1960-11-28

ACREAGE PAYMENTS


Hon. Alvin Hamilton (Minister of Agriculture):: Mr. Speaker, I wish to inform the house of an amendment to the regulations regarding acreage payments to western grain producers.
An order in council of August 31, 1960 authorized the payment of $1 per acre to a maximum of 200 acres to holders of wheat board permits for the 1959-60 crop year. The use of the 1959-60 permits as a basis of payment permitted the payments to be made much more promptly than would have been the case if the 1960-61 permits had been used with the resultant delays pending the issue of the new permits. The main issue of the payment cheques was completed on October
7.	The value of cheques issued to date is $40,070,000.
Because of the early snows and other climatic conditions in 1959 a considerable number of grain producers, who normally produce grain for market, did not take out delivery permits. It was felt that such producers should obtain the benefits under this program. The amendment to the regulations now makes farmers eligible for payments if they held wheat board permits in 1958 and 1960 and if they were actual grain producers in 1959. To qualify they will be required to complete an affidavit giving details of their operations. Applications are being prepared and will go out shortly. To qualify for the payment these applications must be returned to the Canadian wheat board, as agent of the minister, by February 28, 1961.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, I do not expect that the announcement just made by the Minister of Agriculture will mean any great additional burden on the treasury, but it will make it possible for a number of producers, who are not otherwise able to qualify, to obtain the $1 an acre payment.
I noticed that the minister made the factual statement that payment was made on the 1959-60 permit books, and he went on to say this had been done because it would expedite the payment and made it possible
for the payments to be made more quickly.
I hope, I expect and I am confident that there is also another reason not mentioned by the minister, namely that the agricultural producers can look forward to receiving that much, if not more, on the 1960-61 permit books, and that by paying them on 1959-60 permit books the government is in fact, although it has not yet announced it, putting this before the country as a minimum annual payment.



LABOUR CONDITIONS


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I think it would be fitting that I should bring the house up to date with regard to the discussions that have taken place in the last couple of days in connection with the dispute between the non-operating unions and the two railways.
As I said the other day, with a view to bringing the two parties together, a week ago Saturday in the city of Montreal the Minister of Labour, the Minister of Transport and the Postmaster General met with the representatives of the labour unions and thereafter with the presidents of the two railways. On that occasion there was a general discussion of the subject, following which a letter was received by the three ministers in question from Mr. F. H. Hall, vice grand president of the brotherhood of railway and steamship clerks and chairman of the negotiating committee.
I have the letter before me, and I will merely refer to part of it unless the house wishes me to read it in full. In part it states:
On behalf of the negotiating committee of the unions... I have to tell you that following the discussion of last Saturday we have not been able to reach a conclusion which, in light of the mandate that we have from the employees, would permit us to comply with your request for postponement of the strike date of December 3.
Then various facts are set out. At that time the request was, in view of the hardship that would be created and the economic dislocation that would follow, that an agreement might be arrived at, without sacrifice of their rights in any way on the part of either the unions or the railway companies, to postpone the strike, or action in that regard, until the
240	HOUSE OF
Statement on Threatened Rail Strike government would have had the opportunity of securing the report of the royal commission on transportation.
At that time it was asked as to when that report would be forthcoming. I then got in touch with Mr. MacPherson, the chairman, and he advised that although every effort had been made to accelerate the termination of the work of the commission it had been proven impossible, with the various representations being made and those in anticipation, to hold out any hope of a report containing recommendations before March 31, 1961.
You will recall, sir, that one reason for setting up the royal commission, amongst others, and most important, was to assure that a reasonable degree of equality of opportunity would be given to Canadians in all parts of Canada whatever their geographical address. Over the years discriminatory rates had developed which prevented various areas in Canada from being able to compete on an equitable basis. The horizontal increases in freight rates since 1945 amounting to more than 145 per cent, would have the effect of increasing discrimination wherever it existed.
However, following the meeting, and after my conversation with Mr. MacPherson, the Minister of Labour communicated with Mr. Hall, the chairman of the negotiating committee of the unions, and informed him and the committee when the report would be received. It was subsequent to this, on November 21, that Mr. Hall wrote these three ministers the letter to which I have already made reference.
During the week it was decided that one negative answer to the suggestion, which we thought was a reasonable one, was not enough, and that we ought to continue to do everything we could to bring about a settlement of the dispute to the end that a strike would be avoided. As a result, on Saturday I joined my three colleagues in meeting first with Mr. Hall and the 14 representatives of the unions concerned, and thereafter with the presidents of the two railways.
I pointed out the disorder and economic chaos which would result, in particular in grain, livestock and industrial production, and I think that is a fair description of the result of a strike at this time. After outlining the matter in some detail I pointed out that the recommendation of the board of conciliation had no binding effect. In 1950 it was the union that refused to accept the recommendation of the board of conciliation, and on this occasion it was the railway companies that were taking the same attitude. I also dealt with the costs of the recommendations, which provided for a 2-cent increase


per hour on January 1, 1960 and a 5-cent increase per hour on September 1, 1960, as well as certain other vacation rights, the total cost of which for the year 1960 would amount to $6,947,000; and that from January to June in 1961 the total further cost, for the period of six months until the report and recommendation of the royal commission had been handed down, would amount to a further $6,086,000 or a total of some $13,033,000.
I can say that the meeting with the union representatives was conducted in an amicable way, as I would expect from representatives of the railway workers who are at all times good citizens and most law abiding and reasonable in their representations. I pointed out that many telegrams had been received by me, which I had before me, and that they came from all parts of Canada and all the various economic units in Canada such as, for example, representatives of the agricultural industry in the highest echelons, livestock producing organizations, fruit organizations, business in general and indeed representatives of most of the economic sectors of Canada. Mr. Hall said he had also received many telegrams supporting the stand he was taking as chairman of the union. I asked him the following questions after discussion.
1.	Is your decision final and absolute that there shall be a strike unless the pay recommendations of the conciliation board are met before 8 a.m., December 3? His answer was yes.
2.	Would you be prepared to postpone any strike action until May 15, 1961 provided that in doing so there would be no prejudice in connection with collective bargaining processes and your right to claim for wage increases as recommended by the conciliation board, the first to commence on January 1, 1960 and the further one recommended for September 1, 1960?
I said that any acceptance of this request for a postponement was made on the basis that we did not intend to give a subsidy from the people of Canada, for in doing so we would simply be placing on the people of Canada as a whole a responsibility which at this time did not rest upon the people as a whole. I said that when the freeze was lifted on the increase of freight rates, which was imposed at about the time of the setting up of the royal commission, the union and the companies would be in a position to bargain again and, I repeat, without prejudice to the right of the union, on any request to go back to January 1, 1960.
The answer was no. He said that to do so would be to prejudice the employees and would be destructive of their morale, and that in any event, while the majority conciliation

Statement on Threatened Rail Strike
report had been accepted, it was felt that the amount recommended was too small.
In company with my colleagues I then met with the railway presidents, and I received the same type of reply in so far as the question was concerned: Is your decision final that you will not accept the recommendations of the majority of the conciliation board? The answer was that they would not, and they gave the reasons which have already been given public notice for a considerable period of time.
The government intends to exhaust every avenue with a view to securing an agreed settlement of this dispute, and because of that fact a further meeting has been called for today. Although the discussions on Saturday indicated no probability of settlement, I have found through the years that continued meetings oftentimes do achieve a measure of agreement, even though the parties to it start out each firmly convinced that there will be no alteration in their viewpoint.
I shall again today-my colleagues with me-meet with both the representatives of the unions and the representatives of the companies. On this occasion we shall meet together. I shall be there at the opening, and after a preliminary survey my colleagues will remain and further endeavour will be made to bring about a settlement which will be acceptable and will avoid the serious if not tragic results of a strike.
A strike at this time will bring hardship to Canadian producers. It will affect livestock, grain, industrial production and the like. It will shortly have the same effect on consumers, as available stocks are used up. It will mean that thousands of persons unconnected with the railroads will be out of work. A strike at this juncture-and I have emphasized this most definitely-could not but have a serious and adverse effect on Canada's export trade. It would affect, as well, that trade which in the ordinary run of things may be expected in the busy Christmas season.
I am not here to place before the house the merits or demerits of the stand taken by either side, but I am here to point out the seriousness of the situation and, I believe, the reasonableness of the request. The suggestion is to wait until May next, the date fixed, at which time we will have the report of the royal commission.
There are only two ways in which these extra amounts can be paid. One is by subsidy and the other is by increased freight rates. Increased freight rates are prevented because of the freeze. In order to assure that the union shall not suffer as a result of the
freeze, I repeat once more that the offer without any guarantee attached to it is that they shall be in no way prejudiced.
I hope, sir, that as always good sense will prevail and that out of the meeting this afternoon a settlement will result-although I do not express any hope on the basis of the discussions that have already taken place -which will prevent a strike which in my opinion the Canadian people do not want at this time.


Hon. Lionel Chevrier (Laurier):: Mr. Speaker, I think the house and the country will be grateful to the Prime Minister for the statement he has just made, as well as for the attempt which he and his colleagues have made on Saturday and will again make this afternoon at four o'clock in the hope of averting a national strike, although I must say immediately that it is unfortunate that these attempts were not undertaken some time earlier. However, I will not press that point at this time, other than to say that those of us who sit on this side of the house, as I am sure all members do, appreciate the great importance for our economy at this time to maintain railway service in Canada. A railway strike would have tragic consequences, especially at this period when we have mounting unemployment. We are therefore facing a most serious situation which must be considered by all of us objectively and responsibly.
When negotiations between the unions and the railways failed to produce a settlement a conciliation board was established to look into the dispute and make recommendations. The board was chaired by Mr. Justice Mil-vain, an appointee of the present government. The majority report, as the Prime Minister has already indicated, recommended a wage increase in three stages: 2 cents in January of 1960, 5 cents in September of the same year, and 4 per cent or the equivalent of 7 cents on May 1, 1961. According to reliable estimates this would cost the railways about $6.9 million in 1960. Fifty per cent of the total increase recommended would become due only on May 1, 1961.
Under the circumstances it seems to us the government does not have any alternative but to propose a settlement on the basis of the majority report. It certainly cannot question the competence of the board, since it chose and appointed the chairman. Moreover, the board held a long series of meetings and heard evidence from qualified experts representing both parties. The board took considerable time hearing the evidence, and the submissions made to the board both by the non-operating unions and the representatives of the two railways. The board handed down

Statement on Threatened Rail Strike its decision after careful consideration. I think it can safely be said that the government cannot challenge the competence of the board.
In addition, as I understand it, the award of the conciliation board would not impose an intolerable financial burden on the companies or the government in 1960 and the first four months of 1961.
I listened with care to what the Prime Minister had to say about the two questions which he put to the representatives of the non-operating unions, when he inquired about their willingness to postpone the strike until after the royal commission on transportation had handed down its report. At this juncture I should like to bring this fact to the attention of the Prime Minister. When the responsible members of the non-operating unions made representations with reference to this very matter before the royal commission on transportation they were told by the former chairman of that commission, and rightly so, that this was a matter they could not discuss or take up with them because it was already before a board of conciliation, and under their terms of reference they had no jurisdiction to consider the representations.
The Prime Minister has now asked the unions to wait until the royal commission has handed down its report. The Prime Minister knows, as he himself has indicated in this house before, that sometimes a royal commission of this importance and this nature is not always able to hand down a report within the time the government expects. Perhaps the hon. gentleman will remember that when he announced the establishment of this commission he said to the house that it would hand down its report by a certain date. That was not possible due to circumstances over which the government nor anybody else had any control, and I am not finding any fault with that. The point is, however, that the government had to bring down legislation to meet the position pending the final report of the royal commission.
When the Prime Minister indicated that after March 31 the government would have had a month to consider the recommendations of the royal commission on transportation and would therefore be in a position to propose financial assistance, if necessary, to the railways in order to enable them to meet their obligations, I am not challenging that remark, of course, but I do bring to the attention of the Prime Minister the facts that existed when he himself announced the appointment of the royal commission.
It seems to us that it would be unwise to postpone the final settlement of the present dispute until the commission has presented its report, because the commission would


not then be in a position to take that important factor into consideration in making its recommendations.
In the light of all those circumstances there is only one fair solution to the present emergency, and that is the implementation of the majority report of the conciliation board.


Hazen Robert Argue: Mr. Speaker, the Prime Minister has made an important statement on this vital subject this afternoon. I think we are all in agreement on one particular aspect of the question, namely the great hardship that would follow from a railway strike to many sections of the country. Everything that is possible and feasible should be done to bring about an agreed settlement. I express the hope that the Prime Minister and those who will be participating in the discussions may be successful in that regard.
The question is whether the workers at this time are to be given a settlement based on the majority report of the conciliation board. I suggest, Mr. Speaker, there is the belief abroad that railway wages in general are among the cream of wages in this country. I do not think that is correct. As a matter of fact in recent years, in a relative sense when compared with certain other industries, payments obtained by railway workers have been going down.
The case put forward by the majority conciliation board report is that while they are not able to recommend at this time full parity of railway wages with the durable goods industry, they are recommending an association between those two industries; they are recommending certain increases so that the disparity, the difference, will not be broadened. The recommendations, as the hon. member for Laurier has already spelled out, are 2 cents an hour retroactive to January 1 of this year, 5 cents an hour effective September 1 and a further 7 cents an hour on May 1, 1961; and four weeks' holidays sifter 25 years.
The Prime Minister has said that there are two ways in which this recommendation may be met. The first is to provide the sum of money involved through increases in freight rates; the second is by way of a government subsidy. I suggest to him that there is a third way, namely, that of the companies, in the normal course of events, paying this money out of their own funds. I suggest further that from all indications the Canadian Pacific Railway Company, which is usually considered the yardstick, certainly as far as freight rates are concerned, is in a position to make such a payment. I am merely pointing out to the Prime Minister that there is a third method by which those payments can be made.

Statement on Threatened Rail Strike
I am hopeful that as a result of the negotiations that take place a settlement can be reached and a strike can be avoided. I welcome the fact that in the Prime Minister's statement this afternoon there was no threat, there was no suggestion of compulsory arbitration. I think compulsory arbitration is undemocratic, is not in keeping with our concept of freedom in this country, and should be resorted to only in case of the severest national emergency. I am suggesting that compulsory arbitration in this situation should not only be avoided but is not in any way necessary.
Reports have it that a great many millions of dollars are involved. I have seen newspaper reports that estimate that it would cost something like $39 million a year to fulfil the recommendations of the conciliation board. I am pleased that the Prime Minister placed on record the amount of money involved in those various categories, and that to bring about the necessary increase in wages would take some $13 million between now and the end of June next. I do not feel that the Prime Minister should say to the workers that they should forgo any benefits that would result from the implementation of the majority report. After all, when the royal commission began its sittings this question of dealing with labour matters was raised, and the royal commission was opposed to and rejected any inquiry into this situation.
The Prime Minister has told us he expected that in the normal course of events the royal commission report would have been tabled before now. Although he has been pressing the royal commission to make its report at an early date, the commission has told him that it will not be able to report until the end of March. I do not think the Prime Minister is justified in asking the railway workers to forgo the benefits that would result from the implementation of the majority report merely because the royal commission established by the government has been so long delayed in bringing in its report. I suggest that if this is the only alternative, the government should be prepared to consider an interim subsidy of the amount the Prime Minister mentioned, which would carry this situation up to and beyond the report of the royal commission. I think by this means the workers would receive the benefits from the majority report and the government's policy of preventing any further increases in freight rates at this time would be fulfilled, and the country and parliament would have a chance to look at the report of the royal commission when it is tabled.
I hope that in the spirit the Prime Minister referred to the railway workers this afternoon, following his statement that he intends to exhaust every avenue for an agreed settlement, his efforts in this regard will be successful.


John George Diefenbaker: Mr. Speaker, while I do not want to derogate the rules of the house, I think I should have the right to refer to one or two matters that arose in the course of the remarks of the hon. member for Laurier and also the hon. member for As-siniboia.


Mr. Speaker:: Perhaps the Prime Minister might obtain leave of the house. It would be in order for the Prime Minister to correct any misimpression which had been conveyed in the comments on his statement. If that is his purpose in rising it would be quite in order to do so. If he wished to go beyond that, because of the rather extended nature of the remarks, I suggest the house might give him leave.


John George Diefenbaker: I do not want to go beyond that. However, I do want to refer to a statement made by the hon. member for Laurier. He referred to the fact that the unions had desired to make representations to the royal commission on transportation but were informed that the terms of reference of the royal commission denied them making such representations. I think he misconceived-


Lionel Chevrier: No. On a point of order, I think the Prime Minister misunderstood what I did say, or perhaps I did not make myself clear; let me put it that way. What I did say was that the royal commission indicated to those who made representations that the matter was already before another board, namely the conciliation board and that, rightly so, they took the position that they had no authority or jurisdiction to deal with the matter.


John George Diefenbaker: As a statement of fact by the hon. gentleman that is correct, but he misconceives the nature of the statement I made earlier. The royal commission was set up for the purpose of bringing about an equalization of opportunity in this country by making recommendations that would remove the anomalous condition that prevails today when some parts of our country are subject to discriminatory rates. Now, naturally, it would be impossible to have any evidence given on the part of the unions. Their representations were made to a board of conciliation which, of course, has no binding effect whatsoever.
What we are asking is simply this. Instead of bringing in other means which we agree

Proposed Legislation
could be applicable to the circumstances, namely an increase in freight rates, in order to enable the railways to make payment of the increased amounts provided for in the recommendations of the conciliation board, the unions, without prejudice in any way, should wait until parliament will be in a position to act. I give the undertaking that on or before May 15, parliament will be in a position to bring about, through legislation, the recommendations showing the necessity and efficacy of that course being followed, to remove discrimination and at the same time enable the railway companies to operate.
The hon. member for Assiniboia says "They can pay". The C.N.R.'s deficit this year is estimated to be around $75 million. The hon. member for Assiniboia referred to the figures which I gave showing the cost up to June 30. Comparing the cost for 1960 and 1961, the increase would be some $44,207,000, of which a very considerable amount would be payable by Canadian National Railways. To indicate the division, in 1961 the Canadian National's share of the expenditure would be approximately $19,500,000 and for 1960 the amount would be a total of $6,947,000. I rose simply to bring into proper perspective what I believe to be a misconception on the part of the hon. member.


Hazen Robert Argue: On a point of order, Mr. Speaker, I should like to correct one statement the Prime Minister has made. The Prime Minister said that the member for Assiniboia said "They can pay". I said I felt that the C.P.R. could pay, and that on the basis of every indication to date they have very ample revenues to meet this additional cost.



FRASER RIVER


Mr. A. D. McPhillips (Victoria, B.C.) moved: for leave to introduce Bill No. C-43, respecting navigation and salmon fishery on the Fraser river.


Some hon. Members:: Explain.


Albert DeBurgo McPhillips: Mr. Speaker, the bill is designed to rule the power barons off the Fraser river in the interests of the Pacific salmon fishery and navigation.
Motion agreed to and bill read the first time.



TRANSPORT


Mr. Gordon Chown (Winnipeg South) moved: for leave to introduce Bill No. C-44, to regulate extraprovincial transport.


Some hon. Members:: Explain.


Gordon Campbell Chown: Mr. Speaker, the purpose of the bill is to provide for the regulation of the extraprovincial trucking industry in order to obtain the maximum public benefit from a truly competitive enterprise system. The policy is based upon control of entry into the extraprovincial trucking industry by the licensing of services and the control of tariffs. This control of licensing and tariff is to be exercised by a federal regulatory mechanism which is referred to in the bill as a joint transport board. This board is constituted, as occasion may require, by members from the transport boards of those provinces which have an interest in an extraprovincial licence application.
The joint transport board determines whether a licence shall issue and, if issued, sets the tariff for the service. The board weighs its actions on the scale of public convenience and necessity. Its members, as members of the provincial boards, are experienced in applying the public interest to the practical necessities of the trucking industry. Federal control over and guidance of the joint transport board in the national public interest is provided through regulation by the governor in council.
The bill provides for the repeal of the Motor Vehicle Transport Act, which is the present federal regulatory control.
Motion agreed to and bill read the first time.



CANADIAN NATIONAL RAILWAYS ACT


Hon. George H. Hees (for the Minister of Transport) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That It is expedient to introduce a measure to amend the Canadian National Railways Act to increase the number of members of the board of directors of the Canadian National Railway Company from seven to 12.


[Stage Direction]
Motion agreed to.


Hon. J. A. MacLean (for the Minister of Veterans Affairs) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to bring in a measure to amend the Pension Act to provide for increases to disabled veterans and their dependents; to permit payment of supplementary pensions in certain

cases; to permit appeals from decisions of the former board of pension commissioners; and to provide for certain further changes in connection with the administration of the act.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the order:	Government notices of
motion:
November 25-The Prime Minister-the following proposed motion:-
That a select committee, to be designated, be appointed to consider with Mr. Speaker the procedure of this house for the purpose of suggesting any changes that may be desirable to assure the more expeditious dispatch of public business, with power to send for persons and papers, and to report from time to time its findings and recommendations to the house.
Mr. Speaker:: Pursuant to section 2 of standing order 21 this government notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the house.



RESEARCH


[Stage Direction]
On the order:	Government notices of
motion:
November 25-The Minister of Veterans Affairs- The following proposed motion:-
1.	That a select committee be appointed to consider the policy, operations and expenditures of the national research council, Atomic Energy of Canada Limited and Eldorado Mining and Refining Limited, and to report from time to time their observations and opinions thereon;
2.	That notwithstanding standing order 67, the committee shall consist of twenty members, of which eleven shall be a quorum;
3.	That the committee be empowered to sit during the sittings of the house, to print such papers and evidence from day to day as may be ordered by the committee and to send for persons, papers and records.
Mr. Speaker:: Pursuant to Section 2 of standing order 21 this government notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the house.



