1960-08-10

Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, with leave of the house I should like to refer to a question I was discussing the other day, namely the undertaking to provide another day for the discussion on the bill on capital punishment. Since the discussion took place on the last occasion, and as this is not a government matter but rather one for the hon. members concerned and the house in general, I think the matter might be dealt with by each of the private members particularly concerned as mover and seconder of the bill. I simply point out that the attitude taken by myself on behalf of the government was that in view of the great importance of the subject another day was required, and the government would be prepared to expedite the opportunity.


Mr. Frank McGee (York-Scarborough):: With the consent of my seconder, and in view of conversations I have had with members in all corners of the house since this matter was discussed, I should like the unanimous consent of the house to withdraw Bill No. C-6 standing in my name.


Mr. Harold E. Winch (Vancouver East):: Everyone knows of my keen interest in this matter and my desire to see the objective of the abolition of capital punishment achieved. If I thought progress could be made toward the achievement of that objective by a further day's discussion at this time in the session, I would ask for leave to proceed with the additional day. However, after due consideration it is my firm conviction that nothing can be gained by continuing the debate at this time, so for the furtherance of the objective I will agree as seconder to ask the unanimous consent of this house for withdrawal of the bill.


Mr. Speaker:: Is the house prepared to give unanimous consent that the bill be withdrawn?


Some hon. Members:: Agreed.


Mr. Speaker:: It is so ordered.
Order discharged and bill withdrawn.
79951-0-497



UNITED NATIONS


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, I think hon. members would be interested to know that at a special ceremony held yesterday afternoon in Washington, Canada joined with the United States and Honduras in signing the articles of agreement of the international development association. This brings to ten the number of countries which have signed the articles of agreement. The articles were signed for Canada by the charge d'affaires at the Canadian embassy in Washington.
Hon. members will recall that the association will not commence its operations before September 15, 1960, and that the articles of agreement will not come into force until they have been signed on behalf of governments whose subscriptions comprise not less than 65 per cent of the total subscriptions of $1 billion. Ten countries, accounting for 43.1 per cent of the total subscriptions, have now signed the articles. They are Australia, Canada, Norway, Sweden, United States, China, Ecuador, Honduras, Pakistan and Vietnam. The international bank is aware of legislative action having been taken in seven other countries, including the United Kingdom and Germany. These seven countries together with the ten which have already signed the articles account for 63.7 per cent of the total subscriptions.


Hon. Paul Martin (Essex East):: Mr. Speaker, we have already had considerable discussion in this house on the international development association. I want to congratulate the Secretary of State for External Affairs on the satisfactory conclusion which has been announced by the Minister of Finance. I also want to recognize, as the house will recognize, the penetration by the Minister of Finance into foreign affairs as well as into domestic financial problems.


Mr. Pearson:: In a friendly way, of course.



STARRED QUESTIONS


Mr. Carter: 1.	What is the name of the person in the Canadian Broadcasting Corporation who has direct over-all responsibility for the production of the programs "Capital Report" and "Encore"?

Starred Questions
2.	What is the name of the person or persons who compile "Capital Report"?
3.	How are the commentators on "Capital Report" selected?
4.	Are the reports from foreign countries on "Capital Report" live broadcasts or recordings?
5.	If recordings, how long are they prepared in advance?
6.	Is Felix Green employed as a commentator by Canadian Broadcasting Corporation? If so, since when?
7.	How many broadcasts has he made?
8.	Were his first and second reports from Peking live broadcasts or recorded?
9.	If live broadcasts, when was he notified that he would be on the air? If recorded, how long was it prepared in advance in each case?
10.	How many times has the play or T.V. adaptation of a play been broadcast over the Canadian Broadcasting Corporation entitled "The New Men" and on what dates?


Mr. M. J. A. Lambert (Parliamentary Secretary to the Minister of National Revenue):: Mr. Speaker, this is a ten-part question. For the sake of brevity I will merely read the replies, which are as follows:
1.	"Capital Report" and "Encore" are arranged and produced by the C.B.C. talks and public affairs and drama departments respectively. Responsibility for all C.B.C. programs rests with the management of the corporation.
2.	As above.
3.	The commentators for "Capital Report" are selected from persons with journalistic or broadcasting experience and a knowledge of the happenings in the capital from which they are commenting.
4.	Reports from Ottawa and Washington are normally live broadcasts. Commentaries from capitals outside the North American area are submitted by tape or disc recording or are recordings of commentaries transmitted by short wave or cable.
5.	Recordings are made as close as possible to the actual broadcast date to maintain their topicality. Occasionally material of a more general nature is used when distance or other circumstances make difficult the rapid delivery of broadcast material.
6.	Felix Green, as a freelance commentator, has contributed to programs broadcast by the C.B.C. but is not an employee of the corporation.
7.	Eight in 1959 and three in 1960.
8.	Mr. Green's two broadcasts from Peking were tape recordings.
9.	The corporation has no exact knowledge of the time of recording. However, the tape recorded commentary of July 10 was received July 8 and the commentary of August 7 was received August 2, 1960.
10.	"The New Men", an adaptation of Sir Charles Snow's novel, was first telecast September 27, 1959 and was repeated on August 7, 1960 in the "Encore" series.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Hanbidge: 1.	What customs duties or taxes, if any, are imposed on automobile parts brought into Canada from the United States of America (a) for the manufacture of new cars; (b) for repairs?
2.	What percentage of parts required in assembling or manufacturing automobiles in Canada may be imported from the United States of America (or elsewhere) ?
3.	What percentage of parts used in new automobiles manufactured or assembled in Canada are supposed to be made in Canada?
4.	What is the value of the automobile parts that have been imported into Canada from the United States of America in each of the calendar years from 1951 to 1959 inclusive?



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I wonder whether the Prime Minister can inform the house whether arrangements have been made for Canadian representation on the disarmament commission of the United Nations which I believe is to meet next week.


John George Diefenbaker: Mr. Speaker, the meeting is called for August 16 at three o'clock in the afternoon, and it has been decided that the Secretary of State for External Aflairs will be present on that occasion representing Canada. I am sure the house and the country will welcome the fact that he will accept this position and will attend, because of the extent to which he has given outstanding leadership in his endeavour to bring about an agreement on disarmament.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
Harold Edward Winch: should like to direct a question to the Secretary of State. In view of the fact that there is a possibility that the house might prorogue tonight, I should like to ask whether it is possible to have tabled the order for return which was ordered on Wednesday, July 20, under notice of motion No. 129, in the name of the hon. member for Kootenay West.


Hon. Leon Balcer (Acting Secretary of State):: Mr. Speaker, I just signed the return; it will be tabled immediately.



I960

[Stage Direction]
(Translation):


[Stage Direction]
On the orders of the day:
Mr. Gerard Loiselle (Si. Ann):: Mr. Speaker, would the Minister of Public Works confirm or deny the rumour to the effect that the federal government is about to apply foreclosure on some limited dividend housing projects in the city and district of Montreal?


Hon. D. J. Walker (Minister of Public Works):: Mr. Speaker, for the moment I cannot confirm that.


Gérard Loiselle: A supplementary question. Could the minister also tell us how many of those projects are in default at this time with regard to payments due, and what steps have been taken in each case until now?
(Text):


Mr. Speaker:: I think the hon. member, when he asks for statistical information of that kind, unless he has given notice would be well advised to put his question on the order paper; it is not a proper question for the orders of the day.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Harold Edward Winch: should like to ask the Minister of Citizenship and Immigration whether she is in a position to give the house information on the two Japanese students about whom I asked a question yesterday.


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: Yes, Mr. Speaker. The hon. member for Vancouver East in his question yesterday appears to have been referring to two Japanese nationals who applied for non-immigrant visas from the Canadian visa office in Rome on July 15. When they made their application they stated that their purpose was to visit Canada for three months, during which time their expenses would be paid by a friend. As they did not have evidence of onward transportation from Canada, nor possess sufficient funds to pay for their transportation and meet their living expenses while in Canada, visas were refused.
Later the same day the students returned to our Rome office and gave the true purpose 79951-0-497i
Inquiries of the Ministry of their visit. They were to come to Canada at the invitation of an organization to conduct a speaking tour on nuclear disarmament. The information was forwarded to Ottawa for decision with a request that the decision be dispatched to the Canadian visa office in The Hague, where the Japanese applicants were proceeding from Italy. On July 25, before an investigation had been completed in Ottawa and a decision sent to The Hague, the students, who would not give our office their address in the Netherlands, withdrew their application for visas, indicating that they planned to return to Japan.
This difficulty might have been avoided had these young gentlemen applied for visas at the Canadian embassy in Tokyo in advance of their trip, or if their sponsoring organizations in Canada had brought the request to the department's attention.
(Translation):



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Armand Dumas (Villeneuve):: Mr. Speaker, may I ask the Acting Secretary of State a question? Of all questions passed as orders for return, how many have not yet been tabled? Moreover, can the Acting Secretary of State tell us if those returns can be tabled before adjournment?


Léon Balcer: Mr. Speaker, to my knowledge, there are one or two returns that have not been made yet. However, I would draw the attention of the house to the fact that a very large number of questions were put to the government this year and that many of those questions have been passed as orders for return. To date we have made an effort to act with dispatch and I believe that the work accomplished by the government in this respect deserves to be mentioned.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hon. Pierre Sevigny (Associate Minister of National Defence):: Mr. Speaker, in answer to the question which the hon. member for Maisonneuve-Rosemont (Mr. Deschate-lets) asked me yesterday, I want to inform him that the figure he mentioned yesterday was inaccurate. It seems that, as from September 15, there will be a reduction of about 52 employees at the Montreal ordnance

Inquiries of the Ministry depot. The actual number might conceivably be less than 52, but it is rather difficult to tell beforehand what the exact number will be. However, the department, together with the civil service commission and the national employment service are trying to find employment for those people who will have to leave their jobs on or about September 15.
(Text) :



HUMAN RIGHTS


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: I should like to direct a question to the Minister of Public Works. Is he now in a position to announce how Central Mortgage and Housing Corporation will ensure that housing loans will not be denied to Canadians because of their colour?


David James Walker: Yes, Mr. Speaker. As I have told the hon. member for Essex East, who is not only an authority on agriculture but also on this subject, in due course all this will be attended to. Because of the many times he has asked this question, we are making particular efforts to see that nothing is left wanting, and a decision will be made in due course.


Paul Joseph James Martin: Does the minister not recall having indicated that once the bill of rights was passed there would be an announcement forthwith from the government on this matter?

The house in committee of supply, Mr. Flynn in the chair.
DEPARTMENT OF TRADE AND COMMERCE General administration-
390. Departmental administration including fees for membership in the international organizations listed in the details of the estimates. $2,630,716.


Lester Bowles Pearson: Mr. Chairman, I just have a simple question to ask the minister on this item arising out of our desire on this side to secure the basis of the minister's optimistic predictions about our trade and our economy. My question is this. Among the reports which the minister receives from the economics branch, is there one prepared in the first part of the year giving the economic outlook for that year, as has been the case in the past? If there is such a report, could the minister give us the title of that report?


Mr. Churchill:: Mr. Chairman, I want to make it very clear that there has been no change in the giving of information by the
[Mr. Sevigny.l
economics branch to me and the transmitting of that information to the government where necessary. I have asked that monthly reports be sent to me from the economics branch and that periodic forecasts be given to me indicating what, in the opinion of our economists, lies ahead in the few months, or the remaining months, of the year. This has been done.
I found that the report which has evoked so much interest was being issued in March as a forecast for the balance of the year, and as the economic climate changes so rapidly it appeared to me that it would be wiser to have a series of reports that would keep a person up to date on economic matters.
It was on the basis of one of those reports that I gave the economic outlook for the balance of 1960 when I spoke on the subject last week. Now, that is what is going on; there has been no restriction whatever in the amount of advice given by or sought from the economics branch of the department. I am convinced that the method that has now been introduced is better and keeps me better informed from month to month as to the trend of economic activity in Canada.


Lester Bowles Pearson: The minister has indicated that there is a series of reports to him from his department on the economic outlook. But I gather from what he has said that there is also, amongst that series, a single report on the economic outlook and the prospects for the current year, and that he still uses such a report as advisory to him on which he can base his own predictions of what might happen.


Gordon Minto Churchill: Just one correction there; there is not a single report, but periodically I ask for the outlook with regard to the months that lie ahead.


Lester Bowles Pearson: Then from what the minister has now said there is, I gather, no report being produced now of the kind that has been produced in previous years, called the economic outlook for the current year.


Gordon Minto Churchill: That is correct.


Mr. Mcllraiih:: Mr. Chairman, I should like to ask the minister for some information concerning the Export Credits Insurance Corporation legislation, with particular reference to the amendment which was passed in 1959, having to do with permitting the corporation to guarantee certain export credits and to buy and sell certain export paper. I would call to the minister's attention the fact that I directed a question to that subject, in the early part of the session, and the answer seemed to indicate that this new provision had not been used up to that time. Would the minister advise the house as to whether or not that section of the act has since been

used, and what volume of paper has been guaranteed or bought or sold, as the case may be?


Gordon Minto Churchill: This section is still available for use, but no use has been made of it up to the present. It is an undertaking to guarantee bank loans for export purposes, but no use has been made of it yet.


George James McIlraith: When the legislation was before the house a year ago I for one expressed the view that it would help to meet the needs of the export business in this country. 1 think, if I recall correctly, the minister expressed the same view. I am now rather surprised to find that no use has been made of those provisions. Could the minister give us any idea why the provisions are not being used?


Gordon Minto Churchill: There was considerable demand for this at the time, and that caused us to bring in the amendment. But apparently our exporters are finding sufficient protection under the export credit insurance factors of that act, the earlier sections, or have been able to get credit for their export purposes without calling upon the government to make the guarantees; or, alternatively, the banks have not requested any guarantee from the government.


George James McIlraith: What I want to know is this. Is it a matter of the exporters not applying for guarantees for the export paper; is that right?


Gordon Minto Churchill: Yes, that is correct.


George James McIlraith: There is just one more subject I want to raise. On August 6 a return was tabled by the minister having to do with the Export Credits Insurance Corporation with particular reference to the authority issued in June 1959 concerning the sale by Canadair Limited of five freighter aircraft, including engines, in the amount of some $26 million to Seabord and Western Air Lines Incorporated, New York. As I understand the matter it has been necessary for the government to approve a rearrangement of this transaction owing to financial difficulties on the part of the purchaser. This rearrangement involves a rather substantial postponement of the payment of the purchase price. Is that correct?


Gordon Minto Churchill: This is the sale of the CL-44's to this United States firm, and a refinancing was occasioned by some difficulties in the company. However, the whole project was re-examined by the Export Credits Insurance Corporation and the refinancing was found to be satisfactory and sound, but we had then to make the change in the order in
Supply-Trade and Commerce council which had preceded this one and give our approval under the new term.


George James McIlraith: The minister says the refinancing was found to be satisfactory and sound. It may have been satisfactory in the circumstances but I do not know how sound it was, because it does seem that there is quite a lengthy postponement of the payment provisions. I am not necessarily criticizing the government for issuing the order, because I take it they were confronted with the situation where there was a serious financial difficulty on the part of the purchaser and this was an attempt to keep the purchaser solvent and out of bankruptcy in order that the contract could be carried out.
I would like to know whether there are other contracts in a similar position to this.


Gordon Minto Churchill: No. As the hon. gentleman knows, the record of Export Credits Insurance Corporation has been excellent over the years. He has examined it very closely on other occasions. This particular contract was considered to be of such importance- and it is of great importance to the aircraft industry in Canada to sell a transport plane to an organization as important as Seaboard and Western in the United States-that Export Credits Insurance Corporation thought it advisable to re-examine the new proposition with the greatest of care; and using their business judgment, which has proved to be excellent over the years, they recommended that this change should be accepted and that was done. It may not be as sound an arrangement as most of the insurance contracts which are entered into; nevertheless, after looking into the matter very carefully we decided that this was within the scope of Export Credits Insurance Corporation's authority and we accepted their advice because we found they have been so accurate in the past in their examination of these matters.
Then of course, as the hon. gentleman knows, prior to concluding any such contract a very careful examination is made of the financial competence of the company that is asking for assistance, and that was done in this case. All these things being taken into consideration, we thought it worth while to carry this on under the new term.


George James McIlraith: I take it from what the minister says that this is an isolated case. What I am more concerned about is whether there is any difficulty looming before the corporation created by other cases of this type.


Gordon Minto Churchill: No, this is an isolated case.

Supply-Trade and Commerce


Mr. Nasserden:: Mr. Chairman, the Department of Trade and Commerce is, of course, one of the most important departments of government and covers a great range of activity, all of which is important to Canadians in all parts of this country. The minister is carrying a heavy burden, and I would like to congratulate him on the leadership and inspiration that he has given to all of those who have been associated with the marketing of Canadian grain in world markets.
During the past three years competition in the grain trade has multiplied, and it is a significant tribute to his efforts and those who carry out the details that sales of Canadian grain have been maintained at the high level at which they are today, which has characterized the record of this government since they came to office.
This year marks the 25th year of orderly marketing of western grain. Throughout that period of time great changes have taken place in both the production and the marketing of grain. Transportation patterns have changed somewhat, and in general there has been a gradual decline in the per capita consumption of flour. The Canadian wheat board was originally organized and created by a Conservative government, at the request of western farm organizations, to achieve the orderly movement and sale of wheat. That program was so overwhelmingly endorsed and supported by western grain producers that at a later date legislation was sought and achieved to bring oats and barley into the some operation.
On this occasion, when we are thinking in terms of the 25th anniversary of the formation of this board, I think it should be recorded here in the House of Commons that farmers are well satisfied with the operations of the board over that long period of years. It is true that there is some desire to see the effectiveness of the board improved and increased, but the substance of these suggestions is primarily a matter of government policy.
The value of orderly marketing has proven itself many times during the past 25 years, and the years of rust, frost and excessive moisture have vindicated the actions of the Conservative government which gave to the agricultural people of western Canada this instrument to protect themselves. Many of those who were strong opponents of orderly marketing 25 years ago have been converted, and about the only segment of the grain trade that remains aloof and alone to criticize orderly marketing are those who would like to see the futures market monopolize the marketing of Canadian grain.


There is one matter that I have discussed with the minister and members of the Canadian wheat board which has not been given the serious consideration that I would like to see. That is the situation with regard to those who have joined together to engage in a co-operative farm in order to try to improve their returns through the savings that can be made by pooling equipment, labour and resources. The arbitrary ruling now in effect concerning quotas discriminates against these people, and I am surprised that this matter has not been dealt with at this time, since it has been brought up many times. I would remind the minister that despite the fact that there are a limited number of people involved, it is a matter worthy of his usual brisk dispatch.
As hon. members all know, we have taken great pride in the standards set and maintained which have made Canadian wheat known throughout the world as hard red spring wheat. I wonder if the minister would give us some indication of the position with regard to the production of soft wheat in Canada, and the possibility of transferring some of our production along these lines to diversify our supply for prospective customers?
There is another matter that I have been asked about by many people, and it has to do with the progress being made by the small business section of the Department of Trade and Commerce. I assure the minister that there is a great deal of interest in this matter throughout the country, and the inquiries I get seem to indicate a desire for the extension of the services of this section. I wonder if the minister would give us a review of the present situation with regard to possible expansion of this branch.
Canada has been blessed with bountiful supplies of oil. Enterprising businessmen have dedicated their lives to the development of this resource. It is one of the most romantic chapters in the history of this country. There have been reports of oil imports from other countries into the natural marketing perimeter of some of our best oil reserves. I would like the minister to give us a summary of the position in regard to the import and export of petroleum products.
As hon. members are all aware, one of the great problems facing this country and its agricultural producers is the surplus of wheat which, while diminishing under the present administration, is still a matter of concern to all of us. I am heartily in agreement with the hon. member for Danforth and others who have indicated that more imagination could be brought to play in the marketing of all Canadian products. However, I am also convinced that part of the solution lies in

the encouragement of a balanced agriculture production. Several weeks ago I indicated that incentive prices under the stabilization program might be an effective aid in this regard. At this time I am thinking particularly of soybeans, and I should like to know if the minister could tell us whether there is any obstacle in the way, such as might affect our trade in general, to this government embarking upon a program to encourage soybean production in certain wheat producing areas in Canada with a view to reducing our total wheat production and supplying from Canadian farms the demand which apparently exists in this country for soybeans.
Finally, I should like to see placed on the record some indication of the situation with regard to wool and woollen products in so far as there products enter into our trade with other nations. I should be interested to know the value of imported woollen products, and I should also like to know if any raw wool has been imported. There are areas in western Canada where wheat is now being produced which are ideally suited for the production of wool and lambs. The past 10 or 12 years have seen the elimination of a number of textile plants along the St. Lawrence river, and I wonder whether the minister would care to venture an opinion as to the feasibility of promoting wool production and relocating of some of these plants in western Canada.
In conclusion I should like to compliment the minister on his realistic approach to Canada's trade problems. All of us admire the job he is doing. As we look out on the world today and realize the extent of the offensive now being mobilized against our way of life, an offensive that embraces and extends into all our trading problems, I cannot emphasize too strongly the importance of this country recognizing that offensive for what it is and taking the steps necessary to bring an awareness of the resulting problems and challenge to the attention of the general public. Those in industry at all levels must be brought face to face with the consequences of this offensive to everyone in our country unless some measure of sacrifice is made to maintain and expand our industrial capacity.
It would appear to me that some of the plants which have been closed down during the past 10 or 12 years were the victims of the rigidity of attitude of those who would not acknowledge that competition is the life blood of industrial well-being. The fault has not been with labour alone; it must be shared by management and owners as well. In a land so blessed with natural resources, inhabited by a people who pride themselves on their know-how, these closed factories and
Supply-Trade and Commerce manufacturing plants surely represent a challenge worthy of more initiative by those most directly concerned than has yet been apparent.


George James McIlraith: On Saturday, near the conclusion of the proceedings that day when the Prime Minister was speaking, he referred to the number of unemployed as of June, 1957 as being over 200,000. My colleague the hon. member for Essex East interjected "150,000". Then later, in the somewhat warm discussion that followed, the Prime Minister returned to the subject and gave the national employment service figure, as I recall it, although it does not appear in Hansard', there were some interjections and the figure seems to have been lost in the interjections.
In any event, I want to place on record the figure taken from the news release issued jointly by the Department of Labour and the dominion bureau of statistics headed "The Employment Situation, June, 1957". The figure there of people looking for work on June 22, 1957-people without jobs and seeking full time work-is shown as 152,000.


Lester Bowles Pearson: There is one question I wish to put to the minister before this item carries, and it is based on a statement made by the minister on March 21, as reported on page 2295 of Hansard, which reads:
Apart from the problem of lead and zinc, Canada's access to United States markets was unaffected by any major adverse developments.
Does the minister feel that is still the situation with respect to our access to United States markets during the current year?


Gordon Minto Churchill: What is the page?


Lester Bowles Pearson: Page 2295, on March 21 of this year. What I have in mind when I ask the minister whether he still subscribes to that statement is whether he would not agree that the action or lack of action taken by the United States government with regard to our uranium option is bound to become, if it has not yet shown itself to be, a major adverse development in our access to United States markets,


Gordon Minto Churchill: I would accept the correction made by the Leader of the Opposition. The statement should have been "Apart from the problems of lead, zinc and uranium".
Before the item carries, perhaps I should say in answer to the hon. member for Rosthem, who is very much interested in the work of this department and has a great knowledge of most of its aspects, that I will take up the question of the quotas concerning co-operative farms with the wheat board

Supply-Trade and Commerce to see if a new look may be had at that question and perhaps a more satisfactory answer produced.
On the subject of soft wheat, I am not sure I can give an answer to that today. Most countries of the world are producing soft wheat. We are in the enviable position of being a great producer of hard wheat, which gives it a special position in world wheat trade. The soft wheat that is produced in this country is largely grown in eastern Canada, I think. Most of it is consumed here in eastern Canada, and some is exported to the United States as flour for pastry purposes.
On the subject of small business, the branch has been quite active in assembling a great deal of information and keeping in contact with small business throughout the country. The branch has acted in accordance with the terms of reference that were given to it when the subject was discussed in the House of Commons in 1958.
The small business branch was to act as a clearing house in relaying inquiries by small business to the appropriate departments of the Canadian government or provincial and municipal governments, and to various other organizations and institutions. That is what it has done. It was instructed to compile and distribute bulletins and reports on topics of general interest to small business, including information on government procurement, and that has been carried out. It was asked to assist small business on request, to obtain statistical, technical and other information on management, production and marketing problems, and a great deal of work has been done along that line.
The branch was also asked to undertake studies concerning small business, particularly for the guidance of the government in developing new policies in this field and as background material for dealing more effectively with the problems of small business. This activity has consumed a large portion of the time of the branch, and it has produced some very valuable studies. The branch was also asked in the course of its work to consult and co-operate with educational institutions, representative business associations and other private organizations, and that has also been done.
The branch is currently planning the development of a business education program which could take the form of management and marketing aid bulletins and business management meetings or seminars. In addition they are actively engaged in a research program to study the composition and structure of small business in the Canadian economy.
Over and above that, very serious consideration has been given by the government

to problems affecting small business, and that consideration is continuing. Up to the present we have fulfilled some of the needs of small business, but we recognize the fact that the problem has complications and other factors must be examined. We are proceeding with that examination.
The hon. member raised a question about oil imports and exports. If he would remind me of that when we reach item No. 401 in the estimates, when the officials of the energy board are present, the answer will be produced.
On the subject of wool let me say this. The figures for wool products imported are as follows: $64 million in 1958 and $67 million in 1959. The figures for actual raw wool imported are as follows: $22.6 million in 1958 and $25.7 million in 1959.
The hon. member went on to discuss the possibility of greater wool production in Canada and things of that nature, which are important and of interest to the Department of Trade and Commerce but which can be more adequately dealt with by the Department of Agriculture. However, we will endeavour to get some additional information for the hon. gentleman and send it to him later on. As soon as the officials have a chance to examine his remarks in Hansard they will correspond with him on this particular subject.


George James McIlraith: Mr. Chairman, I have a question relating to the minister's responsibilities in the field of research. If it is agreeable to him I would prefer to raise it under the national research council item rather than now, although it does not relate directly to the council.


Gordon Minto Churchill: All right.


George James McIlraith: The other matter I want to raise has to do with the details of the estimates as shown on page 487 and again on page 499, in the details of the items relating to general administration and to the board of grain commissioners. I notice reference in these details to anticipated savings due to staff turnover. This first item has increased from $120,000 last year to $200,000 this year. The corresponding item as shown in the details under the board of grain commissioners is from $50,000 to $90,000. Does that reflect a situation in the department where there are a great many persons leaving? Does it indicate a new figure based on the experience of last year? What is the reason for the substantial change in that item?
I may have given the minister the wrong page. On page 487, where the increase in

that item is from $120,000 last year to $200,000, and again at page 499 where the increase is from $50,000 to $90,000.


Gordon Minto Churchill: The staff, of course, is large and the staff turnover is sometimes considerable. I judge that in 1959-60 there was an underestimate as to the amount of money that might be saved. There have also been certain increases in salaries. At any rate, it is only a small proportion of the total amount voted for the department generally and also for the board of grain commissioners. I db not think it is out of line with the total amount of money indicated for salaries.


George James McIlraith: It indicates a 50 per cent anticipated increase in staff turnover in the Department of Trade and Commerce itself, which is a rather substantial increase. Does that means there is some staff demoralization?


Gordon Minto Churchill: Not at all; in fact morale is very high. It is only in the amount of money that there is the increase that is indicated. That is based on estimates which are in turn based on the salaries of the employees.


George James McIlraith: Knowing the thoroughness of the examination of these estimates by the treasury board officials when they are being prepared, there must be something to justify this and it could only be a larger turnover in personnel than anticipated, or perhaps a very thrifty Minister of Finance trying to make his estimates look as small as possible. I do not know. The estimate is there.


Gordon Minto Churchill: I can vouch for the very careful scrutiny of the estimates by the treasury board, and the Minister of Finance is a very careful housekeeper with regard to the finances of the country. I do not know that this was done in order to make things appear better. I would judge that it is an accurate assessment of the situation.


Mr. Campeau:: Mr. Chairman, I should like to make some brief comments on a suggestion I have already made earlier in the present session. Government policies in Canada have been designed historically to support an underdeveloped country's economy, and especially its resources industries. Such past commercial policies that favoured resources industries and left the Canadian market open to all foreign competitors are responsible to a great extent for today's high level of unemployment. In fact, all plans for Canada's expanding prosperity have assumed that growth in manufacturing would provide jobs, income and higher living standards. This has not happened and is not happening.
Both as a provider of jobs and as a producer of goods Canadian manufacturing has been losing its earlier place in the Canadian 79951-0-498
Supply-Trade and Commerce economy. The 1955-57 boom in capital spending increased Canada's reliance on the construction industry as a provider of jobs, the very industry in which seasonal unemployment is the highest. Canada's cold climate, closing many outdoor industrial operations, always causes winter unemployment. There is always unemployment at any season when the business cycle turns downward. The business cycle has been turning upward since the autumn of 1958, but unemployment remains in some stubborn pockets. Hence a third category of built-in stationary unemployment has become apparent which does not readily yield to improving economic conditions or to the annual summer business spurt.
Technological factors, automation and the nation's monetary policies have been cited as reasons for these conditions. However, this chronic unemployment can become critical when the post-war baby boom makes its presence felt in the job market of the 1960's. Canada's population is now 17} million and will bounce up 27 per cent to 22J million by 1970, a 43 per cent increase in the job-seeking teen-age population alone. Unless the pace of industrialization quickens there will not be enough jobs to go around.
If manufacturing does not thrive, who will provide new jobs? This country has to develop enough industrial sinew to create an economy in which there is some healthy balance between manufacturing and resource development. We need domestic industries to supply the wants of the growing population and to provide employment for a large percentage of the labour force. We need to develop domestic industry in such a way as to reduce our propensity to import. Let me tell you, Mr. Chairman, that a new 100-man industry in any community will result in almost $1 million worth of new retail business in the community, in about 130 new homes, 65 new children, 185 more cars, 390 telephones and three new retail stores. Let me cite an editorial which appeared in the Montreal Gazette on August 8, 1960:
This is a good time to keep in mind the railway survey made of six Ontario and three Quebec cities, to determine the full impact of industrial development. This study, covering the years 1941 and 1951, showed that the addition of 100 new manufacturing workers meant to their community 427 more people; 131 more households; 66 more school children; 117 more workers employed other than in manufacturing; 187 more motor vehicle registrations; 393 more telephones; three more retail establishments, and nearly $1 million worth of increased retail sales per year.
When manufacturing can produce results like these for even 100 workers, it is obvious how important it is that everything possible should be done to encourage its growth in this country. Everybody benefits.

Supply-Trade and Commerce
It is especially the small industries, which are playing a very essential role in our economy, which have difficulties at the present time. They receive very limited financial help from the chartered banks and even from the industrial development bank. They need help, and their problems should be considered at the national level, on the same basis as those of the house builders, the western farmers, the maritime fishermen and others. Small industries have to be protected and multiplied even if only to ensure the stability of the country.
If you will permit me, Mr. Chairman, I should like to quote from a 1958 publication of the United States department of commerce:
During the past 10 years, two new types of credit organizations have evolved (in the United States) to help finance economic development-the development credit corporation and the development authority. Purpose of both is to provide long term risk capital to promising new and expanding industries that find themselves unable to meet the loan requirement of commercial banks and other financial institutions. Although both organizations derive from special legislation, the basic difference between them is that the credit corporation is a private organization depending entirely upon private sources to develop a loan fund. The authority, on the other hand, is an arm of the government with its loan fund originating, at least in part, from public sources.
This is what the article has to say about the credit corporation:
Legislation is required in forming a credit corporation to permit banks to accept institutional membership in the corporation. Such membership enables a bank to make available a small but specified percentage of its capital or surplus, or similar fund, to the corporation's credit pool. Thus, existing sources of capital can be tapped and the risk of a bad loan evenly distributed among institutional members and others.
In addition to institutional membership for financial organizations like banks, insurance, security and investment houses, stock is sold to private persons and other organizations. Management of the corporation affairs is handled through a board of directors, selected from stockholders, and by an executive committee usually elected by the institutional members.
On the other hand, the development authorities are getting their funds directly from public sources. What is urgently needed now in Canada is the creation of an organism to provoke industrial development, in the same way Central Mortgage and Housing Corporation was created when the country was in dire need of housing. The first goal of this organism would be to make or guarantee loans for creating new industries or for maintaining and expanding existing ones. Its action would go far beyond the limited field of the present industrial development bank. Its operations would be based on a national program of development, taking into consideration the industrial capacity of
[Mr. Campeau.l
the country and its consumption requirements. Each individual loan would be considered in the light of this broad general program, according to a procedure similar to the one followed at the present time by Central Mortgage and Housing Corporation in the field of housing.
This proposed organism would encourage research and would thus bring extraordinary help to technical education. It would help us to keep within the country our outstanding scientists now deserting us for the United States. It would help to establish a sound immigration policy, the new immigrants to be absorbed by new industries. Finally, it would help in balancing efficiently our trade with foreign countries, by developing local industries capable of satisfying local needs and by diversifying our exported manufactured goods. By encouraging technical research, the new organism would encourage the creation of new products to be manufactured for local consumption and for export. Such a program would also permit Canada to compete efficiently against European trade blocs, especially the communist one, and also against the impact of the growing industrialization of underdeveloped countries.
Not only would the creation of this new organism be an efficient measure against increasing cyclical unemployment, but it would also become the basis of a well balanced national development program for the continued orderly growth of the whole country.


Mr. Carter:: I want to ask the minister
one or two questions about the small business section. Is the vote for the small business section included under general administration, or is it under the special vote for economic and technical assistance?


Gordon Minto Churchill: General administration.


Chesley William Carter: Can the minister say how
many people are employed and what the total vote is for the staff for this year?


Gordon Minto Churchill: There is an establishment of 13 provided for, with seven people at present employed.


Chesley William Carter: Under the reorganization outlined by the minister the other night when he presented his estimates, is it the plan to have a special division for small business?


Gordon Minto Churchill: It is a special branch now, and it will come under the division which we are calling domestic commerce.


George James McIlraith: The details of the first item show a reduction in trade promotion at home and abroad from $60,000 to $35,000, cutting the item almost in half. With respect to trade commissioner posts abroad there is a

reduction shown in the posts at Bonn, Brussels, Hong Kong, Kingston, Jamaica, London, Paris and Tokyo, among the most important posts we have. There is also a reduction in the item for participation in exhibitions and displays. The reduction is centred on the items having to do with trade promotion, whether with regard to trade commissioner posts or the item having to do with exhibitions abroad. What is the reason for the cutting down of the effort to sell outside of Canada?


Gordon Minto Churchill: There has been no reduction in the number of staff employed at the posts mentioned by the hon. member. The other night I drew the attention of the house to the fact that we are increasing our posts abroad this year. Under trade promotion at home and abroad we are asking for an increase of $150,000 in the supplementary estimates that will be before the house later, so there has been no reduction in our activity with respect to this very important part of the department's work.


[Stage Direction]
Item agreed to.
The Chairman:: Shall vote 553 carry?


George James McIlraith: Mr. Chairman, would it not be more convenient if we went through the regular estimates first?


Jacques Flynn: It has been ordered that it be done in this way, and I would point out that item 553 supplements item 390.
393. Exhibitions branch, $743,766.


George James McIlraith: According to the details of this item there seems to be a reduction in the actual amount being spent abroad on these exhibitions. There is no reduction in the amount being spent in Ottawa. Is there any significant change in the situation concerning Canada's participation in exhibitions?


Gordon Minto Churchill: There has been no significant change. We are participating in 16 exhibitions this year, and last year the number was 14. There is a slight difference in the estimate of the cost, but that has been related to the actual expenditure in the preceding year.


