1961-07-12

STARRED QUESTIONS


Mr. Pitman: 1.	Did the Canadian National Railways, directly or indirectly, reproduce and mail any portion of the comments of its president, Mr. Donald Gordon, made at any of the meetings during the present session of the sessional committee on railways, air lines and shipping?
2.	If so: (a) what portions were so reproduced, by whom, by what method, how many, and at what cost? (b) to whom and by whom were such reproductions mailed, and at what cost?


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, the management of Canadian National Railways advise as follows: Certain portions of the testimony referred to were reproduced in regular editions of two employee communications media known as Management Bulletin and Daily Report. This is normal practice. In addition, as suggested during the committee, other features of the testimony will be reproduced in the magazine Keeping Track. The first two publications referred to are reproduced on duplicating machines and are distributed to supervisory and management personnel, while Keeping Track, a monthly printed magazine, is distributed to all employees and pensioners and others. As indicated, the communications referred to are regular publications and the costs of insertion of particular items are not therefore segregated.



SOULANGES CANAL


Mr. Chevrier: 1.	Did the Department of Transport receive tenders from industry in relation to the purchase of the east end of the Soulanges canal at Pointe des Cascades?
2.	If so, what is the list of names, addresses, and amounts of such bidders?
3.	How many employees are likely to be engaged
in each case?
4.	What action has the government taken on these tenders?


Léon Balcer: Mr. Speaker, the answers are as follows:
1.	Yes.
2.	(a) Max and Sol Goldberg, Montreal, P.Q., $50,000.
(b) Roger LaFleur, Montreal, P.Q., $52,000.
3.	Goldberg offer-no firm plans but reference to possible 100 employees.
LaFleur offer-no reference.
4.	Offers not considered satisfactory and, as already announced, property involved offered to the province of Quebec along with balance of Soulanges property.



AUTOMATIC ARCTIC WEATHER STATIONS


Mr. Chevrier: 1.	Is any applied research being conducted in Canada into the feasibility of using atomic energy to power automatic weather stations in the Arctic?
2.	Is any government agency co-operating with the American atomic energy commission in the research work being done by the Martin Company in Baltimore in the development of an isotope power atomic weather station?
3.	Has any consideration been given to the use of such atomic weather stations in the Canadian Arctic?


Léon Balcer: Mr. Speaker, in reply to part 1 of this question, the Department of Transport has no knowledge of any such research.
With regard to parts 2 and 3, I would refer the hon. member to the reply given in the house on July 5 to his oral question by the Secretary of State for External Affairs. I might add that the Department of Transport has no knowledge of any government agency co-operating directly with the United States atomic energy commission on this subject.



DAILY POINTS OF CALL, LETTER CARRIERS

Mr. Thomas: 1.	How many points of call are considered an average day's work for a letter carrier?
2.	What would be the estimated cost of extending house-to-house delivery to towns and villages with 1,500 or more points of call?
3.	How many additional jobs would be created by such an extension of house-to-house delivery?
4.	What percentage increase in postal rates would be required to pay for such extended service?


Hon. W. M. Hamilton (Postmaster General):: Order for return, Mr. Speaker.


Mr. Speaker:: Order for return.



ROYAL COMMISSIONS, 1951-1957

Mr. Hanbidge: 1.	How many royal commissions were established by the St. Laurent government between July 1, 1951, and June 10, 1957?
2.	What was the purpose of each such commission?
3.	When was each established?

Starred Questions


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, the answer to part 1 is 15, excluding routine investigations into charges of political partisanship. The answer to parts 2 and 3 is rather lengthy and detailed. With leave of the house may the answer be printed in Hansard?


Mr. Speaker:: Is it agreed that the balance of the answer may be incorporated without being read?


Some hon. Members:: Agreed.
[Editor's note: The balance of the answer follows:]
2 and 3. Purpose and date of establishment.
1.	Claims arising out of world war II, (Mr. Chief Justice Ilsley), 31 July, 1951.
2.	South Saskatchewan river project, 24 August, 1951.
3.	Staking of areas and application for permits re exploring petroleum products by Sun Oil Company and California Standard Company, 12 November, 1951.
4.	Claims arising out of world war II (Mr. Chief Justice Campbell), 23 October, 1952.
5.	Criminal law relating to defence of insanity, 2 March, 1954.
6.	Criminal sexual psychopaths, 25 March, 1954.
7.	Quartz mining and placer mining in Yukon Territory, 29 April, 1954.
8.	Agreed charges under part IV of the Transport Act, 20 May, 1954.
9.	Parents, copyright, trade marks, 10 June, 1954.
10.	Humber river valley flood, 20 October,
1954.
11.	Coasting trade in Canada, 2 December,
1955.
12.	Long term prospects of the Canadian economy, 17 June, 1955.
13.	Broadcasting in Canada, 2 December, 1955.
14.	Dispute between Canadian Pacific railway and brotherhood of locomotive firemen and engineers, 17 January, 1957.
15.	Financial position of Newfoundland, 21 February, 1957.



CANADIAN NATIONAL RAILWAYS


Mr. Fisher: 1.	Did the "small" operating profit reported by the Canadian National Railways trucking operations include the operating profit of Midland-Superior?
2.	If so, what provision was made In the accounting to allow for the fact that the C.N.R. did not own Midland-Superior outright in 1960?
3.	What was the amount of this allowance?
4.	Were any dividends paid to shareholders (other than the C.N.R.) of this trucking firm in 1960?
5.	If so, what was the amount?

6.	Was any charge made against the revenues of Midland-Superior in 1960 for the cost of the capital allotted to purchase this firm?
7.	If so, did it wipe out the operating profit?
8.	If not, was this practice used on East-West Transport and Empire Transport during 1960?


Léon Balcer: Mr. Speaker, the answers to the eight parts of this question are as follows:
1.	Yes.
2.	As was indicated in the answer to starred question No. 265, since the purchase of Midland was not completed as at December 31, 1960, there is a credit of about $400,000 not yet taken into C.N.R. accounts for that year.
3.	See answer to No. 2.
4.	No.
5.	Not applicable.
6.	No.
7.	Not applicable.
8.	No.



C.N.R.-EMPLOYMENT OF MANAGEMENT CONSULTANTS

Mr. Fisher: 1.	Did the Canadian National Railways employ any firms of management consultants during 1960 and 1961?
2.	If so, what were the names of the firms, and how much were they paid in total for fees and expenses?
3.	On what assignments did the firms work?
4.	Were the firms selected after calling for tenders and picking the low bid? If not, what was the basis for selection?
5.	How much does the C.N.R. expect to spend for management consulting fees and expenses during 1961?


Léon Balcer: Mr. Speaker, the management of Canadian National Railways advise that in common with all large organizations it obtains from time to time technical advice or consultation on specific problems. A number of firms have been employed in respect to special studies and projects. In doing so, the company avoids building up its senior staff on a permanent basis. The term "management consultant" is not susceptible to precise definition. However, in the general consulting field the firm of Woods Gordon and Company has been assisting the company in its general reorganization. At the same time the firm of Price Waterhouse has been assisting management in the development of accounting techniques to coincide with the new form of organization. It is not practicable to call for technical advice by tender, so that the selection of such assistance is a matter of management judgment exercised in the light of the knowledge and the skills available in relation to the particular problem. It has not been the practice to disclose the amount of fees paid.



EXTERNAL ASSISTANCE GRANTS AND LOANS

Miss LaMarsh: 1.	What is the total of Canadian external assistance grants for each year since the second world war?
2.	What percentage of Canada's national income (or gross national product) was spent on external assistance grants in each year since the second world war?
3.	What is the total of Canadian external assistance loans for each year since the second world war?
4.	What is the total of Canadian external assistance grants and loans for each year since the second world war?
5.	What percentage of Canada's national income (or gross national product) was spent on external assistance grants and loans in each year since the second world war?
6.	What is the total of Canadian external assistance loans less repayments of principal and interest on external assistance loans for each year since the second world war?
7.	What is the total of Canadian external assistance grants and loans less repayments of principal and interest on external assistance loans for each year since the second world war?
8.	What percentage of Canada's national income (or gross national product) was spent on external assistance grants and loans (less repayments of principal and interest on external assistance loans) for each year since the second world war?


Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker, this question involves complicated statistical research and more than one department is concerned. I ask that it be made an order for return.


Mr. Speaker:: Order for return.


Mr. W. H. McMillan (Welland):: I should like to direct a question to the Minister of Finance. Since the hon. gentleman is now in the house I wonder if he could now give me an answer to starred question No. 449.


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, I was detained when the house opened. I was on the telephone, and I arrived only after the starred questions had been called. I had intended to ask, when we had completed the questions on the orders of the day, if the house would agree to revert to starred questions to permit me to answer several of them.


Mr. Speaker:: Perhaps the house would give the hon. minister leave to answer those questions now.


Some hon. Members:: Agreed.



CASH BORROWING REQUIREMENTS, EXCHANGE FUND

[Stage Direction]
Question No. 445
Mr. Benidickson:: What is an up to date estimate by the government of its cash borrowing requirements during 1961-62 to provide the exchange fund with resources to assure the maintenance of a significant discount of the Canadian dollar vis-A-vis the U.S.A. dollar?
Starred Questions


Donald Methuen Fleming: I think there are three questions which I would have answered, had I been present at the moment when they were called which were allowed to stand in my absence. The first is No. 445. I am asked for an up to date estimate by the government of its cash borrowing requirements during 1961-62 to provide the exchange fund with resources to assure the maintenance of a significant discount of the Canadian dollar vis-a-vis the United States dollar.
I dealt with this subject in the budget. It has not been the practice to issue, except perhaps on such occasions as a supplementary budget, any further statements on such subjects during the course of the year. None of the estimates with relation to the balance of ways and means or cash is made the subject of further statements during the course of the year once the budget has been introduced.



PERSONNEL, FINANCE MINISTER'S OFFICE

Miss LaMarsh: 1.	Apart from the minister and parliamentary assistant, what was the maximum number of persons employed in the office of the Minister of Finance in the fiscal year 1956-57 and what was the aggregate of their annual salaries in that year?
2.	Apart from the minister and the parliamentary secretary, what was the maximum number of persons employed in the office of the Minister of Finance in the fiscal year 1960-61 and what was the aggregate of their annual salaries in that year?


Donald Methuen Fleming: Question No. 452 asks, first what was the maximum number of persons employed in the office of the Minister of Finance, apart from the minister and the parliamentary secretary, in the fiscal year 1956-57, and what was the aggregate of their salaries in that year. The second part asks the same question with respect to the fiscal year 1960-61.
My answer is that the number of employees in the office of the minister was the same in both years. It was 10 in the fiscal year 1956-57 and it was 10 in the fiscal year 1960-61. It has been reduced to nine since, and at the moment it happens to be, temporarily, eight.
As to the total paid by way of salaries, in the fiscal year 1956-57 it was $35,969.63. In the fiscal year 1960-61, having regard to increases in salaries which became effective since the earlier year, one made effective in the fiscal year 1957-58 and the other in the fiscal year 1960-61, the total of salaries was $51,936.46. With the reduction of the staff since the beginning of the present fiscal year there has, of course, been a reduction since that time with respect to the amount of salaries payable in the fiscal year 1961-62.

Starred Questions



EXCHANGE FUND RESERVES

Mr. McMillan: What was the amount of reserves in the exchange fund on the close of business on (a) June 20, 1961, (b) June 30, 1961, (c) the latest available date?