BROADCASTING


[Stage Direction]
On the order:	Government notices of
motion:
November 25-The Minister of National Revenue- The following proposed motion:-
That a special committee be appointed on broadcasting to consider radio and television broadcasting with power to examine and inquire into the matters herein referred to and to report from time to time their observations and opinions thereon and to send for persons, papers and records;
Motions for Papers
That the committee have power to print such papers and evidence from day to day as may be deemed advisable or necessary;
That the committee shall consist of 35 members;
That standing orders 66 and 67 be suspended in relation thereto.
Mr. Speaker:: Pursuant to Section 2 of standing order 21 this government notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the house.



INDIAN ACT


[Stage Direction]
On the order:	Government notices of
motion:
November 25-The Minister of Citizenship and Immigration-The following proposed' motion:-
That a joint committee of the Senate and House of Commons be appointed to continue the examination and consideration, begun by a joint committee of the Senate and House of Commons, pursuant to a resolution of the house on April 29, 1959, and continued by a joint committee of the Senate and House of Commons, pursuant to a resolution on March 9, 1960, of the Indian Act, chapter 149, R.S.C. 1952, and amendments thereto, and to suggest such amendments as they may deem advisable, with authority to investigate and report upon Indian administration in general and, in particular, on the social and economic status of the Indians;
That twenty-four members of the House of Commons, to be designated at a later date, act on behalf of the House of Commons as members of the said committee, and that standing order 67 (1) of the House of Commons be suspended in relation thereto;
That the records, exhibits and evidence received and taken by the joint committees appointed at the last two sessions to examine and consider the foregoing matters be made available to the said committee and made part of the records thereof;
That the said committee have power to call for persons, papers and records and examine witnesses under oath; to sit while the house is sitting, and to report from time to time; and to print such papers and evidence from day to day as may be ordered by the committee and that standing order 66 be suspended in relation thereto;
And that a message be sent to the Senate requesting that house to unite with this house for the above purpose, and to select, if the Senate deems advisable, some of its members to act on the proposed joint committee.
Mr. Speaker:: Pursuant to Section 2 of standing order 21 this government notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the house.



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 10-Mr. Coates:
For a copy of all telegrams, reports, correspondence and other documents exchanged between the Minister of Public Works or any officials of his department, and the government of the province
[Stage Direction]
Motions for Papers
of New Brunswick, from July 1, 1959 to July 1, 1960, regarding the study of the proposed Chignecto canal.
Motion agreed to.

[Stage Direction]
Motion No. 11-Mr. Chevrier:
For a copy of the bilateral air agreement signed by Canada and the United States on June 4, 1949 together with the exchange of notes dated November, 1955, and the exchange of notes dated April, 1959, and any other letters, documents or correspondence relating to air rights and privileges between the two countries.
Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker, I am making inquiries about this motion, and I will be very grateful if the hon. member will allow it to stand for a few days until I check.


Lionel Chevrier: Agreed.
Motion stands.



DORVAL AIR TERMINAL


[Stage Direction]
Motion No. 13-Mr. Chevrier:
For a copy of the specifications used in the tender for the food and beverage concession at the Dorval air terminal building, together with the set of plans annexed thereto and the instructions which went out to the bidders.
Motion agreed to.


[Stage Direction]
Motion No. 14-Mr. Howard:
For a copy of all correspondence, telegrams, and other documents exchanged between the federal government or any agency or department thereof and any other government, person, organization, or Indian band, since January 1, 1930, dealing with the lease, sale, or use of any part of the Klemtu (Kitasoo) Indian reserves to or by J. H. Todd and Sons, Limited or any other person or corporation.
He said: Mr. Speaker, I ask leave of the house to withdraw this motion.
Order discharged and motion withdrawn.


[Stage Direction]
Motion No. 15-Mr. Howard:
For a copy of all correspondence, telegrams, and other documents exchanged between the federal government or any agency or department thereof and any other government or person, since January 1, 1958, dealing with that part of the British Columbia government's highway 16 that runs through the Kitwanga Indian reserve.


[Stage Direction]
Motion No. 16-Mr. Howard:
For a copy of all correspondence, telegrams and other documents, except those containing opinions from counsel on legal questions which were submitted to them by the Department of Justice, 
exchanged between the federal government, or any agency or department thereof and any other person, company or organization, since January 1, 1957, relating to the prosecution of Canadian Breweries Limited, for alleged infractions of the Combines Investigation Act.
Hon. E. D. Fulton (Minister of Justice):: Mr. Speaker, by consent of the hon. member may these motions be allowed to stand?


Mr. Speaker:: Is the minister referring to No. 15?


Edmund Davie Fulton: Nos. 15 and 16. I have had a brief discussion with the hon. member, and I would appreciate it if these two motions could be allowed to stand for a day or two.
Motions stand.



CENSUS TEST, JUNE, 1959

[Stage Direction]
Motion No. 17-Mr. Chevrier:
For a copy of the form or document entitled "dominion bureau of statistics, census test, June 1959", which has been used in certain cities of Canada for testing purposes during 1959 in view of the 1961 census.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Hon. J. W. Pickersgill (Bonavisla-Twillingate):: I wonder if I could ask the Minister of Public Works whether there is a conference going on or a conference has been arranged between the national conference of Canadian universities and colleges and Central Mortgage and Housing Corporation, and if so what is the purpose of the conference.


Hon. D. J. Walker (Minister of Public Works):: Mr. Speaker, I would not call it a conference, but there is consultation because we have great respect for the judgment of the national conference of Canadian universities, and in order that we may make loans to universities in an equitable way we would like to consult with them. After all, there are no regulations at the present time; these are unlike the laws of the Medes and Persians, and we are willing to hear their views and any other points of view in order that we may have equity in the granting of these loans.


John Whitney Pickersgill: May I ask a supplementary question. Can the minister say whether the national conference or anyone else has made representations to him with respect to the final and conclusive list of institutions which he gave to the house on Friday?


Mr. Speaker:: I am wondering about the propriety of these questions because I understand they refer to a matter on the order paper. Oh, the bill was passed by the house; under those circumstances I will admit the question.


David James Walker: No representations have been made to me personally, and if and when there is any further announcement to make to the house I would be very happy to do that.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. J. W. Murphy (Lamblon West):: should like to direct a question to the Prime Minister in connection with a Canadian of Polish descent by the name of Mr. Koyer, who formerly lived in Sarnia and later moved to Montreal. He made a trip to Poland to see his mother and was arrested. What action, if any, has been taken, and can the Prime Minister bring us up to date about the situation?


John George Diefenbaker: Mr. Speaker, I have to speak entirely from recollection. Mr. Koyer was a Polish citizen who came to Canada and secured Canadian naturalization. The country of origin demands that every citizen shall continue to hold the citizenship of his original country, regardless of whether he takes up the citizenship of the country to which he migrates. I believe that this man, who visited in his country and was taken into custody on the last day of his visit, is now being held by the authorities there. His plight has been brought to the attention of the appropriate authorities, and I can say no more at this time than that the hon. member may rest assured that whatever can be done under the circumstances within the ambit of international law will be done.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: I should like to address a question to the Minister of Transport based upon press reports from the maritimes and Quebec city, apparently indicating a new government policy of abetting winter shipping in the St. Lawrence. Can the minister indicate what his department has been doing to expedite winter shipping and what effect it may have on volume trade through Saint John and Halifax?
Inquiries of the Ministry


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, following a request from the metropolitan bureau of Quebec city concerning the intentions of the department for the winter that is coming, I sent a telegram to the bureau indicating that, as it did last year, the department intended to give the following instructions to the icebreaker force in the St. Lawrence and the gulf. Icebreakers will carry on the priority work that is assigned to each of them, and after this priority work has been done they will assist the reinforced ships coming up the gulf and river. After that, if it is possible and if it is necessary, under the authority of the local representative of the Department of Transport the icebreakers will help and escort coastal shipping that comes up the St. Lawrence in the wintertime.
This situation is practically the same as last year in so far as the icebreakers are concerned. I should like to say that an analysis of the traffic that was handled in the port of Quebec last year has shown that part of the goods came into Quebec or left Quebec to and from Halifax harbour. In so far as the balance of the goods were concerned, they were goods exported through Quebec which otherwise would not have been exported until the spring. They were goods that would have spent the whole winter in the sheds in the harbour, but instead of waiting for spring, the fact that ships came into Quebec permitted the export of these goods during the winter season.



REPORTED USE OF CANADIAN SHIPS IN CUBAN TRADE

[Stage Direction]
On the orders of the day:
Mr. C. W. Carter (Burin-Burgeo):: I wish to direct a question to the Minister of Transport. Will the minister comment on the statement attributed to Premier Castro of Cuba that Canadian ships were carrying into Cuba potatoes, beans and other food from Russia, Czechoslovakia, communist China and Japan?


Mr. Speaker:: Before the minister undertakes to go that far afield may I say that I think the hon. member who asked the question might consider whether it is part of the administrative responsibility of the Minister of Transport. It seems to me to go a bit beyond anything with which he is concerned.


Léon Balcer: As far as my information goes the trade relations between Canada and Cuba are normal, and ships which are engaged in such trade are doing so in normal fashion.

Inquiries of the Ministry SPORTS



GREY CUP-PROTECTION OF EDMONTON MEMBERS IN OTTAWA

[Stage Direction]
On the orders of the day:
Mr. Terry Nugent (Edmonion-Strathcona):: I should like to direct a question to the Minister of Justice. In view of the event of last Saturday and in view of the events planned in Ottawa for this evening and the attendant possibilities from the large crowds, can the minister provide enough R.C.M.P. officers to protect Edmonton members who tonight may stroll the streets in their Eskimo toques and scarves?


Edmund Davie Fulton: am sure the house can appreciate, as well as I can, the concern felt by the hon. member for the potentialities of this situation. I am also sure he will appreciate that, under these circumstances, the R.C.M. police can only intervene if requested by the Ottawa city police, and I am not at all sure how anxious the Ottawa city police would be to request protection for Edmontonians in a situation of this kind.
Therefore I would suggest to the hon. member that perhaps the best protection for the Edmonton members of parliament on this occasion would be to disguise themselves as residents of Ottawa. In view of the increasing length of our sessions, Mr. Speaker, perhaps this will soon not be too difficult.



FINANCE


[Stage Direction]
On the orders of the day:
George Harris Hees: Last Friday morning, Mr. Speaker, the hon. member for Laurier asked for my comments on a press report to the effect that the United States bureau of customs has increased in an arbitrary way the valuation for duty purposes of Canadian goods in contravention of the 1956 agreement on firm valuations, and that the Canadian case had been presented too ineffectually and with too little authority.
I have now seen the press report to which the hon. member referred'. I am glad to have this opportunity not only to correct the erroneous impression apparently held by certain sections of the press that a United States customs accommodation is, in fact, an agreement between our two governments, but also to assure the house that what my hon. friend describes as the "Canadian case" was appropriately presented.
I have here a lengthy statement setting forth the details of this arrangement. Rather than


take up the time of the house I would ask for unanimous consent to place this statement on the record.


Lionel Chevrier: No objection, providing it is not a political statement.


George Harris Hees: Never a political statement; just the facts.


Mr. Speaker:: Does the minister have unanimous consent to have the residue of his statement printed in the record at this point as though it had been read.


Some hon. Members:: Agreed.
[Editor's note: The statement above referred to is as follows:]
In 1956, in order to accommodate Canadian exporters, the United States bureau of customs set up a procedure by which Canadian exporters might obtain, before shipment, an advisory opinion on the value for duty that U.S. customs was likely to set on their entries. This was an accommodation procedure set up by the bureau of customs for the convenience of Canadian exporters, and should not be confused with an agreement between the two governments. When this procedure was adopted it was made clear that opinions applied for would be advisory only; the bureau could not be bound prior to actual entry and appraisement.
Previously, both exporters and U.S. importers had long been troubled by uncertainty regarding the valuation on which U.S. duties would be levied. Not infrequently value, for duty purposes, was appraised on 'foreign' value which was higher than either shipper or consignee had anticipated, and required, therefore, the deposit of additional duties. The new accommodation procedure was widely welcomed, and worked satisfactorily up until shortly after the 28th February, 1958, when the new value for duty provisions of the Customs Simplification Act of 1956 took effect.
These new provisions of the U.S. customs law eliminated, in most cases, the concept of 'foreign value' in appraisement of the value of goods for duty purposes, and substituted in its place the concept of 'export value'.
Without going into the detail of the definitions in the law regarding 'export value', it is enough to note that a key definition is '... freely sold... or offered for sale', and that this means 'at a price which fairly reflects the market value of the merchandise'.
In 1958 certain Canadian companies, all subsidiaries, obtained advisory opinions as to the value for duty of certain shipments of components they proposed to ship exclusively to their parent corporations in the United States. Possibly because of the new law's

novelty and the lack of experience with it of the U.S. customs appraisers at the border, they were advised that these goods would be appraised on the basis of 'export value'.
It was not until about a year later that the bureau of customs attorneys concerned with valuation principles came to a review of these cases. They concluded that because these companies' prices for shipments to their parents did not fairly reflect the market value of the goods in Canada-as prescribed by the U.S. valuation law-'export value' did not, therefore, exist.
The bureau accordingly ruled that valuation in the case of shipments made exclusively to parent companies must-lacking a finding of both 'export value', and the prescribed alternative 'United States value'-be based on 'constructed value'. 'Constructed value' is the cost of materials and fabrication plus an addition for general expenses and profit.
This, in effect, reversed the previous customs opinions on which these companies had shipped and put the value for duty in these particular cases back up to roughly their list price in Canada to Canadian purchasers.
The grievance of these exporters was brought to the attention of the Department of Trade and Commerce by the Canadian Manufacturers' Association, and the government sought clarification of the matter in Washington. After a most careful review of the problem the American authorities replied that the bureau ruling complained of was, under the law as it now stands, the only ruling possible.
The press accounts referred to have greatly exaggerated this issue, and have implied that the bureau of customs has shown bad faith. This is not the case. U.S. valuation law is complex and its technical points are not always readily grasped by persons unfamiliar with it.
It is not true, as some accounts have seemed to represent, that Canadian exporters are denied valuation on the more liberal terms of the new 'export value'. Any Canadian firm-if it ships to more than one unrelated purchaser in the United States, in the ordinary course of trade-can have its export price accepted as the 'export value' for duty purposes. The limit to which the exporter may lower his price for sale to the United States is set only by the U.S. anti-dumping law, the application of which in the past 10 years, and particularly since its recent modification, cannot be described as unduly severe.
To date scarcely more than a half dozen subsidiaries of U.S. companies have been involved in this valuation problem. It would indeed be unfortunate were this problem permitted to be so distorted as to create general difficulties in relation to United States
Inquiries of the Ministry valuation practices. The new valuation procedure, far from being an obstacle, represents a major improvement in Canadian access to the U.S. market.
The problem which arises in exclusive transactions between related companies where there is, in fact, no other possible buyer, is difficult, and is receiving attention. We know of only a very few such cases.
In all the others the solution to the problem is already in the hands of the companies and their parents if they choose to use it.



RESTRICTIONS ON STRATEGIC EXPORTS TO COMMUNIST COUNTRIES

[Stage Direction]
On the orders of the day:
George Harris Hees: On Friday last the hon. member for Richelieu-Vercheres asked me a question concerning restrictions on exports to communist countries.
In reply I wish to advise that in addition to arms and munitions there are other goods having a strategic nature or value which are subject to export restrictions to sino-soviet bloc countries. These goods are shown in the export control list established under the Export and Import Permits Act. Pancreas glands, Lacombe swine, pork and pork products, logs, pulpwood, and scrap iron and steel, while also included in the list, are under export control for supply reasons and price stabilization purposes. I am sending over to the hon. member a copy of the export control list.


Mr. G. J. Mcllrailh (Ottawa West):: I have a supplementary question. Can the minister tell us whether nickel, copper or aluminum are under control?


George Harris Hees: I have no knowledge of those items being under that particular control, but I will check on the matter.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. Hubert Badanai (Fort William):: I wish to direct a question to the Minister of Transport based on a telegram which I received this morning from the Fort William-Port Arthur trades and labour council. Is the minister in a position to explain to the house the reason for extensive lay-offs of Canadian National Railways employees in the lakehead area, a move which appears to be quite unnecessary at present?
Inquiries of the Ministry


Léon Balcer: The management of Canadian National Railways advise me that work force reductions which have been made in the lakehead area are part of the adjustment which must accompany variation in traffic volume.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: I wish to direct a question to the Minister of Labour and ask him whether he is in a position, from activities over the week end, to give a progress report on the efforts of Mr. Craig Munroe, the industrial inquiry commissioner, respecting the grain strike on the west coast.


Hon. Michael Slarr (Minister of Labour):: Evidently the hon. member is not aware of it, Mr. Speaker, but that dispute was settled on Friday evening.


Frank Howard: I would ask the minister to be courteous enough to tell the house about the activities of this commissioner rather than be nasty about it.


Michael Starr: Of course the hon. member is being nasty about the whole situation. I might say that the activities of Mr. Munroe were extremely successful.



IMMIGRATION


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Now that the question is no longer sub judice, can the Minister of Citizenship and Immigration say whether she intends to persist in her effort to deport from Canada Mrs. Louie Yuet Sun, the mother of an infant Canadian citizen who will either be exiled or deserted as a result of her action?


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: Now that the deportation order has been upheld by the supreme court, I would expect Mrs. Louie Yuet Sun to take her departure from Canada out of respect for Canadian law. As a matter of fact, I would have thought she would want to return to her husband and her other two children.


John Whitney Pickersgill: I should like to ask the
minister whether I am correct in understanding that she intends to do her utmost to banish this Canadian citizen?


Mr. Speaker:: Order. The question is one of those that make an assertion in the form of a leading question.


Edmund Davie Fulton: And an incorrect assertion.



NUCLEAR ENERGY


[Stage Direction]
On the orders of the day:
Mr. R. J. McCleave (Halifax):: I wish to direct a question to the Minister of National Health and Welfare, of which I have given notice. Has he anything to add to the information he gave the house on November 18 in connection with the disposal of United States radioactive wastes in the Atlantic ocean south of Nova Scotia and, more specifically whether there is a contamination hazard?


Hon. J. W. Monleilh (Minister of National Health and Welfare):: Mr. Speaker, I appreciate the hon. member's interest in this subject, and I am glad to be able to assure him that disposals at the site mentioned would not seem to constitute a contamination hazard to Nova Scotia.
The United States atomic energy commission has licensed two companies to dispose of low level packaged wastes in an area in international waters where the minimum depth is 1,000 fathoms. This area, which I find is just over 150 miles south of Yarmouth, was selected by the commission following consultation with the competent scientific groups in the United States.
The wastes are mixed into concrete and encased in steel drums before disposal, which usually is made in other areas further south. The two firms were licensed over 2 years ago, but no disposals on their part have yet been reported in this particular area, although the commission dumped small quantities of low level wastes there prior to that time.
For a statement of Canada's position on radioactive waste disposals in areas of this kind I would refer to a reply made by the Prime Minister to a more general question on the subject, on July 13 of this year. The answer may be found on page 6173 of Hansard. Reference is made there to an ad hoc panel appointed by the international atomic energy agency. The panel, which included a Canadian representative, presented the findings I referred to in the house on November 18. It recommended that disposal sites, once designated, should be monitored regularly and that a registry should be kept of all disposals. The United States atomic energy commission is adhering to these recommendations to my department's satisfaction.


It is worth stressing that a number of investigations into waste disposal methods have been conducted, and that none of these reported that any contamination had been detected, even in an area where very substantial disposals were made.



BROADCASTING


[Stage Direction]
On the orders of the day:
Mr. M. J. A. Lambert (Parliamentary Secretary to the Minister of National Revenue):: On November 18 the hon. membei for Kootenay West asked the Minister of National Revenue a question in connection with alleged discrimination by a radio station in Nelson, British Columbia. In that connection I am advised by the board of broadcast governors that it has investigated the action taken by radio station, CKLN, Nelson, British Columbia, in order to determine whether it is a breach of the broadcasting law and regulations. The board, after reviewing all the correspondence, is satisfied that there has been no breach of the Broadcasting Act or of the radio broadcasting regulations in this case.


Mr, H. W. Herridge (Kooienay Wesi):: thank the hon. member for the answer to my question, and I understand there has been no breach. However, this matter is coming before the radio and broadcasting committee at the request of a number of businessmen.


Mr. Speaker:: Order.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Douglas Mason Fisher: I wish to direct a question to the Postmaster General. In view of the fact that a Toronto citizen has won $18,000 playing the British football pools, and the fact that the Toronto papers are still printing the results of those pools, may I ask whether his officials have given up their vigilant attempts to stop this participation by Canadians through the mails?


Hon. W. M. Hamilton (Postmaster General):: Mr. Speaker, we are still following the same practice which I outlined to the hon. member last year.



FINANCE


Hon. Donald M. Fleming moved: the second reading of Bill No. C-40, respecting loans to
Guarantee of Loans to Small Businesses proprietors of small business enterprises for the improvement and modernization of equipment and premises.
He said: Mr. Speaker, there was a wide discussion of this measure at the resolution stage, and I think my remarks today can be very brief in consequence. I should like to acknowledge the support that this measure received in all parts of the house at the resolution stage, and to thank hon. members for the approval of the measure which they then expressed.
There has been, in the meantime, an opportunity for the public to examine the measure, and for representatives of the organizations of retail business and other businesses which will be principally concerned in the measure to do likewise; and we have had further opportunities for consultation with the banks. The measure has been received not only favourably but enthusiastically by the representatives of retail merchants, and we have received further assurances of co-operation on behalf of the chartered banks.
Sir, at this stage we are considering the principle of this measure. I think the nature of the measure is such that the principle may be described in this form, that government guarantees should be provided for loans by banks to the classes of small business named in the bill in order to extend intermediate term credit to these businesses for the purpose of financing their capital improvements.
The house is well aware of the definition that has been given to small business in the measure. It is not easy, Mr. Speaker, to devise an adequate definition of small business that will meet all circumstances. The definition that has been written into this bill is, I think, placed upon the only footing that could be regarded as satisfactory for this purpose, namely gross revenue.
I think the house will be interested to know what percentage of businesses in the four categories we calculate will qualify under the definition of small business. Based upon the 1951 census and upon a study that was made by the dominion bureau of statistics in 1957, our calculation-and these figures can only be approximate-is that 92 per cent of the business establishments in Canada in the four categories of business enumerated in the bill will qualify for loans under the terms of the measure.
I again make it clear that tourist enterprises do qualify within the terms of the bill. I think this will be a matter of satisfaction to many hon. members, such as the hon. member for Parry Sound-Muskoka (Mr. Aiken),

Guarantee of Loans to Small Businesses who have been effectively urging measures of this kind for some time past on behalf of operators of tourist businesses.
Mr. Speaker, I trust that the principle of this bill will commend itself to hon. members.