[Stage Direction]
Item agreed to.
395. Dominion bureau of statistics including the fee for membership in the inter-American statistical institute and a contribution of $500 to the international statistical institute, $10,789,333.
Harold Edward Winch: Mr. Chairman, I have been requested by certain organizations in British Columbia to have the minister comment with respect to a matter coming under this item. Until just over a year ago it was possible 79951-0-498i
Supply-Trade and Commerce to take out a blanket subscription for all the publications of the dominion bureau of statistics, and the fee was $60 a year. However, just over a year ago a change in policy was made whereby a blanket subscription for all publications could no longer be obtained and people had to order publications individually, from a list. According to my information, if an organization still wanted all the publications it meant an increase in the fee from $60 to $420. I can understand the bureau wanting to obtain a return on the sale of their publications more commensurate with the cost, but an increase of approximately 600 per cent to 700 per cent in one fell swoop seems rather extraordinary.
I also happen to know that certain research bureaux in British Columbia proceeded, because of the change in policy, to subscribe for the publications they specifically wanted. I have in mind one bureau that subscribed for 43 publications in March of last year. In March of this year the bureau of statistics sent a subscription renewal notice at exactly the same fee as before, although during the year the organization did not receive all the publications for which it had subscribed. The organization paid the renewal fee although it had not received certain publications because they had not yet been published.
When they complained to the bureau of statistics they got what I consider a most peculiar answer. They were told that this happened on occasion because the publication was issued once every 14 months rather than once every 12 months, or perhaps was not issued even that frequently. The part I thought peculiar was that the bureau of statistics informed the research bureau in British Columbia that if they continued to pay their subscription fee for a period of five years it would work out that over that period of time they would receive all the publications for which they had subscribed. To me this appears to be a peculiar way to administer a business. It sounds more like a horse race or a lottery than a business administration, to be told that if you subscribe for five years you will receive all the publications at some time during that period.
I am not going into more detail, but I should like to have the minister's comment on the reason for the 600 per cent to 700 per cent increase in the fee if a person wants all publications, and also the reason organizations should be told that if they did not receive a publication this year they will eventually receive it if they subscribe for five years. To me that does not seem quite right.


Gordon Minto Churchill: The cost of dominion bureau of statistics publications is important. I recall

Supply-Trade and Commerce the discussions we had concerning this matter. We were receiving complaints that people who had taken out blanket subscriptions were getting a great deal of material which they did not want as it did not necessarily cover fields in which they were interested. Complaints were made that there was tremendous waste. Material was coming in at intervals and going immediately from the desk to the wastepaper basket. So it seemed sensible to put the thing on a more businesslike basis, and that was why we changed from the blanket subscription to the individual subscription. From the information that has reached me, I would say it has been working very well. The people buy the publications they require, and they are not expensively priced.
This is of importance also to the Queen's printer, who drew our attention to the complaints with regard to waste. I have not been receiving these complaints since this new policy was put into effect. I doubt if there is any organization that wants all the publications or that could make effective use of all the publications of the dominion bureau of statistics, which are concerned with the more specialized fields in which people are working. I do not know of any organization that has registered any complaint with us on this basis, because they have recognized that this is a much more sensible way of doing business and avoids the waste that occurs when publications are sent out that are not desired and which only end up in the waste-paper basket.
Now, with regard to the particular point raised by the hon. member that a research bureau in his province subscribed for 43 publications, obviously I cannot produce an answer to that here. However, I will take that up with the dominion bureau of statistics and we will investigate it. We will communicate with the hon. member and try to straighten it out. If any of these matters are drawn to our attention we will certainly take a look at them. If some serious inconvenience has been caused a certain research organization in Canada by the change from the blanket subscription method, we would like to have a look at it to see what can be done. It is a matter of adjustment from year to year. At the moment it appears to me that it is a very sensible change and has reduced excessive printing, and the needs of the public have been met because the publications are available at very reasonable cost. The universities and educational institutions, if they were on the list, were not changed and were not affected in any way whatever.


Harold Edward Winch: I believe that basically the minister is correct when he refers to the

change from the blanket method of subscription because I was a member of a committee a couple of years ago which studied this matter. However, I believe the minister will agree that if you do subscribe, as in this case, to 43 publications and you do not get them but are billed for them the next year, you pay for the whole works and you do not get them all, which is a matter which should be considered.
These people complained and received a letter from the acting supervisor of the publications unit from which I should like to read a couple of sentences. The letter says the interval may vary from 10 to 14 months, but the person who renews his subscription on a regular basis is assured of receiving five consecutive annual issues over a five-year period. It goes on to say that the annuals mentioned will average out over several years, and that you will receive them all on a five-year basis. This means that one hopes to receive, on a five-year basis, all the publications for which one has paid, yet one is billed each year for those not received in the previous year. This strikes me as being a peculiar method of business administration.


Gordon Minto Churchill: It strikes me as being a bit unusual, too, but we will have a look at it.


Lester Bowles Pearson: This item for the dominion bureau of statistics is the one under which I assume we would discuss the work of the interdepartmental committee which has been asked to recommend a new official standard of measurement for unemployment. When we attempted to discuss this matter on the estimates of the Minister of Labour, Mr. Chairman, you will recall that he pointed out that it would be more appropriate to do so under the estimates of the Minister of Trade and Commerce. I presume this is because the bureau of statistics is the agency of government which is most primarily concerned. At that time we on this side expressed the hope that when we came to this item, not only would we have a discussion of that matter but that the Minister of Labour might find it possible to be here to participate in that discussion.
This committee has been in existence for many months. It was set up, at least in part, as the result of a suggestion from this side of the house that the time had come when we should try to eliminate the confusion surrounding these statistics which are used to measure unemployment in this country. At the moment we have two separate sets of figures which have been used for some years, the bureau sample figures and the figures for registrations at the national employment

service offices. These figures never correspond. It has been suggested that the bureau figures are too low, and it has certainly been suggested that the national employment service figures are too high. In any event I think it is desirable, if it can be done, to resolve this problem by having one agreed standard of measurement which would be used in our discussions of this subject, thus avoiding some of the confusion that we have had in the past. Indeed, last Saturday the Prime Minister used as his figure for unemployment in a certain month in 1957 the national employment service registration figure which has been condemned by hon. members opposite on other occasions as being an exaggerated figure for unemployment in the country.
When the Minister of Labour announced the setting up of this interdepartmental committee on March 3 he said, and I quote from page 1702 of Hansard for that date:
Whenever a report Is forthcoming on this matter it will be made available to the house.
We on this side have been attempting to get that report before the house for some weeks so we would have it for consideration at this time when the estimates of trade and commerce are being examined. The minister has said for several weeks that the report was not ready, had not been completed, and that he was not solely responsible for it. It was an interdepartmental committee, and he was not able to do anything to hurry it up. He did say the other day however that the report had been completed and was before the cabinet for consideration. Last Saturday, as a matter of fact, the minister reported to the house that the government had received this report and he added, as reported on page 7679 of Hansard, that it would not be tabled until the government had reached a decision as to the recommendations contained therein.
This is a very different statement from the one he made on March 3, when he said that whenever the report was forthcoming it would be made available to the house. Now we are told that it will not be made available to the house until the government reaches a decision in regard to it. It seems to me these two statements are not consistent.
I repeat what I have just said. We still think it is important that we should agree, if we can, in this house on the most appropriate standard of measurement for unemployment. If agreement can be reached, we should use that figure so that at least this complex technical question will not become a partisan issue. So far as we are concerned, we are prepared to take a responsible attitude toward this matter, providing we are not
Supply-Trade and Commerce subjected to a fait accompli by the government and provided we are not told that the decision has been made, that a certain measure for unemployment is being accepted while there has been no opportunity of considering the matter in any way in the House of Commons prior to that decision being taken. We think, therefore, there should be no unilateral action taken in this matter, even if this may mean a slight delay, until there has been an opportunity to discuss it and get agreement if possible in the house.
For that purpose, Mr. Chairman, I have two suggestions to make. The first is that the report of the joint committee which is now before the government should be made available to the house immediately, as the Minister of Labour indicated on March 3 would be done, so that we can see it today and study it.
My second request is that no action be taken with regard to any recommendations in this report before the next session, because it is quite obvious that there will be no time now for the kind of examination which it deserves and which its importance warrants. We suggest that at the very beginning of the next session this report should be referred to the standing committee on industrial relations so that its authors and other experts could be examined by members of that committee and the report made clear by those who drafted it to members who are concerned that there should be from such a report, a single measurement of unemployment which would be acceptable to all members of the house.
It seems to me that only if that procedure is followed can we be sure that the new measurement, if there is to be a new measurement, will meet the approval of the house itself; and if it does not meet the approval of the house generally then there is not much likelihood that we are going to avoid in the future a difference of opinion over measurements such as we have had in the past.
It is for that reason, Mr. Chairman, that I bring this matter up, and it is for that reason that I have made these two suggestions.


Gordon Minto Churchill: Perhaps. I might speak to that immediately. I am in agreement with the Leader of the Opposition concerning the value which would accrue to all of us if we based our discussions on one set of figures instead of two and sometimes more. The Minister of Labour has had the responsibility in connection with the report, although I have had consultations with him concerning it and it was an interdepartmental committee which was set up to consider it, in which committee our department played quite a part.

Supply-Trade and Commerce
I will draw to the minister's attention immediately the suggestions made by the Leader of the Opposition. In fact I will send him a note outlining the suggestion that the report be tabled immediately, that no action be taken concerning its recommendations before the next session, and that when the next session meets the report be referred to the committee on industrial relations. These suggestions might very well be looked at today, and I will send this message to the Minister of Labour immediately so he can consider them.
I have nothing to add to what the Minister of Labour has said and the answers he has given to questions raised in the house about the report. It has been received, and it is a question as to when it will be tabled or distributed to members.


Paul Joseph James Martin: Mr. Chairman, we are grateful, I am sure, to the Leader of the Opposition for bringing up this matter. It is a matter which I have brought forward on orders of the day not less than seven times during the course of the present session. This could easily be one of the most important matters that we will be discussing at this tail end of the session.
Unemployment is undoubtedly the most important domestic problem in Canada. It has persisted now since 1957 in serious proportions. Unemployment at the present time on the basis of the latest available figures issued by the minister's department, through the bureau of statistics, reveals that we have unemployment at a higher level at this time than at any period since 1935.
When this question was vigorously pursued during the course of the session the Minister of Labour, I believe largely to remove himself from any embarrassment, sought to indicate that the government was going to ask for a consideration of a new standard of measurement of unemployment in Canada.
It is important to keep in mind what are the present standards of measurement. They are the standards employed by the dominion bureau of statistics, based on a sampling of some 30,000 or so individuals in our country. There is also the figure provided by the national employment service, which I believe to be a more accurate figure because it is actually founded on the end of the day reports in our unemployment offices in Canada. The dominion bureau of statistics figure is nothing more than what it purports to be, a sampling of unemployment in our country. A sampling cannot take into account heavy concentrations of unemployment. Then, there is what I believe to be the irresistible figure, made up of the number of people actually in receipt of unemployment insurance benefits.


Because there are these three sets of figures the government has suggested that it is confused and that the public mind is confused as well. I believe there is no confusion. Each of these three sets of figures indicates nothing more than what each purports to establish. However, the fact is that the government, having established this mirage of confusion, did decide to set up an interdepartmental committee. That was over four and a half months ago. The Minister of Trade and Commerce says he is not charged with this matter, that this is a matter which comes under the responsibility primarily of the Minister of Labour. The Minister of Labour contended, when we were discussing his estimates, and he was pressed strongly, that this was a matter which came within the authority of the Minister of Trade and Commerce.
I do not know which minister is primarily responsible, but the bureau of statistics is a division in my hon. friend's department. I believe that if he could definitely assure the committee, as he has so co-operatively indicated today, that this matter would be open for discussion in parliament when we next meet before this question is finalized, there would be no difficulty today. But I believe we have to have that definite assurance.
The situation is not as easy as the minister's co-operative attitude this morning suggested. The industrial relations committee met this winter. It had one meeting. That was an organization meeting, for the purpose of electing a distinguished member of this house as its chairman. There is before that committee a motion in the name of the hon. member for Kenora-Rainy River, to the effect that the committee should give study to the various standards of measurement of unemployment in Canada.
The chairman of that committee asked the hon. member for Kenora-Rainy River, if he would not proceed with the motion at that particular time, so it could be considered at a subsequent meeting which, we were told, would be called shortly. That meeting has never been called. We have asked in this house that a meeting of the industrial relations committee take place so that motion could be disposed of. We have not been able to receive from the government or from the chairman of the committee any co-operation whatsoever, with the result that for five and a half months this motion of the hon. member for Kenora-Rainy River has stood in suspense.
Now, the Minister of Labour told me a week ago-ten days ago or thereabouts, to be precise-that he did not know whether

the interdepartmental committee had made its study. When pressed that he should himself initiate an inquiry as to whether the study had been completed, he very reluctantly agreed. Then three or four days ago he announced that the study had been completed and that a report was in the hands of the government. When asked by the Leader of the Opposition, when that report would be made available for consideration in this house, he said that the cabinet had not yet had an opportunity to consider it.
I want, first of all, to submit that I doubt very much if this is a matter for the cabinet at all. This is a matter of procedure to be determined by the bureau of statistics in co-operation with other departments, and it seems to me somewhat unusual, that the government of Canada should want to interfere in a technical matter of this kind. It is a technical matter, because the assessment made by the bureau of statistics must be in accordance with standards about which the government as such cannot be expected to have any expert knowledge. In any event, we have not yet on this, possibly the second last day of this session, or even the last-


Gordon Minto Churchill: I prefer that.


Paul Joseph James Martin: -we have not had from the Minister of Labour, who has been wholly uncommunicative with regard to all these questions that concern unemployment, any information whatever as to whether or not the government considering this report or whether parliament will have an opportunity of examining the recommendations.
I feel that this is an extremely important matter. We can only determine the degree of unemployment in our country in accordance with the standards of measurement that are used. We are shortly to prorogue. We shall in all probability not come back here until next January, 1961. Every indication seems to suggest that unemployment will be as severe this fall and next winter as it has been in the previous periods. We do not want, in the interval between prorogation and the opening of a new session of parliament, unemployment to assume serious proportions while we, as members of parliament, are placed in a position where, because of the adoption of new standards, we are not able to determine that fact.
If the minister will give us an assurance today-and it must be today, I believe- before we can pass this item that parliament will not be denied the opportunity of examining this particular report before any change is made, then the minister will, I am sure, have the knowledge that the passage of his estimates is going to proceed
Supply-Trade and Commerce without any trouble. The hon. gentleman has been co-operative today-much more cooperative than the Minister of Labour-and if he can give us this assurance that there is not going to be any change made in this standard of measurement without parliament being given the opportunity to know whether any proposed change is a sound one or a desirable one-


Mr. Spencer:: The hon. member has just said it was not necessary for the government to consider this report.


Paul Joseph James Martin: I said exactly that, but if the government is going to concern itself with it, it must also be a matter for parliament. I feel keenly about this, speaking as I do for an industrial part of Canada, where there is heavy unemployment.
Before resuming my seat I want to say that we have contended all along, as did the hon. gentleman, that the national employment service figure is the most reliable of all, and we had confirmation of that view in the well-balanced, controlled speech made by the Prime Minister last Saturday afternoon, when he himself referred to unemployment in 1955, using the national employment service figure, thereby confirming the contention which the Leader of the Opposition and other members of this parliament have been makng during the course of this session.


Gordon Minto Churchill: The hon. member for Essex East is very persuasive when he is in the relaxed mood that prevails this morning.


Paul Joseph James Martin: I never was so unrelaxed.


Gordon Minto Churchill: I think his suggestion-and he is following the suggestion of the Leader of the Opposition

is worthy of careful consideration. I appreciate his concern over this problem, which is one that concern us all. I realize that the report will be studied with the greatest of care and interest by everyone who has taken some interest in the problem of unemployment in this country. My only regret is that the hon. member for Essex East should have suggested that perhaps the item now before us will not be passed unless an assurance is given that no action will be taken on the report until parliament has had a chance to examine it. That is a severe, stringent requirement which the hon. member for Essex East is placing on my shoulders. If he would give me a little time to examine the matter-


Paul Joseph James Martin: Agreed.


Gordon Minto Churchill: -perhaps we might reach an understanding, but I hope he will not simply say that the estimates will be held

Supply-Trade and Commerce up until such and such a thing happens, because I know he is anxious to conclude, in orderly fashion, the business of this session. But over one item, such as this matter that might be disputed, we would not want to prolong the session into the next two or three weeks.


Lester Bowles Pearson: The minister has suggested that a little time might be given him to consider this matter. Our request is surely a reasonable one. The minister must have known it would be brought up; we made it clear to the Minister of Labour that we were going to bring it up on these estimates, because this would be the only occassion when we could discuss it. As my hon. friend has said, we would like an assurance that action will not be taken on this matter without parliament having a chance to consider it. Otherwise we may find ourselves in the next session confronted with an entirely new measurement at a time when the standard of measurement will be very important, without ever having been given an opportunity to discuss that new standard so it could be an agreed one. That is what we are asking the minister, and I think it is a reasonable request.
The hon. gentleman is asking for a little time to consider, and I think that is a reasonable reaction. Perhaps we could allow this item to stand, and while consideration is being given to this question we can go on with the rest of the estimates. I am sure the hon. member for Essex East was not attempting to threaten in any way, shape or form.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: He was simply suggesting that if the discussion which would undoubtedly take place on this item could be avoided, the estimates would be completed much earlier than would otherwise be the case.


Jacques Flynn: Shall this item be allowed to stand?


Some hon. Members:: Agreed.
Item stands.
Board of grain commissioners (Canada Grain Act) -
396. Administration, $159,075.


George James McIlraith: On Saturday last in the course of his remarks the minister gave some figures indicating Canada's percentage of the total commercial export wheat markets of the world. I must say that at the time he gave those figures I had not seen them before, and I was not very satisfied with them. I tried to get from the minister other facts concerning the percentage share of Canada in the total world market for wheat, but the minister did not have those figures with him at that time. I wonder if he has them now.


Gordon Minto Churchill: We will certainly get that information in a minute or two, Mr. Chairman.


Lester Bowles Pearson: I do not know if I can help the minister, but my friend the hon. member for Ottawa West did not have with him when he asked this question the daily bulletin of the bureau issued on July 22, which gives figures for supply and export of wheat for the first ten months of the year.


Gordon Minto Churchill: Let us just be clear. Does the hon. member want an answer with respect to the percentage of world trade in wheat?


George James McIlraith: Yes. What concerns me is that the minister used a figure on Saturday-*


Gordon Minto Churchill: What page?


George James McIlraith: Page 7713. This deals with commercial sales. I wanted to know our percentage of the total exports.


Gordon Minto Churchill: Oh, yes.


George James McIlraith: My understanding is that
there is quite a substantial difference in the two. I was quite concerned with what is happening now. It seems to me we are in some jeopardy of losing our relative position in the export market.


Gordon Minto Churchill: The figures I was using
were total figures, our total exports of wheat, which would include our commercial sales plus the program of gifts. The figures I was giving were extracted from an official publication, a table printed in August, 1959 respecting the wheat situation, published by the United States department of agriculture. I gave the figure then for the average in the inter-war years and for 1958 and for 1959.


George James McIlraith: In the Canadian wheat
board report there is a table given at page 15. It deals with the crop years and covers the period from the 1945-46 crop year up to 1958-59. My concern is that the figures for 1958-59 show Canada as having 23.9 per cent of the total world export trade in wheat. The minister used a figure for the year 1958 of some 35.7 per cent. I took it to be the minister's argument that we had increased our share of the world market. My understanding of the situation is that we are in some difficulties and have a relatively smaller part of the world market than we had in earlier years, certainly not a better one. That is the point I want cleared up.


Gordon Minto Churchill: The hon. member for Ottawa West is correct in what he is saying. Here we are getting into two statistical tables which we had better straighten out right

away. I was giving the figures for the commercial situation. I gave the figure of 35.7 per cent in 1958 as Canada's share of world trade in commercial markets. When you take Canada's share in the total world trade of wheat including the concessional items, the gift programs of our country, the United States and others, Canada's share is 24.2 per cent. That is a decline of 6 per cent from the years 1920 to 1939. The United States percentage increased quite substantially from the period 1920-39 to 1958 due to a great increase under PL480 gifts of wheat to underdeveloped countries.
The hon. member said something about some danger here. It is not a loss of Canada's markets that has been suffered at all. In fact, as I pointed out, we have in the last three years maintained our position as the leading commercial wheat salesmen in the world. We have maintained our position with regard to our share of the wheat that is sold for actual cash. The activities of the United States under PL480 has not seriously affected Canada's sales abroad, as I have shown. Through co-operation with the United States authorities we are taking the necessary steps to see that as markets develop for wheat in other countries, in Asia and Africa, we will have an opportunity to participate in those markets when they become commercial markets.
That is one of the reasons we are sitting in with the United States in discussions of wheat disposal programs. That is one reason Canada is participating in these programs, and that is one reason we are actively engaged in making certain that if new markets develop in Asia or Africa, Canadian wheat or flour will be considered. At the moment I do not see any particular danger to Canada in the fact that her share of the total exports of wheat is somewhat less than it was 20 years ago, because she has maintained her position in the commercial markets of the world.


George James McIlraith: I thank the minister for clarifying the matter of the statistics he was using. That clarification is wholly satisfactory as far as I am concerned and explains what the difficulty was. The conclusions the minister draws from the statistics are somewhat different from mine, but the statistical fact is that our percentage of he market on any basis is down from the period between the wars, and our percentage of the total export of wheat, taking more recent periods, is down too.
I realize the difficulty of picking out particular statistics, but it is interesting to take the three crop years 1951-52, 1952-53 and 1953-54. Our share varied from 32 per cent
Supply-Trade and Commerce to 39 per cent of the total wheat exports of the world in those years and are now down to 23.9 per cent in 1958-59. I am prepared to admit that that was unusually high in the years 1951-54. Then we came into an era of programs sometimes called give-away programs, under which wheat is given by some countries to others on a basis of other than commercial sales, and our percentage share of the total exports dropped sharply. It seems to me that indicates a matter for real concern today, and this is a situation that has to be watched closely.
The fact is that viewed by any criteria we are down in our wheat exports. Our reduction in percentage of total world trade coincides in timing with the expansion in the type of program under which gifts are made to other countries. The problem is also complicated by the uncertainty of'the access of our agricultural products to the United Kingdom and European markets because of the relationship of the United Kingdom with the trade areas of Europe. As far as I am concerned it is the cause of some alarm.
I am one of those who recognize that the marketing of our wheat is of the utmost importance. I think I may be permitted to make this comment. In the wide-ranging debate that took place yesterday it seemed to me there tended to be not sufficient recognition of the problems of the marketing of wheat and the huge carryovers in this country. It is of the utmost concern to the whole economy of the country. It is not just a problem of the western wheat farmers; its impact falls on them primarily but it is a problem of the whole economy of the country, and for that reason I make no apology for raising this question for the consideration of the committee or for drawing it to the attention of the minister.
There are other aspects that could be developed, of course. There is the whole matter of the development of exports to Japan. I hope great foresight will be used in developing and exploiting that market to our best advantage. I recognize that it will require some steadiness and some resourcefulness, and also some resistance to pressures which may arise in connection with our trade with that country, but I hope it is something that the minister will bear very much in mind.


Gordon Minto Churchill: May I say one final word with regard to wheat. I appreciate the hon. member's remarks, and he is quite right in saying that this is not the sole concern of the western farmers. It is primarily their livelihood, but it is of concern to all Canada

Supply-Trade and Commerce because of the surpluses we have been carrying and the importance of wheat in our general export trade. We should not minimize the importance of that whatsoever, but our surplus situation 'has been materially improved in the last three years. In July, 1957 it was estimated that in this country we had a surplus of 730 million bushels, and this was before the new crop of 1957 was harvested. That surplus situation has been reduced in the course of the last three years by certainly over 200 million bushels. I think now the surplus stands at something over 500 million bushels.


Lester Bowles Pearson: It is 566 million bushels.


Gordon Minto Churchill: That is quite a sharp reduction from the surplus of 730 million bushels three years ago. I am not sure whether the hon. member for Ottawa West mentioned anything about the decline in our wheat exports. Percentagewise, with regard to world trade, he may be able to show that but in actual fact, over the last three years-


George James McIlraith: Percentagewise.


Gordon Minto Churchill: -there has been an increase in our export position. I gave the figures at page 7713 of Hansard, showing that in the 1957-58 crop year we exported 320.3 million bushels; in 1958-59 we exported 249.1 million bushels, and estimates for the crop year that has just closed are 276.7 million bushels, making an average of roughly 297 million bushels for each of those three years, which is above the average for the preceding three years when it was 276 million bushels. The preceding 10-year average was 284.4 million bushels and the 30-year average was 252.6 million bushels. Therefore we are really doing better in our export business now than we were before.


Lester Bowles Pearson: Mr. Chairman, perhaps I can say just a word about this because of the importance of the matter. I understand that in the first 10 months of this year the world trade in wheat was up about 6 per cent and our percentage was down about 3 per cent. The minister has explained the reason for that. It was due largely, though not entirely, to non-commercial sales by the United States; but of course we have also increased our sales by special arrangements, although not quite to the same extent as has the United States. If we are going to make comparisons of cash sales we have to take Canadian cash sales against United States cash sales.
The minister has pointed out that there has been close co-operation and liaison maintained with the United States in respect of those non-commercial sales in order to ensure that when they become commercial


sales, if they ever do, we shall have an opportunity to participate in the increased commercial marketing which will result. Of course that is very important if it can be brought about. It can only be brought about by our own effort and by the co-operation the minister has spoken about with the United States, and I do not suppose this situation is likely to change very much in the next year or two; certainly not to our advantage, because while our own surplus has gone down, as the minister has pointed out, from about 734 million bushels to 566 million bushels, I think I am correct in saying that the United States surplus has gone up. Therefore there will be the same, if not greater, pressure on them to force that surplus in some way or other on to the world's markets. We are going to be up against this problem for some time.
Then we also have another factor, namely the competition we are encountering from the Soviet union, not very serious at the present time except perhaps in the Netherlands, where I understand there has been some Soviet grain marketing to our disadvantage. In any event, it is not only an important matter; it is a matter which causes anyone concerned with it some anxiety.
I will just put on the record the figures for July 22, as published by the dominion bureau of statistics, which show exactly what the situation is in terms of the number of bushels shipped during the August-May period of this year, which is the period I am talking about. I am quoting from the bulletin which says:
Total exports of wheat and wheat flour in terms of wheat from these four countries-
The four main exporters.
-in the first 10 months (August-May) of the current Canadian crop year totalled 821 million bushels, some 6 per cent above the 771.5 million bushels exported during the same months of 1958-59.
Then it goes on to say this, and this is the reason for our worries:
Shipments from each of the four countries during the August-May period this year were as follows, with the preceding year's corresponding totals in brackets (in millions): United States, 425.4 bushels (380.6); Canada, 235.9 ( 243.8); Argentina, 62.8 (85.5); and Australia, 96.9 (61.6).
These figures show that the United States during this period has shipped, if my calculation is correct, 109 million bushels more wheat on the world market than we have. The minister has said-and I am not challenging his figures because I do not know; I accept them-that we are still maintaining our superiority in cash shipments over United States exports. If that is the case, that would mean that during those 10 months the United States has thrown on the world market in a non-commercial way 190 million bushels of wheat, which is a very dramatic measure of
AUGUST 10, 1960	[DOT]
Supply-Trade and Commerce
the kind of competition and the magnitude of the competition that we are up against.


Gordon Minto Churchill: That is quite correct. There has been a great movement of United States wheat into world markets but not into commercial markets. Seventy per cent of United States exports of wheat are going forward under their gift program to the countries that need it. The figures for 1958 indicate that Canada exported to commercial markets -I take this from the United States publication to which I was referring-270 million bushels compared with exports by the United States of 142 million bushels. That was in 1958, and it shows the difference in commercial sales between the two countries.
However, we are also participating in the export of wheat by way of an assistance program similar to that of the United States in some respects. Under the Colombo plan we have shipped a substantial amount of wheat out of this country over the last eight years. I have a table here which might be of interest to hon. members and perhaps could be incorporated in Hansard. It is not in any partisan spirit that I refer to the fact that shipments have been higher in the last few years than in the earlier years. Rather it is an indication that the whole program of gifts to underdeveloped countries has been expanding. If hon. members would like to have this table printed in Hansard it will give a picture of the gift program and the loan program that have been in effect now for a number of years. For the last three years the figures have been running this way. We have given by outright gift some 36,362,697 bushels of wheat or wheat in the form of wheat flour, valued at $60,649,968. On a loan basis we have shipped from Canada 21,560,795 bushels of wheat valued at $34,999,999.
Therefore in the last three years the wheat and flour export program under the Colombo plan by way of outright gift or by way of long term loan has amounted in total to approximately 58 million bushels valued at approximately $95J million. We are sharing in the program to assist countries that require food, and we are doing it by outright gift and by long term loans.


Lester Bowles Pearson: I think the minister's figures as to our share of non-commercial marketing in the world are quite interesting, and I am not complaining about the growth of these figures. It is quite true that in the last three years, as the minister has pointed out, our wheat marketings under the Colombo plan have become substantially greater than they were in previous years when we were operating under the Colombo plan. However, I am also quite sure that in those earlier
years under the Colombo plan there was a great reluctance on the part of recipient countries to include consumer goods such as wheat, wheat flour and things like that within the programs of assistance which we were negotiating with them. As the minister knows, the Colombo plan is a plan for technical and capital assistance, and there was quite considerable reluctance to have that pattern of assistance altered in those earlier years. The fact that these increases have been made in recent years is an indication not only that we have a lot of wheat to dispose of but that the recipient countries have altered to some extent at least their attitude toward assistance under Colombo plan arrangements of that kind.


Gordon Minto Churchill: That is quite true, and I am glad the Leader of the Opposition has added that point. Parliament approved an increase in Colombo plan aid from $35 million to $50 million, and of that increase the larger amount has gone into the provision of surplus food for countries that need it. The Leader of the Opposition is quite right that prior to that the Colombo plan funds were primarily intended for capital investment and improvement in those countries. Nevertheless, even under those circumstances and with the reluctance of the receiving countries to take food rather than capital assistance, there was a substantial program in the preceding five years from 1952 to 1957. Outright gifts amounting to 10,814,436 bushels were made in the five years I have mentioned, having a value of $29,142,059.


George James McIlraith: I think the minister indicated that he wanted to put the table on the record.


Gordon Minto Churchill: It is all on now.


[Stage Direction]
Item agreed to.
Special-
411. Economic and technical assistance branch, $455,161.
Lester Bowles Pearson: I wonder whether the minister could give us some information as to this vote for economic and technical assistance. It is in the amount of $455,161, which is an increase of approximately $44,000 over last year. What kind of economic assistance is covered by this vote, and would this be the vote that would cover economic reports to the minister?


Gordon Minto Churchill: No. As the Leader of the Opposition knows, the Colombo plan comes largely under the Department of External Affairs and the administrative responsibility is carried out by the Department of Trade and Commerce. This particular vote is for

Supply-Trade and Commerce the people who do the work in our department under the Colombo plan, and represents payment of salaries.


George James McIlraith: Who is the director at the moment?


Gordon Minto Churchill: Dr. O. E. Ault is the director


[Stage Direction]
Item agreed to.

[Stage Direction]
401. Administration, $496,260.
George James McIlraith: On April 1 the minister announced the results of the hearings before the national energy board involving the applications of many companies to export natural gas to the United States. At that time he indicated the government's concurrence in the recommendations of the national energy board, and in the course of his remarks he pointed out not only the long term significance of the export of natural gas to the United States but also its significance in terms of the employment that the development of the facilities for export would provide, and other related matters of that sort. In the light of that announcement, can the minister tell us what has happened since that time with regard to these export permits? In how many cases has the United States power authority granted permission on their side for the import into that country of natural gas, and in how many cases are applications still before the board? What is the significance of this now in the light of the prognostication the minister made in terms of employment and activity in this country with respect to the provision of facilities?


Gordon Minto Churchill: The federal power commission in the United States has granted permission for the import into that country of the amounts in the applications that were before us, with the exception of Trans-Canada Pipelines Limited authorization to export 204 million cubic feet of interruptible gas at Niagara and the last one we were considering, a smaller one; I think it was the St. Lawrence Company.
In so far as the effect on employment that was forecast is concerned, there has been a delay in the United States. We brought this before the house and the decisions were made at the end of March. Well, from that time until now the matter has been before the federal power commission. It is quite obvious therefore, that the program for 1960 will not be proceeded with as rapidly as we had expected had the federal power commission authority been granted immediately following the decision made here. However, in so far as the over-all planning and


the amount of money that is going to be invested are concerned, the development and construction in Canada, that remains the same and the employment figure will be the same but it will be prolonged into 1961.


George James McIlraith: Will it mean that the employment that would be provided by many of these projects will be put over until the next building season, or is there still time to get building programs under way?


Gordon Minto Churchill: Some may be done this year, but there may be a slight further delay because the California public utilities commission still has to pass on these applications. There is still time this season for a certain amount of work to be done.


George James McIlraith: The minister is referring to the state authority as opposed to the federal authority?


Gordon Minto Churchill: Yes.


Edward Nasserden: Would the minister be prepared now to answer the question I asked?


Gordon Minto Churchill: I have here the imports, in barrels per day, of crude oil and oil products; I also have the exports expressed in the same way. I have them for the years 1955 to 1959 in both instances. Is that the information the hon. member was requesting?


Edward Nasserden: Yes.


Gordon Minto Churchill: Perhaps this table could be printed in Hansard, if the committee were agreeable, rather than have me read all these figures, although I could do that if I were requested to do so.


The Deputy Chairman:: Is it the pleasure of the committee that this table be printed in Hansard at this point?


Some hon. Members:: Agreed.
[Editor's note: The table referred to above is as follows: ]
	Imports-barrels	per day	Total
	Crude oil	Products	
1955 ...	
237,400	104,000	341,4001956 ...	
290,900	99,400	390,3001957 ...	
306,600	94,500	401,1001958 ...	
285,000	80,300	365,3001959 ...	
315,900	105,400	421,300Exports-barrels	per day	TotalCrude oil	Products	1955 ...	
40,600	2,600	43,2001956 ...	
117,200	6,800	124,0001957 ...	
152,500	8,400	160,9001958 ...	
86,800	3,400	90,2001959 ...	
91,600	5,800	97,400


Lester Bowles Pearson: I should like to ask the minister a question or two on the oil situation, based on the progress that has been made

in achieving the objective for domestic marketings set out in the report of the Borden commission. I have made some calculations based on some figures which I was able to secure and which I should like put on the record. Perhaps the minister will comment on them. I hope they are accurate, but if they are not I am sure he will correct them.
These figures cover the first six months of the current year and deal with the consumption of crude oil, first. They show, too, that domestic consumption during this period of six months in 1960 totalled 78,675,000 barrels against 75 million barrels for the same period in 1959. In other words the consumption of domestic crude has gone up, but the consumption of imported crude also has gone up to 57 million barrels from around 55 million barrels.
Now, if I may call them that, the Borden report totals-we are within five months of the date on which these totals were to be reached-were 700,000' barrels of Canadian oil per day. That would amount to a figure for the six-month period of about 128 million barrels. We are therefore a long way from reaching this Borden total with only five months to go. The progress has not been as rapid as some hoped it would be. I have seen it stated by some experts that in the light of the experience of the first year, it may take about three years to reach that objective of 700,000 barrels a day. This means that very soon the government will be faced with the problem of deciding what to do about this matter. We are about five months from the date fixed by the Borden commission, but we are a long way from the objective. The increase in the consumption of Canadian crude in Ontario has been very modest indeed.
I ask the minister, therefore, if he can tell us what the plans of the government are for dealing with this matter. We had a statement a few weeks ago in which he said this would be a major problem for the government, and it would be given immediate consideration. Perhaps I could put on the record a paragraph from a column dealing with this matter which appeared in the Vancouver Sun, written by Mr. Gerald Waring, dated July 22, 1960. At the very end of his column he had this to say:
And if it proved that -western oil could be competitive with imported oil, it would put the west-east pipe line proposal on a sounder base.
This speculation, of course, leaps far ahead of the existing situation. The government apparently has not made up its mind yet about requiring the Montreal refineries to accept western oil on a quota basis, and will not until parliament is out of the way-[DOT]
I hope parliament is almost out of the way. Perhaps I should not put it in that form, but parliament is likely to be out of the way before long.
Supply-Trade and Commerce -and it has the results of a national energy board study of the problem to guide it.
But this is the direction in which the government will have to move, if it decides to catch the ball batted by the Borden commission.
In other words, the government will have to move in the direction of doing something to meet the objective set down in the commission report which apparently, and the minister will correct me if he thinks I am wrong, is not being met by other marketing forces.