Donald Methuen Fleming: This question asks what was the amount of reserves in the exchange fund on the close of business on (a) June 20, 1961, (b) June 30, 1961 and (c) at the latest available date.
As I have pointed out on earlier occasions, it has never been the practice to issue figures on the holdings of exchange except at the month end. These figures are published at the end of each month. They refer to the holdings of gold and foreign exchange, usually U.S. dollars, which are official holdings. Practically all of the official holdings are in the exchange fund. It is not the practice to issue the figures apart from the total. In total the official holdings, as I say, are nearly all in the exchange fund.
Now as to the holdings, in keeping with the practice I shall begin by giving the figure on May 31. It is not one of the dates that appear in this question, but in keeping with the practice observed at all times in the past I am coming as close as I can to the dates that are mentioned in the question. On May 31 the official holdings of gold and United States dollars at the close of business that day were $1,949.2 million. On June 30 they were $1,985.2 million. Mr. Speaker, the date June 20 happens to be the date of the budget, and is a date, not being a month end, when it has not been customary to issue any statement as to holdings. The same would apply to part (c) of the question, the latest available date. I think therefore, Mr. Speaker, I should not depart from the practice that has been observed, but I may perhaps suggest that there has been no significant or great change in the figures.


Mr. Speaker:: Answered.

On the orders of the day:


Donald Methuen Fleming: Mr. Speaker, perhaps there is one thing I might have added to the answer I gave in reply to starred question No. 449. Within the limits of the practice in these matters I may say that part of the increase in the holdings of gold and U.S. dollars between May 31 and June 30 occurred before June 20. Also, in relation to what has happened since June 30, the holdings of gold and U.S. dollars are less today than they were on June 30.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Argue: 1.	How many publishing houses are there in. Canada?
2.	What is the name of each, location of head office, and type of publishing business?
3.	Are any of these (a) owned (b) controlled by (i) American (ii) other foreign nationals?
4.	If so: (a) which ones? (b) by what company are they owned or controlled, and to what extent? (c) on what date did this control or ownership take place?


LOANS TO INCORPORATED COMPANIES
Mr. Howard: 1.	Since January 1, 1950, have any loans, except those made by C.M.H.C., been made to incorporated companies other than crown corporations?
2.	If so, with respect to each such company, what is (a) the name, address, and type of business (b) the total amount of each loan (c) the date of each loan (d) the term of each loan (e) the rate and type of interest paid or payable on each loan (f) the authority for each loan?
3.	Have any companies defaulted on their loan, and, if so, which companies, and what are the details in each case; and what is the total amount lost to date by defaulted loans?


DAILY POINTS OF CALL, LETTER CARRIERS
Mr. Thomas: 1.	How many points of call are considered an average day's work for a letter carrier?
2.	What would be the estimated cost of extending house to house delivery to towns and villages with 1,500 or more points of call?
3.	How many additional jobs would be created by such an extension of house to house delivery?
4.	What percentage increase in postal rates would be required to pay for such extended service?


EXTERNAL ASSISTANCE GRANTS AND LOANS
Miss LaMarsh: 1.	What is the total of Canadian external assistance grants for each year since the second world war?
2.	What percentage of Canada's national income (or gross national product) was spent on external assistance grants in each year since the second world war?
3.	What is the total of Canadian external assistance loans for each year since the second world war?
4.	What is the total of Canadian external assistance grants and loans for each year since the second world war?
5.	What percentage of Canada's national income (or gross national product) was spent on external assistance grants and loans in each year since the second world war?
6.	What is the total of Canadian external assistance loans less repayments of principal and interest on external assistance loans for each year since the second world war?
7.	What is the total of Canadian external assistance grants and loans less repayments of principal and interest on external assistance loans for each year since the second world war?
8.	What percentage of Canada's national income (or gross national product) was spent on external assistance grants and loans (less repayments of principal and interest on external assistance loans) for each year since the second world war?



PRIVILEGE


Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, I rise on a question of privilege. Yesterday the Minister of Finance indicated that if questions were asked by the opposition on the operation of the exchange fund as they should have been asked-as the minister put it, if the opposition "had been on their toes"-they would have been replied to. I call your attention to the fact that questions Nos. 445 and 449 appear on the order paper as starred questions. Those questions deal with this very subject. The Minister of Finance is not here to answer them, nor is his parliamentary secretary nor anyone else.


John George Diefenbaker: Mr. Speaker, as soon as the minister is available I am sure they will be answered. I compliment the Leader of the Opposition for following the suggestion of the Minister of Finance that if hon. gentlemen opposite had been "on their toes" they would have received this information.


Lester Bowles Pearson: In reply to what the Prime Minister has said, the right hon. gentleman has probably forgotten that questions on this subject have been asked previously. Apparently the Minister of Finance also forgot that yesterday when he made that inaccurate statement. I point out that two questions dealing with this subject are on the order paper and there is no one here from the Department of Finance to reply.
[Editor's note: For answers to questions above referred to, see "Starred Questions" this day.']



CUSTOMS TARIFF


[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: Mr. Speaker, I wish to direct a question to the Prime Minister. Would the Prime Minister inform the house whether any steps are contemplated to establish a joint conference between representatives of the House of Commons and Senate to deal with the controversial Senate amendment to the customs tariff bill?


John George Diefenbaker: When the Senate convenes this afternoon the answer to that question will be given. It is appropriate that any response should be made in the other place, where the discussions are taking place.
Inquiries of the Ministry FINANCE



INTERNATIONAL MONETARY FUND


[Stage Direction]
On the orders of the day:
Mr. John R. Matheson (Leeds):: Mr. Speaker, I wish to direct a question to the Prime Minister and ask whether the government has received any communications since June 20, 1961 from representatives of the international monetary fund criticizing or questioning this government's action in forcing down the exchange rate?


John George Diefenbaker: Mr. Speaker, I will take that question as notice, and will answer it in the proper course.



EUROPEAN COMMON MARKET


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, may I ask the Prime Minister a question arising out of his suggestion some time ago that there might be a conference of commonwealth prime ministers to discuss the European common market. Has his attention been called to a statement made in the British House of Commons yesterday, and reported in the press, by the Prime Minister of the United Kingdom that such a conference would be quite unsuitable?


John George Diefenbaker: Mr. Speaker, I have seen a reference to that matter in the press but as yet have not had Hansard in order to ascertain the degree to which the summary in question represents what actually took place. I might say that, as the hon. gentleman knows, it is not the practice for commonwealth prime ministers to comment on the views expressed by prime ministers in other parts of the commonwealth. Each is entitled to follow the viewpoint which he believes is proper.
Tomorrow meetings will commence between Right Hon. Duncan Sandys and four ministers of the Canadian government. These meetings will be in the nature of the United Kingdom government placing its views before the Canadian government. As we see it, these are preliminary discussions.
In so far as the statement is concerned that a prime ministers' conference would be out of place, may I refer the Leader of the Opposition to my words of June 9, 1961, as found at page 6085 of Hansard:
I envisage bilateral consultation, official and ministerial, but because of the potential consequences of United Kingdom membership in the common
7940	HOUSE OF
Inquiries of the Ministry market, I believe that the fullest consideration should be given to collective ministerial discussion and also, if necessary, to a meeting of the prime ministers.
That still represents the viewpoint of this government.


Hazen Robert Argue: I have a supplementary question, Mr. Speaker. I wonder if the Prime Minister could tell the house whether he thinks a prime ministers' conference is necessary in the light of this grave threat to Canada's market.


John George Diefenbaker: Mr. Speaker, after the United Kingdom has had the opportunity, through the secretary of state for commonwealth relations, to place before the representatives of the Canadian government the situation as the United Kingdom sees it, then it will be time enough to determine the future course to be taken.
As to the statement regarding the grave consequences, may I say this. Discussions have already taken place between Mr. Sandys and the governments of New Zealand and Australia. Those countries also have discussed the potential consequences, results and implications of the United Kingdom joining the common market. We are going to have the same opportunity now. Having heard in detail what the situation would be from the United Kingdom viewpoint, then it will indeed be early enough to determine the future steps to be taken.


Hazen Robert Argue: I have a further supplementary question, Mr. Speaker. I wonder whether the Prime Minister would comment on Prime Minister Macmillan's rejection of a prime ministers' conference when the Prime Minister of Canada has made no such request?


Mr. Speaker:: Order. I think the hon. member's supplementary question was answered earlier by the Prime Minister who indicated that he did not consider it proper practice for one prime minister to comment on another prime minister's statement.


Lester Bowles Pearson: Mr. Speaker, may I ask the Prime Minister whether, in the forthcoming discussions with the secretary of state for commonwealth relations, advantage will be taken of his presence to raise the question of the desirability of extending these European freer trading arrangements across the Atlantic to include the United States and Canada?


John George Diefenbaker: 

NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Minister of Northern Affairs and National Resources. In view of the many requests from British Columbia organizations and members of parliament for the establishment of an office of the Canadian government travel bureau in San Francisco, in view of reports to the effect that the minister has recently visited that city in this connection, and in view of the general interest of the house in the minister's activities, has the minister anything to report to the house with respect to his recent visit to San Francisco?


Hon. W. G. Dinsdale (Minister of Northern Affairs and National Resources):: Mr. Speaker, I thank the hon. member for this question, because it gives me an opportunity to inform him and the house that the tourist bureau in San Fransisco was officially opened on Monday afternoon. I was able to be present representing the government of Canada.
It was a very successful occasion. Various state authorities were present, including former Senator Knowland. There were representatives from most of the consulates in the city of San Francisco. His Worship Mayor Christopher officially cut the ribbon declaring the centre open. Personally I was impressed with its location. It is in one of the most strategic comers of the city of San Francisco and should do much to stimulate tourism, particularly to the western parts of Canada.
I should also add that the province of British Columbia is following the good example of the federal government in this regard and it is going to locate British Columbia house in the same district.


Lester Bowles Pearson: Mr. Speaker, may I ask the minister whether he was able to stay over in San Francisco for the all star baseball game?


Walter Gilbert Dinsdale: Mr. Speaker, we were so busy on official duties during the very short visit to the city of San Francisco that I was only vaguely aware this event was taking place.


Mr. Mcllraith:: That is too bad.


Walter Gilbert Dinsdale: But I do assure the hon. member that had the opportunity been presented I would have accepted with enthusiasm.



STATEMENT ON DELIVERIES TO FEED MILLS

[Stage Direction]
On the orders of the day:
['I noticed the report of that statement.']
John George Diefenbaker: Mr. Speaker, yesterday the hon. member for Assiniboia asked me the following question:
In view of the fact that the new crop year is just a few weeks away, and the government has stated there would be a review of the policy of the wheat board in relation to the delivery of grain to feed mills, has any consideration been given to this policy-
While that question was directed to me, I think it should be answered by the Acting Minister of Agriculture.


Hon. D. S. Harkness (Acting Minister of Agriculture):: Mr. Speaker, in November, 1960 the Canadian wheat board announced a new policy in respect of deliveries by producers to feed mills, which was to remain in effect until the conclusion of the present crop year on July 31 next, at which time this policy would be subject to review by the board.
In the application by a feed mill for designation as a non-quota feed mill provision is made whereby the mill will supply periodically to the board information in respect of its purchases of wheat, oats and barley from permit holders. The final report from the mills must be submitted to the board on or before August 15, 1961. This information will form an integral part of the data to be considered by the board in the review of its feed mill policy and, as a consequence, this review cannot take place until subsequent to August 15, 1961.
In the interim it is the intention of the board to extend its present policy beyond the end of the current crop year until the review of its feed mill policy can be completed, which should be toward the latter part of August, 1961.



[Stage Direction]
On the orders of the day:
Hon. Paul Marlin (Essex East):: Mr. Speaker, I should like to ask a question of the Prime Minister based on a speech he made in Winnipeg on the 9th of this month, and more particularly on this statement in the Prime Minister's speech as reported in the press:
We need to be strong and unhesitating in our defence of essential western rights and obligations .. . We need at the same time to maintain a calm judgment so that we will not overlook possibilities of compromise which, without amounting to appeasement, might none the less contribute to peace.
90205-6-501
Inquiries of the Ministry
May I ask the Prime Minister to outline to the house, with regard to the East-West German problem, what he means by "compromise" in the Berlin situation and "appeasement" in the same situation.
Right Hon. J. G. Diefenbaker (Prime
Minister): While discussions are going on relative to this matter designed to bring about a degree of unity which has not always been present among the NATO countries, I think the hon. gentleman would agree that it would be inappropriate at this time to go into detail.