Chesley William Carter: Mr. Speaker, we of the official opposition support the principle of this bill, as we did that of the resolution which preceded it. As emphasized by our leader, we Liberals are anxious to facilitate whatever legislation the government puts forward to deal with the problem of unemployment and the economic emergency which faces us at this time. We are anxious to get something done. It was for that reason that we deliberately refrained from putting up more than one speaker at the resolution stage. Though we may not restrict ourselves to the same degree on second reading, nevertheless for the same reasons I shall endeavour to make my remarks as brief as possible.
At the resolution stage we were concerned mainly with the general principle of providing loans to small businessmen. Now on second reading we have the bill before us and we can therefore see how the general principle has been applied and assess its value in the light of the most urgent needs of small businessmen.
The four most urgent needs of small business today are (1) credit, including both long term and medium term credit; (2) low rates of interest; (3) tax relief, and (4) working capital. How does the bill meet those four needs? It makes no provision whatsoever for working capital. We can understand the emphasis which the bill places on building premises and equipment because we know the minister and the government are looking upon it in terms of providing employment. But lack of working capital is often one of the greatest obstacles to expansion of small business, and it is one need which has to be met before any solution of a permanent nature can be evolved.
This bill does not give any measure of tax relief. Tax relief was one of the main features of the Pearson plan which I put on the record the other day, and which can be found on page 57 of Hansard of November 21. This proposal was ridiculed by members opposite, but it is interesting to note that the Canadian Chamber of Commerce, in its policy declarations of 1960-61, has referred to the need for relief from the tax burden. For example, I quote from page 33 of the Canadian Chamber of Commerce policy declarations:
The chamber is firmly of the opinion that the burden of taxation is too onerous in Canada, that personal and corporate income tax rates discourage


initiative, and that sales and similar taxes add appreciably to the costs of domestic producers and to consumer prices.
Perhaps this particular bill would not be an appropriate measure in which to make tax changes, but we do hope that the minister will keep this in mind when he brings in his so-called baby budget, which we hope will be introduced before this house rises for the Christmas recess.
With regard to the need for low interest rates, as far as we can see the rate on these loans will be the normal bank rate of 6 per cent.


Donald Methuen Fleming: No. Why do you
say that?


Chesley William Carter: Well, there is no interest rate written into the bill, as far as I can see.


Mr. Bell (Carleton):: That was explained at the resolution stage.


Donald Methuen Fleming: We went all over that at the resolution stage.


Chesley William Carter: Yes. These loans are ordinary bank loans given under the normal bank procedure, and the only change is that the term of loans has been increased to ten years. Therefore one would assume that the ordinary bank interest rates would apply.


Donald Methuen Fleming: Is the hon. member not aware that today the prime lending rate of banks is 5f per cent, which does not take into account the value of a government guarantee?


Chesley William Carter: We are glad to learn that the effect of a government guarantee is worth one quarter of one per cent.


Richard Albert Bell: That is not the point at all.


Donald Methuen Fleming: You have missed the point entirely.


Chesley William Carter: In any case the bank interest rates are such that the ordinary businessman who takes a maximum loan will have to pay a substantial amount in interest.
With respect to credit, this bill provides intermediate term credit but not long term credit; yet most of the problems that face small business are such that only long term policies could solve them. At the resolution stage the government supporters almost fell over themselves in their efforts to congratulate the minister and the government on this bill, so much so that it almost appeared as if an epidemic of mutual admiration and self-commendation had broken out in the Tory ranks.


An hon. Member:: You may join us if you like.

Guarantee of Loans to Small Businesses


Chesley William Carter: If the government had introduced this in an effort to offset some of the harm that its policies have done to small business then I would be prepared to join in the commendation because of the element of restitution this measure contains.


Mr. Hodgson:: Mr. Speaker, would the hon. member permit a question? In simple terms,
I invite the hon. gentleman to name one;
I urge him to give us one example of anything this government has done since it came in power in 1957 that has harmed small business.


Chesley William Carter: If my hon. friend would contain himself, I was just about to put an illustration on the record. I do not think any government has ever done as great harm to small business as has the present government. We have only to think about the economic climate that this government has generated. I invite hon. members opposite to think about the fiscal policies of this government, the tight money philosophy, the conversion loan episode and all the uncertainties and confusion that have been generated.


Clayton Wesley Hodgson: That is not true.


Chesley William Carter: My hon. friends must remember that our small businessmen cannot run off to the United States for loans, as our junior levels of government have been forced to do. I ask my hon. friends, if they have so much concern for small business, why is there no allocation in the present estimates for the small business section of the Department of Trade and Commerce?


Donald Methuen Fleming: There is.


Chesley William Carter: I should like the minister to tell us where it is.


Donald Methuen Fleming: Mr. Speaker, may I ask the hon. member if he is not aware that there is provision in the estimates for the small business administration of the Department of Trade and Commerce? It is not shown as a separate item, but it is included in the provision made for that department, and the sum provided is in excess of the sum provided the year before. Is the hon. gentleman not aware of that?


Chesley William Carter: No, I was not aware of that, Mr. Speaker, and I am glad to have that information from the minister. It certainly was not shown as a separate item, and last year the amount provided totalled only $30,000.


Donald Methuen Fleming: That was for part of a year.


Chesley William Carter: I ask my hon. friend why this bill meets only one of the four main needs of small business?


Mr. Aiken:: Surely money is the big one.


Chesley William Carter: Yes. Here I should like to reply to the hon. members for Vancouver South and York North and several other hon. members who extolled the idea of using the chartered banks and ridiculed the thought of expanding the scope of the industrial development bank or setting up a similar body. These hon. gentlemen based their arguments on the fact that the industrial development bank operates only 12 branches across Canada and made only 532 loans in the last year. We will not deny these facts, but my hon. friends should have gone on to point out that the small number of loans made was due mainly to the terms of reference under which the industrial development bank operates. That body is restricted to making loans for new industries, and mainly manufacturing industries. It takes care of only one of the four categories outlined in the bill.
It is typical Tory reasoning that the more banks we have the more loans we get, but my hon. friends completely forget that the number of loans depends largely on the attitude of the banker himself. That is true with respect to the Farm Improvement Loans Act and it is true with respect to this bill. It is also true with respect to the Fisheries Improvement Loans Act.
I wish to point out to the minister that because of the attitude of the banks the legislation with respect to loans to fishermen has had no effect at all in my province. We on this side are not personally wedded to any particular means of making these small loans available. What we are anxious to achieve is legislation that will really be effective and not merely express good intentions. There is something to be said for expanding the scope of the industrial development bank. If that idea is so ridiculous, why do we have the Farm Credit Corporation?


Mr. Woolliams:: Because it is similar to this bill.


Chesley William Carter: Let me point out to the hon. gentleman who interrupts that it is not similar to this bill. That is the point. The Farm Credit Corporation is set up to give long term loans, loans for 30 years, at 5 per cent. The minister drew a parallel between this bill and the farm improvements legislation when he introduced this measure in the house. I want to point out to him now that the farmers have a source of long term credit, This bill provides only intermediate term credit. Why not provide the same for small business as for the farmer?


Donald Methuen Fleming: Mr. Speaker, if my hon. friend will permit me to interject, I said nothing about the Farm Credit Act at all. I spoke of the Farm Improvement Loans Act,
254	HOUSE OF COMMONS
Guarantee of Loans to Small Businesses
and I did not once make reference to the Mr. Carter: No, I know the minister did Farm Credit Act or the Farm Credit Corpora- not. I am asking him if that is what he tion that acts under it.	means.


Clayton Wesley Hodgson: The hon. member had a dream.


Chesley William Carter: That is the point I am trying to get across to the minister. The farmers have two sources of credit, one a source of intermediate term credit and one a source of long term credit. Under this measure we will provide only intermediate term credit for small business, but they require long term credit just as the farmers do.
The minister quoted Mr. Ashforth as saying the money supply is easing. If that is so the effectiveness of this legislation may very well be somewhat obscured, because if the credit money supply is easing then many loans will be credited to this measure which would have been made in any case.
In this legislation the banker is the key man. We may very well raise the question as to how this legislation is going to be interpreted in terms of individual loans on the basis of the banker-borrower relationship. Clause 3 of the bill requires the banker to exercise the same care and caution as he does with other loans; otherwise the government has no obligation with respect to the losses that may be incurred.
How will our bankers evaluate the government guarantee? Will they evaluate it in the aggregate or in terms of individual loans? Since the banker is responsible for 90 per cent of any losses, and since the government is unwilling to lend its own money, is it likely that the banker will be any more eager to do so? Will the government guarantee be interpreted as lessening the risk, therefore requiring less collateral? Will the loans be extended to borderline risks which otherwise might be rejected?
These questions are pertinent in my opinion because, since the banks in exercising their ordinary functions are making hundreds and hundreds of loans every day, it is important to know just how this legislation will affect their policies and normal operating procedures apart from substituting a ten-year term for payment on demand.
There is need also for some clarification of the minister's statement with regard to the $300 million ceiling on the aggregate of loans to be carried over three years. Does the minister mean $300 million a year, or $300 million for the three-year period, because it can be interpreted either way; or is it only a larger sounding way of saying that the government's risk is limited to $30 million spread over three years, which is probably no risk at all.


Donald Methuen Fleming: I did not use the
words $30 million at any time.


Donald Methuen Fleming: The figure is $300 million.


Chesley William Carter: The figure of $300 million is the aggregate of loans that can be made, and the government is limiting itself to 10 per cent of the loss. Is that not correct? Therefore the minister's loss could not exceed $30 million.


Donald Methuen Fleming: Mr. Speaker, may I suggest that it would be much more appropriate if questions of this kind were dealt with in the committee when we come to the clauses of the bill. I do not wish to restrict the hon. member's observations on the principle of the bill, but he is entering into matters now which I am sure he will agree could be much more appropriately dealt with in committee.


Chesley William Carter: If the minister could give us some information when he replies, perhaps-


Donald Methuen Fleming: I will give it in committee.


Chesley William Carter: -we would be in a better position to ask questions on the bill. On the point of order which the minister raised, I should like to point out that we should know just what this figure means. Until the questions are answered we cannot have a clear idea as to just how effective this legislation will actually be.
In conclusion I wish to repeat that our chief criticism of this bill is that it leaves the real and essential initiative with the banks instead of with the government. We criticize also the fact that it meets only one of the four primary needs of small business, and that one only partly. Nevertheless, we will co-operate to expedite its passage, in the hope that it will produce the results for which it was intended.


Frank Howard: Mr. Speaker, I have a comment or two to make at this stage on this particular bill. We all know that the type of economy we have, which is agreeable to the Minister of Finance and his colleagues, from time to time places certain groups in our economy at a disadvantage visa-vis other groups, and that the policy of the C.C.F. and the democratic socialist movement has always been to lessen this disadvantage as much as possible and make sure that so long as we have a capitalistic type of economy, all sections of that economy are able to function within it to the best advantage.
Unfortunately, small businessmen are one group which has been at a particular disadvantage for a variety of reasons. This bill

Guarantee of Loans to Small Businesses
as a half measure will somewhat alleviate the squeeze and the disadvantage which small businessmen have found themselves in over the years. It is unfortunate, though, that even although the party to which my friend the Minister of Finance belongs, before it became the government, espoused this idea of assistance to small business, it took the economic conditions that we have today to force him and his colleagues to introduce a measure such as this when a similar proposal, or an expansion of it, could easily have been introduced two or three years ago, which perhaps would have assisted some of the small businessmen, or prevented them from getting caught in the economic squeeze in which they find themselves to a great extent because of other activities of my hon. friend and his government.
I would have thought, Mr. Speaker, that it would have been advantageous to agree to have this particular bill referred to the banking and commerce committee when it is established, which I hope will be soon, in order that a complete and full examination could be made by the committee. If that were done the people who are interested in it could make their views known to the committee rather than through the narrow conduit pipe to the minister's office, and also we could have before the committee the views of the Department of Trade and Commerce or its small business bureau. If this bill were sent to that committee we could get the ideas of the small business bureau-if that is the proper designation of the division-with respect to this particular piece of legislation.
Our examination of the bill certainly indicates to us that it leaves much to be desired, and that a number of improvements could be made in the bill itself. Having in mind, sir, the speeches made by hon. members on the government side of the house during the resolution stage preceding this bill, I would say that the bill does not bear out in full the ideas expressed by those hon. members; and perhaps the banking and commerce committee, as I indicated, would be the proper place to sound out their views and attempt to draft a much better and more expansive bill than we have at the present time.
My suggestion that this bill be referred to the banking and commerce committee is not an attempt to indicate that this is not an emergent situation and that the economy does not warrant some sort of activity of this kind. Obviously the minister himself is not as concerned about having this bill advanced through the house and finally becoming statute law as quickly as was indicated in the speech from the throne, because one of the conditions in the bill is that-and I am not going into the details-it will come into force 90205-6-17
upon proclamation, which could indicate some sort of indefinite time in the future.
If the minister and his colleagues were desirous of this particular bill becoming law as quickly as possible, then the words "upon proclamation" would not have been in there; the bill would have been debated and dealt with here and sent to the Senate for its consideration and given royal assent immediately upon passage by the Senate. Perhaps this is the course that should be taken.


Donald Methuen Fleming: Will the hon. member permit a question? Is he not aware that in legislation of this kind regulations have to be passed and they have to be ready to be put into effect before the legislation can be proclaimed. Regulations cannot be promulgated until the legislation is in effect. Legislation of this kind always takes this form.


Frank Howard: That may well be; hence there is no need to tie this particular piece of legislation in with the great rush that was indicated during the throne speech discussion and the reference in the throne speech.


Donald Methuen Fleming: The hon. member is quite mistaken.


Frank Howard: The minister cannot have it both ways. Either he knows what he is doing and he is prepared to advance the legislation and regulations as quickly as possible, or he is in no great rush and does not want it to proceed in the manner that it should.
Inasmuch as the minister has not any idea what should be in the regulations until proclamation takes place, perhaps the proper thing to do would be to send the bill to the banking and commerce committee so he might get the benefit of the views of the members of that committee, many of whom would be from his own party, in order that the regulations perhaps would be more properly worded in such a way as to advance the cause of small businessmen more than they might if the minister merely drafts them based upon his own knowledge and understanding.
One of the things in the bill which is not too acceptable to us is its restrictive quality, as I see it, confining loans to a type of activity dealing with the improvement or modernization of certain kinds of business premises. Perhaps the bill should contain a provision which would allow a person to borrow money to purchase or enter into a small business rather than restricting him to improving what he already has an interest in. I am sure there are a number of people in this country who at one time or another
256	HOUSE OF
Guarantee of Loans to Small Businesses have been engaged in small business enterprises and who, if the statistics on bankruptcies are any indication, have gone out of business for a number of reasons. Incidentally, the number of bankruptcies has been increasing since this government took office. Undoubtedly there are a number of people who unfortunately went bankrupt and would like to get into business again. I think they should be given an opportunity to enter into a business under this type of legislation.
This is not a new idea, because the principle of allowing someone to enter into a business with a government loan has been established under the Fisheries Improvement Loans Act, and I should like to make a short reference to that act to indicate that the situations are comparable. The Fisheries Improvement Loans Act provides that a loan can be made by the government for the purchase or construction of a fishing vessel or the purchase or construction of fishing equipment. There is another provision of the act setting forth that a fisherman is one who is interested in a weir or a fishing vessel, or desires to have an interest in one or to purchase one. I think the same principle could be applied under this legislation rather than restricting it wholly to improvement and modernization.
When this legislation becomes law I think it might also be advantageous if provision were made for people to be able to borrow money for the purpose of retiring a mortgage. I imagine there are many businessmen Who have gone into debt in one way or another in recent years and who have found that the interest rate on their debt is rather high. They might find it advantageous to be able to borrow money under this legislation in order to retire the old debt and improve their over-all financial position.
I understand that the Minister of Finance borrowed a few million dollars the other day, or perhaps it was today, in order to retire previous outstanding loans. He borrows money regularly to pay off past debts hoping, I believe, to improve the financial condition of the treasury. Surely small businessmen should be given the same oportunity to engage in that sort of activity. Surely they should be able to attempt to improve their financial lot by borrowings of one sort in order to pay off borrowings of another kind if they believe they will benefit by the alteration.
We also find it odd that no limit is stipulated in the bill with respect to interest rates. It is odd from our point of view, because if the government is to guarantee these loans I think we are entitled to come to the conclusion that the implication is that


there is practically no risk involved in making such loans. If the operations under the Fisheries Improvement Loans Act and the Farm Improvement Loans Act are any indication, bad debts are a relatively small fraction of the total amount of loans made by the banks, and these losses are guaranteed.
To all intents and purposes it can be said that there will be no risk in lending money to small businessmen under this legislation when it becomes law. As there is no risk, as there is a money-back guarantee on the part of the Minister of Finance, certainly the interest rate should be somewhat lower than is the general case. I think pegging the interest rate at 5 per cent, as was done under the Fisheries Improvement Loans Act, would be the equitable thing to do rather than leaving the situation wide open and allowing the interest rate to be at the same level as the prime interest rate in the case of other people. The fact that to all intents and purposes there is no risk involved is all the more reason why this should be done.
I will have other comments to make at the committee stage of the bill, at which time I will go into more detail with respect to some of the ideas I have now put forward in general terms.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have listened with some interest to the last speaker, the hon. member for Skeena, and from his contribution to the debate I judge that his main specific suggestion was that the provisions and the benefits of this legislation might be extended and made applicable to discharged bankrupts.
That is a very interesting philosophy, I am sure, and no doubt the Minister of Finance will give it due consideration. If the hon. member is serious in his suggestion, possibly it might be better for him to wait until, as indicated in the speech from the throne, the Minister of Justice brings in amendments to the Bankruptcy Act or possibly a new act. The hon. member might consider trying to induce the Minister of Justice to include this very interesting suggestion in the Bankruptcy Act so that those who have gone through bankruptcy might then become eligible. That might be a condition precedent to their being eligible for a loan.


Frank Howard: I think my hon. friend misunderstood.


Gerald William Baldwin: I hope I did.


Eldon Mattison Woolliams: It was very hard to follow the hon. member.


Gerald William Baldwin: I should like to take issue with the statement by the hon. member for Burin-Burgeo when he suggested that this

Guarantee of Loans to Small Businesses
was a measure which was inimical to small business. Surely the government has shown, as a result of all the legislation it has introduced and the actions it has taken, that here at long last is a government dedicated to the preservation and the advancement of small business and the little people of the country. I do not want to go into detail on that. All one has to do is make a casual survey of the legislation which has been passed since 1957. Last year we had amendments to the Combines Investigation Act. We had the bill of rights. We have also had many other measures, financial and otherwise, for the benefit and assistance of the small family farmer.
These are but a few of the many important measures which indicate beyond any doubt that the government has taken a firm stand with respect to this question and in doing so has reversed what I can only describe as the cult of bigness which, unfortunately for this country, characterized the last administration for so many years, a cult of bigness in government and bigness in business.
The act now before us is just one of the measures which will achieve the change in this philosophy which clearly indicate the pattern that has been emerging for three years, and which are proof of the fact that the government stands firmly on the side of and behind the small people of this country.
The hon. member for Burin-Burgeo spoke also on the resolution stage, and I was very interested in hearing him refer to what I heard described for the first time as the Pearson plan, which probably indicates an attempt to merge the rather tattered shreds of the Liberal party within the more robust standards of the Leader of the Opposition (Mr. Pearson).


Clayton Wesley Hodgson: That is for the manufacture and sale of bow ties.


Gerald William Baldwin: In raising this matter at the resolution stage the hon. member for Burin-Burgeo referred to the fact that the proposed legislation was simply the adoption of this particular aspect of the Pearson plan. I take exception to that suggestion. What is contained in the quotation referred to by the hon. member on page 57 is along these lines, and I now quote:
The facilities of the industrial development bank should be extended to include retail trade. Our small merchants have faced increasing competition from the large chains and at the same time have found it increasingly difficult to obtain capital for improvements and expansion. It is essential that our small merchants should have the opportunity to raise capital on reasonable terms.
There are these distinctions, quite plain and quite palpable. It would invoke the machinery of the industrial development bank, which has many inherent weaknesses and certainly could 90205-6-17J
not do the job which this legislation is designed to do. There would be the firm distinction in the amount of capital available. The minister has said here, and the legislation confirms his statement-I believe it is in clause 3-that the amount which is involved will be a total of $300 million. Then, third, the suggestions contained in the Pearson plan are restricted to the retail trade. On the contrary, in this bill I am not going to go into this in any detail because obviously during the committee stage there will be an opportunity to do so. In the interpretation section of this legislation the interpretation of "business enterprise" is far wider, far more comprehensive and permits the benefits of this legislation to be extended to many more than the retail traders.
Finally, the main distinction is and I think this is very important, that the Pearson plan was, in the words of the quotation to which the hon. member for Burin-Burgeo (Mr. Carter) referred on page 57, merely an election campaign plan. He said:
-I should like to quote from page 22 of the Pearson plan, which our leader put forward when the 1958 election was called.
Obviously this bill now introduced is not an election plan but a firm piece of legislation containing the obvious benefits for which this country has been waiting and which will serve a most useful purpose.
I do not want to take up too much of the time of the house, Mr. Speaker. I know there are others who want the opportunity to say something about this particular bill. However, I think I should add this: This legislation can be used in connection with other complementary acts as an instrument of national policy. I say this because I come from a constituency which is remote from the settled areas of Canada, and for many years we have been restricted almost exclusively to agricultural production. During the last 10 or 15 years there has been a slow and gradual change, much of which I should say has been accelerated by the program which this government has commenced during the last three years to the effect that we should now turn our attention to diversification. In this way, we could fulfil our great destiny.
We have in our country a great potential for agricultural development, with gas and oil resources, lumber, minerals, fisheries and so on. We are now at the stage where we may expect industrial development and secondary industries. We have been held back because of the lack of capital. The provisions of this legislation can be used, as suggested by the hon. member for Bow River (Mr. Woolliams), in connection with the housing legislation, as an instrument of national policy
t[DOT]'V,;
258	HOUSE OF
Guarantee of Loans to Small Businesses for accelerating the development which should have taken place many years ago and which my part of the country now awaits.


