1960-05-31

CIVIL DEFENCE


[Stage Direction]
Righl Hon. J. G. Diefenbaker (Prime Minister): Mr. Speaker, I should like to make a statement in connection with the emergency measures organization. Hon. members will recall that some months ago the government adopted the policy of arranging for regional, federal administration in Canada should a major war occur, to work in co-operation with provincial governments and tie in with the regional army commands.
The plan is to provide in each province a centre from which a small core of federal, provincial and army personnel can direct emergency operations within the province, even in the presence of radioactive fall-out, the loss of normal means of communication and possibly the destruction of some provincial capitals.
Continuity of government is essential to our survival as a nation, and the need of guidance and control by civilian authority will be more than ever vital to our people should Canada find itself in war. Moreover, the army has responsibility for emergency communications, for the attack warning system, for prediction of fall-out patterns, and for a number of other important survival services. These responsibilities make it necessary to have a centre in each province where, given reasonable protection against fall-out, the army can meet its military commitments and carry out the survival and support functions it has been assigned.
The government, in assessing physical requirements for meeting the federal civilian responsibilities and for those falling on the army, believes that they should be met from the same emergency centre in each province, recognizing as it does the very important role of the provinces in respect of the more localized wartime responsibilities falling on them. While the regional governmental centres will be provided and administered by federal authorities, the plan is to make suitable provision for a nucleus of the provincial government and officials in each regional centre. In this way the province concerned would use the facilities there to aid in meeting
its own wartime role, and would work in close association with federal authorities in so doing.
Regional centres will be established speedily in each of the provinces. There will be some variation in their size and character, depending on a number of factors including the size of the population to be served, the likelihood of the provincial capital coming under direct attack, and particularly the emergency communications system and its technical requirements. The centres will be limited in size but will be sufficient to ensure the required operational capability.
In some provinces construction will be necessary, while in others modification of existing buildings may suffice to meet the requirement. The principal need is adequate protection against radioactive fall-out, the same peril against which the government is encouraging householders to protect themselves by means of suitable basement shelters. Immediate action is being taken to provide the required structures, and details regarding provincial participation in their use will be the subject of discussion with provincial authorities forthwith.
In making this announcement at the present time, Mr. Speaker, I underline and emphasize what I said on an earlier occasion when this plan had its inception, namely that I do not want anyone to interpret the announcement at this time as indicative of any change in the peaceful relationship of our country with other countries.

Hon. Howard C. Green (Secretary of Stale for External Affairs):: Mr. Speaker, yesterday I outlined to the house the assistance that had been given by Canada to Chile. Since then we have received a request from the Chilean government through the Canadian embassy in Santiago that the two R.C.A.F. North Stars which were due to reach there this morning should be used for airlifting supplies from Santiago to the stricken area in the south of Chile, as larger planes cannot land in the latter area. The government through the Department of National Defence has arranged for this to be done. In addition the R.C.A.F. will be flying to Chile at once a second mobile

Inquiries of the Ministry field hospital as well as drugs and other medical supplies. I believe there will be three further R.C.A.F. North Stars used for this purpose.
I am also glad to be able to announce that the government has decided to make a gift of $1 million worth of flour to the Chilean government for use in feeding disaster victims. Arrangements are now being made by the departments concerned to have this flour shipped to Chile just as quickly as possible.


Hon. L. B. Pearson (Leader of ihe Opposition):: Mr. Speaker, I am sure all members of the house will have welcomed the announcement by the minister that it is going to be possible to do more for our friends in Chile than was originally announced. This has been a terrible disaster, as the minister knows better than any of us, having just been there, and anything the government can do to help our friends at this time will certainly be warmly supported by us.



COMPANIES ACT


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Pori Arthur):: Mr. Speaker, I should like to direct a question to the Acting Secretary of State. It arises from a speech given by the Ontario deputy provincial secretary indicating that there will be a new companies act that will be uniform across the country with federal legislation, and setting out some of the points in the act. Can the Acting Secretary of State tell us whether it is indeed true that the proposals for revision have been completed and are now in everyone's hands; and can he indicate whether the general public and the house will have these proposed changes made available to them?


Hon. Leon Balcer (Acting Secretary of State):: Mr. Speaker, I have not read the press report to which the hon. member has referred, but I will read it and give an answer tomorrow.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. W. C. Henderson (Cariboo):: I should like to direct a question to the Prime Minister. Can the Prime Minister say whether the government expects to receive the report of the royal commission inquiring into the route

of the proposed railway to Great Slave lake in time to permit a decision to be made and the project commenced this year?


Right Hon. J. G. Diefenbaker (Prime Minister):: I understand the report is nearing completion, but at this time I cannot hazard a guess as to when it will be produced. I can assure the hon. member for Cariboo that as soon as it is received the government, of course, will give immediate consideration to that report.
(Translation):



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. J. N. Tremblay (Roberval):: I should like to direct a question to the Minister of National Revenue or, in his absence, to his parliamentary secretary.
Could the minister obtain the following information from responsible C.B.C. officials.
Has the C.B.C. authorized Mr. Gerard Pelletier, of Montreal, to interview, on the program "Premier Plan" presented on the French T.V. network last Sunday evening, May 29, at 10.30 p.m., certain experts who took the opportunity, in commenting on the collapse of the recent summit conference, to praise the socialist doctrine and system?


Mr. M. J. A. Lambert (Parliamentary Secretary to the Minister of National Revenue):: Mr. Speaker, since the hon. member for Roberval sent me notice of his question, I inquired from responsible C.B.C. officials, but I have not yet obtained an answer. I shall answer this question later.



STATEMENT ON REPORTED INTENTION TO SEND PRODUCTION TEAM TO EUROPE

[Stage Direction]
On the orders of the day:
Marcel Joseph Aimé Lambert: While I am at it, would the house allow me to answer certain questions which have been put to me regarding the C.B.C.? First, here is the answer to the question asked last Wednesday, May 25, by the hon. member for Montmagny-L'Islet about the program "Chez Miville":
I am informed by the C.B.C. that the program "Chez Miville" is entirely sponsored. All travelling and other expenses are recoverable and the C.B.C. expects that this series will be profitable.



I960 STATEMENT ON CANCELLATION OF FRENCH TELEVISION PROGRAM

Marcel Joseph Aimé Lambert: Then, the hon. member for Roberval inquired on Wednesday, May 25, about a special awards program for performers. Here is the answer to this question:
I am advised by the C.B.C. that the decision to broadcast a special awards program on May 23 was taken because of viewer interest in this type of program, this being the main consideration when the C.B.C. has to decide whether various events should be carried on T.V. or not.



STATEMENT RESPECTING NEWS COMMENTARIES ON UNITED NATIONS MEETING

[Stage Direction]
On the orders of the day:
Marcel Joseph Aimé Lambert: Mr. Speaker, on May 24 the hon. member for Roberval asked a question concerning Jean-Louis Gagnon of Montreal's La Presse. Here is the answer to that question.
Being a public service, the Canadian Broadcasting Corporation televised during a live program on the United Nations' network a simultaneous translation of Mr. Gromyko's speech, in English for its English network and in French for its French network. It also carried a live broadcast, on the English network, of Mr. Henry Cabot Lodge's speech, while a simultaneous translation of the same speech was carried on the French network. Following Mr. Gromyko's speech and Mr. Lodge's reply, panel discussions were televised over the French network to analyse the statements made by each speaker. The panels included:
Panel No. 1: Moderator, Mr. Paul Lacoste; members: Messrs. Jean-Louis Gagnon, Naim Kattan and Andre Laurendeau.
Panel No. 2: Moderator: Mr. Jean-Luc Pepin; members: Messrs. Louis Beaudoin and Nicolas Mateesco, both of them professors at McGill University, in Montreal.
Other comments were made by Reverend Father Richard Ares, s.j. and Mr. Paul Sauriol.
Both panels had been asked to analyse and comment on the two speeches from various standpoints in order to cover every aspect of the matter. Panel members were absolutely free to express their own personal views.
In reply to the supplementary question, let me add that such discussions are chaired by a
Inquiries of the Ministry moderator and aimed at bringing out as many of the facts and opinions as possible for viewers' information. The views expressed are strictly those of the panel members.



STATEMENT ON PROGRAM &quot;RENDEZ-VOUS AVEC MICHELLE&quot;

[Stage Direction]
On the orders of the day:
Marcel Joseph Aimé Lambert: With your permission, Mr. Speaker, I should like to answer a question asked by the hon. member for Roberval on May 26 concerning the program "Rendez-vous avec Michelle".
I am advised by the C.B.C. that on programs of that series, a good many well known personalities are interviewed and that no preferential treatment is granted Mr. Pierre Tisseyre. I understand that on many occasions representatives of other publishing firms were interviewed in that same series.


Jean-Noël Tremblay: Mr. Speaker, may I direct a supplementary question to the parliamentary secretary?
Could he inquire from the C.B.C. as to which publishing firms received preferential treatment from the corporation in the series "Rendez-vous avec Michelle"?


Marcel Joseph Aimé Lambert: I shall be pleased to do so, Mr. Speaker.
(Text):


Mr. Speaker:: While I do not want to discourage the hon. member's interest in radio programs I suggest that if he has a number of inquiries of this kind he might consider putting them on the order paper.



INQUIRY AS TO REPORT OF ROYAL COMMISSION

[Stage Direction]
On the orders of the day:
Mr. Lawrence E. Kindt (Macleod):: I should like to ask the Minister of Mines and Technical Surveys when the government expects to receive the report of the royal commission on coal.


Hon. Paul Comtois (Minister of Mines and Technical Surveys):: Probably in the late summer, Mr. Speaker.


Lawrence Elliott Kindt: I have a supplementary question. Is there any truth in the rumour that three mines in Nova Scotia are likely to be closed prior to the production of the report?


Paul Comtois: No, Mr. Speaker.
4362	HOUSE OF
Inquiries of the Ministry TRADE



CHINA-INQUIRY AS TO FORECAST OF INCREASE

[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: I should like to direct a question to the Minister of Trade and Commerce. The question is based upon a news report originating in Shanghai to the effect that the Canadian trade commissioner in Hong Kong, Mr. Forsyth-Smith, said there will be a considerable increase this year in trade between China and Canada. Can the minister-perhaps not now, because no notice was given of the question, but on a subsequent day-give an indication to the house of the type and volume of goods that will be involved in this considerable increase in trade?


Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Speaker, I saw the article to which the hon. member refers. Our trade with China has not been very great over the years, but it has been running in the neighbourhood of $2 million. It was $1.7 million for the calendar year 1959. The article predicts a substantial increase in Canada's trade with China. Although there are possibilities there, we shall have to wait and see what transpires. Some Canadian goods perhaps reach China indirectly rather than directly. Our trade commissioner, Mr. Forsyth-Smith, has been closely in touch with the situation. He sends back information to Canadian businessmen with regard to the possibilities for trade with China. Over the years that trade may increase. From his reports I judge that he does not see a spectacular increase in that trade at the present time but there are possibilities; and if they are investigated by Canadian businessmen, so much the better for Canada's export trade.
Hon. L. B. Pearson (Leader of fhe
Opposition): I should like to ask the minister a supplementary question. Are the trade returns with regard to continental China kept separately from those respecting Formosa?


Gordon Minto Churchill: Yes, my information is that they are separate.



THE CENSUS


[Stage Direction]
On the orders of the day:
Douglas Mason Fisher: Mr. Speaker, I have a question for the Minister of Trade and Commerce, arising from the fact that the census starts tomorrow. Can the minister indicate whether the dominion bureau of statistics, with its more up to date equipment, will be 

able to give the House of Commons the necessary population statistics for redistribution purposes any earlier than the March after the official census year?


Gordon Minto Churchill: Mr. Speaker, the hon. member's question is based on a fallacy. The census does not start tomorrow; next year will be the census.


Douglas Mason Fisher: A supplementary question. The information I have is from a news release from the dominion bureau of statistics which states that the official preparations for the census start tomorrow.


Gordon Minto Churchill: The preparations for the census have been going on for many months, Mr. Speaker.


Douglas Mason Fisher: A supplementary question. This does not invalidate the question. Will the dominion bureau of statistics be able to give the house these statistics any earlier than after the previous census?


Mr. Speaker:: I am not sure of the urgency of this question. If the hon. member would ask it at this time one year hence there would still be a question whether it was urgent.


Douglas Mason Fisher: Redistribution is always urgent.



RESEARCH


Mr. J. W. Murphy (Lambton West):: Mr. Speaker, may I have the permission of the house to revert to the presentation of reports?


Mr. Speaker:: Has the hon. member leave to revert to reports?


Some hon. Members:: Agreed.
Mr. Murphy presented the first report of the special committee on research and moved that the report be concurred in.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The house resumed, from Monday, May 30, consideration of the motion of Mr. Fulton for the second reading of Bill No. C-58, to amend the Combines Investigation Act and the Criminal Code.
Hon. E. D. Fulton (Minister of Justice):: Mr. Speaker, if I might be permitted on a question of privilege to make one change in

Hansard, it might make the text more intelligible. Page 4345 of Hansard, near the end of the second paragraph in the second column, reads:
-again emphasizing that there is no change in effect-making it clear that acts which are beneficial to the public, such as the pooling of resources for research and do not constitute a combine as defined can be carried on without danger of misconstruction or conviction.
That should be changed as follows: There should be a semicolon after the word "effect", the dash should be eliminated and the words "the provision" should be inserted before the word "making". It should thus read:
-again emphasizing that there is no change in effect; the provision making it clear that acts which are beneficial to the public-


Lester Bowles Pearson: Mr. Speaker, I am glad to have that correction made by the minister in the record of what he said yesterday, but I am afraid it does not alter my feeling about this bill as being one that we on this side will not be able to support on second reading.
Last evening I was trying to correct the historical background to this bill as it was put forward by the minister. This afternoon I should like to begin my remarks by saying something about the events leading up to the bill itself. Those events represent another instance of fumbling and indecision on the part of the minister and the government.
For more than two years the minister has been talking about changes to the Combines Investigation Act. He discussed the principles involved in some detail in 1958. He discussed them again in January, 1959 in a speech he made in New York. But the bill which was to have dealt with this matter was not introduced into this house until June 11, 1959. We recall that it was introduced at that time without a preceding resolution, an omission which was surprising on the part of a minister who is such an expert on the rules; therefore a clause in the bill last year which provided for the appointment of ad hoc commissioners had to be deleted. On June 15, 1959, four days after the introduction of the bill, we had another speech on the question by the minister in Montreal, this time dealing with the matters which were contained in the bill. In a sense this was the minister's second reading speech on the amendments of last year, although the speech was made in Montreal. However, consideration of the bill in the house was delayed, because it became evident very quickly that the bill was ill conceived and highly objectionable and, as I think the minister himself admitted last night, some 79951-0-275
Combines Investigation Act strong protests concerning it were received. Therefore some parts of the bill were, I think rightly, withdrawn on July 7 before any consideration could have been given to it, presumably because of the representations which were received.
At that time, however, the minister decided to proceed with the amendments to the resale price maintenance sections of the act; then later he decided to withdraw that part of the bill as well. Now, one year later, and four months after the beginning of this session, we have for consideration this other bill which in some of its provisions at least is new, and so we ask ourselves why this indecision, why this hesitation, why these changes and this chopping; and we will do our best to find out about that in committee.
The history of this matter, as I tried to point out last night, and the background to the introduction of this bill both reflect the fact that the positions of the two parties on this subject are basically different. The position of the Liberal party historically has been that competition should be maintained and enforced in the private sector of our economy. The position of the Conservative party over the years has been in favour of the regulation of competition even if this should mean certain combines, monopolies or restrictive practices, if they were found not to be against the public interest. In other words the Conservative party has not shown itself to be as keen about competition within the private sector of our economy as it has always shown itself to be keen about competition between public and private enterprise. The present bill, as I shall try to point out, reflects this attitude.
The fact is that our economy, as I also tried to point out last night in brief, whatever may have been the situation 100 years ago, has altered. Today it is quite unrealistic to describe the Canadian economy without qualification as a private enterprise economy. What we have is a mixed economy with public, co-operative and private enterprise sectors, and this is as it should be. For progress and for stability the government has had to accept increasing responsibilities in the public sector to fight unemployment, for instance, and inflation. Private or free enterprise alone could not possibly do this job. Moreover, there are certain undertakings and certain national activities which must be assigned to public initiative if we wish to ensure the greatest possible freedom and welfare for the individual.
However, the scope and nature of this kind of government intervention will vary in different countries, and it will vary at different stages of development in the same
4364	HOUSE OF
Combines Investigation Act country. Similarly the co-operative sector which is growing in importance in our country, and rightly so, has a great part to play in ensuring the prosperity and progress of the small producers and consumers.


Edmund Davie Fulton: Mr. Speaker, may I ask a question there. I would be interested to know whether in his use of the word "co-operative", which he also used last night, the Leader of the Opposition refers to co-operative organizations in the generally accepted sense or wnether, as might have been suggested, he means an area of co-operation between public enterprise and private enterprise?


Lester Bowles Pearson: While of course, Mr. Speaker, there should be co-operation between public and private enterprise in their respective sectors of the economy, I was using the word "co-operative" in the sense the minister mentioned, as referring to co-operative undertakings within our economy.
We accept, as Liberals, that these two divisions exist, but as Liberals we also believe there is a large and important sector of the economy which should be left to private enterprise for exactly the same reasons I have mentioned in connection with the other two, the progress, prosperity and freedom of the individual. All these considerations require what I have called a mixed economy, each sector serving the public interest in its own way and according to rules laid down. In considering this bill we are particularly considering the rules that should be laid down.
That is our view, and it opposes the traditional Conservative insistence on extreme private enterprise and the socialist insistence on extreme public enterprise. These differences are bound to lead to different approaches as between the parties to the problem of monopoly. We believe, for instance, that if the private sector of the economy is to best serve the public interest it should be subject to the maximum possible extent to the competitive rule. Private controls within that sector will certainly be inadequate. Public regulation of private initiative is a poor substitute for competition as a preventive of monopoly, and it tends at times to serve the private rather than the public interest. In our view-and I think history supports that view-the traditional attitude of the Conservative party has been otherwise. In the past they have encouraged the development of private controls and privileges and weakened the competitive rule in many fields of economic activity.
I believe, Mr. Speaker, that attitude continues to be shown in some sections of this bill,


which we oppose. As I ventured to point out very briefly last night, without changing the legislation that we have now in any respect, by administrative action it could be improved in three ways. Perhaps I might go into those possible changes in more detail this afternoon. First-and this is one I mentioned last night-the powers of investigation of the director, which are wide and rightly so, should obviously not be abused and should obviously be used with discretion. They should always be carried out on the presumption that anyone, a corporation or an individual, is innocent until he or it is proven guilty.
I recognize that last night the minister complained that I had charged that there have been complaints on this score. I feel, and I am quite willing to repeat my feeling in the house, that the attitude and conduct of investigation by the investigators should be scrupulously fair to those investigated, with strict administrative directives to ensure against any possible abuse of power; otherwise, as I already said, public confidence in the act will be weakened.
Second, Mr. Speaker, the MacQuarrie committee, which has been mentioned already more than once, recommended that the commission in its hearings and reports should not always make those reports preliminary to criminal prosecution, because the present law does say that such a report shall "appraise the effect on the public interest of arrangements and practices disclosed in the evidence and contain recommendations as to the application of remedies provided in this act" and then it adds these three words "or other remedies"; other remedies such as the use of tariffs or the use of patent legislation.
Convictions and penalties are not always the best or the only remedies to correct an undesirable monopolistic situation or practice. I take it that when the trade practices commission was set up it was expected to recommend such other remedies as it could find to correct undesirable practices, and it has not done so.


Edmund Davie Fulton: Oh, it has.


Lester Bowles Pearson: Well, if 1 am wrong the minister will be able to correct me. It is my information that the reports are at least normally-and almost without exception-preliminary to prosecution under that section of the act.


Edmund Davie Fulton: There have been cases, though.


Lester Bowles Pearson: Well, I stand corrected if there have been cases. Perhaps I am correct when I say that normally the investigation is preliminary to prosecution.


Edmund Davie Fulton: That would be not quite right.