Gordon Minto Churchill: The Leader of the Opposition has raised a problem of considerable magnitude. It is a problem which is very complex in its ramifications. The Borden commission produced two excellent reports, one on gas and one on oil. The second one, on oil, has been very carefully studied by the national energy board and by the government, and we are fortunate in having set up the national energy board where people can devote their whole time to problems of such importance to Canada as gas and oil.
The national energy board, as hon. members are aware, will have been in operation for just one year on October 1, and in the course of that time has wrestled with the extremely difficult problem of the export of gas and the number of applications which have come before it, and it has settled some of those problems. It has facing it the consideration of a number of applications concerning the export of electricity by Canada which has been conducted on a year to year basis, and before renewal of those applications public hearings have to be held and the consideration of the national energy board must be given to them.
Superimposed upon those two great problems has been that of oil. Canada is blessed with great quantities of oil. It has a great developing oil industry which feels that it could move much more rapidly if certain decisions were made or if the export market were enlarged, and naturally we are concerned, as is every Canadian, with the development of national resources and the importance of gas and oil.
The oil industry has become substantial and well established in western Canada; its problems are known to the government and to the Canadian people, and were reviewed in the report of the Borden commission. In the course of that report certain targets were set as being acceptable in order to sustain and enlarge the oil industry so that the productive capacity of that industry in Canada, certainly in western Canada, could be increased; because following upon that would come exploration to discover more oil and one thing leads to another. This enlarges the opportunity for other employment, and

Supply-Trade and Commerce makes available to Canadians a source of power which is essential in modern times, and as exploration continues maps out the reserves on which we can base plans for the future development of Canada.
The Borden commission report indicated that if a production target could be reached of 700,000 barrels per day, that would be a great help to the industry, and it indicated that a period of time should be permitted to allow the industry a chance to adjust itself to that production. It examined the consumption requirements in Canada and the export possibilities in the United States, and over the last year along with the energy board I have been watching closely the developments in the oil industry and the situation with regard to our export markets in the United States. We see the problem more clearly and appreciate the difficulties which face us.
The obvious market for the export of Canadian oil is of course the United States, but there are some difficulties there with competition from other sources. There are obvious large markets in Canada, but whether they should be sustained by oil from other sources or from Canadian sources is a matter yet to be determined because there are so many factors involved. Again, it cannot be a matter for easy generalization; there are too many complicated factors for a quick or early decision which would not be based upon sound information.
The situation at the moment is this, and I stated this in the house some time ago. It is a matter of priority for the government, and the responsibility rests with us to determine some of the aspects with regard to the oil industry and try to forecast the future. At the present stage of progression I have asked the energy board to assemble the information which is required so that a proper decision can be made. That involves bringing up to date the statistical information contained in the Borden report and adding fresh information that is perhaps now in the hands of the energy board or can be obtained from the industry itself; then setting up the various problems which face the oil industry not only with regard to our domestic market but with regard to our export market.
In order to make a proper assessment of that we have to know the situation in the United States with regard to their policy on imports of oil, and we have to know something about the world situation with regard to the production of oil. It has become one of the great problems facing us at this time, and before too long I hope we will have available all the facts and figures which are required to reach a decision in order that a proper, and sound policy for the whole industry in Canada can be formulated.

I do not foresee any easy route in reaching the decisions which are required. The problem is not without great complications, and we have to consider, as we did with the subject of gas, the question of reserves and Canadian requirements and try to forecast the future. Fortunately the Borden commission made a very extensive study of the oil industry, and that will be the foundation on which we will move forward in the course of the next few months to determine what should be done. We expect the interest of the provinces and the co-operation of industry in this search for a solution, and I am sure that in the field of power, whether it is electricity, gas, oil or atomic energy, Canada as a whole is very much interested; because it is on the basis of power, and cheap power from whatever source, that the industrial strength of Canada can be maintained.
These factors and others are now being considered. I cannot say when the studies will be completed, but they are already under way. The national energy board is now fortunately organized and experienced, and will be of great help to the government in assembling this information and presenting advice based on the knowledge and experience which is essential with regard to an industry that has such great complexity as the oil and gas industry of Canada.
That is as far as I can go in answer to the question of the Leader of the Opposition. We are apprised of the problem; we are working on it, and we hope before long to present to parliament and the public our views with regard to the oil industry of Canada. This is a matter which will be awaited with a great deal of interest and even with impatience in some quarters, but we feel it is better to move slowly and effectively rather than to rush in without all the facts being at our disposal.
I think all members will agree that the action taken in this regard should be based on a study of all the facts available in order to reach a sound conclusion. The decision with regard to gas exports has given a great stimulus to the whole of the petroleum industry which, of course, is as much interested in gas as in oil. With that background of experience and sound decision I think we can rely on the energy board to bring forward sound proposals with regard to this other problem that confronts us. As I indicated some time ago, this is a priority task, and it is being treated in that manner.


Lester Bowles Pearson: I think the committee will be grateful to the minister for the statement he has been able to make on a subject of such great importance to our national development as the development of a national oil

policy. As the minister has said, and as I am sure we all agree, there is no easy route to the solution of the problems he has mentioned, and I am sure the minister is grateful that the national energy board is at his disposal to give him advice on this and other matters. Perhaps I might be permitted to pay my tribute to the manner in which that board is working.
It is true that the Borden commission made an expert and exhaustive survey of this question, and as a result of that survey the commission came to the conclusion that the Canadian oil industry could live-and I am paraphrasing what was said-reasonably comfortably with a situation which would permit them to market 700,000 barrels a day. Five months from the date which was set for this result that figure has not, of course, been realized, and I suspect it will not be realized in any event unless there can be increased access to the United States market. The minister has said that is the obvious market for a large proportion of our production, and of course that is true. But there is nothing, to a layman at least, very obvious about the way in which the oil industry works in the United States. While it is true that in a well-ordered continental society, if we really had continental co-operation and consolidation in these matters, that is where a great proportion of our oil production should be going, there are forces, as the minister knows better than I do, which are working against such a development; forces not only of domestic competition which will reflect themselves in domestic political action, but forces which arise no doubt because an industry which may be domestic is also very international in its scope. Therefore the great corporations have to weigh their interests in Canadian supplies against their interests in those from Saudi Arabia, Venezuela as well as from the United States itself. So the development of a national oil policy which will ensure the exploitation of these great oil resources for the benefit of Canada will have, shortly, to be undertaken.
We can talk about this subject at length, though I am not sure whether anybody wishes to do so at this time, but I should like to ask the minister if he is reasonably satisfied as to the situation with regard to United States action that may be taken to interfere with the increase in our marketing in that country. I know that within the last year or so ago this stupid argument that the United States government should take action against our imports on grounds of security has been dropped. There could be nothing much more unreal than that kind of argument, but there are other considerations at
Supply-Trade and Commerce work, and perhaps the minister might be in a position to give his own views as to whether we are likely to be faced with less or greater restrictions as we try to reach this market, which is the natural market for such a high proportion of our oil production.


Gordon Minto Churchill: Again the Leader of the Opposition has raised an important matter. I do not see any change on the horizon in the present arrangement regarding the export of Canadian oil to the United States. As the hon. gentleman pointed out, we experienced some difficulty a couple of years ago, but that was cleared away and there has been no indication recently that there will be any change in the present arrangements.


[Stage Direction]
Item agreed to.
Jacques Flynn: Would the committee like now to revert to item 395, or would it still like that item to stand?


Lester Bowles Pearson: It depends on the minister.


Gordon Minto Churchill: I am not in a position to give the assurance which was requested by the Leader of the Opposition and the hon. member for Essex East. I wonder if there will not be an opportunity to raise the question they have in mind without actually linking it to a section of the estimates of this department. This is a subject which has been raised from time to time in the house, and perhaps other opportunities will occur later today. If on the other hand hon. members feel that something more should be said on this item, I cannot, of course, press them on that; but I do think the subject could come up in some other way rather than be linked with this particular item which affects more matters than just an interdepartmental report. I leave it to the good sense of the opposition.


Lester Bowles Pearson: We try to be sensible about these matters, and whether the question comes up under this item or in some other way does not make much difference. The minister has some other matters to bring forward for consideration, some other appropriations. I am thinking particularly of the national research council. Perhaps if this item could just stand until we have cleared up the minister's other problems, by that time he will be in a position to decide what to do about this, and by that time the hon. member for Essex East will have finished his lunch.



NATIONAL RESEARCH COUNCIL

[Stage Direction]
256. Salaries and other expenses, $27,965,857.
Mr. Batten:: As a member of the special committee on research I should like to make a few comments at this time, but in view

Supply-Trade and Commerce of the hopes and aspirations that we hear voiced around the corridors today I shall try to make them very brief.
In the six or eight meetings of this special committee on research which we were able to hold it was necessary to confine ourselves to the general policy of organization and administration. The offices of the national research council prepared especially for this research committee the little pamphlet I hold in my hand, which I suppose I could refer to as the little grey book. In my view it is a very fine summary of the work of the council. I hope the minister or the president of the national research council will see to it that this publication receives wider circulation than just hon. members of the House of Commons or members of the special committee on research. This booklet certainly gives a fine idea of the work done by the council. Because of that fact and because it is written in layman's language I think it should be widely distributed throughout the country. My reason for saying that is that it gives an excellent idea of the work being done by the council, not only in Canada, but also the successful efforts that are being made by the council to rank Canadian science with that of other countries of the world.
As I said before, there was time to discuss only in a limited way the organization of the council. I suggest to the minister that there are many more interesting phases of the work of this council which could be gone into. I suggest to him that this committee be resumed early in the next session so that many of the interesting things that can be considered in the committee may be discussed with the officers of the national research council.
I suppose it is true that some of the work that council is doing has resulted from tasks which it was given some years ago and which perhaps do not now form a very important part of its work. I refer particularly to the Canadian government specifications board. The work of this board probably could be more properly delegated to some branch of the treasury board. Perhaps the minister will see fit to recommend transferring it from the national research council to some other appropriate authority.
Those who came before the committee at its meetings were able to assure us of the fine work which is being done and tell us of the contribution that is being made by Canadian scientists to world science in general. I should like to commend the work of Dr. Steacie and his associates, who were most anxious to give to members of the committee all the information they thought was pertinent to the various topics discussed. They went to all sorts of

trouble to provide facts and figures which were not contained in the grey book, and were very anxious to give satisfaction to all hon. members of the committee. For that I wish to thank Dr. Steacie and those associated with him.
The council established in 1916, then known as the national advisory council for scientific and industrial research and now known as the national research council, was at that time a very small body. Even in 1917 it consisted of only 11 men. Those 11 men began a survey of Canada's scientific resources. Two things followed from that survey. First, it became very evident that industrial research was almost non-existent in Canada. Second, it was recognized that the national supply of research personnel was most inadequate. In our universities at that time we found university personnel almost completely absorbed in undergraduate work. There was little time for research. Graduate scholarships were lacking, and most of our postgraduate students took their training outside the confines of Canada. Only a small percentage of them returned to this country.
The council was able to set up a system of scholarships and grants so successful that today they form an important part of its present activities. The council has been able not only to do its own work but has given a great impetus to research in industry which has been improved over the years. It is now rapidly approaching the point where industrial research in Canada is becoming equal to industrial research in other countries.
Here in Canada, of course, we have a number of problems that require research. I am sure that in industry and in defence there is a great need for research on ore. We know there is a great need for medical research, too. Most of that type of research is now being done by the universities and is sponsored by the national research council. A great deal more could be done along that line than is now being done.
We should also have research done on the transmission of electrical power. I speak of that because it is of particular importance to my province, where we have a large potential on the Hamilton river, something exceeding 5 million horsepower. If it were possible to devise some method of transmitting this power the value of that source of energy would be much more important than it is today. We have stretching across this continent, and particularly in the west, pipe lines transmitting oil and gas, other forms of energy. There is no reason why we should not have a grid across this country transmitting electrical power, particularly when we have the sources that will supply that power.

As hon. members know, electrical power is transmitted by alternating current at high voltage for relatively short distances. If electricity has to be transmitted at high voltage for distances beyond 700 or 800 miles some difficulty arises. In some countries in Europe a great deal of research has been done with respect to the transmission of electricity over long distances by transmitting the electricity in direct current form rather than in alternating current form. I hope the national research council will gather some information regarding the possibility of transmitting electrical energy in Canada over long distances at high voltage by means of direct current.
I was referring to the growth of the national research council. Twenty years ago only 300 people were employed by the council. Today we have 722 employees on the scientific staff, 972 on the technical staff and 896 on the administrative and service staff, making a total of approximately 2,600 employees, and this even without the defence research and atomic energy employees.
The efforts of the council have provided not only much of the scientific research required in Canada, but have made a contribution to scientific knowledge in general. Reference was made in the committee hearings to the scientific journals and I shall comment further on those. At page 121 of the fourth volume of the minutes and proceedings of the special committee on research Dr. F. T. Rosser explained that the journals of the national research council enjoyed a wide circulation. He said:
The journals go into every country in the world that has important scientific institutions. I have given you the figures for Russia, and the Chinese figures are even larger than Russia's. There are 315 subscriptions going into 14 institutions in China; and, on exchange, there are 19 subscriptions in 5 institutions. This is true all around the world. The same is happening in every country that is progressing scientifically.
Dr. Steacie went on to say:
Thirty or forty years ago there were just the odd small groups which were internationally well known. There has been a very big increase since. The net result is that scientifically, rather than being in the backwoods we have now become one of the important scientific countries of the world.
I think we have reached this status largely because of the efforts of the national research council. Its journals, of course, are the publications of the work done by the council and are the end product and the permanent record of the research work carried on. We know that our research work here in Canada is very acceptable to many other countries of the world, and perhaps two reasons can be cited for that assumption. First, the journals find their way into the scientific libraries of all the major countries of the world; second, Canadian scientists now publish their papers
Supply-Trade and Commerce in the Canadian journals, where years ago the papers were published in the journals of foreign countries.
In 1945-47 the average total pages for the Canadian journals was 1,710; the average for 1957-59 was 7,722. Circulation in May, 1960 totalled over 10,000, with 4,000 in Canada and over 6,000 in foreign countries. I recite these figures just to show the progress which has been made by the national research council and the effort which is being made to distribute scientific knowledge gained in Canada to the rest of the world.
The basic functions of the national research council, as I understand them, are the promotion of scientific research, the operation of laboratories, and university research in Canada; and in these three functions, I believe Canada is being well served. The council should be given every opportunity to expand its activities in its own way either in fundamental or applied research.
Finally, Mr. Chairman, I again suggest to the minister that this committee be continued next year, so that perhaps many of the most interesting problems relating to the national research council can be discussed at that time.
(Translation):


Armand Dumas: Mr. Chairman, as we take up this item, I draw to the attention of the committee and of the authorities a matter which, for more than three years, has provoked much comment and annoyance among people in northwestern Quebec. I refer to the experiments being made in that area of the province for the purpose of inducing artificial rainfall by seeding clouds with crystals of silver iodide vaporized in generators commonly referred to as "rainmaking machines", or by means of aircraft.
To introduce the subject, I had better quote some excerpts of an article published in the L'Echo Abitibien of July 21, 1960, under the heading:
June rainfall: 7.45 inches.
After quoting certain statistics, the paper concludes as follows:
As the saying goes: "It rained so much that no one remembers when it rained more." The "Union Catholique des Cultivateurs" and the chambers of commerce in the area keep protesting against the uncontrolled use of rainmaking machines, which are reportedly very active at this time. The national research council is even said to have selected the area for its experiments this year. Last year, a federal government B-25 aircraft is said to have passed the summer in the Abitibi, seeding the clouds.
On the other hand, some authorities vigorously deny having anything to do with the heavy rain-

Supply-Trade and Commerce
falls now occurring in western Quebec. However, learned articles have been written stating that no data are available on the effectiveness of rainmaking machines.
Those remarks seemed to imply: "Since we have no specific data, rainmaking machines are not doing any damage in the areas where they are used."
Meanwhile, our crops are getting a beating, our lakes and streams have swollen to levels unprecedented for this time of the year, and tourists are seeking fun and relaxation under different skies.
As early as 1958, the Val d'Or-Bourlamaque chamber of commerce had instructed the members of its tourist industry committee to inquire into the rumours to the effect that tests on a fairly large scale were being made in the area to induce rainfall by artificial means.
The committee which made the inquiry reported on January 14, 1959.
That report, in the form of a 28-page brief, contains very interesting information. I cannot list all the details here, but I might quote a few excerpts from the first two pages, which read as follows:
In compliance with the expressed wish of members of the Val d'Or-Bourlamaque chamber of commerce, we have looked carefully into the problem of artificial precipitation of rain and snow.
This report is a record of our research and interviews, and includes reprints of articles published in various newspapers and magazines that have shown interest, in recent years, in this matter which we feel is of the greatest importance for the stability and especially to the development of our tourist industry and our agriculture.
It is obvious, Mr. Chairman, that rainmaking equipment considerably increases normal rainfall, with consequent damage to our businesses, industries, settlers and farmers.
Indeed, as a result of our investigation, we have reached the conclusion that no control is being exercised over those rainmaking machines. Hotel-men and businessmen agree that there is a drop in the tourist trade. How can it be otherwise when we have had so little sunshine to offer tourists during the so-called "fair season," especially in the last two years.
The report then prints a whole series of articles from newspapers and scientific journals dealing with the possibilities of producing rain by artificial means. It also refers to certain experiments conducted in Canada and in the United States. I do not propose to read all those articles, but just the same I should like to read the conclusions of the report which is found on page 28 of the brief:
We must face the facts: scientists have developed a way to induce artificial rainfall. It seems that this discovery, which could be of great service to humanity, in periods of drought, is being used and applied by two large corporations whose apparent sole concern is to produce rainfall for the benefit

of a few customers, such as operators of logging companies and other such companies. Since there is no control over the operation of the machines, they are being used at the detriment of our local tourist industry and of our store keepers, contractors, engineers, air transport companies, prospectors, miners, workers, transport companies and farmers. They are also detrimental to the health of our local people, who are thus deprived of the precious benefits of sunshine, especially in a part of the country where summers are already relatively short.
We honestly believe that it is the duty of the Val d'Or-Bourlamaque chamber of commerce, at whose request we have undertaken the survey to call to the attention of people in larger centres, through their chambers of commerce and municipal bodies, to that abnormal situation, so that those same public bodies may undertake further research as a basis for representations calling for government action in controlling those rainmaking devices.
Mr. Chairman, so far this year we have an excessive amount of rainfall in northwestern Quebec, and people there are convinced that the experiments and tests carried out in the area in connection with artificial rain have something to do with it. The matter was first brought to their notice by articles published last May and June.
The first of those articles appeared in the Financial Post of April 2, 1960, and reads as follows:
(Text):
Many industries, governments and the military will be watching closely this summer as giant and repeated rainmaking efforts are made in Quebec's Rouyn-Noranda area. Private and government groups are backing the experiment, called precipitation physics project. Truly successful rainmaking could revolutionize farming, forest fire fighting.
(Translation):
The second article, which aroused the people's anger, appeared in the Imperial Oil Review for the month of June under the heading: "Water, Life's Pivot". Here is what it said:
Hatfield-
A scientist,
-had discovered "cloud seeding", a technique which is still being tested. At Val d'Or, Quebec, the national research council is conducting experiments on the seeding of clouds with silver iodide crystals. The final results are not yet known, but according to British and American tests, the technique increases rain precipitation by 10 to 15 per cent in hilly country.
In an article published in L'Echo Abitibien for July 7 last, and sponsored by the chamber of commerce of Val d'Or-Bourlamaque, we find the following paragraph:
We know that last year the same national research council sent a B-23 type plane to Val d'Or, in charge of sergeant Miller, to carry out cloud seeking and research work north of the city. We feel that we could very well do without it at this time.

And the article goes on to say:
How long will we, in the northwest, have to go on serving as guinea-pigs for experiments on the rainmaking machine, which surely has proven itself in our area over the last three years, despite statements to the contrary from some people who have a financial interest in trying to prove the opposite?
Then the article goes on to say:
We would suggest that letters be sent by the federation of chambers of commerce to the various departments concerned, asking for some control over those machines which could be operated for the welfare of the community, but which at present are subjected to no control and are operated for the benefit of a few large corporations.
I do not intend to deal much more extensively with this matter; however, I would like to say this. Following representations made by the chamber of commerce of Val d'Or-Bourlamaque, the Abitibi federation of chambers of commerce contacted the Minister of Transport (Mr. Hees) and asked him to comment on this matter of artificial rain and on the experiments which are made in northwestern Quebec.
Following this correspondence between the federation and the Minister of Transport, the L'Echo Abitibien, of July 28 last, published a very interesting article from which I will quote a few excerpts. It is entitled:
Rain experiments in our region.
And the article begins as follows:
The population of western Quebec has just received not only a first implicit confirmation that this area is the site of experiments on weather modification, but has received an outright invitation to sacrifice itself for the advancement of science in this field.
The article then quotes parts of Mr. Hees' letter and adds the following comment:
According to the signer of the letter of July 22, the federation is said to have asked last spring for "discontinuance of experiments on precipitation", whereas, apparently, the local chambers of commerce have invariably asked for "control in the use of rainmaking equipment".
In any event, the minister says that when he inquired from his officials, they gave him the following explanation:
"As you know, the wide variation in atmospheric precipitations from month to month and from year to year, in a given locality, causes either a great lack of rainfall or excessive rainfall, as was the case this year in your area." We assume that the phrase "as was the case", used here, refers to "excessive rainfall" rather than to the words "lack of rainfall".
But let us go on. "The economic advantages", adds minister Hees, "which might result from an increase or decrease, through human intervention, of atmospheric precipitations at a given time and in a given place, would surely be considerable. Many experiments have been undertaken in order to discover the secret of the process of precipitation, and of the control or change of this precipitation".
Supply-Trade and Commerce
After those general remarks, the minister admits that "even if this process is not adequately understood, many business firms have undertaken to increase precipitation and do away with hail in certain localities.
Because of inadequate knowledge of the physics of clouds and rain, and in view of the great difficulty of ascertaining the effects, if any, of those experiments, my department has been asked to assess the methods now in use to modify the weather."
"On account of the economic possibilities inherent in weather modification, added the minister, especially with regard to forest fire fighting, water power and agriculture, it has been decided that steps should be taken to increase scientific knowledge on the cloud and rain formation process, so that reasonably accurate information can be made available to all concerned."
Mr. Hees then deals with the experiments themselves. "Therefore, a scientific project has been launched for the detailed study of all aspects of cloud formations and precipitation.
An airplane equipped with special instruments studies the composition of clouds and carries out an extensive program of observation in the clouds and in thunderstorm areas. The rainfall accompanying such thunderstoms is recorded in detail in two test areas by means of ground instruments which show the curve of quantity and intensity of the rainfalls".
"Part of those tests, adds the letter, consists in making a comparison between clouds treated with chemicals and untreated clouds, in order to obtain a wider range of information on the rain formation process. In the present case, silver iodide crystals are used. This comparison is not in itself an attempt to increase or decrease rainfalls, but simply part of a general scientific investigation."
"As I know, concludes the minister, that members of your chamber of commerce are interested in man's ability to modify and control certain elements in nature, I believe that, now that they have more complete information, they will wait for the results of the test, instead of worrying about the damaging effects which might result from it."
"If you wish additional information, or if I have failed to describe certain aspects of the matter, please let me know", (signed by) Mr. Hees.
We suppose that the two chambers will find the minister rather reticent, even if he admits a good deal, and that they will, in fact, ask him some questions, more particularly about the necessary duration of those tests.
That, Mr. Chairman, is the most important point.
The people of northwestern Quebec through their chambers of commerce and other local organizations, are asking the relevant authorities to establish efficient control of the problem of artificial rainfall and of its rainmaking machines used in those tests. The request is a fair one, and I have good reasons to think that the government will give it all the attention it deserves. (Text):


Mr. Best:: Mr. Chairman, I should like to make a few remarks on this vote for the

Supply-Trade and Commerce national research council. I think few Canadians would question the fundamental importance of research and increased research activity in this country. I have always felt that in a small country like Canada with our problems of exports imports, and the use of our vast store of natural resources, research on a per capita basis was even more important than in many other lands around the world. Like the hon. member for Hum-ber-St. George's, I would certainly hope that our committee on research which was set up this year, and which had a few meetings, could be set up again at an early date next session in order that we might continue our work of examining the national research council and other bodies involved in research in this country. There is very much that remains to be done in the way of increasing and sponsoring research by the government of Canada. Nevertheless I am proud, and I am sure other members of our party are proud, of the very important and creditable record of our government in the last three years in the field of government sponsored research.
Speaking from memory, if my recollection is correct our grants to the national research council, for instance, have about doubled during the period from 1956 or 1957 until 1960. This year we are talking of a sum in the neighbourhood of $33 million, which is a vast increase in such a short period of time and will certainly provide a stimulus to research in this country. A part of this increase is in a very important field, that is the area of scholarships and grants in aid to universities. Universities are a natural training ground for students, graduates, fellows, and teachers, and as a result of the mingling of the teaching staff with the research staff seem to me to be the best places where money can be used for the purpose of increasing research efforts in this country. The increased amount granted by the national research council for this, is certainly most stimulating.
I should like to mention briefly a most important document that was tabled the other day, and which I think could be referred to under this heading; that is the report of Dr. Farquharson's committee studying medical research grants and the aid that could be given to medical research by the government of Canada. I think it is fair to say, Mr. Chairman, that this document is the most important one of its kind in recent decades in this country. Its recommendations and its whole purpose are crucial to the medical profession and the people involved in medical research in Canada. As an aside, may I say I am hopeful that perhaps some day we will have the same sort of study,

and perhaps the same sort of decision eventually, in regard to an agricultural research council in Canada.
The recommendations contained in Dr. Farquharson's report are most interesting and I should like to refer to two or three of them. First there is the establishment of a separate medical research council under terms similar to those of the national research council. I am hopeful this recommendation will prevail with the government, and that the Minister of Trade and Commerce and the Minister of Finance will recommend the establishment of this separate body in the near future.
There are several other recommendations that are worthy of note. For instance, there is the one that an interdepartmental medical research co-ordinating committee be set up to integrate the activities in medical research presently being carried on in the department of health and welfare, the Department of Veterans Affairs and the defence research board. There are recommendations involving finances to be used for the purpose of medical research, some of which relate to the budget of this proposed new council itself. There is mention of the sum of $4 million for this purpose, and then a reference to the large amounts of $25 million and $12 million respectively for new medical schools and for research facilities in hospitals. These amounts total approximately $40 million in all, and would provide a tremendous stimulus for medical research in our country. I was most interested in seeing the tables in Dr. Farquharson's report indicating government expenditures devoted to medical research in Canada, which in one column are expressed as percentages of the gross national product. These tables indicate that in the years since our government assumed office we have made some major increases in these expenditures. As a matter of fact they have been increased in the period 1956-57 to 1959-60 by almost 50 percent. Nevertheless, when one looks at tables I, II and III in this report one can see how far we are behind such countries as the United States in government expenditures for this purpose. The table indicates that we have a long way to go to catch up to the United States and other countries. This area is one to which the Prime Minister and the cabinet will have to give detailed consideration in the future. I believe this report marks a milestone in the study of research facilities and research funds for medicine in Canada.


George James McIlraith: The report of the special committee on research which sat during this session of parliament contains a recognition of the fact that the committee did not have an opportunity to do its work thoroughly. There is a reference to this in the report, as

I say, and I want to direct a specific question to the minister concerning it. The committee recommended that it be reconstituted early in the next session of parliament in order that it may continue its deliberations. This recommendation was made after the explanation concerning the difficulty of examining the subject matter in the limited time available. Is the minister in a position to give an undertaking now that the government will bring forward a motion to set up this committee at an early stage in the next session?


Gordon Minto Churchill: I feel very sure that will be done because of the importance of the study the committee will want to undertake. It did not have time to complete its survey this year. I am in agreement with the hon. member for Ottawa West that the committee should be re-established.


George James McIlraith: I have one other question with regard to the report to the minister by the special committee appointed to review government supported medical research. The report was tabled on August 6, and it is very interesting. I do not propose to discuss it today, but it contains some very specific recommendations for the setting up of a medical research council and refers, among other things, to the budget for that council. Has the government made any decision as yet on this matter? If so, what is that decision; and if it has not taken a decision when may we expect such a decision to be taken?


Gordon Minto Churchill: In connection with the recommendations, not all of them have been adopted. The one concerning the setting up of the medical research council is approved and, so far as this year is concerned, it will be set up under the jurisdiction of the national research council. Subsequently, when we have had time to consider, it will become a separate entity, but for the moment it will come into being and will operate independently for all practical purposes, except that it is under the national research council for the presentation of estimates to the house.


George James McIlraith: It will carry on in the interim as an activity of the national research council alone, separate in form but under the legislation governing the national research council?


Gordon Minto Churchill: Yes. It is quite separate, except that the national research council will be responsible for the administrative services required by the medical council.


[Stage Direction]
Item agreed to.
Supply-Trade and Commerce
Atomic Energy Control Board-
35. Administration expenses of the atomic energy control board, $62,755.
Lester Bowles Pearson: Mr. Chairman, this vote deals with the atomic energy control board, and is perhaps the vote under which most appropriately can be discussed atomic energy and matters connected with the uranium industry which is the source of that energy.
This particular vote and the questions relating to it were considered by the special committee on research, but that consideration, Mr. Chairman, was very short and cursory. The committee had one meeting only on the question of atomic energy, during which it received a very interesting and valuable report from the president of Atomic Energy of Canada Limited. After that report I think there was opportunity for five, 10 or at most 15 minutes' discussion, and that was that.
It is unfortunate, to say the least, that a matter of this importance received such limited and insufficient consideration by the committee. The president in his report explained the development of atomic policy in what I thought, although I was not at the committee meeting, was a very impressive way. He explained to the committee why the development of atomic energy was taking the form, so far as power is concerned, of the kind of nuclear reactor which is moderated by heavy water and fueled with natural uranium. There has been a great deal of argument as to this form of nuclear power development versus other forms. I am not qualified to express any opinion on that highly scientific matter, but we must all hope that the course along which we are moving in this connection will turn out to be the proper one.
Related to this question is the position of the uranium industry in this country as the source of atomic energy. It is clear, of course, to everyone who knows anything about this subject that our supplies of uranium are so great that whatever may be the developments in terms of the non-military use of atomic energy in Canada, we will be able to consume only a very small portion of this commodity. Therefore we have been and are still dependent on export markets for the maintenance of this industry. Above all we are dependent on the United States of America, which has taken in the past and is at present taking practically all of our production.
I was interested to read in the report of the president, at page 187 of the minutes of the meeting, that-
7904	HOUSE OF
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Canada has also been fortunate in its close collaboration with the United States since the war years.
That is, on atomic energy matters. I think we have been fortunate in our collaboration in the matters with which the president was dealing, but certainly we have not been so fortunate in the last year in our relationship to the United States as the market for our uranium production. As a result of the action taken by the United States government last August, I think it was, the industry and those communities which depend on the industry have received a very severe blow to their future development, and indeed to their very existence as communities.
The importance of this industry in our national economy is not appreciated by very many people because it is a new development. Most people are not aware that last year we exported more than $300 million worth of uranium, mostly to the United States. In the present year there will be a diminishing export, and in two or three years, unless something happens to restore the market for this uranium in the only place where it could be restored, the United States, our exports will have largely disappeared. It will be a very difficult period indeed which we will have to face until the world again needs our uranium as a source of energy. That is bound to come, but there is going to be a gap between that time and the end of our contract with the United States. The uranium communities, especially Elliot Lake which is the largest of them, have to prepare for some pretty lean days during that period.
While I understand the pressures in the United States from domestic producers, I think in refusing to take up the options which were in the original contract the United States has not asked in a way we might have expected from a neighbour and a friend which talks so much about continental collaboration in defence, which should mean industrial collaboration for defence as well as other forms of defence. In any event, as we know, the United States government did not take up any of the options last summer, and an arrangement was made between the two governments in Ottawa and in Washington for a stretch-out of existing contracts.
We have been told, Mr. Chairman, that the original contract, which was for five years, should have been negotiated on a longer term basis. We are told that we on this side, who were responsible at the time for the negotiation of this contract, should have realized then that there would be a decreasing market for uranium as the years went by, that therefore we should have


held out for a longer period, and that we should have anticipated this lessening demand and the difficulties ahead.
We on this side who were concerned with this matter at that time are told we should have taken this position in 1954 and in 1955, when the contract was negotiated. We were supposed to have known of all this at that time, although some years later when the situation was in fact changed because of the development of United States production, those on the other side who are now responsible for these matters were not themselves aware of the difficulties. The Minister of Transport made it clear in October, 1957 that in his view, and I quote, we could "now look forward to continued and extensive development in this field of the mining industry". By that he meant the uranium industry.
At that time the preoccupation in this house, when the matter came before the house and the committee, and in the minds of those concerned with this industry, was that we were tying up our production for too long a period of time rather than for too short a period of time. That caused a little difficulty at that time with the United Kingdom, which had to make special arrangements with us in order to get any share of the production which had been earmarked for the United States.
Therefore it is hard to appreciate why a situation which was not considered difficult in 1957 and 1958 should have been considered difficult in earlier years. Indeed, as late as July of last year spokesmen for the government, including the Minister of Trade and Commerce himself, said that we on this side were being too pessimistic when we said there was only one thing which could save the industry, and that was by intervening at the highest political level with the President of the United States to ensure, if it could be ensured, that these options would be taken up. That was not done and we have a stretchout instead, so the uranium communities are in difficulties.
When this matter came before the house- and I will resist the temptation to go through the record in Hansard-we were told that the government was doing something about this situation. We were told there was a factfinding committee. We were told the government was aware of the seriousness of the situation, and that there would be visits to Elliot Lake and other places. In answer to our request from this side regarding what was being done we were told to be patient. Finally in May we were told that another committee had been set up to look into the situation. As a matter of fact I think the first committee was set up in December, 1959 to

deal with this matter-the minister will correct me if I am wrong-so then we were told in May, 1960 that the remedy would be the setting up of another committee.
I am asking the minister if he can inform us what proposals have been made by this committee which even now might be of assistance. What, even now, can the government do to help these uranium communities to face the difficulties which have been created for them?
There are various things that could have been done. There are various things that have been considered very carefully by the province of Ontario as things that should be done. Indeed the province has taken action in some respects. If you really want to learn about the difficulties and what can be done, Mr. Chairman, you will get a great deal more information by reading the Hansard from Queen's Park than by reading the Hansard of Ottawa. That is where I get most of my information. That Hansard from page 1700 on quotes letters exchanged between Mr. Macaulay and the minister and gives a great deal of information as to what might be done to help the community of Elliot Lake.
I am not going into all the proposals made for such assistance. They have been made and rejected, so far as we know. The possibility of a nuclear research station for Elliot Lake was removed when the government decided to locate that station in Manitoba. The possibility of some financial inducements which would encourage new industry to move into this community seems to have been removed as far as I am able to ascertain. Certainly I know of one negotiation which has ended without anything being done. The possibility of a provost training school being established at Elliot Lake was removed by the Minister of National Defence the other night. The minister said it was going to Camp Shilo, and he thought the people of Elliot Lake would be in agreement with that decision. Well, he was wrong in that respect. I do know that the province of Ontario was willing to make available a school building for this purpose, but the department of defence considered the site not suitable, and so it goes. We do not know what steps if any are going to be taken in the federal field to assist these people who, without question, need help.
Of course there are other communities in Canada which have had misfortunes, and I would point out that sometimes they have received help. But this is a desperate situation for the uranium communities concerned. There is surely an obligation on both levels of government to do what can be done to meet the situation. That does not mean merely
Supply-Trade and Commerce setting up a committee. So perhaps we shall get a report from the minister as to what that committee has been able to do.
It is not hard to understand the action of the United States government in refusing to take up the options last summer especially in the light of reports, some of which I have before me, of the development of new uranium production in the United States since the action was taken in Washington. However that may be, the results are apparent, and I am asking the minister under this item if he can inform the committee even at this late date whether these committees which have been set up-the first of them last December, the fact-finding group some time in March and another committee in May- have been able to make any recommendations to the government which would meet this problem at least in part and, if so, whether the government is proposing to implement such recommendations.