Paul Joseph James Martin: I ask the Prime
Minister whether his attention has been called to the statement of Chancellor Adenauer yesterday that there could be no compromise in the Berlin situation.


John George Diefenbaker: I noticed the report of that statement.



NEWFOUNDLAND


[Stage Direction]
On the orders of the day:
Hon. J. W. Pickersgill (Bonavista-Twil-lingate):: May I ask the Minister of Justice how soon the government expects to be in a position to make the joint reference to the Supreme Court of Canada with respect to the Pepperrell air base at St. John's, which was agreed upon between the Prime Minister and the premier of Newfoundland some time ago, and I think it was actually announced in the house?


Hon. E. D. Fulton (Minister of Justice):: am not in a position to give a definite reply to that question. I had a meeting with counsel for the government of Newfoundland some two or three weeks ago at which the question of bringing it on as early as possible was explored. I would certainly hope that the terms of reference might be agreed upon in time for argument at the sitting of the court this fall.


John Whitney Pickersgill: May I ask the minister a supplementary question. Does he not appreciate that until some arrangement is made about this matter this very valuable property which ought to be in use is not in use?


Edmund Davie Fulton: I understand there have been discussions between my colleague the Minister of National Defence and the premier of Newfoundland with a view to finding some method of making it possible to use the property. I am not aware of what has been the outcome of those talks. I know there have been difficulties arising from time to time.


John Whitney Pickersgill: I wonder whether the Minister of National Defence has anything he can usefully say about this problem at this time.

Inquiries of the Ministry


Douglas Scott Harkness: Mr. Speaker, there was a joint board set up to operate the dock or the pier particularly, and that has now been in operation for a considerable number of months. There was another board set up to take over actual possession of the rest of the Pepperrell base from the United States, and I proposed to the premier of Newfoundland that if he wanted to make use of the hospital, which was the building in that complex of particular interest to the province of Newfoundland, there was no reason why this should not be done. I have not heard from him since in that connection.



TRANS-CANADA AIR LINES REQUEST FOR REPORT ON LABOUR DISPUTE

[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, may I ask the Minister of Labour whether he can give the house any up to date information on the progress of negotiations between Trans-Canada Air Lines and the Canadian air lines flight attendants association.


Hon. Michael Slarr (Minister of Labour):: The progress I can report on this dispute, Mr. Speaker, is that they are continuing their talks and we hope through that process we shall be able to arrive at an agreement.


Hazen Robert Argue: May I ask
a supplementary question of the Minister of Labour. Has the minister received a telegram from Mr. Robert Smeale, business manager of the C.A.L.F.A.A. in which he makes a further complaint of the continuing intimidation of employees by T.C.A.? How does the minister square this with the statement yesterday that there had been no further complaint on this question?


Michael Starr: No such telegram has yet been brought to my attention.


Hazen Robert Argue: It was supposed to be in your office.


Paul Joseph James Martin: A supplementary question. Can the Minister of Labour not say that perhaps the telegram in question has been sent, if not to the Minister of Labour, to the Prime Minister?


Michael Starr: I do not know where the hon. member gets all this misinformation.


Paul Joseph James Martin: Is the Minister of Labour not aware that all leaders of the parties, the Leader of the Opposition and the leader of the C.C.F., have received telegrams? It is unusual if the Minister of Labour or the Prime Minister has not received one.


Michael Starr: I am not aware of that.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. J. P. Deschaielels (Maisonneuve-Rose-monl):: Mr. Speaker, I should like to direct a question to the Minister of Labour. Will the minister say what plans for the extra winter works program have been decided on? If so, will he let us know what this program is?


Michael Starr: As soon as a winter works program has been decided on by the cabinet it will be made known.
(Translation):



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Marcel Bourbonnais (Vaudreuil-Sou-langes):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Could the minister state the reasons why he refused the offers that were submitted to him for the purchase of the Pointe des Cascades area along the Soulanges canal, which had been put on sale by his department?


Léon Balcer: Mr. Speaker, we have refused to sell the Pointe des Cascades areas to private enterprise for the following reason. The department of fish and game of the province of Quebec did not accept our original offer, and its representatives indicated that they would cancel all plans for the development of parks and a fish hatchery in the Soulanges canal area if we sold a single section of the 14 miles of land along the canal.
In view of that attitude on the part of the provincial government, we had no alternative but to reject the offers we had received.
(Text):



DOMINION-PROVINCIAL CONFERENCE INQUIRY AS TO MEETING TO AMEND CONSTITUTION

[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: May I ask the Minister of Justice whether he can bring the house up to date on the progress of the conference with the provinces on constitutional amendments?


Edmund Davie Fulton: Since the time of my last report to the house in answer to questions, I have been in communication wtih provincial attorneys general to have the meetings resumed in June or September. It was not possible to set a date

in June. A date has been set in September; if my recollection is correct, September 12.


Lester Bowles Pearson: May I ask the minister whether in the course of those constitutional discussions the question of Senate reform has been raised?


Edmund Davie Fulton: No, Mr. Speaker; that was not a matter which at that time it seemed appropriate for us to consider. Whether or not the situation in that regard has changed I will leave it to the hon. gentleman himself to speculate on.



INCOME TAX ACT

Donald Methuen Fleming: the third reading of Bill No. C-120, to amend the Income Tax Act. (Translation):


Mr. Gabriel Roberge (Megantic):: Mr. Speaker, when the committee considered this bill, and particularly when it considered clause 19, if the official opposition had not, through the hon. member for Laurier (Mr. Chevrier), raised the matter of grants to universities, the arrangement made with the province of Quebec in 1960 and represented in this house as a great victory over provincial autonomy would have lapsed without the members of this house being made aware of it, and particularly without hon. members on the government side knowing about it. Obviously this arrangement would also have expired without any notice being given to the government of the province of Quebec. (Text):
In other words, Mr. Speaker, the bilateral arrangement worked out in 1960 would have been terminated wisely but certainly not with dignity.
(Translation):
I should like at this time to recall briefly the background of this unilateral action on the part of the central government. First, may I call the attention of the house to the discussions that took place in committee on clause 19 last Monday.
In reply to a question raised by the hon. member for Laurier as to the reasons why the government had terminated this arrangement with the province, the Minister of Finance made this statement, as recorded on page 7813 of Hansard for July 10, 1961:


Donald Methuen Fleming: We were asked to leave out of this year's legislation, whether income tax legislation or federal-provincial fiscal legislation, any reference to the kind of arrangement that was made in 1960 and to provide for an alternative arrangement in respect of the university grants.


Mr. Chevrier:: May I ask the minister who asked the federal government to do this?


Donald Methuen Fleming: Premier Lesage.
90205-6-501i
Income Tax Act
This vague answer of the minister was not deemed satisfactory by the opposition, especially by the hon. member for Laurier who later in the same debate returned to the charge, as reported on page 7817 of Hansard of last Monday, by asking the following question:


Lionel Chevrier: Let me use the minister's own words. He was asked by the premier of the province of Quebec not to bring this matter into the scope of the new arrangements. I should like to ask the minister when this conversation took place. He has already said that it was during the course of the last federal-provincial conference in February. Could the minister be a little more specific and say whether it was at the opening, during the course of, or at the end of the conference?
This is what the Minister of Finance replied:


Donald Methuen Fleming: It was not during the course of the conference proper. It was a discussion held outside the conference.


Lionel Chevrier: Was there anyone present?


Donald Methuen Fleming: No, not at that time.


Lionel Chevrier: Could the minister say whether it was on the first or second day of the conference?


Donald Methuen Fleming: I can locate it by saying to the hon. member that it was during the evening of the governor general's dinner.
Everybody in this house was under the impression at first that this matter had been discussed in plenary session during the talks and meetings that were held here in Ottawa between representatives of the federal and provincial governments.
Now, following the questions asked by the hon. member for Laurier, the minister told us that it was just an intimate conversation which took place during or after a dinner given by His Excellency the Governor General. That is not all, Mr. Speaker. We learned yesterday that the version which the Minister of Finance gave to the house is not true to the facts. His statement was most emphatically contradicted by the other interested party, the premier of the province of Quebec. Indeed, here is what he said in that connection:
I read in the newspapers, this morning, a Canadian Press report on a debate which occurred in the House of Commons yesterday concerning federal grants to universities.
It is reported in that dispatch that the Minister of Finance (Mr. Fleming) stated that I have asked him to leave out of the legislation "any reference" to the agreement signed in that regard, in 1960, with the Quebec provincial government.
I must say I have never made such a request to Mr. Fleming. There has been no communication between the Minister of Finance and myself, either orally or by letter.
The subject was discussed briefly in the course of a friendly and private conversation during a dinner given by His Excellency the Governor General, in February. We discussed together the proposals I made as early as in July 1960 concerning the federal government's gradual withdrawal

Income Tax Act
from the joint programs and the progressive return to the provinces of their taxation rights so that the latter may fully meet their obligations in that respect.
From one thing to the other, we got to speak about Bill C-56 which has become chapter 13 of the 1960 federal statutes. I have never asked or even suggested the abolition of the 1 per cent abatement granted corporations in the provinces which handle university grants themselves.
I just reiterated to Mr. Fleming some criticism I had, in any case, publicly voiced before, against one provision in Bill C-56. I am thinking of the clause allowing the federal government to deduct from equalization payments the surplus revenue which the additional taxation of 1 per cent yields to a province-which is the surplus amount received from the federal government by the universities under the federal act. I added that we should try to find something better to fully safeguard provincial autonomy. As far as I remember, the conversation on the subject did not go any further.
I repeat that I have not since received any communication from Mr. Fleming or from the Prime Minister and that I myself did not get in touch with the federal government or with any of its ministers or officials.
Needless to say that I was greatly surprised this morning at reading this item announcing onesided action by the federal government. There is certainly a misunderstanding somewhere. I fully trust that the federal government will be ready to start negotiations with us to settle the matter, said Mr. Lesage.
Mr. Speaker, this is not the first time during the last weeks that statements by the Minister of Finance have been denied. It would be useless to quote other instances of such incidents which are familiar to all. But this new incident is of very great significance and extremely serious, because it endangers good relations between the central government and the provincial governments, those relations being essential to the good operation of our administrative system.
(Text):


Mr. Speaker:: Order. I remind the hon. member that the debate is on third reading of the bill, and that discussion should be relevant to the bill as it has been reported from committee and not to extraneous matters which are not covered in the bill. I am not sure to what section of the bill this question of university grants relates, but it seems to me that the course the hon. member is following just now goes beyond the subject matter of the bill.


Gabriel Roberge: I say to you with great deference, Mr. Speaker, that my remarks are related to clause 19 of the bill as reported from the committee and as now before us for third reading. If I may be allowed to go ahead I have only a few more sentences. (Translation):
I should like to recall once more, Mr. Speaker, that last year a great number of

Quebec members supporting the government, including the Minister of Transport (Mr. Balcer), the Associate Minister of National Defence (Mr. Sevigny) and the present Secretary of State (Mr. Dorion), rose in the house to praise the Minister of Finance and to commend him for having at last found a formula which, in their opinion, was a satisfactory solution to the problem. I trust that, in the course of this debate on third reading, we will hear these ministers criticizing now the Minister of Finance for the inaccurate report he made last Monday of his private talks with the Quebec premier and for the unilateral action he has taken.
I trust also that the minister himself will inform us before long of his intentions in that matter and that he will tell us what new formula he expects to propose to the province of Quebec as far as university assistance is concerned.
(Text):


Mr. M. J. A. Lambert (Parliamentary Secretary to the Minister of National Revenue):: Mr. Speaker, I rise to point out that what has been alleged to have been said by Mr. Lesage was taken from press reports. Leaving aside the possibility of inaccuracy or error arising from condensation of his remarks, it should be pointed out that the Minister of Finance during the course of the debate indicated that he had informal discussions or conversations with Mr. Lesage in this regard. Mr. Lesage admits that such conversations took place, although he does not place upon them the interpretation placed by the minister.
I remind hon. members that while no one can comment on what transpired at the in camera sessions, Mr. Lesage outside the in camera meetings did publicly discuss in complete and full detail the various features of the government's proposal. In fact one might say he dotted the i's and crossed the t's. I believe I am correct in saying that at no time did Mr. Lesage refer to the question of university grants within the framework of the government's proposal. If following that he was dissatisfied that this was not discussed within the framework of federal-provincial relations, if he felt it should have been in the government's proposal, or if he did not feel in accord with what was said by the Minister of Finance, certainly one might have expected some comment from him either at that time or since.
It is clear that this legislation will continue in force until March 31, 1962. There has been no indication on the part of the government that any other course would be followed. The Minister of Finance indicated his willingness to meet with authorities of the province of

Quebec to discuss this matter and make mutually suitable arrangements. The position of the minister has not changed since he made that statement. From the events that have transpired it is clear that there must have been some understanding that the matter was not to be discussed at the time of the conference.


