

The next ground upon which we say that a supplier would be entitled to discontinue supplying is when the person supplied was making a practice of using the article supplied not for the purpose of selling such articles at a profit but for the purpose of attracting customers to his store in the hope of selling him other articles. Is there anything unreasonable about that? If a supplier finds that the person supplied is using the goods supplied not to promote the sale of those goods but as a come-on device in order to get people into his store for the purpose of selling them other articles which is damaging the trade of other merchants who are trying to sell his goods, is there anything unreasonable or improper about the supplier discontinuing the supply of those articles to the offending merchant? I hear no voice raised in opposition or contrary assertion. I, of course, am satisfied that no one could hold that it is an unreasonable thing to make it clear that a supplier has the right to discontinue his supplies under those circumstances.
The third circumstance under which it is made clear that supplies may be withheld is that the person supplied was making a practice of engaging in misleading advertising in respect of the articles supplied by the person charged. Will anyone argue that it is unreasonable or improper to make it clear that a supplier can discontinue supplying if the person supplied was using the articles in question as a subject of misleading advertising in an unethical way or engaged in unethical and dishonest practices with respect to the goods supplied. Therefore we say that there should be no question but that the supplier would be right to discontinue supplying there.
The fourth circumstance in which it is made clear that a supplier has a right to discontinue supplying is when the other person made a practice of not providing the level of servicing that purchasers of such articles might reasonably expect from the merchant in question. The circumstance here is not that the person selling articles did not provide a level of servicing required by the manufacturer. That would not be a valid ground for discontinuing supplies. The circumstance justifying withdrawal of supplies is that the merchant made a practice of not providing the level of servicing that purchasers from him might reasonably expect him to supply. This is directed at another dishonest device wherein merchants hold out that they are sellers of goods with respect to which purchasers normally expect a certain level of services and do not make it clear that their low prices are on the basis that

they do not service the goods. The purchaser from them comes back and says, "My appliance has broken down will you come and repair it?" And only then finds this merchant saying, "We do not have a policy of servicing these goods". The effect of this section is to say that anyone who holds himself out as giving service with respect to goods that he sells, and who then does not give the service which the purchasers from him are entitled to expect on the basis of that holding out may have his supplies discontinued without the person discontinuing the supplies being interpreted necessarily as having attempted the practice of resale price maintenance.
Hence every one of these circumstances outlined here under which supplies may be discontinued without that necessarily being held to be part of a resale price maintenance policy, are circumstances in which the consumer has a definite interest in seeing that that policy of discontinuing supplies would be followed; because every one of the practices jutifying a discontinuance of supply is a practice that works against the interests of the consumer. I make that statement without hesitation or equivocation.
Having analysed the basis upon which this legislation proceeds, the basis upon which it says that discontinuance of supply under these circumstances shall not be taken ipso facto as evidence of a desire to maintain resale prices, let me turn to the next criticism that my hon. friends make.
"Oh," they say, "but the decision whether or not to discontinue supplying is a sort of private law". Somehow or another they suggest that this matter is placed entirely beyond the reach of the administration of the combines legislation. They say that we are placing the power in the hands of suppliers and thus of manufacturers, of administering private law, and they suggest that the combines branch will not be able to look at it any more and that the courts will not be able to deal with it.
This also is an argument ad absurdum. This can be demonstrated if we go back to review the course of an inquiry that would be made if a complaint was laid by a merchant whose supplies had been discontinued. Let us suppose the case of a retailer whose supplies had been cut off and who got in touch with the director and said, "My supplies have been cut off and I say it is because I refused to maintain a resale price which the manufacturer or supplier asked me to maintain". The director would make an inquiry. The director would examine the suppliers in order to ascertain what was the reason for which the supplies had been
Combines Investigation Act discontinued. He would examine into the situation in order to see whether in fact any attempt had been made to practice a resale price maintenance policy.
My hon. friend says, but all that the person then investigated would have to do would be to say, "Oh, somebody told me that the merchant whose supplies are discontinued was carrying on a practice under one of the clauses (a), (b), (c) or (d)". This, of course, would not be by any means an answer to the inquiry into the question of whether there was resale price maintenance, because not only would the supplier who discontinued supplies be obliged to satisfy the director that he did believe that one of these practices was being engaged in, but he would be obliged to show that he had reasonable cause to believe it; and he would not be able to rely upon the suggestion made by my friends in the opposition that somebody had told him and therefore he had reasonable cause to believe. It would then have to be proved that the person who told him also had "reasonable cause to believe".
Are we to assume that just because this legislative amendment is made, the director, the restrictive trade practices commission and in the ultimate analysis the minister and the courts are going to take leave of their common sense and not require the persons who are being investigated to show them positively that they had "reasonable cause to believe" that one of these things were taking place which alone is the justification for the discontinuance of supply?
It is apparent that hon. gentlemen opposite have simply closed their eyes to the real meaning and to the obvious meaning of the provision we have placed before parliament. The director is not going to be hoodwinked, the restrictive trade practices commission is not going to be hoodwinked; they are not going to allow someone to say to them "I have simply formed a belief" without asking why he had formed that belief and whether there were reasonable grounds for it.


George James McIlraith: Does the minister not realize that the supplier will have cut off supplies and inflicted a penalty before the director is called upon to intervene, and suppose the director finds there is no defence-


Edmund Davie Fulton: That is a completely irrelevant question.


John Whitney Pickersgill: -after he has been put out of business?


Edmund Davie Fulton: There is no change at all. Right now if a manufacturer were to cut off supplies by reason of a policy of resale price maintenance we could not restore that situation until there had been a complaint and

Combines Investigation Act an inquiry followed by a report and a conviction. There is no change in that situation whatsoever. Of course, there has to be an inquiry. That would be the case whether this amendment were here or not. So there is no interference with any access on the part of the merchant to the director, and no change in that regard at all.
The director, as I say, is not going to refrain from applying common sense to this situation just because this amendment is here. He will require to be shown that there is reason to believe that one of the practices outlined in the section was involved, and if that is not proved he will say that this section provides no defence. So it will be with the commission, so it will be with the minister to whom the commission will report, and so it will be with the courts. The courts are most certainly going to require that anyone who relies upon the defence of this section must show that he not only did believe but that he had reasonable cause to believe that one of the offensive practices was being carried on by the persons whose supplies are discontinued, and it is only if that can be established that the section is available as a defence.
So I say that when you examine what we have provided here as a reasonable protection for merchants against the unfair competitive practices of some of their competitors, and when you find it does not restore resale price maintenance, that it does not take away the common sense of the combines branch, either of the director or of the commission, and that it does not impose any criminal liability on persons in respect of practices that cannot be defined in legal terms suitable for inclusion in criminal law; when you compare all this with the amendment put forward by the Leader of the Opposition which flies in the face of every report by every agency, including those established by the government of which the hon. gentleman was a member, all of which conclude that it is not practicable to define the practice of loss leader selling and make it a criminal offence, I say to the committee that I am confident that in the light of that comparison they will agree with me that the amendment of the Leader of the Opposition should be rejected and that the proposal of the government should be adopted.
Amendment (Mr. Pearson) negatived: yeas, 20; nays, 59.


Charles Benjamin Howard: This clause has been kicked around somewhat and I think there has been a pretty exhaustive examination of it. However, I think there is one group of words which should be removed. We have already


debated their effect and intent to some extent. If they were removed I do not say I would support the clause in its entirety, but for the sake of ensuring the greatest possible degree of clarity I think the words that relate to reasonable cause to believe should be removed, and I should like to move, accordingly, as follows:
That subsection 5 of clause 14 be amended by deleting, in lines 43, 44 and 45, the words
"that he and any one upon whose report he depended had reasonable cause to believe and did believe".
I think that removing the reasonable cause to believe business will make it more clear, and put more responsibility on the person who is charged to prove why he discontinuef his supply to the other person involved.


John Whitney Pickersgill: I must say I think this amendment commends itself to me.
Amendment (Mr. Howard) negatived: Yeas, 19; nays, 64.


Charles Edward Rea: Shall clause 14 carry?


John Whitney Pickersgill: On division.
Clause agreed to on division.
Clauses 15 and 16 agreed to.
On clause 17-Jurisdiction of courts.


George James McIlraith: Mr. Chairman, I wish to raise a point I raised on second reading. I do not propose to reiterate any of the arguments made previously but I want to point out again to the committee that subclause 4 combined with the new section 32 (1) as adopted earlier today by the committee make it abundantly clear that where an offence or a prohibited act has been committed under this legislation the Attorney General of Canada at his discretion-and likewise the attorneys general of the provinces at their discretion-may proceed by civil proceeding instead of by way of criminal prosecution. That in my view raises a very serious constitutional issue because of the fact that the legislation against combines has been held to be within the competence of parliament because it is criminal legislation.
If we make it clear as I suggest we are doing by the adoption of clause 17 (4) that it is no longer criminal legislation but may be merely a matter that is to be dealt with by way of civil remedy and civil proceedings then we are raising a real constitutional issue that may very well jeopardize-I am sorry I cannot hear the hon. member who is interjecting-the legislation. We are raising a constitutional issue by the adoption of this; clause combined with section 32 (1) in the form in which it has been approved by the committee. I merely wanted to point

that out to the committee. I do not think I need elaborate on the subject or reiterate the arguments I used earlier.


Edmund Davie Fulton: Mr. Chairman, I appreciate the brief re-statement by my hon. friend of his position and I will be equally brief in reply because we did cover this before. In my submission my hon. friend is confusing the procedural with the substantive. The hon. member is saying that because we have provided a different procedure to obtain a remedy, we have changed the nature of the jurisdiction under which we seek the remedy. In my submission that is not a sound view. In my submission the procedure by way of information which, is provided in subclause 4 as an alternative is equally a criminal as a civil procedure. We are not relying on any different jurisdiction although it is true that we have provided an alternative remedy.


George James McIlraith: The minister's argument would be perfectly valid if he had adopted an earlier argument advanced this afternoon to the effect that the discretion be left in the courts and not in the minister, but since it is a discretion left in the minister it changes the complexion of the matter altogether. That is the nub of the whole argument. If the minister had left the matter with the courts his answer would have been effective but having taken the discretion himself it gives rise to the problem to which I referred.