Mr. Alan Macnaughion (Mount Royal):: Mr. Speaker, while I have listened to a great many interesting speeches in this house for many years, and while I have the highest regard personally for the Minister of Finance (Mr. Fleming), I must tell him that I And this bill disappointing. It is disappointing because the bill fails to provide the assistance and the stimulus which small business requires if small business in this country is to continue to survive and to fulfil a very useful economic function in our general economy.
The small businessman has a much greater concern than merely acquiring new plant and equipment. Competition is the vital thing at the moment, and the small businessman is faced with tremendous competition from the large chain stores, large chain retail outlets, which are obviously reducing his margin of profit considerably. There is no doubt that the gross profits of small businesses are shrinking. There is no doubt that the modern purchasing techniques of chain producers and chain retailers amount to severe competition. The big operators are overshadowing the small. Bankruptcies are up sharply in 1960, and it is almost trite to say that we are in the throes of a merchandising revolution. So I say the small businessman needs credit to keep pace with this competition.
This bill we are discussing today gives no special consideration to any taxation; it gives no chance to acquire working capital. It is the lack of working capital, in my opinion, that is the real problem of the small businessman today. With a reasonable amount of working capital, he could compete and he could survive. With a little financial fat on his bones he could ride out the ups and downs of the economic situation that we have had from time to time in this country. But without this financial fat on his bones he faces bankruptcy, no matter how much credit this bill may pretend to grant him for the increasing of his plant and the purchasing of necessary equipment.
I do not believe anyone in the house has any dispute with regard to the general principle, namely the need of small business for capital, the need to purchase new equipment and, if necessary, to renovate premises. If a guarantee is necessary, if it is required by the banking system, then it is only fitting that the government should provide it. However, it is a rather small gesture, to my way of thinking, toward solving the economic problems of 1960, and those which will face us in 1961.


Donald Methuen Fleming: Small business does not think so.


Alan Aylesworth Macnaughton: I doubt very much if the measure will create a large number of jobs in the various supply and manufacturing trades, as it is supposed to do. The government for example, is proposing to guarantee a loan by the same yardstick which the banks apply at the present time. I say that this is no basic solution for the chronic problem, the shortage of working capital which faces the small businessman. I say, further, that this bill is disappointing because we have been promised so much over the last three years. In the 1957 election and the 1958 election representatives from the other side of the house went across the country promising to establish an office in the Department of Trade and Commerce to assist small business financially. I believe they did it; I believe they did open up one office. They did put one person in charge, appoint an officer. They did give that one person in that one office a secretary.


Donald Methuen Fleming: Surely you know it is much more than that.


Alan Aylesworth Macnaughton: I should like very much to hear the details about that particular office and what it has done in the last three and a half years that we have been waiting for this bill to come forward. I understand that in July, 1960 two deputy ministers were appointed. Again I assume that one of them was charged with the job of investigating now small business could be helped. At long last, on November 22, my friend the Minister of Finance brings in this bill rather than the Minister of Trade and Commerce (Mr. Hees). I suppose we should congratulate him on the action he has taken in at least bringing in this bill. However, I think we must criticize the government for its three and one half years of delay and for the long time it took in presenting legislation in the form in which we have it today because it does not attack the root problem of the small businessman.
It is obvious that the small businessman deserves all the help that we can give him. The present bill may help him in acquiring new machinery, in building a new plant and in making his premises more attractive, something which should help in the retail section of the economy. However the operators of these businesses and the communities which they serve will not gain the full benefit of these improvements unless there exists the financial ability to compete and to survive.
If you look at clause 3 (l)(c) of the bill, Mr. Speaker, you will find that the bank officer is to use the same care required by the bank in

the conduct of its ordinary business. This bank official must, I presume, be sure that the person who is applying for the loan has the ability to stay in business and that he has sufficient working capital. If those two restrictions are applied to any borrower who is trying to get money by means of which to improve his premises or to purchase machinery it seems to me that he will be under much the same restriction that he is under at the present time. I therefore do not expect the flood of new applications which various hon. members who have spoken in the house have predicted. Furthermore, the minister must, if he is a good minister, limit to 10 per cent the guarantee to the banks which in turn will form another check on the granting of loans and the creating of employment. I say that the need is much greater than this.
It seems to me that today there are at least three present needs for small businesses. There is first of all the need of access to equity financing. By that I simply mean that the small businessman first of all starts with his own resources. Then if he needs more money he turns to his friends and to his relatives. When the money from these sources dries up he has no place to which to go. He is too small for the general money market. He cannot go and raise stock issues and bond issues. He has not the necessary security, name, experience or the business. The present basis of taxation which we have in this country does not permit him to accumulate the capital he needs. I say that the second need of the small businessman is for long term debt financing. Too many small owners of small enterprises who have started in good faith and have set up their various businesses in this country and who need money for expansion and capital requirements in due course find themselves the employees of those who advance the money and find that they have lost control of the companies which they themselves had started. If the operator is clear of long term debt or if the debt which he has is of a small amount he may-and I underline the word "may"- qualify for a loan under this bill.
The third need to which I would call the attention of the house is the need of the small businessman for a revision of taxation rates. The small businessman needs a better break on his early profits. Today he is taxed at the same rate as are the larger companies. I submit to the Minister of Finance that the real problem of the small businessman can be solved more readily by a program of tax relief and concessions. This bill offers a small businessman no more or no less than the assistance which the government at present offers to the home owner, the farmer and the fisherman. The small businessman needs much more than that. When the Minister of Finance
Guarantee of Loans to Small Businesses brings down his baby budget before Christmas I hope he will consider giving some tax relief and concessions to the small businessman. If I may, I should like to suggest the following tax relief and concessions which the minister might consider.


Mr. Deputy Speaker:: Order. In my opinion it would not be relevant, on second reading of the bill, to discuss detailed proposals of this kind. I suggest, as the hon. member has indicated, that he will have a better occasion on which to do this.


Alan Aylesworth Macnaughton: I am very sorry; I thought I had some rather good points to offer.


Lionel Chevrier: The hon. member will just be postponing them.


Alan Aylesworth Macnaughton: Yes; it will just be postponed a year and a half or so. In any event, if I may, I should like to call the attention of the minister to the basic question as it affects small industries and it is this. The rate of depreciation is far too low at the present time. As the minister well knows, the rate of depreciation is 20 per cent the first year. I maintain that it should be increased up to 50 per cent at least the first year and the balance within another year or two. I would also suggest that instead of granting loans up to a maximum of $25,000 the minister should perhaps give tax relief up to the amount of $25,000 in consideration of the necessity for the small businessman to acquire working capital.
If those steps were taken by the Minister of Finance I believe that, in combination with the terms of the bill as we have it at the present time, an approach at least would be made to the root of this problem; that a contribution would be made to the stability and the financial welfare of that sector of the economy which we designate as small business and that this would be done without placing an undue strain on the national treasury.
Other hon. members have mentioned the industrial development bank. I assume the minister has looked at the industrial development bank in relation to the bill. As far as I am concerned, I feel that we should expand the operations of the industrial development bank. I think it is far too conservative. Although I understand its terms of reference provide for loans to industrial enterprises-that is to say to producers and to manufacturers but not to retailers-at the present time it seems to me that it is just a subsidiary of the Bank of Canada. The staff of the bank look to the Bank of Canada and I think the industrial development bank is run in much the same spirit as is the Bank
260	HOUSE OF
Guarantee of Loans to Small Businesses of Canada. I think the time may have come when the industrial development bank should be separated from the Bank of Canada. I think the time has come to modernize it, to make it more aggressive, to induce the bank to take more and greater risks and to seek out small businesses which it certainly could help.
In closing I should like to suggest a few things to the Minister of Finance. First, I should like to suggest that he give consideration to placing the administration of the proposed legislation under the jurisdiction of the industrial development bank. I appreciate that this action might require changes in the bill that is before us and perhaps changes in the charter of the industrial development bank itself. However, I think this step would certainly be worth while. My suggestion is that the industrial development bank become the agency of the government in this matter working with the chartered banks which would deal with the applications and make any authorized loans. There is a gap in existing credit facilities for small business in Canada. I hope this bill is no mere political subsidy for one segment of the community but rather is a real attempt to underpin small business enterprise.


Mr. A. D. Hales (Wellington South):: Mr. Speaker, I welcome the opportunity of saying a few words on this bill which is now before the house. Many fine contributions were made by many members on this side of the house during the resolution stage, and I was surprised at the very few remarks we heard from those on the opposite side of the house. The two hon. members who have spoken on this bill regarding loans to small business both seemed to be following along the same line of thought. They spoke of small business needing credit and needing working capital. Do they not realize that this very bill which we have proposed and which is now before the house is here just to do that? What it means is that a man in business, rather than tying up his money in capital expenditures and in other forms of operation, can now obtain a loan to improve his property and increase his efficiency. He can do this, and not tie up as much capital in those fields.
They spoke of what this party has done to help the small businessman. I think both hon. members-the hon. member for Mount Royal (Mr. Macnaughton) and the hon. member for Burin-Burgeo (Mr. Carter)-can, if they want to, go up and down the streets in their communities and ask the retail merchants and those in small business what they think of this bill which is now before the house. They would get nothing but glowing remarks and fine praise for what this government has done. They know there are many


small businesses in their communities that require and would like these loans made available to them.
They ask, what have we done, as a party, for small business? Have they forgotten the time of the tight money days? Just ask some of the men in small business about those days of tight money. And do they remember the time when they elbowed the small businessman out of business by doing away with the Resale Price Maintenance Act in 1951? Ask the businessman what he thinks about that. Ask him what he thinks about the Conservative party and its efforts to reintroduce amendments to the Resale Price Maintenance Act, as we did last session.
Therefore I think if they would both earnestly ask themselves about this bill they would come forward and say they are in accord with the measure which we have now placed before the house. Yes, Mr. Speaker, I am very proud to be a member of the government which has seen the problem that exists and has done something about it. We did not turn a deaf ear to these serious problems.
However, I do not think I should take the time of the house to elaborate on the plight of small business. Every member of this house knows full well the situation, if he has the interests of his constituency at heart. He knows that the number of businesses-and they are not all small businesses either

that are struggling for existence because of the lack of capital to enable them to be more competitive is very great.
Every hon. member knows that these small businesses are the lifeblood of any community. These men take part in civic affairs and community interests. They take part in Red Cross canvassing and all these efforts that go on in any community. Who is it gets behind and promotes these things? It is the small businessman in the community. In many cases their forefathers in these small businesses have been pioneers of the country. They helped to develop all these cities in Canada

and what for? For chain stores to come in and take over.
Apart from setting up the industrial development bank in 1944 the Liberal party did nothing for the small businessman. They forgot him. If anything, they put him out of business; they put him out of his place in our economy. Yes, Mr. Speaker, they gave the small businessman a real push out of business in 1951 through the Liberal legislation that abolished the system of resale price maintenance. We went about bringing these back into focus.
I will now proceed with some remarks concerning this bill. Mr. Speaker, I think

it is only natural that loans should be made available to small business as well as farmers, manufacturers and others. The geographical situation of Canada in itself makes it necessary that we should help develop small business because 44 per cent of our population is to be found adjacent to the communities of 1,000 or less, while there are only 40 places where the population is 30,000 or over.
If retail stores had not followed the settlers we would not be the nation that we are today. How many small business concerns are likely to need assistance? This is rather difficult to say or to forecast, Mr. Speaker; but according to Dunn's Review and Modern Industry of October, 1957, a survey of a crosssection of industry in the United States revealed these figures: 9.6 per cent of the retailers, 9 per cent of the wholesalers, 12.4 per cent of the manufacturers and 14.1 per cent of the service establishments were being held back in their growth by lack of capital and financing.
Applying these percentages to the following Canadian figures, we find that retailers total 151,626; and using the 9.6 per cent figure for the United States of those needing assistance, we find we would have 14,566 retailers needing capital assistance in Canada.
Likewise with wholesalers the figure is 26,167; and using the 9 per cent figure for the United States, we find that 2,355 would need assistance in Canada. With regard to manufacturers the figure is 37,021; using the 12.4 per cent figure for the United States, 4,590 would need assistance in Canada.
Finally, in the service establishments the figure is 58,748 in Canada; using the 14.1 per cent figure for the United States there would be 8,283 needing assistance in Canada. We find that 10.89 per cent of the total of these four groups may need financial assistance. If we eliminate manufacturers, who have access to the industrial development bank, there would be some 25,000 prospects for these loans set forth in Bill No. C-40.
Is a loan of $25,000 sufficient? Yes, I think this is a very reasonable maximum. The small business administration act of the United States reports that 51 per cent of the loans they made were for $25,000 and under. In a three-year period that same organization- the small business administration of the United States-made 2,316 loans to wholesale, retail and service establishments for $72,777,136, or an average of $31,424. Therefore in Canada they estimate that for a hardware store 10 per cent of last year's gross would be a reasonable figure to use for remodelling or fixing up a store.
A Canadian grocery survey of a short time ago stated that a grocer who wishes to modernize his store with refrigeration for
Guarantee of Loans to Small Businesses frozen foods, meats, etc., in the hope of meeting competition of the big chains, requires from $25,000 to $75,000, with an average of $27,500.
I think the amount of $25,000 is a very fair maximum. If a merchant or small business operator takes a loan of $10,000 it will mean that over a period of 10 years he will have $1,000 a year to repay on principal or approximately $83 per month or $20 per week. This should not impose too much of a drain or hardship on almost any small operation.
Will the $250,000 gross revenue or sales make most of those in the four categories, namely retail, wholesale, manufacturing and service industries, eligible for loans under this bill? I think it will. I believe the minister in his remarks drew attention to a survey made in 1957 which indicated that 95 per cent of the retail stores had a gross revenue of $200,000 or less-which would take care of practically all the retail houses-57.3 per cent of the wholesalers had a gross revenue of $200,000 or less and 74.6 per cent of the manufacturers had a gross revenue of that amount or less. I therefore think almost all those in small business will be covered adequately.
Bringing this matter home to our own constituencies or our own backyards, as it were, I think of the benefits that will accrue to many engaged in small businesses. I think of the old established family business handed down from father to son with a new generation coming along with the business needing a loan so it may be revitalized. I think of the many new Canadians who have come to Canada some of whom have settled in my own community and built little enterprises that are hamstrung for lack of capital with which to enlarge their premises or improve existing equipment. I think of the corner grocery store in a new area in my constituency. The area has expanded, there has been great development. We want to establish a sub-post office in that area. The grocer wants to put it in his store but does not have sufficient room in his little shop. By getting a loan for building an addition he could have the sub-post office thereby satisfying a need in that community.
I think also of the jewellery store operator who wishes to install a new store front. I think of the main streets of the small towns where the store fronts may need renewing. Of what great assistance it will be to those small communities to have their main streets brightened up with new store fronts.
I think of small manufacturing concerns perhaps operated by new Canadians who have come to Canada and brought with them their
262	HOUSE OF
Guarantee of Loans to Small Businesses trades. Perhaps they have a wonderful business that is growing by leaps and bounds but they have not adequate room in which to carry on their work efficiently. These loans will be just made to order for people in that position.
I think of a fruit wholesaler who has worked up a nice business and who needs to instal refrigeration to take care of additional perishable products. He will be able to instal the required refrigeration by making use of the loans instituted by this government. I think of barber shops wanting to remodel, fix up and brighten up. I think of small motels in the tourist area throughout the country and of what great help these loans will be to them. Nor must we forget about the winter works program and of what great assistance this bill will be in developing it, thereby putting more people to work this winter.
All of the people I mentioned and many more will benefit by the passage of this measure, Bill No. C-40. In addition to that I think of the psychological effect its passage will have on those people who are in business and who may never have entertained the thought of securing a loan. When they realize that loans are available many will decide they should take advantage of this opportunity of injecting new life into their business and better business establishments will be the result.
This legislation should go a long way toward fulfilling the request for assistance that has been made by that group of Canadian citizens who operate thousands of small business enterprises throughout Canada, those people who are the mainstay of free enterprise. If the Conservatives and the Minister of Finance (Mr. Fleming) and the Minister of Trade and Commerce (Mr. Hees) had not listened to their legitimate requests for loans to small business the small business operators might easily have been elbowed out of existence altogether.
I do not believe it is necessary for me to say again how necessary it is to keep the efficient, independent merchant in a strong position. This is in the consumers' long term interest. Any legislation is only as successful as the number of times it is used. I would therefore strongly urge that this bill be enacted as quickly as possible. As soon as the Christmas rush is over small businesses and particularly retailers will turn their thoughts to remodelling, fixing up and making improvements on their premises. The sooner this measure is enacted the better. The Minister of Labour (Mr. Starr) should find this measure of great assistance in stimulating his winter works program as I mentioned before.


I would hope that the chartered banks and more particularly the local bank managers will get behind this loan scheme and make loans available to the small competent businesses with creditable records for meeting their obligations. There are many of them in every community and they are making a very worthwhile contribution.
The retail merchants association, the wholesalers association, the Canadian Manufacturers' Association, the tourist industry and others will, I know, all get behind this measure and go all out to inform their members and others about the availability of loans when this bill has been passed.
In my opinion this is one of the finest pieces of legislation to help small business that has ever been introduced. Hon. members opposite have said that this measure does not provide enough assistance, that it does not do this and does not do that, but they have not advanced any better suggestion. I must remind them that they were in power for many years during which time they had the same opportunities to introduce legislation of the type that is now before the house.


Mr. H. W. Herridge (Kootenay East):: Mr. Speaker, while I spoke for a few moments at the resolution stages, as hon. members of this group are particularly interested in the development and protection of socially desirable legitimate free enterprise and the economic family farm unit as necessary segments in a democratic society performing a useful function because of their economic and social impact upon our society as such, I return to the subject once again as a small boy does to a good fishing pool.
We support this bill in principle although, as the hon. member for Skeena (Mr. Howard) mentioned when speaking, we think it is restricted in some respects and in discussion at the committee stage we intend to introduce a few amendments with a view to improving the legislation.
The development of monopoly control in business has been recognized in this country by many groups and individuals over the years with its consequent effect on small business and the economic family farm unit. On that account this group has urged the governments of the day to introduce legislation of this principle and type.
We are very pleased to see that the government has finally responded to the pleas of persons inside and outside of this house and has brought in this legislation. In addition to that, members of the Retail Merchants Association of Canada, representatives of small industries in Canada, and other groups, have made representations to the government, particularly in recent years, urging legislation to

provide some medium or long term credit for their use in the development and expansion of their business.
I want to read briefly from a pamphlet which came to my desk some time ago entitled "Free Enterprise for Small Businessmen". I want to read from page three because I think this case is very well stated. I agree with what is said in this paragraph; I think most members will. It is headed:
Freedom of Opportunity Should be Cardinal Principle of Combines Legislation
It is our principal contention that, under present circumstances, some of the basic principles of our democratic and free society should be restated and re-emphasized.
We can agree with that. I continue:
Because of the disparity in economic power between large and small business, it is necessary for public policy and legislation to protect small business and to strengthen it against the ever present attempts of large business to assert effective control over it.
How true that is.
If economic freedom is to continue to have practical meaning in Canadian society, independent businessmen must be left free to make their own decisions as to sources of supply, pricing and other business policies and not be subject to the dictation, direct or indirect, of large organizations on these matters vital to the operation of their businesses.
This pamphlet was in a brief submitted to the Minister of Justice (Mr. Fulton), in 1959. No doubt the gentlemen who wrote this pamphlet felt keenly the impact of the indirect or direct control of big business on their operations.
I want to say this before proceeding. It is interesting to note this development in the outlook of small business with respect to our society. Not so many years ago you heard the small businessman say that he wanted freedom; he did not ask for any government action, any government attention or any government intrusion into business. Today we have the government accepting the principle which has been advocated by this small and staunch group throughout the years, that government must give leadership in many of these problems. Here we have the government today by this legislation-and rightly so -giving leadership to protect legitimate free enterprise and its interest in this country.
Members of this group and various organizations that I have mentioned made representations for some years urging legislation along the lines that is being discussed by the house at the present time. What was the result? Well, finally, the former Liberal government recognized the problem of small business to a very minuscule extent by the publication of a small business manual. Then, later on, after this government came 90205-6-18
Guarantee of Loans to Small Businesses into power, the problem was further recognized by the establishment of a small business branch in the Department of Trade and Commerce. Therefore, there was some limited recognition of the need for some consideration of the problems of small business.
What was this manual that the Liberal government distributed? Really it is a most enlightening document, Mr. Speaker, if hon. members would only read it. It is a sort of junior business primer. I think it would be normally sent to a high school student who was contemplating the establishment of a peanut vending stand, or something of that sort. However, there is some useful information in it; I would say, after reading the pamphlet through, that it takes a very, shall I say, elementary view of the problems of small business and rather underestimates the intelligence of those who would be establishing small business in this country. It deals with the law and regulations, and that is very useful. It deals with government agencies communicating with small business. It is also an elementary text book on forms of ownership, desirable location of factory sites or stores, accounting methods, use and sources of credit, buying and selling on credit, and then last, but not least, it deals with how to go into bankruptcy. It is a masterpiece of simplicity when it comes to a contribution to the solution of the problems of small business. If hon. members have not read it, then I suggest that they do so.
I recommend it to the parliamentary secretary to the Minister of Finance (Mr. Bell), who is now looking in my direction and apparently listening intently. I suggest he read this manual as he will find it will provide a contribution to his store of knowledge and may help him to fulfil to better advantage his duties as parliamentary secretary to the Minister of Finance.
As I said before, it is a useful document to a person just commencing to engage in business activity, but it was no solution to the problem whatever. This is a problem which is not confined to Canada; it is a problem of capitalism throughout the western world. It is one of the difficulties of capitalism which has been considered in the United States for some years. In fact, in 1956 a committee of the cabinet of the United States made a report on the difficulties of small business and made certain recommendations to remedy the situation. Thinking and progressive people in the United States realize that while we continue to talk about free enterprise, free enterprise is disappearing almost overnight in many sections of our economy.
264	HOUSE OF
Guarantee of Loans to Small Businesses


Eldon Mattison Woolliams: That is only in Saskatchewan.