Some hon. Members:: Oh, oh.


Marcel Joseph Aimé Lambert: Hon. members who now protest that statement were not present at the conference. Certainly there was no comment indicating a possible change. It is clear that there is no difficulty concerning the effecting of a satisfactory arrangement between the federal government and the province of Quebec or between the federal government and any other province that wishes to adopt this course between the present time and the time at which the present arrangement concludes in March of 1962.


Gabriel Roberge: Mr. Speaker, I rise in an effort to clarify my position. In his opening remarks the hon. member for Edmonton West said that the statements attributed to Mr. Lesage were drawn from newspaper clippings. I hasten to indicate that what I have cited from the remarks of Mr. Lesage was taken from yesterday's press. Everything I cited appeared in quotation marks, and the words were attributed to the premier of Quebec.
(Translation):


Mr. Mariial Asselin (Charlevoix):: Mr. Speaker, I listened with great respect and attention to the statement of the member for Megantic (Mr. Roberge) concerning an alleged difference between the statement made yesterday by the Minister of Finance (Mr. Fleming) and the answer which the premier of Quebec saw fit to give the press.
I am under the impression, Mr. Speaker, that the premier of Quebec somewhat misunderstood the statement made yesterday by the Minister of Finance concerning agreements between the federal and provincial governments on the matter of grants to universities. In my opinion, it has been clearly established in the house thanks to the action of the Conservative members from Quebec when Bill C-56 was under consideration last year that educational problems as well as the matter of grants to universities are an exclusive provincial prerogative.
The statement of the Minister of Finance yesterday did not go against the principle established last year, as a matter of fact the minister did not say that the government
Income Tax Act
was now prepared, before the agreements expire in 1962 to propose to the government of the province of Quebec another formula regarding university grants.
If we correctly understand the meaning of his words, we can see that the Minister of Finance clearly expressed in my opinion that the principle which has been recognized under Bill C-56, will be kept in force until 1962. So this arrangement in Bill C-56 shall remain in force for the province of Quebec until 1962, but the minister also indicated that should the province of Quebec be willing to discuss another form of arrangement after 1962, this government would be prepared to open discussions with the premier of Quebec.
I feel there has been a storm in a teapot over the statement made by the Minister of Finance, as well as the reply of the Quebec premier. An attempt has been made to muddle things up in order to gain political advantages.
I do not wish to express here the Quebec point of view, but I might say that, as long as the agreement under Bill No. C-56 is in existence, until 1962, we, on this side of the house, who represent the province of Quebec, will fight with the utmost energy to safeguard the principle that education should be the exclusive responsibility of the provinces, and that grants to universities be administered by the provinces, as provided under that arrangement.
And I am convinced that the Conservative party which achieved that compromise now helping Quebec universities, will manage, in the light of the discussions held, and whatever party may be in power in Quebec, to uphold that principle and recognize the claims of the province of Quebec.
(Text):


Donald Methuen Fleming: Mr. Speaker, although I am the mover of this motion I have not spoken in this debate. I should like to say a word by way of clarification of the matter raised by the hon. member for Megantic.


Mr. Speaker:: Has the minister leave to take the floor?


John Whitney Pickersgill: Mr. Speaker, perhaps the hon. gentleman, as he did the other day, could speak to a question of privilege. I am sure there would be no objection from this side of the house if the hon. gentleman wished to do that.


Mr. Speaker:: I am not sure that I am prepared to put that proposition to the house. Perhaps the house would give the minister leave to deal with the only point that has been raised in this debate.

Income Tax Act


John Whitney Pickersgill: Mr. Speaker, the hon. gentleman would have had the right to intervene at the time the hon. member for Megan-tic resumed his seat, but he did not avail himself of that opportunity. I speak only for myself when I say I would not wish to deny the minister that opportunity now provided he dealt only with the point raised by the hon. member for Megantic, and did not introduce extraneous matters. I am sure my colleagues would consent to having the minister do that.


Some hon. Members:: Agreed.


Donald Methuen Fleming: I thank the house, Mr. Speaker. I simply wish to say something
by way of clarification of the matter raised by the hon. member for Megantic, which arises out of a statement I made in the debate in committee on July 10 and which has been commented upon by Premier Lesage of Quebec in a statement given to the press yesterday.
Mr. Speaker, it occurred in the discussion which you will find commencing at page 7813 of Hansard and principally at page 7817. It was concerning one clause of this bill, namely clause 19 relating to deduction from corporation tax in the case of corporate taxpayers in any province that is a prescribed province under the 1960 amendment. The position is this. I did not wish to give the committee the impression that I had discussed this particular bill with Premier Lesage. I did not wish to do that at all. What I indicated to the committee and sought to make very clear when the matter was raised a second time, as found at page 7817 of Hansard, was that the subject of the university grants and the special provision that had been introduced into the Federal-Provincial Tax-Sharing Arrangements Act in 1960, in the case of any province which desired to become a prescribed province because its universities were not accepting these federal university grants, had not been introduced into the discussions at the conference; I refer to the dominion-provincial conference. My reference to my conversation with Premier Lesage, as I said in reply to a question by the hon. member for Laurier, was that this was a conversation that occurred outside the conference. I simply asked the premier whether he wished this subject to be introduced into the scope of the discussions in the conference. He indicated that it was not his wish. Clause 19 of the bill is consequential in nature simply by reason of the fact that the 1960 amendments to the Federal-Provincial Tax-Sharing Arrangements Act which dealt with this subject were given only a two-year life. They conclude under the 1960 enactment with the conclusion of the

five-year period under the Federal-Provincial Tax-Sharing Arrangements Act, namely March 31, 1962.
Before that date arrives there must of course be discussions in relation to how this problem is to be met in the future. That consideration was clearly in Premier Lesage's mind and it was clearly in my mind in what I said to the house on July 10. As found at page 7817 of Hansard, the first column, I stated as follows:
This matter as to what happens in regard to university grants will have to be a subject of further discussions between now and the end of this present fiscal year.
Again, as found at page 7818 of Hansard, at the top of the page, I stated:
I make it quite clear that we are not terminating anything. The hon. member-
That is the hon. member for Laurier.
-talks about our terminating something. We are not terminating anything. We take account of the fact that the legislation which was passed by parliament last year was given by parliament a two-year life. It will expire at the end of the present fiscal year. And all that we are doing here, pending the making of some new arrangement, is to make some provision for what happens at the expiry of that two-year term. It expires with the legislation that parliament enacted in 1960. I am not attempting for one minute, Mr. Chairman, to prejudge what may be done in relation to this problem as from April 1, 1962.
I make it quite clear, Mr. Speaker, that I think there is no occasion for misunderstanding on this matter. Certainly I did not wish, by anything I have said, to give rise to any misunderstanding in relation to either Premier Lesage's position or future discussions that may occur. This matter will certainly have to be discussed. At the present time the province of Quebec is a prescribed province under the 1960 legislation. Its federal corporate taxpayers received an additional 1 per cent abatement in 1960 and the province is continuing in the position, by its own decision, as a prescribed province also this year. Accordingly the federal corporate taxpayers in this province will receive the benefit of that additional 1 per cent abatement on corporation tax in 1961 as well.
As to what happens beginning with next year, that will have to be a matter for discussion. We shall be pleased, of course, to take this matter up with Premier Lesage and discuss it with him at any time that meets with his wish.


John Whitney Pickersgill: Mr. Speaker, the minister gave several citations from what he told us in the committee stage in the house, but he refrained from giving one which I now intend to put on the record. It is found at page 7813 of

Hansard, half way down, the first column, where the minister is reported to have stated as follows:
We were asked to leave out of this year's legislation, whether income tax legislation or federal-provincial fiscal legislation, any reference to the kind of arrangement that was made in 1960 and to provide for an alternative arrangement in respect of the university grants.


Lionel Chevrier: May I ask the minister who asked the federal government to do this?


Donald Methuen Fleming: Premier Lesage.
My hon. friend from Megantic has read a statement by Mr. Lesage, who said he did not make that request. Those two statements are in direct contradiction of one another, and no discussion about what may happen in 1962 or any other aspect of the matter will alter that flat contradiction.


Mr. Speaker:: Is the house ready for the question?
Motion agreed to and bill read the third time and passed.



DOMINION-PROVINCIAL RELATIONS AGREEMENTS RESPECTING TAX COLLECTION, ANNUAL GRANTS, ETC.

[Stage Direction]
The house resumed, from Tuesday, July 11, consideration in committee of the following resolution-Mr.	Fleming	(Eglinton)-Mr. Flynn in the chair:
Resolved that it is expedient to introduce a measure to authorize tax collection agreements with the governments of the provinces and to provide that the minister may pay to a province, out of the consolidated revenue fund, in respect of any fiscal year in the period commencing on the 1st day of April, 1962 and ending on the 31st day of March, 1967,
(a)	a tax equalization payment;
(b)	a provincial revenue stabilization payment;
(c)	additional annual grants of ten and a half million dollars to each of the provinces of Nova Scotia, New Brunswick and Newfoundland, and of three and a half million dollars to the province of Prince Edward Island;
(d)	a further additional annual grant of eight million dollars to the province of Newfoundland;
(e)	where a province does not levy a succession duty, an amount equal to the standard estate tax applicable to the province for the fiscal year; and
(f)	advance payments on account of amounts collected under a tax collection agreement that may be entered into with the province.
Lester Bowles Pearson: In speaking last evening to this resolution, Mr. Chairman, which deals with new tax sharing arrangements with the provinces, the minister had this to say, as found at page 7910 of Hansard:
It-
That is the new arrangement.
-has materially increased the return to the provinces from the existing tax sharing arrangements-
Then he also stated:
Although it has greatly improved the financial substance of the present arrangements, this government has recognized the weaknesses of the tax
Dominion-Provincial Relations
rental system which it inherited, both from the provincial and federal standpoint, and has become increasingly convinced of the need for a new approach which would give greater freedom and responsibility to the provincial governments, and which would be compatible with the constitution.
The minister then proceeded to show how greatly the provinces would benefit under these new arrangements. We do not propose to discuss the resolution at great length, Mr. Chairman. As I said last night, we will reserve our detailed consideration of this matter for the bill itself. However, if this new arrangement was so advantageous to the provinces as the minister indicates it was, it is very strange that the provinces, or at least most of them, should have been so ungrateful in their reception of it and so lacking in appreciation for this new deal. When these new arrangements were announced the premier of British Columbia expressed great disappointment that British Columbia would get no equalization grants, and he found other things to criticize in the arrangement. On February 27 the premier of Alberta told the Alberta legislature that the provinces of Canada were given "no option" at a federal-provincial fiscal conference in Ottawa on the Thursday and Friday before. He went on to say:
-the federal government left no door open for the provinces to choose between the new taxation program outlined them and the tax rental agreements presently in force.
Then he indicated his disappointment with these arrangements. That is two provinces. Then we come to Saskatchewan, where the provincial treasurer said on February 28 that the dominion-provincial tax sharing arrangements proposed by the federal government would not benefit Saskatchewan or its local governments. He then told the Saskatchewan legislature:
-the proposals would merely "freeze us to the level of payments we would have received under the present arrangements."
He went on to say this, according to the Canadian Press report:
Abandonment of the tax rental system means there can be no leadership expected from the federal government in preventing a return to the "tax jungle of the 1930's".
That is something I mentioned last night. Then Mr. Lloyd had this to say:
More important, it means the federal government will have lost the last vestige of control over the use of income taxation as a means for combating unemployment and stimulating economic growth.
So Saskatchewan was bitterly disappointed over these arrangements. Now we come to Manitoba, where the premier, according to a report in the Winnipeg Free Press, said this-


Donald Methuen Fleming: What date?