[Stage Direction]
Clause agreed to.
Clauses 18 to 22 inclusive agreed to.
On clause 23-Application of acts to fishing agreements.
Charles Benjamin Howard: This provision was inserted in the act last year which, in brief, provided that the act would not be construed to apply to the Ashing industry on the west coast up to a certain period of time. This arises out of the fact that there was an inquiry by the director into the Ashing industry and consequently a statement of evidence was made to the restrictive trade practices commission. Hinging on this the industry and union were unable to enter negotiations. The Ashing association took the position that they would perhaps run afoul of the law again by negotiating with the union on the price of Ash. The period involved was from January 1, 1959 to December 31, 1960.
A number of reasons combined to postpone the hearing by the commission. I do not know whether a Arm date has yet been set for this hearing. There has been some correspondence between the union and the minister and as is the usual practice I am sure the union sent copies to at least all hon. members from
26. 1960
Combines Investigation Act British Columbia. I understand their contention is that there is a possibility of entering into negotiations between now and the end of December, 1961 which could result in agreements which would be in effect beyond the end of 1961. Although they want it to apply for the next 99 years the association suggested that the extension might more properly be to December, 1962 in view of extenuating circumstances and the complications that might arise to ensure that they have the coverage and protection of the law relating to any contract signed in this period.
If the commission meets and hearings are held it will be some time before the matter is concluded and the report released. Following that if there were a decision to prosecute some of the parties the proceedings could well carry on well past 1961. Until the question is Anally cleared up the extension should be granted for an additional year beyond 1961 as is presently provided for. Would the minister indicate the decision he has made with respect to an extension to December 31, 1962?


John Whitney Pickersgill: I should like to support- I do not think there is any need to repeat the argument-very warmly the suggestion of the hon. gentleman.


Edmund Davie Fulton: I doubt very much whether I can accept the suggestion, for the reason that it will be quite simple to take care of a situation which might arise if the hearings of the commission are protracted, or if the court has not dealt with the matter by the time limit contained in the proposal before the committee, namely the 31st day of December, 1961. It will become obvious to parliament in the course of the session, and as a matter of precaution the time limit would be extended by a sufRcient period to take care of the eventualities, and so on from time to time as appeared to be necessary.
I would hesitate very much indeed to give a statutory exemption to an arrangement which might be held by the courts to be a contravention of the act and And then that by so far advancing the period of exemption the arrangement might continue to operate for an appreciable length of time after it had been found that it was otherwise a contravention of the act. I would think it would be much preferable to keep the period reasonably close; then, if from time to time it is found that it is necessary to postpone the expiry of the exemption period, that can be done.
I might point out to my hon. friend from Skeena by way of, shall I say, compensation for any disappointment he might feel in not having his amendment accepted that any such further postponement would give him the

Combines Investigation Act opportunity to discuss the matter again every time. Thus, it is not an unmixed blessing so far as he is concerned.


Charles Benjamin Howard: I did not know you would invite me to take part in the discussion again.


Edmund Davie Fulton: The reason I do not like to see it extended for too long a period is that the arrangement might continue to operate for an appreciable length of time after it had been found that it was otherwise a contravention of the act. For these reasons I am not able to accept the extension of the postponement under this section.


Charles Benjamin Howard: In so far as the minister's suggestion is concerned, may I say I think that some of his friends on that side of the house would object strenuously to my participating in any debate which might prolong the session.
I do not intend to press the matter to a vote because of what the minister has said, and I think it can be taken as a solemn guarantee to everyone concerned that if circumstances are such at a subsequent session that it is necessary to extend the precaution for an additional period of time, this will be done until the matter is cleared up.


Edmund Davie Fulton: Yes, I will confirm that understanding, Mr. Chairman.


[Stage Direction]
Clause agreed to.
On clause 5-Counsel.
Charles Edward Rea: The Chair has an amendment of the hon. member for Ottawa West.


Edmund Davie Fulton: Mr. Chairman, it was agreed that we would allow this clause to stand and that I would review the remarks and suggestion of the hon. member for Ottawa West in the light of what I had said and would then attempt to produce an amendment which reconciled the points of view. Accordingly, I have one which I would be glad to ask my colleague the Minister of Labour to move. I think the hon. member for Ottawa West has been provided with a copy. I will send one over now if he has not one.


George James McIlraith: Before the amendment is moved perhaps I should withdraw the amendment I had offered.


Charles Edward Rea: Will the committee give unanimous consent to the hon. member for Ottawa West to withdraw his amendment?


Some hon. Members:: Agreed.
Amendment withdrawn.


Michael Starr: I move:
That lines 3 to 5 on page 3 he deleted and the following substituted therefor:

13. Whenever in the opinion of the commission or the director the public interest so requires, the commission or the director may apply to the minister to appoint and instruct counsel to assist in an inquiry and upon such application the minister may appoint and instruct counsel accordingly.


Charles Edward Rea: The committee has heard the amendment.


George James McIlraith: I just wish to indicate that this fully and clearly expresses the views that I was seeking to embody in the amendment I moved.


Edmund Davie Fulton: I do not wish to appear to obstruct my own amendment, but I notice now it seems to have reference to the original bill and I am just wondering, to avoid misunderstanding, whether we are working on the reprinted bill or-


Charles Edward Rea: We are working on the original bill.


Edmund Davie Fulton: Then it is alright.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
Charles Edward Rea: Shall the committee revert to clause 9.
On clause 9-Findings to be included in report.


Charles Benjamin Howard: I understand this clause was held over to make sure that it would not conflict with the possibility of one or more amendments being accepted to section 32 but, in as much as none was accepted, perhaps we might deal with this in a formal way. The minister introduced, or there was introduced on his behalf by the hon. member for Burn-aby-Richmond, an amendment to section 32, notably to subsections 4 and 5, which deal with the export trade question. I am not advancing this favoured point of view because I do not think the clause before us now, namely clause 9, commends itself to our acceptance, in any event. There is a specific reference to findings in the clause and authority is to be given to the commission so that it shall include-and I am reading now from the top of page 4:
-a finding whether or not the conspiracy, combination, agreement or arrangement relates only to one or more of the matters specified in subsection (2) of section 32 and, if so, shall include a finding whether or not the conspiracy, combination, agreement or arrangement, has lessened or is likely to lessen competition unduly in respect of one of the matters specified in paragraphs (a) to (d) of subsection (3) of section 32,-
And so on. If it is desirable to give the commission authority to make findings with respect to subsection 2 and subsection 3 of section 32, would it not also be correct for

the minister to give the commission authority to make a finding with respect to subsections 4 and 5 also?


Edmund Davie Fulton: Mr. Chairman, I do not know that a great deal hangs on the suggestion one way or the other, but I have a reluctance to accept it because I would point out that the amendment with respect to export arrangements, it seems to me, is quite distinguishable and proceeds on an entirely different basis from the amendment in the earlier portion of section 32 relating to arrangements in the domestic field. I suggest to my hon. friends that this present clause does not have the implications that they read into it. There was nothing intended by way of creation of the principle or the insertion of the principle of specific detriment. Its intent was to be by way of guidance to the minister as to the proper course to be followed in applying the remedies; that is all. Therefore, I do not want to enter into a great controversy about it, as though a great deal hung on it because not a great deal does hang on it.
We would have to make a fairly lengthy and complicated amendment to meet the suggestion of my hon. friend with regard to the new proposed subsections 4 and 5 of section 32, and since I think the amendment with regard to export trade is clearly distinguishable from the amendment regarding domestic situations I regret that I have to say I do not see any necessity for an amendment and would therefore have to oppose the suggestion.


John Whitney Pickersgill: On this particular point I think I must say that on balance I would agree with the minister.


[Stage Direction]
Clause agreed to.
Charles Edward Rea: We will now go to clause 13, section 32.
On clause 13, section 32-Conspiracy.


Charles Edward Rea: The Chair has an amendment moved by the hon. member for Burnaby-Richmond.


Charles Benjamin Howard: Mr. Chairman, we have had an opportunity at least to spend another half hour looking at the amendment during the supper hour, and on balance I think our position is substantially the same as was expressed in the committee. While we have the greatest concern possible for the economic position of Canada, the need that exists to participate more fully and completely in export markets and the need to be even more and more on the alert to protect ourselves against the economic assault already started by the Soviet union, we feel that our combines legislation is not the place to deal with this sort of thing.
Combines Investigation Act
I think I might perhaps disagree with some of the suggestions made by the hon. member for Bonavista-Twillingate and the Minister of Justice, but as was pointed out with respect to subsections 2 and 3 of section 32 it is very easy for an agreement relating to one sort of thing to spill over into something else. I might say here that the economists who appeared before the committee were divided in their opinion on this matter. Some felt it was desirable to deal with it this way and others felt it was not.
I subscribe to the point of view that it is not desirable to amend the combines law to deal with this problem because of the possibility of a slopping over of a conspiracy to fix uniform prices for the export market into the domestic market. When Mr. Hyland, who represented the fisheries council of Canada, appeared before the committee he gave some evidence in this regard. While it relates to an individual group of people in the fishing industry, nevertheless I think it has some bearing on this situation. His evidence is found on page 273 of the proceedings of the committee and starts about half way down the page. Mr. Hyland is answering a question posed to him by the hon. member for Port Arthur and while it has to do with a regulatory trade commission perhaps I should read the whole thing. The passage reads as follows:


Mr. Fisher:: If you have a regulatory trade commission, with some kind of expert knowledge in the development of a background and a history, they might be in a position to make that judgment. might they not? They are doing it in other parts of the act.


Mr.   Hyland@: One thing of which I am always very much aware, as an individual responsible for the sale of a lot of fish, is that we are not selling anything that anybody has to have. It is well known that the per capita consumption of fishery products in Canada is in the realm of 13 or 14 pounds a year, whereas meat and poultry is more like 150 pounds. And of that 13 or 14 pounds canned salmon is about 21 pounds. There are many people who do not eat it at all.
Therefore, we recognize that we have to have a price which will sell the product, and where there is the most public benefit involved, if we are to have a healthy industry. We are recognizing the realities of our export marketing, and we are selling the production. We cannot sell it all in Canada. If we encounter a strong market situation in the export field and we get as much as we can for our product-we have people who have no interest whatever in the Canadian market, who do not service the Canadian market, and if they can get $40 a case for sockeye from Great Britain they are not going to sell it to anybody in Canada for $35.


Douglas Mason Fisher: In other words, there is a very close relationship between the world price and the domestic price?


Mr.   Hyland@: There cannot help but be.


Douglas Mason Fisher: But the world price tends to be set by the export price as long as there is any kind of export market?


Mr.   Hyland@: Yes, as long as the export price is strong it will bring it up.