Lester Bowles Pearson: I am not being critical of the commission for that, because during the three years of the activity of the commission on restrictive trade practices, under the present government, there have been only two members on the commission; the third member, I think, was appointed only recently. Before that time this commission, which was not appointed very many years ago, felt it had quite enough to do-and indeed it had more than enough to do, as I perhaps will be able to point out when I come to another change that may be suggested; yet I express the hope that in the future it will be able to use more than it has in the past this provision for other remedies, to quote the act.
Then a third change which I hope can be made, and which does not require any alteration of the present legislation, is to strengthen and intensify the work of the commission in research in the field of monopolistic situations. The minister will remember, of course, that the MacQuarrie committee put great emphasis on research of this kind, and it had a good deal to say in its report about the importance of these matters of research.
Section 42 of the act, as amended in 1952, implemented the recommendations of the MacQuarrie committee in this regard and gave wide powers of research to the director. That will be found on pages 55 and 56 of the report. But these powers have not been exercised to any significant extent; and if that is the case again I say, Mr. Speaker, it is not the director's fault, because his staff is small and more skilled research personnel are needed for this work of investigation, which seems to me of such great importance to the effective operation of this office. The provision of that kind of help, of course, is the responsibility of the government. If a greater effort could be made in this field and provision for this effort made we would surely have a far better knowledge and a far greater understanding of monopoly problems than we have now; what steps should be taken to correct them, and what changes are needed in the present legislation.
These are three changes that could be made in the present legislation without amending the act at all. However, we have before us a bill which does introduce amendments to the act. Dealing with the bill itself and the principles embodied in it, Mr. Speaker, I recall that the minister said last night-I may not be quoting him exactly, but I am sure this is the meaning of what he said-that this bill recognizes the inherent soundness of the principles of the present legislation. If that is true, then of course this bill in intention at least does not change those principles; but as we read it, as we 79951-0-275i
Combines Investigation Act understand the amendments, they will certainly weaken the principle which is inherent in the present legislation. We cannot see in this bill, whatever its purpose may be, any result which would protect either small business or the consumer. We think the effect of this bill will be to weaken competition, to give more rather than less protection to combines, and to reintroduce undesirable monopolistic practices.
Having said that, Mr. Speaker, I shall try to produce evidence to support the contention. The minister pointed out last night that there are two main parts to the bill. There is the part dealing with monopolistic situations, and there is the part dealing with trade practices. As he did, I should like to deal with these in turn.
The part dealing with monopolistic situations can be divided into changes recommended regarding definitions, changes in regard to litigation procedure and remedies, and new remedies to be applied. Let us look at the changes in definition first. The definition of monopoly in the amendment is substantially the same as it was, and the test remains operation to the detriment or against the interest of the public. In the case of mergers this test is restricted by the qualification that competition must be lessened. While the detrimental aspects of most mergers are to be found in the lessening of competition, there are others which might involve broader considerations of public interest; and since mergers often give rise to monopolies it seems to us that the same tests and the same definition should be applied to both as is the case under the present law.
There are also some changes proposed in the definition of a combine or conspiracy, and these are important. With two modifications, one of which may be a little more important than it may seem on the surface, the bill incorporates section 411 of the Criminal Code, that section which defines conspiracy, as the minister pointed out. We on this side have no great objection to putting that section of the Criminal Code in the Combines Investigation Act. But what is more serious is a new and broad exemption under the bill. Under a provision of the bill a combine relating to certain matters -the minister mentioned what they were last night-such as exchange of statistics, definition of product standards, research and one or two other things, may operate provided it has not lessened or is not likely to lessen competition unduly in respect of the five matters which we both mentioned last night; prices, quantity or quality of production, markets or customers, channels or methods

Combines Investigation Act
of distribution, and restriction from entering into or expanding in an industry. Therefore under this provision these practices on this condition-I add that-will be permitted. That is a substantial departure from the principles of traditional legislation in this field. If combinations are allowed for these purposes, would other agreements be necessary to eliminate competition with respect to prices or production or markets? There are a great many objective experts, students of this subject, who have studied these matters carefully and who think the answer to that question would be in the negative.
I realize, of course, that an agreement even on the matters enumerated will be illegal if the courts find that it has lessened or is likely to lessen competition unduly in respect of the matters I have mentioned. Nevertheless the minister will agree that this is an entirely new test for the courts. Proceedings before the courts in this field up to now have been relatively simple, though some people might not consider them absolutely simple. It has to be shown that an arrangement regarding prices or production does exist and that it involves substantial control over the market for the product concerned. That is all. Therefore the evidence is or needs to be largely limited to matters of fact, namely the existence of an agreement and the degree of control brought about by that agreement in the industry in question.
Under this amendment the task of the courts will be much more complicated. They will still have to make findings as to the existence of an agreement and the degree of control; but also, in relation to the matters and practices enumerated, the courts will now have to appraise the effects of such arrangements on prices, production, markets, distribution and the number of units in an industry and find, if they can, whether in these respects competition will be lessened unduly by any arrangement made.
How will the courts decide whether an arrangement about the exchange of statistics on costs and prices, an exchange of figures on costs and prices, will lessen competition unduly in respect of prices? Will it be on the basis of mere uniformity of prices? The minister knows that in economic theory prices are also uniform under conditions of perfect and free competition. Will the courts then have to appraise the levels of prices, which would bring them into very intricate economic theories of evaluation?
Surely it has always been the prevailing view that the courts of our land were not well equipped to appraise the effects and consequences of trade practices of this kind. Mr. Justice Hope, one of the men learned in

the law of this country, in dealing with this matter once in a case had this to say:
The courts should not be called upon to adjudicate between conflicting theories of political economy.
Under these amendments they may well be called upon to do just that. I know that certain business groups, as the minister pointed out last night, I think, have complained about the uncertainty and vagueness of the present legislation. It is our contention that these amendments will make that situation more uncertain and more vague. How can these amendments improve the situation? Certain business groups have also requested -I think the Canadian Manufacturers' Association might be mentioned in this regard-[DOT] that certain joint activities or arrangements should be specifically legalized, and no doubt their briefs have had some effect on the minister. But how can this be done under amendments of this type without restricting the scope of the legislation as a whole? In any event, the bill provides only for conditional exemption, so that it even fails to meet the position that business groups have in mind because it does, as we see it, leave the position more uncertain and more vague, not more certain and more precise.
Under this bill even an arrangement for the exchange of official statistics could be brought under prosecution. Therefore while the bill is not going to help in this respect it does have some dangerous implications. As I have said, the courts will have to appraise the effects of a great variety of joint activities and consider in each case whether or not a specific detriment is involved. That is going to be very difficult for them. Either the courts will interpret this new provision, if it becomes law, so as to leave the existing jurisprudence unchanged, which would make the new provision useless, or they will interpret it as giving more leeway to business to engage in joint activities or combinations, which will greatly weaken our present legislation.
May I say a word, Mr. Speaker, about the second part of this section, concerning litigation procedure, and perhaps I can deal with remedies at the same time. Until 1952 the only litigation procedure for an offence was criminal procedure, criminal prosecution. It will be recalled that in its report the Mac-Quarrie committee expressed the view that it would be desirable if the courts had the statutory power to issue a judicial restraining order as a preventive procedure. But while they made that recommendation they apparently had some doubts about the constitutional validity of such a change, because at pages 40 and 41 of their report we find these words:

Already the courts have certain procedures of a preventive kind in the field of criminal law. Their power to bind over persons to keep the peace and to release persons upon the condition of future good behaviour approximate an injunctive process. There is as well, a growing body of doctrine that the courts have jurisdiction to issue orders preventing the commission of public wrongs ... Constitutionally a strong case can be made that federal jurisdiction over criminal law includes steps essential to the prevention of crime and that the authorities should not have to stand idly by until wrong has been done if the situation lends itself to preventive measures.
They are not too sure about the constitutionality, but they think it is arguable. They did, then, make this recommendation, and as a result the legislation was amended by a new subsection which provided for a restraining order. I am now talking about the existing legislation and not about the bill before us. The provision for a restraining order was only where, and I quote, "a person is about to do or is likely to do any act constituting... an offence". This new remedy, therefore, was limited and was not an alternative but a supplement to criminal prosecution. Under the present legislation, if an offence had been committed criminal prosecution remained the only procedure under the act.
This has been changed in this bill. Under this bill in proceedings commenced by information of the attorney general, the use of restraining orders is extended to cases where an offence has already been committed, and in such cases the court will merely prohibit the continuation of the offence. Moreover, this bill also provides that the attorney general may at his discretion-I mentioned those words last night as important-institute proceedings either by way of information or by way of prosecution.
This, Mr. Speaker, is new and it is a dangerous provision because it provides not a mere supplement but an alternative to criminal prosecution. If this bill is approved the minister will be in a position, at his own discretion, to institute proceedings for the same kind of offence either by way of information or by way of prosecution. In the latter case persons involved will have to go through a criminal trial, and in the former case they will not. If the prosecution resulted in a conviction they would be liable to two years' imprisonment or a heavy fine; but if the minister proceeds by information, at the most they would get a warning not to offend again and undo, if possible, what had been done.
This extension of the use of the restraining order, therefore, as an alternative to prosecution is, I repeat, a dangerous innovation. First, it is of dubious constitutionality as a civil remedy while federal jurisdiction in the
Combines Investigation Act field is limited to criminal action. Second, it involves undesirable discrimination in that different persons are liable to different treatment for the same offence at the minister's discretion; let us not get away from that. Finally, the new procedure will remove some of the risk of criminal procedure and punishment and therefore induce the formation of combines or even mergers and monopolies. This will decrease the preventive value of the present legislation. Nothing the minister said last night on second reading has removed our anxiety about the effect of these provisions.
The final part of this act, on the principle of which I want to say something, deals with trade practices. In this regard the bill refers to discrimination, trade allowances, price misrepresentation, matters which we will be able to discuss in some detail later in this debate or perhaps in committee. I am going to restrict my remarks at this time to one matter dealt with under this section, the matter of resale price maintenance, as it is affected by this bill.
There is a great deal of literature on this subject, and I am sure the minister has read much of it. I know it is a difficult and' complicated matter. I know there can be differences of opinion about it. But I know also that the MacQuarrie committee made an exhaustive examination of this whole question of resale price maintenance in 1951. The committee defined resale price maintenance-and I think it is an acceptable definition-at page 71 of their report as:
The practice designed to ensure that a particular article shall not be resold to retailers, wholesalers or other distributors at less than the price prescribed by the suppliers, that is, in most cases the manufacturers.
After the examination which they gave to this matter the committee came to the conclusion that resale price maintenance was not justified, either on the ground of economic efficiency or of maintaining a free, competitive economy; or, indeed, on the ground of protecting the small businessman.


Edmund Davie Fulton: Would the hon. gentleman say again from what page he read that definition?


Lester Bowles Pearson: Yes, it is the definition in the 1951 interim report of the MacQuarrie committee on resale price maintenance. It is on page 71 of that interim report, I think that is the correct reference. This committee viewed resale price maintenance, and I quote again from its report, as-
-a manifestation of a restrictive or monopolistic practice which does not promote the general welfare.
It also condemned these practices for other reasons. I am going to read some of the
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Combines Investigation Act reasons which were given in this report; because while the minister claims that resale price maintenance is not affected by these amendments, since it is retained in the legislation, it is our contention that because of the provisions in the legislation dealing with loss leaders it will now be greatly affected. These are the reasons given against it by the MacQuarrie committee:
1.	The direct and immediate effect of resale price maintenance is the elimination of price competition among retailers in price-maintained goods; ...
2.	Resale price maintenance facilitates and makes more effective horizontal agreements (open or tacit) among manufacturers ...
3.	Resale price maintenance, to be effective, requires some method of enforcement. If a manufacturer merely indicates a resale price but makes no provision and takes no step to enforce it, then he has no real control over his distributors. However, when measures of enforcement are involved, resale price maintenance establishes a private system of law allowing no appeal to the courts of justice ...
If these amendments are passed it is our contention that this would be done.
4.	Although precise information is lacking, there is some evidence that resale price maintenance contributes to price stability but that the general level of prices thus stabilized is higher than it would be under competitive conditions and production more unstable.
These reasons are given on pages 67 and 68 of this interim report. Acting on these recommendations, Mr. Speaker, the previous government, at the end of 1951, introduced amendments to the Combines Investigation Act-after a great deal of care and consideration and after this exhaustive examination by an objective, impartial committee, not in haste and not without consideration- designed to implement the recommendations of this committee report and to prohibit resale price maintenance. After a long debate and very strong opposition led by the opposition party of that day, in which the present minister took a very leading part, the amendment was finally approved by parliament.
There were dire predictions at that time that at the first possible opportunity this amendment would be removed by a Conservative government when it came into office. Well, Mr. Speaker, it is our contention that this amendment we have before us, or a provision in it, does undo what was done in 1951 under the provision for dealing with loss leaders.
Now, this practice of loss leaders was dealt with in this report as well, and was also very thoroughly investigated by the director of investigation and research and by the restrictive trade practices commission.
It was investigated for over two years, in fact for nearly two and a half years. As a result of this investigation, which was


thorough, capable and objective, in March, 1955 the commission issued a report which included a unanimous conclusion that no legislative steps should be taken against loss leaders. In brief the reasons given-and they will be found at pages 265 and 266 of the commission report of March, 1955 on this subject-were that the retailing difficulties which the commission realized existed at that time were not caused by this practice of loss leaders but by changes brought about by the action of normal competitive forces in our economy.
Here, Mr. Speaker, after an impartial and exhaustive inquiry, a commission recommended that no change should be made in the law, and after it heard individuals and groups who were interested in the question. I ask the minister these questions. Did he seek the advice of this commission before deciding to change the law? Was there an investigation before these amendments were decided on by the government? Was an investigation or inquiry made under section 42(1) of the present legislation? Did the director act on his own initiative in making any such investigation, or was he instructed by the minister to do so, or did the restrictive trade practices commission make such an investigation? Our answers to these questions on this side must presumably be no, because no report has been made as is required by the act. Therefore presumably no investigation was made. Therefore the minister failed to follow the proper procedure to investigate these practices mentioned in clause 14 of the bill before he introduced legislation to curb them.
The last inquiry or the last investigation that was made reported against such a change. Surely that makes the neglect of the minister to order such an inquiry the more reprehensible.


Edmund Davie Fulton: Where does my friend find the requirement that the minister must order an inquiry before he introduces legislation? That is a novel view of ministerial responsibility.


Lester Bowles Pearson: 
Edmund Davie Fulton: Perhaps my hon. friend should finish reading subclause (b). It is extremely important:
-for the purpose of attracting customers to his store in the hope of selling them other articles:


Lester Bowles Pearson: What I read was from clause 14 of the bill, which states that a supplier will be entitled to refuse to sell on certain conditions. If the minister wants me to read the rest of that clause I will do so.


Edmund Davie Fulton: I think it is important.
Combines Investigation Act


Lester Bowles Pearson: I shall be glad to read the whole clause. It is at page 8 of the bill, section 14:
14. Section 34 of the said act-
I am reading from the amendment now.
-is amended by adding thereto the following subsection:


Edmund Davie Fulton: It was subclause (b) that my hon. friend did not read fully. I thought he should complete the reading of subclause (b).


Lester Bowles Pearson: I will read this clause so there will be no misunderstanding. It reads as follows:
14. Section 34 of the said act is amended by adding thereto the following subsection:
"(5) 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-
Then it quotes the six conditions I have mentioned, or at least I have mentioned three of them. I think perhaps I had better mention the other one, which is that the dealer was unfairly disparaging the value of the article. That is the final one; there are four. What kind of evidence will entitle the supplier to take action?


Edmund Davie Fulton: There are five conditions,
actually.


Lester Bowles Pearson: All right; there are five.


Mr. Chevrier:: I would ask the minister to let the Leader of the Opposition make his speech. The minister made his, and he was not interrupted.


Edmund Davie Fulton: This is only in the interests of accuracy. If my hon. friends does not want accuracy, that is all right.


Lionel Chevrier: The minister was political and not accurate the other night.


Lester Bowles Pearson: There are five conditions in the bill, two of which deal with exactly the same thing, as I have shown. If the minister wants me to read all five in all their detail I shall be glad to do so. However, I have given my four, one of which includes two in the bill. What kind of evidence will justify the supplier to take action under this clause? The supplier will be the judge; he will decide. In order to be entitled to refuse to sell he will not have to show that the retailer did in fact engage in the practices enumerated in the bill. He will only have to indicate that he and an informer-possibly a competitor of the so-called accused-had reasonable cause to believe and did believe that the retailer was following those practices.
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Mr. Speaker, that surely is a travesty of justice, if you can use that word at all in relation to it. The informer, that is the man giving the information, who as I say might well be a competitor of the retailer, will need to have very little evidence indeed to have reasonable cause to believe that his competitor was following those practices which are so vaguely described in this bill. A manufacturer or supplier could be bombarded by a multitude of informers wishing to eliminate their competitors, and might find himself in a quite untenable position. Indeed, he would have to examine the representations received from any such informers and decide on the basis of the information he received whether he had reasonable cause to believe that the accused retailer did engage in those practices. He will not only have to make decisions on the basis of the reports received from the informers, but he will also have to be in a position to defend such decisions before the courts.
Mr. Speaker, we are therefore creating the fantastic situation where retailers could police and denounce each other, and where the manufacturer would find himself in the position of a judge between them.


Edmund Davie Fulton: The hon. gentleman realizes, of course, that there is no obligation on the manufacturer to do that.


Lester Bowles Pearson: Of course there is no obligation; let me make that clear. What I am suggesting is what might very well happen, if this bill becomes law, in manufacturing and in retailing. If it does happen, how can the manufacturer be considered an impartial judge? He will obviously be an interested party to the transaction, and he will not be forced under the law to take any action of any kind against any retailer. Therefore he may use the powers conferred upon him-and they are important powers-in a discriminatory fashion, or he may not use them at all. He may cut off supplies to Smith but permit Jones to conduct the very same practices. He is not obliged to do anything, which would make it much easier for him to discriminate. Surely this power is subversive of fair dealing and equal opportunity for all, and could be used as a weapon to control the distribution of a product in a wrong and discriminatory fashion. If it cannot be used for that purpose, I would be interested to hear the minister remove our doubts on that matter.
The supplier, then, will not be, and could not very well be on the face of it, an impartial and objective judge. He will also not be a free judge. Indeed, retailers will resent price cutting by a competitor more than the supplier himself might. They can exercise,


either individually or through their trade association, very strong pressure on the supplier and threaten to refuse to handle his product if he does not take action against the price cutter. Such pressures and threats will be, of course, reasonable cause to believe that he is entitled to refuse to sell.
In addition, the accusations which the supplier-that is the judge-has to believe before being entitled to impose a penalty are at best expressed in very vague terms indeed. In so far as the meaning of some of those accusations can be ascertained, they refer to practices which can hardly be viewed as detrimental in themselves to the public interest.
Mr. Speaker, let us look at the four or five of them, whichever you wish. The first two are, if I may abbreviate the definitions, selling "for the purpose of advertising" and "of attracting customers".


Edmund Davie Fulton: May I suggest again that the hon. gentleman complete that particular quotation, which is "in the hope of selling them other articles". I think it is important to have the whole definition.


Lester Bowles Pearson: I would be happy to do that. The first one is this, subsection (a) of section 14:
(a)	that the other person was making a practice of using articles supplied by the person charged as loss leaders, that is to say, not for the purpose of making a profit thereon but for purposes of advertising;
The second one is:
(b)	that the other person was making a practice of using articles supplied by the person charged not for the purpose of selling such articles at a Drofit but for the purpose of attracting customers to his store in the hope of selling them other articles;
That, Mr. Speaker, is why I lumped these two together in effect as dealing with the same thing, and that is also why I made four out of the five provisions in the bill.
These first two practices which I have read in full are of course, substantially the same, so it is not clear, in my mind at least, why we should have two clauses at all.
The meaning of these clauses is quite clear. A seller may be exposed to retaliation by the supplier if he uses the article not for the purpose of making a profit thereon but for the purpose of advertising or of attracting customers to his store. Well, Mr. Speaker, surely the minister will admit that those expressions are very vague and susceptible of very different interpretations. A seller, for instance, may decide to reduce the price of an item below the prevailing level for the purpose of increasing his volume of business while still making a profit, a little less profit, per article. However, if he resorts to that device, under

this amendment he would be using the article for purposes of advertising or of attracting customers to his store and not for the purpose of making a profit, which in this particular case would be a secondary consideration. He would also be liable under the clause to have the supplier cut him off.
Now, on what basis will the supplier decide that the article was not sold for the purpose of making a profit and that such selling, not for the purpose of making a profit, had become a practice? It would be almost impossible for the supplier to make his decision on refusal to sell on a precise mark-up or cost, including the handling cost of the seller, because mark-ups and costs vary from one article to another and under reasonably free competition vary from one retailer to another. Very often the retailer himself does not even know what his cost of handling a particular article may be, because he is primarily interested in the profit of his business as a whole.
If the retailer does not know exactly his own cost and profit per unit, how can the manufacturer or supplier be expected to know whether or not the retailer is making a profit or is selling the article for the purpose of making a profit, indulging in that as a practice? How will the supplier know what purpose the retailer had in mind?


Mr. McGee:: The supplier can read the invoice.


Lester Bowles Pearson: Yes, of course he can read the invoice, but that will not help the manufacturer in the application of this particular provision.
One method available to the supplier would be to take the average mark-up shown by the studies of the dominion bureau of statistics for the whole trade in question. He could insist that if his product is sold in a particular store below that mark-up, then it is not being sold for the purpose of making a profit thereon. That would not be a very satisfactory method.
Another method would be to suggest an acceptable price to the retailer or to all retailers in that line after consultation with the appropriate trade association, and to decide that any price below the suggested level indicated that the article was not sold for the purpose of making a profit; and if he so decides he could cut the retailer off.
These two methods, or some modification of them, which are the only ones I can think of which could be used by the supplier in arriving at a decision to sell or not to sell, will enable the manufacturer himself to enforce indirectly but very effectively a scheme of resale price maintenance.
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Combines Investigation Act
So we have resale price maintenance of this type enforced not by law but by the supplier. The very act which continues the prohibition in one of its clauses-resale price maintenance-by this particular amendment would be introducing or re-introducing that undesirable practice, as I have said, through the back door. Moreover, it will still be quite legitimate to spend millions on advertising "for the purpose of attracting customers" but a retailer will be liable to retaliation if he follows a continuing policy of "specials" to do the same thing. The big stores can, of course, spend millions in advertising but small stores cannot and price reductions are very often the only method available to them to compete with large scale advertising.
The fact is that this so-called ban on loss leaders, enforced not by the law but by the manufacturers, is not really going to hurt the chain stores, the big stores, or to help the small independent dealer. The chains and the big retailers have already shown in the experience of recent years that they are quite prepared to stick to resale prices on nationally known brands while cutting prices on their own widely known private brands, products it should be noted that are not available at all to the small retailer.
Then there is the provision, I think it is No. 3 in clause (c), which could be urged as a defence against prosecution under the resale price maintenance clause. According to the new provisions the supplier will also be able to refuse to sell if the retailer is persistently engaging in misleading advertising. I do not think anyone could take exception to that except that it puts powers in the hands of manufacturers to do something which should be and which indeed is illegal under the law and under this very act. I am therefore at a loss to understand why the minister should put it in this particular clause.
Then there is the failure to provide servicing which could be urged as a defence.