Dominion-Provincial Relations


Lester Bowles Pearson: The date is April 8 and these words appear in an article by John Dafoe:
The new federal-provincial tax agreements which go into effect in 1962 won't likely produce any extra revenue for Manitoba until the 1964-65 fiscal year, Premier Duff Roblin told the legislature Friday.
The premier went on to say there were some good features in the agreement of which he approved. I do not wish to give a one-sided impression of his reaction. He also went on to say, and apparently this is the best Mr. Roblin could say:
"On the whole", Mr. Roblin said, "the new plan does Manitoba no harm at present and, in the latter years of the agreement it is likely to do some good through moderately increasing provincial revenues. It is, nevertheless, disappointing that the province is to receive no immediate increase in the new proposals as compared to the old agreements".
He also said this:
-"the lowering of the equalization level from the average of the top two provinces to the Canadian average would, by itself, seriously impair Manitoba's position".
Now we come to Ontario. As the richest province Ontario comes out of these arrangements better than any other province, but according to Premier Frost the arrangements fell-
-"far, far short" of the annual $150 million of additional revenue he had sought to negotiate in the two days of talks with Prime Minister Diefen-baker and Finance Minister Fleming.
Then he added:
"Additional taxes are our only possible alternative"-
We know what that meant; a sales tax. So the premier of the province that did the best out of these arrangements was singularly modest in his expressions of appreciation. So far as the premier of Quebec is concerned the Canadian Press story had this to say on February 24:
Premier Jean Lesage's first reaction to the news that his province would receive not a cent more from the arrangement was one of naked anger.
I think we can leave that reaction there. Then we get to the Atlantic provinces. Of course the reaction in three of the four Atlantic provinces was much more favourable. In New Brunswick the premier said the new taxation proposals "would do lasting harm" to his province. The premier of Nova Scotia -I wish to quote all the reactions, favourable and unfavourable-was more satisfied with the arrangements and expressed that satisfaction in measured terms. The premier of Prince Edward Island was satisfied. The premier of Newfoundland was pleased with the inclusion in the arrangement of the $8 million grant for five years in lieu of the constitutional grant flowing from act of union

under term 29. This is satisfactory, of course, as far as it goes, but it does not meet the point that this grant to Newfoundland was guaranteed by the act of union and should not depend on action by this parliament. However, there it is for five years, and I am sure the government and the people of Newfoundland will be very glad to receive it.
Mr. Chairman, this shows that in general the provincial reaction to the new tax sharing arrangements was not the kind one might have expected if in fact these proposals will do as much for the provinces as the minister indicated last night. To illustrate this the minister put some interesting tables on the record. As I said, we will in due course submit our own tables. There is one table to which I wish to refer particularly. That is table 3, which is headed:
Hypothetical illustration of provincial revenues for the year 1962-63 under new formula assuming-
This is the assumption that is made. I hope it is a more accurate assumption than others which have been made in this field by the minister:
-assuming rate of growth of 5 per cent per annum in tax yields and no change in the 1961-62 percentage distribution by provinces of tax yields or population.
I ask the minister now if he will also submit and put on the record a projection of this table for the four years after 1961-62. If these figures can be collected and made public for the one year, surely it is possible to do this for the subsequent four years of the agreement. We would certainly like to have that information, because without it the whole story is not told.
Our main quarrel with these new tax sharing arrangements and this new formula is the weakening of the principle and the application, of the principle of equalization. In this connection let me quote what the Prime Minister said on July 25, 1960 in words which surely constituted a formal pledge to the premiers of the provinces. The Prime Minister said this:
I want to make this abundantly clear on behalf of the dominion government that whatever the ultimate decision may be, the principle of equalization must be preserved.
No doubt the minister will tell us the principle is being preserved. But at that time the Prime Minister went on to explain what he meant by the principle and what he understood to be the application of the principle, which is even more important, when he defined equalization in these words:
-a payment by Canada to the provinces to bring the per capita return from the three taxes at standard rates up to the average per capita yield in the two provinces in which per capita yield is

highest. For provinces in which the tax potential is relatively low, this principle is most important.
By "principle" he meant bringing up the per capita yield in the other provinces to that of the two highest provinces, not the national average. This is a formal, specific, definite pledge and that pledge is abandoned for something else, Mr. Chairman, in these new arrangements.
This new formula has been put forward by the government in a form which I think could very easily deceive and which, indeed, has already deceived the layman, the nonexpert in this field. It appears to increase gradually the provincial share of personal income tax without, as the minister claimed last night, unduly weakening equalization. We claim that this impression is altogether unjustified. When we look at the new formula itself without the guarantees and the grants and the arrangements which were substantially attached to it, we find that only one province can benefit, and that is the richest province of all, and that all the other provinces will be worse off for the first few years during which the arrangements will apply, though that situation in some cases changes during the latter part of the agreement.
While the so-called new formula, then, would give $18 million more, I believe, to Ontario in the year 1962-63, all the other provinces would lose in that year as compared with the present arrangements in spite of the higher rates on personal income tax, through the lower equalization basis, because the basis of the two top provinces has been abandoned for the national average. Even though a new factor has been added, a new growth factor, nevertheless the receipts by the other provinces would be lower because of that fact.
Therefore what has been presented by the government as a new general formula is, at best, a formula which in the early stages would benefit the richest province only. Since the so-called general formula was clearly not applicable to all the other provinces, a lot of patchwork had to be done until we have these special arrangements, these special deals, if I may use that expression, designed to remove some of the original inequities.
There is a special grant, of course, to the Atlantic provinces. The existing grants are, I believe, increased by $10 million a year. But the Atlantic provinces will receive only $5it million more in 1962 and 1963 than they would receive if the present arrangements were continued, because of the application of the equalization formula. Of the additional $10 million which is provided, $4.5 million 90205-6-502
Dominion-Provincial Relations will be needed to fill the gap between the present arrangements and the new formula. It is only after four years that the Atlantic provinces will benefit fully from the additional $10 million, that is in 1965-66.
Then another arrangement is offered to Quebec, Manitoba and Saskatchewan, three provinces which will be below the national average for equalization purposes. That arrangement is a guarantee that during the next five years those provinces will not receive less than if the present arrangement had merely been extended. Under such a provision I admit that those three provinces will not be worse off. Quebec and Manitoba will begin to benefit slightly under the new formula in the last year of the new arrangements, that is in 1966-67. But Saskatchewan will never benefit during this period. These three provinces, therefore, will continue to live under the conditions of the existing arrangements during the next five years. For all practical purposes they will gain nothing; therefore their disappointment is easily understood.
Then, of course, a fourth arrangement is offered to Alberta and British Columbia, two provinces which would be above the national average. These two provinces do not receive less during the next five years than they got on the average during the last two years of the existing arrangement, that is in 1960-61 and 1961-62, as compared with the extension of the existing arrangements. However, as compared with an extension of the existing arrangements, Alberta will always be worse off under the new system. My calculation shows that Alberta will lose about $20 million in the next five years under the arrangement now contemplated. British Columbia will lose in the first two years and gain during the last three years. In the aggregate, if my calculations are correct, British Columbia will gain about $7 million during the next five years.
It is our contention that this new formula, these new tax sharing arrangements, weaken the principle of equilization; that they create rather than remove regional inequities as compared with the existing arrangements, and that these inequities will result from the lowering of the equilization base. Some of the provinces will be hurt. The per capita revenue in 1966-67, when the new system will yield its maximum benefits as compared to the present system, will be lower in Alberta, about the same in Quebec, Saskatchewan and Manitoba, and higher in the other provinces.
It must be observed also, and this is certainly important, that all the provinces in Canada under these arrangements will lose in relation to the richest province, the province of Ontario. Surely it is not a good thing for national unity, for one federal system and for national development to neglect to act

Dominion-Provincial Relations in a way which will bring the less rich provinces into alignment, as tar as that can be done by federal help, with the richer provinces.
These are the reasons why we disapprove of some of the aspects, and some of the important aspects, of this new program, and why we cannot go along with the minister in his extravagant praise of this new deal brought about after four years of conferences with the provinces; brought about, the hon. gentleman said last night, in a way which would cause great satisfaction in all the provinces which would benefit by it, but which seems to have been received in most of the provinces with disappointment and only in one or two with satisfaction.


Mr. Regier:: It is the opinion of this group that this is by far the most important legislation which we have had before us since the house opened last November, because this has to do with the development or otherwise of the Canadian people as a nation.
As you know, Mr. Chairman, I represent a constituency in the province of British Columbia. I admit at once that I believe that in the long run, if we were to regain our original rights, or if our original right to levy our own levels of personal and corporation income tax were to be returned to us, British Columbia would be much better off than if the agreements were to be continued. However, I should like to think I was a Canadian before I was a British Columbian, and I believe most British Columbians would accept the responsibility of being Canadians ahead of any feeling they might have for their own welfare within the province.
We know that on a per capita basis we are one of the wealthiest and fastest growing provinces in Canada. We believe that the legislation forecast in this resolution is contrary to the intent of the fathers of confederation, who worked so hard and overcame so many difficulties to achieve the necessary teamwork and co-operation among the then existing colonies to lay the beginnings of one nation that was intended to extend from the Atlantic to the Pacific. We believe that in these proposals the government are not now supplying the leadership that is essential to the growth of Canadian nationhood. We believe they are supplying leadership in the wrong direction, and that this will hurt what we like to think is at least a developing nationhood.
We do not believe in centralization; we believe in the federal system of government. However, we now have responsibilities on all levels of government that were not even contemplated when Canada was first formed in 1867. I am sure if the fathers of confederation had been able to foresee the needs
of the Canadian people in 1961 they would have made many arrangements other than those that were arrived at. I am sure that were they here today they would not applaud the spirit that is behind the resolution now before us.
We do not want centralization. We need to continue, for very valid reasons, our federal concept of government. However, this ought not to prevent growing co-operation among all levels of government. This abrogation of the spirit of dominion-provincial tax sharing, this abrogation of the spirit of that legislation which we have had on our books now for so long, is not likely to lead to closer co-operation. It is more than likely to lead to greater divergencies, to greater discrepancy, to greater bitterness not only among various levels of government but also among various areas of Canada in their relationship one to another.
We realize that the path to harmony under our system of government is strewn with many obstacles indeed, that the difficulties are great; but we have confidence. We believe we have more confidence than the government of our day in the basic good intention and feeling of patriotism that exist in the hearts of all Canadian people from coast to coast. We feel that this legislation of desperation, as I would call it, is not crediting the Canadian people with the basic qualities that we believe they have. We contend that had there been a real will a way might have been found to resolve this problem in an altogether different manner from that that is now being proposed.
I know the minister is predicting all kinds of safeguards in the legislation to come before us so there shall be no undue hardship imposed on any of the provinces, but in essence what this government are proposing is that they are intending to desert a system whereby national agreement was reached and provinces were entitled to things as Canadians. That is to be replaced by what in effect is everybody for himself, and we shall in effect give hand-outs to our poorer relatives in other parts of Canada. I do not think the poorer provinces of Canada will take kindly to this new atmosphere that is to be created.
The people of Nova Scotia have rights as Canadians, and they do not want to feel that they are dependent upon the big-hearted Minister of Finance in Ottawa who may arbitrarily, in the years to come, have unto himself the right to determine the fate of the people of Nova Scotia, and be able to determine how much money we will be prepared to let the people of Nova Scotia have out of the national treasury.