Combines Investigation Act
I have read extensively so I would not be accused of selecting only one or two comments out of the passage. There is a very close connection between the export price and the domestic price and this slopping over or osmosis as I believe one of the economists called it, is something that happens almost unconsciously. So far as export markets are concerned, these people are primarily interested in the selling price of the product. They are not concerned about distribution or anything else. We are allowing them to conspire to set a uniform price on the export market so they will be able to compete with other countries' prices or be able to get the highest possible price. In our view this price conspiracy so far as export trade is concerned can very easily spill over into the domestic market.
As I say, we are sure it is necessary to take steps to deal with the export trade question. It is the very lifeblood of British Columbia. Fisheries products were referred to a moment ago. The hon. member for Burnaby-Richmond went extensively into the question of the lumbering industry and how dependent we are on the export market. We also export minerals, pulp and paper and a number of other things too numerous to mention. It is necessary for us to engage actively in the export field. We merely say that this is not the place to legislate in that regard. We think it should be no part of our combines legislation but rather that other arrangements should be made to promote and enhance our export markets through state organizations or by means of assistance or guidance. For this reason we are opposed to the amendment before us at the moment.


John Whitney Pickersgill: Before the minister replies I should like to say a word or two. Having supported the hon. member for Skeena in his desire for additional time to look at the amendment, I have looked at it again and the more I look at it the more I am satisfied that paragraph (d) of the proposed subsection 5 does really safeguard the position about which the hon. member is genuinely and properly worried, namely that some kind of combination in the export field, which need not necessarily be a combination for uniform prices, is likely to result in a similar combination in the domestic field. It seems to me it is quite clear that if it does there is no defence under this amendment if it can be properly applied because it says that subsection 4 does not apply if the conspiracy combination, agreement or arrangement has lessened or is likely to lessen competition unduly in relation to an article in the domestic market. For that reason, I warmly support
[Mr. Howard.!
the amendment. Indeed, I thank the government for accepting our suggestion that they should deal with this matter this year instead of waiting for another year.


Gordon Harvey Aiken: Mr. Chairman, I should like to make a few remarks in connection with the export market, particularly in relation to the amendment which has been introduced. I think the first thing I should say, in reply to the hon. member for Skeena with reference to the price arrangement made by the fisheries council and the lumber industry, is that in essence the arrangement they tried to make with regard to their export market was to try to set as low a price as it was possible for them to set and still make a reasonable profit. I think there is a great deal of difference between the arrangements that these exporters have outlined in their brief and the arrangements that we normally consider as detrimental under price fixing legislation. As I understand the proposition that is made by the fisheries council, and I want to read some extracts from the brief they submitted, it is made to meet competition in the export market for canned salmon. They found that they were competing against persons who had either state control pricefixing systems or some cartel arrangement within the country which fixed export prices.
As I recall it, each year different groups of the fisheries industry were called upon by importers from other countries who asked what the price of canned salmon would be that year, that is, what the Canadian price would be. They must set the lowest price possible in order to get into the export market. I think to that extent there is a difference between what we are normally concerned with in price-fixing arrangements, and these arrangements, because under normal price-fixing arrangements the price is a little higher than one would normally expect. I feel that in this case it is more a situation in which Canadian exporters as a whole agree on a price they can follow in the export market, and this does not mean basically a combine.
I should like to read a passage from the brief of the fisheries council of Canada which was presented to the committee on June 22 of this year. It reads as follows:
Both the fisheries council of Canada and the fisheries association of B.C. strongly support the recommendation of other important export industries that the realities of competitive export marketing should be recognized in Bill C-58. If it is necessary or desirable for Canadian export industries to reach group decisions and policies covering export marketing, such activities should be clearly exempted from the provisions of the Combines Investigation Act.
Canada is an important fishing nation and the catching, processing and marketing of our various

species of fish contributes importantly to the economic life of many Canadian communities. In many areas it is the predominant source of revenue.
An important feature of this great national industry is that approximately two-thirds of its annual production is exported to markets outside of Canada. The fisheries of British Columbia, with which I am most familiar, provide no exception to this national pattern. Since the inception of the canned salmon industry in British Columbia in 1870 the industry has always depended on export marketing to absorb 50 per cent or more of its annual production. Up until the outbreak of world war II between 60 and 65 per cent of each year's pack was sold in export markets.
Farther along in the brief, it is pointed out, as I have previously mentioned:
For several reasons our industry has found that an industry approach to export marketing rather than an individual canner approach has enabled the canned salmon industry to compete successfully in export markets with the other canned salmon producing nations. I would enumerate these important reasons as follows:
(1)	Canned salmon enjoys sufficient demand in the major markets of the world to qualify as a commodity of world trade and to have a world market price based on world supply and demand.
(2)	Canada is one of four countries of supply, the other three being Japan, U.S.A. and Russia. The production of these countries in most instances has an equal or greater influence on world price structure than the Canadian production. The Japanese suppliers are organized into an effective export cartel. There is a "one desk" sales organization-


George James McIlraith: I wonder if the hon. member would permit a question?


Gordon Harvey Aiken: Yes.


George James McIlraith: Can he give us the page reference to the committee evidence from which he is reading?


Gordon Harvey Aiken: I am reading directly from the brief which was presented to the committee on June 22. What I am reading from the brief has been copied into the committee report at the bottom of page 266.


George James McIlraith: I think, in all fairness, I should point out that the hon. member for Parry Sound-Muskoka is following precisely the practice to which the minister objected earlier.


Edmund Davie Fulton: What minister?


George James McIlraith: The Minister of Justice objected to the reading from committee evidence at length.


Edmund Davie Fulton: No, I pointed out when I was accused of having selected certain passages, that hon. members opposite had placed so much of the committee evidence on the record I could hardly be accused of being selective.


Charles Benjamin Howard: You mean one hon. member.


Gordon Harvey Aiken: In order to satisfy the technical point raised by the hon. member for Ottawa West, I would be glad to continue my reading
Combines Investigation Act from the committee evidence at page 266. When I was interrupted, I believe I was quoting from paragraph 2.
There is a "one desk" sales organization and prices are set to secure for Japan the share of total world demand which is required to move the annual pack. As there is virtually no domestic market for Japanese salmon it is nearly all destined for export markets. Russian canned salmon prices are named by a state trading agency.
Now, Mr. Chairman, I should like to go on with the reading of the brief. I have these passages marked in the original brief, and I will try to find them in the committee evidence. The next section I should like to read is at the top of page 268 of the committee evidence, and reads:
I believe that the practice of the canned salmon industry in making important decisions on export marketing on a group basis has been fully justified by the results achieved. The record of the British Columbia salmon canners in the competitive field of export marketing has stood the test of experience. Under very difficult circumstances, access to important markets has been retained or expanded. Industry planning has never lost sight of the fact that the availability of export markets is of great importance to the industry. Consequently, today, Canadian canned salmon enjoys as secure a position in world trade as at any time in the history of the industry. It is my sincere conviction that such a position is very much in the national interest.
Then I should like just to quote the evidence from the fisheries council. At the bottom of page 268, in summarizing, they say this:
It is my sincere conviction that it would be a serious error to handicap Canadian exporters by imposing restrictions on their marketing activities, the successful prosecution of which is so important to all Canadians.
I think all of us in the committee were impressed with the evidence by the fisheries council of Canada. Following the presentation of the brief there was a good deal of questioning as to the effect which the export market limitations would have on domestic markets. The fisheries council brief was followed on the same day by the brief of the council of forest industries of British Columbia. Here again, Mr. Chairman, as I have marked the original brief I will just try to find the evidence given in the committee. I cannot find it at the moment but I have the place marked in the original brief presented by the council of forest industries of British Columbia in their comments on the export trade.
During the three years that have elapsed since the present government took office, the Right Hon. the Prime Minister, the Secretary of State for External Affairs, the Minister of Finance, the Minister of Transport and other ministers have stressed on numerous occasions the desirability and necessity for action leading to or directed towards the improvement of Canada's export trade and correcting the deficit in such trade. The major export industries in British Columbia, of

Combines Investigation Act which the forest industry is the most important, are concerned over the fact that the freedom of action which they consider necessary to enable them to compete successfully in world markets will be threatened unless something is done in the new combines legislation to reassure businesses engaged primarily in the production of goods for export.
These two briefs were discussed in the committee. After the brief had been submitted and when the bill was being discussed section by section, certain comments were made by members of the committee. First, I should say that the amendment which is before us probably does not go as far as the industry would like it to go. However it recognizes the fact that the people in the export industry have a problem and that the government is facing that problem and giving some recognition of the difficulties which they face. They have to meet competition and they have to meet it effectively if Canada is going to stay in the export market. In committee an amendment was moved by the hon. member for Bonavista-Twillingate. I think it should be pointed out that while there was a considerable amount of discussion among other members present, the hon. member for Bonavista-Twillingate produced first an amendment which was not passed but this is the way in which it read. I should like hon. members to note the rather vague language in which it is phrased. Although the intent was good, the committee did not feel at that time that it carried out what was wanted. The hon. member would have made an amendment something like this:
In determining whether any offence under section 32 or 33 has been or is being committed, the court shall not find the accused guilty if it is of the opinion that the offence charged relates mainly to the export trade and the development of Canada's market outside Canada and that the offence charged does not otherwise contravene the provisions-of the act, as it affects domestic markets within Canada.
I am sorry, Mr. Chairman, but I am reading the wrong reference.


An hon. Member:: Take it as read.


Gordon Harvey Aiken: The amendment made by the hon. member for Bonavista-Twillingate is found at page 748 and reads:
(2) In determining whether any offence under section 32 or 33 has been or is being committed, the court shall consider the best utilization of Canadian resources to meet the requirements of the export trade and the development of markets outside Canada.
We felt that the phrase "the best utilization of Canadian resources" would be one which would be virtually impossible for any court to interpret. The court itself would be obliged to try to determine exactly what was meant

and we felt-or certainly I did so-that it was the place of the legislature to set this out in detail.
Then I made a suggestion as to the amendment of the hon. member for Bonavista-Twillingate which I read in error a few minutes ago and I will not read it again. The minister at that time undertook with the committee that while he could not accept either the amendment moved by the hon. member for Bonavista-Twillingate or the proposal I made in substitution, that he would take them under consideration.
I feel that the amendment which has now been produced is one which will have the effect that the committee wanted and I think that hon. members should be entirely in agreement with the wording which the minister has now proposed.


Murray Douglas Morton: I know that hon. members of the committee are very anxious to complete this bill-


George James McIlraith: Except the government.