Gordon Minto Churchill: I am not sure whether the Leader of the Opposition and I are in the mood to get into too spirited a debate with regard to some of these problems. We discussed them at length in March and I have covered all the ground, all the arguments raised on the other side. It is just open to question whether there should be a repetition of those views on this occasion.
There appears to be some doubt as to what information was available at the time the uranium contracts were entered into. The Leader of the Opposition has indicated that there was some concern that Canada, by entering into those contracts, might be committing too much to the future if her contracts with the United States for uranium were extended beyond the five-year period. Of course it is getting in the background now as to what should or should not have been done several years ago, but I have in front of me an extract from an address by Mr. W. J. Bennett, who was president of Atomic Energy of Canada. The address was delivered to the Toronto board of trade in Toronto on January 24, 1955, five and a half years ago, and Mr. Bennett said this:
It is impossible to say at this time what the demand for uranium will be after March 31, 1962, the present expiry date of the guaranteed market. The military demand may continue at the present rate or may cease altogether. On the other hand, we may have a situation in which there is still government buying but on a reduced scale. Whatever happens, it can be safely predicted that there will be some requirement for uranium for use in atomic power programs in the early sixties. It is evident, however, that the demand for uranium in the early stages of a Canadian atomic power program will take up only a small part of our potential production. Consequently, if the military requirement ceases or is cut back substantially, Canadian producers may have to look to export markets

Supply-Trade and Commerce
and should expect to meet the same conditions which prevail in the case of other base metals which are not in short supply.
There were other examples of warnings given in 1955. In fact, in March I read the warning given in September of 1954 by the late Mr. R. J. Henry of Eldorado Mining and Refining Company indicating the discoveries of uranium in the United States, the mines operating there and the supply situation generally. I wonder at what the Leader of the Opposition expressed as Canadian concern at the time the contracts were negotiated that Canada might be signing away some of her uranium for too long a period if the contracts were for more than a five-year interval.
However, the situation has turned out just as Mr. Bennett thought it might. The military demand declined and therefore the demand for uranium declined. Then we got into a position where the options were not going to be taken up and a stretch-out program had to be arranged. Not sufficient attention has been paid to the value of that program.
What actually faced the uranium industry in Canada was the shutting down of practically all uranium mines in 1961 and 1962 unless a stretch-out program could be arranged. What faced us before that was the shutting down of some mines in 1959 and 1960, with the loss of the undelivered portions of their contracts. So the arrangement made with the United States was that a master contract would be written replacing the earlier contracts. That master contract would contain the total amount of uranium that was involved in the other contracts and the delivery of the uranium in the future-in 1960 and the following years-would be under that master contract so that not one pound of the uranium contracted for in the earlier contracts would be lost to Canada. Where mines were closed their contracts could be transferred to other mines, and the total production for Canada would not vary from what had been arranged originally in the contracts signed for the five-year period.
This has meant to the Canadian uranium industry $120 million that otherwise would have been lost and not available to Canada. In all the discussion that has been going on about the stretch-out program, the failure of the United States to take up the options, and the criticism of the Canadian government for not doing what it could have done in the opinion of some people, I have heard very little commendation for the action of the government in saving for Canada and the Canadian uranium industry $120 million that otherwise would have been lost. This factor is completely overlooked.

The second part of the stretch-out program has meant that uranium mines will be continued in operation for a longer period than otherwise would have been the case. In the three major areas where uranium is being produced the mines will be operating into the years 1963 and 1964, whereas not long ago the prospects were that they would all be closed down by 1961 and 1962. Very few people have bothered to commend the government for making this arrangement, yet it is important to the communities affected and it is important to the miners working in those mines. The stretch-out program has accomplished just that, and has provided for employment over a longer period of time.
Some people not in the mining business but interested in supplying the mining community with the services required have said that it would have been better if there had been no stretch-out program and the mines had closed down in 1961 or early 1962, because they would have operated full blast for five years and the commitments that certain people had made in the business communities could have been met in that five-year period based on the payroll of the communities working full out. That is one way of looking at it, but from the standpoint of the employment of miners I think it is better to have the stretch-out program that carries them forward for another three years.
In the western regions the Port Radium mine, which was the original mine, has been closed down because of lack of ore and will be out of production this year. Beaverlodge and Gunnar are staying open. The employment factor there, including Port Radium, is 1,300 men at the present time, in the latter half of 1960. During 1961, 1962, 1963 and running into 1964 employment will be maintained at about 1,150. I am speaking now of miners in the mines and personnel engaged right at the mines themselves.
In the Bancroft area two mines will remain in operation. The employment figure for 1960 is roughly 1,000. It will continue at that rate during 1961 and 1962, and I hope we will carry that forward into 1963. Certain adjustments have to be made which will make it possible for the Bancroft area to carry on well into 1963.
In the Elliot Lake area some mines have been closed and others are staying open. My information at the moment is that Quirke, Nordic, Panel, Milliken, Stanleigh, Denison and Stan Rock are in operation employing for the second part of 1960 just over 6,000 men. It is expected that in the first half of 1961 the employment figure will be close to 5,500 and then it will be reduced to 4,500 and run at that figure well into 1963.

These three mining communities have not immediately collapsed because of the change in the uranium program. Through the stretchout arrangements and the transfer of contracts, employment has been provided for almost 8,500 miners at the present moment, reducing by the end of 1962 to just over 6,000 and then in the latter part of 1963 to about 5,000. That is the over-all figure for the uranium industry.
By the end of 1963, however, we will have a much clearer picture as to the demand for uranium. It is my hope that there will not be a demand solely for military purposes, and it may be that a demand will be created in the field of peaceful uses of uranium. Perhaps by the time another three and a half years have elapsed other uses will have been found for uranium. Experiments are going on now which give some promise of success. Although the failure of the United States to take up the options has had an effect, although some mines have had to close down, and although the three communities mentioned have all been affected, nevertheless the situation is not as bleak as it has been painted. I am not so sure that we cannot do more. I believe that the stretch-out program came into being in order that those communities could be maintained. There is an adjustment period, of course, but that adjustment period is spread over three full years, 1960, 1961, 1962 and running into 1963.
The Leader of the Opposition has asked what has been done with regard to assisting the communities affected. An immense amount of time has been spent exploring the possibilities for assistance to the communities. Delegations have been met; individuals have been interviewed; a committee has been working at the job; and it has proved to be extraordinarily difficult to find immediately other means of employment for people in the three mining communities that I have mentioned. I have indicated, however, that employment is being sustained at rather a good figure; but to bring a new industry immediately into the area is not the easiest thing in the world to do. We have explored that to a very great extent. Some attractive leads appeared at various times but I cannot report that there has been success in some of those investigations.
We had nothing as a federal government in the way of an institution to put into any one of the three communities that I have mentioned. There was some discussion about the Department of National Defence placing one of its training schools in one of the communities, but the expense was very great and it seemed wiser to spend the money for defence in other ways than transferring a school to a community in which the army was not established.
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Commercial firms have been interested in the community of Elliot Lake, but we have not been able to reach any particular settlement with regard to the transfer of certain commercial firms to that area. In the past I have commended the people of Elliot Lake on their enterprise in attempting themselves to attract industry to that area, but it is difficult to do that in mining areas, and we appreciate that fact. However, we are open to suggestions from any source with regard to what may be done to assist industry to establish in one of those three mining communities so that employment may be sustained.
In the course of the next three years it may be that mining for uranium in the mining communities may become more important from the standpoint of world demand, or it might be that other mines may be opened, producing other minerals. That is the situation. The people who are seriously affected by the dislocation in employment that has come about through no fault of their own have been a matter of great concern to the gvernment. They did not foresee this break in what appeared to be rather a good and continuing future, but the break has occurred and adjustment has to be made. My hope is that that adjustment can be eased a bit over the next three years. In some instances it will be eased; in others it has been rather abrupt and we regret, naturally, that those people should have suffered. But I can assure the Leader of the Opposition and the committee that a great deal of effort has been put into trying to find alternative schemes to assist the three mining communities affected. At the moment, as far as the federal authority is concerned, it is the stretch-out of the program which assures the miners another three years of employment which has seen the major part of our efforts along that line.


Lester Bowles Pearson: I do not want to prolong this discussion on what may conceivably be the last day of our session, but I want to deal briefly with one or two of the points made by the minister. He indicated that some of us did not understand or appreciate the advantages of the stretch-out. It should be clear, Mr. Chairman, that the stretch-out arrangement with the United States, while it prolongs the employment of the miners concerned, prolongs the employment of a smaller number of them because the stretch-out does not and cannot result, as I understand it, in the production of a single pound of uranium which was not provided for in the original contract. It is a difference, if you like, if I may put it in those terms, between sudden
7908	HOUSE OF COMMONS
Supply-Trade and Commerce death and a lingering death, I do not hesitate to say that the latter certainly is preferable. I have already said that the stretchout is something; it does provide, if you like, for a lingering death during the period of which you may be able to find the remedy that may mean you will not die at all; and I admit that is better than sudden death; but if no remedy is found during the longer period, then the result will be just the same. It will be the end of this industry in its present form.
One of the points the minister made-he repeated this many times-was that we should have known something about this. Mr. Bennett is quoted as indicating that there would be difficulties in the future, and we should have been aware of those difficulties. The fact remains that at the time this contract was signed the only observation made in this house about it was by the leader of the opposition of that day, and it was along the lines that I have indicated, wondering whether we were not tying up our production for too long a period, and when the matter came before the committee there was no suggestion made by anybody which would justify the kind of warning that we are given now in 1960. Indeed, as the London Economist pointed out a little while ago, dealing with the United Kingdom phase of this matter, and I quote from an editorial:
When the United Kingdom program was first drafted experts worried that the world production of natural uranium might not be sufficient to meet the United Kingdom needs.
This situation changed as soon as the United States began to explore and develop sources of uranium in its own country. It had every right to do this, but I suggest that the action should have been related to the commitments that the United States had made with Canada under its contract and its options. Once the United States began to ignore any such moral commitment and to find and to develop its own supplies of uranium in great quantities, then the whole situation changed and there was no possibility of getting out of this difficulty unless the matter was brought to the attention of the United States government in the terms which I have previously indicated. It was all right for them to find uranium, of course; but I suggest that in view of the relationship which existed between the two governments, having found that uranium, they were in honour bound not to develop it in a way which would prejudice the successful working out of the contract and its options. The United States did not do that, and once it became clear that the United States was not going to do that, then we were in trouble.

As I said in 1957, the only way we could get out of this trouble was on the highest political level. But the spokesmen for the government in 1957 did not think we were in trouble. I have already quoted the Minister of Transport. When we argued the case in the house along the lines I have stated it now, we were accused, as usual, of being prophets of gloom and doom. The doom has not descended on the industry but it is pretty gloomy and I certainly hope that something can be done to remove the gloom.
That brings me to the only other point I wish to make. What can be done? The minister has said that the government has worked hard. The committee has worked hard. I know that the hon. member for Essex South, who is head of the committee looking into this matter, has done very good and very hard work investigating the problem. I think anybody in the area from which I come is willing to acknowledge that, and I acknowledge it. I am grateful to him for the investigations he has made and for the way he has been willing at any time to receive anybody who had anything to say about this matter.
But the Minister of Trade and Commerce said, and I am quoting now from his statement on April 12, "The problem requires action on a broad front and that action is going forward." So far as we have heard this afternoon, in spite of the investigations that have been made and in spite of the work that has been done, it has not been possible for that action to go forward. I will only express the hope now that as a result of the work about which the minister has talked there will still be some possibility of action which will enable Elliot Lake and the other uranium communities to live over the very difficult period indeed that faces them to the time when they will face a far brighter future when uranium will be needed, we hope, for non-military purposes to an extent to which it is not required today.


[Stage Direction]
Item agreed to.
DEPARTMENT OF TRADE AND COMMERCE General administration-
395. Dominion bureau of statistics, including the fee for membership in the inter-American statistical institute and a contribution of $500 to the international statistical institute, $10,789,333.
Paul Joseph James Martin: Has the minister been able to make his agonizing reappraisal?


Gordon Minto Churchill: No agonizing reappraisal is involved. I passed on the request of the genial member for Essex East to my colleague the Minister of Labour and the situation rests at that point. While the hon. member

for Essex East was out of the chamber I put forward the question, important as the problem is to which he has referred, whether it was essential that it be tacked on to this particular item. We have got on pretty well with the estimates of the department and I was wondering whether the hon. member could not raise the matter in some other way or at some other time today. We have plenty of time yet today and I know we want to get on with our work if we can. I ask the hon. member to reconsider the matter and perhaps let this important item pass now.


Paul Joseph James Martin: I can very well appreciate the minister's desire to have it passed. If, for instance, we could be given the opportunity of discussing this matter on the privy council estimates the minister would have an opportunity of consulting and discussing the matter with the Minister of Labour, but I do not think it would be fair to leave the matter under any other arrangement. This is the last item on which we can hang it in accordance with the rules of the house. If it will facilitate matters, there is no reason why we could not do what I have suggested. It would be understood that the minister or the Prime Minister or the Minister of Labour would indicate whether the suggestion made by the Leader of the Opposition is acceptable. Otherwise we are going to be in a very difficult position.


Lester Bowles Pearson: Perhaps the minister will give us the assurance that if this infant is removed from his doorstep to the doorstep of the Minister of Finance or the Prime Minister, whose estimates will be coming up later, one or the other of these hon. gentlemen will take in this infant so we can examine it. If so, that will be all right.


Paul Joseph James Martin: I do not like to differ with my leader but if we left it with the Minister of Finance I think the discussion would be a protracted one.


Donald Methuen Fleming: Not today.


Gordon Minto Churchill: I am not sure, of course, that I can give the assurances that are required, but the Minister of Finance is in a co-operative mood and he thought the suggestion was fairly reasonable.


Donald Methuen Fleming: What suggestion?


Gordon Minto Churchill: The suggestion that perhaps this subject matter might be raised when the privy council estimates are before the house.


Lester Bowles Pearson: Would the minister tell the Minister of Finance what our suggestions are?
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Supply-Finance


Paul Joseph James Martin: In view of the co-operative attitude the Minister of Finance has displayed I think that in fairness to him I would want to withdraw my remarks
which perhaps were true but were unfair in the context.


Donald Methuen Fleming: Hear, hear.


[Stage Direction]
Item agreed to.

[Stage Direction]
General administration-
107. Departmental administration, $2,454,511.
Mr. McMillan:: Is the Minister of Finance going to make a statement at this time?


Donald Methuen Fleming: Mr. Chairman, I do not think there is any statement I can usefully make. The house has had many occasions during the course of the present session to discuss financial questions and budgetary and fiscal matters. On various occasions the house has very patiently heard the Minister of Finance on a number of these subjects, and for that reason I do not think I should delay the committee today with a statement. I have no announcements to make.
The house is well aware that while the estimates of the Department of Finance aggregate about $1J billion they are, nevertheless, nearly all statutory in nature. If regard is had, for instance, to the main estimates and account is taken of the fact that we are withdrawing item 125 concerning university grants, in these main estimates there is only about $70 million to be voted out of the total appearing in the blue book of $1,443 million. In other words, of the main estimates only about 5 per cent requires to be voted and approximately 95 per cent is statutory in nature.
I have mentioned that we are withdrawing item No. 125. That, of course, was made known to the house several months ago during the debate on the bill to amend the Federal-Provincial Tax-Sharing Arrangements Act. Under that measure university grants have become a statutory item, and I indicated in the debate on that measure that when the estimates of the Department of Finance were called I would withdraw item 125.


William Hector McMillan: Perhaps the minister might answer one question. Would he tell us about the $101 million taken out of the stabilization fund? Was that taken into the consolidated revenue fund?


Donald Methuen Fleming: Mr. Chairman, there was no money taken out of the exchange fund as the expression "taken out"

Supply-Finance
is ordinarily understood. There was absolutely nothing abnormal in any respect in any of the transactions carried on by the Bank of Canada as agent of the Minister of Finance in exchange transactions this year.
The function of the exchange fund is a very limited one, and it is unchanged. The method of operation is precisely what it was under our predecessors; there has been no variation or departure. This fund is not used with a view to directing the trend of the exchange rate. It is simply used day by day with a view to avoiding the sharp edges of the variations in exchange rates from time to time. There was no departure this spring at the time when there were rather active movements of the exchange rates from the basis of operation which has prevailed with respect to this fund for years. There have been some baseless slanders and accusations made in certain journals, one in particular in New York, that the Minister of Finance had taken advantage of an opportunity to reduce the exchange fund with a view to supporting the Canadian dollar and in this way to endeavour to counteract the rise in the value of the United States dollar and the decline in the value of the Canadian dollar in the month of May of this year. There were vague suggestions that this had been done deliberately with a view to reducing the amount of the exchange fund, and providing out of the proceeds Canadian dollars to supplement the cash available in the consolidated revenue fund. There is not one particle of truth in any of these accusations. The operations of the fund were completely normal in every respect.
Because there was such an active exchange market in the month of May, the transactions of the exchange fund were numerous, and because the trend of the Canadian dollar was downward in value the effect of the transactions was to bring about a reduction in exchange fund holdings of United States dollars. But this was only a temporary trend and the holdings of United States dollars in the exchange fund have risen since until at the present time they are approximately what they were at the end of April. I say to you, therefore, Mr. Chairman, there never was any truth in these vague slanders and accusations which emanated, in the first place, from New York. The operations were entirely normal in every respect, and the normal nature of the transactions is best reflected in the fact that by reason of the operations in the ordinary way, the way in which this fund has been operated for years, our holdings in the fund now are back approximately to what they were at the end of April.


William Hector McMillan: 
Mr. Bell (Carleton):: Would the hon. member indicate the page reference of that quotation?


William Hector McMillan: Page 2889 of Hansard. I do know that the minister found fault with the previous government on the basis of increased staff in the different departments. I have not added up this year the increased staff in his department but I do know that it was up last year. I also know that the cost of administration in his department is up about 15 per cent, if we can go by the blue book. This does not represent the whole of the extra cost that the taxpayers in Canada must accept on account of the fiscal policy of this government. They must all pay extra provincial taxes and extra municipal taxes.
Why has that come about? First of all, I would say it is because of the overspending of this government and they had to go

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contains a table showing the value of industrials in various countries as follows: market prices in Australia up 45 per cent from March 1958; Austria up 153 per cent; Germany up 179 per cent; Japan up 90 per cent; United Kingdom up 90 per cent; the United States up 32 per cent and Canada up only 9 per cent.


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


William Hector McMillan: I shall require only a couple of minutes to complete my remarks, Mr. Chairman.


Donald Methuen Fleming: Mr. Chairman, may I suggest that the committee give unanimous consent?


Charles Edward Rea: Does the committee unanimously consent to allow the hon. member to continue?


Some hon. Members:: Agreed.


Paul Joseph James Martin: The Minister of Finance is very generous today.


William Hector McMillan: I wish to thank the committee, Mr. Chairman. I said that market prices of Canadian industrials were up only 9 per cent from 1958, but from March, 1959 they were down 10 per cent as compared with 2 per cent in the United States. All the other countries which I mentioned were up.
I have read various articles in the foreign press on Canadian financial policy. I read many of them when I was in Boston this year. Some of them were mystified by the actions of our Department of Finance, just as mystified as we on this side of the committee are.
Two years ago I predicted these high interest rates. I am afraid that if the minister carries on as he has been there will be a flight from the Canadian dollar. In fact, there are some people moving their money to New York at the present time. I am sorry to see that. I do not know how much the Canadian taxpayer can take but certainly if the next two years are anything like the last two we will not only see our bonds depreciated but we will also see our currency depreciated.


Harold Edward Winch: Mr. Chairman, this is probably one of the most important votes that comes before us. At the same time it is probably one of the most complex to explain or understand. The question of financing is important and difficult on any level whether individual, family or government, as I am sure all hon. members will agree. Financing is always a difficult problem especially if you try to balance income with outgo. I do not pretend to be an expert on finance on a governmental

level even though it was my responsibility for some 12 years to be financial critic of the provincial budget in the legislature of British Columbia.
We could spend hours and days on this vote attempting to analyse the correctness or otherwise of government policy in relation to a balanced budget, a deficit budget, the question of conversion loans, the Bank of Canada, interest rates and many other aspects of finance. It is not my intention this afternoon to go into the complexities of these matters in any way whatsoever. I do not think they can be resolved at this time in this session.
The government has to accept responsibility for the financial policy; it has to face the criticism of the opposition. I still do not feel that I am in a position to discuss this matter, nor do I feel that anything of advantage would be gained by doing so at this time. All I want to do is to raise a matter which I think is of absolute paramount importance and ask the Minister of Finance whether he will comment on it. At the time of confederation, brilliant as they were, the fathers of confederation could not possibly foresee the development of the economy of Canada; they could not foresee the growth of Canada or the complex situations that would arise between the various levels of government in this country. Brilliant as they were, they could not foresee the responsibilities of the different levels of government in the establishment of what I might term the welfare state.
In recent years the complexities of government have reached a point where in our estimation, giving all honour to the fathers of confederation, the time has long passed when a good look should be taken at the responsibilities of all levels of government and their ability to accept them. Year after year we have seen the increasing complexity of the responsibilities of governments and their inability to meet them. We find that year after year the municipalities, the children of provincial governments, are screaming to high heaven and to the provincial governments for greater financial assistance. We hear the provincial governments year after year screaming to high heaven to the federal government for greater assistance to enable them to meet their financial responsibilities. To whom does the federal government scream for assistance? Of course, the federal government has only one answer. It is either no or a compromise with the provinces by utilizing its powers to make the taxpayers scream over an additional tax burden. In short, that is the situation. Surely under those circumstances we have now reached the time when an exhaustive analysis



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[Stage Direction]
and survey have to be made of the responsibilities of the various levels of government and their ability to meet them. As I said, Mr. Chairman, today's conditions could not have been envisaged at the time of confederation. We now have to face the realities of the situation. I say the time is long past when we can continue to ignore the changes that have taken place in the responsibilities of government and their ability to meet them. I am not recommending the appointment of a royal commission. I feel sometimes, and I have felt over the past few years, that we have reached the point of having royal commissionitis. We can go too far, but I do believe that the greatest contribution that can be made today by the federal government is to recognize the need for a review of the responsibilities of the three levels of government, their ability to pay, and work out something different from what we have at the present time under which the federal government assumes certain responsibilities in co-operation with the provinces. The provinces, according to their thinking, then pass some of the responsibilities onto the municipalities.
As I say, I do not believe in a royal commission or a three-day dominion-provincial conference, but in a longer study, whether it takes days, weeks or months, by experts of the departments of finance of the dominion, provinces and municipalities. They should call in all the experts they require to try to work out what I think is the greatest need today, namely a new look at the responsibilities of governments and their ability to meet them. I emphasize this because there are too many-and perhaps many of us are guilty of this-who think that they can make demands on government and get what they ask for for nothing. There is not one service that can be given by any level of government in Canada that can be received for nothing. There is nothing whatsoever that can be obtained for nothing from a government. It has to come eventually from the taxpayer's pocket, individually, collectively or co-operatively, and the ability to collect is based on the productivity of our nation through the work of our people or the natural resources of our country.
We know that the municipalities are up against a tough time at present. They can appeal to only one body, namely the provincial government. The provinces can appeal only to the federal government. The federal government has only one answer, namely no or new taxes. The sooner that we at all levels of government face up to that situation and the sooner the people learn that what they want they have to pay for the better 79951-0-500
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it will be for our country. From my experience in a provincial legislature and seven years in the House of Commons I do honestly believe that we have to sit down, giving all honour, as I said, to the fathers of confederation, and face up to the situation. At the same time let us recognize that now, almost 100 years later, having in mind economic development, technological advances, the new responsibilities of government and the interrelationship between the municipalities, the provinces and the federal government, a new look is required.
I am not going to go into all the complexities of the matters I mentioned when I first rose which could be discussed for hours and days, but I should like to ask the Minister of Finance whether he does not agree that the time has now arrived for this kind of study, review and new look at the responsibilities of governments in Canada and their ability to meet these responsibilities and to meet the new and ever increasing demands by the people of the country. That is an issue that we have ignored and have not faced up to in the past, and it is time that we did.
I am not going to say anything more except to refer to an entirely different matter. It does not come under the estimates of the minister's department but is found in the legislation estimates which have already been passed. Although we have not yet passed all the estimates for this year, I know that for the past month government officials have been working on the budget for next year. I wish to make a plea to the Minister of Finance that he give very sympathetic consideration in the estimates now being prepared for next year to the plea of the Speaker of the House of Commons for an increase in the commonwealth association grant in order to enable greater co-operation and understanding and a greater intermingling of commonwealth peoples. I am convinced that is the finest investment that could ever be made and that the extension of understanding within that group will perhaps make it the greatest instrument for peace.
Mr. Bourque:: Mr. Chairman, as it is my intention to limit myself to municipal financing because of the precarious condition that Canadian municipalities find themselves in at the present time, I should like to make an appeal to the minister to see if a more equitable distribution can be arrived at so that the municipalities can carry on the work they are meant to carry on. First of all, I should like to ask the minister this question. Is there an arrangement between the federal and provincial governments to share the expense of hospitalization or maintenance in
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the case of immigrants or refugees coming into Canada? If I am not going to get a reply now, I will go on.
I am in total sympathy with the bringing in of refugees on compassionate grounds and also other immigrants but they should not be left to seek help from the provinces and municipalities; especially from the municipalities with their very limited powers of taxation. In other words, their welfare should remain the responsibility of the federal government.
As mayor of a municipality it has been my experience that after one year and one day immigrants who are unfortunate enough to become ill or indigent become the responsibility of the province and the municipality in which they reside. The cost of our social service division in Outremont has increased by approximately 300 per cent in the last three or four years.
The selection of these refugees and immigrants, whether on compassionate grounds or otherwise, is the responsibility of the federal government and the responsibility in the case of indigency or hospitalization should rest with the federal government until they are entitled to attain full citizenship. These neo-Canadians should not be left to the mercy of the municipalities which have not the means or the facilities to give them the help they need. They should remain the responsibility of the federal government for the first five years of their residence in Canada.
Canadian municipalities are experiencing unprecedented difficulties in their financing at the present time. The unwarranted high rate of interest on debenture loans is discouraging municipalities from undertaking capital expenditures and major works programs due to the high cost of providing the necessary moneys by bonds or debentures. Many pressing municipal works projects have had to be postponed and many essential ones that could not be delayed are reduced to the necessary minimum.
I come now to the question of tax exempt municipal bonds. Should the federal government exempt the interest on municipal bonds from income tax? This is the United States practice. I believe that as an alternative to such an exemption the government should establish an intergovernmental loan corporation or a national loan fund. The responsibility for the provision of appropriate funds at low interest rates should rest with the federal government. This corporation would be authorized to purchase the securities of municipal governments at a rate of interest which would reflect the cost of borrowing to the federal government plus a carrying charge, including in the computation of the

charge probable losses through defaults. The corporation should not be restricted to the financing of self-liquidating projects and should be authorized to buy the securities of any community whose economic capacity reflects the ability to pay for the loan over a fairly long period of time. This solution would provide assistance to municipalities, particularly the poorer ones, which are plagued by high interest costs.
If such a loan corporation or loan fund were established it would enable an attack on municipal problems on a much broader basis than that involved in the low cost borrowing made possible by tax exemption and would make unnecessary such a tax exemption even in a modified form. May I say that such a fund has been specifically requested by the Canadian federation of mayors and municipalities and is also supported universally across the country by the municipal governments. I should like to read a short extract on capital borrowing from the national municipal program issued by the Canadian federation of mayors and municipalities.
Because of the nature of their undertakings, municipal governments must necessarily finance most capital projects by loan financing. This requires that they have access to capital funds at a cost commensurate with the social purposes of municipal undertakings and within the reasonable capacity of a community to afford. If municipal governments are to keep pace with their growth requirements, renew obsolescent community facilities. and maintain their capital plant at a satisfactory standard of efficiency, they must be able to finance the cost of such improvements at the lowest rate possible.
Joint participation by the federal, provincial and municipal governments in the capital expenses of building waterworks, sewers, road building, paving, etc., would go a long way in placing the municipalities of Canada on a sounder financial basis and enable them to undertake many improvements that they could not otherwise go on with.
May I say here that the municipalities of Canada have a serious and justified complaint concerning throughways. They realize that local streets are a municipal responsibility but the principal cross-city thoroughfares of today's cities are no longer merely local streets. They are an integral part of a vast interconnected system of regional, provincial and national highways, and the cost of constructing these throughways should be apportioned and shared by all levels of government.
Within a short span of years the population of Canada has shifted considerably. In 1901 our rural population was 62.5 per cent of our total population and the urban population was 37.5 per cent. In 1951 the rural population had dropped from 62.5 per cent to 43.3 per

cent, while the urban population had increased from 37.5 per cent to 56.7 per cent of our total population. Forecasts have been made to the effect that in 1980 some 80 per cent of our total population will be living in urban areas. As a result of the shift in rural and urban populations the demand for increased municipal services and local improvements is growing at a rapid pace. Changing conditions give rise to newly expanded governmental activities. This, in turn, necessitates close governmental collaboration if the municipalities are to retain a reasonable standard of services for the local activities which cannot be financed from local taxes or other local revenue sources.
Municipal governments today need to have direct communication with the federal arm of government on a wide variety of matters. Urgent and involved questions are consistently arising which affect federal-municipal affairs, especially in matters of taxation and revenue. I should like to read a short extract from the booklet entitled "Canadian Public Administration" by Mr. George S. Mooney, executive director of the Canadian federation of mayors and municipalities:
Municipal governments are entitled to sufficient revenue to finance the activities required of them by custom or law. The revenues they need will be determined by the responsibilities they assume. Municipalities should not be expected to assume any additional or delegated responsibility beyond the just capacity of their taxpayers to afford, unless supplementary funds to cover the costs are forthcoming from the source originating the responsibility (i.e. federal or provincial governments). Expanded municipal services are possible only to the extent that expanding revenue resources become available.
A little farther on, the article states:
Because of the nature of their undertakings, municipal governments must necessarily finance most capital projects by loan financing. This requires that they have access to investment funds at a cost commensurate with the social purposes of municipal undertakings and within the reasonable capacity of a community to afford. If municipal governments are to keep pace with growth requirements, renew obsolescent community facilities, and maintain their capital plants at a satisfactory standard of efficiency, they must be able to finance the cost of such improvements at the lowest rate possible.
Under the present conditions of the money market the facilitating aid of the provincial and federal governments is necessary if municipal governments, particularly the smaller municipalities, are to be put in a position to continue a reasonable program of needed capital improvements.
The amount of the funded debt of most municipalities is already high and increasing rapidly. Many are near the dangerous limit of 20 per cent of the taxable property valuation. Municipalities in this percentage bracket find it extremely difficult to borrow money, no matter what their needs may be. The 79951-0-500i
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heavy funded debt with which most municipalities are burdened, without having reached the 20 per cent mark, also prevents them from undertaking the borrowing of the money necessary for the carrying on of projected works programs and capital expenditures. Sewers, water works, roadways and necessary improvements are in many cases at a standstill due to lack of funds. The high rates of interest prevailing is another factor that prevents municipalities from borrowing to carry on the improvement programs they badly need.
The municipal taxpayers cannot bear heavier municipal taxes than they are now paying. Hundreds of municipalities have practically reached the bankruptcy stage. The impossibility of municipalities, because of the reasons mentioned previously, to carry on necessary works programs is contributing greatly to the unemployment situation existing today. A 5f per cent interest rate, which municipalities are for the most part called upon to pay, is the cause of great unrest, uneasiness and worry to municipal administrations whose problems are growing more and more complex every day. The range and scope of municipal administration is increasing steadily.
There has been a phenomenal increase in the demands of citizens for additional and better services and municipal corporations, because they are at a lower level than the senior government bodies, exercise but a small influence in the elaborate control structure in comparison to the federal and provincial governments. I should like to read from "Canadian Public Administration", which contains an article entitled "Democracy and Local Government" by Mr. Hugh Whalen, associate professor of political science, University of New Brunswick. I quote:
The local taxing authorities are caught between two millstones. The upper one consists of the top limit of the burden of taxation which it is feasible to impose upon the taxpayers, and still leave them intact financially and leave their representatives intact politically. The position of the nether stone is progressively raised as the amount of the total municipal expenditure ... increases. Thus, the play between the two is continuously reduced and the capacity of the taxing authority, the council, to provide the services demanded by the public is narrowed. Caught as they are in this squeeze, councils are driven to continuous appeals to the provinces for financial assistance or additional sources of revenue. But there is likely to be a reluctance to make available to municipalities any really productive sources of revenue, for most provinces are themselves sufficiently desperate for additional funds that they would hesitate to release them to a subsidiary level of government.
Municipal administrations are finding it more and more difficult to balance their budgets. Their powers of imposing taxation

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are greatly limited and unless the higher governments, such as the federal and provincial governments, grant them relief from many of the responsibilities they now bear the situation is bound to become intolerable. In order to help municipalities to undertake any needed works programs in which it would be necessary to borrow to meet the capital cost, senior governments should lend money to municipalities at a lower rate of interest than that at which they themselves borrow.
I should like to quote some figures which I have taken from the Canadian tax foundation, November 1959 issue, on local finance. The total taxation in Canada was raised in the following proportions in the year 1933 as compared with 1958:
1933	1958
Percentage Dollars Percentage				Dollars
Federal	39.4	278 million	61.8	4,652 millionProvincial	18.9	133 million	21.3	1,605 millionMunicipal	41.7	294 million	16.9	1,275 million
It will be seen that federal and municipal governments collected practically the same percentage of the total taxation in 1933, federal 39.4 per cent and municipal 41.7 per cent. By 1958 the federal share had increased from 39.4 per cent or $278 million to 61.8 per cent or $4,652 million of the total taxation and the municipal share had decreased from 41.7 per cent to 16.9 per cent. Is it any wonder that the municipalities have now almost reached the bankruptcy stage? Is it any wonder that the municipalities are clamouring for a more equitable distribution and a fairer share of the total taxation in Canada?
Unlike the flexible, varied and multiple sources of revenue available to federal and provincial governments, the revenue sources available to municipal governments are both rigid and limited. As a consequence muncipal governments have been operating within a financial strait-jacket wherein there is room neither to adequately meet the backlog of unmet accumulated need for local public works, nor to meet in any degree commensurate with the need the pressing requirements which accelerated urban growth and expansion are forcing upon them.
Most of our municipalities were conceived and designed in an earlier period. To meet present needs it is necessary to widen and provide more costly streets, provide off-street parking, expressways, underpasses and overpasses and other costly traffic and transit improvements. Most water and sewer systems, sewage and refuse disposal facilities, street lighting, civic buildings and other services are obsolete and need to be renewed. Slum clearance on a large scale is now a necessity

and provision of minimum standard housing for low income families must receive immediate attention.
There has been a relatively high and sustained volume of municipal capital borrowing during recent year. Most of this borrowing has gone to meet the costs of deferred public works which piled up during the depression and war years. In 1939 the total outstanding debt of all municipalities in Canada was $1,225,400,000 and in 1958 had reached $3,384,700,000. Muncipalities meet with considerable difficulty when they have to borrow. Small municipalities find it extremely difficult to market their debentures and some have found no market at all for their bonds.
The fixed burden which municipalities have had to assume has increased greatly in recent years. Many municipal taxpayers are experiencing hardship in meeting their local tax obligations and could not stand an increase no matter how small it might be. Yet the city fathers are faced with a difficult situation. They must either raise the local tax rates or cease immediately all work on municipal projects. The municipal governments are genuinely concerned about their financial situation-their available resources are stretched to the limit.
Certain it is that the revenues presently available are inadequate. The needs of most municipalities have reached a critical stage. Many municipalities have reached the point where further capital expenditures cannot be financed. The borrowing of money must be made easier for the municipalities. They cannot continue to undertake the construction and building of necessary local and capital improvements unless money is made available at a lesser rate than the present one. The municipalities can no longer bear the heavy burden under which they are operating.
With respect to the federal government, many phases of federal legislation impinge upon or directly affect municipal governments. There are frequent occasions when the particular problems of municipalities involve federal action and require federal-municipal collaboration. On such matters as health, welfare, indigency and hospitalization the position of municipal governments should be made clear with respect to federal and provincial legislation. Problems which limit and hamper the effectiveness of local government administration and thereby weaken the whole structure of our democratic system of government should receive special consideration from our senior governments.
It is my hope that municipal government in Canada can be lifted to the really important place it deserves, both in fact and in public

estimation. I believe that a joint conference of the governments at all levels should be held and the municipalities should be invited to discuss the present problems confronting them. The Prime Minister and his colleague, the Minister of Finance, might take advantage of the meeting with the premiers of the provinces of Canada in October to prepare the way for a future conference with representatives of the municipalities of Canada.
Before closing I should like to refer to an article in the Financial Post of August 6, 1960. That article says that there has been a 40.7 per cent drop in government, provincial, municipal and corporation public bond financing in Canada for July, 1960. The total financing in July, 1959 was $150,757,500 and this total dropped in July, 1960 to $89,324,225. The municipal financing last month amounted to $12,298,225; 20 issues from Quebec and the maritimes, 11 issues from Ontario and six issues in western Canada. This, compared with the amount of $24.6 in July, 1959, represents a drop of practically 50 per cent.