Edmund Davie Fulton: Servicing at certain levels.


Lester Bowles Pearson: Perhaps the minister would like me to read the provision. This provision could be urged as a defence by the supplier:
(d) that the other person made a practice of not providing the level of servicing that purchasers of such articles might reasonably expect from such other person:
This is a new arbitrary power conferred upon the manufacturers in this country. The manufacturer, not the court, will be called upon to appraise what the purchasers might reasonably expect from the retailers in terms of servicing and if that hypothetical but reasonable expectation is not met he will be justified in refusing to sell to them. If he is

Combines Investigation Act accused of indulging in resale price maintenance he can urge this as a complete defence.
How can the manufacturer make an unbiased appraisal of consumers' expectations in regard to servicing? The minister must know-he is a consumer and perhaps a shopper too-that consumers' preferences vary in this matter perhaps more than in any other aspect of retailing. A great number of people prefer to buy a product at a lower price without any servicing attached to it. Others are willing to pay a higher price provided the cost of normal servicing during a given period is included in that price. We feel that the various preferences of consumers should be met on the market and that retailers should be free to meet those preferences according to the competitive rule and that no manufacturer should be able to urge as a defence against a breach of the law that some retailer was not giving adequate service as a practice to his customers.


Edmund Davie Fulton: He could only urge it if the retailer held himself out as giving a service and did not.


Lionel Chevrier: Why not abide by the rules of the house?


Lester Bowles Pearson: I have read that provision and although the meaning may not be clear the wording is very specific. I will now read the last chapter in this charter of commercial feudalism of 1960:
(e) that the other person was unfairly disparaging the value of articles supplied by the person charged, in relation to their price or otherwise.
In other words the supplier will be able to refuse to sell if the retailer is unfairly disparaging the value of articles sold to him. I wonder what is meant by that? What is meant by "unfairly disparaging the value of articles sold to him"? Of all the vague expressions in this bill, surely that is just about the vaguest.


Mr. Pickersgill:: In other words, "Buy this thing; it's so lousy".


Lester Bowles Pearson: It is claimed that consumers often judge the quality of a product by its price. A manufacturer, therefore, surely will have reasonable cause to believe that the value of his product is unfairly disparaged if it is sold by a retailer at a price below the prevailing price. The supplier will be entitled to refuse to sell if he believes that his product is not well located in the retailer's store or is not well presented by the dealer.


Edmund Davie Fulton: He can do that now.


Lester Bowles Pearson: Is the minister trying to tell me that under our present law if a product
is not well shown in a retail store the manufacturer can cut the retailer off from that product under the law?


Edmund Davie Fulton: Yes, certainly. There is no resale price maintenance there at all. That is not related to price.


Lester Bowles Pearson: This is resale price maintenance-


Edmund Davie Fulton: No.


Lester Bowles Pearson: -by giving the manufacturer the right to cut the retailer off from his product if he has reasonable cause to believe that the value of his product is unfairly disparaged if it is sold by a retailer at a price below the prevailing price, or if the product is not shown or displayed as the manufacturer thinks he would like to see it displayed. He can urge this provision as a complete defence.


Edmund Davie Fulton: As he can do now.


John Whitney Pickersgill: If that is so, why is this provision necessary?


Lester Bowles Pearson: If that is the case, why make the change?


Edmund Davie Fulton: To make it clear. We have said that all along. Have you just discovered that? Have hon. gentlemen opposite just now found out what their own law means? No wonder they are surprised and amused.


Lester Bowles Pearson: This is a new interpretation of the law. These particular clauses are for the purpose only of clarification according to the minister. If so, it is the vaguest kind of clarification that was ever introduced into any legislation. This gives the manufacturer wide discriminatory powers over the retailer's business. It can be expected perhaps that the powers will be exercised mainly against the small retailer and the dealers who are attempting to reduce the cost of distribution. Indeed, the lower the cost of handling a product the more likely will its value be disparaged, to use the language of the section. We contend, therefore, that this provision will endanger the independence of retailers, hit low-cost distributors more heavily than the others, and will certainly hurt the consumer.
Those are some of the reasons-and there are others which will be brought forward in the course of this debate-which I hope make it quite clear that we consider this bill retrogressive. We feel it will do harm rather than good to the small businessman and the small retailer and the consumer. Because of that we will certainly vote against second reading of the bill.


Edmund Davie Fulton: Mr. Speaker, would the Leader of the Opposition permit one question before he leaves the subject of second reading. The

hon. gentleman said in the course of his remarks that surely there are better ways of helping small business than those represented by the amendments to section 34. I am sure it would be helpful if the hon. gentleman would indicate some of the ways of helping small business within the ambit of the combines legislation.


Lester Bowles Pearson: Yes, I will be glad to send the proposals to the minister. It would take me a long time to repeat the proposals we have made in the last four years to help small business, especially on the financial side, on the loan side. Those proposals, which I will be glad to send to the minister's office, will be found by him to be very, very impressive, indeed, in comparison with the measures taken by the present government which, the minister said last night, are working quietly. Those measures involved the transformation of the office, which already existed in the Department of Trade and Commerce, into the same office with a different name, with an official in charge. I think he has a clerk and a stenographer. I think we can do better than that, Mr. Speaker, and I would be glad to send the minister a long list of proposals we have made in that regard.


Edmund Davie Fulton: Perhaps my hon. friend would direct his remarks to this legislation.


Frank Howard: Mr. Speaker, I suppose one should have a feeling of trepidation in following the Minister of Justice (Mr. Fulton) and the Leader of the Opposition (Mr. Pearson) in the intensive debate that each of them has entered into in respect of the bill. However, I do not approach it in that light, because I consider this to be not only the most important piece of legislation presented to us so far this session or, for that matter, which appears on the order paper which may be proceeded with later, but also the most important piece of legislation that we have seen introduced so far by this particular government in so far as its broad aspects are concerned and the impact it will have upon the economy and upon the consumer. Nevertheless, I expect I may run into the 40-minute time limit rule, as to deal adequately and fully with the incorrect interpretations, the illogical assumptions and the misinformed analogies given to us last evening by the Minister of Justice would certainly take more than 40 minutes. It would require more than that time to set the record straight and to clear up those particular interpretations and assumptions.
One thing that struck me right from the outset of the minister's remarks was his reference to the need for a royal commission to study thoroughly and completely whether 79951-0-276)
Combines Investigation Act or not there should be a complete revision of the act. Almost in the next breath he said that since the day he assumed office he started within his department a study of his particular act itself and almost three years later we see the results of that study. Normally one would think that a royal commission would not take longer than a three-year period to make a thorough, full and complete study of the act and whether there was any need to change it.
What would be even more beneficial would be the fact that a royal commission at least would make a public report, would go into details and explain as thoroughly as it could the reasons for the proposed changes which it might suggest. Here we have the results of an interdepartmental study, with the report being secret or hidden, not available. We do not even know whether this proposed legislation before us now even meets with the approval of the people within the investigation branch itself. From reading reports of the restrictive trade practices commission over the years and prior to that by the director I would come to the conclusion that it does not represent fully the thoughts and ideas of the departmental officials responsible for this particular piece of legislation.
As I listened attentively to the minister last evening I was reminded of the first venture I made a few years ago to purchase a used car. I remember the salesman spending a great deal of time telling me how this used car was in reality a most outstanding car; that is, it had been tuned up, altered, changed, put in tune with the times. In fact, I was told in particular that this used car was not only as good as it was the day it came off the factory line but, because of the tuning up and the alterations, it was even better; that this used car would be truly a car that I could purchase and use in order to get about, protect myself properly and move from one place to another. But I undertook to check the statements of the used car salesman. I discovered that if I had bought that car I would have bought a real lemon, just as the people of this country and the people in this parliament, if they buy this particular bill, will be buying a lemon also.
I was interested, too, to listen to the sham battle, as it were between the Leader of the Opposition and the Minister of Justice, and I expect it will be carried on by the subsequent speakers. I could not help but think back to the time when under the Liberal government there was an inquiry into the flour or milling industry, and that it was the Liberal government that suppressed that particular report and prevented the proper prosecution of that particular case in the courts. As a result of the McGregor report being

Combines Investigation Act hidden, secreted, and the statute law being violated by the Liberal government an illegal condition which had been carried on for many years escaped proper prosecution. I hope the same thing does not exist under the Conservative government; that it does not undertake to suppress particular reports and to keep information from the public about activities discovered as a result of inquiries and investigations under the act, or under the amended act, if it gets that far.
It is the intention of the C.C.F. to oppose and to fight the progress of this particular bill at every stage in its proceedings, on second reading and in the banking and commerce committee also, and in the committee of the whole house, if and when the bill gets back here, and to propose alterations and amendments which we think are necessary if the legislation is not adequately amended and changed to protect the interests of the consumers of this nation. Then, we intend to fight it all the way, morning, noon and night, on third reading also.
There is only one part of it that we endorse. I do not wish to infringe the rules by making reference to specific details, but only to do so in a general way. I refer to the last clause, clause 23, which extends until the end of December, 1961 the fact that this act shall not apply to fishermen along the west coast. Even that December, 1961 extension is hardly adequate, knowing the full impact it is apt to have upon the fishing industry.
We are unalterably opposed to what is in fact a series of proposed amendments which do not, as we see it, clarify the present act but seek to wreck it. One may ask why we should be opposed. It is a valid question. The consumers, the general public, the people of Canada, however you want to refer to them, are the ones affected to the greatest degree by anti-combines legislation. It is their interest and their welfare with which we should be primarily concerned.
The small businessman is really in the same class as the consumers, and I am differentiating between small and large businesses. It is true that these individuals are virtually helpless and defenceless against encroachment by large corporations. They are defenceless against any illicit or illegal practices by large corporations in the fields covered by anti-combines legislation generally, such as price fixing, allocation of markets, restriction of production or distribution and so on.
The only way that the consumer is able to gain any assistance and have any defence in his efforts to get a square deal is by legislation, a defence that guarantees by law

that he will be protected, that is enforced by law to ensure his protection. There is a modicum of protection in the act at the present time but the bill does nothing to increase the degree of protection. It does nothing to assist in promoting the welfare of the consuming public. In fact, it detracts therefrom.
There are two more or less general spheres covered by the bill, as indicated both by the Minister of Justice and the Leader of the Opposition. One is the field of combines and conspiracy related to restrictive trade practices and the other is the field of the small businessman and his activities. So far as the larger corporations of the nation are concerned I am sure that the bill is quite pleasing to them. By having sponsored these amendments, which I will deal with in detail later, I am sure the government party will find the welcome mat displayed on the doorstep of these large corporations. As a result of this bill I am sure the party to which the minister and the other members of the government belong will find there will be no difficulty in filling the treasury chest at campaign time.
The bill also allows the government to tell small businessmen, upon whom it depends for a great deal of its support, at election time how decent the government has been toward them. We have a paradoxical situation of the government trying to be everything to everybody at the same time but it is not carried out in fact when we analyse the details of the bill and see its effect. The minister said last night, as found at the bottom of the righthand column on page 4340 of Hansard, with reference to the study that had been made:
This study was carried out in conjunction with the advisers of my department and of the combines investigation branch, as well as with representatives of business and business organizations who lost no time in making representations to us.
You bet they did not lose any time in making representations to the minister. After all, he is their friend and this bill represents one of the rewards his friends are receiving as a result of past favours. There are elements in Canada, notably those who have been and are still engaged in illicit price fixing and restrictive trade practices, who know how benevolent this bill is. It is a fact that some of these corporations which have been prosecuted in the past for infractions of the act have wanted to write protective features into the legislation for their own benefit to the detriment of the benefit of the consumers and they could not have done any better than to secure the loopholes that are provided under subclause 2 of clause 32.

I think we are entitled to assess the effectiveness of the act as it has been administered up to now and, based on that, see whether or not that effectiveness has been increased or detracted from by the bill. I think almost every minister who at any time has proposed amendments to the combines legislation has stated that one of its purposes is to ensure that competition remains in effect to the fullest possible degree and that the benefits of such competition in a free enterprise society accrue to the consumer. The second design of the act, as has been indicated by each minister who has had the responsibility of dealing with the anti-combines legislation, is to protect the consumer. One of the theories of free enterprise that we hear lauded so much is that automatically there is competition, that free enterprise and competition go hand in hand. However, the mere fact that we have such legislation on the statute books would indicate that this is not so, for if competition were an inherent part of the free enterprise philosophy one would not need this sort of legislation to ensure that it is maintained and to prohibit certain non-competitive and discriminatory practices.
There are a number of penalties and remedies set out in the act with which I should like to deal briefly. I think we may say there are five in particular although there are also ancillary remedies and penalties. One is that the governor in council may remove or lower customs duties if it is found that this will help to bring about the benefits of competition. Second, the Exchequer Court of Canada, upon information from the attorney general and Minister of Justice, may declare as void any exclusive patent or trade mark rights and may direct that the products on which the patent was issued -may be produced in some other fashion by another concern. This is designed to bring about competition. Then there is provision for court orders of prohibition to bring about the dissolution of mergers and monopolies and there is also provision for fines and/or imprisonment.
So far as the customs duty provision is concerned, which is the prerogative of the governor in council, obviously it is designed to bring competition into play from sources outside Canada and thus bring about price reductions through firms outside Canada sending goods into Canada at lower prices than those charged by the group within Canada enjoying the protection. This provision has, of course, been completely ineffective because it has never been used. I took it from the remarks of the Leader of the Opposition-if I am wrong I will stand corrected-that he suggested this could be one of the alternative procedures to prosecution
Combines Investigation Act resulting in a fine or imprisonment, but everyone knows that when the Liberals were in office for so many years they never made use of this section of the act. Nevertheless, hindsight enlightenment is welcome and, as I have said on other occasions, it is amazing how stimulating defeat at the polls is upon the imagination and the development of new ideas.
The section of the act dealing with patent rights is also designed to allow the exchequer court to void those patents and to direct that the product may be produced by other companies. This provision is designed to bring competition into play within the country, but has never been used and that is why, in itself, it is not effective. The remarks I have made about the Liberals being in office and their lack of action in connection with customs duties also apply to the patent rights section because, as I say, it has never been used in any way.
I would point out here, and perhaps this is an aside but it is a related matter, that sometime ago I asked a question with respect to the issuance of patents for antibiotic drugs, the tetracycline group of so-called wonder drugs. In almost every case the patents in connection with these drugs have been issued to United States concerns, and I do not mean Canadian subsidiaries of United States companies but to the parent companies in the United States. Almost all of them were issued while the Liberal government was in office. We all know that the prices of the tetracycline group of drugs have remained static ever since 1951, regardless of the fact there has been an increase in production and regardless of the entry of new companies into the production of antibiotics. Surely there is a prima facie case here that these companies which have patents-true, they are outside of Canada but the patents were issued under our law -have been using these patent rights to unnecessarily hold up the prices for antibiotics. As I said, that is an aside.
Another remedy lies in the fact that the courts can issue an order for the prohibition of the continuation of an offence. I do not really see how this provision brings into play any degree of competition. It merely prevents the continuation of any particular offence. Later on I hope to explain how this order for the prohibition of the continuation of an offence can be effectively bypassed by any group of companies that wants to do so under the price leadership theory.
Then there is a provision for the dissolution of mergers which has not been used at all. I understand that there would have been such an application in the Canadian
4376	HOUSE OF
Combines Investigation Act Breweries case if that case had proceeded along the lines hoped for by the crown in its attempt to prosecute. Quite frankly, I think they gave that case away, but that is another matter with which I shall deal later.
Then the fines and jail sentences are the penalties contained in this legislation. They do not bring competition into play, they merely penalize for past infractions. Incidentally, I do not believe they can be considered, perhaps to a slight degree, as deterrents to corporations that want to infringe the law in connection with these restrictive practices. For one thing, there has never been a jail sentence imposed, at least not to my memory, for an infraction of the section relating to a conspiracy to fix prices. I am quite sure that if some of the judges in this country had acted with that degree of perseverance with which they have acted in other cases and had imposed some jail sentences as a result of convictions under this section it would have been a more effective deterrent than it has been so far. However, no jail sentences have been imposed. If they had been, perhaps the price fixers would not have been able to operate so easily and so freely as they have.
Fines have been the major method of dealing with a conspiracy to fix prices. Practically all the prosecutions which have resulted in convictions have led to the imposition of fines. What, in reality, do these fines mean? I should like to explain why, in many cases, they are not an effective deterrent, if that is what they were designed to be. Certainly fines do not promote competition which is one of the ends to which this act is supposed to lead.
May I take just one isolated case, although there are others. In the farm fencing case a number of firms were fined for price fixing arrangements, and I should like to relate those figures to indicate just how little a fine means in some cases. This information was obtained as a result of a question I asked. The Dominion Steel and Coal Corporation Limited was convicted and fined under, I believe it would be section 411 of the Criminal Code, for fixing the prices of farm fencing and link fencing. This corporation was fined $10,000 in 1956. Ten thousand dollars may seem like a pretty hefty fine for any one corporation or individual to pay, but in reality this amount was only three twentieths of one per cent of the net profit made by Dosco in 1956, or one cent for every $6 of net profit. I refer only to the year in which the fine was imposed, but if the fine were spread over the 20-year period of the conspiracy the amount would be even more infinitesimal.


The Steel Company of Canada was also fined $10,000. Stelco was in a bit better position because the fine meant only four one hundredths of one per cent of the net profit of Stelco in 1956, or one cent for every $25 of net profit in that particular year. There were a number of other corporations involved and my examination reveals that no fine ranged higher than 1.8 per cent of the net profit of the corporation for that particular year. In reality this is nothing more than a licence fee for engaging in these assorted practices, regardless of the fact that Stelco, Dosco and the other steel companies were engaged for a period of more than 20 years in milking the farmers of this country for every penny they could, and in milking the government of this country for every penny they could.
I hope, Mr. Speaker, that perhaps some one of the cabinet ministers will at least read in Hansard what I am saying so that the suggestions I am about to make can be considered because I do not see any of them in the house at the moment.


Frank Charles McGee: Would the hon. member permit a question?


Frank Howard: Yes.


Frank Charles McGee: In relating the fine to the net profit in a given year for the company in question is the hon. member implying that the total net profit was of an illegal nature?


Frank Howard: I did not imply that at all. I merely pointed out what these fines meant in relation to the net profit picture of these companies. There are other cases in that particular year in which fines were imposed. I was pointing this out to indicate that in effect these fines are nothing more than a licensing fee to operate illegally. I was saying that a fine of one cent for every $25 net profit means very little to a company like Stelco.


Frank Charles McGee: If the hon. member wants to be fair, what he means is that the total operations of that company are illegal, not the particular operation which was exposed by the investigation.