Murray Douglas Morton: -now that we are so near the end. In view of the fact that the hon. member for Skeena rather dismissed the argument in favour of improving our export trade as somewhat emotional, especially after the plea of the hon. member for Bonavista-Twillingate, I thought it would be better to put on the record, as quoted in the committee, the actual methods of competition which are expected from the trade in order to show that far from being an emotional problem, it is a realistic problem. I should like to quote from the minutes of proceedings and evidence of the standing committee on banking and commerce at page 267, at which Mr. J. N. Hyland, during his outline of the brief, quoted a letter which had come into his hands addressed to some of the competitors. It is a letter from a Japanese trading company dated July 2, 1959. The heading is "Cartels unofficial announcement of opening prices for 1959 pack Japanese salmon".
At a meeting held today of canned salmon exporters, Japan Canned Salmon Sales Company (The "Cartel") has made unofficial announcement of the opening prices for 1959 pack Japanese canned salmon as per a list enclosed herewith.
Please understand that the above announcement is not official and the new prices are still subject to slight alteration depending upon the opening prices to be fixed by Canadian and U.S.A. salmon industries. Nevertheless we have every reason to believe that at least the first sale to U.K. as well as to other markets such as Australia, Belgium, Holland, etc. will be made at these prices-probably from mid-July through August.
Please take note also that we are not allowed to make firm offers pending the final official decision of sales scheme by the cartel, expected within a few weeks. As soon as we are in a position to make offers, we will communicate with you

In other words, these gentlemen wait until the Canadian companies determine their prices, and then they sell.
Then, on page 293 of the proceedings of the committee on banking and commerce is set out the methods by which the Russians deal in the lumber industry. Mr. Nicholson giving evidence before the committee had this to say on that subject:
Prior to the war, and in fact up until 1954, Canada was Britain's leading supplier of soft wood products-lumber, shingles, and material of that kind. That is, as late as 1954 it was the leading supplier. By 1957 Canada's share of the United Kingdom imports had dropped to 14.7 per cent and Canada's position was that of fourth place supplier of products to the building industry in Britain. We had been replaced successfully by Sweden, Finland and Russia. During this period when the Canadian sales were dropping off, the Soviet of Russia had increased her sales from one-tenth to one-fifth of the total of the United Kingdom's soft wood importation. In the case of the Swedish and Finnish importers they were trading at a profit. Their objective was to make a profit, but their operating costs were lower because wages were lower. That was not so in the case of Russia, when they came in and took that market. I am reliably informed by an official of the Department of Trade and Commerce-this can be checked by reference to the minister or other officials of that department-that the Russian technique in invading the British market is that they will come in with a particular type of lumber which is in demand and, even though the lumber may be needed at home in Russia, they will quote to supply the whole demand at a price that is better than the Canadian price for a particular kind of lumber. It is even better than the Swedish and Finnish prices in some cases. Then if you repeat the order they will give you a further reduction. That is not done by any cartel. That is done by a government trade agency.
Now we see the two methods of competition we are up against in our export trade and we are caught between our desire to protect the Canadian consumer from monopolies which may work within Canada and our desire to give our manufacturers full freedom to compete in the export trade which is so essential to the growth of our country. It is becoming increasingly apparent that something must be done to promote the ability of our companies to compete on international markets.
The hon. member for Skeena has said it is not a matter to be dealt with in this bill. Perhaps that is so. It is a matter which could perhaps be dealt with by other methods but this bill should not be used so as to hamper their task of exporting goods to all parts of the world. Therefore I believe that for the good of this country, without lessening the protection we have provided to our consumers, we should give all the help we can to those companies which export goods abroad. Perhaps another bill to this end might help in this direction.
Combines Investigation Act


John Whitney Pickersgill: Are we to have this parliament turned into a farce at a time when we are being asked to work 56 hours a week?


Jacques Flynn: Does the hon. member rise on a point of order?


Lester Bowles Pearson: I have just one observation to make, and I should like to address my remarks to the minister. In view of the fact that the government has moved this amendment, that it has been accepted by the opposition and that the C.C.F. has made its position known, does the minister not think that we might now pass this bill through committee so that the house might tonight consider a resolution designed to improve the situation of old age pensioners?


Some hon. Members:: Order.


Lester Bowles Pearson: How can the minister explain this filibuster against this bill which is being conducted by his colleagues.


Edmund Davie Fulton: I assume I can answer the question asked by the Leader of the Opposition.


Jacques Flynn: I would think that the only way the remarks of the Leader of the Opposition would be in order would be if the hon. gentleman had risen on a point of order. I must say I cannot find that his remarks are relevant to the amendment before the committee.


Edmund Davie Fulton: I suppose they would have been in order if the Leader of the Opposition had put his question in another form-if he had asked, perhaps, when we expected that the committee stage might be concluded and whether we would ask for third reading of the bill tonight, and that sort of thing. That would have been quite in order, and I take it that is what he had in mind. I should like to answer him by saying that I thought when one or two members had concluded their observations on this amendment and on the question of Canadian export trade I might then make a comment or two in reply and express regret that the C.C.F. party had not been able to accept the amendment.
I do not know why it should be suggested by the Leader of the Opposition that there is no right of speech to be enjoyed by government supporters. It is really a very extraordinary suggestion. I think it is proper for me to observe that government members, by and large, have been very restrained in this committee, both yesterday and today, in the use they have made of their right to speak, especially in the light of the extraordinary and unreasonable strictures that the opposition have expressed with regard to this bill. Our members have shown a remarkable restraint and now, on one of the most important

Combines Investigation Act subjects dealt with in this measure, the amendment dealing with the export industry, when our members open their mouths what do we find? The opposition is still trying to apply closure and suggesting that a private member, just because he happens to be sitting on the government side, has no right to speak. That, of course, is not the way that this government believes in operating parliament.


Lester Bowles Pearson: We know what you are doing -sound and fury.


Edmund Davie Fulton: If my friend will restrain his impatience and remember the proper parliamentary practice he will find that our hon. members will be mindful of the desirability of disposing of this matter. But on the other hand they have every right to take the few moments available to them now to express themselves on this important subject. I do not think it is very seeming to suggest that they be choked off.


Paul Joseph James Martin: Mr. Chairman, it surely is open to any hon. member to question why a particular procedure is being followed at a particular time.


Mr. Palleil:: Come off that.


Paul Joseph James Martin: It is apparent that in the last while we have had speeches designed only for one purpose.


Mr. Kucherepa:: The hon. member is imputing motives and he cannot do that.


Paul Joseph James Martin: Hon. members are eager to ensure that we do not state that purpose.


Edmund Davie Fulton: Mr. Chairman, may I remind the hon. member of the rule against attributing motives.


Paul Joseph James Martin: I am trying to help the minister in his purpose.


Edmund Davie Fulton: I am trying to help you in preserving order.


Paul Joseph James Martin: If hon. gentlemen have decided to contribute to the merits of the particular discussion, of course, there can be no quarrel.


Mr. Bell (Saint John-Albert):: Are you?


Paul Joseph James Martin: But every hon. member, including the Minister of Justice, who has spoken in the last three quarters of an hour has associated his remarks with meaningful smiles indicating how proud he is at the success of the obstruction in which they are indulging.


Some hon. Members:: Oh, oh.


Gordon Harvey Aiken: Mr. Chairman, I rise on a question of privilege.


Paul Joseph James Martin: There we are. Mr. Chairman, it is surely open to the Leader of the Opposition-


Gordon Harvey Aiken: Mr. Chairman,-


Jacques Flynn: Order. I am endeavouring to ascertain if the hon. member for Essex East is speaking to the point of order.


Mr. Legere:: He is engaging in a diatribe.


Jacques Flynn: If the hon. member for Essex East is speaking to the point of order I must listen to him before listening to the question of privilege raised by the hon. member for Parry Sound-Muskoka.


Paul Joseph James Martin: Mr. Chairman, as I indicated at the outset I am seeking to deal with the point of order that was raised by the hon. member who has just taken his seat.


John Andrew W. Drysdale: I rise on a point of order, Mr. Chairman.


Paul Joseph James Martin: I am speaking to a point of order.


Mr. Speakman:: Make your point.


Jacques Flynn: I must ask the hon. member for Burnaby-Richmond to resume his seat because I cannot listen to more than one point of order. The hon. member for Essex East has the floor.


Eldon Mattison Woolliams: Let us make it a genuine one.


Paul Joseph James Martin: Thank you, Mr. Chairman. The point of order is that hon. gentlemen are engaging in a consideration of this matter for only one purpose and that is, as the Leader of the Opposition said, to prevent a discussion-


John William Kucherepa: The hon. member should know better.


Paul Joseph James Martin: -of a measure to improve the situation affecting our senior citizens, to prevent a discussion of old age pensions. That is clear. This is the worst filibuster of the session.


Jacques Flynn: Order. I cannot say that the remarks of the hon. member for Essex East or those which preceded them are in order because it is not in order for an hon. gentleman to impute motives to any other hon. gentleman who speaks in this chamber.


Some hon. Members:: Withdraw.


James Stanley Speakman: That is what he did.


Jacques Flynn: If the committee is willing to resume the discussion on the amendment perhaps we could proceed. I recognize the hon. member for Parry Sound-Muskoka.


Gordon Harvey Aiken: I have a question of privilege, Mr. Chairman. I am one of the hon. members who spoke in the last 45 minutes. The hon. member for Essex East has said that I made my speech insincerely with a smirk on my face, or used some such words, and that I rose only to waste time.


Edmund Davie Fulton: Not only are we not allowed to speak but we are not allowed to smile now.


Gordon Harvey Aiken: I have sat in this chamber for over three years now, and 1 have never stood on my feet to make any speech that was not sincere since I arrived here.


Some hon. Members:: Hear, hear.


Gordon Harvey Aiken: I have a very great interest in the export market. This question came up in the committee. I also spoke on it yesterday and felt I should address myself to it again today. Although I was interrupted by the hon. member for Ottawa West on a question of privilege I nevertheless took 25 minutes. If the hon. member for Essex East thinks I was insincere I should simply like to tell him that I was not and if there is any question of insincerity I think the hon. gentleman should consider his own position.


Paul Joseph James Martin: Mr. Chairman, I did not say that the hon. gentleman-


Some hon. Members:: Yes, you did.


Jacques Flynn: Order.