Donald Methuen Fleming: Mr. Chairman, I shall as briefly as possible deal with the points which have been raised by the three hon. members who have discussed the first item of my estimates. In doing so I think in justice to them I should endeavour to deal with all of the points they have raised.
Perhaps I might begin with the observations of the hon. member for Welland. In the first place, he said that there was a lack of confidence today, as I understood him, in government credit. I think he is quite mistaken and that the figures will demonstrate the extent of his error.
If he will have regard to the tables which I placed on Hansard in the budget speech, which tables appear at page 2678 of Hansard, he will see that between 1958 and 1959 the public's holdings of dominion of Canada obligations increased by $2 billion. At the same time the public's holdings of obligations of provinces and municipalities and business in Canada increased by another $1 billion, and since 1959 the total holdings of Canada obligations by the general public have increased further. There, Mr. Chairman, is the proof, I think the best and final proof, of the confidence of the public in the credit of this country.


William Hector McMillan: Would the minister answer a question?


Donald Methuen Fleming: I think it would be better if I completed my remarks and then I would be glad to deal with individual questions at the conclusion. I think that might economize time and contribute to a more orderly discussion.
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The next point raised by the hon. member for Welland concerned interest rates. He said that interest rates had been high and he evidently holds the government responsible for that fact. It is true that interest rates have risen. Interest rates rose to high levels in 1959; they have receded somewhat since. This is not the first time that interest rates have risen, but I ask the hon. member if Canada is to be insulated from trends which have been occurring in many comparable countries of the world.
The fact is that interest rates were rising at the very same time in the United States and other countries in Europe which are comparable with Canada. The government does not make the interest rates. Interest rates are determined by the operation of the law of supply and demand and the rate is determined as the result of tens of thousands of individual transactions. What governments can do, and what this government endeavours to do, is to have regard to the operation of the law of supply and demand with a view to carrying out its necessary financing operations to the best advantage. We do not like high interest rates and we do not pay one cent more in interest rates than we can avoid, and that is the proved fact.
Hon. members, to be fair, must be prepared to admit, there has been a substantial easing of interest rates within the past year or nearly a year. Now as to the part played by the federal government in relation to its own demands upon the available supply of finance, I simply remind the committee of the important and beneficial steps which the government has taken with a view to reducing its own borrowing needs. Two years ago our borrowing for budgetary and extrabudgetary requirements-that is borrowing of new money-amounted to $1,300 million. Last year it amounted to $900 million. In the present fiscal year I estimated in the course of the budget speech on March 31 that our requirements of new cash for all these purposes would be approximately $210 million. The result of this fiscal policy of the government has been to assist the provinces and the municipalities in meeting their financial problems. There has been a notable easing of the demand upon the financial markets, and benefits have been reaped in consequence by the provinces, the municipalities and business.
Next the hon. member had something to say about debt management. In the field of debt management I think the record of this government has been extremely strong. The hon. member sought to link what he said with the conversion loan. This government is very proud indeed of the benefits which were brought about by the conversion loan of 1958 and the success which attended that action.

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One of the first elements one looks at in relation to sound debt management is, of course, the period, the average period of the outstanding debt. If hon. members will have regard to the table on page 2678 of this year's Hansard they will see again what was the effect of the conversion loan of 1958 on the average term of debt. In 1957, as this table shows, the average term of the entire federal debt was six years. By 1958, as a result of the conversion loan, that average term had been increased to 10.3 years. That movement was not paralleled in some other countries, whose view of this operation was not a little envious. There are comparable countries in the world which would have given a good deal to have been able to increase the average term of their outstanding debt as we did.
The hon. member for Welland, when he speaks about this matter of the conversion loan, points out that in the autumn of 1958 interest rates rose. Yes, but not only in Canada. What happened here was simply a parallel of what happened in the United States. The course of interest rates in the United States always has a very strong influence on the course of interest rates in Canada. What happened in respect to interest rates in Canada? In the late autumn of 1958 the movement was simply parallel to what happened in the United States. That rise was not in any sense attributable to the conversion loan. On the contrary, the conversion loan stabilized the market and left the Canadian market in a much better condition to withstand those influences which in the autumn of 1958 and extending into 1959 weakened the bond market in the United States with consequent effect on ours.
As a result of the rise in interest rates there have been drops in the value of outstanding bonds. That is inevitable whenever interest rates rise. That follows as the day the night-the market value of outstanding bonds drops, and that happened beginning in the fall of 1958 and extending into 1959. The trend in recent months has been the reverse. With the drop in interest rates the tendency has been for market values of bonds to rise. But there is no need to think that this is the only time this has ever happened, or that there is not going to be a comeback in the strength of these outstanding securities. These things have happened before, and markets have come back in Canada.
I reminded the house on April 28, 1959 of what had happened in some earlier periods where rising interest rates led to declines in market values of government issues. I pointed out at page 3112 of Hansard what had happened in some other cases. I took the period between March, 1955 and June,

1957 and I pointed out what had happened with respect to various outstanding issues of Canada bonds. For instance, without repeating all the details here is one that showed a drop of 4.45; another dropped 11.8 points; another had a drop of 14.1 points; another had a drop of 14.75 points. One issue dropped from a value of 99J to 84|; another dropped from 102.1 to 87J; another dropped from 108J to 94J, a drop of 14 points; another fell from 102.1 to 86.8, a drop of 15J; another from 96.6 to 79.75, a drop of nearly 17 points.
These very serious drops occurred between 1955 and 1957. There was a recovery after that, and I am confident that in time there will be a recovery of the market value of outstanding bonds. But no one can say precisely when that will occur. These are fluctuations that occur and always have occurred, and it will remain for those who hold these bonds to hold them until their maturity and collect their value in full.
The next question raised by the hon. member for Welland concerned outstanding debt. I found it very difficult to follow his figures. He apparently was dealing with total debt when he talked about the increase in debt. He did not use the more relevant figures of net debt or of funded debt, and I think his figures are not at all the kind of figures that will influence the committee in reaching conclusions. The figures in this respect are again to be found in the tables which I placed on record in Hansard of this year at page 2678. They are to be found in tables 3, 4 and 5 on that page.
The hon. member had something to say about the blue book, and he talked about errors in estimating the cost of financing the national debt. This matter has been discussed with the hon. member, but if I may say so without offence, he has still not grasped the way in which this estimate is made up. This matter has been dealt with on other occasions, but he goes back to this question of estimates. The situation is not at all complicated.
When the blue book is prepared it is the autumn of the year, the early autumn. What was done with respect to the 1960-61 estimates was precisely what was done with the estimates of the previous year, the year before that and the years before that again. There has been no change in that respect. The amount included in the 1960-61 estimates for interest on unmatured debt is an estimate that was prepared last autumn. It indicates the total interest payment likely to be made during the present fiscal year computed on the basis of the interest rates then

prevailing, that is, prevailing in the autumn of the year when the estimate was prepared.
The estimate is deliberately drawn up in such a way as to make no forecast of the movement of interest rates or of the growth or reduction in the marketable public debt during the fiscal year following. If we were ever to do that we would be giving a signal to the market in advance of the government's debt operations during the fiscal year and we would be indicating what we consider is likely to be the trend in interest rates as well as the extent of likely government operations in the financial markets.
In either case I think the committee will realize what an improper course that would be and why, for that reason, it is the proper course that we should make our calculation in the autumn of the year on the interest rates prevailing at that time and thus avoid giving any signal to the market.
In the case of treasury bills, interest rates are computed on the basis of treasury bill discount rates prevailing at the time the estimate is compiled. For Canada savings bonds the estimated interest charges are adjusted to reflect the amounts of savings bonds which on the basis of previous years' experience are likely to be redeemed during the course of the ensuing fiscal year.
In other words, the figure included in this estimate now before the committee is a calculation of the actual payments to be made during the fiscal year 1960-61 based on the information available at the time the estimate was prepared in the autumn of 1959 and without making any assumption as to the future movement of interest charges or the size of the marketable debt. In that respect we are not following any new course. We are simply following the course that has been followed by the Department of Finance for years. It is the proper course and the course which I would defend under any circumstances. When the hon. member speaks as he does today and brings forward figures he is comparing things that do not admit of being compared together.
The hon. gentleman brought up the old subject of the defence equipment account. That goes back two years. The house approved the course then proposed in the budget. This defence equipment account was set up in the year 1950 and my predecessors between 1950 and 1957 had drawn on that equipment account from time to time. They charged to it rather than to budgetary expenditures the cost of replacing certain equipment. As a result of that past practice on their part the amount in the account had been reduced from $310 million to approximately $165 million. At the time of the government's budget two years ago we believed
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and stated then to the house that it was in the interest of good accounting practice and the maintenance of proper parliamentary control of expenditures that that account should be liquidated at that time and the house approved that procedure. It was open and aboveboard and the house gave its approval in clear terms to that proposal. I think the basis of accounting to the house for government expenditure since has been improved in consequence.
The next matter mentioned by the hon. member was, as he said, the cost to the provinces and municipalities as a result of the government's policies. The fact is, that every province and municipality today is deriving benefit from the federal government's fiscal policy as approved by the house when it adopted this year's budget. I do not need to delay the committee in pointing to the other measures that this government has taken at a very substantial cost to its own budgetary position to bring assistance to the provinces and municipalities.
The amounts paid out by way of the increase from 10 to 13 per cent in the share made available to the provinces from the yield of the personal income tax will bring to the provinces in a period of three years up to March 31, 1961 an estimated $195 million to $200 million. In addition to that we have provided $25 million a year by way of Atlantic provinces adjustment grants, this being the third year of those payments. In addition to that we have increased by tremendous amounts, on which I gave the house a full accounting in the budget speech on March 31, the federal contributions to shared cost programs for the assistance of the provinces and their institutions.
The next point made by the hon. member was an extraordinary statement. He said that the Department of Finance is in control of our monetary system. I have to inform the hon. member that the Department of Finance is not in control of our monetary system. The government is not in control of the monetary system and for very good reason. Parliament has legislated on that subject and placed control of the money of this country in the Bank of Canada. I gave the house a full statement on that subject when I spoke on April 27 and 28, 1959.
In speaking next about our bond offerings the hon. member undertook to say that our bond offerings had been of very short maturity and he said that our bonds were selling lower than those of almost any country in the free world. What are the facts? I will come to the treasury bills later, but let us look at interest rates on bonds.
I have here a comparison of interest rates from other countries. I will not delay the

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committee in this respect but on comparable issues as between Canada and the United Kingdom for example, the rates on midterm bonds, Canadian 2J per cent bonds maturing in 1967 and 1968-comparing those with United Kingdom 3 per cent bonds due 1965 to 1975-the yield today in the market on the Canadian bonds as at the end of July is 4.57 per cent and the yield on the United Kingdom bonds is 5.98 per cent, yet the hon. member says that our bonds are selling lower than almost any country in the free world.
The price of these bonds runs in relation to the interest rates payable. It may be seen here-I could give other figures-that we are in a position in this country to do business in the financial market on terms which are not available to the United Kingdom government in the United Kingdom market when you see how much lower the effective yield on these Canadian bonds is as compared with that prevailing in the United Kingdom on United Kingdom bonds.
Let us look at the treasury bill rates. A year ago we were being screamed at because the treasury bill rate was around 6 per cent. At the time of the last offering of treasury bills, August 4, the rate on the three months treasury bills was 2.83 per cent, a rate that is I am sure the envy of many countries in the world.


Mr. Marlin (Essex Easl):: You interfered with the bids at one point.


Donald Methuen Fleming: Yes, with very beneficial effects.


Murdo William Martin: Yet you say you
have no control over monetary policy.


Donald Methuen Fleming: I pointed out that the government can only operate with due regard for the law of supply and demand and on that occasion we reduced the demand with beneficial effects just as budget policy has been shaped, as I indicated earlier, with a view to reducing demands on the financial markets, and the results have been very beneficial in terms of increased confidence and a decline in interest rates.
I turn now to comparisons with the treasury bill rates in other countries. The comparable rate in the United States at the end of July was 2.4 per cent. The country with the greatest reservoir of capital in all the world was paying 2.4 per cent, and Canada is paying just 2.83 per cent on the last offering for similar treasury bills. The United Kingdom, in its offering of treasury bills of three months duration, at the end of July was paying 5.55 per cent; Canada's rate is 2.83 per cent.

One could go on with other evidence to answer the statement made by the hon. member for Welland. He undertook to say also that we were concentrating too much in our financing on issues of short term bonds. Let us look at the issues that have been put out just in the last fiscal year, whether of Dominion of Canada bonds or C.N.R. bonds bearing Canadian government guarantee. On May 15 last the C.N.R. sold an issue of $60 million of nine year term and $90 million of 18 year term bonds. On July 1, as the hon. member has indicated, we offered some short term issues. On October 1, we offered some short term issues with the convertible feature. I might point out, that of the $135 million of the bonds that were exchangeable out of that October 1, 1959 issue, exchangeable prior to June 30 of this year, into 16-year bonds, a total of $121 million was exchanged for the bonds maturing in 1975. On December 15, there was a further C.N.R. issue of $200 million five year maturity and $100 million 25-year maturity; on February 15, a federal issue of $100 million of two-year seven and a half months bonds; and $200 million of bonds maturing in three years one and a half months; on April 1, we issued $249 million of bonds maturing in three years; and $80 million of bonds maturing in nine years; on June 1, of this year, $140 million maturing in two and a half years. Therefore, the evidence, I must say, answers the hon. gentleman. We have been selling bonds in a very good range of maturities so as to be able to obtain the benefit of the various sections of the market.
The hon. member had something to say about the discount on the Canadian dollar. I have made known on a number of occasions my own personal satisfaction that the discount on the Canadian dollar has shown a substantial drop. I repeat that in relation to what I said earlier in disposing of that baseless assertion that emanated from New York that we had sought to support the Canadian dollar, we did no such thing and today-


Paul Joseph James Martin: Who is "we", the government or the Bank of Canada?


Donald Methuen Fleming: In relation to the operation of the exchange fund, as I pointed out earlier today and have on other occasions, the Bank of Canada operates as the agent of the Minister of Finance.


Paul Joseph James Martin: That is right. The government has no responsibility for monetary policy, my friend says.


Donald Methuen Fleming: That is not monetary policy.


Paul Joseph James Martin: I know; I do not need a lesson from my friend.


Donald Methuen Fleming: Does my friend not appreciate the difference between monetary policy and money supply on the one hand and fiscal policy on the other, including exchange rates?
We were asked to accept the view of the hon. member that there had been some shortcoming on the part of the government because bonds have been issued at discount. We have issued bonds at discount in the three years we have been in office, but this is not the first time that bonds have been issued at a discount, whether short term or long term bonds. These are nothing new. These are issued in relation to conditions prevailing at the time. I dealt fully with this, when I spoke in the house on April 28, 1959. There I pointed out that my predecessors had done the same thing, issued bonds at discount. Here are various series of long term bonds put out at discount prices by our predecessors. I pointed this out, giving full particulars of them. Here are discount prices of 97, 97 and so on, so that the hon. member should refresh his memory on an earlier period in relation to the prices.
Then as to short term issues I gave the details of issues by our predecessors at discount. Here are some of the figures. They are to be found at page 3120 of Hansard of that date: 97J, 97.15, 98, 97.85, and so on. One could go on; there is nothing unusual about this. These are simply in keeping with the practice that has prevailed on the part of our predecessors.
The hon. member concluded his remarks by saying that he expects a flight from the Canadian dollar; that he expects we shall see a depreciation of our bonds and we shall see a depreciation of our currency.


William Hector McMillan: No, I did not say that. I said that if we did not get a change in policy we would.


Donald Methuen Fleming: The policies which have brought about the benefits which I have reviewed now, particularly in relation to this year's budget, are the very policies which will prevent any flight from the Canadian dollar and will prevent a depreciation of currency or of the value of Dominion of Canada obligations. There is no flight from the Canadian dollar, believe me, Mr. Chairman. As a matter of fact there are evidences that more capital has been coming into the country even lately. There have been sonic movements in the exchange of late. This does not indicate any loss of confidence in the Canadian dollar. On the contrary, such movements as have existed in relation to ..capital indicate that there is as much confidence as ever throughout other countries of the world in the strength of the Canadian dollar and in the way in which we handle our finances in
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this country. In saying that I repeat that I do not wish to see a premium on the Canadian dollar such as we have had in times past. That has been the result of a heavy inflow of capital into this country because of the confidence that is reposed in this country and in its financial policy on the part of investors abroad.


Charles Edward Rea: I am sorry to advise the minister that his time has expired.


George James McIlraith: Go ahead.


Charles Edward Rea: Will the committee give unanimous consent to the minister to continue?


Some hon. Members:: Agreed.


Donald Methuen Fleming: I think I had completed my treatment of the subjects raised by the hon. member for Welland. I owe it to the hon. member for Vancouver East and to the hon. member for Outremont-St. Jean to say something concerning the points they raised.
First, may I say of the speech of the hon. member for Vancouver East that I think it was a constructive approach to an admitted problem. In what he had to say, in calling for a survey of the responsibilities of the various levels of government and of the capacity of various levels of government to meet their responsibilities, I do not see how anyone could take issue with him. That is what we are engaged in doing at the present time and were doing in the course of the dominion-provincial conference and in the preparation that led up to it. That is why the continuing committee of officials which was first set up some years ago when Mr. St. Laurent was prime minister, I believe at the suggestion of Premier Frost, at a dominion-provincial conference, and the work of that committee have been so timely and so useful. I pointed out earlier that this is the first occasion, this recent meeting of the dominion-provincial conference on July 25, 26 and 27, that the work of preparation for a conference at the plenary level had been carried out jointly by those who represent the federal and provincial levels of government. Previously there had been preparation at the federal level and the provinces, on the other hand, had made their preparations, but this is the first time that preparations have been carried out jointly.


Paul Joseph James Martin: Mr. Frost ridiculed and criticized the idea of a study group.


Donald Methuen Fleming: Not at all. Mr. Frost has not done anything of the kind. That committee was first set up on the motion of Premier Frost.


Paul Joseph James Martin: But he has ridiculed the way it has developed.

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Donald Methuen Fleming: No, he has not
done anything of the kind. On the contrary, the officials appointed to that committee by Premier Frost and representing the Ontario government have taken an active part in the committee and played a very useful role in its deliberations.
As to the other point raised by the hon. member for Vancouver East, I may say that when he speaks favourably of the commonwealth parliamentary association and the role it plays he is, so far as I am concerned, speaking to receptive ears. Over the years I think no one has been more active than I in the commonwealth parliamentary association, certainly in the 12 years I was a private member of the house, and I think it is an institution that has a most remarkable record of constructive achievement. I think the hon. member will perhaps accept my assurance that I have good reason to wish to see the work of the commonwealth parliamentary association carried forward and flourish.
As to the remarks of the hon. member for Outremont-St. Jean, I point out that he dealt with two subjects. The first had to do with the responsibilities of the respective levels of government in this country with regard to refugees. That is not a matter on which I think I should comment. It is a subject which engaged the attention of the committee of supply, I believe, on the estimates of my colleague, the Minister of Citizenship and Immigration, and also when the estimates of my colleague, the Secretary of State for External Affairs, were under consideration.
I pass to his second subject which concerns the financial problems of the municipalities of this country. I do not think I need to parade my sympathy with the municipalities. I devoted seven years of service to the municipal level of government in this country, and since undertaking my present responsibilities I think I have shown my concern for the problems of the municipalities, not least of all this year when we have taken strong measures with a view to assisting the provinces and municipalities to meet their financial problems.
As to his proposal for the establishment of a national loan fund or a national loan bank for the benefit of municipalities, let me simply remind him that this is not a new idea. It was raised before the present government came into office. To my knowledge it was raised in the house and was commented upon by at least one of my predecessors in the former government. I think I recall two of them dealing with this subject. They pointed out, as I recall, that issuing loans through such an institution would mean that

the federal institution would be dealing presumably directly with something like 5,000 municipalities in this country, all of them with varying credit standing, and that this would create inescapable problems for any such federal institution, particularly as the greatest need on the part of municipalities would probably be on the part of those whose credit was weakest. I recall their pointing out as well, that this would necessarily mean, if low interest rates were to be provided, a direct federal subsidy.
As to exemption from income tax in respect of interest payable on municipal bonds, again I say this is not a new subject but was raised in the days of my predecessors and rejected by them on the ground that it would be discriminatory. I recall their taking issue with the idea of issuing obligations at any level of government, federal or otherwise, where the interest would be exempt from income tax. Attention was drawn to the danger that in that event there could be accumulation of large amounts of these bonds in the hands of persons who were in a position to accumulate them and in that way would derive very substantial benefits in respect of income tax. I simply draw the hon. member's attention to what has been said by my predecessors in this regard.


Romuald Bourque: The minister said that the matter was dealt with by two previous ministers but at that time there was not very much discrepancy between the share of taxes that the different governments were getting. As I have said before, in 1933 the federal government got 39.4 per cent of total taxation and the municipal governments got 41.7 per cent, or more than the federal government. In 1958 the federal government got
61.8	per cent and the municipalities only got
16.9	per cent. So the condition has changed very materially. 1 can understand why the idea might have been turned down at that time but now that conditions have changed the picture is entirely different and I think the federal government should look into the matter very carefully.


George James McIlraith: Mr. Chairman, I wish to address myself to one point in the minister's remarks having to do with his reply to the hon. member for Welland concerning interest on the unmatured debt. The hon. member for Welland pointed out the very sharp discrepancy between the estimates of the interest charges on the unmatured debt since the present minister assumed the responsibilities of his office and the amount actually indicated by the budgetary papers. Notwithstanding the minister's rather strong language in giving his opinion of the competence of the hon. member for Welland, the minister

did not dispose of the point satisfactorily. He explained how the estimates were made up, which is quite clear, but the fact remains that under his predecessor in office the estimate under this item showed a figure remarkably close to the actual expenditure. Under the present minister's regime there is a very sharp discrepancy. It was correctly pointed out that in the year 1958-59 the discrepancy was $126 million and in 1959-60, $116 million whereas in the last year under the former minister of finance it was only $3 million.
The minister took issue with the amounts and there may be a variation in these figures but in any event it is not a substantial one and the point still remains. My point is that in estimating the deficit or surplus in the budget the minister's figures are not to be relied on because of this item that is not disclosed in the main and supplementary estimates. The minister still leaves outstanding the question of the reliance one can place on the minister's estimates and the budget prognostications. For instance, the item in the estimates for this year is actually $38 million less than the actual expenditure last year although the minister has just indicated that there will be new additional financing in a small amount. I have forgotten the figure, but there was a small amount in interest charges and there is nothing to indicate that interest charges will be less than they were last year.


Donald Methuen Fleming: Mr. Chairman,
there is no discrepancy at all. I pointed out how these estimates are made and the factors that enter into them. There are two factors involved. One is the amount of the outstanding debt and the other is the interest rate. I have given the reasons why in preparing the blue book of estimates we would be remiss in our duty if we attempted to prognosticate the precise size of the debt on which interest must be paid or the rate of interest which we think is likely to prevail broadly over the 12-month period of the fiscal year.
What has accounted for the difference between the actual costs as determined at the end of the year by way of interest and the amount in the blue book which was prepared in the fall preceding the beginning of the fiscal year is simply the fluctuation in interest rates. In some years there will be a greater fluctuation than in others. It happened that in the year that the hon. member for Welland chose, a year incidentally when Mr. Harris was in office for about three months and I was in office for nine months, there was more stability in interest rates than there was in the two succeeding years. In 1957-58 we had seen a rise in interest rates in the spring
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of that year which went into the summer, and then in August, 1957 interest rates began to decline and they declined until June of 1958. In the fall of 1958, as I pointed out, there was this serious rise in interest rates in New York which resulted in a parallel movement in this country. It was for this reason we had, by comparison, a wider departure between the figures of actual cost and the estimate in 1958-59 than we had in respect of the fiscal year 1957-58.
During any period when interest rates are stable it will be much easier to set forth in the blue book a figure that will compare closely with the actual cost as determined at the end of the fiscal year. During a time when interest rates are fluctuating there will be differences as between the cost and the estimate. I point out that this estimate for the fiscal year 1959-60 was prepared in the autumn of 1958 for a period that ran until March 31, 1960 and in the kind of world interest market that has existed in this period I do not think anyone could pretend to estimate exactly the interest cost on the debt over a 12-month period.


George James McIlraith: May I ask a question at that point, and perhaps it would clarify the matter.


Donald Methuen Fleming: Perhaps I could go on and deal with the point the hon. member made about the budget. Perhaps that is the point he had in mind. He raised a question as to whether or not this had some bearing on the figures on which the budget was based. My answer is, not at all. When we are making our estimates for budget purposes we are in a position to make them, usually about March, and we have the advantage of making them six months later than for the purpose of estimates. We are not obliged to disclose these to the public in the way that we do with the estimates. The factors which as I mentioned earlier would make it very improper to give publicly a precise estimate, and the reasons I mentioned do not pertain with respect to the budget. When we make our detailed calculations, therefore, at budget time with respect to what we consider our financial requirements are going to be, we are in a better position to make a very precise calculation. This point that has been raised by the hon. member for Welland, and supported by the hon. member for Ottawa West, has no bearing whatever on the budget figures.


George James McIlraith: Perhaps I could just clarify the latter part of the minister's remarks. Assuming the figures we have been using in this connection are correct, that is the interest on the unmatured debt was some $38 million less than the actual expenditure in

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the last fiscal year, do I understand the minister to say that there would be knowledge of those figures at the time the minister made his estimate in his budget for a surplus or a deficit, and that that fact would be considered at the time he made up his estimates; is that a correct summary?


Donald Methuen Fleming: I am not quite clear so far as this figure of $38 million is concerned. We show in this year's estimates, on page 23 and again on page 187, a comparison of the interest cost or the interest on the public debt for the fiscal year 1960-61 with our estimate for 1959-60, and of course these estimates were made in the autumn. The estimate for 1959-60 was $651 million and the estimate for 1960-61 is $739 million. On page 98 of the budget papers we showed the details of the annual interest charges amounting to $632 million, and showed the total annual interest charges on unmatured debt, including treasury bills as of March 31, 1960. Apparently the hon. member is comparing the figure of $632 million shown in the budget papers with the figure of $594 million appearing as one of the figures on page 23 of the blue book under the item, interest on public debt.


George James McIlraith: That is right.


Donald Methuen Fleming: I think I have clarified that point. The annual interest charges as detailed on page 98 represent the figures of interest charges worked out on the unmatured debt at March 31, 1960. Now you can have interest calculated in two different ways, and it depends on the time of year when you do it. You can wait until the end of the year and make a precise calculation. If you are making the calculation before that you have to introduce figures of estimate. I think I dealt with this subject in the discussion at the end of the session of 1958, and certainly in the session of 1959, when I outlined the ways in which this matter of interest could be calculated. We have given here the figures and the information and indicated as plainly as we could how those figures are arrived at. I have pointed out that in seeking to make the comparisons the hon. member for Welland sought to make this afternoon he was not comparing comparable figures. He was comparing different things.


Lester Bowles Pearson: Mr. Chairman, I think it must be a little disappointing to the minister that his estimates, which deal with matters of such importance, have come up in the diminishing hours of the session. Perhaps he would be even a little disappointed if I did not say a word about them.
I do not intend to speak for very long and I certainly do not intend to attempt to cover
[Mr. Mcllraith.l
even a large fraction of the minister's activities, because as we know-and I say this with great respect to him-he is the man of all works in this government.
The minister indicated to us a few moments ago that the fiscal and monetary policies of the government are above reproach, indeed almost above criticism. Perhaps he will not be surprised if we do not take exactly the same view of them. He said also that not the government but the Bank of Canada is responsible for monetary policy. Of course that is written into the Bank Act and in a technical sense is undoubtedly true. But the Bank of Canada can only operate in discharging its responsibility for monetary policy within the fiscal policies laid down by the government. If there is any difference between the bank and the government on such fundamental matters then it has been made clear that the governor of the bank should resign or, less likely, that the government should resign.
While the legal and technical position is quite clear, the over-all responsibility and the importance of the government with regard to monetary policy is equally quite clear. The minister will recall that the Radcliffe report in the United Kingdom outlined the situation pretty clearly recently, and I believe that in essence it is the same situation here. The minister has admitted this afternoon that the government intervened not long ago in the offering of treasury bills. Perhaps, as the minister said, it was a beneficial intervention, but it was an intervention by the government which certainly affected monetary policy.
Therefore, the government undoubtedly has in the broad political sense an important measure of responsibility for monetary policy as well as the full responsibility for fiscal and economic policy. If that were not the case then the Bank of Canada would have powers beyond that which could be admitted in any democratic and parliamentary state.
I should like to mention two other subjects. I will do so as briefly as I can and I know the minister will reply as briefly as he can. The minister has budgeted for an increase in the gross national product of 6 per cent without regard to any change in the price level. I would like to ask him on the basis of the situation that he faces at the moment and of the record so far achieved whether he still thinks that that is a reasonable prognostication. Certainly there are experts in this field not influenced by any political consideration who take a less optimistic view than the minister may take of that figure being reached. Does he therefore still think it is realistic to think in terms of a $12 million surplus and a $200 million over-all deficit? That surplus is perhaps not as realistic as it was 24 hours ago. One might be pardoned for

thinking that the $12 million surplus has gone with the acreage payments.
It remains perfectly clear that we have had four consecutive deficits, huge over-all deficits and an increase in our debt. If we cannot reverse that trend-and the minister stated in his budget that we were going to reverse that trend, I admit that this did create a feeling of confidence which has been helpful to the economy, if we cannot get a surplus at this time of what the government calls prosperity and expansion, what is going to happen to us if we move into a period of what I might call, in order to be relieved of the accusation of attempting to undermine the economy, a period of less expansion, of cause, of hesitation, or if you like of recession? When we hsk questions like this, and it is our duty to ask them and they are being asked outside the house, I hope we will not be accused of trying to sell the country short or of bringing about a depression or any such nonsense as that.
The other matter I wish to mention is that of the recent provincial conference. I would have thought in view of the fact that this conference was the culmination of about three years' preparation the minister might have had something to say about it and its results. Certainly it is clear, clear at least to us on this side, that the leadership and the initiative in this conference came from the provinces. I am talking now about the conference of two weeks ago.
The minister said a few moments ago, and I hope I took his words down correctly, that every province and every municipality benefits from the government's fiscal policy. If that is the case it must have been disappointing and discouraging for the minister to have found so inadequate a recognition of those benefits in provincial and municipal quarters, and I am sure that this feeling was reflected, to some extent at least, in this conference which has just concluded.
After three years of preparation the government has, so far as I know, made no single formal or positive statement about the principles that should now govern fiscal relations between the federal government and the provinces. If any such clarification of principle or statement of principle was made at the recent conference, perhaps the minister would tell us about it.
It was in November, 1957 that the first conference was held following the promises made by the government during an election campaign, glowing promises of what would be done to help the provinces and the municipalities. Indeed there were promises also
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as to what would be done to help the municipalities directly, and we have put some of those on the record.
It will be recalled that the Prime Minister decided at that conference that instead of general fiscal questions being considered the conference would deal with three specific matters, and that was done. Then after that was all completed the minister announced the setting up of the committee of ministers, provincial and federal, and of a study group, or seminar, whatever you wish to call it, of officials. This has been referred to this afternoon and the minister thought it had done very good work indeed.
Perhaps that is true, though as my hon. friend for Essex East has pointed out the premier of Ontario does not seem to share in the valuation which has been put by the minister on all this basic preparatory work done by his officials. In his press conference of July 26 when he was in Ottawa Mr. Frost, when asked about the further work to be done with regard to these matters, tax-sharing formulas, et cetera, is quoted as saying that he did not feel there was any use in temporizing and fooling around with formulas any more.
If there was so much valuable work done in the preparatory field, if cabinet ministers met, as they did, in Ottawa in July and I think in October 1959, and if this joint committee functioned so effectively over so many months, and the minister said it was the first joint committee of this kind to be set up and function in this way, which perhaps does not create precisely the correct impression because the minister will agree that in the preparatory work leading up to other conferences there were committees of federal officials and provincial officials and they did work together. But if such good work was done by the committee, and if the meetings of the ministers were so effective, it is surprising to say the least that so little came out of this conference. If that is true surely the responsibility for this has to be borne by the federal government which adopted, and these are the words used previously, a passive and negative attitude throughout this conference.
The initiative that did come to this conference came from the provincial leaders. Perhaps I could mention in this connection the premier of Quebec. So we surely have the right after this conference has been held to ask the minister if he cannot give us some report on it and some indication of what the government's policy is going to be in this field. That after three years of consideration we have had so little initiative from the federal government in this vital

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matter is surely a reflection on the way in which this whole matter has been tackled.
I know the minister himself made a statement at the conference, a statement which did not seem to me to get the kind of enthusiastic response which the minister indicated this afternoon that the assistance given to the provinces by the federal government should have elicited. As a matter of fact, when the minister made his statement-before he made it-the premier of Saskatchewan called attention to the fact that it was unusual in terms of procedure for the minister to speak in open session. The minister will remember what I am talking about, but perhaps I had better quote what was said by the premier of Saskatchewan:
I have no wish to labour the matter, but merely point out that up until 1957 all the records of the dominion-provincial conferences show that after the last of the premiers has made a statement we have gone into camera. It was only in 1957 that a summary was made by the Minister of Finance, and that is the first itme it was done.
The view taken by Mr. Douglas was supported by the premier of Ontario, because Mr. Frost said:
I think Mr. Douglas is right on that point. In 1957 that element was introduced and it was a matter of controversy. It is very unfortunate to have conferences disturbed by controversy, but that is what happened at that time.
Anyway the minister made his statement and he presented his calculation of the bill which would have to be paid by the federal government if all the requests of the provinces were met. That calculation was at once challenged, and the details of its composition have not yet been made clear. I ask the minister to say something about this matter, because nothing could be much more important than fiscal relationships between the federal government and the provincial governments. I feel that both in this house and outside we have the right to hear of them if any constructive proposals were put forward. Very little has been said up to now, and the opportunity now arises for the minister to enlighten us in this matter.


Donald Methuen Fleming: The minister appreciates the opportunity to offer as best he can enlightenment such as the Leader of the Opposition invites him to impart. The Leader of the Opposition has dealt with three subjects and I will comment briefly on each in turn.
He challenged my statement that the field of monetary policy belongs to the Bank of Canada and he made an assertion that the Bank of Canada can only operate within the limits of government fiscal policy. I must challenge that statement completely. We as a government respect the statute law enacted by this parliament. Parliament has given

monetary policy into the keeping of the Bank of Canada. The federal government has no control over money supply or matters of that kind. The example stated by the Leader of the Opposition is completely irrelevant. He pointed to what he said was an intervention on my part last summer in not accepting all of the bids for one week's offering for Canadian bills.


Paul Joseph James Martin: The first time it has been done in Canadian history.


Donald Methuen Fleming: It was high time, then.


Paul Joseph James Martin: Yet you say you
have nothing to do with monetary policy.