Frank Howard: My hon. friend is now making a statement. I assume he will have an opportunity to participate in the debate and he can make that statement if he so desires. The hon. member initially asked a question as to whether or not that was what I was saying and I said no that was not what I was saying. He can interpret it the other way if he so wishes, and say that every dollar Stelco gained that year was illegal; that is his business, not mine. What I was suggesting was that in relation to the question

of fines there should be an alteration in the approach to the employment of fines.
I would suggest that consideration be given to establishing a fine on a percentage basis, perhaps between 5 per cent and 20 per cent of the net profits of the company say over the past 10 years or for a lesser period of time if the illicit practice has been engaged in for that lesser period of time. This fine, with a minimum of 5 per cent, would establish a penalty which would act as a deterrent by the mere fact it was there. It would act as a deterrent because it is a potential fine. It would also to a degree recoup society by money going into the general revenue some of the money which that corporation had taken by illegal means over the years in which it had been engaged in these activities. It would also give discretion to the court, by placing a 5 per cent minimum and say a 20 per cent maximum, to operate within this area and to assess the degree of illegal activity and decide whether or not a greater or a lesser fine should be imposed.
If I may be permitted to do so, Mr. Speaker, perhaps I could make some reference now to proposals to amend section 32, not in detail but in general, and point out that all of our convictions in the past have been based on and obtained as a result of having access to letters, documents, memoranda, minutes of meetings and so on which set out the desires of the companies to engage in certain price fixing arrangements. But what is occurring or what is developing is that these same organizations or new ones can engage in price fixing now without fear of being detected by the price leadership approach. This is generally as follows and I only set this out in general terms. Suppose there are six companies that want to engage in fixing prices. If one of them raises the price of its product on a particular day and its other five so-called competitors raised their prices on following days, within the next week or two, this is known as price leadership and it is impossible to prosecute; it is impossible to detect.
The minister made reference to the escape parts of clause 32 and that they were leaving in effect the definition of a combine and he made reference to price fixing. He made reference to certain co-operative activities which would be beneficial, I think he said, to society although perhaps he meant beneficial to a certain select private group. These cooperative activities are as follows. I only make general reference to them without reading because I realize that is contrary to the rules. Now a group of corporations-if this bill becomes law-can engage in a conspiracy to fix prices and can have as a defence that they were exchanging statistics. The statistics
Combines Investigation Act are price lists. But if there is an exchange of price lists and competitors follow suit within the next few days under the price leadership approach we have price fixing but it has been legalized by reference here to the exchange of statistics.
They can co-operate on the defining of production standards. They can give a detailed account to each of their so-called competitors about production standards and quality of the products they are producing and within a short while the same group of people can be engaged in price fixing or a production restriction program and engaged in price fixing by price leadership and it can even be completely authoritatively done. They can co-operate in research and development which would be a great boon to the drug industry which already co-operates in the use of research. If that is not sufficient, if the minister has not given enough loopholes and enough legislative authority to price leadership to take over, he throws in a catch-all phrase that they can engage in some other manner not enumerated.
I have only a moment or two left, Mr. Speaker, so I am not going beyond this point into the question of the small businessmen and the price allowances, discriminatory practices and so on. That matter will be dealt with later on by other speakers. But these amendments simply legalize the price leadership approach to price fixing, restricting production and carving up markets and give statutory and parliamentary blessing to abuses of this sort and to setting up private price control agencies which will from here on in be able to operate with immunity and without fear of detection or prosecution because regardless of the minister's comments and the misinformation he gave us about the beneficial effect this would have on society, it will have a decidedly detrimental effect on society. I would venture to say they will never have another prosecution or probably never take another case to court under section 32 for restrictive practices, conspiracy and combines with respect to any of the clauses (a), (b), (c) or Cd) of section 32 (1). This in itself will have an enhancing effect on the present trend toward business itself, something to which the minister made some slight reference. But he makes no reference in the bill as to what can be done to cope with the question of bigness and it is an important problem. This will be enhanced and gain will be made by those who want to engage in the same practices in which they have engaged previously at the expense of the consumer.
It is unfortunate that the minister did not set up this royal commission he talked about
4378	HOUSE OF
Combines Investigation Act when he took office instead of consulting his friends who are not in the house even or who are not even within his own department in order to determine from them what alterations and what changes should be made.
As I mentioned, my time is running out, Mr. Speaker. But perhaps I shall have an opportunity at some other stage of the proceedings, such as at the committee stage, to put into words some of the thoughts I have on this particular bill. I am sure that other members of the C.C.F. will do so because, as I said, we intend to fight this bill morning, noon and night at every step of its progress. We will take the opportunity later on to discuss the dilatoriness, the detrimental effects of the other parts of the bill, the merger question, the question of monopolies, the question of the elimination by the back door of the resale price maintenance section and other factors of that nature.


Mr. L. D. Crestohl (Cartier):: Mr. Speaker, there are not many bills that come before parliament that draw a clear line of demarcation between the philosophy of the government party and that of the Liberal party. From time to time such a bill does come before the house and it is basically one that sets out the differences between the two parties. For example, a bill dealing with the question of high or low tariff protection is one that sometimes comes before the house and is one in which we recognize the lines of party differences. The present bill before the house reflects, in my judgment, that classical and traditional difference between the Conservative party and the Liberal party and their philosophies. Because the present bill falls into that class I think we should give it as close attention as possible and perhaps should be able to express opinions as to the two different philosophies.
This one, for example, clearly establishes in my judgment the clash between the classes, the industrial and commercial tycoons on the one hand and the consumer masses on the other hand. Because we are concerned with that philosophy which politics preaches, the greatest good for the greatest number, we feel that this classical difference establishes the point of view that the Liberal party holds, that any legislation which is going to show any preference to business and industry at the expense and to the prejudice of the large masses of the public across the country is legislation which we oppose, and, as my leader has said, oppose down the line because, as he so well and thoroughly illustrated, this is not a measure that would legislate the greatest good for the greatest number. As I said a moment ago, it is actually a clash between the control of big business over the freedom of competitive trade.


The historic position of the two parties was outlined by my leader with his customary precision and factual truth last night and once again he placed these two points of view into proper focus. As I listened to the minister I got the distinct impression that he was presenting a sort of apology for having to introduce this legislation, and I was reminded of the French proverb, "Qui s'excuse, s'accuse". In his presentation I found that he laboured. He did not appear to be convinced that he was philosophically right in what he was actually doing, because I believe that way down deep he must revolt at this type of legislation, which is commanded only by a loyalty to the philosophy of a party and not by personal conviction.


Edmund Davie Fulton: The hon. gentleman is wrong as usual and also out of order.


Leon David Crestohl: The minister attempted to straddle in colossus-like proportions the classical gap between big business in the form of combines, trusts and cartels, and free and competitive trading. The fact is that this cannot be done. The government's majority will get the legislation on the statute books in all probability, but it will only do what former Conservative governments have done and that is to destroy an effective combines law which was sustained over and over again by the supreme court and indeed by the privy council, despite the frequent attempts by the Conservative party, in league with big business, to destroy it.
The minister was at great pains to repeat several times in a serious attempt to impress the house that this was not a revision of the act but was only an amendment. I noted that he repeated that statement more than once. Well, Mr. Speaker, he may call it an amendment-and technically he is perfectly right, it is an amending bill-but the amendment attempts to remove whole sections, important sections, and replace them with others which alter the basic purpose of the act. The act is left with the introductory clause and with other sections in the act which are meaningless but are necessary to give it form. But certainly the amending bill, because it introduces so many new sections and removes the basic sections of the act, could in every sense with the exception of the technical meaning one can give to it, be a revision of the act now existing.
I say that instead of tightening up loopholes of escape for big business offenders, the minister not only widens these loopholes but creates new ones which will be pointed out when we examine the bill section by section in committee. Under the rules we cannot do that at the present time, but I

hope when it comes before the banking and commerce committee and in committee of the house after second reading we will be able to indicate that more avenues of escape have been created than should have been prevented. As a matter of fact, as I see it the minister is attempting to perform and probably will be successful in performing a very dexterous dental operation. He is really extracting the teeth from the act, and as I said before will probably prove himself to be a very successful dental surgeon.
I have the feeling that if the government did not fear great public resentment they would in all probability repeal the entire act as it now exists.


Mr. Chambers:: Nonsense.


Leon David Crestohl: It may be nonsense to the hon. member. I think that is about the only term I have ever heard him use in this house, but he may be right; it may be all nonsense from beginning to end.


Egan Chambers: I only use that term when you are speaking.


Leon David Crestohl: I have heard him use it constantly when others are speaking too. I recommend that if the hon. member learns another term which might be a little more descriptive he will get some promotion.


Egan Chambers: Talk about something else and I will use another term.


Leon David Crestohl: If the government should possibly withdraw or repeal the act they would then be following the Conservative philosophy which as is well known has been established through the years. But as I say they do not dare do it.
The fact is that every time they came into power, and that is on two occasions during the past 50 years, one of the things they did with the combines investigation law was to water it down, create loopholes, create avenues of escape. That has been the only accomplishment of their treatment of this law.
I would like to illustrate that and to point out-


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



PRIVATE BILLS

Mr. Hanbidge:: Mr. Speaker, before you leave the chair I ask for the consent of the house to have the second reading of Bill
Private Bills
No. S-31, an act to incorporate Northern Pipe Line Company, proceeded with first. It is item No. 343.


Mr. Speaker:: Is the house prepared to give unanimous consent to taking item 343 before the other items standing for consideration at this time?


Some hon. Members:: Agreed.



NORTHERN PIPE LINE COMPANY

Robert Leith Hanbidge: the second reading of Bill No. S-31, an act to incorporate Northern Pipe Line Company.
He said: Mr. Speaker, this bill is for the purpose of incorporating Northern Pipe Line Company into a dominion company with head office at Regina in Saskatchewan. The purpose of the act is to create a company to apply to the national energy board for a permit or permits to construct, own and operate pipe lines for the transmission and transportation of gas, oil and other liquid hydrocarbons within and outside of Canada.
It is expected that the company will have Canadian and United States shareholders of financial and business responsibility as and when it is ready to proceed with a program for financing and constructing pipe line facilities. In the meantime the principal beneficial shareholder is Minnesota Pipe Line Company, a corporation organized and existing under and by virtue of the laws of the state of Delaware with its principal office located at Saint Paul, Minnesota. The extent of the interest of the Minnesota Pipe Line Company in this new company, Northern Pipe Line Company, when the plan of organization is complete, has not been determined and will remain an open question until such time as the Northern Pipe Line Company is ready to proceed with its application to the national energy board.
The chief beneficial owner, Minnesota Pipe Line Company, owns and operates a 16-inch crude oil pipe line system extending from a take-off point on the interprovincial pipe line system at Clearbrook, Minnesota, a distance of 256 miles. The Minnesota pipe line system is transporting about 40,000 barrels a day of Canadian crude oil to United States' markets. That pipe line system originally cost about $12,800,000. Its replacement cost as of today would be about $16 million.
As and when Northern Pipe Line Company has been incorporated by act of parliament it is contemplated that an application will be made to the national energy board for a permit to construct a 16-inch or larger crude oil pipe line system near Regina, Saskatchewan, to a point on the international boundary

Private Bills
line between Canada and the United States near North Portal, Saskatchewan, a distance of about 153 miles. An estimate of the cost of this crude oil pipe line system is $10,500,000.
It is contemplated that the Northern Pipe Line Company would connect with and deliver crude oil and other liquid hydrocarbons to a 16-inch or larger crude oil pipe line system to be constructed from a point near Portal, North Dakota, to connect with the Minnesota pipe line system at Clearbrook, Minnesota, a distance of about 330 miles.
The Northern pipe line system would transport and deliver to the United States pipe line system in the initial stages approximately 26,000 barrels a day of Fosterton type crude oil now being transported by the south Saskatchewan pipe line system from the Fosterton, Dollard and other fields in southwest Saskatchewan via Regina and initially approximately 12,000 barrels a day of the Midale type crude and other types of crude oil now being or to be produced in the fields of southeast Saskatchewan. It is contemplated that the United States pipe line system would transport initially about 20,000 barrels a day of crude oil from fields in the Williston basin area in North Dakota for delivery into the Minnesota pipe line system.
This proposed Northern pipe line system is required to provide more economical transportation for Canadian crude oils to United States' markets and to expand markets for Canadian crude oil.
I might add that as at December, 1954 there were 1,094 oil wells in Saskatchewan. As at December, 1956 the number had increased to 2,414. As at December, 1954 there were 30 oil fields in Saskatchewan and as at December, 1956 this number had increased to 46. In 1956 over $600 million was spent in western Canada on exploration and oil field development programs. Saskatchewan is the second greatest oil producing province in Canada. The establishment of this company will mean employment in Saskatchewan and a financial investment in that province as well as a market for our crude oil.
The persons who are interested in incorporating this company are already interested in Saskatchewan oil. They drilled the discovery well in the Fosterton field in the southeast corner of the Kindersley constituency approximately 35 or 40 miles northwest of Swift Current. They also have other interests in addition to their interest in the Fosterton field.
If the bill receives second reading I intend to move that it be referred to a standing committee of this house where all details can be discussed and witnesses appear to answer all questions that may be put with regard

to the incorporation of the company, the shareholders, the financial setup, etc. As I have already stated, before any construction will be proceeded with it will be necessary for the company to make application to the national energy board for its approval. I move the second reading of this bill, seconded by the hon. member for Melville (Mr. Ormis-ton), and commend it to the favourable consideration of the house.


Mr. G. J. Mcllrailh (Oitawa West):: Mr. Speaker, I wish to thank the hon. member for the explanation he has given the house about the reasons for the company seeking incorporation by special act and the explanation he has given as to the intentions of the company after incorporation.
I wish to raise one other matter. I regret that in his remarks the hon. gentleman did not deal with the matter of the urgency of bringing this bill forward out of its regular place on the order paper. What it means is an added difficulty in bringing the session to a conclusion because all hon. members will have to remain in the chamber of the House of Commons at all times and can no longer rely on the order paper for the sequence of business. That is, unanimous consent for bringing forward business out of its regular sequence as indicated on the order paper can be obtained at any moment in the proceedings without any explanation whatever for that being given to hon. members.
I believe the house is entitled to know in advance, if possible, what the order of business will be although I appreciate that in some cases it is not possible. Surely some reason for this practice is owed to other hon. members who are interested in legislation. They are entitled to know the reason for the urgency in dealing with this matter ahead of the several hundred other private bills that are on the order paper ahead of it.
However, be that as it may, I have no criticism whatever of the hon. member on that score because I know it was not any wilful omission on his part in any way. My purpose is rather to draw the attention of the house to that practice which in my opinion is dangerous to the rights of debate and to the rights of hon. members of this house.


Gordon Minto Churchill: Would the hon. member permit a question. Would the hon. gentleman make it clear that this is not government legislation?


George James McIlraith: Oh, quite. I want to make it entirely clear that this is a private bill. I was not criticizing the government for it at all. I was merely attempting to draw attention to a practice that is growing up in the private members' hour that can be harmful to the conduct of business in the house.

There is another matter which I feel I should raise at an early stage in the discussion of the bill although I do not know whether it would be more properly raised on second reading or in committee. Perhaps it should be mentioned now so there will be notice of it at the earliest possible moment. I refer to the name of the company. We have an application for incorporation of a company under the name of Northern Pipe Line Company. At the same time we have in existence and operating through a wide area of Canada a pipe line company incorporated by special act of parliament and called Trans-Northern Pipe Line Company. We also have a crown corporation known as Northern Ontario Pipe Line Crown Corporation. It seems to me that to grant a name so similar to that of two operating companies already in existence, without some explanation as to the reason for the name, or some other explanation as to why that name should be granted to this company, is setting a dangerous precedent. I have asserted on other occasions, on other bills the proposition that there is likely to be confusion by the public of the names by reason of the names granted to companies incorporated by special acts of parliament.
There is no procedure in parliament for examining the possibility of confusion in the names being granted as there is in letters patent companies, and this particular name sought by those incorporators raises that very question in a very precise way. I hope that at the committee stage consideration can be given to the question as to whether or not, in the opinion of the committee and later when the bill is returned to the house, in the opinion of the house, there is likely to be confusion caused to the public by the granting of this amendment.
There is nothing more for me to say about the substance of the bill because facts having to do with the company itself can be brought out at the committee stage and can be dealt with more appropriately there.


Mr. Erharl Regier (Burnaby-Coquitlam):: Mr. Speaker, I want to express my appreciation to the hon. member for Kindersley (Mr. Hanbidge) for his fine remarks in presenting the bill to the house. I should like to hear him, either when he concludes the debate or maybe this information can be made available when the bill is referred to the committee, on the reaction of the government of Saskatchewan in regard to the application for incorporation of this company. Natural resources come under the jurisdiction of provincial governments. I note that in particular the hon. member made reference to the fact that this pipe line company would be carrying at certain places oil now being carried in other pipe lines.
Private Bills
I have only two matters that I should like the hon. member to touch on either now or at the committee stage. The first one is as to whether or not this pipe line means merely a duplication and unnecessary overhead for the movement of oil. My second point is, what is the reaction of the government of Saskatchewan and of the governments of Alberta and Manitoba, if they are involved in the plans of this pipe line company?


Mr. Speaker:: If the hon. member for Kindersley speaks now he will close the debate.


Robert Leith Hanbidge: May I say a word, Mr. Speaker. With regard to the name, I may say that the name that this company first chose was the Yukon Pipe Line. They found that that name had already been used by a company incorporated by this parliament, so that was out. However, I believe this can be dealt with later in the committee. I believe the present name was approved by the officials of the other place after consultation with some of the other departments.
So far as the urgency of the matter is concerned, the reason for bringing it up is that when it goes before the committee on railways, canals and telegraph lines it will be necessary to have some parties interested come from Texas and Minnesota. I was hoping that we could get through second reading today so that there would be plenty of time to get in touch with those people. I believe their solicitors are now actually in Regina. They have some business to do there.
With regard to the matter raised by the hon. member for Burnaby-Coquitlam (Mr. Regier), I have to take that up with Regina. I am quite sure my hon. friend agrees with me that the government of the province is most interested in the development of the resources of the province and will do everything it can to co-operate with us in getting this company incorporated so that it will develop the oil and gas fields in Saskatchewan and promote the sale of the product. However, I will see that that matter is taken up with the proper parties.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on railways, canals and telegraph lines.
The Deputy Chairman:: Order. House again in committee of the whole on private bills; shall the 46 divorce bills be taken as one
item?


Mr. Peters:: No, Mr. Chairman.


Charles Edward Rea: We may consider Bill No. SD-49.

Private Bills-Divorce



ROGER VERMETTE

[Stage Direction]
The house in committee on Bill No. SD-49, for the relief of Roger Vermette-Mr. Mc-Cleave-Mr. Rea in the chair.
On clause 1-Marriage dissolved.
William Arnold Peters: I should like to make a few remarks on this particular bill. This particular case has several oddities about it and several very disturbing factors are contained in the bill. You will note, Mr. Chairman, in reading the evidence in this case that the Senate saw fit in discussing this particular matter to give back part of the Senate parliamentary fee to the man because of his financial condition. This would appear to be a good practice and a practice arising out of the lawyer's questioning and his investigation into the amount of money that the workman made.
This particular case has another bad feature in that there are four children. The fact that there are those children gives us some concern.


Charles Edward Rea: Order. I will have to remind the hon. member again that he cannot refer to the children.


William Arnold Peters: I do not intend to discuss them; I am pointing out there are some oddities in this particular case that we have not had in other cases. Although there are four children the husband in his answers indicated that he is 35 years old; that he lives at St. Sophie, in Terrebonne county, province of Quebec. Questioning by the clerk brings out the following information:
Q. At the time the petition was drafted, where were you living?
A. At 462 Ouimet street, in St. Jerome.
Q. What is your occupation?
A. Labourer.
Q. Are you married and if so to whom?
A. Yes, to Aurore Belanger.
Q. When were you married?
A. August 23, 1947.
Q. Where were you married?
A. In St. Therese de Blainville, Terrebonne county, province of Quebec.
Q. By whom?
A. By l'Abbe Vezeau.
Q. What is your religion?
A. I was a Catholic at the time.
Q. And what religion was your wife?
A. She was a Catholic also.
Q. I show you a document. Do you recognize it?
A. That is my marriage certificate.
At that point, it is very interesting to note that, in keeping with something that I was told not long ago by one of the learned lawyers, there is no divorce possible for Catholic people. He pointed out that as a Catholic himself he had no objection to acting in divorce cases for the simple reason that no Catholic could obtain a divorce. He said that if they took this procedure they were not Roman
[The Deputy Chairman.]
Catholics. Therefore it is interesting to note in the evidence that the petitioner said:
A. I was a Catholic at the time.
Q. And what religion was your wife?
A. She was a Catholic also.
He agrees that the information in the marriage certificate filed as exhibit No. 1 is correct and also that exhibit No. 2, the photograph, is a close likeness of his wife and that the photograph is only a couple of years old. The lawyer in this case was Alvin B. Jacobs from the city of Montreal. He appeared for the petitioner and he asked the following questions:
Q. Where were you born?
A. At St. Scholastique, in the county of Two Mountains, province of Quebec.
Q. Have you always resided in the province of Quebec?
A. Yes.
Q. During your marriage with your wife where did you live?
A. In Ste. Therese and St. Jerome.
Q. Did you have any children with your wife?
A. Yes, four.
Q. Can you give their names and how old they
are?
A. Louise, born July 28, 1948; Yves, born December 18, 1950; Daniel, born November 8, 1952; Denis, born January 23, 1955.
Q. With whom are the children living today?
A. They are with me.
Q. How did you get along with your wife during the time you lived together?
A. Not very well.
I think that some comment is called for there. It would appear that they got along fairly well at particular times and that the situation here did not involve aggravation built up over a period of time. Something must have happened in this particular case. I think this is also in keeping with what learned counsel indicated to me the other day, that in the majority of bona fide cases there are other circumstances than the charge of adultery in a motel or some place else that is put forward for our benefit. It is not the actual cause of the dissolution of the marriage. I see one learned hon. member listening. This gentleman pointed out that he had handled 10 cases and that in 9 of them detectives were not used as the evidence was quite easily obtainable in other ways. This man lived with his wife over some period of years and therefore when he answered "not very well" to the question as to how he got along with his wife I think that was stretching the point considerably.
It reminds one of the old story of the man and woman who were visited by a gentleman and he observed that they did not talk to each other. He asked them if this had been going on for a long time and he was told that they had not talked to each other for years. Then he noticed a number of little children and he asked whose children they were. He was told they were theirs. He said,

"But you have not talked to your wife for years" and the answer was, "We do not get along that badly". So perhaps the answer "not very well" does not mean exactly what it says. Then the petitioner was asked these questions:
Q. What trouble did you have?
A. My wile was going out a lot and she was using bad language to the children, she was blaspheming. Often, while the three oldest ones were to school she would have the baby minded by a neighbour and she would go out in the afternoon.
Q. Now, did you live intimately as man and wife with your wife all the time?
A. No. About a year and a half or two years before the date of November 24 my wife did not want to sleep with me any longer.
Q. Do you personally know what happened on November 24, 1958 between your wife and Paul Emile Labelle?
A. Yes.
Q. Were you with the detectives when you saw your wife with Mr. Labelle?
A. Yes.
Q. Where did you see her?
A. At a motel in St. Janvier de Blainville, room No. 15.
Q. Where was your wife when you saw her in that room?
A. She was in the bed.
Q. What condition?
A. She was naked.
Q. Who was with her?
A. Paul Emile Labelle.
Q. Where was he?
A. He was beside her, naked also.
Then a senator asked this very obvious question:
Q. How did it come about that you surprised these people?
I think hon. members should be very interested in that question.
A. After the detectives obtained the key to the motel and they walked in-
Here we see again this type of action. In the near future we are going to be asked to discuss a bill of rights yet so often in these cases we read about people entering other people's premises in this way, gaining entry by false means, breaking down the door and so on. People's privacy is invaded but other hon. members do not seem very concerned about the matter. It may be all right in the province of Quebec to barge into anybody's house if you can find a key that will fit the door. I certainly hope it is not because if that is the practice it will lead to a great many abuses. It seems to me that the senator was quite correct in asking this question. The answer was:
A. After the detectives obtained the key to the motel and they walked in, there were two of them, they used the key to get in, then my wife screamed and cried, "Paul", the detective turned on the light and he removed the bed covers and I saw them both naked in the bed.
I suggest that the members of the committee of the other place should have taken
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advantage of this opportunity to ask the detectives what arrangement there was whereby they arrived at this motel on that particular night and how they were able to obtain a key to get into somebody else's room. Mr. Jacobs went on to ask these questions:
Q. Before November 24 did you give instructions to have the conduct of your wife investigated?
A. Yes, by detectives.
Q. On November 24 did the detectives come to your house and tell you anything?
A. Yes, they came to get me to go to see my wife.
Q. Where were you at that time the detectives
came?
A. At home.
Q. Since November 24, 1958 have you had any sexual relationship with your wife?
A. No.
Q. Has she ever returned home to you and the children?
A. No.
Q. Does she come to see the children?
A. No.
Q. Is there any collusion or arrangement between you and your wife to obtain this divorce?
A. No.
Q. Did you discuss it with her?
A. No.
Q. Did you arrange with Paul Emile Labelle to take your wife away from you so you could bring this petition here?
A. No.