Paul Joseph James Martin: Mr. Chairman, I did not say that the hon. gentleman was insincere. If he is now telling us that he was I can only tell him that I never doubted it. I have no hesitation in saying, however, that that sincerity accompanied his reading of minutes of the committee that had nothing to do with argument.


John William Kucherepa: The hon. member for Hull read for hours the other day. What malarkey. Read Hansard.


Murray Douglas Morton: Mr. Chairman, I wish to associate myself with the remarks made by the hon. member for Parry Sound-Muskoka in raising a question of privilege concerning what was said by the hon. member for Essex East. This is not the first time that the hon. member has imputed such motives to members on the government side. Just because hon. members on this side exercise their right to speak the hon. member for Essex East-


Jacques Flynn: Order. I thought the hon. gentleman was rising on a question of privilege.


Some hon. Members:: He is.
Combines Investigation Act


Jacques Flynn: I would ask the hon. member to state immediately what are the words to which he objects.


Murray Douglas Morton: Mr. Chairman, I said that I associate myself with the hon. member for Parry Sound-Muskoka in speaking in respect to the reflections cast upon us by the hon. member for Essex East.


John Andrew W. Drysdale: He is smiling now. Look at him.


Michael Starr: Look at the hon. member for Essex East laughing.


Murray Douglas Morton: This is not the first time the hon. member has cast such reflections nor is it the first time I have had to rise in this chamber on a question of privilege with respect to the reflections he cast. I feel as does the hon. member for Parry Sound-Muskoka that it is both unfair and unparliamentary for this experienced parliamentarian to take advantage of those of us who have not been in this chamber very long in trying to cast these reflections upon us simply because we exercise our right to speak which is one of the purposes for which we were elected.


Lester Bowles Pearson: Mr. Chairman, on a point of order, no one on this side desires to reflect in any way on the sincerity of the two hon. gentlemen and the smiles which were mentioned as being displayed on their faces was merely an indication of their intense interest in our export trade.


Charles Benjamin Howard: Mr. Chairman, I rise on a question of privilege. Since I was one of those who spoke in the last three quarters of an hour I want to inquire of the hon. member for Essex East if he included me in his reference.


Paul Joseph James Martin: No, Mr. Chairman, I was not looking toward the hon. gentleman. My eyes were directed westward.


Eldon Mattison Woolliams: Which eye?


John Andrew W. Drysdale: Mr. Chairman, I hope my remarks will not be considered irrelevant. I merely wish to speak to the amendment. I should point out to the committee that I rose and then the hon. member for Bonavista-Twillingate arose and in deference to that hon. gentleman's seniority and experience I resumed my seat. As a result of that I have been unable to make my contribution to the debate until this time.
Allegations were made by members of the opposition, who in my opinion spent a considerable time this year on irrelevant discussions, and they seem to take objection when hon. members on the government side rise to set forth their points of view. I spoke

Combines Investigation Act once this afternoon, and I was prompted to rise at this particular time because the hon. member for Skeena alleged in his statements that the Combines Investigation Act was not a suitable place in which to include this particular amendment.
I have done a great deal of study on the particular matter concerning exports. I feel very strongly about it; I feel that this amendment is a tremendous contribution toward the economic policy of Canada and toward keeping Canada one of the world's first export nations. Because of the remarks made by the hon. member for Skeena I feel it is important to set the record straight. Unfortunately my hon. friends in the opposition seem to feel that if there is anything said that is critical of the attitude taken by them then closure should be applied and we are not entitled to set forth our points of view and refute the statements that have been made.
I rose because the hon. member for Skeena made this particular allegation, and when I was contemplating the question of exports I thought it should be clear to the committee that the problem was raised with regard to the inquiry into the fish industry. I think the difficulty with regard to exports and the very reasonable difficulty in the minds of most people in the fisheries, forestry and other industries, who presented their briefs before the committee, was in the reference made by the combines director, and this is found on page 311 of the banking and commerce committee report. I have the summary here, which is referred to, and this is what it says:
It is my further allegation that during the period from August 1954 to June 1956 the following were parties to agreements or arrangements relating to the export market which had the effect of enhancing prices or otherwise preventing or lessening competition in the production, supply and sale of Canadian salmon for the domestic market to the detriment, or against the interest of the public, and during the same period agreed or arranged to prevent or lessen unduly competition in such products.
This was the particular matter which brought forth the doubts as to the question of the export trade. Up until the time this particular statement had been made it was the opinion of the majority of lawyers, generally speaking, that the Combines Investigation Act did not apply to exports. When this allegation was made in the fish inquiry some doubt was cast on the particular situation, and to indicate clearly what the doubt was I think further reference should be made to the committee reports.
Mr. Hyland, who was the director of the fisheries council of Canada, and who testified before the committee, said, as reported at page 269:

Our industry has been investigated, and we are in receipt of a statement of evidence and allegations from the director of investigations which alleges that our activities in export marketing have had an influence on domestic prices. Therefore, we are in violation of the act. It is for that reason that we are particularly concerned about the question.
Further on, on the same page, Mr. Hyland states:
It was clearly stated that our activities in export marketing and the fact that we did arrive at common policies, common prices for our export quantities of canned salmon, had the effect of enhancing domestic prices and therefore we were in violation of the act.
On page 278, Mr. Hyland states:
We are already suspect now. It has been alleged that what we have done in the export field has had a detrimental effect on the Canadian public, and we feel that this is an effective and a successful way of marketing our product, and we do not want to continue doing it under a cloud. Therefore, that is why we are suggesting that the new act should make it clear that activities of this kind are not in contravention of the act.
Mr. Hyland then went on to state further that this pattern of setting prices for the export industry had gone on for the last 60 years. He stated specifically on page 282, and I think it is of some help to the committee that the questions and answers be put on the record:


Mr. Horner (Acadia):: Is there any competition in setting the export price between the four or five large companies or do they all sell at the same price?


Mr.   Hyland@: The whole objective of the export fisheries committee is to arrive at uniform export prices.


John (Jack) Henry Horner: Have you always been able to do it?


Mr.   Hyland@: It has been the pattern in the industry in the last 60 years.


James MacKerras Macdonnell: No question has been raised?


Mr.   Hyland@: No question has been raised.
Mr. Hyland also pointed out at page 284 that the export price tends to influence the domestic price. Among the reasons for the industry approach to the export market rather than by individual canner approach was the reason that it is necessary to enable the canned salmon industry to compete successfully in the export markets with other canned salmon producing nations. Another reason given by Mr. Hyland at page 287 is as follows:
My experience in the marketing of canned salmon leads to the conclusion that the domestic price of any commodity which is exported in material quantity cannot be isolated from the world price. This is true whether the commodity is fish, lumber, pulp, copper, aluminum or newsprint.
These statements were made by somebody who was involved in the fish inquiries and in summary it was his opinion that the export trade was completely fair. Some doubt

arose at the last session and the minister brought in an amendment at that particular time which amended section 23 of the act to provide for negotiations between the fisheries associations and the fishermen, but there is no provision made in this particular section. Perhaps it might have been an oversight, but no mention is made in this particular section about maintaining the status quo with regard to fishing companies which were engaged in the export trade.
As Mr. Hyland stated, they have carried on this practice for the last 60 years and they carried it on in good faith. This question was raised by Mr. MacDonald, the combines director, and I think quite rightly under the circumstances and under the present legislation. Nevertheless a doubt was raised as to the status of those particular companies with respect to their dealings in the export industry and I feel that the companies and the people who appeared before us wanted to have it perfectly clear that what they were doing was entirely within the realm of the law.
To emphasize the position I think reference should be made particularly to the decision of the Supreme Court of Canada in Howard Smith Paper Mills Limited v. the Queen, 1957 Supreme Court Reports at page 403. I should like to refer particularly to the statement of Mr. Justice Taschereau at page 406. Incidentally, I might mention that this is the latest supreme court case dealing with this matter, or it is the case that comes closest to this particular matter because, as was said earlier in the committee, there never has been any case dealing specifically with the export market. But I feel that the principles enunciated in this particular case would apply to any company involved in the export trade. Mr. Justice Taschereau is reported as having said at page 406:
It has been argued on behalf of the appellants that the offence is not complete, unless it has been established by the crown beyond a reasonable doubt, that the agreement was detrimental to the public, in the sense that the manufacture or production was effectively lessened, limited or prevented, as a result of the agreements entered into. It has also been suggested that there is no offence, if it is shown that the acts complained of were beneficial to the public. With these submissions I entirely disagree. Conspiracy is a crime by itself, without the necessity of establishing the carrying out of an overt act. Stephen (Digest of the Criminal Law, 9th ed. 1950, p. 24), basing his opinion on Regina v. Whitchurch, et al. (1), goes as far as saying:
"When two or more persons agree to commit any crime, they are guilty of a misdemeanour called conspiracy whether the crime is committed or not, and though in the circumstances of the case it would be impossible to commit it."
The public is entitled to the benefit of free competition, and the prohibitions of the act cannot
Combines Investigation Act
be evaded by good motives. Whether they be innocent and even commendable, they cannot alter the true character of the combine which the law forbids, and the wish to accomplish desirable purposes constitutes no defence and will not condone the undue restraint, which is the elimination of the free domestic markets.
I feel I should also quote the statement of Mr. Justice Cartwright in the same case at page 426.
In essence the decisions referred to appear to me to hold that an agreement to prevent or lessen competition in commercial activities of the sort described in the section becomes criminal when the prevention or lessening agreed upon reaches the point at which the participants in the agreement become free to carry on those activities virtually unaffected by the influence of competition, which influence parliament is taken to regard as an indispensable protection of the public interest; that it is the arrogation to the members of the combination of the power to carry on their activities without competition which is rendered unlawful; that the question whether the power so obtained is in fact misused is treated as irrelevant; and that the court, except I suppose on the question of sentence, is neither required nor permitted to inquire whether in the particular case the intended and actual results of the agreement have in fact benefited or harmed the public.
In other words, once it is established that there is an agreement to carry the prevention or lessening of competition to the point mentioned, injury to the public interest is conclusively presumed, and the parties to the agreement are liable to be convicted of the offence described in section 498 (1) (d). The relevant question thus becomes the extent to which the prevention and limitation of competition are agreed to be carried and not the economic effect of the carrying out of the agreement. In each case which arises under the section the question whether the point described has been reached becomes one of fact.
I would suggest that if Mr. Hyland's evidence before the banking and commerce committee is read in conjunction with the statements in the Howard Smith case we will see that Mr. Hyland has raised a reasonable doubt whether the particular companies are in violation of the present Combines Investigation Act. In my opinion the amendment brought forward by myself, based on technical advice from the minister and his assistants, has the effect of clarifying the situation and, as the minister said earlier in introducing the bill, one of the prime objects was to clarify this particular situation.
The evidence given by Mr. Hyland was reinforced by the evidence given by Mr. Nicholson on behalf of the forest people.
I believe that the contention made by the hon. member for Skeena that the Combines Investigation Act is not a suitable place for this amendment is completely erroneous. I have put this information on the record although a great deal of it was tendered before the committee and, although as a government member I have taken up the time of the committee in speaking on the floor of the house, I hope that hon. members do not

Combines Investigation Act object too much because if they will consider the relative amount of time taken in this chamber they will find the time I have taken is negligible. I believe that government members also have a contribution to make and, having put the situation clearly on the record, I think there is every justification for the committee to pass this particular amendment.