Herbert Wilfred Herridge: I heard a voice over to my left but it was so ghostly that I am not going to reply to it.
In addition, there have been many books published on the subject in western Europe, in Great Britain and in the United States particularly, and a few publications, mostly pamphlets, in Canada, as a result of some superficial studies of the question. But it is a problem facing capitalism in the western world, and one that has to be faced if we are to maintain the form of economic democracy. I say that those who support only large companies and those who associate themselves with those ideas, or those who remain inert in the face of, shall I say, continued dissolution of the small sector of our business in this country are simply digging their own graves, and paving the way for some form of dictatorship in the future. That is why we in this group are very concerned about the maintenance of socially desirable, responsible, legitimate free enterprise and the economic family farm unit.
To illustrate the wide range of interest in this problem, even John Buchan, a former governor general of this country, paid some consideration to this question. I want to quote from his book, "Pilgrim's Way", written in 1940, in which he had this to say about the basic dilemma; this is a basic dilemma that faces capitalist society at the present time and I quote from the book:
Somehow or other, we must make our social and economic world more fluid.
He means 'fluid' in the right sense.
We must widen the approaches so that honest ambition and honourable discontent may have elbow room.
The world must remain an oyster for youth to open. If not, youth will cease to be young, and that will be the end of everything.
Let me say this, Mr. Speaker. Because we have allowed this state of affairs to develop, and it is developing at an alarming rate in the forest industry in British Columbia, we have this situation. I tell hon. members now for their information that within the last year one very wealthy United States lumberman has come into my constituency and has acquired practically all the timber in the Slocan circle. He has acquired the mills with the exception of one small one and now has this entire area for a distance of some 20, 30 or 35 miles under his control. The small men who fought for this country, who were born there and have lived there all their lives, are losing their opportunity to go into business in a small way.


Small business, Mr. Speaker, is not always inefficient. There are opportunities in the forest industry for small saw mills and small industry operating in areas in which it is not economical for the large companies to operate. I mention this matter because it is something that is going on daily and I repeat that governments and corporations who allow this sort of thing to develop are digging their own political and economic graves and laying the foundation for some form of dictatorship in the future.
I wish to quote from a book entitled "Small Business and Venture Capital", by Rudolph L. Weissman, published in 1945 in the United States. This is what he has to say:
Once again we must choose. Either we wish to maintain free enterprise, modified in the course of industrial evolution to fit a 20th century one world economy, or we desire to break abruptly with our traditions to embrace a society of big business only, with cartelization and monopoly as accepted features.
That is our choice at the present time. That is the choice that the people of Canada and the other countries of the western world face in the economic field. The members of this group, Mr. Speaker, believe that socially desirable and responsible free enterprise, where the genuine element of competition has free play-


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


Herbert Wilfred Herridge: Certainly.


William Heward Grafftey: How do you define "socially desirable"?


Herbert Wilfred Herridge: Surely the hon. member understands the English language.


William Heward Grafftey: Define it.


Herbert Wilfred Herridge: By "socially desirable" we mean enterprise that is working to the general advantage of the community in which it exists and the majority of the people therein. I will commence my final statement again. I say that the members of this group believe that socially desirable and respon-ible free enterprise, where the genuine element of competition has free play-in reply to my hon. friend, that is one reason why it is socially desirable-has a significant and important role to perform within the framework of a democratic and socialist planned economy, directed toward definite economic and social objectives, designed to maintain full production, full employment and to promote at all times world free trade. That is all I wish to say at this time, Mr. Speaker.
(Translation):


Mr. Vincent Brassard (Chicoutimi):: I am
very happy, Mr. Speaker, to rise this afternoon in support of Bill C-40. Besides, it is a

pleasure for me to speak after one of the socialist leaders. We are in perfect agreement; we have to do our utmost to save free enterprise.
I represent a Quebec constituency which is half rural and half urban and which, in addition to some large industrial plants, contains a great number of small business enterprises which are defined in paragraph (c), section 2 of Bill C-40 as enterprises where manufacturing, wholesale trade, retail trade and service businesses are carried out.
There are, indeed, a great many small saw mills, manufacturing plants and an even greater number of small retail enterprises which are suffering from the hard competition of some large outside concerns.
Therefore, Bill C-40 comes at the right time, and I consider it a complement to the anticombine legislation. As a matter of fact, the anti-combine act is a purely negative one. Bill C-40, on the other hand, is a positive measure which will enable a great number of small businessmen to get the necessary funds to develop their business.
This bill meets a real need in mixed production areas. From my own experience of small businesses, I can say that if, 15 years ago such a bill had been in existence, it would have been a great help.
I am personally in close and almost daily contact with a great number of small businessmen. I know that everybody will commend the passing of this bill which, because of the loans it provides, will make it possible to proceed with improvement projects. It will, more particularly, help put a stop to what I would call the loan shark racket. I have seen a number of businessmen pay interest rates of up to 10 per cent, capitalized, and the borrower often has to pay a rather large commission on the yield of the loan.
Thanks to this new source of available loans, our businessmen will not have to turn to loan sharks any more. Bill C-40 will also put a stop to the doings of the sharpers who sell, on the instalment plan, store equipment at exorbitant prices, to which are added extremely high financing charges.
I am therefore very happy, Mr. Speaker, to support the principle of this bill and at the same time to congratulate the Minister of Finance (Mr. Fleming) for his very commendable step which will prove beneficial to free enterprise.
A moment ago I heard the member who is apparently spokesman for the official opposition. He was complaining that Bill C-40 did not provide any working capital loans. From
90205-6-184
Guarantee of Loans to Small Businesses my own experience, I may say that if our small businesses lack working capital, it is precisely because they use their working capital to finance improvements. Consequently, the bill now before us exactly meets the present needs. To my mind, it is not up to the state to provide working capital loans. The chartered banks are already there when it comes to those loans. In conclusion, Mr. Speaker, may I add that this bill, like all human undertakings, may not be perfect. However, I remember that in 1937, the Quebec government set up the Quebec agricultural credit board, an action that saved agriculture in Quebec at the time. Of course it had to be improved, and amended almost every year. Now this legislation, in my opinion, is just as important in its far-reaching consequences as that of the Quebec agricultural credit board and I feel sure that the Canadian nation will welcome it heartily.


Mr. Maurice Bourgei (Levis):: Mr. Speaker, I hope it will not be taken amiss if I say a few words about this bill and especially that I will not be charged' with any attempt to delay its passage. I only have a few remarks to make. I may even be thus doing a service to the government, for this afternoon I noticed that the whips were quite busy trying to find speakers.
During the debate on the resolution, before the bill was introduced, the Minister of Finance (Mr. Fleming) said that under this legislation the government may guarantee loans made by chartered banks only. He gave as a reason the fact that credit co-operatives and credit unions are strictly under provincial jurisdiction and that it would be a problem to include them here. He added that the federal government is not authorized at this time to set up any form of supervision on loans granted by those organizations.
I agree with the minister, namely that authorizing those organizations to grant loans under this legislation would be a problem. But, Mr. Speaker, what are we here for if not to solve problems that come up and whose solution might be of benefit to the majority of Canadians?
It seems to me that the Minister of Finance, with all the good will he has shown in the past, should by means of discussions with the parties concerned, be able to reach an agreement that would enable our credit unions and the caisses populaires to make loans just like the chartered banks.
Since the purpose of this legislation is to help small businesses it is necessary to give small businessmen the greatest possible
266	HOUSE OF
Guarantee of Loans to Small Businesses facilities to obtain loans. In some areas of our province, as perhaps in other provinces of Canada as well, there are no branches of chartered banks; or else the majority of small businessmen in those areas deal with credit unions, with caisses populaires. The minister will understand that in those circumstances, the people concerned will have to overcome many difficulties. First, they may have to travel long distances to get to the nearest bank, or they may have to discuss their business with someone with whom they do not generally discuss those matters. The minister will surely agree that in such cases the businessman will find himself handicapped and will not find it as easy to secure a loan. Therefore, I feel that those difficulties could be eliminated if credit unions and caisses populaires enjoyed the same treatment as chartered banks as far as those loans are concerned.
May I also take this opportunity, Mr. Speaker, to praise the wonderful job done by our caisses populaires. I know about them, since the head office of the caisses populaires is in Levis, in my own constituency-and I know from experience the significant role they play not only in helping the development of our small industries but also in helping establish new industries.
Quite recently, I had an opportunity to discuss that matter with some officials of the caisses populaires, and they told me that they were ready to help our small businessmen. You remember that, on many occasions, Canadians were urged to invest their savings in Canadian industries. Well, we know that there are large amounts of savings in our caisses populaires.
I think that the minister would be well advised to give those people the opportunity of investing their savings in this assistance scheme for small businesses.
Besides, someone told me a few days ago, that the caisses populaires have granted several million dollars' worth of loans to small businesses. I therefore ask the minister to reconsider his decision in order to enable our caisses populaires and our credit unions to take part in this worth-while project.
Before concluding my remarks, Mr. Speaker, I should like to correct a statement made in this house by one or two hon. members to the effect that our caisses populaires were granting loans at 12 per cent. In order to clear up any misunderstanding and


Mr. W. H. A. Thomas (Middlesex West):: Mr. Speaker, I do not wish to delay the house for long, but I should like to associate myself with the other hon. members in this house who have commended the minister and the government for this fine piece of legislation. Our economy is in a state of constant change, and technological developments are compelling us to constantly shift the emphasis of our legislation from one group in our economy to another for the purpose of creating equity in so far as that can be done through government policy.
This legislation recognizes that the time has come when those who are trying to carry on small business operations require some special assistance to place them in a position where they can compete more successfully in these days of immense organization, the development of great corporations, and when our retail business, which once was carried on in the corner grocery store or in the country store, is now in the hands of our large chain corporations. I am not going to say that this development toward largeness is not a good thing. I believe it is a good thing in some respects. At any rate, it is a development in our economy which has come about for various reasons and which is here to stay.
The small business people are finding it difficult to compete with these large organizations, and this government has demonstrated time and again during the three years of their administration that they are particularly interested in the small operator and in helping the small operator to hold his position in our economy. This legislation is very timely and will assist the small businessman in obtaining credit facilities.
This legislation has been compared to the farm improvement loan legislation. As one who has had some knowledge of the workings

of the farm improvement loan legislation, I should like to say that it has performed a wonderful service to the agricultural people in Canada. It has also been of service to the banking interests. The losses under the farm improvement loan operation have been extremely small. Someone told me they amounted to one tenth of one per cent or three tenths of one per cent. I have talked to bankers who are highly pleased with and have been greatly impressed by the success of the farm improvement loan legislation. It makes it possible for farmers who could not otherwise do so to borrow in order to buy improved equipment and to improve their buildings. This legislation is aimed to provide in much the same way assistance for improving buildings and equipment in the case of small business operators.
The opposition have raised points that were not so much objections to this legislation as they were suggestions that it does not go far enough. From opposition members there have been several suggestions that the industrial development bank should be used for the purpose of extending these loans under the proposed legislation. I would submit that the industrial development bank lacks the branches and that they are not situated in such a way that they can get in touch with enough people who are operating small businesses; they are too remote from the operators of small businesses. On the other hand, the chartered banks have branches in almost every part of the country where business is carried on. It therefore seems to me that the chartered banks are the logical people to handle these guaranteed loans to small business.
Other suggestions were made to the effect that the scope of the legislation should be increased so that people could purchase small businesses, so that they could also pay debts and that the legislation should provide loans for working capital. May I say that there is no limit to the extensions that could be made to the legislation. However, to my mind the legislation is good as it stands. I think it goes far enough to do the job it was intended to do. There are complaints that it does not provide for long term debt financing. Possibly it does not do so, but ten years could be considered to be fairly long term financing in the business world today.
There have been some suggestions that assistance could be granted by offering more rapid depreciation rates for income tax purposes and possibly tax concessions. These suggestions really have nothing to do with this matter of improved credit facilities. I would
Guarantee of Loans to Small Businesses repeat that I think the bill in its present form is good. I should like again to congratulate the minister and the government for bringing in this good legislation and I should like to offer my support. It comes at a time when it will no doubt create a good deal of work and work means jobs, something we need in Canada today as much as anything else. I think the legislation is timely, that it is complete and that it will do a good job for the people of Canada. I know that it will be well received in our constituency of Middlesex West.


Eldon Mattison Woolliams: Mr. Speaker, in rising to say a few words this afternoon in reference to this particular legislation with regard to loans to assist small business I do so particularly because of the introductory remarks of the minister who said that this would be one piece of legislation that would apply to the tourist industry. Also in my introductory remarks I should like to answer the hon. member for Burin-Burgeo (Mr. Carter) who said that he was surprised that so many Conservative members spoke at the resolution stage congratulating the minister. I cannot understand why that particular Liberal member should be surprised. Once again I say, in rising in my place in the house, that this is just proof that this government keeps its promises. One of the promises made by this party before it was elected in 1958 and in 1957 was that it would do the very thing which the Minister of Finance (Mr. Fleming) has done by introducing this piece of legislation in parliament.


John Whitney Pickersgill: Three years later.


Eldon Mattison Woolliams: In addition to Conservative members who have congratulated the minister-and I join with them-there are others who have had something complimentary to say about the legislation. I read from a letter of the Retail Merchants Association of Canada Incorporated dated November 23, 1960 in which Mr. D. A. Gilbert, general manager of that organization which represents the retail merchants of Canada, made this statement, and this will supply the answer to that particular Liberal member to whom I have referred. The organization which represents the retail merchants of Canada had this to say through its general manager:
We are elated, of course, with, your government's bill to legislate government guaranteed loans for small business through the chartered banks. I have communicated our congratulations to the Prime Minister and to the Minister of Finance.
That statement speaks for itself. Speaking personally as one who comes from western Canada, I may say that I myself am elated with this type of legislation because it brings
268	HOUSE OF
Guarantee of Loans to Small Businesses small business in tune with what has been done in the field of agriculture by means of farm improvement loans. Many times when we are out in the rural communities and visit the small merchant stores in the small villages these merchants have pointed out to us members of parliament and those people in public service that sometimes they feel that the small businessman in this country had been forgotten. If he was forgotten under the Liberal government for the past 22 years today he is being remembered by a Conservative government which once again is giving dynamic leadership by bringing in this type of legislation.
I also think it would be of some interest to refer to the Retail Merchants Association of Canada brief and to see what they had to say as to what they wanted. In referring to this brief in that regard I would suggest that it supplies some answer to critics who tried to find something wrong with the bill today and who, in my humble opinion, made an extremely bad job of it. This is what the Retail Merchants Association of Canada asked for; and after all, if that is what they wanted there is no reason why this government, which always has its ear to the ground, should not give the merchants what they asked for. This brief which is dated September 8, 1960 states as follows:
We would further suggest that the loans might be arranged through the chartered banks with whatever government guarantee might be necessary, similar to the provisions of the Home Improvement Loans Act.
In other words, the businessman and small merchant wants his loan from the chartered bank. Businessmen and small merchants want to deal with the man in their own community, whether they are dealing with the Bank of Commerce, the Bank of Nova Scotia or the Toronto-Dominion bank. They want to deal with someone with whom they are used to dealing. Probably they attend the same church, or they belong to the same club, and they can sit down together and are able to understand each other's problems in a mutual way.
Therefore I am quite certain that when the Retail Merchants Association of Canada presented its brief to this government and stated that this was what they wanted, they were speaking for the small businessman in the community. I might repeat, Mr. Speaker, that I feel it is commendable in this way; this government has gone a long way in regard to farm improvement loans and loans in connection with agriculture, and now credit is available to assist the small merchant.
I think, also, that too often when we are looking at legislation of this kind we think


of it as being legislated, or brought in yesterday. Let us think of it as of today, because today there is a revolution going on in the retail trade. The small merchant, whether it is the hardware merchant, the general merchant or the groceteria, is up against very keen competition from large enterprises known as chain stores. This legislation is introduced for the purpose of assisting those small merchants to compete against big business. I think that is very important.
It will also help in this way. Today is the age of specialization. We go to the new shopping centres, and in the new shopping centres we see people specializing in various types of business. Whether it is the business of selling ladies' hats, ladies' dresses, or whatever it is, today we have a form of specialization. This legislation will help the businessman to specialize in his field, by giving him credit to carry on his business. It will also help the country and rural merchants to continue to serve the rural districts of western Canada. He, the merchant in small towns, will be able to serve the farmers in his particular area.
Now I come to one particular field which I feel is going to receive great assistance from this legislation. I am referring to the tourist trade. This legislation will help the businessman who is working in tourist development. In that regard, Mr. Speaker, I might take just a moment of time to refer to part of the definition of "business enterprise" set out in this bill. It covers manufacturing, the wholesale trade, the retail trade and service businesses. In that regard, I suppose the way it will fit into the tourist trade is in the retail trade and service businesses.
Only a few days ago I said it was regrettable that in the tourist trade in a place like Banff, Alberta, where there are more than one million people who come to visit the area each and every year through the the east and west gates, in many cases the small businessman who is serving that type of tourist industry

which is sometimes from eastern Canada, and from the United States -has difficulty in obtaining credit for the motel business and tourist business generally. This legislation shows that the government has listened to some recommendations of the Canadian Chamber of Commerce, which after all is an organization that does represent freedom of enterprise and business generally in Canada.
I want to refer for a few moments to the Canadian Chamber of Commerce policy declarations of 1960 and 1961. This, again, shows that the government is right in line with

what is needed in business, because these are new policy declarations of the Canadian Chamber of Commerce.
This is dealing with tourist promotion, and I will read from page 43 of this particular pamphlet. If you will bear with me I want to read two or three paragraphs because I do feel they will be appreciated. After all, the tourist trade is one of the largest businesses today in Canada and brings in more new dollars for us to spend. It is the third largest outside of pulp and the wheat industries. Speaking of tourist promotion the Canadian Chamber of Commerce pamphlet on policy declarations says:
The Canadian Chamber of Commerce recognizes the value and importance of the tourist industry which annually attracts to Canada millions of dollars of new wealth and which can and should be developed to produce an expanding market for food, gas and oil, manufactured articles and services. By promoting this industry a number of major objectives can be achieved, including (a)

Which is very important:
-attracting new wealth from tourists visiting Canada from beyond her borders,-
That is no doubt referring to the United States. Then it goes on:
(b) by inducing Canadians to visit the many attractions of Canada, thereby developing our own tourist vacation and recreational areas, and (c) by fostering better understanding of Canada by visitors from other countries, thus cementing international friendships.
Those are three high aims. Then it goes on:
The federal government, the provincial governments, municipalities, business, chambers of commerce and boards of trade and all groups and associations can contribute to this important goal by promoting vigorous tourist promotion campaigns to attract visitors to Canada's national parks,-
Of course, in Alberta there are two, Banff and Jasper:
-provincial parks and other areas of scenic, recreational or historical interest by means of advertising, development of highways, tourist accommodation, recreational facilities and by other means to the fullest possible extent. It is important that, in so far as seasonal conditions permit-
I might just digress from my reading for a few moments. One of the big difficulties of businessmen who are engaged in the tourist industry in Banff and Jasper is that the season is so short. Their profits, if any, from the business accrue in the months of June, July, August and probably September. Sometimes September happens to be a bad month and it works out to just about a three and one half month season. Therefore it is very important to these people. That is why they will be encouraged by this legislation. This applies to people who are doing business in the
Guarantee of Loans to Small Businesses parks, who will receive the means of obtaining credit and will be able to expand and carry on their businesses to serve this type of industry.
I will continue for a few moments reading what the Canadian Chamber of Commerce has to say in its policy declarations:
It is important that, in so far as seasonal conditions permit, each of the national parks should develop accommodation and facilities to provide a year-round program of rest and recreation, so that such facilities may be available to all Canadians in the regions in which they live.
I might add this with reference to the seasonal nature of this industry-and I am thinking of the future of a place like Banff particularly, and probably Jasper-Banff particularly could become the playground of western Canada, and probably all Canada, for winter sports and eventually for the world Olympic games. In this last connection the Banff chamber of commerce is making a strong bid at this time. In order to develop those facilities necessary to make it a winter sports playground for Canada it is necessary to have credit facilities, and in this particular bill those facilities are made available.
The Canadian Chamber of Commerce goes on to say:
The tourist industry offers one of the most attractive opportunities for Canada to earn foreign currency, particularly from United States citizens. There is a need for the expansion of facilities to accommodate tourists, but it is frequently difficult for those engaged in the industry to secure adequate credit.
That is the very point the Canadian Chamber of Commerce has endorsed in its latest policy declarations. It has been asking the various governments at various levels to supply credit where credit has never before existed. Therefore I say that this bill is going to do a good job for the people engaged in the tourist industry.
Mr. Speaker, I see that it is six o'clock.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
Eldon Mattison Woolliams: Mr. Speaker, before the recess I was discussing the tourist industry and describing how Bill No. C-40 would help the tourist industry particularly by assisting businesses connected therewith. I referred to a policy declaration in 1960-61 of the Canadian Chamber of Commerce published in pamphlet form. At page 44 of that pamphlet it is stated:
The chamber believes that it would be in the national interest to make it possible for the tourist industry to obtain loans-
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Guarantee of Loans to Small Businesses
I mention this to illustrate that this bill follows the recommendation of policy suggested by the Canadian Chamber of Commerce which stands for business in this country. This bill will accomplish that end. The Canadian Chamber of Commerce in this pamphlet went on to state:
Millions of dollars are privately invested in the best of visitor accommodation across Canada. Generally, patronage of these facilities is concentrated in the months of July and August and, during this period, over recent years, there has been an increasingly further confinement of this patronage to the last two weeks of July and to the first two weeks of August.
It goes on to point out that because of this trend it is necessary for business to obtain credit to be able to supply the necessary facilities.
Following a discussion in the pamphlet of the tourist industry the Canadian Chamber of Commerce went on to make certain recommendations. The sixth recommendation appearing at page 45 reads as follows:
The chamber recommends:
(6) that the federal government make it possible for the tourist industry to obtain loans-
As I suggested, this party prior to coming into power in 1957-58 mentioned that it would bring in a bill to assist small business. That is exactly what has been done. The government has kept its promise in that regard.
I wish now to deal with another matter relating to small business obtaining loans. In the past it was difficult for small business to finance because long term loans were not readily available through the chartered banks. In many cases, under the provisions of the Bank Act and because of the way the chartered banks operated, loans had to be paid up within one year. In fact, many notes are on a demand basis and the rate of interest is set out. The chartered banks say that when the interest goes up the interest on the demand notes must go up too, the maximum being 6 per cent governed by the Bank Act: However they never reduce interest rates when they obtain money on a lower interest -rate market. This present measure will enable small business to obtain credit just as the farmers can obtain credit under the Farm Improvement Loans Act.
Before resuming my seat I wish to comment on some of the remarks made by the hon. member for Kootenay West (Mr. Her-ridge) who participated in the debate this afternoon. It always surprises me to find that when a dynamic measure such as this is introduced by the Conservative government hon. members of the C.C.F. group leap to their feet and say that this has been brought about because they suggested it. They seek to give the impression that they have advocated these measures for the last 22 years.