Donald Methuen Fleming: That had nothing to do with monetary policy. These were treasury bill offerings each week on terms which entitled the government to accept or reject any bid either in whole or in part, and we exercised that right on that occasion because we were borrowing the money. It was not a matter of monetary policy but of the government's own fiscal practice, and it was the government's own decision in a matter entirely within the field of government action or responsibility. I wish to make it very clear that at no time have I, since I became Minister of Finance, attempted to interfere in any way whatever with the responsibilities and jurisdiction given by this parliament to the Bank of Canada in respect of monetary policy.
The second point raised by the Leader of the Opposition concerns the outlook for the gross national product and my budget forecast which I submitted to the house on March 31. It is, I believe, a sound and correct principle that no intermediate or interim report is given to the House of Commons by the Minister of Finance during the course of the year with respect to the estimate given when he introduced his budget. Several years ago I happened to be in the House of Commons at Westminster when just such a question was asked as has been put to me by the Leader of the Opposition, and the then chancellor of the exchequer, Mr. Butler, formally took the position that it would be highly improper, once the budget had been disposed of, to undertake to make comments during the course of the year on how it was working out.
The third subject, and the one on which the Leader of the Opposition dwelt most, was the subject of the recent dominion-provincial conference. I did not attempt to make any report to the house because what occurred at that conference in the public session is well known. All hon. members have available to them a complete record of what was said at the conference, and I know the Leader of the Opposition would not expect me to discuss what

followed in the private session of the conference. These are the reasons why I attempted no report; I considered it would be completely superfluous, because I was sure that hon. members opposite had read the record in its completeness.
With regard to the assertion by the Leader of the Opposition that leadership and initiative came solely from the provinces and tlfet the federal government took a passive and negative attitude, I must point out that there is a fundamental difference in understanding or approach here. It may be that the hon. gentleman is accustomed to conferences in which the federal government comes forward with a firm proposition and says: this is it. That is not the way we have approached this conference. We came to this conference as we did to the conference of 1957 with an invitation to the provinces to discuss with us important common fiscal problems.
The Prime Minister in his opening statement at the conference reviewed the situation and indicated certain lines of government policy. He was very clear in his assertion of the government's position in relation to the equalization principle-the principle of fiscal aid. That was a proposal which was fully supported and indeed a point on which his speech was warmly welcomed by all the provincial premiers. Let it not be said that the federal government took merely a passive attitude. We stated the federal government's approach within the proper elements of principle at this stage of these proceedings and the Prime Minister then very properly called upon the provincial premiers to indicate their views. Fully in accord with the understanding of the governments represented and within all the proprieties of the occasion the Prime Minister indicated that these subjects would be taken under consideration. It was known before the conference met, indeed some time in advance, that it was not the intention of the federal government to submit hard and fast proposals to this conference at all.
This is the first of what may be a number of continuing conferences. There are abundant precedents for dealing with these questions in that way. As a matter of fact, the best precedent and the closest precedent is what happened in 1955. We are dealing now with what are to be the fiscal arrangements between the federal and provincial levels of government after March 31, 1962. The present arrangements in the present quinquennial period were worked out by the conference that began in 1955 and issued eventually in the introduction in this house in the summer of 1956 of what is now known as the Federal-Provincial Tax-Sharing Arrangements Act.
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They had a long series of conferences in 1955. The first conference was held on April 26 and 27. That conference discussed largely the agenda. The federal government on that occasion did not come forward with leadership and initiative, to use the expression of the Leader of the Opposition, by saying what should be worked out in the way of concrete proposals. Then on April 28 the officials met. They sat in committee, doing the very thing that is now being derided by some hon. members opposite. They engaged in the preparation of statistical and technical material. Then there was a conference from May 26 to May 30 dealing with a particular problem. I do not dwell on that.
Following that conference another day was spent by the officials in committee, following it up. Then on June 20 and 21 there was a further conference on the problem of unemployment assistance and shared cost programs. Then on July 4 the preparatory subcommittee met in Ottawa. It dealt with health grants and hospital insurance. From July 4 to July 6 the preparatory committee, a committee of officials, again met in Ottawa and dealt with fiscal relations, health and public investment matters.
Then on September 11 and 12 the officials on the preparatory committee met again in Halifax. From October 3 to 6 there was another plenary conference at which a number of problems were discussed. On October 6 there was a further conference of ministers of health. Then on January 23 to 26, 1956 the federal-provincial committee of health ministers met in Ottawa to deal with a particular question. I do not dwell on that because that was of a separate nature. On February 2 and 3, 1956 the technical committee of officials met again. Lastly, on March 9, 1956, there was a plenary conference held in Ottawa.
In addition to that long series of meetings in 1955 and 1956 there were exchanges both by way of correspondence and, I believe, by way of personal discussion. Therefore, Mr. Chairman, you will see that in asking us apparently to come out with some hard and fast proposals before this series of conferences in 1960 ever began, hon. members opposite were not asking us to follow the course which they followed in 1955.
I was asked to deal with the matter of the provincial requests for further assistance. I am glad to give these; I have been waiting for the opportunity to do so. I was quite prepared some days ago to give these figures. These are the figures of the estimate of the additional cost to the federal treasury of the various provincial proposals submitted at the public sessions of the dominion-provincial conference held on July 25 and 26, 1960.

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As the Leader of the Opposition has indicated, when I spoke at the conference on July 26, following the statements of the ten provincial premiers X made a rough estimate at that time that to accede to these various requests would involve the federal government in additional obligations of approximately $2 billion per annum. Later when I was asked a question in the house I acknowledged that that was a pretty hasty reckoning. It had to be under the circumstances because I was called upon immediately to follow the premiers. We had an opportunity within the next day or two to make in the department a more careful estimate. I selected for this purpose just six of the items and I will give the estimate that has been placed in the department on each. It would perhaps be more convenient from the point of view of reference if I were to set them out in a table as follows:
Estimate of the additional annual cost to the federal treasury of the provincial proposals at the public sessions of the federal-provincial conference on July 25 and 26, 1960.
1.	Tax-sharing arrangements on basis of standard rates of 50-50-50 with equalization to top two provinces as at present, $1,600 million.
2.	Prepaid medical plan (excluding dental care and pharmaceutical services which were also requested) if applied to all provinces, $175 million.
3.	Inclusion of mental and tuberculosis hospitals and depreciation and amortization of debt as shar-able costs under present hospital insurance program and increase of hospital construction grants to one third of construction costs per bed, $100 million.
4.	Federal participation in a broadened program of highways which would include construction of provincial arterial highways, resource roads and tourist facilities, $75-$100 million.
5.	Interest free loans to municipalities for social capital, $50 million.
6.	Exemption of municipalities from federal sales and excise taxes, $30 million.
Total-$2,030 million to $2,055 million.
I have not included in this calculation a number of other requests, some of which would have involved annual or continuing burdens on the federal treasury, others of which would have involved construction of particular works and would not have involved continuing obligations except, of course, for maintenance and matters of that kind.


Paul Joseph James Martin: What you have not pointed out is the falseness of the premise.


Donald Methuen Fleming: The following are requests which I did not include in the six I have given.


Charles Edward Rea: Order. I am sorry to interrupt the minister but I am just looking at the clock.


Donald Methuen Fleming: Mr. Chairman,
would hon. members be willing to agree to continue through the dinner hour?


Harold Edward Winch: We all want to facilitate matters but I think we should give consideration to the staff. Could there not be an understanding that if we could complete the business tonight we would all exercise selfrestraint? I ask the government and the official opposition this question: How about adjourning between six and seven o'clock on the understanding that we will finish our business this evening?


Donald Methuen Fleming: Mr. Chairman, that is entirely satisfactory to us. I wonder if I could take one minute to complete this list and put it on the record and then I will have completed my reply to the Leader of the Opposition and then we could perhaps rise until seven o'clock.


Lester Bowles Pearson: That is agreeable, although I am a little worried about giving a firm undertaking to finish tonight. I myself see no reason why we should not, but that is not quite the same as giving a firm undertaking.


Paul Joseph James Martin: It depends on the Minister of Finance.


Lester Bowles Pearson: The Minister of Finance has control.


Harold Edward Winch: I think the government has control, but in all decency and honesty we should reach an understanding now. Unless there is that understanding, if my information is correct, then of necessity we have to agree now to have an interim supply bill. I think it would be wrong to have an interim supply bill dealt with tonight and the whole appropriation bill introduced tomorrow. Could we not have some understanding now?


Lester Bowles Pearson: Surely we can go this far. If we are not finished at eleven o'clock, we shall go on until we are.


Donald Methuen Fleming: I thank the committee for its attitude. May I just finish reading this list and it will complete my remarks: No. 7, construction of Chignecto canal; No. 8, construction of the P.E.I. causeway; No. 9, substantial increase in the Atlantic provinces adjustment grant; No. 10, tax concessions to industry in the Atlantic provinces; No. 11, expanded programs for national and regional development; No. 12, purchase of 25 per cent of all provincial bond issues by federal government for various accounts; No. 13, joint federal-provincial financing of hydroelectric generation and transmission facilities; No. 14, increased aid for technical and university education; No. 15, income support for agriculture.


Lester Bowles Pearson: May I ask one question? Does the minister feel that these demands may eliminate the $12 million surplus?


Donald Methuen Fleming: This may be a good note on which to seek a little dinner.


Charles Edward Rea: I understand the committee will resume at seven o'clock.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 7 p.m.
Jacques Flynn: Shall vote 107 carry?


[Stage Direction]
Item agreed to.
120. Government's contributions to pension plan (and death benefit plans) for employees engaged locally outside Canada who are excluded from the Public Service Superannuation Act, $100,000.
George James McIlraith: There is one matter I wish to raise and I believe this is the correct item on which to raise it. It has to do with the group surgical-medical insurance plan for civil servants and superannuated civil servants.


Donald Methuen Fleming: I think that is item 124.


[Stage Direction]
Item agreed to.
124. Government's share of medical-surgical insurance premiums, determined on such bases and paid in respect of such persons (and their dependents), as the governor in council prescribes, who hold offices or positions or perform services the remuneration for which is payable out of the consolidated revenue fund or by an agent of Her Majesty, or who are contributors as defined in the Public Service Superannuation Act, or who are members of the Canadian forces or the Royal Canadian Mounted Police, $8,250,000.
George James McIlraith: Mr. Chairman, the point on which I want some clarification has to do with the group surgical-medical insurance plan and the action of the government in the spring of this year when certain changes were made in that plan. The point with which I am concerned is a rather narrow and specific one. It would appear from information I have been able to obtain that the benefits so far as retired civil servants are concerned have been cut down under the rearranged plan and the premiums payable by such people have been increased.
I would draw the attention of the minister to the answer given to question No. 363 in which is set out in some detail the premium rates charged to civil servants in the various categories and the premium rates charged superannuated civil servants in the various categories and then the comparable benefits. The point with which I am concerned is this. It would appear on the face of it at least as if this change involves superannuated civil servants in having to pay a substantially
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increased premium while at the same time receiving a more limited benefit. In a concise way, that is the point with which I am concerned.
It will be seen from the answer, for instance, that a single employee pays a premium of $1.35 per month while a superannuated civil servant pays a premium of $3.40 and the benefits of the superannuated civil servant are much narrower than the benefits of the active civil servant. As I understand the matter, formerly under the direct plans the premiums were practically the same. Can the minister explain this matter to the house?


Donald Methuen Fleming: Mr. Chairman, the plan that was worked out was one requested by the national joint council and was the outcome of discussion in that council and negotiations with the council extending over a very long period of time. We have worked out the best deal that we could possibly work out both for civil servants and their dependents and the dependents of the armed forces and dependents of the Royal Canadian Mounted Police on the one hand and former civil servants on the other hand. The plan was put out to tender. We invited tenders from any companies qualified to do this type of business in Canada provided they were in a position to do it on a nation-wide basis.
Superannuated civil servants, of course, do not obtain the benefit of the government contribution in respect of their adherence to the plan. They pay their own premiums. The fact that the benefits accorded to superannuated civil servants are not as wide and valuable in their effect as those accorded to civil servants or the dependents I have mentioned
is,	as I understand it, simply a matter of age.
This is the sort of consideration that insurers are bound to take into consideration in connection with the benefits they provide for any such group. Naturally the insurance rates on persons of a more advanced age are much higher ordinarily, in this type of insurance, than for persons who are younger or are in the prime of life. As I understand
it,	that is the entire reason why we have today a difference in benefits as between the civil servants on the one hand and superannuated civil servants on the other.


George James McIlraith: There have been a great many letters written on this subject, and I am sure the minister has received some, complaining about the situation. There was one letter published in the Ottawa Journal of April 12. I will not read the letter but I should like to point out that there has been an additional charge put on the superannuated civil servants by this change which

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amounts, in cases where there are not many dependents, to about $25 per year. It is a fairly complicated matter, but I should like the minister to look at it in a specific way, and go through it rather carefully. If he will take the two forms put out by the government, with which no doubt he is familiar, and the correspondence, I think he will see the nub of the problem. It does appear as though there has been a substantial burden put on superannuated civil servants that was not there formerly. This, of course, works a real hardship on them, as I think the minister would be the first to agree, and that is something that is not desirable. I would ask him to look into this whole matter to see if something could not be done to remedy the situation.


Jacques Flynn: Shall item 124 carry?


George James McIlraith: Will the minister say he will look into the matter before this item carries?


Donald Methuen Fleming: This subject has engaged a good deal of my attention and study for quite a long time now. There are bound, in the introduction of new and widely applied plans of this kind, to be problems of dislocation when they are put into effect. These are all being studied. Naturally we would like to see those who are on superannuation enjoy the best possible benefits that can be procured at the premiums they are called upon to pay, and that has been our approach to the whole plan, to obtain the best possible plan at the most reasonable cost which might be available.


[Stage Direction]
Item agreed to.

[Stage Direction]
39. Salaries and expenses of office, $890,860.
Mr. Macnaughion:: During the last 12
months there have been a few rather important changes in the Auditor General's office, and if I may have your permission, Mr. Chairman, I should like to comment very briefly on them. First of all, as we all know, Mr. Watson Sellar who for almost 20 years was the Auditor General, retired during the month of August, 1959. I do not think it is saying too much to say that his reputation for reporting fearlessly any irregular transactions was well known. There is no doubt about it; he has, during that long period of service, been scrupulously fair to those responsible for departmental administration. During his tenure of office tremendous changes took place, not only in the volume of public expenditure but also in the pattern of expenditure. Each of these changes, of course, has added materially to the responsibility of the Auditor General's office.

The acting auditor general, Mr. Ian Stevenson, from August 5, 1959 to February 29, 1960 had a great deal to do with the preparation of the Auditor General's report. As a matter of fact he signed the 1959 report. Of course, we all know that Mr. Maxwell Henderson was appointed on February 1, 1960 to be Auditor General of Canada. Before this time he was controller and chief financial officer of the Canadian Broadcasting Coropo-ration. We know that he has had a great deal of experience in private corporation matters which he is bringing to the service of public affairs in Canada. He is a member of the institute of chartered accountants of Nova Scotia, Ontario and Quebec.
I refer to this recent appointment because there have been very material changes in the growth and development of the Auditor General's office and of his responsibilities during the last 10 years. As an example of the increase in work in the Auditor General's office, may I say that in 1950 the total annual government expenditure amounted to approximately $2,449 million. This embraced 29 government departments and 23 crown corporations. Today, in 1960, government expenditures are over $5,737 million, and they embrace 34 government departments and 29 crown corporations. The number of employees in the Auditor General's office in 1950 was 166, whereas in 1959 the size of the establishment had been reduced to 142. The average strength today is approximately 136, and I am told it has been reduced from even that number.
I think it should be noted that in his testimony before the public accounts committee the Auditor General said that if he got some assistance he was prepared to submit detailed reports to the various agencies and departments. As a matter of fact, the Auditor General's report for 1959 contained a great deal more in the way of explanation with respect to these crown corporations for which the Auditor General was responsible. Without detaining the committee any longer I should like to suggest that because of the greatly increased work in the Auditor General's department, and also because of the fact there are considerably fewer employees to do that work in 1960 as compared with even 1950, and because of the fact that the business of this country is getting more and more important and increasing in volume each year, I should like to suggest that we, as members of the house, are entitled to more detailed information on the various aspects of public affairs.
May I refer the committee to paragraphs 77 and 78 of the report of the public accounts committee for 1960. I should just like to

quote those two paragraphs so they will appear in the record. The recommendations contained in paragraph 77 of the public accounts committee report read as follows:
Parliament has placed broad auditing responsibilities on the Auditor General and they involve the largest and most complex business in Canada today-the federal government. To carry out these responsibilities adequately in the interests of parliament and the public requires the highest order of leadership coupled with a competent staff of career accountants and auditors. In the opinion of the committee it is fundamental that this independent auditing office be strong, capable, efficient and equipped to operate in accordance with the high standards of independence and objectivity expected of professional accountants.
Then paragraph 78 contains this recommendation:
Since the Auditor General is responsible only to parliament, the committee recommends that at the next session of parliament, the proposed special committee on the Civil Service Act should give consideration to authorizing the Auditor General, with the approval of the treasury board, to recruit his own staff under a plan of organization necessary for the proper functioning of his office and the establishment of rates of compensation for each class of position, having regard to the rates of compensation and conditions of employment for comparable positions in other branches of the public service and outside the public service.
May I commend that to the Minister of Finance.


Donald Methuen Fleming: Mr. Chairman, I thank the hon. member for Mount Royal for his remarks. I think it fair to observe that as the respected chairman of the public accounts committee he has been in an unsurpassed position to observe the value of the service rendered to this House of Commons by the present Auditor General, and by Mr Stevenson as the deputy auditor general, and also previously by Mr. Watson Sellar.
The retirement of Mr. Watson Sellar closed a career in the public service that has been notable from many points of view. Mr. Sellar brought to this office an independence and a capacity which have distinguished both him and the office, and I am happy that a man of the quality and calibre of Mr. Henderson has accepted the office as Mr. Watson Sellar's successor.
As to the work of the committee this year I say that the report tendered to the house by the committee will be very carefully studied. Some of the matters that the hon. member has mentioned are stressed in that report, and it will be my obligation to give very serious study to those questions.


[Stage Direction]
Item agreed to.
Jacques Flynn: This completes the estimates of the Department of Finance.
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PRIVY COUNCIL

[Stage Direction]
308. Payment, notwithstanding anything in the Financial Administration Act or the Senate and House of Commons Act respecting the independence of parliament, to each member of the Queen's privy council for Canada who is a minister for whom no salary or allowance in addition to the allowances under section 33 and section 44 of the Senate and House of Commons Act is provided (the acceptance of which shall not render such member ineligible or disqualify him as a member of the House of Commons) of a salary of $7,500 per annum and pro rata for any period less than a year, $7,500.
Jacques Flynn: Privy council, items 308 to 316 inclusive. This department will be found on page 60 of the blue book, the details on page 418. Shall the item carry?


Harold Edward Winch: Mr. Chairman, we are now nearing the end of the estimates for this year, and perhaps it is appropriate that almost the final vote should be left to those of the privy council whose estimates are under the direction of the Prime Minister.
Mr. Chairman, I should like to ask the Prime Minister if he would comment on what to over a million organized workers in Canada is a matter of importance. I refer to the power of the cabinet, headed by the Prime Minister, to disallow within 12 months legislation of a provincial nature if it is not considered to be for the general good of Canada.
There was passed in Newfoundland over a year ago legislation which denied the right of free association and organization in that province by outlawing a certain union, thereby denying the right of free association and organization. This of course has particular interest to the Prime Minister because of his interest in and promotion of a bill of rights which has now been passed by this house.
It is not possible for me now to speak on why there was not a disallowance of provincial legislation which denied the right of trade union association or organization. But a question I would like the Prime Minister to comment upon is this. According to my information the international labour office of which Canada is a member at its most recent meeting in Geneva was most concerned with the legislation passed in Newfoundland and in particular with the fact that the Prime Minister through his power as Prime Minister, and through the executive, the cabinet and the privy council, did not exercise the power of disallowance.
I am given to understand that prior to the 12-month limitation running out within which the government could exercise its power of disallowance the Prime Minister received a communication from the I.L.O. conveying to him the view of the I.L.O. committee on

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freedom of association, asking that action be taken on this most important matter.
If my advice is correct, and I have no reason to think it is not, the Prime Minister was informed by this committee of the I.L.O. some two months before the time period for federal disallowance ran out that the legislation was such that if no action was taken by the federal government under its powers of disallowance there was the feeling that the government of Canada would be guilty of a breach of the basic principles of the international organization to which we are syndicated.
I could speak for a long time on this question, but instead I just want to ask the Prime Minister if he will explain why the government, having the power through the British North America Act to disallow such legislation, did not do so. In particular, could the Prime Minister advise us as to what answer he gave the I.L.O., of which we are a member, in reply to the letter they sent to him which said that they felt that if Canada did not disallow it we would be guilty of a breach of a commitment which we had made to the I.L.O. with regard to the freedom of trade union association and organization.


John George Diefenbaker: Mr. Chairman, it was only about five minutes ago that the hon. gentleman advised me that he intended to ask this question and I have not before me the files connected with this matter. Neither have I the letter from the I.L.O. nor the reply thereto and the correspondence in general.
In so far as the exercise of the power of disallowance is concerned, I think a reading of Canada's constitutional development indicates that the power of disallowance when it was originally provided in our constitution was believed by the fathers of confederation to constitute a means whereby any legislation passed by the legislatures might be disallowed almost without any limitation, and in the first few years after confederation, and by that I mean almost until 1896, there were a number of exercises of this power.
However, in the present century the number of disallowances has gradually diminished. Indeed the power of disallowance has in general not been exercised for many years when the legislation passed by the legislatures was apparently within the competence of the legislature. The exercise of this extraordinary, sweeping and even arbitrary power has in the passing years been diminished. Whatever one's feelings with respect to legislation passed by provincial legislatures may be, however much one may dislike it, the gradual development has been that the federal government, through the governor general in council, does not exercise that power where

there is on the face of it an apparent conformity with the legislative authority of the legislature which passes it.
I recollect very well that I did receive a communication from the international labour office in Geneva and the letter received from that organization was passed on to the government of Newfoundland. Again, I speak from memory and maybe I am not completely correct in my recollection in this regard. My feeling was, and I think it is soundly based on Canadian constitutional development, that the federal government, through the governor in council, ought not to exercise this power against the legislature of any province. The legislatures are elected by the people of the provinces and whatever one's views may be with regard to the legislation, to do otherwise would be to place the federal government in the position of a judge and jury over the legislation passed within the competence of the legislature, something that no longer is considered a proper and reasonable attitude for the federal government to take.


Harold Edward Winch: I thank the Prime Minister for his statement. But I believe it is for the general good of Canada that perhaps the federal government should move in, on occasion, as they have done in the past. Through you, Mr. Chairman, I ask the Prime Minister whether in view of the passage of the bill of rights he feels that this measure now guarantees to all workers in Canada the right to freedom of organization and association of their own choice.


John George Diefenbaker: The passage of the bill of rights cannot, will not and does not in any way interfere with those matters that come within the legislative competence of the legislatures. In so far as the right is concerned to which the hon. gentleman has made reference, where that right is a matter of civil rights in the province-I know the hon. member would agree after all the discussion that took place, with the preamble as it is and the section which was accepted following the deliberations of the committee, that we made it clear that the bill of rights covered no field beyond the legislative competence of parliament. The fact that it was passed will in no way authorize the federal government to interfere directly or indirectly with those things that are within the competence of the legislatures.


Harold Edward Winch: But surely, the right of freedom of association and organization is a basic right in all Canada. Is that not covered by the bill of rights? The Prime Minister says no?


Chesley William Carter: I rise merely to correct one statement made by the hon. member for Vancouver East when he put his earlier question to the Prime Minister. The hon. member for Vancouver East said that the legislation passed by the Newfoundland legislature destroyed the right of free association of a certain union. I should like to ask the hon. member and other members of this committee this: if that legislation destroyed the right of association, how can this very same union, the international woodworkers association, organize a local as they did at Deer Lake in Newfoundland a week or two ago?


Harold Edward Winch: A week ago.


Chesley William Carter: If their right of association was destroyed, how could they organize a local? What the Newfoundland legislation did was not to destroy any right of any worker or group of workers to free association but to take away from the international woodworkers association a monopoly of bargaining rights, and that is something very different.


[Stage Direction]
Item agreed to.
Privy council office-
309. General administration, $503,171.
Paul Joseph James Martin: I do not know if the Prime Minister is aware of an arrangement made this afternoon when we were discussing the estimates of the Minister of Trade and Commerce. We had raised on the particular estimate dealing with the bureau of statistics a question involving the report of an interdepartmental committee, set up to examine the existing standards of measurement of unemployment in Canada. Several hon. members, including the Leader of the Opposition and myself, took part in this discussion. We had indicated to the Minister of Trade and Commerce, who now enters the committee and who, I think, will confirm what I am saying, that we were reluctant to pass that item in the absence of an assurance that the report of that committee would not be implemented without parliament being given an opportunity of examining its conclusions. The hon. gentleman indicated that he would prefer us to permit the passage of the item at that time.
The Minister of Trade and Commerce was going to endeavour between the period when we were discussing the item and the moment when we would be discussing this item to see if he could not get some assurance that would enable us to feel assured that in the interval between the prorogation of parliament and the summoning of the next session
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of parliament-if there is to be one-no opportunity would be taken to change the standard of measurement without that change being first discussed in parliament. The situation now is that we are to be afforded an opportunity of considering this matter on this item. That is pursuant to the arrangement made with the Minister of Trade and Commerce who very kindly co-operated in the matter.


John George Diefenbaker: Mr. Chairman, the Minister of Trade and Commerce advised me of the intention of the Leader of the Opposition and the hon. member for Essex East to bring up this question. May I say at once that in so far as the report is concerned that report will receive the consideration of the government, something that as yet has not taken place. That can be understood because-I speak subject to correction-I think it was delivered to one or two ministers of the cabinet on August 8. Personally I have not had the time to examine it.
However, I must say that when the hon. gentleman suggests that there should be a hard and fast determination made at this time as to the action the government will take, I am sure that on reflection he would realize that if action is demanded before the next session is called together and if such action is within the competence of the governor in council, then it is obvious that such an agreement on my part would be both unjustified and unjustifiable.
I am at all times anxious and desirous of assuring that nothing shall be done by the governor in council which will in any way transgress the authority of parliament. That is essential in every matter that comes before the governor in council. But I certainly would not give an assurance that in the light of events and with full regard to the authority of the governor in council would mean an abdication by the governor in council of its authority. If, on the other hand, such a report after consideration by the cabinet is found to contain recommendations that require or demand that they should be brought before parliament before a decision is made thereon, that course would be followed.
I would point out the fact that some years ago a change was made in the base year used in the cost of living index. The cabinet at that time decided that instead of continuing to reveal the actual situation as to the rise in the cost of living from its original base which might lead people to believe that the dollar had greatly depreciated a change should be made. A decision was made by the minister within his powers under which 1949

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was established as the base year in calculating the cost of living index. I do not remember what the cost of living index was at that time but I think it certainly was around 150. It was immediately put back to 100. A new base year was determined upon and the cost of living index today is shown on the basis of the new foundation year used in the index.
Desirous as I am at all times to accommodate the opposition I could not give such an undertaking. I have already stated that there is a possibility that the next session may not be too far removed. If I were in a position at this moment to say more than that I would do so. I am sure that hon. gentlemen having regard to the world situation and Canada's position will realize that while I have an antipathy for starting the session in the fall rather than in January circumstances may conceivably require that the next session be not delayed until January.
In the meantime, this report of the committee will be studied. If action by the governor in council within its constitutional authority is possible and necessary, I could not agree to binding the government in advance as suggested by the hon. gentleman to fail to exercise its constitutional power by a promise made at the present time. However, if action is to be taken and is determined upon and it is within the authority of the governor in council, then as soon as the house is reconvened the opposition will have every opportunity to show its lack of confidence in the action taken by the constitutional means of an amendment to the speech from the throne.


Lester Bowles Pearson: Mr. Chairman, we are talking now about the report of a committee which is in the hands of the government. That committee was set up during this session after parliamentary discussion and through what I think I can fairly call parliamentary initiative. In that respect the recommendations of this committee, if any, differ from the precedent which the Prime Minister has cited of recommendations which were made to the government in the past concerning the alteration of the base on which the cost of living index should be established. There is a parliamentary connection with this committee.
So far as I know there is no question about the government's power and authority to implement the recommendations of this or any other committee which is reporting to the government. That does not seem to me to be in question at all. The government, of course, can do what it likes. It can accept the recommendations of this committee and
[Mr. Diefenbaker.l
implement them, it can accept the recommendations and do nothing about them for the time being until parliament has had a chance to examine them, or it can reject them and do nothing at all.
After all, these are the recommendations of a committee on a matter of importance, of course, a matter of controversy, though a technical matter. What is the best statistical method of measuring unemployment? The government has the power to do anything it likes with this report. The question is, what is the best procedure to follow, what is the best way of measuring unemployment, so that the differences of opinion that have arisen in the past over how this matter can be removed and so that when we discuss unemployment in the house we shall be discussing unemployment and not methods of calculating it. Therefore, Mr. Chairman, I would think that from everybody's point of view it would have been desirable to have had parliamentary agreement on any new kind of procedure if we are to make a change. That is what we were asking for before the change was made.
We are asking that the report of this committee be submitted to the appropriate parliamentary committee so that if possible there can be agreement on a procedure for measuring unemployment, an agreement by which we will all feel ourselves bound, and an agreement which will remove the kind of argument and, if you like, controversy, which we have had now for quite a long time, going back to 1954 and 1955, in respect of this matter. What we have asked for is merely an assurance on the part of the government that before action is taken parliament will have a chance to consider the matter through a parliamentary committee.
The Prime Minister is unable to give us that assurance. He rests on the power of the government to take any action which it feels necessary. We do not challenge that power; we question the propriety of the government that has that authority taking that attitude.


Harold Edward Winch: I do not know whether I can ask this question on this vote; I hope I can. It has to do with a matter about which I feel very strongly. The members of this group are most interested in the maintenance of peace in the world. At the time of the difficulties between Israel and Egypt the House of Commons was in session and it passed on our emergency force. At the time of the Congo difficulty the House of Commons was sitting and we gave the government the authority to act. I am most concerned about the period when the House of Commons may not be in session. I hope nothing occurs, but

if something does I should like to know under what authority the Prime Minister, the privy council or the governor general in council is able to move in to give Canada's assistance in the maintenance of peace. I know that if parliament were meeting the government would get the authority but, as I say, I am concerned with the time when we are not meeting and a disturbance may occur. What authority has the government to take action in an occurrence such as that?


John George Diefenbaker: In the past when an emergency arose which is contemplated by the War Measures Act, then of course the War Measures Act by proclamation would be brought into effect and the powers incident to that act would immediately be vested in the governor in council. In so far as the rapid convening of parliament is concerned, I can only say this. While in the old days it did take some considerable time to bring about the convening of parliament, today it is a matter of days, if not of hours. As soon as the call is sent out a telegram is sent to each member; the radio and television naturally communicate the decision made and it becomes simply a matter of available transportation to provide members with the earliest opportunity of gathering in Ottawa. I am sure that if it became necessary, through international conditions worsening to the extent that would demand the collective conscience of parliament being mobilized, parliament could be convened in a matter of a couple of days.


Harold Edward Winch: There may be some slight misunderstanding about what I was asking. I agree that the authority lies with parliament but what I wanted to be informed of was, is there any power existing that could be exercised in the event of an emergency such as the Congo, if parliament is not sitting? I want to make sure that Canada has the power to act. We know that parliament has, but in the event that parliament is not sitting, is there any power to utilize our forces in the maintenance of peace?


John George Diefenbaker: The other day the hon. member for Essex East-


Harold Edward Winch: I am speaking only for myself.


John George Diefenbaker: I appreciate that. I am just going to give the other side of it. As I recall it, the hon. member for Essex East asked me to give the assurance that in the event it became necessary to send an additional number over and above the number provided for in the decision of parliament, then before the additional number was sent out of Canada parliament should make the decision in this regard. Constitutionally I believe that action could be taken, but I
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believe that to take such action without having behind it the power of a unified House of Commons would be action which would not be in keeping with the discharge to the fullest extent of Canada's responsibilities.


Paul Joseph James Martin: Mr. Chairman, I should like to return to the matter discussed by the Leader of the Opposition, a matter which I regard, as the Prime Minister I am sure will appreciate, one of the greatest importance. The Leader of the Opposition has stated the situation in so far as I am concerned, but I should like to reinforce what he had to say. The fact is that in this country for many years unemployment has been measured by three different standards: the one provided for by the dominion bureau of statistics, which is a sampling process; another by the national employment service, which is the record day by day of registered people who are applicants for jobs; and then, in addition, there is a figure made up of the number of people actually in receipt of unemployment insurance benefits. In my judgment, these three sets of figures are not confusing because each of them seeks to do specifically what each sets out to do. Whatever confusion has existed has been created by circumstances altogether apart from these three standards of measurement.
This session, last session and in the autumn session of 1958, there was much discussion about unemployment in our country. When the question was under discussion during the current session of parliament we were told by the Minister of Labour some four and a half months ago at least that the government had set up an interdepartmental committee to look into the standards of measurement with a view to arriving at a new standard or of confirming the existing standards.
After this statement was made by the Minister of Labour an opportunity was taken at an organization meeting of the industrial relations committee to try to give to that committee the power of examining the very matter which had been referred to an interdepartmental committee. A motion was made by the hon. member for Kenora-Rainy River to that end. That motion was designed not to supplement the work of the interdepartment body but to give members of the house an opportunity of paralleling their efforts with those of the interdepartmental committee. The chairman of the standing committee asked the hon. member for Kenora-Rainy River if he would allow the motion to stand until the next meeting. No meeting of that committee has since taken place notwithstanding the fact that the hon. member for Kenora-Rainy River asked the chairman of

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the committee on the orders of the day when the committee would be convened so that his motion could be dealt with.
We have asked the Minister of Labour repeatedly during this session whether he had been advised by the members of the interdepartmental committee if they had completed their report. It is interesting to note that the Department of Labour is represented on that committee. When the estimates of the Minister of Labour were under discussion in the house a few days ago the minister told us that as far as he knew the report was not yet ready; in any event, it had not yet come into his hands, but when he was encouraged to take the initiative and inquire whether it was ready he promised to look into the matter.
Since that time the Leader of the Opposition has put two questions on two separate days to the Minister of Labour asking him if the report was yet available so that the house might be given an opportunity to examine its contents and decide whether the recommendations, if they did suggest a change, should be accepted. At no time was the Minister of Labour able to say if the report had been prepared, whether it was ready or whether the government had enough time to give consideration to it.
However, a few days ago, I think on Monday last, the Minister of Labour did say in answer to a question that was put that the report was now ready but that the government had not yet considered it. Again, on a later day a question was put to the Minister of Labour to find out whether the government had yet considered the report. We were told that the government had not yet considered it.
I fully understand the Prime Minister when he says that he has been busy since the report was prepared and has not had an opportunity to examine its contents and consider its recommendations. It is perfectly understandable that he and his colleagues have not had time to do so. However, the house is now about to prorogue and while we may be meeting in the fall, as the Prime Minister has suggested, it is possible we will not be meeting until January. That will mean that an interval of at least five months will take place unless parliament comes back in the fall. During that time we may or may not have heavy unemployment.
This undoubtedly is the most important single domestic issue in Canada at the present time. It is a matter about which there is strong feeling and about which there is great public interest. If we are to have a new
[Mr. Martin (Essex East).!
standard of measurement devised by the government without having that standard submitted to parliament for consideration it could be that the government by giving effect to the recommendations would be able to create a situation whereby we would not get the kind of picture of unemployment we have been getting and which I feel is essential in the interests of objective discussion of this problem.
The Prime Minister himself has given confirmation of the validity of the national employment service figure because that is the figure which he himself referred to last Saturday afternoon when we were discussing some aspects of a related matter. It may be that this is not a matter that normally would be considered by the executive except in the unusual circumstances of the present situation. I am not trying to suggest that this is not a matter that the cabinet should consider but there are many standards adopted by the bureau of statistics in its assessment of statistical situations in our country that are not considered by the cabinet as a condition precedent to particular methods of assessment being adopted. I say that in the face of the controversy which exists regarding this problem and in the light of the fact we have had these three standards of measurements in this country for over 15 years it would be a serious departure from our traditional practices for the government, now that the report is ready in the dying days of the session, to deny parliament the opportunity of knowing what is in it and then, while parliament is not in session, to adopt a new standard that might not reflect the state of unemployment in Canada not in accordance with those standards that have prevailed since the end of the war and even during the war.
In the face of the fact that parliament has been seized with this matter I would urge the Prime Minister to consider carefully whether it would be in keeping with our parliamentary traditions to permit a change in the standard of measurement to take place without giving the industrial relations committee, which has a motion before it, and without giving parliament the opportunity in the light of current discussions of determining whether the recommendations, if they suggest change, should be adopted.
This is not a parallel situation, as the Leader of the Opposition mentioned, with the changes made a few years ago in the cost of living index. That was not at any time a matter before parliament in the sense that this situation is.


John George Diefenbaker: Oh, yes, it was; there was a committee set up.