Charles Benjamin Howard: Mr. Chairman, inasmuch as the last two, or three-


George James McIlraith: Three.


Charles Benjamin Howard: -readers, or perhaps I should say speakers, have referred to me and what I said, I think perhaps it is only fitting that I should say a word or two in reply. It is still our contention that this is not the place to deal with this particular problem, and I think there is sufficient evidence to support that view which can be found in the evidence of the witnesses who appeared in support of those with a specific interest in the export trade and who advocated some reference in the act to protect them in respect of their activities in conspiring to fix prices in the export market. Perhaps I might be permitted to read a few short references. I will not do so to the same extent as hon. members who have preceded me.
I wish to refer to the evidence of Mr. Hyland as found on pages 282 and 283 of the proceedings of the committee, No. 4. The hon. member for Burnaby-Richmond made some reference to questions found on this page and I should like to carry on. The witness was being questioned by the hon. member for Acadia. Incidentally, the hon. member for Acadia had been asking Mr. Hyland certain questions about the functions of the fisheries association, how it operated and what relationship there was between its arrangements with respect to export prices and its arrangements, if any, as to domestic prices. The passage reads as follows:


John (Jack) Henry Horner: How do these same companies arrive at a price for the Canadian market?


Mr.   Hyland@: I do not know whether or not I am in a position to discuss this. Certain allegations have been made against the industry in that regard. Mr. Macdonnell, of course, is very aware of them.
While the use of the name "Macdonnell" would indicate that Mr. Hyland was referring to one of the members of the house, I think he was perhaps referring to Mr. MacDonald, the director of research and investigation.


John Andrew W. Drysdale: No, that is right.


Charles Benjamin Howard: The hon. member for Burnaby-Richmond says "That is right". What does he mean?


John Andrew W. Drysdale: I believe he was referring to the hon. member for Greenwood.


Charles Benjamin Howard: That may well be. I continue:


@Acting Chair(man)? of Committees of the Whole: Is it under investigation now?


Mr.   Hyland@: It is not under investigation, but we are still awaiting the outcome of hearings.


@Acting Chair(man)? of Committees of the Whole: Perhaps under those circumstances the witness should not be asked to make any statement.
However, this theme was developed regardless of whether Mr. Hyland wished to make any statement. In any event, at an earlier stage of the proceedings, to which I will make reference, Mr. Hyland did mention the close relationship between the export price and the domestic price: I continue:


John (Jack) Henry Horner: I am not going to try to draw out information which may be detrimental to you in any investigation. I just wondered if it would not have an effect if they knew at what price company "A" was going to sell its product overseas. They would know for what company "A" sold its product on the Canadian market, and that would pretty well narrow it down. They could say that company "A" would sell its product within two or three cents of such and such.


Mr.   Hyland@: Since 1953 I believe we have successfully divorced those two areas of marketing, domestic and export. What the individual companies do in the domestic field is their own prerogative and there is no exchange of information or opinion in that area.
Perhaps it is quite true there is no exchange of information or opinion in the domestic area. I submit there does not have to be. The exchange of information has already taken place with respect to the export field. That is where the exchange of prices, statistics and so on takes place for the purpose of establishing a uniform price for the sale of any particular pack of salmon. However, as found on page 267, Mr. Hyland was then presenting his formal brief. He had read the letter from the Japan Canned Salmon Sales Company known as the cartel and was dealing with important reasons why there should be an industry approach to export marketing. He went on to say:
My experience in the marketing of canned salmon leads to the conclusion that the domestic price of any commodity which is exported in material quantity cannot be isolated from the world price. This is true whether the commodity is fish, lumber, pulp, copper, aluminum or newsprint. In this connection it should be emphasized that the factors of world supply and demand can work to reduce domestic prices as well as increase them.
Then he goes on to give examples which occurred in the period 1947 to 1953 when the domestic prices of canned salmon increased a certain percentage as compared with the increase in the combined food commodities index. The point here is that on the one hand Mr. Hyland says they have successfully divorced the relationship between the conspiracy in the export market concerning the prices at which they sell and the prices at which they sell on the domestic market; that they do not exchange statistics in so far as the

domestic market is concerned. I submit it is not necessary for them to exchange information as to what the price is on the export market because Mr. Hyland himself said, in his initial brief, that the domestic price of any commodity cannot be isolated from the world price.
I would point out that any brief is usually well prepared and well thought out in order to get the exact point of view across. We should', therefore, place a little more importance on what is said in the brief than what is said in answer to a question when the answer is given, so to speak, off the cuff. I think this brief carries more weight and should have a little more attention paid to it than the off the cuff answer. I am not saying Mr. Hyland would have given any different answer to the hon. member if he had sat down and prepared it sometime in advance. However, on the one hand he says, we have divorced the relationship, there is no connection, we do not exchange prices in the domestic field and we have not done so since 1953; we only do this in connection with the export market, which is isolated.
On the other hand, he says that his experience in marketing canned salmon leads him to the conclusion that the domestic prices of any commodity which is exported in material quantity cannot be isolated from world prices. I say that they had engaged in an arrangement to establish the selling price for the export market and this price is influenced by factors outside of Canada, influenced by the volume of the pack in other countries, influenced by the demand that exists or is built up by importing nations, influenced by the desires of the other nations, such as the Soviet union. There are a number of factors that influence export prices.
In any event, the desire of the fisheries association has been for many, many years, and apparently still is, to arrange or agree on export prices. By his own admission Mr. Hyland makes it clear that the domestic prices can be influenced by these prices. There is this question of osmosis, as I think Dr. Skeoch called it, the spilling over of the results of agreements in the export field into the domestic field. Naturally there is no need to exchange statistics in the domestic field because by Mr. Hyland's own admission the domestic price is established by the export price. I submit that if we give legislative sanction, as this amendment proposes to do, to this practice, namely that in a prosecution under subsection 1 the court shall not convict the accused if the conspiracy, combination, agreement or arrangement relates only to the export of articles from Canada we will be, by the admission of Mr. Hyland, allowing them to conspire to set prices in the domestic field.
79951-0-443
Combines Investigation Act Then we will have a difficult time attempting to discover this sort of thing.
This, incidentally, is one of the reasons why I say this provision should not be part of the arrangements under the Combines Investigation Act, but should have been looked at many months ago by this government, if it had any foresight in these matters, and dealt with in a far better way in different legislation. In any event perhaps the minister could reply to these things, specifically to the reference I made earlier today with regard to whether he feels there is perhaps a conflict between the amendment proposed now and other parts of the bill which have already been passed. Now, the proposed subsection 5 reads:
(5) Subsection 4 does not apply if the conspiracy, combination, agreement or arrangement
(a)	has resulted or is likely to result in a reduction or limitation of the volume of exports of an article;
(b)	has restrained or injured or is likely to restrain or injure the export business of any domestic competitor who is not a party to the conspiracy, combination, agreement or arrangement;
So far as I can recall I do not believe there is any other reference to volume in the bill. I believe there is a reference to quantity or quality. For instance, there is a reference to quantity or quality in subsection 2 of the very same section that this proposal would amend. I should like to hear from the minister as to whether or not, for the sake of uniformity and clarity, there should not be a deletion of the word "volume" and substitution therefor of the words "quantity or quality". If a case were to go to the courts there would be more certainty in the mind of the court if we were talking about the same thing in each case instead of the words being different.
Then in paragraph (b), to which I have already referred, there is the phrase "domestic competitor". I wonder if the minister does not think that the word "domestic" is redundant. This provision could only have territorial effect.
I should like to have the opinion of the minister also with regard to paragraph (c) which reads:
(c)	has restricted or is likely to restrict any person from entering into the business of exporting articles from Canada;
It is the words "from entering into the business" about which I am concerned. I wonder whether there should not be an alteration here, especially in view of the fact that subsection 3, paragraph (d) refers to "entering into or expanding a business in a trade or industry". We are merely providing for the restriction of any person from entering into a business and excluding from consideration the person who is already in
7012	HOUSE OF
Combines Investigation Act business but who is prevented from expanding. I feel that these circumstances should be looked at also.
Then I posed other questions to the minister. I point out that these provisions just affect a combine of companies in Canada and relate to their specific effect on Canadian consumers. Since we are thinking in terms of the export market in which we run up against international cartels, I wonder whether some examination should be made of this aspect of the matter. I understand there was an extensive examination and study made in 1945 under the Department of Labour of the effect of international cartels on Canada, and the relationship of international cartels to the domestic market. This has been the subject also of extensive study under the United Nations and by international conferences, and is an extremely complex subject.
This is something which would require a bit of examination and study because of the variety of effects that can accrue to a nation from the operation of international cartels. These cartels can affect our imports; they can affect our exports, the amount we export and the price at which we export, whether or not the companies are subsidiaries of other companies which are in international cartels.
This is another phase of an extremely broad and complicated problem that I think requires a great deal of examination. However, in this regard I wonder what effect, if any, this proposed amendment would have. Would it allow a relationship between a Canadian company or a conspiracy between a Canadian company and an international cartel owing to the fact that imports into Canada that compete with articles of some of the Canadian companies engaged in this conspiracy are cut off or decreased. What is the fact in that regard? I think this is an important matter.
We are not saying that any one of these companies, if you are talking about the fishing industry, is part of an international cartel. I do not think so. I would think perhaps the aluminum industry is part of an international cartel system on aluminum and allied products. I should like to have these questions answered by the minister before we proceed to consider giving final passage to this bill. Although some of these matters may be considered to be rather minor-that is whether one word should be another word -nevertheless in the long range view, when we are drafting legislation-and this is what we are doing in effect; even though somebody else may have drafted it, still the house must consider it-I think we should give careful consideration in order to ensure that the words contained in that legislation mean as closely as possible, if not precisely, what we


want them to mean. While they may be small matters, nevertheless I think they have some importance and should be cleared up.