In answering the remarks of my hon. friend I thought it might be interesting to find out exactly where that group stands with reference to small business and free enterprise by examining some of the statements of the illustrious leaders of that group in the past.
This subject is of special interest to me because I was born and raised in Saskatchewan and lived there until I was almost 30 years of age. I saw the C.C.F. party come into power in that province. I believe that the socialists in this country represented by the C.C.F. drove business out of that province and succeeded in keeping it out. I am thinking about the lumber business for example. I remember that the small lumber yard owner was chased out of Saskatchewan because the C.C.F. government took over the lumber business under the lumber board. The same applies to the fishing industry. The C.C.F. government also took over the shoe manufacturing business and the woollen manufacturing business. In fact, even insurance agents were driven out of the province of Saskatchewan because the C.C.F. government implemented its own insurance scheme. There was no thought about loans to help small business. No thought at all directed to help business in Saskatchewan.
As a result of the actions of the C.C.F. government in that province many people have left Saskatchewan. Many individuals and businesses have gone to Alberta. Some people in Alberta with reference to their own provincial government say that it is a conservative government-with a small "c"-and in some respects I must go along with that because they certainly stand for business.
When the socialists claim this afternoon that they stand for free enterprise and small business I say we should take a look at some of the things that were said by distinguished leaders of that party in the past. I do not know if C.C.F. members today endorse what was said in the past in view of the new party being born, but let us examine what was said by no less distinguished a person than Mr. Coldwell in his maiden speech in this house. By the way, Mr. Cold-well came from Rosetown-Biggar where I was born and raised. I thought the hon. member from Kootenay West would be interested in being reminded of Mr. Coldwell's remarks in respect to free enterprise. I am sure that even the Liberal members will be interested and some of the senior hon. members will personally recall the stand taken by the C.C.F. concerning free enterprise. This is what Mr. Coldwell said as reported at page 172 of Hansard of February 13, 1936:
Once again the lesson has been learned that co-operation and competition are two opposing forces and that within a competitive society.

co-operative institutions cannot function in the economic field without taking an active interest in the political field.
Let us also look at what Mr. Woodsworth said as reported at page 1689 of Hansard of February 1, 1933-


Frank Howard: The good old Tory days.


Eldon Mattison Woolliams: They may have been old Tory days but sometimes we must remind you socialists where you built your foundation. I do not know if present C.C.F. members believe what was espoused by their party in those days or if they believe in something new and foggy that none of us can understand-if you can indeed understand it yourself-but today an hon. member of that group rose in his place and said that the C.C.F. group stands for free enterprise and small business. Of course, coming as I do from Saskatchewan where all small business was chased out by the C.C.F., I cannot help but be interested in learning just where they do stand. I remind hon. members of the C.C.F., of course, that I do not know where the new party stands. In fact, I do not even know if they are married yet or are just living together, as it were.
Let us examine what Mr. Woodsworth said on the occasion to which I referred:
Let me say that we must distinguish clearly between the Co-operative Commonwealth Federation and communism. It is quite true that both believe in a changed social order, in a new economic system. The communists are convinced that this can be brought about only by violence. They think it cannot be done in any other way. We believe that it may come in Canada by peaceful methods and in an orderly fashion, and that is the purpose of this organization.
On that occasion Mr. Morand made the following interjection:
The end being the same.
The distinguished leader of the C.C.F. having been interrupted, let us see what he replied:


Mr. Woodsworth:: It may very well be that force may prove inevitable, yes, if the attitude of certain gentlemen is persisted in and the people of this country are denied the right that they have to self-expression and to the enjoyment of a decent livelihood.
The end result of communism and socialism would appear to be the same on the basis of that statement and yet hon. members of the C.C.F. maintain today that they now stand and have always stood for small business and free enterprise. That is rather a joke. With that evidence on the record I think you can safely say that the socialists in this house do not stand for small business and free enterprise and never have. They have always stood for socialism and the words I have placed on the record speak for themselves.
Guarantee of Loans to Small Businesses
The Canadian people should know this when the new party moves around certain constituencies. I should like to hear from those eight members; I should like to see them rise in their places and hear them say, "We are socialists", or "We are not socialists; we do not endorse the words of our great forefathers, Woodsworth and Coldwell; we stand for something new. We are conservatives with a small 'c'." I should like to know where those socialists stand. I am sure all hon. members would like to hear it, too, and particularly from the new member who has brought wisdom and direction on how we should run our constituencies, because I noticed that in the paper the other evening.
In conclusion, may I add my words of congratulation to the minister and to the government on bringing forth this bill to help small business to the extent and in the manner indicated, which means that they can now borrow up to $25,000 on a fairly long term basis. I am sure this will stabilize business and assist in the unemployment problem in this country.


Mr. P. V. Noble (Grey North):: Mr. Speaker, many of the obstacles in our economy are long standing and the result of neglect and indifference on the part of the former administration. Now, on the introduction of corrective measures by a wide awake government we hear wails that convey to us the regret of a repentant party. Bill No. C-40 is one more step forward by a progressive government, and it will certainly be welcomed by the many struggling small businesses.
I will make a few observations on how Bill No. C-40 will apply to my area. On visiting my riding over the week end I heard much favourable comment on this legislation. It appears to me that ridings such as mine, which are quite removed from any large urban centre, stand to benefit very materially, as a large percentage of the businesses could qualify.
I am particularly interested in the bill, owing to the fact that I represent an area which is being rapidly developed as a tourist playground, embracing both summer and winter attractions. We have a million dollar ski development with a lift costing over $100,000 nearing completion and dozens of service businesses in the surrounding area will now find the facilities afforded them by this legislation an excellent opportunity to improve their services and strengthen the economy of our district. This, of course, would also apply to our excellent beaches and their development. Our manufacturers who can
272	HOUSE OF
Guarantee of Loans to Small Businesses qualify will also be encouraged, and I can see only good results, which will be far-reaching.


William Heward Grafftey: Mr. Speaker, during the throne speech debate the Leader of the Opposition (Mr. Pearson) criticized much of the legislation which is being brought before the House of Commons because he said, and I paraphrase here, so much of the legislation which we are passing and are about to pass depends on the initiative of the municipalities, of the Canadian people and of the provinces. To my way of thinking, Mr. Speaker, he hit the nail on the head. That is one of the fundamental differences between our party and the party that he leads in opposition today. We have faith in the initiative of the Canadian people; we have faith in the initiative of the provinces; we have faith in the initiative of so many of the institutions for which this type of legislation is designed.
This particular legislation is part of our progressive policy of partnership economic expansion. One of the attractive things about the legislation which can be found in the throne speech and in so many of the announcements of the ministers is that the legislation and policies which are being announced will not encumber the actions of future governments with overhead and debt. In many instances they are self-liquidating programs. To my way of thinking this is one of the very essential things about this particular piece of legislation. It is designed to help the small businessman in our country. I ask everybody in this house, no matter in what party, when in the history of Canada has such imaginative legislation been brought before the House of Commons on behalf of small business? All parties and all members must agree and admit that the answer is, never. This is imaginative legislation which is going to get immediately to the places where it should go.
I am not going into the details and examine here on the floor of the House of Commons, how this legislation will help the small businessman in my particular area. The area I represent in this House of Commons is, like so many areas, made up of small businessmen. I will not pinpoint the manner in which this legislation will help. It is self-evident; it is obvious.
The Leader of the Opposition has gone from one end of this country to the other preaching doom and gloom. I have said this before inside and outside the House of Commons. In time of war we have a bipartisan spirit. I would be the last person to say that all discussions in the House of Commons be approached in a bipartisan manner. No one


likes a good political donnybrook any more than I do but when it comes to getting jobs for Canadians I think we should approach this in a bipartisan mood. With the east-west conflict that is going on I think major matters of economics reflecting the honour of this country should be approached in a bipartisan spirit.
Apart from little procedural amendments they talk about and harp on, unless the opposition have what I call substantive amendments to make and substantive things to suggest in a constructive way, they are doing nothing to help this country at home or abroad by spreading this prophesy of doom and gloom.
The hon. member for Trinity (Mr. Hellyer), who is not in the house at the present time, said the other night he was sure that things were going to be terrible economically in the months ahead. How was he so sure? Where is his proof? He did not offer those things in a factual, detailed way; he just said he was sure things are going to be bad. The Leader of the Opposition who spreads so much doom and gloom is now spending, I believe, half his time in New York consulting about the United Nations. He thinks the domestic situation is so bad, or so good, apparently, that he has to spend only half his time in the House of Commons. It is a two-way week, half in New York and half in Ottawa. Well, he must think the domestic situation is pretty terrible if he can spend so much of this time out of the country during these important days.


Mr. Batten:: How small can you get? You did not have anyone good enough to send.


William Heward Grafftey: This is part of our progressive legislation for economic expansion. The government has brought before this House of Commons legislation to help universities, to help individuals to help themselves, to help our municipalities and our provinces. This is not Liberal or socialist legislation which says that the federal government can solve all problems. Unlike past Liberal administrations, we do not pretend for a minute to operate on a co-equal plan with the deity and hide-bind the Canadian people with doctrine. This type of legislation that is before the Canadian House of Commons is designed to help people to help themselves. I would suggest it is the sort of thing that all hon. members know is imaginative on the long term and short term basis. This is why I rise in my place to support this type of positive law.
I would suggest to the Leader of the Opposition and to the members of the opposition at this time in Canadian history that if they have nothing constructive to say, to join with the government in building faith in Canada
NOVEMBER 28, I860	273
along with business, labour, the provinces, the municipalities and the citizens of Canada. They do not have anything positive as an answer so, without further ado, I will voice my support for this legislation which will not only help the people of my constituency on a short and a long term basis but will also help all Canadians from coast to coast. It is legislation based on sound Progressive Conservative doctrine and I am proud to support it.


John Whitney Pickersgill: Mr. Speaker, I thought it might be a refreshing change if someone in the house got up and talked about the bill before the house. It is for that reason that I have decided to intervene to support, in the first place, the position taken by the hon. member for Levis (Mr. Bourget) this afternoon that the government should consider when we get into the committee stage extending these guarantees to credit unions and caisses populates as well as to the banks, as was done in the legislation providing fisheries improvement loans, as the minister, of course, is aware.
Since this imaginative legislation, as the hon. member for Brome-Missisquoi (Mr. Grafftey) described it a little while ago, is based on legislation that owes a great deal to the imagination of Mr. Ilsley and his advisors in 1944 when the Farm Improvement Loans Act, from which this is sedulously copied, was enacted by this parliament it surely did not require three years for the imagination of the Minister of Finance (Mr. Fleming) to conjure this up, particularly as in those three years it has been necessary for the Minister of Finance to propose extensions of the Farm Improvement Loans Act, which was the model for this legislation, and of the Fisheries Improvement Loans Act, which was also modelled on the Farm Improvement Loans Act.


Donald Methuen Fleming: Would the hon. member permit a question?


John Whitney Pickersgill: Certainly.


Donald Methuen Fleming: Were there not 13 years between 1944 and 1957?


John Whitney Pickersgill: Yes, there were 13 years between 1944 and 1957 and those were 13 years of the greatest economic growth in the whole history of Canada.


Donald Methuen Fleming: No small business loans legislation.


John Whitney Pickersgill: For most of that time there was no need whatsoever for government guarantees for the expansion of any kind of business, large or small. I would remind you, Mr. Speaker, that in that period
Guarantee of Loans to Small Businesses no government in that time had to come in with a supplementary estimate seeking another $50,000 for the administration of the Bankruptcy Act as the Minister of Finance did the other day in his supplementary estimates.


Chesley William Carter: Fifty million dollars.


John Whitney Pickersgill: No, $50,000 for the administration of the Bankruptcy Act, presumably because there is so much more work in that division of the government.


Mr. Anderson:: Get back to the bill.


John Whitney Pickersgill: If this legislation was needed before 1957, which I do not think it was, it was needed in 1957, it was needed in 1958, it was needed in 1959 and it was needed in the first half of 1960. During all that time these wise gentlemen with their great imagination have been responsible for the government of this country and at long last, three and one half years after they took office, they bring in something which is almost a precise mirror, as nearly as anything could be applying to two different industries, of an act of parliament that was introduced by a Liberal government as part of its post-war program, an act which was good legislation, which had worked very well and which we certainly hope will work as well in the present circumstances.
However, I have very little doubt that there could be any possible harm in the government accepting the suggestion of the hon. member for Levis. The fact is that if businessmen do not go to the credit unions or the caisses populaires to obtain such loans the suggestion would not be operative and if they did they would presumably do so because it was more to their advantage to do so. If small business does need credit facilities of this kind at the present time I say that the proof of the pudding will become apparent later. In the case of the farm improvement loans nobody knew for sure whether they were going to work. They have worked out exceedingly well but nobody knew for sure beforehand and nobody knows for sure in this instance. We hope that they will and I am sure the legislation will have some good effects.
However, I think we also ought to ask ourselves another question about this legislation and it is this. Is this legislation a part of the government's program to deal with unemployment or is it a part of the government's program to aid small business, because it is possible it might do both? I do not know whether the minister has any notion of safeguarding against this in the regulations because I find nothing in the bill to this effect but it is just as possible that these loans

Guarantee of Loans to Small Businesses may result, In a temporary way at any rate, in a diminution of employment. If these loans are used by small businessmen to finance capital undertakings of a character which reduce the need for labour, that is to say, for labour-saving devices of one kind and another which many small businesses greatly need, the immediate effect of the legislation may well be to reduce employment.
I am not complaining on that account because small businesses obviously have to modernize if they are going to compete in the world in which we live. It is necessary that they should and it is desirable that they should have every opportunity to do so on an equal basis with others. I do not think we should be too sure that the short term effects of the legislation are necessarily going to be productive of very many jobs. I would hope that possibly that might be the case in the manufacturing field to the extent that advantage is taken of this legislation but in other fields it might very well be that the immediate net effect would be that businesses could be modernized, labour saving devices could be introduced and in fact the need for labour immediately would not be so great.
As I say, this is purely a matter of speculation but we should not build exaggerated hopes, which is not in the least to condemn the legislation because I think we feel that, having such a good model, it is good legislation. However, notwithstanding the enthusiasm of the elderly and experienced member for Brome-Missisquoi and the faith which he expressed in the initiative of the government of the province of Quebec, which I found very touching, I think we should not exaggerate what are likely to be the effects of what after all is not the beginning of the millenium for small business or for the econ-nomy of the country but what may prove to be a somewhat useful device, as Mr. Ilsley's legislation of 1944 has proved to be.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Flynn in the chair.
On clause 1-Short title.
Frank Howard: Before clause 1 carries, I should like to make a comment with respect to paragraph (a), that is the definition-


Donald Methuen Fleming: That is in clause 2.


Frank Howard: Oh, I am sorry.


Chesley William Carter: This might be the appropriate time to put the question to which the minister objected on second reading. Apart from extending the period of repayment from payment on demand to a ten-year term, will the minister explain how the loans made under this legislation will differ from the ordinary,

everyday loan made by the bank? What changes will be made in bank policy and in banker-borrower relationships?


Donald Methuen Fleming: Mr. Chairman, a reading of the bill will make it quite clear that the banks will proceed in the ordinary way. Persons desiring these loans will apply to the banks and the banks will conduct a normal examination of the affairs of the applicant to determine whether or not he is credit-worthy. If he is, he will receive his loan if he complies with these provisions. If the loan so granted complies with all the provisions of this bill and qualifies for a guarantee, then the guarantee is provided for by the legislation. If there is default, then presumably a claim will be made against the government in respect of the guarantee. In this respect, the administration under this measure will correspond in quite a precise manner with the administration under the Farm Improvement Loans Act.


Chesley William Carter: I gather that the only difference, then, between ordinary loans and loans made under this legislation, is the extension of the period of repayment and the government guarantee?


Donald Methuen Fleming: The banks will operate in the ordinary way. Indeed, the legislation requires the banks to investigate these applications. It is in the result which follows in the event that the loan qualifies for a guarantee that the difference arises between this and an ordinary application that does not involve intermediate term credit.


Lionel Chevrier: Mr. Chairman, the minister has made no comment with reference to a suggestion made by the hon. member for Levis and the hon. member for Bonavista-Twillingate, both of whom spoke during the course of this debate. I refer now to the suggestion made by both hon. members concerning the inclusion here of caisses populates and credit unions. It would seem to us that consideration should be given to that aspect of the matter, particularly in the light of what was done in the earlier statutes to which the hon. member for Bonavista-Twil-lingate referred.
With that in mind, I should like to move an amendment.


Jacques Flynn: Order; we are still on clause 1. If the hon. member wishes to move an amendment to clause 2, I suggest he wait until clause 1 is carried.


Lionel Chevrier: We are on clause 1.


John Whitney Pickersgill: Oh, I see, clause 1 is the short title.


[Stage Direction]
Clause agreed to.

Guarantee of Loans to Small Businesses
On clause 2-Definition.
Lionel Chevrier: I was discussing an amendment which I want to make, and I make it now. I move:
That there be added to clause 2 which would read as follows:
"Lender" means,
(1)	a bank; and
(2)	a credit union, caisse populaire or other co-operative credit society designated by the minister as a lender for the purposes of this act.
Unfortunately, in the time at my disposal I have just had the opportunity to make one copy of that amendment.


Donald Methuen Fleming: Mr. Chairman, I would be pleased to discuss the question on its merits, but I point out to you that this type of amendment is meaningless and nugatory unless it is associated with an amendment to other provisions of the bill. This bill does not authorize the minister to make payments to the lender as proposed to be defined. This bill, under clause 3, authorizes the minister in certain cases to make payments to a bank and a "bank" is defined in clause 2 (a) as a bank to which the Bank Act applies. This, of course, does not include a credit union or a caisse populaire, so that in my submission this amendment is quite irrelevant because it has no relationship to the substantive provisions of the bill. In my respectful submission, therefore, this amendment is not in order.


John Whitney Pickersgill: On the technical point raised by the minister, I may say that of course it would be necessary to do as was done in the Fisheries Improvement Loans Act. This would not be very difficult for the committee to do. We could substitute the word "lender" in the next clause for the word "bank". If the will were there the government would not have any trouble whatever in finding a way of doing it. As we can only amend one clause at a time according to the rules, my hon. friend from Laurier has proposed an amendment to the definition clause which happens to come as the first substantive clause of the bill.
I have no doubt, although I have not read his mind or even consulted him about it, he would be prepared to offer consequential amendments if the minister did not get one of his colleagues to anticipate him by doing it if the government wants to get some credit out of this. I am again not entitled to speak for my hon. friend from Laurier, but I am sure he would be flattered if the government were to take over the whole project from now on.


Donald Methuen Fleming: I think the reason the hon. member for Laurier has proceeded in this way and not in the way that would
achieve the purpose that he claims to have for his amendment is that the amendment that would be effective would be quite out of order when introduced by a private member. If his intent is to seek to amend clause 3 by widening the provisions so as to extend the guarantees not merely to loans made by banks but to loans made by caisses populaires and credit unions, obviously that is a measure that imposes a charge upon the crown and cannot be introduced by a private member of the house. I therefore think it is quit) clear why the hon. member has sought tc introduce his amendment in clause 2 by i definition.