We not only believe that this is a turning back of the clock with respect to the development of Canadian nationhood, but we also regret that this represents in essence a new low in our dealings with the provincial governments. We used to have the courtesy at least of sending them telegrams. The minister was severely criticized at the time he began to substitute the sending of telegrams to the heads of provincial governments for consultation. As the hon. member for Bona-vista-Twillingate so rightly corrected me the other day, in effect in the atmosphere that now prevails the policy is "take it or else" and this has been made very plain. I was pleased to hear the leader of the official opposition say that at least the head of one government has complained that they have been left with no option, no open door. As I understand the language of no open door, this means that the federal government has decided in fact that there shall be no consultation any more to see whether agreements mutually satisfactory might not be arrived at. Now the provinces are told "take it or else".
In many respects it has to be "or else". If the provinces want to take advantage of federal collection machinery they will have to conform to very stringent and almost impossible conditions. I can tell the minister right now that if he insists on those conditions the province of British Columbia will have to collect its own income tax. It is absolutely unrealistic to expect a province that is as wealthy in natural resources, especially in the basic industries, to comply willingly with those terms. I am convinced that in its own interests the government of British Columbia will have to establish its own collection machinery. We in that part of Canada at least now know that we shall have a double system of income tax and in effect a return to the tax jungle of the hungry 1930's.
We believe the Minister of Finance of the province of Saskatchewan really hit at the essence of this policy when he said that the federal government is now proposing to abdicate its ability to combat recession and unemployment. What is going to happen? If the federal government decides that in order to stimulate the economy of our country a 5 per cent reduction in income tax is reasonable and desirable, the minister knows very well what the hard pressed provincial governments will immediately do. If the federal government for national purposes deems it advisable to reduce income tax levels by 5 per cent, each of the provincial governments will immediately absorb that 5 per cent and the intent of the federal government for national purposes will immediately have been vetoed. Vice versa, if 90205-6-5024
Dominion-Provincial Relations the federal government feels at some time that it needs to increase the levels of income tax there will be a great desire on the part of politicians on the provincial level to make good fellows of themselves, especially if they are politically opposed to the government at Ottawa. Their inclination will be to reduce the income tax by as much as the federal government raises it, so they will be able to go out on the hustings and say to the voters "Look what evil people the members of the federal government are; they have raised your income tax, but we good politicians, friends of the people, have lowered the income tax".
This will not lead to harmony. It will lead to disharmony. It will lead to one level of government being played off against another level of government. It will lead to the introduction of political aspects into this whole field, and the federal government will find that it has tied its hands with regard to its ability to accept responsibility for the national economic welfare.
The federal government will find that it has in effect deserted its responsibility with respect to the particular needs of hard hit regions of Canada. The federal government should realize that it is now proposing to desert the desire of all Canadians that there should be basic national minimum standards in the fields of health, education, welfare and highways, and that there should be teamwork in the matter of forest fires and so on.
I express the opinion that our nation is already far too deeply involved in the field of co-operation, in the field of the sharing of responsibilities between the two levels of government, for the federal government to attempt at this late date to turn back the tide. I should like to read one sentence from a book entitled "Law and Policy" by J. A. Corry, vice-principal of Queen's University and acting dean of the faculty of law. On page 62 he has this to say:
Federal spending now supports so much of the established political, social and economic structure that there is genuine reluctance to take steps that might wipe it out.
The book was published in 1959, and the passage I have read is taken from a lecture delivered by Professor Corry in 1957. I am sure that as recently as 1957 no leading thinker in our nation ever expected that the day would arrive when we would have in office a federal government that would attempt to push back the tide, that would attempt to turn back the clock; and I would say that the efforts of the government in this respect are going to fail because the Canadian people will not be prepared to accept this scheme.
7952	HOUSE OF
Dominion-Provincial Relations
We have co-operation now between the federal government and the provinces in the field of combating forest fires, in the field of professional education, in the field of university education, in the field of highway construction, in the field of building forest access roads and roads to resources, and in the field of public welfare to ensure basic minimum standards for all Canadians. Every Canadian gets an old age pension of $55 a month no matter where he lives in Canada. Some Canadians receive more. They receive an additional payment from their local government, but every Canadian as a Canadian receives his $55 a month.
We have had for a long time the greatest of co-operation in the field of health and in our attempts to establish basic health services for all Canadians regardless of the province in which they live. The federal government is going to find it very difficult, if not completely impossible, to implement its apparent tendency to hand back to the provinces, as the government says, all the responsibilities and the revenues that constitutionally belong to the provinces. In the book "Law and Policy" some doubts are expressed as to the constitutionality of many of our existing activities where co-operation and the sharing of responsibilities with the provincial governments are involved. However, no leading Canadian has ever dared to test these things before the courts, and Mr. Corry comes to the conclusion that it is a good thing that the designation of particular responsibilities has been absorbed by the political field in Canada and that interpretations and rulings by the judiciary in this regard have been avoided. He feels that it is in the interests of a developing nation that this has occurred. He is rather pleased that political techniques have been employed to overcome at least a number of our major problems in this respect.
We cannot make uniform national progress in Canada if the intentions of the government are going to be pursued. We will find British Columbia becoming richer and Nova Scotia becoming poorer. This is inevitable. This measure will not supply employment to the unemployed miners of Cape Breton. It will not help northern New Brunswick to raise its living standards. It will make the people of Ontario wealthier than they are today, and possibly inadvertently and unintentionally it will result in the spread between the haves and the have-nots in Canada continuing to grow. We believe that the spread between the rich and the poor in the various regions of Canada in which they live should be narrowed. We understand that possibly not in our lifetime will all Canadians enjoy equal rights in all parts of Canada. However,


that certainly ought to be our objective; and the activities of this government in the matter of dominion-provincial tax sharing lead us in this group to believe that the government is leading us on to very dangerous paths indeed that will sow the seeds of disunity in Canada and will set Canadians against Canadians.
There is no appeal here to Canadians to come to the conference table and resolve their problems as Canadians. This is an appeal to Canadians to stay at home and ignore the welfare of other Canadians, who will have to make do; but in case they are in very dire need they will have the right to come to Ottawa and out of the goodness of our hearts we will then decide what kind of a hand-out we will give them to help them with their particular problems.
I cannot help but recall the underlying election appeal that our Prime Minister put forward so successfully in 1958. He really took hold of what he felt was a growing Canadianism, an awareness of Canadians as Canadians, and he capitalized on it very successfully on the hustings. I do not hold this against him. I suppose every politician likes to take the innermost feelings of the people and use them in order to commend his own election platform and program. I see nothing unworthy about that. However, I fail to understand how one great Canadian Conservative Prime Minister, Sir John A. Macdonald, could lead the first major move to weld the colonies into one Canada and another Conservative Prime Minister, who I am sure wants to be an equally great Canadian Prime Minister and who won election on the basic appeal to Canadianism, can now, instead of the co-operation we heard so much about, say to our provinces "Take it or leave it".
The government say, "We will give some guarantees to those of you who might otherwise have to suffer unduly, and if you run into serious difficulties we may, out of the kindness of our heart, decide to give you a hand-out." I am sure the founders of this nation meant that a Canadian would be a Canadian from the Atlantic to the Pacific. I deem it to be the responsibility of this gov-erment to ensure that a boy or a girl in Cape Breton will have the same educational and employment opportunities as a boy or girl in wealthy Ontario or wealthy British Columbia.
This government is steering this country in a direction that it was not intended it should go by those who founded our Canadian nation. If the Prime Minister warns of an election platform upon which he may be willing to appeal to the people, I can tell him that if he goes to the people now Mr. Coyne will have

been forgotten after the first week of the election campaign and this will be the big issue. I am sure we will win out on it.


Paul Joseph James Martin: There are some aspects of this problem upon which I should like to say something, particularly in so far as they concern the province from which I come, the province of Ontario. However, before dealing with those aspects of the problem I should like to say it is regrettable that a matter of this great importance is presented to us by the Minister of Finance just a few days before we are apparently going to adjourn this session of parliament. It is true that the bill based on this resolution is not going to be proceeded with at this part of the session. Nevertheless the resolution having to do with this matter, and of course the related bill, are of such importance that one can legitimately complain about the fact that we are dealing with this measure at this particular juncture.
As a matter of fact, when one thinks of the important legislative measures with which we have dealt in the last three weeks, one can only conclude that we have had a further demonstration of the inept way in which the affairs of this house have been directed by this government.


Mr. Churchill:: May I ask the hon. gentleman a question?


Paul Joseph James Martin: I am not directing my remarks at the Minister of Veterans Affairs when I say that. I am saying we have had important legislation dumped on us like an avalanche during the last three weeks, and this has demonstrated the ineffective way in which our affairs have been directed by this government. Much of this legislation could have been presented earlier in the session, when we could have had an opportunity of giving it careful consideration.


Mr. Browne (Vancouver-Kingsway):: If we
had not been delayed by the Liberals.


Mr. Marlin (Essex Easl):: I am not going to be thwarted by these remarks about being delayed.


Mr. Spencer:: It is a fact, though.


Murdo William Martin: My hon. friend from Essex West now says something in support of what has been said. I may tell my hon. friends that if they want to interject these remarks, they do not divert me in any way. The fact is that we did not have any legislation of a serious nature presented to us up until the dying days of this session, and particularly in the last few weeks. This is a reflection upon the ability of the government to organize its affairs and organize the affairs of this house. Now, that is a
Dominion-Provincial Relations fact. We find that included in these important measures is the particular measure which we are discussing at this moment.
The Minister of Finance presented a number of tables, I think no less than seven, in the dying hours of last night's sitting. These tables defy the kind of analysis which we are entitled to have of this problem. We will be able, I take it, in the interval before we come back to make the kind of assessment with regard to those tables that will have a very important bearing upon the contention the minister has made, that the recent federal-provincial fiscal arrangements have been widely received by the provinces. The fact is that the provinces are not happy about this measure at all. The words quoted by the Leader of the Opposition this morning are a clear confirmation of that fact.
May I call it one o'clock?


Gordon Minto Churchill: Go ahead; you have two minutes.


Murdo William Martin: I shall be glad to go on to accommodate the hon. member.


Gordon Minto Churchill: Will the hon. member permit a question?


Paul Joseph James Martin: Yes.


Gordon Minto Churchill: The hon. gentleman has suggested that the house is being pressed to consider this resolution. Would he suggest a time for the termination of the session? We have not suggested that we end the session immediately. How many days would he like to spend on the discussion of this resolution?


Paul Joseph James Martin: Let me tell my hon. friend that we are prepared to stay here as long as there is important public business to discharge.


Mr. Ricard:: So are we.


Paul Joseph James Martin: Let there be no doubt about this. What do we hear in the public corridors, what do we hear in the lobbies both on the government side and on our side? We hear the question, when are the Liberals going to stop debating measures so we, the Tory members, can get home? That is the request that is being made.


Gordon Minto Churchill: That does not answer my question.


Paul Joseph James Martin: Has my hon. friend any more questions?


Gordon Minto Churchill: My hon. friend has not answered the question. How many days would you like to spend on the resolution stage?


Paul Joseph James Martin: As long as it is necessary to discharge our responsibilities.

Dominion-Provincial Relations


Marcel Joseph Aimé Lambert: May I ask the hon. member a question? Would he inform us how many of the members of his party are on vacation now?