Edmund Davie Fulton: I think my hon. friend makes the mistake still of attempting to equate a provision dealing with industry in the export trade exactly or precisely with a provision dealing with industry entirely in the domestic market. It is because he makes that mistake, if he does not mind my making the suggestion, that he falls into the error of saying that the words used in this provision should be precisely similar to the words used in the other provision, namely subsections 2 and 3 where they appear earlier in the section.
The problem of export trade is of an entirely different nature from that of companies engaged in domestic business and the same words are therefore not necessarily applicable. To try to use the same words and to make them applicable would be to require us to torture and twist them so that they would fit into situations where they would not fit. For instance, my hon. friend complains because here we use the words "volume of export" instead of "quantity and quality of exports". The reason is obvious. We are concerned here only with the quantity. It would surely be ridiculous to make it an offence for exporters to change the quality of their exports when the requirements of the export market might dictate that they should change the quality of their exports. It is for that precise reason that we have confined it to the word "volume".
With regard to the omission of the word "expanding" in subsection 3 where my hon. friend complains because we have said only "restrict any person from entering into the business" instead of "entering into or expanding the business", may I point out that the problem of expansion has been covered where we think it should be covered, namely in subsection (a) above, where we have provided in general that the benefit of the section is not available if the arrangement has resulted or is likely to result in a reduction or limitation in the volume of exports of an article. It is also covered in part in subsection (b). I think in fact that subsection (b) also clearly covers the complaint that was raised in the circumstances alluded to.
Those are some specific answers to the question asked, but in general the answer is that the situation of the export trade is different from the situation of industry engaged entirely in domestic operations. Therefore the words that are applicable to the one are by no means applicable or suitable in a provision dealing with the other.


George James McIlraith: Hon. members on the
government side have spoken in rather

laudatory terms about the amendment before the committee put forward by the hon. member for Burnaby-Richmond. I must say that I think the amendment is a sastifactory one. It meets very well the point raised in committee by the hon. member for Bonavista-Twillingate. There is every reason to be pleased that this amendment is being included in the bill at this stage.
There are two points to which I wish to address myself particularly tonight. One has to do with the importance of the export trade to this country. In his remarks early this afternoon the minister, in putting forward this amendment or giving notice of it, made a reasoned statement on the subject and rightly emphasized the importance of that subject to Canada. It is particularly timely that we should deal with this subject tonight in view of the Daily Bulletin of the dominion bureau of statistics which has just been delivered and which is dated Monday, July 25, 1960. It is volume 29, No. 142. That Daily Bulletin, under the subheading "Exports in June..." goes on to say as follows:
Canada's commodity exports to all countries in June were valued at $457,400,000, a decrease of 11.4 per cent from the monthly all-time peak value of $516,300,000 in June last year-
Then a little bit further down it goes on to say this:
Exports to the United States in June fell to $257,100,000 from $318,800,000 in the corresponding month last year-
That sharp drop in our exports in this past month as compared with those in the corresponding month in the previous year shows the timeliness of any action that can be taken at this time to assist the export industry.
Mr. Pallet!: Will the hon. member also read the rest of the report which compares this year's to-date export trade with last year's to-date export trade.


George James McIlraith: Yes. I can read the rest of it. It goes on to point out the effect of the cumulative total for the six months and it points out that the figures are up. If the hon. member wishes me to read it, I can do so.
Mr. Pallet!: I think it says that there is an 8 per cent increase over last year.


George James McIlraith: Yes. I can give the hon. member the precise figure, if he wishes to have it.
Mr. Pallet!: It is 8 per cent, is it?


George James McIlraith: It is 8.4 per cent.
Mr. Pallet!: An 8.4 per cent increase over last year?
79951-0-443J
Combines Investigation Act


George James McIlraith: That is right. This decline points up the difficulties there are in this field as well as those difficulties indicated by the minister this afternoon when dealing with the subject, namely the difficulties owing to external forces over which this country has no direct control. I refer, of course, to what appears to be a trade offensive by the U.S.S.R. and the possible trade activity on the part of China. There are other factors in this field which cause grave concern to this country and among them is the whole question of the regrouping of the European countries for trade purposes. The policy of the government with regard to this whole subject of trade has not been one to encourage the confidence of exporters from this country.
There is no doubt that great damage was done to the export industry by the precipitous action of the Prime Minister of Canada in announcing that he was going to divert trade from the United States and then his subsequent denial of this announcement, although it is on record in newspapers right across this country and had been impressed on the minds of television viewers who saw the Prime Minister on television and heard him make that announcement of policy.
Then there was the policy of the government in refusing to find out what the United Kingdom had in mind when they said they were prepared to discuss free trade with Canada at the time plans were being completed for the economic conference. The announcement was made at Mont Tremblay, and the Canadian government has remained strangely silent since with the result that it has not been ascertained just what the British authorities had in mind, whether they meant immediate free trade, free trade in the long term future or whether, in fact, they meant freer trade. In any event, it is to be regretted that the government has refused to find out what the United Kingdom had in mind on the subject and, in consequence, made it impossible for this country to decide whether the effect would be beneficial to us.
Then, of course, we had the unreasoned action of the Minister of Transport in cutting out Canadian shipping to the West Indies at a time when the West Indies were just developing their form of government into a federated body and when there was every indication that trade with that area would increase sharply. It has been obvious from speeches of the Minister of Transport in this chamber that he did not understand the implications of his action on that occasion. It is particularly interesting, for example, that he did not consider what might be the

Combines Investigation Act effect on our balance of payments of his action in cutting off shipping in Canadian ships to that area of the world. Clearly, he misunderstood the effect on our export trade to that area.


Mr. Maclnnis:: Would the hon. member permit a question? Now that the hon. member has had a further word to say on this matter would he indicate whether he disagrees with the remarks of his leader about a filibuster?


George James McIlraith: I agree wholly that an extraordinary position was taken by the government tonight. When this amendment was put forward for consideration this afternoon the minister took the position after fully explaining his stand on it, and the import of the amendment, that it should be dealt with then. That was his position at that time. No hon. member opposite rose to speak at that time.


An hon. Member:: Answer the question.


George James McIlraith: Then tonight we had the spectacle of hon. members opposite rising in sequence to read excerpts from the committee evidence and later in my remarks I propose to continue that exercise so that hon. members opposite may be thoroughly enlightened as to what that evidence contained.
Since hon. members opposite chose to read excerpts from the evidence without entering into debate on their part, with the possible exception of the hon. member for Burnaby-Richmond who did include. I think, one sentence, or part of one sentence in his remarks. I may say that the hon. member for Parry Sound-Muskoka in his contribution read from the brief which the witness giving evidence read to the committee; that was the way he did it. I think it is highly desirable that all those hon. members opposite should know just what the evidence is on this subject, and since they are so interested I think it is highly desirable that they should hear more of it. Particularly is it desirable that they should hear that part of the evidence which was given by the Minister of Justice when he explained his reasons for not proceeding with the suggested amendment on export at that time. I therefore propose to read, among other excerpts from the evidence, this passage which will be found at page 694 of the proceedings of the banking and commerce committee near the bottom of the page:


Mr. Thomas:: Mr. Chairman, there were two suggestions made by the British Columbia forest products group. They wanted to have the words "within Canada" placed after the word "unduly" in the bottom line on page 6. That would make it read: or is likely to lessen competition unduly within Canada. This group pointed out that due to the competition in foreign trade, it might be

in the national interest for the various corporations producing plywood and other lumber products in Canada to form a combination for the purposes of competing in foreign trade.


Edmund Davie Fulton: Yes.


William Howell Arthur Thomas: Therefore they thought the words "within Canada" should be placed after the word "unduly".


Edmund Davie Fulton: Yes. I think their proposal with regard to subclause (3) related also and was ancillary to the proposal for the insertion of another subclause in (2).


George James McIlraith: That is right.


Edmund Davie Fulton: They submitted that this would have the effect of creating a defence if the agreement related to export trade. That was the effect of it. Their actual submission was that there should be inserted in subclause (2):
"the allocation of markets and the creation of uniform prices and terms of sale in export trade to better facilitate the competitive position of articles exported from Canada against foreign competition."
The minister went on to say:
This might be an appropriate place to deal with the questions of the submissions that were made that some amendments should be made to take account of the situation of companies engaged in export trade. We have given careful consideration to that both before and after we received these submissions. In this field of combinations-and I am referring now to section 32-we felt that if there was a real difficulty in holding out any umbrella, the difficulty would be that, in giving them any umbrella at all, you could not isolate the protection that that umbrella gave to the export field alone. I have not yet seen any way in which you can allow them to carry on activities which would otherwise be an illegal combination and say that the effects of that will be isolated in the export field, and that it will not spill over and have an effect on the domestic field. That is the first difficulty which I have seen with respect to putting in such a provision.
The second reason why we have not felt it appropriate to put in such a provision is that we have a case now before the restrictive trade practices commission, to which reference was made in the submissions, in Vancouver. It is, so far as I know, the first such case in which an inquiry is now under way as a result of allegations having been made with respect to activities which were primarily directed to the export field. I only mention that here because it has already been mentioned and referred to specifically. I refer, of course, to the fisheries case. We do not normally confirm or deny that inquiries are proceeding. We have this case, which is now before the commission, and it would seem to me to be premature for me to be suggesting legislation which is going to have very far reaching effects. As I have said, I was just concerned as to whether I could isolate the export field from the domestic section. I would think it premature to introduce that legislation when such a case is before the commission. And the commission, in its consideration, will, I am sure-and I speak now without consultation with the commission, because I think this is one area where it would be improper for me to consult with them because they are an independent body-I am certain that the commission, in its reviews and reports, will address itself to this very question we are now discussing and that is, whether arrangements having the design of facilitating or improving the position of Canadian companies in export markets can be carried on without having a possibly disadvantageous effect on the consumer

in the domestic market. I think the commission will, as I appreciate the terms of the act and responsibilities imposed upon them, have to address its mind also to the public interest and to the question of whether the public interest is better served by allowing such arrangements at all, whether the general interest of Canada is better served by things that facilitate Canadian companies in export fields and, therefore, any detriment there may be in the domestic field may be outweighed by the general advantage of the economy of the country. It seems to me that is one of the things to which the commission must address its attention. In the light of the fact there is now an inquiry before the commission in which these issues are relevant, it would seem to me to be premature for me to be recommending legislation at this time on that subject.
The hon. member for Middlesex West intervened:


William Howell Arthur Thomas: There was another suggestion by the metal mining association


Edmund Davie Fulton: May I just conclude, Mr Thomas?
On that occasion the minister was not as tolerant of the supporters of the government as he is this evening. The minister went on to say:
I think it is premature because I think the situation will be greatly clarified, and the members of the House of Commons as well as the government, in considering what legislation if any, should be introduced and enacted, will be assisted greatly in that task by the report of the commission.
The hon. member for Burnaby-Richmond then interjected:


John Andrew W. Drysdale: In the meantime, would every consideration be given to these people competing in the world export market, provided their competition is such as not to affect the domestic market-because there is no indication, at present, as to when the decision is likely to come down in this case referred to, and it could be a matter of years? I was wondering if consideration could be given, in the meantime, to those who are engaged in this export field.
The hon. member for Greenwood then stated:


James MacKerras Macdonnell: Consideration has been given to them for sixty years.
The following exchange then took place between the minister, the hon. member for Kenora-Rainy River and the hon. member for Burnaby-Richmond:


Mr. Benidickson:: Mr. Chairman, has the minister had time, since the representations were made by the Canadian metal mining association and others, on this point, to give it much consideration or to take it to his colleagues; or will he be able, perhaps, to review it between now and the committee stage of the bill in the house?