John Whitney Pickersgill: On that point of order I suggest that once again the minister has stretched the rules beyond anything that was ever conceived by those who were responsible for them in the past. The amount of the liability of the government is precisely set out in this bill in money. Whether that liability is incurred to a caisse populaire or to a bank does not increase the liability one iota. The minister is surely not going to say that the private members of the House of Commons have been reduced to such a state of tutelage that it is impossible for them to suggest that the objects of a bill should be varied somewhat as long as the ultimate potential charge against the crown is not increased. If, on the other hand, the minister is suggesting that by including caisses populaires the chances of the government having losses would be greater than in the case of the banks, may I say that is a reflection on the caisses populaires that would certainly not be made from this side of the chamber.


Donald Methuen Fleming: The point made by the hon. member from Bonavista-Twillingate is clearly not valid. What the bill does is to put certain ceilings on the liability but within that ceiling the liability of the crown or the charge upon the crown would certainly be increased by the kind of amendment that would be made to clause 3 if the hon. member for Laurier were to carry out his avowed purpose in this respect.


John Whitney Pickersgill: In what way?


Frank Howard: I should like to ask the minister a point blank question in this regard. I know that the rules can perhaps be used on almost any occasion in order to prevent a member of parliament from moving almost any sort of amendment if the government wants to do it. However, I think it is probably an unnecessarily stringent application of the rule that the minister is asking the Chair to use. May I ask the minister this question? Why was it not put in the initial bill? I refer to the question of credit unions and caisses
276	HOUSE OF
Guarantee of Loans to Small Businesses populaires being allowed to lend money under the act. This appears to me to be the key to the issue, namely the question of whether or not the provision should be in, not some technicality as to whether it can be ruled out of order. That is the question I want to put to the minister: Why was it not put in?


Donald Methuen Fleming: I shall be glad to deal with the hon. member's question, Mr. Chairman, while you are considering your ruling on the amendment or I can wait until you have dealt with the point.


Jacques Flynn: I think the Chair would appreciate it if the discussion were to continue along these lines for the time being while I am considering the matter.


Donald Methuen Fleming: This point was dealt with at the resolution stage. Here let me review some of the legislation in this respect in order to put this point in its true setting. We have four statutes that are comparable in nature and purpose in their respective fields with the one now before the committee. They are the Farm Improvement Loans Act, the Veterans Business and Professional Loans Act, the home improvement loans sections of the National Housing Act and, fourth, the Fisheries Improvement Loans Act. Only one of those statutes makes any provision for government guarantee of loans made by credit unions or caisses populaires and that is the Fisheries Improvement Loans Act. It was introduced into that act only when amendments to that act were before the banking and commerce committee in the year 1955. It was not in the original bill introduced in the house. The case made at that time was of a special nature, namely that there were many fishermen in quite remote fishing villages to whom ordinary banking facilities were not available but to whom lending facilities by credit unions were available. That view commended itself at the time both to the banking and commerce committee and to the government and that is the reason why you find provision made today in the Fisheries Improvement Loans Act, in section 2 (j), that the word "lender" in the act means:
(i)	a bank, and
(ii)	a credit union, caisse populaire, or other co-operative credit society designated by the minister as a lender for the purposes of this act;
In none of these other statutes were caisses populaires or credit unions admitted to the benefit of the act. Provision for them is not found in the Farm Improvement Loans Act, the Veterans Business and Professional Loans Act or in the home improvement loans sections of the National Housing Act. What is the reason? I think the reason is simple. The banks are federal institutions; they are under 

the control of parliament in all respects. In the way they transact their business they are subject to federal supervision. Then the interest rates which the banks charge are governed by legislation of this parliament. In the case of credit unions or caisses populaires, these are provincial institutions. In no respect are they subject to federal jurisdiction or federal supervision and they are under no limit as regards the interest rates which they may charge so far as the legislation of parliament is concerned.
Bearing this in mind, Mr. Chairman, may I say that, if we make the kind of amendment which the hon. member for Laurier is trying to work into this bill tonight we would be committing ourselves to guaranteed loans at whatever interest rates the caisse populaire or credit union might charge. There is no percentage limit imposed by law on them. Already in the course of discussion at the resolution stage we had testimony from hon. members of this House of Commons who have had experience in this field of lending through credit unions and caisses populaires and they pointed out that the interest rates charged by these institutions are in many cases substantially above 6 per cent.
These are just a few of the reasons why it is quite inappropriate to introduce into this measure provision for extending government guarantees to loans made by a credit union or caisse populaire. I think it is quite clear to the committee why these institutions were not included and why it would be quite inappropriate to include them. We have had no request from credit unions or caisses populaires for inclusion in the provisions of this act. I wish to make that point quite clear. No doubt if they were invited or stirred up they would probably ask for the benefit of these guarantees. What lending institution would not do so? But the fact is that we are dealing here with small business and the facilities of the branch banking system of this country, with between 4,000 and 5,000 branches, are available to small business.
Effective supervision can be carried out in the operations of these institutions under the federal legislation existing for the purpose. This does not imply any antipathy towards caisses populaires or credit unions; far from it. The fact is, however, that we are a federal parliament. We are legislating in the federal sphere. The caisse populaire and the credit union are within the provincial sphere. It would be perfectly proper for provincial parliaments to legislate with respect to those institutions.


Mr. Creslohl:: I do not think the minister really intends to hold a special brief for the banks over and above other lending institutions and to tell the committee that the banks are government institutions. The banks are privately owned and privately administered lending institutions, the same as are the others. But why we should legislate to give a preference in this business loans act to this particular type of lending institution is far beyond my understanding.
In the national housing legislation we certainly recognize insurance companies, trust companies and a variety of lending institutions. Now it is said that these are provincial matters. Certainly they are subject to control by this parliament as to their interest rates, and they are subject to control by the superintendent of insurance.
Whilst we are legislating in this section we are actually defining the word "bank". If the word "bank" is not already defined in other acts, why then do we particularly say in this act that "bank" shall mean so-and-so? If we are now defining "bank" I think we can extend this definition to all other recognized lending institutions.
I think we would be going far afield to say we will legislate in favour of one type of lending institution. If it is a government institution, it is one thing. But I draw to the minister's attention that they are all under the supervision of the Bank Act, and so are other institutions under that supervision. Certainly these banks are privately owned and controlled, but we should not legislate differently for them and we should not treat them on a different basis than other institutions in the country.


Donald Methuen Fleming: Mr. Chairman, I am sorry that the hon. member for Cartier was not following what I had to say about the reasons, relating to jurisdiction, relating to supervision and relating to the control of interest rates and other features. It is evident, I think, that the kind of speech he is now making and the kind of thinking in which he is now indulging would be appropriate if he were a member of a provincial legislature, but I suggest it is not appropriate in parliament.


John Whitney Pickersgill: Mr. Chairman, would the minister permit a question at this point?


Donald Methuen Fleming: Just a moment; I will take the question later.
May I also ask the hon. member to reflect on this fact, which evidently has escaped the attention of the hon. member for Laurier. I thought he would have remembered it. He was in this house in 1944 when the farm
Guarantee of Loans to Small Businesses improvements loans legislation was introduced. There was no provision made in that legislation for extending its provisions to caisses populaires or credit unions. The guarantee provisions there were confined to loans made by banks. The hon. member continued in this house until 1954, ten years. It did not occur to him then that that legislation should be opened up so that the guarantee provisions should be extended to credit unions or caisses populaires.
Similarly, the hon. member for Laurier was an hon. member of this house when the Veterans Business and Professional Loans Act was introduced in 1946. That made provision for government guarantee of bank loans. It did not occur to the hon. member for Laurier that the guarantee provisions of that legislation should be extended to caisses populaires and credit unions.
Similarly, the hon. member for Laurier
was a member of this house when the National Housing Act was introduced in 1944. The provisions relating to home improvement loans are found there; they make provision for guarantees in respect of bank loans and certain credit institutions. It did not occur to the hon. member for Laurier to rise then in his place and propose that these guarantee provisions should be extended to caisses populaires or credit unions.
This went on year after year after year and none of the hon. members opposite seem to have thought it was necessary in those cases to extend the guarantee provisions to caisses populaires or credit unions.
I am sure this has just been overlooked for the moment. I venture to remind the hon. member for Laurier of these facts.


Lionel Chevrier: I am grateful, Mr. Chairman, to the Minister of Finance for reminding me of what should have been my duty in years gone by, but I would recall two things to his attention. The first is that he has given no satisfactory explanation, in so far as I am concerned, why credit unions should not be included in this legislation.
Credit unions and caisses populaires are small business, and we have heard speech after speech in this house, beginning with that given by the Minister of Finance, of the decision of the government to come to the assistance of the small people. It is the small people-as the Minister of Public Works likes to call those who are going to benefit under the National Housing Act-who are going to benefit. The small people, as many hon. members in this house have also said, would benefit by this legislation. If there are small organizations in this country, credit unions and caisses populaires are among those.

Guarantee of Loans to Small Businesses
Then as to the point raised by my hon. friend that these are under another jurisdiction; surely when we dealt with other legislation here on Friday and earlier we were dealing with legislation having to do with municipalities, municipalities which are creatures of the provinces and not of the federal government.
If the argument advanced by the Minister of Finance applies in this case, surely it should apply to the other legislation, the housing legislation under which this parliament authorized loans to municipalities for certain purposes. If it could be done in that case, why can it not be done in this case?
Then there is the argument which my hon. friend advances as to the position which I took earlier. What position did he take in connection with that legislation when he sat on this side of the house? That is the question which he could ask himself, and not me, because I was not a member of the opposition then.


Donald Methuen Fleming: You were a member of the government.


Lionel Chevrier: In those days why did he not think it was essential to bring in legislation for credit unions and small business? The position advanced by my hon. friend, the Minister of Finance, is a highly technical one and does not deal with the merits of the case in any way.
It seems to me that we should have an explanation dealing with the merits and not with the technicalities, such as my hon. friend undertook to do earlier in the course of the discussion on this amendment. I submit, with deference, that if the government really intends to come to the assistance of small business, here is an opportunity to do it. Instead of criticizing the member for Laurier for what is an addition to the four categories of small business envisaged in this bill, the minister should be making some attempt to deal with the merits of the case. He should give some explanation, other than that which he has given, to include in this legislation small business of that character.


Donald Methuen Fleming: Mr. Chairman, this is a most extraordinary speech by the hon. member from Laurier-most extraordinary. He is all mixed up. He either has not read the bill or has completely misapprehended the provisions. He talks about adding credit unions and caisses populaires to the four classes of business provided for under this bill. He is talking about something completely apart from his own amendment.
This bill makes provisions for guarantees of bank loans to four classes of business, retail, wholesale, manufacturing and service.


The hon. member for Laurier started out to propose that among the lenders, along with the banks, should be included caisses populaires and credit unions. But he has completely befuddled the whole situation now, because he says we should add the credit unions and caisses populaires to the four classes of business we are proposing to help as borrowers under the bill.


John Whitney Pickersgill: He did not say that at all.


Richard Albert Bell: That is exactly what he said.


John Whitney Pickersgill: That is a real fuddle.


Richard Albert Bell: That is exactly what he said.


Lionel Chevrier: You are all mixed up.


Frank Howard: Mr. Chairman, I am not as
familiar as the Minister of Finance or the hon. member for Laurier with those historic days when their places were changed, so consequently I cannot appreciate this chit-chat back and forth about what happened 13 or 14 years ago and who did what. In any event, I think that is entirely beside the point.
I gather that the minister gave two basic reasons why credit unions and caisses populaires were not included as lending institutions in this bill in the first instance. The first one-not necessarily in this order of importance-was that the parliament of Canada had no jurisdiction; that caisses populaires and credit unions came under provincial legislative jurisdiction, and consequently we had no authority over them. To this extent it is quite true. Their interest rates are pegged by provincial legislation.
Surely the minister's argument that because credit unions and caisses populaires are established under provincial legislation we can have nothing to do with them is spurious. The parliament of Canada decided some years ago that it had authority to establish both as lending institutions for the purpose of government guaranteed loans. That is precisely what we are asking to do here.
The Minister of Finance supported an amendment to the Fisheries Improvement Loans Act in 1955. The measure went before the banking and commerce committee indicating that the parliament of Canada has already dealt with this matter. Let me read this again. It has already been referred to. It appears in the Statutes of Canada, volume I, 1955. Contrary to what the minister is trying to lead us to believe, the word "lender" in that act means a bank-and a "bank" means a bank to which the Bank Act applies; and the word "lender" also means:
(j) (ii) a credit union, caisse populaire, or other co-operative credit society designated by the minister as a lender for the purposes of this act;

Parliament has already decided the question of jurisdiction. The minister now uses that as an argument to get around the real reason why he does not want to include them in this bill.
The minister gave as another reason for not including them the fact that there was no limit to the interest and that we have no jurisdiction over the interest charged by credit unions. That is probably quite true. The minister on his own initiative introduced this bill with an open end interest rate attached to it so there can be no limit to the interest rate depending on what the Bank Act says. Because the minister wanted an open end interest rate attached he has deprived himself of his own argument. Even without a pegged interest rate if the provision were contained in this bill the minister, having the authority mentioned in the Fisheries Improvement Loans Act, would surely not designate a credit union or caisse populaire which might have an interest rate in excess of that established by the Bank Act. In most cases I know of the interest rate is lower. The saving feature is there.
The minister's question of jurisdiction has already been decided on by the parliament of Canada and enshrined in a provision in the Fisheries Improvement Loans Act so the hon. gentleman cannot argue on that ground. The minister's second point also has no validity. He should have introduced an interest rate.
It is my hope that we will have an opportunity to vote on this amendment, that the minister will forget his affection for history and forgive himself for making these invalid arguments, admit that he was in error, accept a good point well made and recognize caisses populaires and credit unions as lending institutions under this bill.


Some hon. Members:: Sit down.


Frank Howard: I get the usual intelligent comments from hon. members opposite.


John Whitney Pickersgill: Mr. Chairman, I wish to say a word about one of the arguments used by the minister. The minister said that when parliament put the provision in the Fisheries Improvement Loans Act to include credit unions and caisses populaires in that case it was because of the scattered nature of the fishery, because of the fact that fishermen lived in remote places where there were no banks and that that justified the inclusion in that instance.
I do not know how much time the minister has spent in the fishing communities on the coasts of this country but I do know that I have never yet visited a fishing settlement where three or four fishermen were gathered together that was so very small or remote
Guarantee of Loans to Small Businesses that in the same place there was not a businessman and on the minister's own showing if what was done in the case of the Fisheries Improvement Loans Act was justified and if the government means business in helping small business, these are precisely the kind of people that ought to have this sort of thing available to them, the small businessman in the coves of Newfoundland, for example. Why should they be discriminated against because there are not any branches of the Toronto-Dominion bank there, I do not know.
Of course, I cannot believe that a great constitutional authority like the Minister of Finance who must have read the British North America Act at Osgoode Hall if he has never looked at it since would seriously argue for one moment that any provincial legislature has any jurisdiction over interest whatever. The minister knows too much for that. He knows that it is one of the specified powers given to this parliament in the British North America Act. The hon. gentleman also knows, as the hon. member for Skeena pointed out, that if the minister wants to prescribe a limit beyond which the caisses populaires or the banks cannot charge interest, it is perfectly competent for him to suggest it and it is perfectly competent for this parliament, if in its wisdom it wants to do so, to do it. I will not argue that point because it is not the point before us.
What I am arguing is the real need, on the same basis as the Minister of Finance himself recognized it, that is to say that in the case of the fisheries it is needed because there were many of these remote small villages where there were not branches of banks, that that is equally true in the case of the small businesses which serve the fishermen. On the very ground that the minister justified what my friend Mr. Harris recommended to parliament in 1955, the hon. gentleman should if he agreed with what Mr. Harris did and if his prejudice against credit unions and caisses populaires were not so great-


Mr. Bell (Carleion):: Nonsense.


John Whitney Pickersgill: The minister can answer that for himself without any help from his parliamentary secretary, I should think. I would hope the minister has no prejudice-


Thomas Miller Bell: You just said he had.


John Whitney Pickersgill: No, I did not say that. I believe the hon. member will find that I made it hypothetical and I left it to the minister to make his own choice. To me there seems to be only one reason why the minister should want to exclude credit unions and caisses populaires and that is because he does not have confidence in them, because if he had confidence
280	HOUSE OF
Guarantee of Loans to Small Businesses in them what conceivable objection could there be to including them and giving the benefits of this measure to the really small businesses in the small places where there are not branches of the chartered banks?


Donald Methuen Fleming: Mr. Chairman, I have a strong prejudice against misleading imputations. The reasons that it is not appropriate to provide for extending guarantees under this measure to caisses populaires and credit unions are those which I gave, and they did not bear any resemblance to those which have been put forward in this oily manner by the hon. member for Bonavista-Twillingate. I suggest to the hon. gentleman that he reserve his unctuous speeches for those who do not know him as well as we on this side of the house know him.
The reasons why a special case was made in 1955 under the provisions of the Fisheries Improvement Loans Act are those which I have given. I remind the hon. gentleman that they were excluded from the original legislation introduced by the government of which he was a member. You see, this conscience of his that has pricked him so very severely tonight was lulled in 1955 until this measure got so far as having passed second reading and having reached the committee on banking and commerce before that lively conscience of my hon. friend stirred from its slumber. Why does he not be fair in this situation? The fact is that this was put before the banking and commerce committee, as I indicated, as a very special case.
Hon. members will not need to be told that of all these related statutes the Fisheries Improvement Loans Act is the one under which the operations are the smallest, both in numbers and in aggregate.


John Whitney Pickersgill: Too small.


Donald Methuen Fleming: I may say the present government has put a lot more drive behind this legislation than was ever put behind it by our predecessors. Its provisions have been made much more effective in our time than they ever were in the time when the hon. member was occupying a place on the treasury benches. But the fact is, compared with the other statutes to which I have referred the operations under the Fisheries Improvement Loans Act are the smallest. It evidently commended itself to the banking and commerce committee at that time, as the legislation at that time provided for an aggregate sum per loan of only $4,000 that since the loans were not going to be extensive in their proportions, parliament should overlook the fact that it had no control over the operations of the caisses populaires and credit unions and admit them for this purpose, for


the reasons I have mentioned, namely that many of the fishermen in remote areas on the Atlantic and Pacific coasts were accustomed to having whatever credit transactions they had with credit unions and not with chartered banks.
Before hon. members opposite shed too many tears over the omission of any provision in relation to guarantees of loans made by caisses populaires, let me tell hon. members opposite that from the time the Fisheries Improvement Loans Act was introduced in 1955, making provision, as it did, for government guarantees on loans made to fishermen by caisses populaires, not one loan has yet been made by a caisse populaire guaranteed under that legislation, not one.


Hazen Robert Argue: What about credit unions?


Donald Methuen Fleming: There have been some, as I pointed out to the house when we had the amendments to the Fisheries Improvement Loans Act before the house a year and a half ago, but not one of those guaranteed loans has been made by caisses populaires under the provisions of the Fisheries Improvement Loans Act.
I suggest, Mr. Chairman, in the face of that fact, to have hon. members opposite shed copious tears over the fact that there is no provision in this bill for guarantee of loans by caisses populaires can be recognized as shedding crocodile tears.


John Whitney Pickersgill: Mr. Chairman, if I may shed one more tear and correct something that the minister said, it was not my conscience that was bothering me at all. I wanted to draw attention to the fact that in 1955 we had a government that did not object to changing its legislation when it got good suggestions from private members, as we did on that occasion in the banking and commerce committee. Mr. Harris did not present the rigid attitude that is presented by the minister tonight.


Donald Methuen Fleming: Why did the hon. member for Bonavista-Twillingate not go back and open up the Farm Improvement Loans Act to extend its guaranteed provisions to caisses populaires and credit unions? As a member of the government why did he not propose an amendment to the Home Improvement Loans Act and extend the benefit of the guarantee to credit unions and caisses populaires? It is just so much eyewash that we have seen here tonight.


Jacques Flynn: I should now like to deal with the amendment moved by the hon. member for Laurier. I must say that the amendment as moved presents a rather complicated situation from the technical point of view.

If the amendment should be the only one moved to the bill it will not stand on its own feet because the word "lender" is not used anywhere else in the bill. On the other hand, if there is a subsequent amendment it might acquire some meaning. I would not like to prejudge the validity of a subsequent amendment. It is very difficult to decide on the merit of the amendment as it is, but I cannot find sufficient reason to rule it out and therefore I will allow it.