Paul Joseph James Martin: Not very many.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Paul Joseph James Martin: Mr. Chairman, I agree with what the hon. member for Bur-naby-Richmond has said, namely that this resolution takes us back to a period that could be characterized by saying that the taxing opportunities taken by the federal and provincial governments 20 years ago represented a period that was one of confusion and often of uncertainty. This resolution takes us back to the pre-Rowell-Sirois days before 1941. Anyone who is familiar with the history of federal-provincial fiscal relations will appreciate what that means. I also agree that this measure is calculated to bring about a lack of co-ordination in provisions for the standards of living of all Canadians. No matter what the minister may say to the contrary, it will mean that different provinces will have different means and methods of providing for the welfare of their people. There will be inequalities that will be encouraged as a result of the step that is taken in the government's policy embodied in this resolution and announced many months ago; it was announced last fall, to be precise.
However, one cannot fully appreciate the full implications of this resolution by merely examining its expressed provisions. In this resolution there is nothing to indicate the abandonment by the government of procedures that have been followed now since well after the beginning of the second world war. To understand exactly what the government has done one should go back to the assurances given to the Canadian people by the present Prime Minister when, in the opening campaign speech at Massey Hall on April 25, 1957, he said:
We intend to form a government to immediately convene a dominion-provincial conference to bring about a settlement of these problems, not in the spirit of arrogant domination as displayed by the present government, but in the spirit of unity and amity and with mutual tolerance and respect.
As was said by the hon. member who has just spoken, in this particular bill and all that it represents and all the procedures that were taken in connection with it from the time the government's present policy was announced there is nothing that suggests an

effort at unity or an effort at collaboration with the provinces. It is a "take it or leave it" position and is contrary to the spirit implied in the statement of the Prime Minister which I have quoted. In the same speech the Prime Minister said that he was pledged to work out new tax-sharing arrangements with the provinces which would strengthen Canada's federal system and give provinces and municipalities the funds to carry out their responsibilities.
It will be seen that this bill will not give the provinces the funds to carry out their responsibilities. It is therefore only right that at this late stage in our proceedings we should examine the implications of this resolution. As I said before the luncheon recess, when the bill comes before us there will be an opportunity to particularize our reactions to it. At this time, however, I wish to confine myself to one aspect of the consequence of this policy by giving special emphasis to its consequence in the province of Ontario.
It will be recalled that during the course of the present winter officials in the government of Ontario made it clear-and I may say this was early in February-that if they did not get the additional $100 million which Premier Frost said he must have from Ottawa, it would be necessary to impose a further form of taxation in the province of Ontario. As a matter of fact, I am wrong in using the figure of $100 million. While that figure represented the demand made a year and a half ago by Ontario, and also one made by the premier of Ontario in April of 1957, it had grown to not less than $118 million in the month of February of this year.
To understand the full implications of this resolution it should be recalled that in July, 1960 Premier Frost made additional demands on the federal government for a 50-50 share in federal income, corporation and succession duty taxes. At that time the proportion of sharing in these taxes by the provinces was on the basis of 13 per cent of income tax, 9 per cent of corporation tax and 50 per cent of succession duty taxes. Only because of the demands made on his government, Premier Frost pointed out, was it necessary for him to increase this amount. His enthusiasm in 1957 will be recalled, when he approved of this government and particularly of the present Prime Minister, giving every evidence that he fully expected to be able to obtain from the present federal government additional sums of money which he said had been denied his province by the previous administration.
While it is a fact that Premier Frost made his demand for an increase to 50-50 sharing in these three areas of taxation with the federal government, it is also a fact that this

demand was turned down by this government. It was turned down in a manner that 1 believe warranted the criticism Premier Frost and other members ol his government levelled against this administration for its failure to live up to the commitments made and the assurances given by the Prime Minister in his speech in Massey Hall in 1957.
When Premier Frost was faced with the rejection of his request for these additional sums of money, he then sought-it will be remembered-a constitutional amendment to give Ontario the right to levy an indirect retail sales tax. We do know that in October of 1961, the federal government, through the Prime Minister, said there would be no increase in the present sharing of tax revenues.


Mr. Speakman:: Are you reading the Prime Minister's mind?


Paul Joseph James Martin: I beg your pardon?


James Stanley Speakman: You said 1961.


Murdo William Martin: 1 intended to say that in 1960 the Prime Minister announced there would be no increase in the sharing of revenues with the provinces beyond the formula of 13, 9 and 50 per cent. The Prime Minister then said that in view of the decision of this government not to increase grants as requested by practically all the provinces, the federal government proposed the abandonment of the existing tax rental arrangement with nine of the provinces.
The Minister of Finance has said that the proposal now before us was well received by the provinces. I think it is clear from what the Leader of the Opposition has pointed out that this is not the situation. The premier of Ontario had no hesitation in giving his reaction to this announcement of policy by the government. He said, "This is very far removed from Ontario's requirements. It falls far short". We do know that his dissatisfaction with this announcement of policy was widely shared all across Ontario. Perhaps a report in the Toronto Globe and Mail of March 6, 1961 reflects the reaction that exists throughout the province and which immediately followed the announcement by the Prime Minister. The Globe and Mail said on March 6, 1961:
What all of this shows to Ontario, and to the other provinces, is that leadership in fiscal matters cannot be left to Ottawa. Ottawa is not giving such leadership; will not give it for at least another five years, because the new tax sharing system which starts March 31, 1962 runs until March 31, 1967. By that time, the Ontario sales tax-like many another emergency measure-will be solidly entrenched.
The government of Ontario has announced that because of the failure of this government to live up to its commitments and its certain
Dominion-Provincial Relations failure to recognize the demands made by Ontario and other provinces, and because of the obligations imposed on the government of Ontario, it had to resort to an additional form of taxation to obtain the necessary revenues which it feels it is entitled to receive from Ottawa.
This is a far cry from the statement made by the Prime Minister in 1957 when he said, "We will make sure the provinces and the municipalities have sufficient money to do the job they are supposed to do". What the Prime Minister and what the government have in fact done is to say to Premier Frost and to the other provinces, "If you need more money, go out and get it yourselves". That is exactly what the province of Ontario has done.
I say that if the Ontario government has imposed a sales tax to be collected some time in the month of September, the main contributing factor in the decision of the Ontario government to provide for this additional form of taxation rests on the shoulders of this government because of the arrangement it is now proposing to the provinces.
I have before me the Ottawa Journal of February 23, 1961 and the headline is:
Sales tax threatened in Ontario.
The article goes on to say:
Such a tax, Ontario Premier Frost pointedly did not deny, could be the price of failure of the provincial and federal governments to reach an amicable new settlement of the 20 year old issue of tax sharing.
Let no one say that in suggesting the province of Ontario has been compelled to resort to this sales tax because of the failure of this government I am resorting to inaccuracy. This is based on an admission made by the premier of Ontario himself, as I have just indicated, in this story which appeared in the Ottawa Journal on February 23, 1961.
Mr. Chairman, we have also the budget of the provincial treasurer for the province of Ontario delivered by Mr. Allan on March 10, 1961 in which the provincial treasurer pointed out the need for additional revenue in Ontario. He pointed out the consequences of the failure of the federal government to recognize the claims made by Ontario and other provinces and then announced, of course, the decision of the government of Ontario to impose a sales tax.
It will be recalled that the provincial treasurer of Ontario had announced that his budget would be presented in the Ontario legislature some two weeks, I believe, or thereabouts, before the date when it was actually presented. It was postponed in the hope that as a result of the conference which was about to take place with the federal government there would be some announcement of policy by the federal government

Dominion-Provincial Relations which would enable the provincial treasurer to change his budgetary proposals. These changes were not forthcoming and in the budget of Mr. Allan of March 10, 1961 there was the announcement of this new policy and its consequences for the people of the province of Ontario.
I do not think I overstate the case when I say that throughout the province of Ontario there is great dissatisfaction over the introduction of this sales tax. I think when we are discussing this matter we should fix the blame where essentially it lies, as was stated by the provincial treasurer and by Premier Frost himself. The Ontario government said, "We need additional revenues. We cannot get sufficient moneys to take care of our obligations because of the failure of the federal government to give us the money to which we feel we are entitled. Consequently, as we have to build schools, as we have to build roads, as we have other obligations to meet, we have no other course but to impose this additional sales tax". I am not saying the Ontario government should not have found another way of providing for the revenues which it felt it required. I am saying that the evidence is clear; the Ontario government was driven into this position as a result of the position taken by the federal government and its intransigence with regard to its tax sharing policy with the provinces.
The consequence of this, in the province of Ontario, will, of course, be great. I mentioned the other day, and I repeat now, that the effects of the removal of the excise tax on automobiles at long last will be considerably mitigated in the province of Ontario, the largest market for Canadian purchases of automobiles, as a result of the sales tax to be imposed in Ontario collection of which will commence some time in September. The consequences will, of course, be even wider than this. They will be felt all over Ontario as this tax comes to be imposed on all kinds of goods, creating all kinds of new obligations for retailers and for consumers who, in their thousands, are beginning to protest the imposition of this tax. When we are discussing the policy of the federal government regarding this matter it is only proper that we should attribute to the federal government its share of responsibility for the course which has been taken in Ontario.
It is all very well for hon. gentlemen, when confronted with specific proposals, to examine them per se, to fail to relate them to the facts of history and to circumstances, particularly those which attended the announcement of policy by this government when it was asking the people of this country to give

it support in 1957 and 1958. We were told then that this government would embark on a policy which would resolve once and for all the fiscal differences which prevailed between the two senior levels of government. We were told there would be a dominion-provincial conference early in September. Those elections were held in the month of June. We know there was no conference held until the month of November, and then it was only because of prodding from this side of the house that a one day conference was held. We do know that following that conference instead of a policy being arrived at in collaboration with the provinces there was an announcement of the policy of the federal government, unilaterally, by way of a telegram which, we all remember, did not contain correctly the figures which had to do with further dispositions of money to be made to the provinces.
But let this be clear. We shall have an opportunity, when this bill comes before the house, of examining further aspects of this measure. The bill is not going to be dealt with until we return. We are now simply discussing the resolution. I feel, as a member from the province of Ontario, knowing the dissatisfaction which exists in Ontario over the sales tax, that it is only proper that we should attribute to this government the proper degree of responsibility for that fact. I do not say that this was the only way by which this additional money could be raised, but it is right to say that not only are individual citizens in the province of Ontario complaining, not only have members of opposition groups in Ontario complained about the sales tax, but organizations generally are complaining about the failure of this government to live up to its assurances in the matter of federal fiscal arrangements. When Ontario citizens come to pay this tax they will not only remember the Ontario government but they will remember the assurances given by the federal government -the assurances given by the federal Prime Minister in Massey Hall in the presence of Premier Frost in 1957. They will remember that Premier Frost indicated there was going to be some relief for Ontario as a result of a new fiscal deal.
Well, we have the results now, and there is no new deal for the province of Ontario. There is no new deal for the other provinces. What we have, once again, is a failure by this government to live up to the assurances which it gave not only to the people of Ontario but to the people of Canada.
(Translation):


Jean-Paul Deschatelets: Mr. Chairman, this resolution is of extreme importance because it determines and establishes the axis around