An hon. Member:: He means well.


Frank Howard: It is written well.


William Arnold Peters: I suggest that the lawyer in this case asked the type of questions which would tend to obtain the answers that he wished. I think that hon. members should be interested in knowing several other things. Did the lawyer make arrangements in this case for the respondent and corespondent to be at a certain place at a certain time? Second, is it not possible that arrangements were made between the detectives and the people who were trying to obtain this divorce? In the case before us we learn from the evidence that this man was an unemployed carpenter. He makes less than $85 a week and he is only employed on a seasonal basis. He has four children and he has to live in somebody else's house. He has to have people look after his children.
I suggest that this man does not necessarily want to get married. He is not earning enough to keep his family and there is no apparent reason why he should be obtaining a divorce at all. I think if he were given his way this particular case would have meant the end of this relationship but there would have been no hurry to get this divorce. I also suggest, and it should have been quite obvious to the legal counsel who was asking these questions; I suggest it was, and he did not ask certain questions because that would have defeated his purpose-that the person who wants the divorce is the woman in this
4384	HOUSE OF
Private Bills-Divorce
particular case. Likely arrangements have been made with this Paul Emile Labelle, and she wants to marry him. As this particular lawyer told me the other day, there is seldom a divorce petition filed unless one of the parties has made an alliance with somebody else and is in a position to remarry. If they do not want to get married, then there is no particular advantage in getting a divorce, particularly when you consider the amount of money they have to pay for a divorce which goes through parliament.
I suggest that this questioning is very careful questioning. It is questioning which is designed not to bring out the true state of affairs. The questions are framed in such a way that a person can answer them and still not put his foot into the pudding, so to speak, or cause any trouble. Hon. members should give some consideration to whether it is true that the woman in this case is the one who wants the divorce. It will be the woman or her boy friend who is paying for this divorce. This arrangement has been made by all the parties concerned. There is not necessarily collusion between the petitioner and respondent, but I believe there is collusion between the legal counsel, the respondent and the corespondent, and that an arrangement has been made that at least some of the money will have to be paid by the corespondent in this particular case.
Some hon. members were suggesting that I did better while I was reading. I would suggest that they are going to have to give some consideration to these other matters, and they should not listen only to the stereotyped evidence. They should give close attention to both parts of the case, that is what is read and what we are suggesting, because they have to make up their minds on this bill. It is their responsibility, and I would suggest they pay close attention to both aspects.
The lawyer asked a number of questions about the children, and I believe it would be all right to read those. In any event, the petitioner says he supports them.
Q. Who looks after them?
A. I live with another family and when I leave they look after the children.
Q. Do you live in the same house with the children?
A. Yes.


Charles Edward Rea: I must remind the hon. member once more that in Bill No. SD-49, there is nothing regarding children. If he keeps referring to children I shall have to ask him to resume his seat.


William Arnold Peters: It is true that in the petition there is no mention of them, but the other place did give some consideration to their welfare. However, I do not intend to refer


to that. Senator Roebuck, the chairman of the committee, asked these questions:
Q. Have you got a job?
A. No, not at present. I worked as a carpenter this summer but it is seasonal work and I am not employed at the moment.
Q. How much do you make?
A. Two dollars an hour and more.
Q. Is that sufficient to keep your family?
A. Yes.
Q. Will you likely be going to work again shortly?
A. Yes.
Q. How many hours a day do you work?
A. About 10 hours, it depends where.
Q. Would it be usually $20 a day you make when you are working?
A. Not always, it varies.


An hon. Member:: What are you talking about now, unemployment?


William Arnold Peters: No, I am just indicating that this man only earns this amount of money. I am suggesting that he cannot pay for this divorce. I have not seen any evidence indicating any reason why he should obtain this divorce. I am suggesting, therefore, that the divorce is not being paid for by the petitioner but is very likely being paid for by the corespondent. There should have been more questions directed to this matter because, as the evidence indicates, the amount he has earned has not been enough for him to keep his family.


Egan Chambers: It is irrelevant.


Charles Edward Rea: Order.


William Arnold Peters: Somebody says it is relevant, and I think it is relevant. If the hon. member had said "irrelevant", I would not have been so sure. I think it does matter. This man earns $90 a week but is only employed seasonally. He probably does not work more than half the year.
Senator Roebuck asked these questions:
Q. Do you own any property?
A. No.
Q. Do you own your own house?
A. No.
Q. Have you got any money in the bank?
A. Not much.
Q. Do you own any stocks or bonds?
A. No.
Then Mr. Jacobs makes a statement about the man's financial situation. This probably proves exactly what I am saying. The lawyer, knowing full well how much it costs to get a divorce through parliament, makes the claim that this man has not earned enough money to pay for it and, therefore, he should be given back some of the money paid in fees. He says:
Mr. Chairman, I would make application that under the circumstances of this man's financial situation and particularly in view of the fact that there are four young children to bring up, that part of the parliamentary fee be remitted to him. As to the amount, I would leave it to the discretion of the committee.

It should be borne in mind that the parliamentary fee is only $210 but that a divorce costs, on the average, $2,500. It seems to me that the lawyer is just trying to make it look good for himself and at the same time get some consideration for the man. I am very pleased to say that the committee did give consideration to this application and agreed to reduce the fee to $100, giving the man back $110.
The investigators in this case are old friends of this committee. They have been here on numerous cases. They always give the same type of evidence. Having read all the evidence in this particular case, I think you will be pleasantly surprised to know that there is a change in the evidence. This time they had no clothes on. Before they always wore baby doll pyjamas or something like that.
Then, Gerard Daigneault, 32, of Montreal, gives his evidence.
Q. What is your occupation?
A. Investigator.
By Mr. Jacobs:
Q. I show you a photograph which has been filed as Exhibit 2, can you identify the woman in it?
A. That is Mrs. Roger Vermette.
Q. Did you have occasion to conduct an investigation into the conduct of Mrs. Roger Vermette?
A. I did, sir.
Q. Over what period of time?
A. Our services being retained by you, Mr. Jacobs, during the first week of November, 1958, at which time you furnished us with this photograph over here and also giving us certain information, I started investigation with Mr. Paquette, and as a result of that investigation on November 24, 1958, accompanied by Mr. Vermette and Mr. Paquette, at approximately 8.30 p.m., at the Moulin Rouge motel, near St. Jean, in Quebec, unit 15 after having obtained the pass key from the proprietor of the hotel the three of us proceeded to unit 15.
I have seen this motel. It is a very pretty place. It is a large, elaborate motel. I think if the corespondent can take his girl friend there he can well afford to pay for this divorce and he should get no sympathy from us. But to anybody who wishes to stay at a motel I would suggest that if detectives float around with a whole pocketful of keys it might not be the best place in the world to spend a week end. The questioning continues:
By the Chairman (Senator Roebuck):
Q. Who were the three?
A. Mr. Paquette, Mr. Vermette, and myself. After opening the door with the aid of the pass key I put on the ceiling light to the right as you entered-
You see, Mr. Chairman, if this were even an hotel, from my reading of detective stories and that sort of thing, normally even if they were police they would not let people go into it themselves. The manager or the detective of the hotel or the desk clerk or somebody would go up with the pass key and
Private Bills-Divorce
would open the door. Instead of there being three there, there would have been four because the hotel official would very likely have been along. I see no reason why he should entrust the pass key which can be duplicated for any room in the hotel very simply or why he should give it to some other party. But things are done differently in Quebec than they are done elsewhere. That may be the answer. Anyway the evidence continues as follows:
After opening the door with the aid of the pass key I put on the ceiling light to the right as you entered and there right in front of us both Mrs. Vermette and the man who was with her were completely naked on the bed. As we entered the woman shouted, "Paul", and she took the white covers and covered herself up with the covers. Then I went to her, and she was holding the covers over her face like that, and I took her hand away and I asked Mr. Vermette, "Is that your wife?" He said yes. Then he added, "This is where you go for your moving picture." And I then asked the man's name; first he refused, and then I told him I would know just the same because his car was at the door. Then he wanted me to identify myself properly, which I did, and then I asked him for his car registration: he gave me his car registration and on it was written "Paul Emile Labelle", address 20-72nd avenue. St. Therese, Quebec. I asked him if that was his real name, and he said yes. After telling the both of them they would be hearing from Mrs. Vermette's attorney we left the premises.
Mr. Chairman, in a case we had the other day I mentioned the fact that quite often this question is put and this is one of those cases in which it is put:
I asked him if that was his real name, and he said yes.
This is the only case I have noted for some time where this question has been asked. I think it is a procedure that the other place would be wise to insist on. If they did so, probably some remarkable and surprising things might be prevented, if television stories give an indication of what may happen in this type of case. The questions continue:
By Mr. Jacobs:
Q. How many beds were in the room?
A. Only one bed.
Q. You stated they were both lying there naked; what were they doing?
A. Well, actually I think they were looking at T.V.
Q. And after that did you and Mr. Paquette drive Mr. Vermette home?
A. We did, sir. When they registered it was 6.45 p.m. and I left Mr. Paquette there and I went and got Mr. Vermette at his home at St. Jerome.
By the Chairman (Senator Roebuck):
Q. Did you see any clothes around the premises?
A. Yes, a woman's clothing, underwear, were on the bench at the foot of the bed. The other thing, the two of them were not lying with their heads at the head of the bed, the two of them had their heads at the foot of the bed.


An hon. Member:: What difference does it make?


William Arnold Peters: A great deal of difference. That is the only way in which they could watch television because the television set obviously was at the foot of the bed. This question was asked by the chairman of the committee of the other place:
Q. So that they could see the television?
A. Yes; and the man's underclothing were on the chair to the right as you entered.
Mr. Chairman, it surprises me that this should constitute adultery. We know that there are many people in Canada who run around with their clothes off quite a bit of the time in nudist camps, when the weather is warm enough; and I have heard that they are as moral places as there are in existence. It may be quite natural to run around disrobed in that circumstance. It may be very comfortable to run around in motels with no clothes on and to watch television. I do not think that in either case we have proof that adultery took place. I can point out by Mr. Powers exactly what adultery involves.
The Depuiy Chairman: Order. I must inform the hon. member that his time has expired. I recognize the hon. member for Skeena.


Some hon. Members:: Carried.


Frank Howard: Mr. Chairman, I do not have the giggling Gertie approach to these things that some hon. members seem to have.


Charles Edward Rea: Order. I would advise hon. members that only one hon. member may have the floor at a time.


Frank Howard: What I should like to do first, Mr. Chairman, is to pose to you a question and ask for your guidance on your approach to it. It relates to children. This is something new that has arisen. I know the rulings you have made on many occasions in the past to the effect that we should not discuss-and have no authority and no right to do so-the maintenance of children and their welfare or anything of that nature. You know, of course, that even though that is the rule of the house, we disagree with it from time to time.
However, I wonder whether you would indicate, for future guidance and for guidance in this case whether reference might be made to the fact that there are children in cases where there are children, in order to prove that the marriage was consummated. This appears to be a key point. If you are going to dissolve a marriage you must determine first whether there was a marriage and, second, whether there was consummation of the marriage; because if there was not consummation, then presumably the approach would be to petition for an annulment. Is it permissible to make reference to the children to the extent of proving their existence both by the

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petition and by subsequent evidence? Perhaps this is a reason why the members of the other place raise questions with respect to the children. I do not know whether you would like to deal with that question right at the moment or at some later date, Mr. Chairman.


Charles Edward Rea: I think it is quite clear-and that all hon. members of the committee will realize it-that we cannot discuss children at all. The question of whether or not these people were originally married is determined in the evidence given in the other place by documentary proof. The question of having children does not come into the matter.


Frank Howard: If I may, I would point out that while documentary proof is given, questions are also asked of the witness in order to identify the documentary proof of marriage and to establish that the facts set out in the certificate are correct. However, the question I want to pose is this. If children are born of a marriage, that is obvious proof that the marriage was consummated. It was only to that extent that I was thinking of discussing it. If the marriage was not consummated, then the approach is to petition for annulment and not to petition for divorce.
The Depuiy Chairman: Order. The only thing the committee can discuss is the bill which is actually before it, as shown in the preamble, and that is the question of dissolving this marriage. That is all the Chair can allow to be discussed, and nothing else. Anything else is not relevant to the bill.


William Arnold Peters: A few moments ago we were discussing the fact that two naked people lying on a bed in a motel room were watching television. Admittedly that is exactly what they were doing. While the lawyer suggested there may have been other things going on as well, he asked what they were doing and the answer was "Well, actually I think they were looking at T.V.". The fact they were running around with no clothes on proves nothing. In fact, certain women in British Columbia have done that as a form of protest, but nobody suggested it implied any type of adultery.
In Kent Power it says:
There is no doubt, however, that in divorce and other matrimonial causes adultery means sexual intercourse between a married person and a person of the opposite sex other than-
The Depuiy Chairman: Order; we are now
back to procedure again. I must ask the hon. member to come back to Bill No. SD-49.


Frank Howard: Mr. Chairman, on the point of order you have raised, I thought it had been cleared up some time before. In the

first part of the bill, in the fifth paragraph of the petition, the petitioner prays for divorce on the ground of adultery and that the marriage be dissolved. What the hon. member for Timiskaming is seeking to do is, I submit, to point out that adultery has not been proved and he is referring to what adultery means. I think that to this extent he should be allowed to continue.


Charles Edward Rea: We cannot allow a discussion about adultery in broad terms, only as it refers to this bill, and that can only be discussed by referring to the evidence.


William Arnold Peters: What I am trying to do is to set a definition and reduce it to its limited terms under the bill. The word adultery is quite a definite word and-


Charles Edward Rea: Order. This committee does not have to decide the validity of the definition of adultery. This committee only decides whether or not it will accept this bill.


William Arnold Peters: Paragraph 5 of the petition says:
That your petitioner has ascertained that the respondent, Aurore Belanger, committed adultery on November 24, 1958, in the town of St. Janvier, in the district of Terrebonne, at the Moulin Rouge motel unit 15, with Paul Emile Labelle, who resides at 20-72nd avenue, St. Therese, Quebec.
I suggest that everything in the petition must be relevant to this bill, that this is very much a deciding clause in the bill. I suggest that adultery does not constitute lying naked on a bed watching television. I cannot see any connection between the two. Legal authorities point out what constitutes adultery, and I think they agree with me that it does not constitute lying on a bed watching television. If this chamber's decision is that adultery has been proven by this particular bill, then I suggest we have a new definition in Canada of adultery.
The next witness was Clovis Paquette, aged 43, investigator. He is asked:
Q. Could you tell the committee where and under what circumstances?
That has reference to where they had met Mrs. Roger Vermette.
A. In the afternoon Mr. Daigneault and I went to St. Jerome, Quebec, we were parked where we could see 426A address. At 6.05 we saw Mrs. Vermette come out of the place, the house, and she started walking along the street beside her house, she walked about two blocks, and then got on the Noel car, and they met about one street or two, and he stopped at the drug store, and the man walked out of that car and stayed there a few minutes, and got on the car again and proceeded on the highway 11-8. They went about 8 to 10 miles and stopped at Moulin Rouge. After we were positive he was in cabin 15, Mr. Daigneault left from there and he went back to St. Jerome to
Combines Investigation Act
get Mr. Vermette. He came back around 8.30. After Mr. Daigneault got the key to the motel we went in there with Mr. Vermette.
Q. What did you see?
A. We saw Mr. Paul Emile Labelle with Mrs. Vermette; they were watching the T.V., they were both naked on the bed.
Q. Did you notice any clothes around the room?
A. Yes, her clothing was on the chair, and some on the chair; it was all mixed up. There was an empty bottle of brandy, and 7-Up bottles empty.
Q. Did Mr. Vermette identify her as being his wife?
A. Mr. Daigneault asked him who the woman was, and he said. "That is my wife all right".
Here is a case where the only evidence we have of adultery is two people lying on a bed, not in the bed but on the bed, in a reverse manner with their heads down at the foot of the bed instead at the top of the bed where the pillows are, and they were watching television. It is also surprising that the evidence is not anywhere near the same which the two witnesses give, although they are both highly qualified professionals. The second one throws in a bottle of whisky or brandy and a number of 7-Up bottles. I am surprised that the other one did not notice there were any bottles, but according to the evidence, knowing the type that some of these detectives belong to, I imagine that he did not bother to look around the room at all but was interested in other things. He may have been interested in the particular television program.
In my opinion this is a case which should be given very careful examination and we should give a reassessment to what we consider to be adultery. As Kent Power points out:
Since it is almost impossible to adduce direct evidence of the act of adultery, its commission-


Charles Edward Rea: Order. It being six o'clock, shall I rise, report progress and request leave to sit again at the next sitting of the house?


Some hon. Members:: Agreed.
Progress reported.



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

[Stage Direction]
The house resumed consideration of the motion of Mr. Fulton for the second reading of Bill No. C-58, to amend the Combines Investigation Act and the Criminal Code.
Mr.   Rae@Acting Speaker: At eight o'clock the house will resume the business interrupted at five o'clock.
At six o'clock the house took recess.
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Combines Investigation Act AFTER RECESS
The house resumed at 8 p.m.