Paul Joseph James Martin: This matter was put forward by the Minister of Labour during the course of a debate in the house on unemployment. It is difficult to accept the view that it would take four and a half months for this report to be drawn up. It is difficult to believe that its appearance at this tune is not coincidental with the fact that parliament is about to prorogue. I say that if before we come back to this house these standards of measurement have been changed the conclusion will be irresistible that they have been changed because the government was not anxious to have the unemployment picture portrayed in the way that it has been portrayed in our country now for almost two decades.
If there is a recommendation made by this interdepartmental committee that a change should take place, no great disservice to the nation will develop if no action is taken on this report until we come back in January, so that parliament or a committee of parliament, or both, may be given an opportunity of determining whether the recommendations made are in keeping with the demands of the situation in our country. If the situation should develop that we are going to come back in the fall, then certainly no great national inconvenience will arise as a result of a delay of two or three months. No national inconvenience or disservice will arise even if we wait until January.
I ask the Prime Minister to give consideration to these matters so that there can be no doubt about the confidence that the Canadian people will have in the new standards, if there are to be new standards, so that they will have no feeling of a lack of confidence in the merit of whatever changes are made, if there are going to be changes made. I hope that if the suggestion made by the interdepartmental committee is simply for a modification of the dominion bureau of statistics technique, namely to increase the number of individuals covered in the sampling process, I hope the Prime Minister will not regard that as an improvement, particularly in the light of the standards recommended by the international labour office. These are standards which the international labour office believes should apply in countries in which there is an honourable and objective effort made to assess the nature of unemployment.
I make this submission to the Prime Minister, agreeing with what the Leader of the Opposition has said, because I feel that in a matter of this importance nothing should be done that would in any way give any justification for a feeling that the standards used by the administration were not the best available standards to measure this most difficult problem.
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John George Diefenbaker: Mr. Chairman, this discussion on the part of the hon. gentleman is a most interesting one. He said that we do not want new standards of unemployment at this time without parliamentary acquiescence and discussion. I am sure, however, that what we do want is a true standard of measurement for unemployment, not a new one but a true one. I find it most unusual that the hon. gentleman should become so perturbed over this question. A moment ago he said that I referred in the house a few days ago to the national employment service figures in 1957 for the month of June and said that there were 267,000 unemployed.


Paul Joseph James Martin: That is right.


John George Diefenbaker: He said the true figure was 150,000.


Paul Joseph James Martin: That is right.


John George Diefenbaker: I am glad he has said "That is right". He indicates that he realizes the national employment service figures are far above the actual level of unemployment.


Paul Joseph James Martin: Not at all.


John George Diefenbaker: Now he is afraid of the national employment service figures. When I mentioned them the other day he said they were not reliable. They showed over a quarter of a million unemployed, while the actual number of unemployed was 150,000. He proves, by his own words out of his own mouth, that the figures upon which he relies when he desires them to meet his purposes are exaggerated, the relationship being 267 over 150.
Now no one has any desire, I am sure, to exaggerate the amount of unemployment. But the very fact that the hon. gentleman now is concerned, and having the other day deliberately stated that the national employment service figures were not correct, is now very much frightened-


Murdo William Martin: Mr. Chairman, the Prime Minister-


John George Diefenbaker: -by what I am about to say.


Paul Joseph James Martin: I never did say that.


John George Diefenbaker: All right, I will read what the hon. gentleman said.


Paul Joseph James Martin: Read what I said.


John George Diefenbaker: I will read, if I may, from page 7730 of Hansard:
They had been warned in the month of June of 1957, and if my recollection is correct the number of unemployed at that time was over 200,000.


Paul Joseph James Martin: One hundred and fifty thousand.

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Paul Joseph James Martin: On the basis of those in need.


John George Diefenbaker: He always does this when he finds himself being tied up by his own statistics, when not from his own bureau. He immediately becomes excited. I wanted to prove from the record exactly what was said. I read from page 7733 of Hansard:


Paul Joseph James Martin: I made a statement
as to the unemployed in June, 1957, and the Prime Minister now, in an effort to show that that was a wrong statement is quoting from the N.E.S. figures, which are not the figures on which I am relying, which he realizes. In order to be fair the Prime Minister ought to quote from the-
Then there are some interruptions, and I am reported as having said:
Mr. Chairman, I know the hon. gentleman's great powers, but he does not yet know what I am going to read, although his powers of perception in this case indicate that he is afraid of the facts. Registration for employment at any N.E.S. offices-


Paul Joseph James Martin: How about persons without jobs?


John George Diefenbaker: -totalled about 267,000. I simply wanted to place on the record-*
This indicates very clearly that the national employment service figures, when they do not meet the needs of the hon. gentleman, become unreliable. What we are going to try to achieve, and this was suggested along with others by the Leader of the Opposition, is a full and complete investigation into the matter to the end that Canadians would know the position of unemployment. They asked for one standard measurement of unemployment so that never again would we find ourselves quoting one set of figures on one side of the house and another set of figures on the other side of the house. Having set up the committee, and the committee having reported on August 8, the hon. gentleman becomes greatly aroused-


Paul Joseph James Martin: Because of the rights of parliament.


John George Diefenbaker: -because of his fears. What are those fears? The only fear he could possibly have is that when a true basis is achieved for measuring unemployment he will see that his figures have been grossly exaggerated. I am glad of this opportunity. I would not have been able to refer to the national employment service figures, and the differences between him and me, had he not seen fit to introduce this subject.
While we are dealing with unemployment, may I point out a few things. In so far as unemployment is concerned, much has been made of the degree to which he and his hon. friends would meet this problem and met it. Well, here is the record.
[Mr. Diefenbaker.!


Murdo William Martin: Let us discuss the issue.


John George Diefenbaker: Mr. Chairman, the louder and more contentious the babble, the more certain the fear on the part of those doing battle. The hon. member does not want these figures placed on record. In June, 1936, unemployment amounted to 12.8 per cent; in June, 1937 to 9.1 per cent-


Paul Joseph James Martin: Mr. Chairman, I rise on a point of order. If we are going to have a general debate on unemployment, then we welcome that discussion right now. What we are discussing now is whether this parliament is going to be given an opportunity before any changes are made, if they are to be made, of discussing the recommendations for those proposed changes. That is the issue. It is not the state of unemployment at the time of the Prime Minister's birth. What we are now discussing is that single question, and I would ask you to direct the Prime Minister's attention to that fact.


John George Diefenbaker: Mr. Chairman, I realize this is harrassing to the hon. member's soul, but I want to put the facts on the record because I have heard this repeated over and over again.


Jacques Flynn: Order. I thought the Prime Minister was replying to the point of order raised by the hon. member for Essex East. I must say that by agreement it was arranged that the matter of the report on methods for measuring unemployment would be discussed on this item, but it was only by agreement. I do not think the whole question of unemployment should be discussed here because it would open up a very wide debate, too wide to meet with the agreement under which this matter is now being discussed.


John George Diefenbaker: Mr. Chairman, I would have thought that the hon. gentlemen, desiring the true figures, would have welcomed comparisons, but in view of his understandable annoyance over any reference to this question I will immediately desist and come down to June, 1960.
I would like to point out that no one, I am sure, would want to have figures of unemployment that did not represent the true facts. Out of the hon. member's own mouth the other day, from the statement he made I am able to establish how wrong the N.E.S. figures are, but they are the figures which he usually relies upon when endeavouring to show how serious unemployment is.
I will conclude, providing the hon. member wants conclusion, by saying that nothing is more the subject of concern to the government at all times than the degree of unwelcome unemployment. Today we have some

200,000 more people at work than last year. We had in 1957 a total number of persons with jobs of 5,843,000; the number today is 6,154,000, 320,000 more. Those figures, however, do not assist the man who is unemployed and that is the problem that is before us.
When I listen to hon. members opposite talking about how different things were when they were in power it surprises me that when I want to put the facts on the record suddenly the rules become so important. May I simply point out that in Canada, as in the United States, with an expanding industrial economy we find ourselves in the paradoxical position of having a measure of unemployment. When hon. gentleman opposite try to lead the Canadian people to believe that we are in a position different from other nations, may I point out that in the months of June and July the D.B.S. figure for Canada was 4.6 per cent, and the equivalent figure for unemployment in the United States was 5.5 per cent.


Murdo William Martin: That is not a correct statement.


John George Diefenbaker: I prefer statistics which come from the records, not from the mind of the hon. member for Essex East who produces the kind of statistics which he believes at the moment suit his purposes. I have accepted his basis which he laid the other day. Indeed I did not rise to challenge it because I knew that the statement that he made on Saturday when he challenged the figures which I gave would be an answer to him soon or later, and as it has turned out, much sooner than I had expected.
May I simply say this in conclusion. If as a result of the examination of the recommendations of this committee, which incidentally the opposition wished to have set up, we consider that it is necessary they should be carried into effect before the next session of parilament, we shall do so, for the hon. member for Essex East has quite frankly admitted that we have the constitutional right to follow that course, and that constitutional right we shall follow if we so require.


Lester Bowles Pearson: Mr. Chairman, I propose to deal only with what the Prime Minister has said, and I expect to be allowed to do that even though the Prime Minister strayed away from the subject which is before us. The Prime Minister ended up by saying that the government had the constitutional right to do whatever they felt like doing with regard to this report. We do not challenge that, Mr. Chairman. What we challenge is the parliamentary propriety of taking that action at this time.
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The Prime Minister had a great deal of amusement out of manipulating the words which the hon. member for Essex East used last Saturday. I took down what the Prime Minister said and I will use those words just as he spoke them with only one change to show how futile his argument was.
The Prime Minister was tied up by his own statistics and condemned out of his own lips. By his very words he proved last Saturday that the N.E.S. figures were the right ones. He used the N.E.S. figures deliberately when the D.B.S. figures did not meet the needs of the right hon. gentleman. All I did there was to change "D.B.S." to "N.E.S.", because they were the figures the Prime Minister himself used. That perhaps indicates how futile his argument was.
So far as the facts with regard to unemployment at the particular month in question are concerned, the Prime Minister said that in June, 1957 the unemployment situation was serious, and the figure of registration for employment which he gave was 267,000. What, then, would he say about current conditions when in June, 1960 there were more than 400,000 registered at N.E.S. offices? That is 50 per cent more than in June 1957.
While we are very interested in this subject, and we would be very glad to have a debate on unemployment, what we are talking about here is the parliamentary propriety of the government at this time of the session keeping from parliament a report which is in their possession. This is a report-and I would like the Prime Minister to deal with this matter-about which the Minister of Labour said on March 3, as reported on page 1702 of Hansard:
Whenever a report is forthcoming on this matter it will be made available to the house.
Does the Prime Minister repudiate that statement of the Minister of Labour, that whenever a report on this matter is forthcoming-not whenever a report has been approved by the cabinet-it will be made available to the house? That is what we are asking for. May I ask the Prime Minister whether he proposes to table this report at the beginning of the next session, if he will not table it now, and give us the information contained in it?


John George Diefenbaker: That is a very proper suggestion, and it will receive the most sympathetic consideration. That is a very proper question and one which I immediately answer in the manner in which I have.


Paul Joseph James Martin: May I ask a
supplementary question? If the Prime Minister will table that report, as he has now agreed to do, I take it that in view of the co-operative nature of my hon. friend's

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interrogation there will be no action taken on that report until parliament has had an opportunity to study it.


Harold Edward Winch: What has this to do with vote 310?


Jacques Flynn: It was agreed that under vote 309 the report of the special committee charged with studying a new measurement of unemployment figures might be considered.


Harold Edward Winch: I thought 309 was carried and that we were on 310.


Paul Joseph James Martin: I think the Prime Minister was about to reply before that intervention took place.


John George Diefenbaker: In the interval we may have gone on to another item, but if the hon. member would repeat his question-


Paul Joseph James Martin: My question was, since the Prime Minister acting in accordance with the co-operative attitude of the Leader of the Opposition has agreed to table the report-


Mr. Fulton:: No such thing.


Paul Joseph James Martin: I am asking the Prime Minister-


Edmund Davie Fulton: Twisting again.


Paul Joseph James Martin: I am asking the Prime Minister if the government will allow parliament to consider the recommendations of that report before any action is taken with regard to any proposed changes, if there are any proposed changes.


John George Diefenbaker: I have always had to pay careful attention to the questions asked by the hon. gentleman, because while he talks of co-operation his words sometimes do not reveal that co-operation which he so strongly espouses. May I say this: Whatever the spirit of co-operation may be, the government will act in a way that it believes necessary within its constitutional powers.


Paul Joseph James Martin: You know what you are going to do.


[Stage Direction]
Item agreed to.
Emergency measures-
311. Administration and operation of the emergency measures organization including duties in the field of civil defence transferred to this organization, $635,430.
Lester Bowles Pearson: We are now on the item emergency measures, and this is a very important matter. Has the Prime Minister anything to tell the committee with regard to this item?
[Mr. Martin (Essex East).l


John George Diefenbaker: I thank the Leader of the Opposition. If he will allow me I will make a statement in this regard.
This vote provides for the operating expenses of the emergency measures organization both at headquarters and in the field, including the cost of obtaining technical advice and assistance from outside the public service with respect to special projects. The functions of the organization are:
To develop with federal departments their essential plans for wartime operation.
To develop plans in areas not the normal concern of federal departments or not specifically assigned to them for civil emergency planning purposes.
To co-ordinate all such plans, including particularly those grouped under the heading "civil defence".
To develop plans for decentralized federal government in wartime, and to correlate the planning of provincial governments in relation thereto.
To maintain general liaison with the provinces and to provide advice and assistance to provincial authorities on matters not the responsibility of other federal agencies.
Last year I reported in general on this subject. Since that time there have been further developments and it is these, I take it, which the hon. gentleman wishes me to place before the committee.
Whatever our feelings may be as to the international situation, fear still hangs over the hearts of men everywhere in the world. Planning for a war emergency has had to be continued. It is not based on any considered view that war is more likely or more imminent, but simply on the conviction that it is prudent that realistic planning should go forward by governments and by individuals against the possibility of nuclear attack on Canada.
Following a conference of federal and provincial representatives on the subject last October the proposed rearrangements which were in the planning stage a year ago were accepted by the provinces. All concerned in the civil defence functions have put a great deal of thought and effort into their program since that time. Aided by the doubling of funds provided by this government under the civil defence financial assistance program the provinces and many municipalities have developed extended and intensive plans to meet not only a wartime emergency but also natural disasters which might strike our people suddenly and without warning. These plans are reflected in the projects which have been submitted during the current year.

The departments concerned most immediately with this matter are the privy council, national defence, national health and welfare and justice. The privy council office, whose activities are now before the committee, is the co-ordinating agency in this field. It deals with these departments in all aspects of their planning as well as with all other federal departments and agencies having responsibilities in this field, and with the provinces.
The role of E.M.O. in respect to civil defence is to ensure that all planning bodies work to clearly defined objectives with dispatch and without gaps or overlaps. The efficacy of the arrangements made last year comes under review constantly. Close examination occurs at the time of national exercises, such as the one held in May of this year, and at conferences of federal and provincial ministers such as that held in October, 1959. National exercises and conferences will be repeated from time to time as the need for them arises.
One aspect of civilian emergency planning, is the home shelter program. Useful and practical information on the construction of basement fallout shelters in now being provided throughout Canada. It seems to be generally agreed among those who have given study to the question that the greatest danger to the greatest number of Canadians in nuclear war is radioactive fall-out.
From time to time one hears two views, both of which are negative and dangerous in that they counsel Canadians to do nothing in the face of possible danger. On the one hand it is alleged that nuclear war is so awesome in character that it will never occur. On the other hand it is said that if it does occur all, or nearly all, of our people will inevitably perish. Those who have made a thorough study of this subject believe that both these points of view are wrong. If there is a nuclear attack on Canada a great deal can be done by the government and by individuals to enable this country to survive the awful terror of nuclear war.
The provision of various types of fall-out shelters as a measure of prevention is necessary. Some say that there would be no survival anyway. That is not the opinion of those who have the responsibility of civil defence in our country or in other countries in the free world. On the other hand, there is a widespread interest. More than 4,000 people have written to the E.M.O. offices in recent weeks asking for information and plans for basement home shelters. I believe that each and all of us should make provision in this regard. In the Prime Minister's home which belongs to the people of Canada there will be provided such a basement shelter.
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1 think generally speaking among those who have responsibilities in government or in opposition action in this regard is simply a necessity with full regard to all the circumstances.
Last year I spoke of the continuity of government in wartime. We have endeavoured to make provision in that regard to the end that if we are struck by a nuclear attack without warning the government of the country shall be continued. This matter engages the attention of departments and agencies of the federal government as well as provincial and municipal authorities. Provision must be made for suitable accommodation and essential communications. The functions to be carried on in an emergency must be determined now and the individuals who will be concerned must be selected and trained. The government has plans for central, regional and zonal facilities to ensure continuity of government in the event of attack. I wish to report that these plans have gone forward not only nationally but regionally with the co-operation of the provincial governments. In all of the provinces the necessary facilities will be provided.
The central facilities will be staffed by federal civilian personnel and by the army. It is planned that each regional centre will be occupied also by persons representative of the public service of provincial government. E.M.O. is currently engaged in working out with provincial authorities the relation between federal and provincial wartime responsibilities in order to ensure the best possible working arrangements.
Various federal departments are involved in plans for continuity of government. Two or three examples may suffice. National health and welfare has expanded and intensified its emergency planning in both health and welfare in order to aid provinces to make more ample provision in these fields. The Department of Transport has created a new agency, the emergency national telecommunications organization, to plan in detail the controls required in that field in wartime. The Department of Defence Production has set up a planning body to develop the elements of a war supply agency charged with control over production, distribution and pricing of civilian and military supplies in wartime. In all these activities E.M.O. has a significant part in its role of co-ordination.
While I would not wish to create the impression that all elements of emergency planning have been dealt with fully since there are some that arise as the problems receive study, I feel that the house would want the assurance that progress has been made in the period under review.

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A number of questions have been asked in the press and elsewhere especially dealing with the question of survival. These studies that have been made have been based upon various attack situations. Also regard has been had to the several sizes of nuclear bombs. The results of these studies point to the fact that even with modest preparations many people would survive even the heaviest type of attack.
The provinces' responsibility is in the field of the preservation of law and order, control of traffic, reception services, medical, hospital and public health services, highways, utilities systems, fire fighting services and also in the field of the training of civil defence workers.
The question of evacuation has been referred to on a number of occasions. What is the policy in this regard? The government has issued a statement of policy which was the subject of communication with the provincial premiers in November, 1959. In essence it recommended that the evacuation of probable target areas should be based upon a voluntary decision on the part of individuals and the probable target areas should develop traffic plans to facilitate whatever voluntary evacuation is likely to take place.
Mention has already been made of the assistance under the National Housing Act in connection with the building of shelters. Some have suggested that the shelter will not protect. This fall-out shelter was designed by a team of government employees including scientists from the defence research board and the national research council. It is a proved scientific fact that a mass of dense material such as earth and concrete will reduce the intensity of radioactivity.
Questions have also been asked with regard to who would be responsible for the implementing of civil emergency planning. That responsibility rests on the Prime Minister and also on the three federal departments to which I have already referred.
Expenditures on civil defence have increased very greatly. In 1959-60 the total amount was $10,028,345 and in 1960-61 it is $36,824,500.
I believe that that generally represents something of the situation and brings the record up to date from the explanation I made last year.
Let me emphasize that the action being taken does not imply that we believe that war is imminent, but it would be less than wise for the Canadian people or for people anywhere in the free world not to take those precautions which can be taken now. All of us pray that the occasion will never arise when Canada or those nations associated with her in the free world will ever require

to implement these plans of precaution. We in the free world pray there will be peace and we can cause those who from time to time threaten and bluster to realize that whatever number of survivors there may be, a nuclear war, if it did not destroy civilization, would at least set it back to the dark ages for generations to come.
A question was asked today by the Leader of the Opposition as to the disarmament commission meeting next Tuesday. As I am about to conclude these estimates I express the fervent hope of hon. members in all parts of the house and of the Canadian people that those who today would by their action threaten with awesome declarations will realize that such threats deny disarmament without which mankind today is in greater danger than at any time in its march to better things.
One does not like to bring before parliament a picture that in the twentieth century preparations have to be made for survival. What we are doing, what we have done, is designed not to constitute an attitude of defeatism, defeatism when measured in the light of the international situation, but rather the taking of that action which is a responsibility that rests on the shoulders of those who endeavour to discharge the responsibilities of government.


Lester Bowles Pearson: 
Mr. Regnier:: I believe this matter of civil defence is one of the most important problems facing the Canadian nation. I believe a well organized civil defence for survival is the greatest deterrent we can have against war or against attack. I think a nation that knew we were organized to survive might hesitate to declare war on Canada. I am one who believes that we should organize for civil defence irrespective of costs. We may be spending billions of dollars for national defence, military defence, just as deterrent, but if war should come it may be that all the money that we spend for national defence is money down the drain; that the only thing that might be useful would be shelters constructed for the survival of the Canadian people.
I know that when I came to this house in 1958 I was aghast to find that the previous government had prepared for one million casualties and had accumulated supplies to take care of that many people. I was scandalized that they had not prepared for prevention. I am not so much impressed with the cure. I think we should avoid casualties and I agree with the Prime Minister that we can survive if we prepare for survival. I think we can take the sting out of the bomb if we organize properly for civil defence.
I believe we should organize in such a way as to have one million shelters and that the government should help. Probably the winter works program should be made applicable to the building of shelters. I know that something is being done in the Department of Public Works to help in the construction of shelters, but I do not believe that if we leave it to the Canadian people to build shelters we will be ready if war comes.
We know that Khrushchev is rattling his rockets. We may have war tomorrow and we are not prepared. I would rather spend money on one million shelters than on 100 planes because planes may be useless against rockets and missiles whereas shelters would be a safeguard against fall-out from missiles or rockets. I really have been scandalized by the failure of the previous government to take action at the proper time. I am not satisfied that we are doing enough even today. I think this is the greatest emergency that has faced the nation and we must help the people to build shelters. We must make provision for allowing depreciation so far as income tax is concerned. We might even be able to pay half the cost of shelters because

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we are faced with the situation that we may have war any day and we cannot lose any more time.


John George Diefenbaker: Mr. Chairman, I do not want to hold up my own estimates but the Leader of the Opposition asked whether the necessary organizational measures had been provided. He indicated in his remarks that neutralism for Canada was a fantastic dream and that we, occupying as we do a central position between the U.S.S.R. and the United States, cannot conceivably be neutral in any way. Our geography denies it, our tradition denies it and our belief in freedom denies it.
In charge of the organization is the Prime Minister or acting prime minister, and with him the other key ministers to whom I have already referred. The federal civilian group and the army group will be given orders from the national headquarters. They will have the authority, of course, to take certain measures on their own responsibility. If they are cut off from the centre they will have the authority to act on their own.
There will be in each regional centre a senior representative of the federal government who will immediately assume this important task if and when war breaks out. He will have full authority to act when necessary on behalf of the federal government. In addition, of course, we shall have the army commanders exercising their authority over military operations but subject at all times to the direction of the government, either directly or through the regional representatives. I think that answers in general the question asked by the Leader of the Opposition.


[Stage Direction]
Item agreed to.

[Stage Direction]
504. Contributions to the governments of the provinces of Alberta, Saskatchewan and Manitoba, in accordance with terms and conditions prescribed by the Minister of Agriculture, of one half the amounts paid by the governments of those provinces in respect of the transport of fodder, straw and other livestock bedding and the movement of cattle to feed from the 12th day of October, 1959, to the 30th day of April, 1960, $261,500.
Paul Joseph James Martin: What is this?


Mr. Harkness:: This is the item you would not let pass last night.


Paul Joseph James Martin: Would the minister give us the information now, please, which we asked for?


Douglas Scott Harkness: Mr. Chairman, I gave all the information that was asked for last night. Apparently the hon. member had no more questions to ask at that time and if he has no more now I think the item should carry.
[Mr. Regnier.l


Paul Joseph James Martin: Mr. Chairman, I would not want the last question to be on such an unfortunate note as that. I will not say that the minister does not know the answer. I will only say that he has not got the answer within easy reach.


Douglas Scott Harkness: Mr. Chairman, I answered all questions that were asked last night, and if the hon. member has any other questions in connection with this matter I would be delighted to answer them also.


Murdo William Martin: Next session.


Douglas Scott Harkness: I do not think he has any
further questions.


Lester Bowles Pearson: Mr. Chairman, the hon. gentleman has no further questions.


Some hon. Members:: Hear, hear.


Lester Bowles Pearson: On that subject.


[Stage Direction]
Item agreed to.
Resolutions adopted this day in committee of supply reported and concurred in.

Donald Methuen Fleming: that the house go into committee of ways and means.
Motion agreed to and the house went into committee, Mr. Flynn in the chair.


Donald Methuen Fleming: That towards making good the supply granted to Her Majesty on account of certain expenses of the public service for the fiscal year ending March 31, 1961, the sum of $2,452,983,811.56 be granted out of the consolidated revenue fund.


[Stage Direction]
Motion agreed to.
Resolution reported and concurred in.
Mr. Fleming (Eglinlon) thereupon moved for leave to introduce Bill No. C-90, for granting to Her Majesty certain sums of money for the public service of the financial year ending the 31st March, 1961.
Motion agreed to, bill read the first and second times, considered in committee, reported, read the third time and passed.
John George Diefenbaker: Mr. Speaker, as we are now coming into the end of a long, arduous and productive session, may I express the appreciation of all hon. members in the house for the manner in which you have discharged your responsibilities! as custodian of the rights and privileges of the House of Commons. To the Deputy Speaker and to the chairman of committees, I give our thanks, too, for the manner in which they have discharged their responsibilities. To the Leader

of the Opposition (Mr. Pearson) and to the hon. member for Vancouver East (Mr. Winch), the deputy to the deputy of the party to which he belongs, and to all hon. members in the house, may I express good wishes for the months that lie ahead. To the Leader of the Opposition (Mr. Pearson), may I say this: I wish him health and happiness, but not too much success.


Lester Bowles Pearson: Mr. Speaker, may I, on behalf of the opposition, be permitted to join in the observations of the Prime Minister and express our appreciation in regard to your own services, as well as those of the Deputy Speaker and the chairman of committees. It has been a long, difficult and at times contentious session. You, sir, and others in the chair, have always shown patience, good humour and fairness in your dealing with the opposition. If at times we have tried your patience, perhaps you will remember that the government has tried our patience.
I should like also, if I may be permitted, to express our appreciation of the services to the house, and perhaps here I can speak for all hon. members, by the Hansard reporters, who have certainly had a difficult, long and arduous session; the officers of the house, the pages and translators as well as others who have ministered to our comfort in so many ways. I am not forgetting the restaurant. This, as I have said, has been a long and difficult session for them. It would have been much more difficult for us if we had not had the advantages of their skilled and unselfish work.
May I say to the Prime Minister and to the members on the government side that we have enjoyed working with them. If at times they have not been receptive to the ideas from the opposition, so many of which have come from my hon. friend from Essex East, that has not been their loss so much as it has been the country's loss. I reciprocate the Prime Minister's personal good wishes. I hope he now has a restful time and a happy vacation, because he is going to need it.


Harold Edward Winch: Mr. Speaker, after consultation with our group I find I can speak with a unanimous voice. I am proud, sir, on behalf of our group, to tell you how much we have appreciated the way you have conducted your office, and the respect you have shown for what is compatible with your position in maintaining the rights and privileges of members and the decorum and decency of parliament. I may say that I cannot agree with the remark of the Prime Minister that it has
Ways and Means
been a productive session, but that is a responsibility he will have to accept. However, sir, it has been an interesting session, a long and arduous session. I have no hesitation in saying that I am glad it is coming to a close tonight because, having been home only six days this year, I thank God to learn during the discussion of divorce that desertion is not a ground.
I believe that although there have been long and sometimes perhaps bitter discussions in this house this is parliament and democracy in action. One thing, sir, I do want to say, not only as a result of my seven years here but my previous experience, and one thing of which I am proud, that is that the difference in policies and in principle in the house do not stop friendships outside of it. Though we may differ in politics and in policies, one thing I think goes out from this house, we are all Canadians. So with those words I will say-I do not want to say good-bye because I never will-adios till we meet again.


Mr. Speaker:: If I may be absolved temporarily from my rule of silence I should like very much to acknowledge with great gratitude the very kind words which have been spoken by leaders on both sides of the house.


Harold Edward Winch: And very honest words, sir.


Mr. Speaker:: The cordial tolerance which is shown for the shortcomings of which I am all too conscious encourages me and softens the sadness which I feel at the close of this session. I think I may be able now to bear up during the ensuing weeks.
I should like, if I may to acknowledge on behalf of the officers of the house and those who serve us here the kind words which have been said about their services which all of us appreciate so deeply, as they lay the groundwork for what we are able to accomplish here. I will not include in this the Deputy Speaker and chairman of the committee and vice chairman who are able to speak for themselves and who I am sure would like to have the opportunity to join with me in these words of thanks and good wishes to all members during the recess.
Just one other note I would like to add. When we go to the other place this time we shall not return, but I hope that all hon. members will find their way back if not to this chamber to the one on the other side of the hall.
(Translation):


Jacques Flynn: Mr. Speaker, with Hansard for this session running to 8,000 pages, it would appear that we have reached a new record.

Royal Assent
Not only has the session been long, it has also been at times pretty arduous. You must realize what an extraordinary experience it has been for a relatively inexperienced member to perform the functions of Deputy Speaker of the house and to act as committee chairman.
At all events, I am still alive and it is surely due to the assistance you have given me, Mr. Speaker, and to the generosity shown to me by all party leaders.
I thank all members for their co-operation and their kindness towards me. I have no doubt made mistakes but with time I shall try to improve.
(Text):
To all I wish to say thank you very much for the generosity and I hope that next year the Deputy Speaker will know a little more and will be better prepared.


Charles Edward Rea: Mr. Speaker, may I thank hon. members for their very kind and generous words. It is only with their co-operation that a chairman is able to discharge his sometimes rather hard duties. May I also thank the clerks at the table for their good advice and their kind words when needed.
Mr. Speaker, through you may I thank so many hon. members who inquired from time to time about the progress of my knee after my accident. In that regard may I say I have had a nibble from an unnamed football team.


Mr. Speaker:: It is agreed that the sitting be suspended pending word from the other place?


Harold Edward Winch: At the call of the bell?


Mr. Speaker:: Yes.


Some hon. Members:: Agreed


Mr. Speaker:: Then the sitting is now suspended.



SITTING SUSPENDED


Mr. Speaker:: I have the honour to inform the house that I have received the following communication:
Government House, Ottawa, August 10, 1960
Sir:
I have the honour to inform you that the Honourable Mr. Justice Locke, in his capacity as deputy of His Excellency the Administrator of the government of Canada, will proceed to the Senate chamber

today at 10.50 p.m., the 10th August, 1960, for the purpose of proroguing the third session of the twenty fourth parliament of Canada.
I have the honour to be, sir,
Your obedient servant,
E. Joly de Lotbiniere, Assistant Secretary to the Governor General.
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Honourable the Deputy of the Administrator of the Government of Canada desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
In the Senate chamber, the Honourable the Deputy of the Administrator of the government of Canada was pleased to give, in Her Majesty's name, the royal assent to the following bills:
An act to amend the Judges Act.
An act to amend the Combines Investigation Act and the Criminal Code.
An act for the recognition and protection of human rights and fundamental freedoms.
An act to amend the Judges Act.
An act for the relief of Enid Grace Pascoe Dawson.
An act for the relief of Julianna Catharina Mehilercsik Jutras.
An act for the relief of Helen Kurtzman Bernard.
An act for the relief of Barbara Jean Gillies Harris Cooke.
An act for the relief of Evelyn Annie Macleod Vaillancourt.
An act for the relief of John Thomas Francis White.
An act for the relief of Helen Frances Estelle Kearney Freeman.
An act for the relief of Omer Therrien.
An act for the relief of Helen Elisabeth Millar Ramshaw.
An Act for the relief of Larry Orsa.
An act for the relief of Brenda Mary Pardy Thacker.
An act for the relief of Lily Schucher Cohen.
An act for the relief of Anna Margaret Laurie Cannon Stevenson.
An act for the relief of Roger Vermette.
An act for the relief of Rose Vosko Ribkoff.
An act for the relief of John Gilbert Oakley.
An act for the relief of Earl Bernard Lapierre.
An act for the relief of Marie Rose Nicola Lapenna McLaughlin.
An act for the relief of Delema Grace Mullin Simon.
An act for the relief of Earle James Andrew Aspell.
An act for the relief of Marie Simone Louisette Bellemare Lafond.
An act for the relief of Elizabeth Lebherz Denig.
An act for the relief of James William Neilan.
An act for the relief of Donna Lois Marchand Silverman.
An act for the relief of Leo Proulx.
An act for the relief of June Laura Welby Leger.
An act for the relief of Dorothy May Kenny Mulcair.
An act for the relief of Margaret Kathleen Graham Lane.
An act for the relief of Hubert Shirley Quartz.

An act for the relief of Claudine Fernande Yvette Thibaudeau Tarride.
An act for the relief of Mary Pirie Wood Hunnisett.
An act for the relief of Marine Tony Jakovich.
An act for the relief of George Henderson.
An act for the relief of Jean Ludger Villeneuve.
An act for the relief of Robert Marcel Castets.
An act for the relief of Sarah Mary Shirley Collins Stewart.
An act for the relief of Stella Jean Dunn Breit-man.
An act for the relief of Klari Margo Farkas Bodo.
An act for the relief of Vera Eileen Rath Croucher.
An	act	for	the	relief	of	Rena Kanofsky Perzow.An	act	for	the	relief	of	Pearl Thorne Chipman.
An act for the relief of Joan Ethel Brooks Clarke.
An act for the relief of Ann Aaron Regenstrief.
An act for the relief of Eleanor Agnes Overall Cannon.
An act for the relief of Betty Zaracoff Ferstenfeld.
An act for the relief of Kenneth Alan MacKenzie.
An act for the relief of Honoria Evelyn Day Matthew.
An	act	for	the	relief	of	Rene Georges Clement.An	act	for	the	relief	of	Mary Eva Sheila Redmond Beards.
An act for the relief of Geraldine Anne Mary McElligott Parsons.
An act for the relief of William Gordon Jack.
An act for the relief of Eileen Coates Mac-Pherson.
An act for the relief of Maria Lozinsky Truby.
An act for the relief of Willie Pomerleau.
An act for the relief of Patricia Frances Turley Raustis.
An act for the relief of Mary Jean Olive De Vouge Tremblay.
An act for the relief of Dorothy May Vallis Odell.
An act for the relief of Jimmy D'Abate.
An act for the relief of Mary Semenyshyn Shuch, otherwise known as Mary Semenyshyn Shuck.
An act for the relief of Monique Bauset Malo.
An act for the relief of Rivka Fridman Nimrod, otherwise known as Rivka Fridman Nimrod-Lothan, otherwise known as Rivka Fridman Hebei.
An act for the relief of John Frederick Alfred Webster.
An act for the relief of Mary Prukker Wigmore.
An act for the relief of Elizabeth Rudolph Beau-chemin.
An act for the relief of Georges Delrue.
An act for the relief of Marie Claire Georgette Cronier Brault.
An act for the relief of Marie Therese Louise Forest Morin.
An act for the relief of Donat Savoie.
An act for the relief of Joseph Arthur Andre Sicotte.
An act for the relief of Stanley Wellington Burton.
An act for the relief of Hannah Bitensky Bidner.
An act for the relief of Katherine Elizabeth Moore Shaw.
An act for the relief of Mary Margaret Young Doulton.
An act for the relief of Iris Margaret Leslie Sankey Jolliffe.
An act for the relief of Mary Glen Keirstead Routliffe.
An act for the relief of Helen Balacan Berin-baum, otherwise known as Helen Balacan Berne.
An act for the relief of Morris Arthur Bergeron.
An act for the relief of Erica Theresa Schockner Giwertzman.
An act for the relief of Boris Moses Ovrutzky,
An act for the relief of Mac Ravitsky.
Royal Assent
An act for the relief of Timothy David Rudston Thomason.
An act for the relief of Anne Smilovitch Portnoff.
An act for the relief of Violet Sandra Miller MacKenzie.
An act for the relief of Reva (Rita) Hutkin Agoston.
An act for the relief of Jean Ann Brown Craig.
An act for the relief of Frances Malofy Marzitelli.
An act for the relief of Georgette Malick David.
An act for the relief of John Priestley.
An act for the relief of Caroline May Alexander Clements.
An act for the relief of Ellen Schwarz Blok.
An act for the relief of Nijs de Vos.
An act for the relief of Lucien Girard.
An act for the relief of Emilia Arcoragi Fisher.
An act for the relief of Michael Kaluta.
An act for the relief of Andre Marsolais.
An act for the relief of Jozefa Lukasiewicz Bielicz.
An act for the relief of Beverley June Russell Ehrhardt.
An act for the relief of Edith Hirsch Distelman.
An act for the relief of Lise Johanne Carreau Wolczecki.
An act for the relief of Charlotte Stilman Shul-man.
An act for the relief of Gail Rabinovitch Golden.
An act for the relief of Marie Rose Lucette Duro-cher Di Iorio.
An act for the relief of Nelson Cyr.
An act for the relief of Ivy Baldwin Collier Wright.
An act for the relief of Joseph Alain Jean Guy Berube.
An act for the relief of Shirley Loraine Knodell Burke.
An	act	for	the	relief	of Rene Lassonde.An	act	for	the	relief	of John Pastor.
An act for the relief of Margaret Dunn Hepburn Sanderson.
An	act	for	the	relief	of Maurice Sykes Ward.An	act	for	the	relief	of Clark Alvin Graham.An	act	for	the	relief	of Noeleen Natalie Adams
Lamond.
An act for the relief of Harry Gillman.
An act for the relief of John Philip Bowers.
An act for the relief of Carl August Christensen.
An act for the relief of Barbara Joan Marsh Wolfe.
An act for the relief of Barbara Ann Tuppen McIntosh.
An act for the relief of Dorcina Doris Dubuc Clark.
An act for the relief of Gerald Healy.
An act for the relief of Marlene May Myles Robinson.
An act for the relief of Phyllis Louise Clements Harris.
An act for the relief of Anne Olivia Sinclair Fuller.
An act for the relief of Viola Mabel Stead Cole.
An Act for the relief of Patricia Ann Shirley Howell.
An act for the relief of Lillian Juanita Sheppard Simpson.
An act for the relief of Ivy Winifred Grace Arthur Birks.
An act for the relief of Barbara Ruth Aird Barwick.
An act for the relief of Diane M. L. Turner Hammond.
An act for the relief of Dorothy Craven Masse Perrett.
An act for the relief of Helen Landau Shuster.
An act for the relief of Fagy Litner Selinger.
An act for the relief of Pearl Shedlack Dubin Birnbaum.