Edmund Davie Fulton: I have reviewed it, Mr. Benidickson, and the conclusions I have just outlined, in reply to Mr. Thomas' question, were the conclusions to which we came as a result of that consideration. We were not unaware of the problem when we were initially drafting the bill. In fact, we did have a provision in the bill we presented last year, with regard to the export trade in the field of mergers. But when it was decided it would be more appropriate not to make a substantial change in the merger field, that was dropped. We were
Combines Investigation Act
considering the position of the export trade with relation to the whole act. I was not able to find any way, in the combination field, that I was satisfied could insulate the effects of arrangements made with respect to export from their effect domestically. We do not have any advice from anybody as to ways of measuring the public advantage of one as against the other.


William Moore Benidickson: I am sorry, but I was reading the act at the time when you made reference to the commission bringing down a report, and that this problem would be one of the points considered. What was the commission?


Edmund Davie Fulton: The restrictive trade practices commission, which is now considering the fisheries case in Vancouver.


John Andrew W. Drysdale: There is unlikely to be any further activity in the export field, provided there is no outward obvious violation of the Combines Act until this particular case is settled. I am not trying to pin the minister down to legal advice, but there is likely to be this period when there is nothing covering the export trade. I wonder if, without putting him on the spot, there is anything he could say to the committee which would indicate the position of exporters with regard to this competition?


James MacKerras Macdonnell: Do you not think that actions speak louder than words?


Edmund Davie Fulton: I find it hard to answer that without being ''put on the spot".
The words "put on the spot" appear in quotation marks.


Mr. Valade:: Mr. Chairman, would the hon. member permit a question?


George James McIlraith: Yes, by all means.


Mr. Ricard:: It suits the hon. member's purpose.


Georges-J. Valade: For the sake of clarity would the hon. member in reading his citations also read aloud the periods and commas so we would be able to follow his quotations clearly?


George James McIlraith: I could not hear the hon. gentleman.


John Whitney Pickersgill: The hon. member wants you to include the punctuation.


Douglas Scott Harkness: That is all the hon. gentleman is leaving out.


George James McIlraith: I am prepared to assume that hon. members who are reading the record will recognize the punctuation when they see it. If they are unable to do so I think it would be quite improper for me to indicate it to them verbally. I think to do so would insult the intelligence of hon. gentlemen and I would not wish to do that. I therefore must reject the hon. member's request.
I return to the evidence given by the minister on this point when he took quite a different position from that taken by him today with respect to the amendment. I return to the exchange between hon. gentlemen and the minister at the bottom of page 696:


John Andrew W. Drysdale: I think that is fine, Mr. Minister.

Combines Investigation Act


Edmund Davie Fulton: Mr. Benidickson, I have misinformed you in an answer I gave. I find we did not have any provision with regard to export trade in our earlier bill, as presented to this house. We had it in several of the drafts we had prepared.


William Moore Benidickson: I was going to ask you why it was not in this bill when it was in last year's.


George James McIlraith: If you have finished with that point of export, I want to ask some more questions about subsection (3),

And so on.
These excerpts indicate that in committee the minister had taken a position which was somewhat different from the one taken by him today-


John Whitney Pickersgill: Just like the north pole and the south pole.


George James McIlraith: Yes; the two positions taken are as far apart as the north pole and the south pole. But in any event, I want to be very forgiving to the minister and tell him that I appreciate the fact that he has moved to the correct pole this time and has taken the correct position now in committee of the whole in bringing forward, or having one of his supporters bring forward, the amendment which is now before us. But before doing that I would ask him whether he consulted the commission before bringing this amendment forward? He had grave doubts, as indicated by the evidence, as to the propriety of consulting him. Perhaps he should qualify that matter, because I am quite sure he would not have consulted an independent body, but I do not think any possibility of a reflection on his conduct should be left on the record, and I would ask him whether he consulted the commission since giving the evidence in committee more than a week ago and before bringing in the amendment? Perhaps the minister would answer the question.


Edmund Davie Fulton: I was just looking for the reference to the further occasion on which the matter was discussed in the committee, when I again indicated, as I think the hon. member will agree, if he reads carefully, or considers carefully what he has just read that I indicated then, that I did not have a closed mind on this subject. He will remember that when the hon. member for Bona-vista-Twillingate moved his amendment in committee I indicated that, in view of the fact that hon. members generally were uniformly concerned about this matter I felt, under those circumstances, that I should be prepared to give the matter further consideration and I undertook then to give it further consideration between the time the bill might be reported from the banking and commerce committee and the time it might come up here. This passage is found starting

at page 750 of the banking and commerce committee minutes of proceedings and evidence. I pointed out at that time, and I am now reading from page 750:
And I am pleased to note that the effect of this amendment is to indicate that Mr. Pickersgill, in moving it, admits there can be something done to improve the position of Canadian industry without weakening the effects of the combines legislation. That is the first and most important thing that appears from this amendment. And I am delighted to have this indication of agreement by the official opposition with the stand of the government, that we can indeed make certain changes which will improve and benefit the position of industry, and thus of the economy generally, without weakening the terms and objectives of the combines legislation. That is one of the main objectives of the present amendments. I am delighted to have this endorsement of those objectives.
At this point, Mr. Chairman, I might perhaps interpolate that I am delighted to have the agreement of the official opposition today, as indicated by their readiness to accept this amendment, that once again they have confirmed that the combines legislation can be improved by making it clear that certain activities can be indulged in by industry without detriment to the economy and indeed to the benefit of the economy of Canada, and without weakening the combines legislation. The fact that our legislative scheme has been sound throughout is substantiated by the fact that hon. members opposite are prepared to accept this amendment to amend section 32, to which earlier they were apparently so much opposed.


George James McIlraith: No, not opposed.


Edmund Davie Fulton: Then I went on to discuss the effect of the amendment as proposed at that time by the hon. member for Bonavista-Twil-lingate and to indicate that I was not prepared at that moment to accept the amendment because I felt it opened the door too wide. I am now reading from page 751. I said:
For the reasons I have given, I do not think this amendment, as presently drafted, meets the criteria which this committee, or any government concerned with the welfare of Canadian consumers, could adopt.
My suggestion is that the amendment be rejected, but that the principle be re-examined to see whether a proposal consistent with the interests of Canadian industry in the export field, and the overriding interest of consumers domestically, can be devised. And, if it can, the government would be happy to suggest such an amendment in the house.
Therefore, you will observe, Mr. Chairman, by reference to the latest discussion on this point in the banking and commerce committee, that it is established that the minister's position there was absolutely consistent with the position that he outlined to the committee this afternoon.

With reference to the question of the basis upon which I came to the conclusion that I reported to the committee this afternoon, I can only say that I consulted with the officials upon whom I rely to advise me and the officials with whom it is proper for me to consult and that we did together come to the conclusion that it would be appropriate to introduce this amendment at the present time for the reason I gave to this committee this afternoon.


John Whitney Pickersgill: Mr. Chairman, I had not intended to take up any more of the time of the committee at all until the minister chose to put on the record here his own interpretation of the attitude I took in the committee. I feel that the record will not be complete unless I now put on the record the position that I took in the committee, and obviously there is not time to do that tonight; but I do think there is one thing that may not always be true, the old principle post hoc ergo propter hoc, but there is no doubt in this case that we would not have had this amendment from the government at all if I had not moved an amendment in the committee and forced the hand of the government.


Thomas Miller Bell: Don't be so modest.


John Whitney Pickersgill: The minister knows perfectly well, as my hon. friend from Ottawa West has pointed out at length, that the government had turned down this matter, turned it down completely and finally and I came in and moved an amendment and they began to be worried and thought it was a bandwagon and now they are all trying to get on it. It is eleven o'clock, sir.


Thomas Miller Bell: Your mentor is in the gallery.
Progress reported.
Business of the House BUSINESS OF THE HOUSE


John Whitney Pickersgill: Perhaps the government leader would tell us what he thinks he can get his followers to do tomorrow.


Gordon Minto Churchill: It would be helpful if I could find out what the opposition intends to do from day to day.


George James McIlraith: We tried to help you today.


Gordon Minto Churchill: Tomorrow we will continue and complete this particular bill and then estimates will follow. They will follow in this order, only subject to change if some unforeseen accident occurs, for the balance of the session: northern affairs and national resources, secretary of state, defence production, legislation, labour, defence, finance, trade and commerce, privy council.
On Friday of this week the first item that will be called for discussion other than estimates will be the motion appearing in Votes and Proceedings of Monday in the name of the Prime Minister with reference to the amendment as to the tenure of office of judges.


John Whitney Pickersgill: The amendment to the British North America Act.


Gordon Minto Churchill: Yes. That will be brought forward on Friday.


John Whitney Pickersgill: I wonder whether the minister would repeat the qualification he made about the order of departments?


Gordon Minto Churchill: I said that would be the order unless some unforeseen circumstance arises such as some minister being unexpectedly called away or somebody on the opposition side requesting a change in the order of procedure.


[Stage Direction]
It being three minutes after eleven o'clock the house adjourned, without question put, pursuant to special order.
[Stage Direction]
Wednesday. July 27, 1960