Leon David Crestohl: Mr. Speaker, at the adjournment of the debate at five o'clock I was talking about the various attitudes that the government party and the official opposition adopted in the past in dealing with the subject of and legislating upon combines, the Combines Investigation Act, mergers and trusts. I stated that there were divergent views, each party treating these questions in accordance with their political philosophy and thinking.
In this connection may I point out that so long as Sir Robert Borden was in power there were no anti-combines investigations at all. There were no prosecutions despite the fact that there was an effective law on the statute books. The Conservative philosophy in this regard throughout the years and especially in the period between 1910 and 1937 was, interestingly enough, revealed by the Right Hon. Arthur Meighen, a former Conservative leader, when speaking in the other place and when as reported at page 525 of the Senate Hansard, he used these words:
We struggled so much to legitimize combines that we exceeded the constitution.
That is a frank and honest statement by a responsible and reputable leader who did not hesitate to express his point of view. In colloquial language I would say that the hon. gentleman certainly pulled no punches in expressing his views and those of the Conservative party in relation to combines.
A perfect illustration of the Conservative party's desire to protect combines over the years is to be found in a piece of legislation enacted by the Bennett government in 1935. A clause was introduced into that legislation by the government of the day which virtually made the existing anti-combines laws impotent. This is how it was done. The clause provided that all the evidence acquired in an investigation as to whether a combine existed or did not exist and all the information and material accumulated by the investigators were inadmissible in an open court. That was the effect of the provision. I submit that no combine could be successfully prosecuted without the evidence obtained for the director by the investigators to enable him to decide whether or not there should be a prosecution.
Perhaps the house would permit me to give an analogy. Assume that our security police were on the trail of a spy or a spy ring following a major crime and had accumulated information and evidence on which a prosecution could be based. How frustrating it would be if they found there was a law which
[The Acting Speaker (Mr. Rae).]

prohibited the production in court of all the evidence and material acquired in the course of their investigation. That was the effect of the amendments to the legislation in 1935. This ingenious pro-combine enactment by the Bennett government was later declared ultra vires by the courts and sanity and effectiveness were again restored to the Combines Investigation Act by the Liberal government.
I was not impressed by the undue concern which the minister in his remarks expressed for the small storekeeper when he said that we should protect the maximum number of small storekeepers. Of course we should. No one would disagree with that statement. I should like to point out to the minister and the house that this was only one of the ways by which the minister sought to justify resale price maintenance. In this way the minister directly helps stifle free and competitive trade. That is certainly not beneficial to the great buying public. To do so would be to enact a law that would not provide the maximum good for the maximum number. I see it only as a form of crocodile tears which the minister sheds for the small storekeepers. It is nothing less than an indirect way of helping maintain prices dictated by manufacturers. The small storekeeper has not the means of meeting competition. He must obtain his merchandise from the manufacturer. He is the one who will be compelled to maintain the prices that are fixed and dictated by the manufacturer.
I wish now to say a few words about some of the escape clauses in the bill. While not referring to any particular clause I wish to address myself to those escape clauses which provide a good defence to a prosecution. In a new provision in the bill an escape or a good defence against the prosecution is possible if the combine exists for the purpose of (a) an exchange of statistics, (b) defining product standards, (c) an exchange of credit information, (d) definition of trade terms, (e) cooperation in research and development, (f) restriction of advertising, and (g) some other matter not enumerated in subsection (3). Surely (g) is a very peculiar provision. This is the first time that I have ever encountered such a clause that outlines the things that provide a proper defence to a prosecution. There is also some other matter not enumerated in subsection (3). I should like to ask the minister where he has seen a clause of a similar nature? Can the minister tell the house what the clause refers to when it speaks of a probable defence for some other matter which is not enumerated in subsection (3>? I would be interested in hearing from the minister if he would care to answer the question
now.


Edmund Davie Fulton: I will be glad to answer it when I close the debate.


Leon David Crestohl: Thank you very much. Once we realize that there are six or seven means by which industry can form a combine- and certainly they run the whole gamut there -I put this question to the house: What else, short of an open agreement on prices, can there be to make such a complete combine? That seems to me to be the only thing that was omitted. All these things which the combine is permitted to do certainly will produce profit for the members of the combine. Certainly, more efficiency, reduction of cost of operation, will certainly create more profits and, of course, we all know that there is no altruism in business, especially in big business. Altruism in business would clash with big dividends, and I am sure the minister does not think that parliament is so naive as to think otherwise. This whole new clause- and it is a completely new section-clearly permits the establishment of a combine and peculiarly enough a closed combine, because the clause does not state that everyone in that particular business or industry can have membership in the combine or can enjoy the benefit of this joint activity. Will they at any time be compelled to take in new members, or does everyone in the industry have a right by law to be accepted in the combine so that they may benefit from all those economies which the minister states the combine can perform?
As I see it, those economies can be enjoyed only by members of the combine. All others in that same industry will be prejudiced by not having the benefits that their competitors have. There is no such section in the law, as I see it, that makes membership in such a combine available to everyone in that industry or, assuming that the combine has been created and new people come into the industry, who take up location and establish a similar industry, that they will be able to enjoy the benefits which their competitors enjoy unless the bill contains a clause which will keep such a combine open to everyone in the industry or compel it to accept new members. I say that the absence of such a section in the law would create an unfair situation and to some extent sanction illegal combines.
There are other clauses in the bill which provide other types of escape clauses. I refer to new clauses, although I do not name them by number. There is, for example, a new term that I see for the first time. It speaks of substantially lessening competition. Apparently, it is permissible to lessen competition. Certainly that is an invasion of the combines investigation laws. Apparently
Combines Investigation Act competition can be lessened but that by itself is not an offence. We find that it becomes an offence when competition has been substantially lessened. By whom, and how will "substantially" be interpreted.


Edmund Davie Fulton: Is the hon. member not reading from last year's bill?


Leon David Crestohl: No, certainly not.


Edmund Davie Fulton: Perhaps the hon. member will give me his reference so I can follow him and deal with the point when I reply.


Leon David Crestohl: I am referring to section 33A(c) and to subsection 33B(1). I will read it for the minister if he wishes:
Every one engaged in a business who (b) engages in a policy of selling articles in any area of Canada at prices lower than those exacted by him elsewhere in Canada, having or designed to have the effect or tendency of substantially lessening competition-


Edmund Davie Fulton: This, of course, does not refer to combinations.


Leon David Crestohl: No; it refers to retail price maintenance.


Edmund Davie Fulton: Oh, no; I will explain when I reply.


Leon David Crestohl: When the minister speaks he can explain when the offence is one that has for its effect substantially lessening competition.


Edmund Davie Fulton: If my hon. friend will permit me I will explain this in full later. But may I point out now that these words are found in the present provision of the law, and if my hon. friend objects to them I think he should have objected to them when his own government was in office.


Leon David Crestohl: I am afraid I did not quite hear that.


Edmund Davie Fulton: No, I expect you did not want to.


Leon David Crestohl: I beg your pardon. Will the minister please repeat that?


Edmund Davie Fulton: If my hon. friend will look at the explanatory note opposite section 33A, he will see the following:
The proposed section 33A is section 412 of the Criminal Code, strengthened by the insertion of the words "or tendency" in paragraphs (b) and (c) of subsection (1).
The words "substantially lessening" have been in the law for many years.


Leon David Crestohl: We have heard similar statements that it has been in the law for many years. Surely the minister does not pretend that if something has been in the law for many years, and perhaps has not been challenged that it is good law?

Combines Investigation Act


Edmund Davie Fulton: No. All I am objecting to is my hon. friend's suggestion that I was inserting escape hatches.


Leon David Crestohl: Well, let us go on to the next avenue of escape.


Some hon. Members:: Oh, oh.


Leon David Crestohl: It is there, notwithstanding the laughter of the minister and the members. The laughter certainly does not explain satisfactorily the avenue of escape for a combination under the combines act or from retail price maintenance.
Then, Mr. Speaker, we have in the section the words "materially misleading''. This, as I say, is a new term. I do not know whether the minister will find a spot where it existed before and thereby seek to justify it on that ground rather than on the ground of good, sound law. It is permissible to mislead, apparently, but it is not permissible to materially mislead. When will misleading be material, or when will it not be material, and who will decide that? I mention these facts merely to emphasize that these amendments are being made not for the purpose of enlightening, explaining or assisting to understand the law but for the purpose of confusing it.
There is also a section which uses the language, "an inference unfavourable to the accused." Who or what will make it an inference? Who will decide that? Who will judge whether it is an inference and who will judge whether it is an inference and who makes it unfavourable? This is merely another provision which, while I do not say it was intentionally inserted in the bill for this purpose, certainly does not help to enlighten but rather confuses.
The words "reasonably expect" are also used, and in the context of the provision this is merely an attempt to read another person's mind.


Edmund Davie Fulton: Would you rather have the word "unreasonably"?


Leon David Crestohl: Also the words "unfairly disparaging" are used. When is it unfair? When will it be unfair? Who will judge it as being unfair and when will it be disparaging? I say there are other similarly confusing and unclear expressions used in the bill which we hope we will be able to deal with in detail more vigorously in the committee stage.
Then I also find, Mr. Speaker, that there appears to be an axiety in the proposed bill to justify a defence against a breach of the Combines Investigation Act on the grounds that the apparent breach of the law was for objectives or motives that are commendable. I am now referring to the six grounds of


defence. It would seem that a defence is possible when the breach of the act is for purposes which may be considered commendable. The question is, commendable to whom? Is it commendable to the public or is it commendable to the members of the combine? I submit that this is an unsound principle in law when dealing with combines. This has been clearly established in a judgment of the Supreme Court of Canada in the matter of the fine papers case, to which an hon. member referred earlier today. The judgment was rendered in 1957 and I should like to read a brief paragraph from the jud-ment of Mr. Justice Taschereau who deals with the point in a direct way. He said:
The public Is entitled to the benefit of free competition, and the prohibitions of the act cannot 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 market.
I should like to say a word now concerning the sections of the Criminal Code which are, for the reasons explained by the minister and which I certainly do not accept-


Edmund Davie Fulton: Your leader did.


Leon David Crestohl: -being transferred to the Combines Investigation Act.


Edmund Davie Fulton: May I ask the hon. member a question? Is he aware that his leader accepted those reasons?


Leon David Crestohl: Pardon?


Edmund Davie Fulton: Is he aware that his leader accepted those reasons?


Leon David Crestohl: Yes, I heard the statement.


Edmund Davie Fulton: I just wanted to know where the Liberal party stood on this bill.


George James McIlraith: Why don't you be quiet and listen?


Leon David Crestohl: The party stands united on the bill. I should like to have the minister explain to the house and the country the reason for transferring sections 411, 412 and 416 from the Criminal Code to the act. To me it appears that it is being done because it would be dangerous to add to the criminal law of Canada the avenues of escape which are provided in the bill. I think it would be a very dangerous practice indeed to amend the Criminal Code in such a way as to provide defences. That would be a novel piece of legislation. It could not be done and should not be done to the Criminal Code of Canada.
In general, the sections in the Criminal Code are brief, concise and clear, and its very economy is to block loopholes and avenues

of escape by avoiding doubt and ambiguity. The bill before us creates doubt and ambiguity, and so it is apparently considered wiser to transfer the sections in the code to the act rather than to amend the Criminal Code for that purpose. I say that is a most injudicious thing for any government to do. It is tampering with the criminal law of the land for political or party purposes.


Some hon. Members:: Shame.


Leon David Crestohl: That is dangerous. Yes, it is a shame.


Mr. Nesbitt:: That is the kind of thing your party would do.


Leon David Crestohl: I beg your pardon? Will the hon. member say when and where? He cannot say. He just opens his mouth and expects something to come out.


Mr. Thrasher:: He does not read.


Edmund Davie Fulton: Because of the sincerity of the hon. gentleman's feelings, perhaps I could ask him another question.


Some hon. Members:: Order.


Edmund Davie Fulton: I have asked if I may ask a question.


Leon David Crestohl: When I am through. That is what the minister preferred to do. I submit, Mr. Speaker, that it is a crime whether the control of industry or production or the sale of products is accomplished by means of a combine, a trust, a monopoly or a cartel. These are crimes and they are what the Combines Investigation Act seeks to prevent. They should be dealt with as crimes under the criminal law of the land and not by way of amendments to a statute which are replete with inconsistencies and set up doubts that under our law must favour offenders against the Combines Investigation Act.
The legislation should be clear and capable of certain and immediate application. This bill does exactly the reverse. It is extremely difficult to interpret, understand and apply. I have the sad feeling that this is the main objective of the bill.
(Translation):


Mr. Alexis Caron (Hull):: Mr. Speaker, I was slow in rising because I thought our friends opposite would have something to reply to what has been said up to now, but in view of the situation, I shall take part in the debate immediately instead of waiting until later on.
May I say at this early point that the resolution introduced by the Minister of Justice
Combines Investigation Act (Mr. Fulton), to amend the Combines Investigation Act, is certainly not a model of clarity.
What principle underlies this ambiguity? The purpose of the bill does not seem to be to protect the consumer or the corner grocery.
Last night the Leader of the Opposition (Mr. Pearson) pointed out to the minister that he had all but forgotten to mention the protection that should be given to the consumer.
Instantly the minister jumped to his feet to say that the Leader of the Opposition had not listened too well to what he had been saying.
I made an effort today to read the speech through-this was no slight task either-and I have noted that the minister makes only two references to the consumer.
The following sentence is to be found on page 4348 of Hansard:
The first is how to get at this situation and find an effective method of dealing with it without doing the consumer ... a disservice ...
The second reference appears in the second column of the same page:
-practices which confer no lasting benefit on the consumer.
In his whole speech, which lasted an hour and a half, the minister managed to devote only two sentences to the consumer. Yet, if there is one group that is entitled to some protection, it is surely the consumer, even more than the dealer. It is generally the consumer who suffers when a piece of poor legislation is passed. It is not generally the dealer.
The first part of this bill, which is said to deal with monopolies, combines and mergers, apparently does not fulfil its purpose, because it opens up new possibilities to profiteers. I must point out, incidentally, that the validity of our legislation was always maintained whenever it came up before the supreme court.
On the other hand, looking at the second part of this bill, the part which deals particularly with misleading advertising and price fixing, we find that the Conservative party has come back in a round-about way to the minister's pet ideas.
I think the lack of clarity is intentional, because I would not do the Minister of Justice the affront of saying he has a confused mind.
In fact, despite its outward look of uprightness it does raise some typically Conservative dangers, of which we have been aware all along.

Combines Investigation Act
I realize this bill will be welcome by some people, those who will feel more at ease in their underhand practices to increase their profits, without any risk of being involved in a criminal offence under the law.
These amendments, in fact, are in line with the policy and philosophy of the Conservative party. Apparently, those hon. gentleman think that in order to ensure a permanent prosperity, you have to start from the top, that is, first see that the manufacturer, and the big businessman are prosperous, and when those people or corporations have accumulated enough pelf, they will let their surplus drop like a gentle rain upon the people at large.
You will allow me to have my doubts about it all, Mr. Speaker. When those people accumulate, they always find scores of ways of ploughing back their surplus into company expansion, so that it takes quite some time before the surplus reaches the masses. This bill was conceived with a similar purpose, that is, protection of the big, the strong, the powerful in the country; the others do not matter.
Mr. Speaker, like the press and various people in this country I was surprised by one thing: I mean the reason for which the Minister of Justice did not again introduce the bill he submitted to the house last year. Oh, he will probably tell me that, in the light of representations made to him, he thought it his duty to amend it. If the minister wants to change laws every time representations are made by certain groups, he will never see the end of it, and all our statutes will have to be revised. The minister should know by now that you can't please everybody.
The act which is now in force has always operated well, and each time a judgment has been rendered by a provincial court, indicting a corporation or a group of individuals, the supreme court has always upheld it. Therefore, if things have gone well, following careful inquiries made by the commission, and if the government has succeeded in securing convictions against operators of combines, I wonder for what particular reason, other than those outlined by the Leader of the Opposition and by the hon. member who has just resumed his seat, this act should be amended. As I said earlier, I think it is only a reversion to the principles of the Conservatives who, in the past, have been accusing us of unfair interference in the commercial field. Besides, the Minister of Justice said yesterday that it was as a

result of public pressure, in 1889, that the first combines act was adopted. It was an amendment to the Criminal Code, into which section 498, now section 411, was inserted. It was really not anti-combine legislation; it was simply a section of the Criminal Code which made it possible, if necessary, to condemn those who went too far. But there was no organization which would provide for research, studies, and inquiries the result of which would be submitted to the court. As a matter of fact ten cases occurred between 1889 and 1900, and six were dismissed. That is to say that the legislation was not clear; that it was vague and had a few flaws. Later on, in 1900, under Sir Wilfrid Laurier, parliament amended the legislation by eliminating the word "illegally", which seems to have caused all the trouble. But when Mr. Mackenzie King, an outstanding economist, entered the Laurier cabinet as minister of labour, he worked out a bill on combines which seemed to cover everything and established the position somewhat better, so that inquiries could be carried out, that a commission could be responsible for their carrying out, in order to go to the root of the evil and to facilitate the good operation of that commission. That act, clear and specific, was enacted to protect both the small merchants and the public against operators of combines. Following the adoption of that act, price competition was recognized in a specific way. The Liberal party has always believed that fair competition should not be curtailed; it has always tried vigorously and successfully to supervise the operations of combines already in existence or in the process of organization, and it has always been through our courts that the law has been enforced. If, at times, discretionary powers were conferred upon ministers, those powers were merely complimentary, and did not replace the courts.
Mr. Speaker, we are not surprised at the present intervention. Every time the Conservative party came into power, it attempted by means of formulas that were sometimes very clever, to ease the application of the Combines Investigation Act introduced by the Liberal party.
The amendment now under consideration, if the minister sees fit to make use of it, might favour big companies, and goodness knows they do not need help from anyone. They are powerful enough.
We, Liberals, are proud of this act which led to the detection, prosecution and conviction of those who conspired at the expense of small businessmen.

From 1925 to 1957, 35 companies were prosecuted and convicted for breach of the Combines Investigation Act; they paid fines exceeding $1,600,000. Moreover, in 1957, when the Conservatives came into power, 21 cases were still under review. We have not heard much about them since then.
Mr. Speaker, I said that every time the Conservatives came into power they tried to do away with the combines act by making it inoperative.
From 1911 to 1921, during the term of Sir Robert Borden who, in 1910, had criticized and ridiculed the bill submitted by Mr. Mackenzie King, contending that it was uncalled-for interference in the field of business, no case was tried under the combines act. Sir Robert Borden was against the act, and would not enforce it. Anything went in those days of easy-does-it policy. And the Minister of Justice remarked yesterday: "We are thus abiding by the policy which was always followed by the Conservatives".
The minister also stated that the Conservatives had been accused of opposing the combines act and that this was untrue; he said the Conservatives had always been in favour of a combines act that was fair and could achieve its purpose. And yet, Sir Robert Borden, a Conservative leader whom the present Minister of Justice could not support, being too young, but whom his father has certainly supported, has expressed his opposition to the combines act, not only by ignoring it for nine years, but also by omitting any reference to it in his speeches.
In 1919, Sir Robert Borden's successor, the Right Hon. Arthur Meighen, set aside the combines act to replace it by two acts, that is, the Board of Commerce Act, and the Fair Prices Acts.
Those bills were intended to set up a federal board empowered-please note the spirit-to sanction price fixing. In short, it was supervising combines, not eliminating them. Besides, those two acts have been ruled ultra vires by our courts of justice, therefore unconstitutional.
And you will see Mr. Speaker, that a little later, Sir Robert Borden complained bitterly about it.
Following the return to power of the Liberals in 1923, a new combines bill was placed on the order paper. The improved bill was introduced by Mackenzie King against heavy
Combines Investigation Act opposition from the Conservatives, who said the bill represented unjustified and unwarranted interference in the field of business.
You will recognize, Mr. Speaker, that it took much more courage to introduce such a bill in 1923 than it does today for the Minister of Justice to submit his amendments, because in 1923, the Liberals had no absolute majority in parliament, whereas today, the Minister of Justice can rely on a heavy and servile majority.
In 1925, the 1923 legislation passed its first legal test with flying colours.
In 1930, after the Conservatives had been elected to office, the act again came under attack. Mr. Bennett, then prime minister, refused to publish reports submitted by Mr. Fred McGregor, registrar of the combines act. And the Minister of Justice said yesterday that he was following the same policy as the Conservatives have always followed.
Furthermore, every facility was then refused the McGregor commission, in order to hamper its work. No action was taken, despite the unpublished reports to the effect that the public was being victimized by the illegal and unfair practices of some companies.
If that is the minister's so-called effort to abide by the combines act and Conservative policy, well let him go right ahead and let the voting public be his judge in due course.
In 1935 the Bennett government passed legislation aimed at demolishing the combines act by placing the whole of it under the control of Mr. George Sedgwick, president of the tariff board, and that was another piece of Conservative legislation which was ruled ultra vires by the courts.
It seems to me, Mr. Speaker, that each time the Conservatives introduce a bill- there is no doubt they have brilliant lawyers among them-they always introduce it in such a way that the courts will reject it, so they can say later: "It is not our fault; blame the courts." Well, if the bill they introduced had been well planned, I am sure that the courts would have maintained it just as they maintained the anti-combines acts adopted by the Liberal party.
After the Liberals returned to power in 1936, they rebuilt, under the leadership of Mr. Mackenzie King, an anti-combines act that stood the test of time to the general satisfaction. But, in that year, the act was not

Combines Investigation Act accepted by the Senate. In fact, the Senate, with a Conservative majority, did not let the bill go through. It was then that our friend, the Right Hon. Arthur Meighen, former prime minister of Canada and Conservative leader, said-an assertion nobody denied-in explanation of the opposition he was leading in the Senate against the combines act, as found at page 525 of the English text of the Senate Hansard of 1936:
We...
And this word "We" meant the Conservatives:
(Text):
We struggled so much to legitimize combines that we exceeded the constitution.
(Translation):
That was a statement made by a former leader of the Conservative party, a former prime minister, who said: "We struggled so much to legitimize combines that we exceeded the constitution".
Is that what the minister means when he says he will follow the policy that was always followed by the Conservatives?
The bill he has now introduced is again devised so as to take the teeth out of a piece of Liberal legislation.
In 1951-52, important amendments were introduced to give effect to the MacQuarrie report. Again the Conservatives fought those amendments tooth and nail, and among their main speakers, there was the present Minister of Justice (Mr. Fulton), the present Prime Minister (Mr. Diefenbaker), the present Minister of Finance (Mr. Fleming), the present Minister of Transport (Mr. Hees), the present Minister of Trade and Commerce (Mr. Churchill)-the most misquoted minister of the cabinet-the present Minister of Citizenship and Immigration (Mrs. Fairclough), the present Minister of National Revenue (Mr. Nowlan), the present Minister of Veterans Affairs (Mr. Brooks), and the hon. member for Greenwood (Mr. Macdonnell), a former minister without portfolio. Discussion of the bill lasted six days. In other words, the Conservatives fought for at least six days against the amendments introduced in 195152. And they did not just make speeches, oh no. The present Minister of Justice in 1951, suggested a six months' hoist; the leader of the C.C.F. had moved an amendment "for public control of resale price maintenance", and the present Minister of Citizenship and Immigration moved an amendment to Mr. 