Royal Assent
An act for the relief of Joseph Szczepanski.
An act for the relief of Magdalena Beata Landau Weissler.
An act for the relief of Frantisek Sladek.
An act for the relief of Kathleen Beatrice Title Levy.
An act for the relief of Helen Caroline Coleman Lewchuk.
An act for the relief of Marie Paule Andree Mercier Rowney.
An act for the relief of Alexander Leslie Mittler.
An act for the relief of Beatrice Jean Madsen Rockburn.
An act for the relief of Emma Strachan Machines Creery.
An act for the relief of Vira (Vera) Kotyk Marsden.
An act for the relief of Shashi Kumar Pande.
An act for the relief of Ethel Georgina Pottle Pallen.
An act for the relief of Marilyn Shendelman Kagan.
An act for the relief of Joseph Henri Marcel Vinet.
An act for the relief of Martha Dammel Reiche Domnauer.
An act for the relief of June Isabella Adamson Hogan.
An act for the relief of Wincenty Strzelczyk.
An act for the relief of Janina Rodzoch Nowak.
An act for the relief of Margaret Ruth McLellan Kennedy.
An act for the relief of Hazel Ina McEwing Hickey.
An act for the relief of Marie Marthe Alberta Ladouceur Parenteau.
An act for the relief of Olga Gokler Crisan.
An act for the relief of George Graham Thresh.
An act for the relief of Joseph Arthur Porcheron.
An act for the relief of Paul Drolet Massue.
An act for the relief of David Byrne Kieran.
An act for the relief of Nina Finkelstein Anshell.
An act for the relief of Joseph Leo Roger Latendresse.
An act for the relief of Norma Rosalie Parsons Turgeon.
An act for the relief of Maria Reichinger Lehnen.
An act for the relief of Marie Cecile Leda Nezeau Leger.
An act for the relief of Rose Mary Dubeau Pietrinferno.
An act for the relief of Daniel Edward Napasney.
An act for the relief of Pauline Mary Ann Irene Patry Gaudreau.
An act for the relief of Rose Ella Katherelos Parry.
An	act	for	the	relief	of	Gwendolyn Marion
Mizener Nassif.
An act for the relief of Joseph Ernest Coutu.
An act for the relief of Joseph Henri Berube.
An act for the relief of Maria Hocheder Weber.
An act for the relief of Sherrill Ordidge Glands-dorp.
An act for the relief of Bronislaw Kulawik.
An act for the relief of Pauline Sornin Barrett.
An act for the relief of Sandra Maxine Shoore Sheydwasser.
An	act	for	the	relief	of	Margaret Maclaren
Harris.
An act for the relief of Irmgard Poikonen Horvath.
An act for the relief of Estelle Labelle Baxter Robertson.
An act for the relief of Alphonse Yared.
An act for the relief of Andre Lamothe.
An act for the relief of Rita Hamel Labranche.
An act for the relief of Lionel Boucher.
An act for the relief of Eliza Boudreau Filion.
An act for the relief of William Leslie Baillie.

An act for the relief of Pauline Handji Edel-stein.
An act for the relief of Molly Brenda Stein Butterman.
An act for the relief of Laurette Biron Valade.
An act for the relief of Viviane Hirsch Mont-martin Gadbois.
An act for the relief of Grace Kara Forshaw.
An act for the relief of Gloria Helene Stotland Titleman.
An act for the relief of Armand Simeon La-victoire.
An act for the relief of Audrey Mary Crosbie Morris.
An act for the relief of Joyce Tabah Tomy.
An	act	for	the	relief	of	Ruth Irene Diakur
Mendel.
An act for the relief of Florence Beryl Kellam Weinstein.
An act for the relief of Marie Esteie Caprari.
An act for the relief of Olive Bowes Schofield.
An	act	for	the	relief	of	Jeanne Beauchemin
Arpin.
An act for the relief of Jean Claude Bilodeau.
An act for the relief of Robert George Butler.
An act for the relief of Helen Harpes Avon.
An act for the relief of Sonia Slovsky Coppel.
An	act	for	the	relief	of Shirley Huberman
Schrieber.
An act for the relief of Paulette Goldberg Slepp.
An act for the relief of Richard Austin Evans.
An	act	for	the	relief	of	Marion Mary Treen
Frosst.
An act for the relief of Joyce Mary Whiteman Rogers.
An	act	for	the	relief	of	Vera Arlene Perry
Locke.
An	act	for	the	relief	of	Beatriki Bourboulis
Angelidis.
An act for the relief of Jessie Margaret Cross Joly.
An act for the relief of Guy Labrosse.
An act for the relief of Joyce Agnes Catherine Wilkinson Greenwood.
An act for the relief of Jacques Cormier.
An act for the relief of Mary Lorraine Little Copping.
An act for the relief of Sylvia Trachimovsky Fox.
An	act	for	the	relief	of	Kathleen Shannon
Keene.
An act for the relief of Jean Elizabeth MacCuaig Vinters.
An act for the relief of Lucy Sekora Budnik.
An	act	for	the	relief	of	Joyce Middlehurst
Walker.
An act for the relief of Patricia Shirley Rydberg Menzies.
An act for the relief of Real Blier.
An act for the relief of Viola Elsie Ann Johnson Anderson.
An act for the relief of Margis Wellisch Ruszugar Hancz.
An act for the relief of Janina Lukazewicz Solo-ducha.
An act for the relief of Arthur Woodbridge Dale.
An act for the relief of Maria Jacoba Arens Mannens.
An act for the relief of Gerard Henri Turgeon.
An act for the relief of Nancy Jane Wyllie Wood Aylwin.
An act for the relief of Yves Brodeur.
An act for the relief of James Joseph Sceviour.
An act for the relief of Leon Zygowski.
An act for the relief of Neeltje Doruijter Van der Spoel.
An act for the relief of Paul L'Heureux.
An act for the relief of Joseph Daniel Bernardin Daigle.

An act for the relief of Giovanna Intini Mancuso.
An act for the relief of Eileen Williams Gushue.
An act for the relief of Jean Eleanor Jackson Connell.
An act for the relief of George Henry Basil.
An act for the relief of Eileen Kathleen Astley Craig.
An act for the relief of Edith Tobat Heinemann.
An act for the relief of Davis Zave Garmaise.
An act for the relief of Marie Erederique Ra-phaelle Mireille Fortier Kingsbury.
An act for the relief of Franko (Franz) Stapin-skyj.
An act for the relief of Eva Facey Lund.
An act for the relief of Joan Dunn Ostrosky.
An act for the relief of Teresa Greco Caputo.
An act for the relief of William Pinkerton.
An act for the relief of Frank David Cousens.
An act for the relief of Denise Baril Sarrazin.
An act for the relief of Wassily de Krokhaleff.
An act for the relief of Henriette Rioux Beaupre.
An act for the relief of Lillian Olive Robertson Reinhold.
An act for the relief of Myrtle Gertrude Lily Molloy Heany.
An act for the relief of Kathleen Margaret Sinclair McKenna Roberts.
An act for the relief of Marion Toba Wolfe Cohen Shapiro.
An act for the relief of Marie Lucille Simone David Raymond.
An act for the relief of Otto James Kerr.
An act for the relief of James Justin Sims.
An act for the relief of Sylvia Overland Katz.
An act for the relief of Blanche Brigitte Paulette Gagne Joly.
An act for the relief of Carmel Duguay Mitchell.
An act for the relief of Catherine Maureen Kelly Mavor.
An act for the relief of Maria Ruland Reutter.
An act for the relief of Joseph Louis Victor Dupere.
An act for the relief of Rose Polivka De Bom.
An act for the relief of Vemis Clifton Christie.
An act for the relief of Thomas Edward tableau.
An act for the relief of Jean Guy Cardinal.
An act for the relief of Marie Mathilde Charlotte Boisjoli Dore.
An act for the relief of David Lloyd Tune.
An act for the relief of Sybil Fenster Shaicavitch.
An act for the relief of Lynda Marjorie Cowell Smith.
An act for the relief of Alois Zisser.
An act for the relief of Stanley Sepchuk.
An act for the relief of Nadine Tudor Labreche.
An act for the relief of Robert Gordon Stitt.
An act for the relief of Philippa Jane Hutchins Tanton.
An act for the relief of Julianna Barna Nadasdi.
An act for the relief of Franciszek (Frank) Wys-pianski.
An act for the relief of Mary (Moira) Steel Taylor Maddison-Roberts.
An act for the relief of Marie Evelyn Lindsay Slade.
An act for the relief of Elsa Faiga Manace Grossman.
An act for the relief of Joseph Armand Dube.
An act for the relief of Margaret Elizabeth Perkins Petrachuk.
An act for the relief of Istvan Horvath.
An act for the relief of Kathleen Margaret Man-chios Kotsos.
An act for the relief of Peter Zeppetini.
An act for the relief of Jean Louis Beaudet.
An act for the relief of Antoni Kubowicz.
An act for the relief of Georg Zechanowitsch.
An act for the relief of Sonia Kwas Cada.
An act for the relief of Stanislaw Wroblewski.
An act for the relief of Jean Ednah Hiltz Dewey.
Royal Assent
An act for the relief of Vera Jarvis Lahaye.
An act for the relief of Claire Marie Marchand McGuinness.
An act for the relief of Marie Denise Theberge
Duguay.
An act for the relief of Marie Rita Desneiges Tre-panier Pelchat.
An act for the relief of Darrell Ashley Connor. An act for the relief of Gladys Florida Allard
Chenier.
An act for the relief of Sonia Floomberg Shaffer. An act for the relief of Alice Marylyn Archibald Warren Wornell.
An act for the relief of Doris Miller Burke.
An act for the relief of Jacquelyn Gregory Bradley Walker.
An act for the relief of Monica Carolyn Nolan McCullough.
An act for the relief of Aime Albert.
An act for the relief of Rene Helen Engel Graham.
An act for the relief of Florian Poissant.
An act for the relief of Mary Kathleen Potts (Wittingham) Barretta.
An act for the relief of George Herbert Bissessar. An act for the relief of Leslie Robert Stickles.
An act for the relief of Philippe Simard.
An act for the relief of Estelle Caroline Lohnes Antilla.
An act for the relief of Yolande Marguerite Delorme Houde, otherwise known as Yolande Marguerite Delorme Cyr.
An act for the relief of Andree Edmonde Augusta Fontaine Barriere.
An act for the relief of Eleanor Jean Mott Taylor. An act for the relief of Rose Van Embden Singer. An act for the relief of Jack Emile Chiarella.
An act for the relief of Elaine Louise Robinson Solkin.
An act for the relief of Gerald Onie Shannon.
An act for the relief of Percival Verna Nathan. An act for the relief of Valerie Elsie Price Perrault.
An act for the relief of Joseph Edmond Giroux. An act for the relief of Allen Dwight Westover. An act for the relief of Shirley Grace Edythe Sayers Sutherland, otherwise known as Shirley Seguin Sutherland.
An act for the relief of Claire Ruth Rubins Lyons. An act for the relief of Stanislaw Przybyla.
An act for the relief of Ian Church Wood.
An act for the relief of Marie Hariette Claudette Boisvert Beaudry.
An act for the relief of Arthur Edward Parker. An act for the relief of Owen John Lummis.
An act for the relief of Ronald Norman Hogg.
An act for the relief of Roy Walter Williams.
An act for the relief of Barbara Doris Jennings Fitzgerald.
An act for the relief of Christine Nancy Littleton Cohen.
An act for the relief of Czarna Rose Lemkowicz Bialer, otherwise known as Czarna Rose Lemkowicz Bealer.
An act for the relief of Kazimierz Romanowski. An act for the relief of Norma Katherine MacDonald McLean.
An act for the relief of Diane Hawkins Edler.
An act for the relief of Marcel Pouliot.
An act for the relief of Gisele Raymond Vallee. An act for the relief of Madeleine Arbour Gau-vreau.
An act for the relief of Pierre Frederic Bruneau. An act for the relief of Nancy Virginia Webster Canning.
An act for the relief of Annie Zilinskas Schneid-ereit, otherwise known as Annie Zilinskas Schneider. An act for the relief of Jean Paul Alfred Lebel. An act for the relief of Bernice Ellis Biltis.
An act for the relief of Evagelia Karidi Tsitsos.

Royal Assent
An act for the relief of Barbara Raphael Salomon.
An act for the relief of Richard Denis Giblin.
An act for the relief of Fanny Hussey Baggs.
An act for the relief of Lambly Dorothy Audrey Hage Lambert.
An act for the relief of Paul Emile Raymond.
An act or the relief of Doris Mary Luxford Devenish.
An act for the relief of Beulah Benford Brown Lawrence.
An act for the relief of Kathleen Walsh Cohan.
An act for the relief of Francis Whiting Clark.
An act for the relief of Joan Shirley Davies Herscovitch.
An act for the relief of Eugena Grandmont Ladouceur.
An act for the relief of Ivy Helen Gentles Bell Pull.
An act for the relief of Herve Vaillancourt.
An act for the relief of Madeleine Hermine Kelen Endrenyi.
An act for the relief of Marie Jeannine Andree Boisclair Lafrance.
An act for the relief of Peter Eric Bray.
An act for the relief of Gerard Lafond.
An act for the relief of Jessie Davis Hill.
An act for the relief of Grace Ruth Goldenberg Goldberg.
An act for the relief of Elsie Mae Freake Vardy.
An act for the relief of Gisele Fortin St-Laurent.
An act for the relief of Pauline Anne Elizabeth Cunliffe Hebb.
An act for the relief of Mary Violet Maloney Elm.
An act for the relief of Gilles Jacques.
An act for the relief of Bernice May Snow Oss.
An act for the relief of Guy Grenier.
An act for the relief of Margaret Mary Ryan Girvan Hollett.
An act for the relief of Caroline Petryshyn Was.
An act for the relief of Rhonda Lee Peterson Butt.
An act for the relief of Alexandra Protonotarios Kingsland.
An act for the relief of Frances Theresa Smith MacDonald.
An act for the relief of Anna Soltysik Slawinski.
An act for the relief of Wera Podkopaewa Kraska.
An act for the relief of Ronald Mugford.
An act for the relief of Ida Denis Matte.
An act for the relief of Sterling Norman Woods.
An act for the relief of Mary Wolloch Vineberg.
An act for the relief of Lotte Wilhelmine Schwit-zer Hornig.
An act for the relief of Margaret Clare Haigh Marshall.
An act for the relief of Claire Syrek Stolovitz.
An act for the relief of Lucien Dubuc.
An act for the relief of Aino Maria Leinonen Knudson.
An act for the relief of Mildred May Ghenender Greenspon.
An act for the relief of Gordon Lang Chees-brough.
An act for the relief of Charles Guy Comeau.
An act for the relief of Frida Rosen-Deutcher Falovitch.
An act for the relief of Elizabeth Giliaeff Jahn.
An act for the relief of Myrna Ada Webber Neiman.
An act for the relief of Ellery Gordon Duncan.
An act for the relief of Sarah Wolman Rothman.
An act for the relief of Dragan Baljak.
An act for the relief of Glenda Ruth Warren Meades.
An act for the relief of Robert Hugh Parker.
An act for the relief of Catherine Hetty Dawson Gilbert Cathcart.
An act for the relief of Sheila Alexandra Anderson Williams.

An act for the relief of Georges Justin Goeury.
An act for the relief of Gabrielle Labranche Bisaillon.
An act for the relief of Maurice Joseph Martel.
An act for the relief of Ula Geraldine Taylor Gauthier.
An act for the relief of Margaret Veronica Stacey Abraham.
An act for the relief of Colette Bauer Landau.
An act for the relief of Margot Buerling Zich.
An act for the relief of Barbara Helen Watson Coones.
An act for the relief of Bertha Jacqueline Alice Sweetinburgh Glynne-Percy.
An act for the relief of Alphonse Taghon.
An act for the relief of Paul Morency.
An act for the relief of Mary Jean Frances Collins Park.
An act for the relief of Martine Simonne Georgette Krettly Lefebvre.
An act for the relief of Elizabeth Davis Reed.
An act for the relief of Raymond Faucher.
An act for the relief of Alexander Bleziotis.
An act for the relief of Ralph Gatis.
An act for the relief of Diana Elizabeth Wilson Ronalds.
An act for the relief of Parthenope Eftichidou Economou.
An act for the relief of John Edward Anderson.
An act for the relief of Claire Viger Marcil.
An act for the relief of Denise Claire Lescarbeau Sarroino.
An act for the relief of Carolyn Louise Atwood Leslie.
An act for the relief of Sophia Kaloutsky Kachur.
An act for the relief of Rosaire Armand Far-lardeau.
An act for the relief of Philippa Osier Day.
An act for the relief of Mary Rebecca Pittman Lawrence.
An act for the relief of Frances Cohen Salsky.
An act for the relief of Shirley Edith Rich Henry.
An act for the relief of Helene Lepine Greig.
An act for the relief of Marion Adelaide Smith Berube.
An act for the relief of Sheila Ethel Mitchell Martin.
An act for the relief of Margaret Hunt Tibbo.
An act for the relief of Simone Laramee Des-roches.
An act for the relief of Ethel Bannister Thomas.
An act for the relief of Leo Antonio Gian-francesco.
An act for the relief of Mary Spalton Humphries.
An act for the relief of Nicola Salvatore Veri.
An act for the relief of Noreen Elizabeth Cassidy Pineo.
An act for the relief of Marie Therese Barolet Cayer.
An act for the relief of Iris Nellie Armstrong Wedge.
An act for the relief of Lucien Carbonneau.
An act for the relief of Peter Borbely.
An act for the relief of Joseph Pierre Claude Aubin.
An act for the relief of Vladimir Ignatjev.
An act for the relief of Elizabeth Fairnington Gaul.
An act for the relief of Rolande Mercier Perreault.
An act for the relief of France Andree Joly Smith.
An act for the relief of Marcelle Schipper Brian.
An act for the relief of Norman Edward Fulford.
To these bills the royal assent was pronounced by the Clerk of the Senate in the following words:

In Her Majesty's name the Honourable the Deputy of His Excellency the Administrator doth assent to these bills.
Then the Speaker of the House of Commons addressed the Honourable the Deputy of His Excellency the Administrator as follows: May it please Your Honour:
The Commons of Canada have voted supplies required to enable the government to defray certain expenses of the public service.
In the name of the Commons I present to Your Honour the following bill:
An act for granting to Her Majesty certain sums of money for the public service of the financial year ending the 31st March, 1961.
To which bill I humbly request Your Honour's assent.
To this bill the Clerk of the Senate, by command of the Honourable the Deputy of His Excellency the Administrator, did thereupon say:
In Her Majesty's name, the Deputy of His Excellency the Administrator thanks her loyal subjects, accepts their benevolence, and assents to this bill.



PROROGATION OF PARLIAMENT

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After which the Honourable the Deputy of His Excellency the Administrator was pleased to close the third session of the twenty fourth parliament of Canada with the following speech:
Honourable Members of the Senate:
Members of the House of Commons:
The third session of this parliament has been an unusually significant and useful one for Canadians. As you return to your homes I thank you for your work on behalf of the people of Canada.
Relations between nations of the world continue to cause concern. Several incidents have heightened tensions and aroused anxiety. Despite the sombre outlook, however, my government continues to hope that reason may yet prevail in the Soviet world to the end that the differences between nations can be resolved. This will require energy, patience, strength and understanding. Canadians remain convinced that nothing must be left undone to assure real peace for our people and all men everywhere.
In the meantime, a responsible nation can do no other than contribute its part to the defensive strength of the free world. Canada remains under an obligation to provide forces for the defence of North America, to contribute to the North Atlantic alliance and in support of the United Nations. You have made the necessary provision to meet these commitments. In the past few days you have approved the sending of a Canadian contingent of signalling and logistic personnel to be a part of the United Nations operations in the Congo.
The prime ministers of the commonwealth met together in London during May and reviewed the major international problems of the day and various questions of constitutional development within the commonwealth.
You have continued, at the increased level authorized last year, Canada's contribution to the Colombo plan. You have also voted assistance for a program of aid to newly emerging nations in Africa, as well as further funds for the aid of the West Indies federation. An appropriation for the first year of operations of the commonwealth scholarship plan has been approved.
Canada's economic position in 1960 generally has remained good but the problems of employment in
Prorogation of Parliament Canada, as in the United States, remain a cause for concern. You have authorized an expanded municipal winter works program for 1960-61. You have made increased provision for the training of unemployed persons in co-operation with the provinces. These measures, together with the steps taken to increase financing for housing construction and home improvement will provide added employment in the forthcoming winter.
Agriculture in all its aspects has continued to receive the close attention of parliament and the government. Early in the session you enacted measures to help meet problems arising from unseasonable weather in the prairie provinces which interrupted the harvesting of last year's grain crops. You have also taken concrete steps to provide assistance to the agricultural economy of western Canada.
A measure of great significance that you have enacted in this session has been the act for the recognition and protection of fundamental human rights. At a time when the enemies of freedom everywhere mock the words of freedom you have set forth for all the world to see the declaration of Canadians that the dignity of the human personality shall be preserved in Canada in equality before the law without discrimination.
You have approved a measure to give Indians the right and privilege of the franchise in federal elections on a basis of equality with their fellow Canadians, but without any sacrifice of their traditional rights.
The Canada Elections Act has been revised.
You have approved an address to Her Majesty requesting the submission to the parliament of the United Kingdom for an amendment of the British North America Act to establish a retirement age of seventy five for judges of superior courts and you have made consequential amendments to the Judges Act.
A conference with provincial representatives has been arranged for the autumn to seek agreement on the means by which the constitution of Canada can be amended in Canada in matters affecting federal and provincial jurisdictions.
You have amended the Federal-Provincial TaxSharing Arrangements Act to provide for the extension for the remainder of the period covered by the act of the increase in the share of the revenue from the personal income tax previously allocated to the provinces. Alternative arrangements have been approved in respect of the making of grants to universities in all parts of Canada.
In preparation for the revision of the financial arrangements with the provinces which expire in March 1962, a dominion-provincial conference was held in the last week of July. The conference will resume its discussions in October.
Important amendments have been made to the Combines Investigation Act and related provisions of the Criminal Code which will give protection to the small businessmen of Canada.
The Public Service Superannuation Act has been amended to improve it in several respects. A revision of the Civil Service Act has been placed before you for consideration in advance of action at your next session.
Legislation has been passed to provide for the establishment of a Department of Forestry to have responsibility for all matters relating to the forest resources of Canada over which the parliament of Canada has jurisdiction.
You have extended the Emergency Gold Mining Assistance Act for a further period of three years.
The Trans-Canada Highway Act has been amended to extend for three years the period during which payments may be made to the provinces for construction under the act.
You have approved measures which will enable for the first time the payment of pensions under
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Prorogation of Parliament the Old Age Security Act and the War Veterans' Allowance Act to be made to Canadians who choose to reside outside of Canada.
You have authorized extension of the operation of the Freight Rates Reduction Act to April 30th, 1961.
New trade agreements with Australia and the U.S.S.R. have been approved.
Other measures enacted at this session include an act to establish new C.N.R. terminal facilities in Toronto, the C.N.R. Financing and Guarantee Act, an act to provide for Canada's membership in the international development association, acts to incorporate harbour commissioners at Oshawa and Nanaimo, the La Salle-Caughnawaga Bridge Act, an act to repeal certain fisheries laws of Newfoundland, a new Feeds Act and an act respecting the international boundary commission.
You have also amended the Export and Import Permits Act, the Canada-Netherlands Income Tax
Agreement Act, the Windsor Harbour Commissioners Act, the Department of Justice Act, the National Housing Act, the National Energy Board Act, the Yukon Act, the Northwest Territories Act, the Railway Act, the Canada Shipping Act and the Criminal Code.
Members of the House of Commons:
I thank you for the provision you have made for the essential public services and payments for the current fiscal year.
Honourable members of the Senate:
Members of the House of Commons:
May divine Providence continue to bless, protect and guide our nation.
This concluded the third session of the twenty fourth parliament.

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

Mr. Tucker: 1.	Whom did Levi Frost succeed as postmaster at Hillview, Newfoundland?
2.	How long did his predecessor act as postmaster?
3.	Was Levi Frost assistant to the postmaster? If so, were his services satisfactory in that position, and how long did he serve as assistant to the postmaster?
4.	Has the present postmistress any previous experience in this work?
5.	Has a petition been received since the last appointment, and if so, to what effect?
Answer by: Hon. W. M. Hamilion (Posfmasier General):
1.	Walter Frost.
2.	Forty nine years.
3.	(a) Yes. (b) Yes. (c) From the 1st August, 1957 to the 3rd January, 1959.
4.	No.
5.	(a) Yes. (b) The answer to the petitioners is to the effect that there is no ground for the reinstatement of Mr. Levi Frost.

Supply-Items Passed
General administration-
553.	Departmental administration-further amount required, $150,000.
Board of grain commissioners-
(Canada Grain Act)-
554.	Inspection and weighing of grain and related services-further amount required, $46,645.
[The following items were passed in committee of supply):


DEPARTMENT OF TRADE AND COMMERCE
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A-Department-
General administration-
390.	Departmental administration including fees for membership in the international organizations listed m the details of the estimates, $2,630,716.
Trade commissioner service___
391.	Administration and operation, $3,855,447.
392.	Construction or acquisition of buildings, land, equipment and furnishings, $106,000
393.	Exhibitions branch, $743,766.
394.	Standards branch, $2,450,467.
395.	Dominion bureau of statistics including the fee for membership in the inter-American statistical institute and a contribution of $500 to the international statistical institute, $10,789,333.
Board of grain commissioners (Canada Grain Act) -
396.	Administration, $159,075.
servlce1s"l4e,2t95°.426nd Weighing of grain' and elated
Canadian government elevators-
398.	Operation and maintenance including authority to purchase screenings, $1,496,993.
399.	Construction or acquisition of buildings works, land and equipment, $142,000.
Special-
400.	Economic and technical assistance branch $455,161.
National Energy Board-
401.	Administration, $496,260.
National research council-
256.	Salaries and other expenses, $27,965,857.
257. Construction or acquisition of buildings, works, land and equipment, $5,059,824.
534.	Salaries and other expenses-further amount required, $177,000.
535. Construction or acquisition of buildings, works, land and equipment-further	amount required, $63,400.
Atomic Energy Control Board-
35.	Administration expenses of the atomic energy control board, $62,755.
36.	Grants for researches and investigations with respect to atomic energy, $650,000.
Atomic Energy of Canada Limited-
(Research program) -
37.	Current operation and maintenance, including expendable research equipment, $23,109,900.
38.	Construction or acquisition of buildings, works, land and equipment and to authorize Central Mortgage and Housing Corporation to undertake construction of works at Deep River for Atomic Energy of Canada Limited, $17,830,600.
484.	Advances to Atomic Energy of Canada Limited in such amounts and on such terms and conditions (including the delivery to Her Majesty, in satisfaction of the advances of obligations or shares of the company) as the governor in council may approve, to finance the construction of an atomic reactor (CANDID and auxiliary buildings near Kincardine, Ontario, and works to provide services in connection therewith: to finance the construction of housing and other works at Deep River; and to authorize Central Mortgage and Housing Corporation to undertake construction of the said housing and other works at Deep River for Atomic Energy of Canada Limited, $5,675,000.
485.	Working capital advances to Atomic Energy of Canada Limited, subject to such terms and
$2 0MO00S aS the governor ln council may approve,

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General administration-
107.	Departmental administration. $2,454,511.
108.	Comptroller of the treasury-central office and branch offices administration, $18,751,482.
Administration of various acts and costs of special functions-
109.	Superannuation and Retirement Acts administration, $683,529.
110.	The Bank Act-salaries and expenses of the inspector general of banks' office, $33,293.
111.	Administration of the Farm Improvement Loans Act, the Veterans' Business and Professional Loans Act, the Fisheries Improvement Loans Act and the Prairie Grain Producers' Interim Financing Act, $99,448.
Tariff Board-
112.	Administration, $168,298.
Royal Canadian Mint-
113.	Administration, operation and maintenance $1,208,985.
114.	Construction or acquisition of equipment
$41,595.	'
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Supply-Items Passed
Subsidies and other payments to provinces-
Special payments to provinces-
115.	Payments to the government of each province, in respect of income tax collected from corporations whose main business is the distribution to or generation for distribution to the public of electrical energy, gas or steam, of amounts computed in accordance with section 6 of The Tax Rental Agreements Act, 1952, as if the last two lines of subsection (1) of that section read as follows:	. .ending on the thirty first day of December, one thousand nine hundred and fifty eight", $9,000,000.
Payments to municipalities-
116.	Grants to municipalities in accordance with the Municipal Grants Act and regulations made thereunder, $22,750,000.
Contingencies and miscellaneous-
117.	Miscellaneous minor or unforeseen expenses, subject to the approval of the treasury board, including authority to re-use any sums repaid to this appropriation from other appropriations, and for awards under the Public Servants Inventions Act, $1,500,000.
118.	Telephone service at Ottawa for all departments, $1,458,800.
119.	Losses incurred on foreign exchange tendered in payment of accounts receivable, $500.
General items of payroll costs including superannuation payments-*
120.	Government's contributions to pension plan (and death benefit plans) for employees engaged locally outside Canada who are excluded from the Public Service Superannuation Act, $100,000.
121.	To supplement other votes, subject to the approval of the treasury board, for the payment of salaries, wages and other paylist charges, $3,000,000.
122.	Government's contribution, as an employer, to the unemployment insurance fund in respect of government employees paid through the central pay office, $1,100,000.
123.	Government's contribution to the hospital insurance (outside Canada) plan and to authorize the treasury board to extend the scope of the regulations made pursuant to vote 668 of the Appropriation Act, No. 5, 1958, to provide that the plan established thereby, shall, subject to such conditions as the regulations prescribe, be for the benefit of the persons described therein for such period prior to their departure from Canada to serve abroad as the regulations prescribe, $55,000.
1 4. Government's share of medical-surgical insurance premiums, determined on such bases and paid in respect of such persons (and their dependents) , as the governor in council prescribes, who hold offices or positions or perform services the remuneration for which is payable out of the consolidated revenue fund or by an agent of Her Majesty, or who are contributors as defined in the Public Service Superannuation Act, or who are members of the Canadian forces or the Royal Canadian Mounted Police, $8,250,000.
Miscellaneous Grants-
1 6. Canadian association of consumers, $10,000. 127. Institute of public administration of Canada, $6,000.
Administration of various acts and costs of special functions-[DOT]
515.	Superannuation and Retirement Acts administration-further amount required, $43,400.
Payments to municipalities-
516.	Grants to municipalities in accordance with the Municipal Grants Act and regulations made thereunder-further amount required, $1,700,000.
General items of payroll costs including superannuation payments-
517.	To supplement other votes, subject to the approval of the treasury board, for the payment of salaries, wages and other paylist charges- further amount required, $25,000,000.
518.	To authorize payment of a pension during the current and subsequent fiscal years, notwithstanding anything in the Financial Administration Act or any other act or law, to Percy L. Hoffman, a former locally-engaged employee, at an annual rate of £68.3.0, the equivalent in Canadian dollars for the current fiscal year being estimated at, $191.
519.	To authorize the governor in council to grant an allowance to Mrs. J. A. Lavoie, pursuant to The Civil Servants' Widows' Annuities Act, 1927, and to ratify all payments of an allowance purporting to have been granted pursuant to the Civil Service Superannuation Act, $1.
520.	To extend the purposes of vote 513 of the Appropriation Act No. 5, 1959, to authorize the treasury board to designate those boards, commissions and corporations (including the office of the custodian of enemy property), whose employees join the group surgical-medical plan, that shall from time to time as required by the Minister of Finance pay into the consolidated revenue fund an amount (as determined by the Minister of Finance) equal to the amount paid as the government's share of the surgical-medical insurance premiums in respect of such employees, $1.

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39.	Salaries and expenses of office, $890,860. Insurance-
150. Departmental administration, $691,612.

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308.	Payment, notwithstanding anything in the Financial Administration Act or the Senate and House of Commons Act respecting the independence of parliament, to each member of the Queen's privy council for Canada who is a minister for whom no salary or allowance in addition to the allowances under section 33 and section 44 of the Senate and House of Commons Act is provided (the acceptance of which shall not render such member ineligible or disqualify him as a member of the House of Commons) of a salary of $7,500 per annum and pro rata for any period less than a year. $7,500.
Privy council office-
309.	General administration, $503,171.
Prime Minister's residence-
310.	Maintenance and operation, $25,000. Emergency measures-
311.	Administration and operation of the emergency measures organization (including duties in the field of civil defence transferred to this organization) , $635,430.
Special-
312.	Expenses of the royal commission on railway problems including the payment, notwithstanding the Civil Service Act, of honoraria or allowances as may be authorized by the treasury board to officers, clerks or employees permanently employed in the civil service for services rendered by them to the commission, $181,000.
313.	Expenses of the royal commission on coal including the payment, notwithstanding the Civil

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Service Act, of honoraria or allowances as may be authorized by the treasury board to officers, clerks or employees permanently employed in the civil service for services rendered by them to the commission, $40,000.
Special-
538.	Expenses of the royal commission on coal-further amount required, $25,000.
539.	Expenses of the Royal Commission on the Great Slave Lake Railway including the payment, notwithstanding the Civil Service Act, of honoraria or allowances as may be authorized by the treasury board, to officers, clerks or employees permanently employed in the civil service for services rendered by them to the commission, $6,000.
540.	Expenses of the royal commission on price spreads of food products including the payment, notwithstanding the Civil Service Act, of honoraria or allowances as may be authorized by the treasury board, to officers, clerks or employees permanently employed in the civil service for services rendered by them to the commission, $10,000.
Governor General and Lieutenant Governors-
148.	Office of the secretary to the governor general, $204,817.
149.	To authorize reimbursement to the lieutenant governors of the provinces of Canada of the costs of travelling and the hospitality incurred in the exercise of their duties up to a maximum per annum for each as follows:
(a) where the population of the province at the last decennial census did not exceed 500,000, $5,000;
Supply-Items Passed
(b) where the population of the province at the last decennial census exceeded 500,000, $5,000 plus $1,000 per each 100,000 or fraction of 100,000 of population over 500,000, but not exceeding $12,000 in any case, $86,000.

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Plants Products Division-
504. Contributions to the governments of the provinces of Alberta, Saskatchewan and Manitoba, in accordance with terms and conditions prescribed by the Minister of Agriculture, of one half the amounts paid by the governments of those provinces in respect of the transport of fodder, straw and other livestock bedding and the movement of cattle to feed from the 12th day of October, 1959, to the 30th day of April, 1960, $261,500.

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General items of payroll costs including superannuation payments-[DOT]
498. To supplement other votes, subject to the approval of the treasury board, for the payment of salaries, wages and other paylist charges-further amount required, $15,000,000.
DEPARTMENT OF EXTERNAL AFFAIRS A-Department-
Contributions to international economic and special aid programs-
577. Purchase of flour to be given to the United Nations relief and works agency for Palestine refugees in the Near East as a contribution to world refugee year, $1,000,000.


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Tuesday, July 26, 1960