Mr. Mandziuk:: Mr. Chairman, I am one of
those who has great confidence in credit unions by virtue of the fact that I helped to organize one and managed it for four years. It has grown into a good sized institution. From a start with $260 it has now over $100,000 and is serving the community.
First of all, Mr. Chairman, I feel that members of credit unions would resent it if they were called lending institutions. We in Manitoba in particular consider them societies for mutual assistance by people who have some common interests. Credit unions are organized by parishes; that is, where membership is restricted to members of that particular parish they are organized as a religious body. Some credit unions are organized on a professional basis, and admit only members of a certain profession. For example, there are branches of credit unions to which only school teachers belong; there are those who work in packing plants; and there are those who work in stores. These various groups of people organize themselves into a credit union; they pool their resources. Then if they have need they go to this institution and draw out money. That is the purpose of the credit union. I do not consider it in the same sense as a lending institution or as a bank.
We have credit institutions which foster co-operatives. If for no other reason than that I am against the amendment. Even if the amendment is in order, Mr. Chairman, I shall vote against it because I think the principle of it is wrong. First of all, the credit unions do not think it a favour to them to be championing their cause in this way. Second, those in particular who are sponsored by or sponsoring co-operative stores or mercantile institutions. They are in direct competition and conflict with private enterprise, private individuals, free enterprise, small manufacturers and other small business to whom I believe it is the intention that this bill will give help. To include credit unions in this bill I think would be ridiculous.
Credit unions are organized for their members. I have yet to hear of small businessmen organizing a credit union of their own for mutual help. They are individualists who
Guarantee of Loans to Small Businesses cut each others' throats in this competition that they have to carry on in order to make their living.
I have another reason why I do not think this is the proper place for the credit union to be classed as a lending institution and come under this bill. The moneys provided by this bill are intended to go out on long term loans. I know that from my own experience. The credit union creates a revolving fund from which short term loans can be made even without security to any member of the credit union who is in need because the character of the individual member is the most important thing so far as these institutions are concerned. How do you relate that to the work of the banks and what the banks expect to achieve?
There is a third reason why we would be doing the credit unions a disservice. Are you going to limit their rate of interest? They are governed by provincial statutes. I cannot speak for other credit unions because I am not familiar with them but every credit union in Manitoba has a charter of its own and bylaws of its own. Each member has one vote only and his savings are insured. If he has $2,000 in savings in the credit union then in the event of his death he has insurance amounting to $2,000. The borrowers are also insured. Any person must be a member to borrow from the credit union and storekeepers and small businessmen might not always be welcome. In the event of the death of the borrower the insurance company pays his debt. The debt is wiped out and his estate is cleared.
Consequently the credit unions charge a high rate of interest. The lowest rate of interest in my own credit union is 8 per cent and in the neighbouring credit union the interest rate is 12 per cent, $1 per month per $100. Even if the credit union accepted the storekeeper as a member how could they work out the interest rate to be charged by the credit union? I think the suggestion that has been made is just a case of imagination on the part of some members who wish to climb on the bandwagon and say "me too". All we have had from them since 1944 is imagination.
I am not making these remarks just for the purpose of hearing myself speak or having the committee hear me speak. 1 honestly feel that the credit unions would not be in favour of this proposal. It would not help their business at all. I do not think it would be accepted and therefore I will vote against the amendment.


Hazen Robert Argue: Mr. Chairman, I should like to support the proposition that the government should give credit unions and caisses populaires exactly the same kind of guarantee
282	HOUSE OF
Guarantee of Loans to Small Businesses that is provided to the banks under this measure. The hon. member for Marquette said that he doubted whether the credit unions would want this kind of guarantee. On the other hand, the minister said he was quite convinced that the credit unions would desire this guarantee if the question was stirred up.
I should like to see this measure sent to the banking and commerce committee, not for the purpose of delay but for the purpose of bringing before that committee competent witnesses from the credit unions, the caisses populaires and other interested organizations including the retail merchants association and others in order to find out whether they would like this guarantee provided to credit unions in view of the fact that many of these associations appeared before the banking and commerce committee in 1955 and asked the government that this be done.
I am making a plea that this guarantee be provided to the credit unions because what has happened in the last number of years is that the credit unions and the caisses populaires have been the only source of intermediate credit for small businesses in many communities. I know many businessmen personally who could not obtain long term loans for the renovation of their business premises from the chartered banks. They went to the credit unions of which they were members in their own communities and received loans to enable them to expand their premises and improve their businesses.
As a matter of fact, the credit unions and the caisses populaires have pioneered in this field. It is the banks that have failed and because of the failure of the banks and the desire for credit by small businessmen the government at long last is moving in this direction. However, as the bill now stands it is loaded in favour of the banks and against the credit unions. It definitely discriminates against the credit unions which have pioneered in this field.
I do not know how loud the voices of the credit unions have been in speaking to the minister or whether they have spoken to him at all but I can imagine that the banks would speak with very loud voices in opposing this kind of guarantee being given to credit unions because in many communities the banks are terrified as a result of the tremendous loss of business to credit unions that they considered to be theirs.
The credit unions and caisses populaires are not simply a handful of organizations scattered in a few communities across this country. I have in my hands statistics as to the number of chartered banks in Canada in 1958 and I find that there were 4,677 branches


of chartered banks. In 1958 chartered credit unions numbered 4,485, within 200 of the number of branches of chartered banks.


Mr. Brunsden:: What is their average membership?


Hazen Robert Argue: I would have to check. My friend is good at arithmetic. The total number of members is over 2 million. He can do the arithmetic. Offhand I would say it is probably about 400, and I think that is a very creditable membership. It shows that the credit unions have great popular support and the government should not discriminate against credit unions by leaving them out of this legislation.
The minister puts forward a number of reasons why he claims it would be inappropriate to provide this kind of guarantee to credit unions. He says there is no supervision by the federal government of credit unions and caisses popularies. I ask the minister: Is there any supervision whatsoever by the federal government of the credit unions that have provided loans to fishermen under the Fisheries Improvement Loans Act? Does the minister mean to imply that the credit unions and caisses popularies are not sound businesses, that the federal government must supervise them in order to provide the guarantee? I do not have the information-perhaps the minister has-but I will venture to say that the rate of collection of small loans with comparable risks is much better for the credit unions than for the chartered banks. Yet the government is providing a guarantee to the chartered banks and refuses to provide the same guarantee to credit unions.
The minister says that it is not in other acts. Because a mistake has been made in the past is no reason to continue the mistake today. I have certainly advocated on former occasions that guarantees given to the banks in other acts should be applied to credit unions.
The Minister of Finance says that the hon. member for Laurier and the hon. member for Bonavista-Twillingate are shedding crocodile tears for the credit unions and caisses populaires but in at least one act the former administration did the right thing. This government has yet to do the right thing in the first such legislation it has introduced since taking office by providing this kind of guarantee to credit unions.
The minister says that the interest rates of credit unions are higher and therefore the guarantee cannot be applied. Surely the minister is not advancing that as a sound argument. If he is one would think that he has not read, although I am sure he has, the Fisheries Improvement Loans Act. It defines

Guarantee of Loans to Small Businesses
a lender as including a credit union and then it goes on to say that the rate of interest charged by the lender on the loan shall not exceed 5 per cent per annum simple interest In other words, the government can give a guarantee. It can give a guarantee to a credit union, and it can say to the credit union, you can get a guarantee if you do not charge more than 6 per cent interest.
Why does the government not give to the credit union exactly the same kind of guarantee that it is giving to the banks? I plead with the minister that the government give the same kind of treatment to the credit unions which it has given to the banks. I suggest that in hundreds upon hundreds of communities across this country the credit union will do better than the banks; credit unions will do a better job, will have better success in collections and will demonstrate to all concerned what a sound, democratically operated small business can do.
I think the government, instead of trying to promote the welfare of the banks in other provisions in this bill should be prepared to give the same kind of guarantee to the credit unions and put them on an equal basis. I am sure that if the minister does not agree with the request today the time will come soon when the credit unions will be recognized by a federal government for what they are, very successful credit institutions. In many communities they are giving a service that is not matched by the banks, and they are providing service in many communities in which banks are non-existent.
I wish the minister would end the discrimination against credit unions and give them a chance to compete on equal terms with the banks.


Donald Methuen Fleming: The hon. member for Assiniboia has delivered one of those typical speeches of his, rash, reckless, taking in the whole waterfront in these unfounded generalizations of his. I think it it quite unfair. We can test by the yardstick of fact both the alleged desire of credit unions to qualify and the appropriateness of including them in this legislation.
I said in my last intervention that no caisse populaire loan yet had been guaranteed under the provisions of the Fisheries Improvement Loans Act. Perhaps I did not go far enough. Perhaps some hon. members thought, does that mean that there have been applications and they have been turned down? Let me remove all doubt. Mr. Chairman, since the Fisheries Improvement Loans Act came into effect five years ago there has not been a single application from a caisse populaire in Canada for the guarantee by
the government of a loan made under the provisions of that act, not a single application.
The hon. member for Assiniboia was not talking about a caisse populaire, he was talking about credit unions. The hon. member for Bonavista-Twillingate talked about credit unions, as though the credit unions in his adopted province of Newfoundland were falling all over one another in seeking to take advantage of the provisions that are already open to them under the Fisheries Improvement Loans Act to obtain guarantees of the loans they make.
Well, it would interest him, and perhaps would be of some little interest to the hon. member for Assiniboia, to know that there is only one province out of the ten in Canada in which any credit union has so far made any of these guaranteed loans under the provisions of the Fisheries Improvement Loans Act. There has not been one in Newfoundland; not a single credit union loan down there. There have been none in Nova Scotia, Prince Edward Island, New Brunswick, Quebec, Ontario or the prairies. There are two credit unions in the province of British Columbia which have guaranteed loans under the provisions of the Fisheries Improvement Loans Act. There have been only credit unions in one province that have so far a single loan under the provisions of that act. These happen to be, not small credit unions but quite large credit unions out on the west coast. So you see, Mr. Chairman-


Lionel Chevrier: May I ask the minister a question? What objection, then, could there be, if that is the position, to the inclusion of them in this legislation?


Donald Methuen Fleming: I will repeat, for the benefit of the hon. member for Laurier, the very substantial reasons which I gave earlier and which apparently have not made any impression on him, perhaps no more than the provisions of the bill did in his hasty reading of it. I have pointed out in the first place, Mr. Chairman, why these institutions are-


Lionel Chevrier: May I ask the minister another question?


An hon. Member:: Wait until he answers the first one.


Donald Methuen Fleming: The hon. member asked me a question and then, without waiting for an answer, he wishes either to supply his own answer or ask another question. I suggest that, whichever it is, he defer it until I have repeated, at his request, the reasons I gave earlier.
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Guarantee of Loans to Small Businesses
I have pointed out, Mr. Chairman, that these are institutions under provincial jurisdiction. The federal government has no jurisdiction over them. In the second place, there is an opportunity for provincial supervision over them but the federal government can exercise no supervision over them. In the third place, the federal government cannot be expected to supervise their lending or the interest rates that they charge. You see, Mr. Chairman, we have legislation, which is referred to in this measure, namely the Bank Act. This measure does, itself, regulate the banks and puts a ceiling on the interest charge that may be made. There is no such comparable legislation with respect to credit unions or caisses populaires. So far parliament has, and I think quite properly, refrained from attempting to interfere with the jurisdiction which the provinces properly exercise over credit unions and caisses populaires.
On top of that, it is quite evident I think that there is no desire on the part of the credit unions or the caisses populaires to avail themselves of these opportunities, perhaps for very good reasons. I refer hon. members to the reasons put forward so convincingly a few minutes ago by the hon. member for Marquette. He speaks, not out of an academic interest, not out of an attempt to create an issue out of thin air, but out of sound experience.
I suggest to this honourable committee that when the hon. member for Assiniboia talks about discrimination, he is talking about something that does not exist. If he does not know that it does not exist, then it is high time he found out.


Hazen Robert Argue: Put it in the bill, then.


Donald Methuen Fleming: He goes on talking and tries to leave the imputation that this is a measure introduced for the benefit of the banks. I wish to say a word about that, Mr. Chairman. I do not think that kind of imputation reflects any credit on him. The fact is that this measure has been introduced for the benefit of small business, and that has been made abundantly clear. Every hon. member in this committee who has spoken, with the exception of a couple of C.C.F. members or whatever they now call themselves, has recognized that the purpose of this measure is to aid small business, and that it will aid small business. Everybody knows it except those hon. members. Small business has welcomed this measure because it will supply a need that small business has suffered from by comparison with larger business, namely the lack of intermediate credit facilities.
This measure has been hailed by these small business organizations, but not by those in this committee who now appoint themselves
[Mr. Fleming (Eglinton) .1

as spokesmen for small business. These are not the authentic voices of small business that have been raised from these benches opposite tonight. I prefer to judge what small business thinks, what small business wants, what small business needs, by what the authentic representatives of small business tell us. Their voices bear no resemblance to what we have heard from these voices opposite tonight.
I have put before this committee a measure which has been approved by the house without a dissenting voice. Perhaps the C.C.F. members in the northeast corner missed their cue tonight. They preferred to let the bill receive second reading and then do their sniping in the committee, and bring out these suggestions that have no foundation in fact that this measure was introduced for the benefit of the banks.
We have asked for the co-operation of the banks to give effect to this legislation. The banks have said that they will co-operate. We have assurances from various banks that they will co-operate. They have seen this legislation. One or two heads of banks had spoken after the speech from the throne when they saw reference to this subject in that speech. As I say, I think it ill behooves any hon. member to cast aspersions like this as to the purpose of this bill. I am prepared to leave it to small business to make the judgment on the bill.


Lionel Chevrier: The minister took a long time to answer the question and he finally did not get around to it.


An hon. Member:: He surely answered it.


Lionel Chevrier: I rose to ask the minister another question and I wonder whether he would allow me to ask it now. It is this. May I presume that the minister is as right in answering the question which I put to him as he was earlier in declaring by one great wave of the hand that the amendment which I made was out of order?


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


Lionel Chevrier: There is no answer?


Mr. Robichaud:: The argument made by the Minister of Finance is no argument at all. The minister objected to including caisses populaires or credit unions because they made no loans under the Fisheries Improvement Loans Act. He said no loans had been made in Newfoundland, Nova Scotia, New Brunswick, Prince Edward Island or Quebec. The minister must know that in every one of those provinces there is a fishermen's loan board which has lent millions and millions of dollars to the fishermen of their respective

provinces. Furthermore, the caisses populaires or credit unions have made, are still making and will be making in the future small loans to fishermen where they do not need a government guarantee such as that which is provided under the Fisheries Improvement Loans Act.


An hon. Member:: What is their interest rate?


Hédard-J. Robichaud: The interest rate on the average is 6 per cent. The hon. member for Marquette was objecting to including credit unions. The hon. member must know that in most of the provinces where credit unions or caisses populaires are formed they have a federation and the particular purpose of this federation is to make larger loans to small businessmen in their own community who are members of the credit union. In fact, some of these caisses populaires or federations of caisses populaires are operating in exactly the same way as are banks with a check system and, instead of dealing with the banks, some businessmen are dealing with the federation of caisses populaires. That is one reason why the caisses populaires or credit union should be included in this bill. They should be included because they have done so much to prevent these small businessmen from joining the long list of those who have gone into bankruptcy since this government took office.


Mr. Browne (St. John's West):: May I ask
the hon. member a question?


Hédard-J. Robichaud: Yes.


William Joseph Browne: Will he give me the name of the co-operative or credit union in his province that lends money to private business?


Hédard-J. Robichaud: Certainly. In my own parish of Caraquet we have a federation of caisses populaires. Owing to the large number of loans made by that federation to small businessmen who are members they have prevented a large number of them from going out of business.


Donald Methuen Fleming: Those who are
members.
(Translation):


Mr. English:: Mr. Chairman, I followed the discussion which took place this afternoon and tonight very closely. I believe it is my duty to say a few words in connection with the matter before us, because I am still wondering how many hon. members, among those who took part in this discussion, are really familiar with the part played by our
Guarantee of Loans to Small Businesses caisses populaires and our co-operatives in the province of Quebec and throughout the country.
I had the opportunity of going to St. Francis Xavier University, in Antigonish, to study the system of co-operatives and caisses populaires. I was also able to travel about Cape Breton and to study there the caisses populaires system. May I say that I am still wondering who was right, my professors or the opposition members who are discussing the problem tonight.
First of all, the caisses populaires and the co-operatives were established to help certain categories of people in our society. It might indeed be well to remind hon. members that there have been mistakes made in many cases when founding co-operatives. When an attempt was made to establish the system in the cities, for instance, where there was less poverty, the system took a long time to take root, and even now, it can scarcely be said to be successful there.
The system was really of use in places where poverty prevailed. For instance, coal co-operatives were established in Nova Scotia and a caisse populaire was also founded there for the purpose of helping those who were working in the coal mines. The aim of the caisses populaires never was to loan money to industries, but to care for a class of people who have suffered.
Mr. Chairman, that is my answer to the hon. member for Laurier (Mr. Chevrier), who was asking the Minister of Finance (Mr. Fleming) why he did not want to include the caisses populaires in the bill now before us. To my mind, such attitude would be against the very principle of the caisses populaires which is to look after a certain class of people, and not to make loans to industries.
I therefore commend the government for having taken a similar attitude, because otherwise, it would be working against the very principles of the caisses populaires, and their members would blame their management because they would then be unable to play the part the caisses populaires aim at. That is why I shall vote against the amendment.


Mr. Paul:: Mr. Chairman, I was interested in noting the enthusiasm with which the hon. member for Laurier (Mr. Chevrier) and the hon. member for Bonavista-Twillingate (Mr. Pickersgill) took the defence of the caisses populaires.
As rightly pointed out by the hon. member for Gaspe (Mr. English), you must, first of all, think of the nature and purpose of the caisses populaires. Personally, I quite realize
286	HOUSE OF
Guarantee of Loans to Small Businesses at this time what unfortunate comments perhaps some newsmen will be prone to make concerning the member for Berthier-Maski-nonge-Delanaudiere for rising in this house, apparently to speak against the caisses populaires. That certainly is not my purpose. In my 12 years as a lawyer I have always made it a point to take all my business to those institutions, and I have only praise for all the fine people looking after the financial interests of their members in the various small centres in the province of Quebec.
But, as was so well pointed out by the Minister of Finance (Mr. Fleming), those institutions are under provincial jurisdiction and were created by provincial authorities. Going back to section 91 of the British North America Act, subsection 15, we find that banks are under the exclusive jurisdiction of the federal government. First of all, a bank is created through federal legislation. Second, certain administrative regulations under the Bank Act provide that the bank shall set aside a certain percentage of the money at its disposal, to insure sound operations and the security of the people with whom it carries on transactions. The interest rate set by the banks is also controlled by the federal government.
Now, the caisses populaires were created under provincial legislation from which they derive their legal status. Furthermore, their administration is under provincial control. The rate of interest that they are authorized to pay to their members is a matter for the board of directors in each caisse populaire to decide and any loan application must first be submitted to the credit commission.
I fail to see how the hon. member for Laurier, the very man who, last year, was all for respecting the Canadian constitution, can, today, in this house, attempt to treat the caisses populaires like chartered banks, which under section 91 of the B.N.A. Act, are under exclusive federal jurisdiction.
Besides, Mr. Chairman, I wonder what would be the practical effect in the case of those loans which might be granted by the caisses populaires, since, in the province of Quebec, any loan secured by an individual is now automatically insured by the Desjardins life insurance. Thus when a borrower dies while indebted to the caisse, his loan is automatically paid out through an insurance on his loan.
Therefore, I fail to see how, in the discussion of this bill, particularly in clause 3, we could accept the proposed amendment because the purpose of this bill is to pay back


to the banks any amount of money that they might lose if the borrower failed to meet his obligations.
As far as the caisses populaires are concerned this bill is not applicable because, as I said earlier, any loan secured from a caisse populaire is automatically insured through a policy issued by the caisses populaires Desjardins.


Hédard-J. Robichaud: Insured for what?


Rémi Paul: For the amount of the loan. The hon. member would be well advised to visit the province of Quebec in order to find out what benefits the workers and the farmers derive from the caisses populaires which are, above all, institutions established not to help businessmen and industries, but to facilitate the settlement of workers and farmers and to contribute to the improvement of their situation.
I do not think the hon. member is aware of what is going on when he asks: "Insured for what?". The insurance is for the amount of the loan granted by the caisse populaire.


Hédard-J. Robichaud: Oh. It is a life insurance?


Rémi Paul: Life insurance.


Hédard-J. Robichaud: That is not the same thing.


Rémi Paul: If the hon. member wants to be the champion of the caisses populaires in this house, he should bear in mind first that the Conservative government has always insisted on fully respecting autonomy when constitutional matters are involved and we must admire the firm stand taken by the Minister of Finance (Mr. Fleming) today. He is not prompted by political motives unlike certain members who have voiced their opinion on the subject. His position is based on a complete respect of the Canadian constitution which is still the best way of promoting the whole economic activity in our ccwntry.
Mr. Chairman, as I pointed out a moment ago, I do not think that the caisses populaires are interested in taking advantage of this legislation. If they were interested, they would already have submitted a request to that effect to the Minister of Finance. If they have not done so, it is because they realized that by participating in those loans, they would deviate from the very purpose of their establishment, that is, to assist the worker, the farmer, the small investor, rather than promoting industry.


Hédard-J. Robichaud: Does the hon. member allow me a question?


Rémi Paul: Certainly.


Hédard-J. Robichaud: If the hon. member is so anxious to respect the constitution, can he explain then why the loans to fishermen were approved in 1955?


Rémi Paul: I answer the hon. member that under paragraph 12, section 91 of the B.N.A. Act, the federal government has jurisdiction over fisheries, but the provincial government also has. Besides, it is probably the only exception that arose and if the federal government did not deem advisable at the time to include the caisses populaires, it was because there was duality of jurisdiction rather than exclusive jurisdiction.
(Text):


Some hon. Members:: Question.


Mr. Peters:: Mr. Chairman, we hear so many people talking about caisses populaires-which is the French equivalent, as I understand it, of the credit union movement-and speaking strongly on behalf of their credit organizations. At the same time it is pointed out that the reason this amendment cannot be put in the bill-as the last two speakers have said- is that it would be unconstitutional, as these organizations are not set up in a manner in which they could operate under the jurisdiction which would be necessary for them to qualify as a bank. At the same time, they have not asked the minister to remove from the fisheries act the credit facilities that have already been granted to some of the credit unions.
Many things have been said tonight about credit unions that have been unfavourable,
Business of the House
and I think some of them have been untrue. I have belonged to a number of credit unions and have been a founding member of several. I am aware that there are large sums of money which the credit union movements of Canada and the United States would like to make available to help small business.


Some hon. Members:: Ten o'clock.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: Mr. Speaker, may I ask the acting house leader what the business of the house will be for tomorrow and the next day?


John Angus MacLean: Tomorrow will be devoted to debate on external affairs. As far as the next day is concerned, I regret I cannot be any more specific than was the house leader last Thursday. I expect tomorrow he will be able to be more specific in regard to the business of the house on Wednesday.


Lionel Chevrier: Mr. Speaker, may I ask the acting house leader how he proposes to deal with the item which he has just mentioned for tomorrow.


John Angus MacLean: The item will no doubt be dealt with in the same way by the house as it was a number of years ago on one occasion, probably by a motion to adjourn the house.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
19
[Stage Direction]
Questions