Coldwell's proposal. Mr. Drew, then Conservative leader suggested that the consideration of the bill be deferred until the supreme court had ruled on the constitutional validity of the act.
Amendments were put forward to keep the discussion going and to stretch out the debate against the proposed piece of legislation.
And when it came to the third reading, Mr. Drew, the Conservative leader-therefore leader of the present Minister of Justice-again suggested a six months' hoist. Everyone knows that this means killing the bill. Indeed, even in the current discussion- to which the present Minister of Justice has contributed at some length-he said this, as recorded on page 2110 and 2111 of Hansard for 1951:
(Text):
Yet it is positively a dangerous and improper piece of legislation to be enacting now because of the threat it presents to the existence and welfare of the small independent retailer.
... it will accomplish nothing more effective than to increase the power and competitive advantages of the large chain and department stores at the expense of the small retailers.
(Translation):
It was thrilling to hear the minister say such fine words, as if he did not know that chain stores are better able to defend themselves than the small retailer. Chain stores, with a capital of several million dollars, can profusely advertise on television and the radio, as well as in the press. They have the capital to do so. Could they not thus more easily come into conflict with the law than if the small retailer is allowed to use his goods for publicity purposes?
Indeed, I recall that when I was working in my father's store, in the off-season of the year, that is, in January and February, as well as in July and August-goods had to be offered at a lower price to attract customers and get the necessary money to stay in business and pay the employees' wages. That was a necessity. And in the ladies wear trade, it is well known that if the businessman does not get rid of his stock in less than a month's time, he is sure to have it on his hands for another season. Now, as fashion changes frequently, he often has to sell his goods at half price, thus losing money.
That is what the minister wanted to uphold; he wanted to deny those people the right to put on such sales. Now, we, in the Liberal party, are opposed to that. We say that such practice

legitimately giving a man the right to think for himself and by himself in his own business set-up, without disturbing his neighbour, must be maintained. And the minister stated, as recorded on page 2116:
(Text):
The next consideration is that we have no positive evidence that price maintenance has a harmful effect on the consumer with respect to prices.
(Translation):
Mr. Speaker, that is what he says, but he has no evidence to that effect; it is a mere statement that has to be taken at its face value. Besides, I will show in a moment that those are not the views held by experts.
And, according to page 2117, he is reported to have said:
(Text):
-such evidence as we have not only fails to establish that price maintenance has an adverse effect upon the consumer with regard to prices, or an adverse physical effect upon prices: but that there is evidence that establishes quite conclusively that it will have little or no effect in reducing the cost of living, if outlawed: ...
-we are in no position to determine whether or not it hurts the consumer.
(Translation):
You see, a moment ago he was saying: that has no effect whatever on trade; and now, here, he says that there is no evidence that this may have an effect on trade. Well, he should agree with himself if he does not agree with others; and he should find out whether that may have an effect or not.
According to page 2126, he is recorded to have said:
(Text):
The evidence before us shows that, though there is a restriction on competition in one way. that is vertically, in effect there is created a greater and more effective competition between manufacturers and retailers of competing lines.
(Translation):
There is a lot more I could quote, Mr. Speaker, were I not running short of time. Let me add only this. Section 4 of the famous MacQuarrie report states on page 79 of the French version:
Although precise information is lacking, there is some evidence that resale price maintenance contributes to price stability but that the general level of prices, thus stabilized, is higher than it would be under competitive conditions and production more unstable.
Those words are to be found in the MacQuarrie report, the very report quoted by the Minister of Justice. Farther on, concerning an investigation made by Mr. Oxenfeldt, the following statement is to be found: 79951-0-277
Combines Investigation Act
... when resale price maintenance became effective, it forced chain stores to increase their prices, while individual drug stores, on the average, showed price reductions which, however, varied considerably with the size of stores, and, for all independent store groups, the percentage decreases shown were much less than the percentage increases made by chain stores.
Those were the findings. They brought about price increases and the public and the consumer had to foot the bill.
The following is to be found under section 2:
The price increases were greatest in large cities and in large stores.
And farther down:
.. . the stores that reduced their prices ... were not the stores that had been charging the highest prices: The reduction in the price spread was accomplished through compulsory increase from the lowest previous price.
You have there research carried out by serious economists who knew their business, and that investigation on price maintenance legislation was made not only in the United States but throughout the world. Having completed such a thorough investigation, the same economists gave evidence before the commissions, to the effect that price maintenance brings about price increases, which in turn are borne by the consumer and give rise to inflation. And this is exactly what this government is trying to do through this bill. The present Minister of Finance expressed the same opinion and the present Minister of Citizenship and Immigration said in 1951, as shown on page 2167 of Hansard:
(Text):
We will undoubtedly have a raid on name brands.
We will have a race for the lowest price...
I contend that this legislation is a blind...
(Translation):
And now, Mr. Speaker, it is a fact that, when speaking of a "raid on name brands" we actually refer to those we have seen. And who is doing this? The large corporations are. For instance, the large corporations are asking coffee firms to package a special brand for them. It is exactly the same product as the others are getting but they sell it 10 cents cheaper, while the small retailer may not reduce the price of a known brand without running the risk of the producer refusing to sell it to him.
To my mind, such practice is immoral and unfair. And the Minister of Justice should have thought twice before introducing his amendment. The Minister of Transport said the same thing, and so did the Minister of Trade and Commerce.
It can be easily seen that the greatest worry of the Conservatives is to oppose special prices, for advertising purposes, which

Combines Investigation Act benefit the people at large. But what is being done today aims at the same purpose by indirect means.
When pretending that this practice is detrimental to small retailers, they fail to consider that the larger establishments, the chain stores, have had their own packaging made that they can sell at a better price, thus attracting customers at the expense of the small shopkeeper.
In 1951, amendments were submitted to a joint committee of the Senate and the House of Commons, and the Minister of Justice stated last night that amendments introduced in 1951 and 1952, had been passed in a hurry. Now, the MacQuarrie commission, which was appointed in 1950, seriously delved into the matter. After having submitted its report, a joint committee of both houses was formed in order to reconsider the matter. And it was only after passing all these tests, that the bill was introduced in a practical form in this house by the Liberal party. However, at the time, it was criticized by the present Minister of Justice who was formerly the official critic for the opposition.
As the Leader of the Opposition said, we see a real danger in the definitions under section 32, because they are conceived in such a way as to allow, by devious means, what the present act prohibits. Many a thing can be accomplished by an exchange of statistics; by a definition of standards for various products; by an exchange of information on credits. And that is an entirely unfair and immoral thing. They even go as far as to set up what is called a "black list" for certain people who for some reason refused to pay their accounts. They are dragged into court because they are on the list of those considered to be in bad standing, and that is where human conscience is being tampered with, because, being black listed, they are prevented from receiving certain products from particular manufacturers.
Then, there is the definition of terms with regard to trade; there is co-operation in the field of research and development; restriction of publicity and, finally, everything that is not mentioned under paragraph 3. This act is really planned to be bad. And the Minister of Justice, being a lawyer, knows quite well that not a court in the world would accept such an ill drafted and incomprehensible text as this; "All that is not enumerated in subsection 3". This is actually the draft that was recommended in 1950 by the Canadian Manufacturers' Association, and which was opposed by the Liberal party; and it is Conservative government, which seemingly to help the small businessmen, serves the purposes of the Canadian Manufacturers' Association.
[Mr. Caron.l
On this matter, here is what Mr. Myron W. Watkins had to say in "Monopoly and Free Enterprise".
(Text):
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 ensure 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.
(Translation):
And I could quote even more if time permitted. It is clearly established by economists themselves that the theories enunciated yesterday and in 1951 by the present Minister of Justice, as well as those enunciated by Mr. Bennett and Mr. Meighen, were false and had no value in the face of facts. And if we consider them in the light of the facts, they fall of themselves.
Mr. Speaker, what a situation it will create for our judges. As in the past, they will have to determine the existence of an agreement and of the degree of control, but furthermore, when agreements are related to certain things like the exchange of statistics, the definition of products standards, etc., how do you expect our judges who are probably legal lights but not economists, and who do not have certain agencies available to them to investigate and find out exactly what there is in this or that matter, to be able to pass judgments in such cases and in such conditions? I suggest that the minister, since he is a lawyer, should have known the difficulty in which he was placing the judges.
If we compare the new clause 12, section 31 of the act, with clause 17(4), we note that too extensive discretionary powers are given to the Attorney General of Canada. He will be able to prosecute as he pleases under criminal or common law. What is dangerous for a politician would not be so for a statesman. How many statesmen are there in the present government?
Far from me the thought that the present Minister of Justice would use his powers in one way for party friends and in another way for opponents. Nevertheless, I should like to keep him away from temptation. More

than any other he knows that Christ said: "The spirit is willing but the flesh is weak".
It might be said that he has principles and is well-intentioned, but let us not forget either the saying: "The road to hell is paved with good intentions".
I should not want to see the minister reduced to that. I should like him to wake up in order to hear clearly the judgment that is being passed on his legislation, so that he will not find himself in an inferior situation under the pressures exerted by politicians, by party supporters, by interested parties. In spite of all his good intentions, in spite of his honesty, the minister finds himself in an awkward situation brought about by himself, and that should not be.
Instead, he should do as in the past, when the chairman of the royal commission was instructed to make investigations, to offer suggestions to the government, and to submit a report that was brought before the house and made available to government as well as opposition members.
He would thus be protected, as he would realize that the opposition is watching him closely. But, as things stand, the opposition is unable to keep a close watch over his actions, for he is the only one responsible for decisions to be taken at the civil or at the criminal level. The danger lies in the fact that he is sole judge in the matter.
He can bring in indictments through informers who supply information to the minister and he is then in a position to use his discretionary power.
Now, if you look at section 5 closely you find that matters are even worse. Six informers can demand an investigation. Do you realize what that means, Mr. Speaker?
Is it not possible for a large chain store to direct six of its employees to act as informers against another chain store, and is it not possible for the latter to do the same against some other such store? It is so easy, when a law is so made up that it may apply upon mere information, whether it be justified or not.
I submit, Mr. Speaker, that this bill is bad, that we cannot accept it, that the government has no right to present the Canadian people with legislation thus constructed.
Mr. Speaker, I regret, but I have to go on to another item, since my time is limited.
79951-0-277J
Combines Investigation Act As regards the offence, here is what we find in the bill:
Where the offence Is with respect to a merger or monopoly-
The minister forgot to define what should be understood by a merger; in fact, there may be several kinds of mergers. Some are bad and some are good; some are necessary and some are dangerous.
Here is an example of a necessary merger.
It will be recalled that around 1920, the Banque Nationale found itself in serious financial trouble, while the Banque d'Hoche-laga also experienced some difficulties, though to a lesser degree. So the Quebec government forced a merger of the two banks under the name of Banque Canadienne Nationale; the government guaranteed a $25 million loan, and thus protected the depositors and shareholders, both large and small. Today, the Banque Canadienne Nationale is a strong institution and compares favourably with any other bank, precisely because of that merger and of the Quebec government's backing.
The Banque Canadienne Nationale was thus a case of necessary merger, and it lead to a very happy result, because it is now a great banking institution, one of the most prosperous in Canada.
That point is not covered in the bill. The bill only refers to mergers. A merger as such is not a bad thing. I think the minister has overlooked that point.
I see that my time is running out, so I shall have to cut short. Let me only say that this legislation is a threat to the general public, that it is inflationary in nature, that it gives the minister too much arbitrary power, and finally that it may lead to serious inequities.
Here is my credo:
I would hope the combines legislation would grant equal opportunities to all, whether big or small. It should grant the small or average businessman the right to buy the products which he resells at a price as favourable as that of his competitors.
The right to buy on a free market products which will be resold on a free market.
The right to fix his prices to meet competition from all quarters.
The right to administer his own business according to his own judgment.
I ask those things for the small businessmen because they alone need the constant protection of the authorities. As for the big,
4398	HOUSE OF
Combines Investigation Act strong and powerful businessmen they are able to protect themselves and often crush others to increase their profits.
For all those reasons, I will vote against this bill on second reading.
(Text):


Douglas Mason Fisher: Mr. Speaker, we believe that this is a bad bill in that it introduces amendments that will further weaken or debilitate an act that is none too effective at the present time.
The minister entertained me, and I am sure he must have entertained other hon. members on this side of the house-I do not know about his own following; they were a little tardy in their ability to applaud but that may not have any significance-with a number of things. One thing that I found very interesting was his predilection to the phrase "Conservative principles" with which he interlarded and interlaced his speech. I could not quite make out from his remarks whether these amendments indicate that the Conservative principles are for the encouragement of big business or for the protection and encouragement of small business. I might say the reason anyone who feels he is a socialist or socialistically inclined has to take an interest in combines because it raises a fundamental question to anyone who considers that the government or the state has to and is bound to, with the trend of the times, play a larger and larger role, not necessarily in enterprise but in the regulatory field.
In talking about the mid-twentieth century and adjusting this act to the times I think the minister has really set the keynote of what we should be speaking about and yet he has done very little to elaborate on just how these amendments fit, and how the wholesale revision that he merely prefigured would fit into the mid-twentieth century.
He dealt with the question of bigness in a most vague and indefinite way. He said the Conservative government-at least this is my paraphrase of it, Mr. Speaker-was not against big business; it did not necessarily believe that big business was good or was necessarily more efficient. Now, we have been fighting a campaign against and for big business, and when I say "we" I mean it has been in the climate of opinion in North America for at least 60 years, the question of big business and whether it is good or bad. It has had a bad reputation among many people, especially just before the first war and during the depression. When the


minister talks about the mid-twentieth century one cannot help wonder why he does not face up the situation we have in Canada today-this is even more striking than in the United States, of very huge businesses and corporations getting larger and larger and consolidating and concentrating more and more.
I can illustrate this very well from the economy of my own region which tends to be an isolated one. It is based primarily upon the manufacture of newsprint and various pulp and paper products. We have a large kraft or sulphate mill in Marathon. This was United States capital when it first came in, a relatively small company by United States standards, certainly. It was capitalized near $100 million in its total operation and about two years ago it found difficulties, I believe in raising capital for expansion. The first thing we knew was that our Marathon mill had become part of a much larger framework, one of the mightiest of all corporations in the United States, the American Can Company.
The mill just to the west of that, Long Lac Paper Company, has been part of a large concern, Kimberley-Clark, famous for its manufacture of a product that we all know and use, namely Kleenex. I am not giving it a plug here but I think hon. members all realize from the ubiquitousness of that particular article the scale of the operation that that particular mill and associated woods production fits into.
The next mill along the way once belonged to Brompton. Actually, it got under way just before the second war, in the hands of one of Canada's colourful and most reputable robber barons, Bob Sweezey-I think you will agree with that term-a gentleman who first became mixed up in the Beauharnois scandal and later on in a number of other financial affairs. Brompton Paper Company picked up the Red Rock paper mill when it was broke as a result of the kind of overcapitalization and promotion that happened in pulp and paper companies just before the war. Since then it has moved into the hands of the St. Lawrence Corporation; recently it became part of the managerial enterprise of a man who is very well known, almost a symbol of big business in this country, E. P. Taylor.
Further along the coast, in Fort William, we have a paper mill that has the largest newsprint machines in the world, Great Lakes. It has had a very vigorous kind of expansion recently. At one time it was under the presidency of the hon. member for Duf-ferin-Simcoe (Mr. Rowe), and we considered it a local enterprise. It had its head office at the lakehead. It still has its head office at the lakehead, but we now know that very

recently it too has moved into this very huge complex of pulp and paper companies that Mr. Taylor has under his control.
To the west we have Dryden Paper, which again started fairly small and has since moved up until it is a very large part of the Anglo-Canadian empire; and so it goes, with almost all of our mills. I almost inadvertently forgot to mention that we have three mills at the lakehead which are controlled by Abitibi Power and Paper Company which was in bankruptcy during the depression and has since fought its way out of it and now has mills in operation across Canada and recently extended its operations into the United States. It is a Canadian goliath.
The point I am making about all these companies and their tendency to grow bigger is that it almost seems inevitable that the trend in this particular field, where such large scale capitalization is necessary, is toward hugeness. I want to underline that in our part of the country we have nothing against these companies because they are big, but I should like to look at some of the consequences of their very bignesses. Some of these companies like Marathon and Ontario Minnesota have as much as 2,000 square miles of forest country. They have literally taken over the field from the small woods operator. Today we no longer have the host of small contractors, or the middling size, who were able to move around and obtain certain areas of wood and exploit them in any way, shape or form. As a matter of fact, we have had a very marked decline in that kind of family enterprise and the situation now is that the pulp and paper companies in their dealings with people who have wood that is not on their own property deal with very small farmers or what we might call bush settlers. From a forest management view this may be good. I think it is worth while knowing that, especially when we look at the combines report of the restrictive trade practices commission in dealing with the subject of pulpwood in certain districts in eastern Canada. This report is an indication of how the small individual farmer or wood cutter is treated, in the face of the kind of combination that this pulp and paper industry can create.
Beyond the fact that we have these very large corporations exploiting the forests, giving us a great deal of employment and, incidentally, providing the very large export value that Canada has, we find them cooperating in a number of ways.
For example, we have one co-operative research program, RC-17, in which the Ontario government, the federal government, Abitibi, Ontario Paper and a whole host of other people and agencies, including the
Combines Investigation Act northwestern Ontario timber operators and groups like that, have worked together for research purposes. This is what the minister has indicated he is effecting in the bill. We are at the stage now that if anyone wants to work in the bush in any sort of long term way and with any chance of security of employment and any kind of promotion in the future, to think of doing it himself on his own and through his own resources according to the old traditional idea of the eager entrepreneur is nonsense. It is silly for any young person today to think of founding his own enterprise in the bush. It is almost hopeless. He cannot get capital, he cannot get training, he cannot get experience, he cannot get wood. What he has to do is become part of one of these very large organizations. This is what has happened within the past 20 or 25 years in our major basic industry in that region.
If we look at other aspects of our economy, what are we faced with? We are a major transportation area in Canada. We are the bridge across which everything going east or west has to move. What do we find there? We have two large railroads, the two largest corporations in Canada, I believe, Canadian Pacific and Canadian National, in the transportation field. We have very large air lines such as Trans-Canada providing through service and so far as smaller air line service is concerned we have noted a tendency to consolidate. The Minister of Transport (Mr. Hees) has had protests recently at the opening up of this field to more people who are coming in on a small scale. It has been argued rather effectively that this opening up of the field to other individuals is killing off the people already established in the small air line business.
When the C.P.R. moved into Smith Transport and as the railways developed the piggyback service what else have we noticed? There has been a marked drop in the number of trucking operators giving through service. The piggy-back service offered by the railways and the moving of the railways into this field of transportation has cut down and is going to continue to cut down markedly the number of truckers in the business. In other words, we are again moving toward greater size and consolidation, toward the requirement of greater capital and a situation where there are fewer and fewer opportunities for the small person to get going and to get anywhere. The trucking association has made very strong protests in various places against this trend of the railways moving into the trucking field. I see that the hon. member for Vancouver-Kingsway (Mr. Browne) is here. He has been a spokesman in this regard.

Combines Investigation Act
The irony of the situation is that the railways have no difficulty at all in buying up trucking firms. In other words, despite the ethos that dictates that you should start small and build up a going small enterprise, trucking presidents and managers of firms are quite ready to sell out at an advantageous price, allowing this field to develop into bigger and bigger consolidations around these two pillars of Canadian transport, the C.P.R. and the Canadian National. That is the situation in the two main basic industries.
In our third industry, mining, what do we find. We have a very interesting development north of Port Arthur at Nakina where Anaconda Copper, a colossus in world copper, has given every indication that it is going to move in and spend almost a billion dollars in developing a huge iron ore trench which is anywhere from 40 to 60 miles in scope. It is fantastic to think of a small man or a small operator in that kind of field. The main developed mine that we have in our area, Steep Rock, belongs to the Cyrus Eaton interests and hon. members all know the ramifications of his empire. He has dickerings in Greenland, dickerings in Ungava, relationships with the Russians, relationships with the Germans. It is truly an international organization of great scope and size.
I would not argue that there are not opportunities for young men in such an organization, but in a field such as this, the development of this basic resource that means so much to our area and our country's prosperity, the idea of a role for the small person is nonsensical. More and more we can see that it is a case of immense funds handled by immense and huge corporations.
When you turn to other aspects of mining you find that what might be called the best mine in my constituency, Geco, which has a smart management and a magnificent ore body, was discovered by a couple of very small prospectors. They are getting a good return from it as a result of the deal they made but in effect Geco is an offshoot of Noranda which is one of the largest of all mining outfits in Canada. If any hon. members follow the Northern Miner I am sure they are aware that in the years especially since the war there has been a great consolidation in the mining field. Managerial groups have developed and they have made a tremendous contribution in one way in the Red Lake area by taking over mines that were considered dead, putting a lot of money into them, driving these mines to depth and finding and developing large ore bodies. Again the situation in the mining field is like that in the pulp and paper field and in the transportation field. You have larger and larger units

with more and more a managerial revolution based on large capital and advanced techniques which is complete in one sense in that the small man no longer has a place except as an employee.
It used to be considered in our part of the country that prospecting was one of the last endeavours where there would always be scope for the individual prospector. We still have some prospectors but in many cases they are disillusioned because in competing against large corporations which can afford to hire aeromagnetic service and send out specialists such as geologists and even assay people with the prospecting party the ordinary small prospector has not much of a chance.
When we look in our region at what has been traditionally a field of opportunity for the small scale concern, the retail business, we see what has happened to three large local family enterprises. I am thinking of the Chappies', Matthews' and Bryans' stores. I say they were large because their sales volume was in the millions. They had a great many local employees and family managements. But what has happened? Chappies was sold to Great-West Saddlery which, operating out of Winnipeg and having the capital, is building up a chain of stores in that part of the country. I believe that Matthews was sold to Eatons and that Bryans was sold to Simpsons-Sears, although I may be wrong there. But here again the big retail outlets in our area are Simpsons-Sears and Eatons, national organizations.
The grocery field has been preempted by Safeway, Loblaws and A & P. We have had a very marked decline in small grocery stores, and some of them were not so small. They were quite substantial. But in most cases they have been forced to give up growth prospects and in many cases have had to go out of business. So our people shop mainly at the very large supermarkets that have mushroomed across the country since the war. There is no gainsaying this trend. It is obvious throughout the country; it is obvious in Ottawa.
Then there is the situation in the service type of industry. I am thinking of cleaners and dyers, garages and operations of that type. Again it is very difficult for the small man to operate. If he is in existence it is more and more the case that he is a lessee on a very doubtful and shaky basis from a large organization. Most automobile repairs and that type of thing are now tied in with the larger franchise holders of the big manufacturers.
As to the construction industry, one would expect that in a country with the amount of space that we have and very severe winter

conditions construction development would be improving. What we find is that the small contractors are not proliferating. Instead of having more and more small contractors, we are getting fewer and fewer big ones. Indeed, the irony is that it is almost impossible for any of our local contractors to make a successful bid on a government project, for example, because they cannot compete with the lower bids of the huge organizations with headquarters in Toronto, Winnipeg and centres like that.
One cannot argue against the trend. The trend is there. We can see it. But it seems to me that what we should really do is analyse how big is big, and whether we should let this bigness go any farther, whether there are certain fields in which we should allow this trend and other fields in which we should stop it. Should we set a limit on the size of corporations? I think, perhaps, even more realistic than the type of control we get from the combines act would be a corporate graduated income tax which might do more to control this movement toward huge size, if it is worth controlling.
One of the things that intrigued me in reviewing this legislation was the remarks of the Minister of Justice (Mr. Fulton), with all deference to his Conservative principles about the history of this legislation. I think the real builder and founder of this legislation was the Right Hon. Mackenzie King. Speaking on the original bill in 1910 Mr. King said:
Broadly viewed, It is in the machinery for investigation and for the framing and shaping of an intelligent public opinion which the measure provides, that its main features consist. It aims to get at the truth and to have the truth when ascertained so presented that the remedy for a wrong disclosed will be self-evident. It is framed in the belief that once in possession of the facts which are of first importance to itself, the public will find a way of seeing that any evil under which it may be wrongfully suffering will be removed and that no situation, however complicated, will prove too intricate for a satisfactory solution, but to ascertain the facts, to get at the truth, is the first of all essentials.
It seems to me that Mr. King was very optimistic. He had a great belief that if the public only knew, if the public only realized and saw some examples of combines and mergers and price fixing, the public would so react that this trend would be wiped out. What we are faced with, I would suggest to the minister in the mid-twentieth century, is a fait accompli. We have huge corporations. I am not suggesting they are combines in the nasty sense of the word. I am not suggesting they are the result of mergers in the criminal sense of the word. However, the fact remains that we have them. I wonder just what we should be doing in legislative
Combines Investigation Act terms in order to halt the trend or to reverse the trend. It certainly seems to me that what the minister is trying to do in one part of this act is, in many ways, to make it easier for big business to get bigger, and at the same time he has thrown out a sop to small business in so far as this resale price maintenance tendency is concerned which is supposed to please them.
The minister argued that there is a place for the small businessman. We would not argue against this, but I think he needs to defend his argument against this trend of the times, as I have pointed out and which is so obvious in our particular part of the country. There is always the argument of economies of scale. How can a small businessman really compete with these large scale enterprises that are able to supply cheaper buys and better service? In the long run, despite all the talk about bigger or smaller business, I believe the only way we will retain small business, especially in the retail field and in the service field, is by deliberately stopping the expansion into larger groups.
This raises the question of efficiency and relative efficiency. Here again, we do not know. Perhaps instead of these amendments being put in front of a parliamentary committee it might have been better if they had gone before this royal commission that we have not got but could have had if the minister had been as serious, as we think he should have been.
The difficulty in so far as small business in industrial fields is concerned, aside from the retail stores, although the difficulty appears there as we know, is the raising of capital. We have had one election campaign fought to a degree upon the question of tight money. Outside the house the minister has indicated that the new small business bureau is going to be one means of answering the problem of small business and the small manufacturer. I suggest to him that so far it has been an organizational agency only, or a minor promotional agency. It still has not got around to the role that is being played by the small business administration in the United States, under which large loans are available at relatively low interest rates. There the loans are relatively large, up to $300,000 or $400,000 on a long term basis.
We have not anything like that from this government that would indicate it really is out to do something for the small manufacturer, the young man with some ideas and perhaps a bit of technical ability who wants to get ahead. As it is now, the young man with technical skill and drive almost certainly has to find his role within a very large

Combines Investigation Act organization. I do not know whether I mentioned this before in the house, but I remember a few years ago at a university at which I worked there were 27 boys in one graduating class in commerce. There was not one of them going into business on his own or even thinking about it. Every one of them signed with a very large organization. I have tried to trace some of them since, and what I have been able to discover from a partial sampling has been that most of them are doing very well in large organizations such as Standard Oil of New Jersey, Imperial Oil and very large accountancy firms.
What I am trying to argue, Mr. Speaker, and reiterate and reiterate, is that we have this tremendous trend today. Even geologists in our particular area have gotten together to form a firm so that they could take on the size and kind of projects that are necessary. Except with dentists and lawyers you can see a trend toward some kind of co-operation in the professional field. This is apparent throughout our whole society. All hon. members have observed how, more and more, doctors are moving into clinics. I know in our particular area most of the medical work is done through clinics of a fairly large size. As a matter of fact, the largest clinic is on a share basis, just like a company, and declares dividends and has profits. Again I am not making any comment as to the worth of this trend, but this is the trend of the times, even in the medical field, of having more and more employees with less and less opportunity for the small person, the family doctor, the small family enterprise.
It needs to be mentioned in this debate, it seems to me, that one of the developments about which many people, not the least of whom are on the government side, are wailing about is the trend in the trade union movement. This might be one logical answer to this trend of corporate bigness. You might say it has been one of the countervailing powers against their development in size. If we have huge unions, such as the united steelworkers with their scope in the United States and throughout Canada, this is a reflection of the very large scale of the industries in which employees work. The big forces of our time in our economy are big corporations tending to be bigger all the time, and also big unions tending to be bigger all the time.
It seems to me that if we want to return to what is largely a myth we have to come out with very firm rules and restrictions against the increase in the size of corporations or of unions. We need to get some definitions of bigness and of smallness. We

need to get some definitions of efficiency before we treat things so haphazardly as the minister has treated them in this particular piece of legislation.
One of the points that the minister made was his indication that the government had not received any representations from the manufacturers in connection with the list price policy that section 34 prohibits. He said that in the main the government had followed the representations of small business. I do not know whether he has followed the campaign of the Sunbeam Corporation (Canada) Limited which has a public relations office in Toronto. Sunbeam, right across the country, working as I understand it with the retail merchants association, has put the case strongly for price maintenance; and in effect that is what the minister has given. With all due respect to the retail merchants association I think we deserve a more candid and a more thorough analysis of just what this is going to do actually to protect the small businessman and also to protect him from the manufacturer with whom he will tend to be tied.
By hon. members who have already spoken the point has been made about protecting the consumer in so far as the price setting aspect of these amendments goes. It seems to me that the consumer always is forgotten in our part of the world as a political entity. I think this is probably a factor in all three of the political parties in this house. I think we may tend to make a fetish of the small businessman because of the myth we have. To underline this I want to read some remarks from a recent book by a Canadian economist, B. S. Keirstead and entitled "Capital Interest and Profits". In this book he states as follows:
Western peoples have given much lip service to the ideal of free private enterprise. Such a system is supposed to create the optimum output of goods and services and is believed to be continuously progressive because of competition. Competition is also believed to protect the public against exploitation and to ensure that abnormal profits would be ephemeral. To ensure competition. laws have been passed making monopolies, trusts, mergers, combines and price agreements illegal. Yet one wonders how much of all this is a kind of elaborate social mythology. A truly competitive world is one in which some people get hurt. The inefficient producer goes into bankruptcy; farmers who fail to alter acreage in response to price changes cannot sell their crops. Workers in declining trades have to take lower wages, go unemployed or move to other trades and other areas. By contrast with this harsh world is our kindly paternalistic North American society. If American (or Canadian) manufacturers are suffering from foreign competition, up go the tariffs. If farmers grow too much wheat or make too much butter to sell at the price they want, the government buys it at an agreed price in excess of the market price. If coal from submarginal Cape Breton mines cannot be sold at a profit, subventions are paid to move the coal at less than cost to the Montreal market. If there is serious unemployment and poverty in Newfoundland, we

do not allow starvation to drive the people out,
i.e. increase labour mobility; we pay a special subsidy to Newfoundland. It may be that all this is as it should be; it is not free private enterprise.
This argument, it seems to me, must throw us back upon an analysis of the situation we have today, and I reiterate what I started with, namely the questions as to how big is big, how small is small business or how high is small business and how do you determine whether a business is efficient. We can see that obviously big business on the economic side is transforming society. I do not know about the other members of the house but it has certainly altered my habits with regard to shopping, how I drive and where I drive. It has certainly altered employment opportunities for me and for most of the people that I know.
It seems to me that we have had a transformation of society, yet we do not face up to it. We still keep talking, as does the minister, about free private enterprise and Conservative principles which are always going to see that that ideal is maintained. I tend to feel that this situation is rather long past and that tinkering in the way in which the minister seems to be tinkering here can do nothing but raise suspicion in our minds as to the short run motive of the minister and of the government.
When I speak of suspicion, I wonder how he can spend three years, as he says, in intensive study. We almost have a picture of him, Mr. MacDonald and the other people over at the combines investigation section, day after day churning away at this thing, threading through the MacQuarrie report and looking over the whole field: they are really set to go; they are really drawing things up; they are going to change it. But what has actually happened? The minister introduces his speech by saying that these are not revisions, that this is not a revision of the act and not to be mistaken for it; that these are only relatively minor amendments that are not going to change the purpose of the act but are going to deal with certain specific situations. If small business is in a quandary, surely this act needs something more important than the minister's minor amendments. If we have a situation in which big business is getting bigger all the time and we are getting corporate consolidation all the time, surely after three years we need something more than his way of making the act more ineffectual.
I hope later on, after amendments have been moved with regard to this particular bill, to have the opportunity of coming down to more specific criticism of the bill. However, I felt that the whole issue of bigness and size in our business structure was worthy 79951-0-278
Combines Investigation Act of some examination. If corporations continue to get bigger-and I know there are limits within certain fields-it obviously means that there are going to be fewer and fewer of them in the field. Perhaps we should be considering ways of making sure that the few which are in the field compete rather than adopting this ineffectual way of making it easier for them to combine.
In conclusion I should like to ask the minister to remember this pulpwood combines report. If the minister studies it he will find that these extremely large organizations that co-operate-at least I think they co-operate- in these appeals that are before the courts at the present time are linked with the pulp and paper research institute of Canada which is subsidized heavily by the Canadian government. They are linked with the Canadian pulp and paper association which has a woodland section which interchanges information and research in which government scientists and foresters spend a great deal of time and in which there is interchange of information, statistics and facts. We even have a situation, in so far as the pulp and paper wood side is concerned, where one of the government agencies produced an economic survey of costs on a certain pulp and paper watershed.
This type of co-operation that we have in this largest industrial field we have in Canada indicates to me that the time has been reached when we need to go into this question of bigness and corporate association in all its aspects much more thoroughly than the minister has suggested. He spoke as though his legislation was going to open the oportunity for co-operative research. It is obvious that in the pulp and paper industry that situation exists at the present time in many aspects. It seems to me that his motives, in so far as this legislation is concerned, are not going to do anything for the control of big business. They are not going to do anything effective for the support of small business. Again we carry on with the myth, the blarney, the typical political solution of trying to appeal to every field we possibly can without being crystal clear.
If the Minister of Public Works (Mr. Walker) had the courage in effect to tell the housing industry to go jump in the lake and if the Prime Minister (Mr. Diefenbaker) had the courage to tell A. V. Roe to go jump in the lake as far as the Arrow is concerned, I suggest to the Minister of Justice that he should consider telling big business or small business to jump in some lake. But I do not see how he can have it that he is pulling them both out of the lake at the same time. It seems to me there is a conflict here and

Combines Investigation Act that either one or the other is going to drown. There has to be something done immediately in other fields if we are to have the ideal situation where those Conservative principles reign about which he talks so sweetly.


William Arnold Peters: Mr. Speaker, I had hoped some of the government members would rise to speak on this matter and that they would have endorsed not what the minister said but what they think the minister said, that is that he supported their views that we should maintain big business or that we are pledged to this legislation to support small business.
Frankly I would like to know where the Conservative party stands on this. Are they for small business or big business? I was listening to the minister yesterday and I think it would be very difficult to say whether he was for the small businessman or for big business. It appears to me that there is very little similarity in the needs and desires of these two organizations.
I can say without any consideration of the matter that I am not particularly interested in big business. I do not care about legislation to assist big business. I do not particularly want to eliminate big business because I think it is able to look after themselves. I want to support legislation which will allow small businesses to operate and will allow them to have at least a fair and equal opportunity of existence, which is not true at the present time.
In my own home town in the last few months we have had two businesses go out of business. One was a very large factory, probably the largest woodworking plant in Canada today and certainly the most modern, Hill-Clark-Francis. It has been known for years to be one of the leading manufacturers of fabricated wood products, but a few months ago it decided to all intents and purposes to close its doors. This factory was a large one employing 300, 400 and sometimes 500 people. It was a plant which had attached to it many retail outlets in northern Ontario. They owned the Halliday Lumber Company of Burlington and other lumber companies in British Columbia and throughout the country. They closed their doors and did not make any bones about saying that it was because of competition, or for other reasons. Now they are willing to use other people for their supplies.
At the same time, while this is very much a disadvantage to the town in an employment sense, a small business was started up several years ago which had a very capable manager, a capable staff, and was serving a need in the community and was in the position of a small business. It was a small business connected very closely with the Conservative


party. The manager of this business was very closely connected with the party in my riding and only a few months ago this business folded up.
It seems to me that there must be a much more effective way of allowing these small businesses not to have an advantage over big business but to be able to compete with them. I have examined many of the procedures used in big business and I find that they are very dishonest procedures. You can go to any small businessman who will object most violently over your being able to walk down the street and find a sign in a tobacco store or in a large supermarket which says that cigarettes are sold for $3.18 a carton when the wholesale price of the same people who supply them to the supermarket is $3.19 to the small businessman. Each one of these small businessmen objects most violently, not because he is not able to compete in the sense of operating his business efficiently but in the sense that he is not able to buy in equal competition because there is a combine in the wholesale industry which allows the wholesaler to sell to their own particular outlets at one price, to a volume outlet at another price, and to the small retailer at yet a third, fourth or fifth price in many cases.
These matters are matters of concern to every small businessman. I am sure that each member of the House of Commons has received many petitions in the last few months and I would like to read one which comes from a small store in my area that is not interested in competing with large wholesale outlets, and is not interested in competing even with the large supermarket because there is not one in his community. This man has a store in a small community and has been able to increase the size of his store and put in those additions which will make him a kind of small supermarket where he is giving service and the best product possible to his customers. I will not read what the petition says because all hon. members have received this, but he says:
Today when competition demands larger stores, modern equipments and a large variety of merchandise, the small merchants are at a real disadvantage to compete with the large corporate chains. Chains have a ready source of finances from the public through sales of stocks, debentures etc., whereas the only moneys available to the small merchant is a very limited and inadequate credit from the banks and his small profits which makes it just about impossible to expand.
We are also definitely against trading stamps. In spite of all statements to the contrary, stamps are costly, 2 per cent and sometimes more and if they are legalized there is no doubt that all merchants will be forced to handle them and the cost will be passed on to the consumers.
Loss leaders and discriminatory price practices are also more harmful to the small merchants than the large chains. Since chains by quantity buying pay less for most of their merchandise than the

small merchants unfair trade practices do not hurt them as much as the smaller operator.
It would seem to me that if the Conservatives, and I mean the real Conservatives- not these "Johnny come latelys" who are Diefenbaker Conservatives, who were progressive a few years ago; who decided that John was a progressive and they would go along with him because they think he thinks a certain way-who were for Horatio Alger in the days when Horatio Alger was popular in the United States-


Walter Clarence Henderson: I take exception to the remarks of the young gentleman, Mr. Speaker. He mentioned a "come lately" Conservative. I have been a Conservative all my life, I am 69 years old, and I am proud of it.


The Deputy Speaker:: Order.


Mr. Winch:: I would be careful about boasting about it.


William Arnold Peters: Mr. Speaker, may I call it ten o'clock.
Business of the House BUSINESS OF THE HOUSE


George James McIlraith: I wonder if the house leader would indicate the business for tomorrow and Thursday.


Gordon Minto Churchill: Tomorrow we will continue with this debate. If it is concluded we will take the Canada-Australia agreement. On Thursday and Friday the greater part of the time will be available for estimates in the order I announced last Friday; that is, transport, post office, mines and technical surveys, and fisheries if the house wishes to go that quickly.
If we do not get through the Canada-Australia trade agreement tomorrow I would like to call that for the first item on Thursday. I think it is a non-controversial item which the house will gladly pass as a compliment to the distinguished Australian trade mission which will be in town on Monday.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
79951-0-278J
[Stage Direction]
Question

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

Mr. Argue: 1.	Do Canadian feed firms purchase oats, barley, and wheat (non-milling grades) from the Canadian wheat board?
2.	If so, how many bushels of each grain have been purchased for the purpose of making feed in 1957, 1958 and 1959, in each of the prairie provinces by (a) feed firms holding agreements with the wheat board: (b) feed firms not holding agreements with the wheat board?
Answer by: Hon. Gordon Churchill (Minister of Trade and Commerce):
1.	Yes.
2.	(a) Purchases by feed firms holding agreements with the wheat board.
Province	Period	Grain	BushelsManitoba	
Wheat	... 120,349.1Oats	... 1,838,198.2Barley	... 298,502.0January 1/58-December 31/58	
Wheat	... 84,371.7Oats	... 1,907,840.7Barley	... 235,400.0January 1/59-December 31/59	
Wheat	... 51,374.9Oats	... 1,194,427.1Barley	... 487,792.8Saskatchewan	... 77,700.2Oats	... 174,937.8Barley	... 180,038.3January 1/58-December 31/58	
Wheat	... 97,014.4Oats	.... 57,135.4Barley	.... 122,453.6January 1/59-December 31/59	.... 28,752.5Oats	. ... 48,500.0Barley	.... 88,351.5
Note: The following figures represent total purchases from the board of wheat of the grades No. 5 and lower and all grades of oats and barley. In those instances where a firm operates both a feed mill and a flour mill it is not possible, from board records, to differentiate between purchases utilized for feed and purchases which may have been utilized for low grade flour or rolled oats.
Province	Period	Grain	BushelsAlberta	
Wheat	... 583,979.5Oats	... 1,780,907.0Barley	... 176,442.3January 1/58-December 31/58	
Wheat	... 625,984.9Oats	... 1,964,040.0Barley	... 204,393.7January 1/59-December 31/59	... 367,829.7Oats	... 1,510,090.2Barley	... 277,598.0
Question
Answer 2. (b) Purchases by feed firms not holding agreements with the wheat board.
Province	Period	Grain	Bushels
Manitoba					 1,100.0
		Oats				 90.5
		Barley		
	January 1/58-December 31/58				 902.5
		Oats				 115,240.6
		Barley			 1,403.8
	January 1/59-December 31/59				 11,821.4
		Oats			 182,776.8
		Barley			 278.0
Saskatchewan			 January 1/57-December 31/57				 238.4
		Oats			 17,141.5
		Barley			 3,377.0
	January 1/58-December 31/58				 14,671.7
		Oats			 29,530.8
		Barley			 3,333.0
	January 1/59-December 31/59			 Wheat			 12,227.0
		Oats			 26,002.0
		Barley			 10,740.0
Alberta					 6,317.6
		Oats			 5,235.6
		Barley			 8,465.5
	January 1/58-December 31/58				 9,181.0
		Oats			 7,624.0
		Barley			 9,096.2
	January 1/59-December 31/59				 10,142.4
		Oats			 6,821.2
		Barley			 51,774.6

Wednesday, June 1, 1960