which federal-provincial relations will revolve for a period of five years as of April 1, 1962, until March 31, 1967.
What are, briefly, the main points of this resolution?
An editorial published in La Presse of June 23, 1961, sums them up very well, I think, and I quote:
This week the Prime Minister communicated with the premiers of the provinces. He informed them that his government could grant them no more advantages than those offered in the taxation field during the last federal-provincial conference in February of this year.
In short, Mr. Diefenbaker had bad news for them.
The provinces in general and more particularly Quebec, were disappointed by the February conference on fiscal matters. After all, the provinces were still hoping that Ottawa would relent. Their hopes were now dealt a fatal blow.
As a matter of fact, Ottawa has regressed in the field of personal taxation. But it catches up in other ways, by amending the equalization formula. The new equalization formula submitted by Mr. Diefenbaker considers some new factors by which payments to Quebec will be, to all intents and purposes, frozen for the next five years, whereas, until now, they have been increasing rapidly from year to year.
The formula devised by Mr. St. Laurent was more generous, because it was based on the average return from the three normal taxes in the two wealthiest provinces, whereas the Diefenbaker formula is based on the average return of those same taxes in all provinces. Under Mr. St. Laurent, it was equalization from the top; with Mr. Diefenbaker, we have equalization from the bottom. From this point of view, the new proposal is not only less generous, but discriminatory.
Mr. Speaker, this resolution has been criticized for three fundamental reasons. First of all, the equalization principle is practically frozen, whereas it should necessarily remain adaptable and flexible. Second, the formula means equalization of provincial revenue from the middle instead of from the top, which led the Saskatchewan premier to say at the last federal-provincial conference that this was not equalization any more but "averaging". The premier of Quebec also had some concise but extremely revealing comments to make when he said that "the principle of equalization has been killed".
The third great weakness I see in this formula of the present government is that in practice, it means a greatly reduced income for the provinces recognized in the past as have-not provinces. Moreover, I feel quite sure that Mr. Duplessis would have been the first to reject such a formula outright. Why? Because at the last conference which he attended, he stated quite clearly that what
Dominion-Provincial Relations he wanted was cash; having little interest in the other formulas previously put forward, he would certainly not have liked this scheme which, in the case of the province of Quebec for instance, provides for reduced returns for the next five years, whereas under the old formula which was so bitterly attacked by our Conservative friends, the share of Quebec increased year by year.
In fact it will be recalled that for the first year Quebec drew an equalization payment of $36 million, and for the years 1960-61, it will draw approximately $72 million.
Referring to the table that was placed on the record yesterday by the Minister of Finance on page 7920 of Hansard, I find that it is a little over $71 million.
Mr. Chairman, it is well at this time, in order to understand the mechanics and the yield of both formulas-the old and the new-which are placed before us, to consider first the case of the province of Quebec as an example.
Under the old formula, it will be recalled that the yield of the three taxes, personal income tax, the corporation income tax and the succession duties, in the two most wealthy provinces, Ontario and British Columbia, was about $45 per capita. In Quebec, the per capita yield was $29, so that the province of Quebec was entitled to an equalization payment of $16, multiplied by its population figure. Now, the new formula that is placed before us takes into account the tax yield in the ten provinces, and that yield is about $34.50 per capita on a national basis, as against $29.50 in Quebec.
The province of Quebec is therefore falling short of the national average by approximately $5. Moreover, in this new formula, the government is introducing a new factor: the provincial natural resource revenue, more exactly 50 per cent of that special revenue. Now, the natural resource revenue per capita in the provinces comes to about $7.75, as against $3.25 for the province of Quebec.
Allow me to summarize the two situations. In the case of the three taxes, Quebec falls short of the national average by approximately $5, while in the case of the average for the natural resource revenue, Quebec falls short by approximately $4.50.
These two figures add up to a total of $9.50. And this $9.50, multiplied by the population figure of the province of Quebec, which is about 5,700,000, determines the equalization

Dominion-Provincial Relations payment to which we would be entitled, acording to the new formula proposed by Mr. Diefenbaker; it comes to some $47 million.
Therefore, that is much less attractive than the present formula which yielded approximately $72 million to the province of Quebec.
The Minister of Finance adds a guarantee that there will be no reduction in payments during the next five years. However, there is another guarantee, a guarantee we do not like, namely that during those five years those payments will not increase, as they would have if the old formula had been kept in force.
Mr. Chairman, in general the provinces have shown their disapproval, their great disappointment and their obvious dissatisfaction with that formula. That is why I feel the government is making a serious mistake in forcing the passage of this resolution, especially at this stage of the session. This matter is not urgent. The present agreements will expire only next spring and instead of arrogantly imposing its will to the provinces in a take it or leave it attitude, the government had ample time, to continue its negotiations with the provinces and to seek a new solution with them, in view of the importance of this matter for the unity and expansion of the Canadian federation.
I am not speaking here of expansion in the restrictive sense which the Minister of Finance gives to it, but in a broad sense which would allow the provision of essential services in all provinces so that there may be no underdeveloped sector and so that all Canadians may reasonably reach a comparable standard of living in all provinces.
The Minister of Finance and the Prime Minister have refused to budge an inch from the position they took at the last federal-provincial conference. Having expressed a refusal, they thought they could encourage the provinces by telling them: "Well, you can levy your own taxes if you are not satisfied", just as if that were a new right. In fact, certain provinces have already had to levy direct taxes as for instance, in Ontario where a 3 per cent sales tax will come into force next September.
If the government thinks it has given satisfaction to the provinces it is soon to suffer a rude awakening, after having promised so much to the provinces. It now introduces in resolution form legislation which is certainly nothing to boast about.
We of the official opposition have always attached a great deal of importance to the principle of equalization. But, for all practical


purposes, this measure is getting away from that principle. And the poorer provinces will be the most affected.
The Secretary of State, to comfort the province of Quebec, could tell her: You will get less under this formula, but you will gain in autonomy. He could also say: You will have a higher degree of autonomy than heretofore since you will be able to levy your own taxes should you need more money.
My concept of autonomy is quite different. It is a concept which reconciles constitutional rights and practical common sense. It is not by lowering equalization payments to the provinces in general and to Quebec in particular that we will be promoting their autonomy. A province can only exercise its autonomy to the fullest extent when it has all the required facilities to develop harmoniously. A municipality ceases to be autonomous when it can no longer face its obligations, and the same goes for the provinces, in similar circumstances.
Mr. Chairman, to put it briefly, I submit that this new formula is completely and directly contrary to the promises made to the provinces in 1957 and 1958. In addition to weakening the equalization principle, which has shown its value, this formula will leave the provinces in a state of discontent and frustration that will bring us much closer to fiscal disorder than to the agreement of 1867.
(Text):


The Acting Chairman (Mr. McCleave):: Shall
the resolution carry?


John Whitney Pickersgill: No, Mr. Chairman; I wish to make a few observations about this resolution. They are not so much observations in detail as observations of a general character. In what I say I am not going to attempt to traverse the whole field of federal-provincial relations even since the present government came into office. I am not going to go back to the bad arithmetic of the Minister of Finance and those telegrams which he sent in that new spirit of harmony about which we heard so much in 1957, because I say that never since Mr. Bennett was in office have relations between many of the provinces and the federal government reached the stage which the relations with some provinces have under the present government.


An hon. Member:: Joey Smallwood.


John Whitney Pickersgill: Yes, the premier of Newfoundland, because this government repudiated the terms of confederation. Look at the kind of relations they have with the

premier of British Columbia. Because they were so over-eager they signed a treaty before they knew whether they could carry it out. Now he has torpedoed their whole scheme. It is just of a piece with everything that this government attempts to do. Without exception everything ends in a mess. One of the reasons, in fact, one of the principal ones, I think, is that the Prime Minister did not listen to those very wise words which were uttered from this side of the house by his great predecessor on October 16, 1957 when Mr. St. Laurent said from this house, and I am simply paraphrasing, that for 22 years every undertaking given by the previous government to the people of Canada that the government and parliament of Canada by themselves could carry out had been carried out and people will expect the same thing from their successors. What have they got from them?


J.-H.-Théogène Ricard: Is this the Mr. St. Laurent that you kicked out?


John Whitney Pickersgill: The hon. member for St. Hyacinthe-Bagot has at last given me an opportunity to reply to that insinuation, that innuendo that he is so fond of uttering.


J.-H.-Théogène Ricard: Give it to us.


John Whitney Pickersgill: There are those in this country who know something about my personal relations with Mr. St. Laurent over the years and anybody who thinks that I ever had any part in doing anything but paying the highest possible honour to the greatest living Canadian, one of the greatest Canadians we have ever had-


J.-H.-Théogène Ricard: Your party kicked him out of
office.


John Whitney Pickersgill: -is completely mistaken. As far as our party was concerned it was with the greatest possible regret and I will say more than regret-


J.-H.-Théogène Ricard: You can say that again.


John Whitney Pickersgill: Perhaps the hon. gentleman would let me say it without his interruptions. I do not think he was in the confidence of the Liberal party then or at any other time, nor is he ever likely to be-


J.-H.-Théogène Ricard: I never wish to be either.


John Whitney Pickersgill: -because he has a cast of mind and a type of respect for the rights of others that I would think would make it very difficult for him to find himself at home in the company of Liberals.


J.-H.-Théogène Ricard: I never wish to be.


John Whitney Pickersgill: I say that it was with the greatest regret and not merely regret but
Dominion-Provincial Relations some embarrassment that every Liberal in this country learned that my right hon. friend, Mr. St. Laurent, after the election of 1957 had come to the conclusion very reluctantly that he could not carry on at that time because of the state of his health. All these other stories that have been circulated as political propaganda by hon. gentlemen opposite show how little they have of a constructive character to say to the people of Canada.
What I am saying, sir, is that because of the attitude taken in 1956 at the time that the tax-sharing arrangements act was put on the statute books there was the greatest possible doubt in this country with respect to where the Conservative party stood so far as equalization was concerned. As the Minister of Finance has often told us, the opposition of that day, the Conservative party, voted against that bill. They talked against it and they voted against it and during all the period up to that time they said that they were in favour of a different system involving the allocation of tax fields. Mr. Drew was the leader of the party in the house at that time and he made many speeches on this subject. There was a legitimate fear in many quarters that if a Conservative government came into office in this country equalization would be done away with. The right hon. gentleman who is now Prime Minister will recall that in his speeches, and I think I have some extracts from them here which I do not wish to take up the time of the committee to quote-


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: I am quite willing to but I do not think there will be any quarrel about this point.


Gordon Minto Churchill: Don't misquote them.


John Whitney Pickersgill: The right hon. gentleman in 1957 gave assurances in Carman, Manitoba, and in a number of other places that the present government, if it came into office, would maintain the principle of equalization.


John George Diefenbaker: And it is maintaining the principle.


John Whitney Pickersgill: The Prime Minister says they maintained the principle of equalization and they have maintained it precisely as it was expressed in Mr. Harris' bill in 1957. They maintained it right up until the month of October, 1960, I think it was. From November of 1957 when the first federal-provincial conference was held after the present government came into office until the conference held in July of 1960, the proceedings of which I have here in my hand, there was a good deal of speculation in the provinces and

Dominion-Provincial Relations elsewhere about what kind of proposals would be made to take the place of the existing Federal-Provincial Tax-Sharing Arrangements Act as amended and, to be completely fair about it as I wish to be, as improved by the present government. What was done in 1958 was an improvement and I have never pretended it was not at any time. I have once in a while ventured to express the view, and it is true, that it so happened that the only improvement that was made was made between the two elections. But that is true, of course, of everything else. There were quite a number of things done between the two elections but then the improvements stopped.
On July 25, 1960, a conference was held in the railway committee room in this building. It was opened by the Prime Minister and in the course of his remarks at that conference he made a statement which I should like to read into our record. I am going to read from page 10 and I do not feel I should do anything less than quote whole paragraphs although there are some portions of some of the paragraphs that really have nothing to do with the argument I am seeking to make. However, I wish to be completely accurate and completely adequate in what I say about what the right hon. gentleman said. He said:
Some provinces have indicated a desire to resume the collection of their own revenue from these tax fields.
I think it is in order to make the reference clear. That refers to the income tax, both personal and corporate, and the succession duty or estate tax.
This raises a question which will have to be considered in the course of this conference-
The question of some provinces wishing to resume the collection of these taxes themselves. The following are the words to which I wish to draw particular attention:
[DOT]-but I want to make this abundantly clear on behalf of the dominion government that whatever the ultimate decision may be the principle of equalization must be preserved.


Mr. Mariineau:: And so it is.


Donald Methuen Fleming: Preserved and extended.


John Whitney Pickersgill: Then I go on to the next paragraph which defines equalization very precisely. These are the Prime Minister's words, not mine, and I think it would be fairer to the Prime Minister if these words were put on the record in the way in which they were uttered without having interruptions. I do not mind hon. gentlemen interrupting my words but I am seeking to put the Prime Minister's words on record so they can be read clearly.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: Well, I have enough confidence in my arguments that I am always willing to have the arguments of my opponents put fully and fairly, and I always try to do that.


John George Diefenbaker: Do not get too far out on
that question.


John Whitney Pickersgill: I continue to quote:
Equalization, the second component,-
This is the definition.
-is a payment by Canada to the provinces to bring the per capita return from the three taxes at standard rates up to the average per capita yield in the two provinces in which per capita yield is highest. For provinces in which the tax potential is relatively low, this principle is most important.
Having read that definition, and that definition is very clear and very precise, I say it is a definition of equalization that Mr. St. Laurent, Mr. Harris and their colleagues-


Paul Raymond Martineau: Would the hon. member permit a question?


John Whitney Pickersgill: No, not at this moment- including the Leader of the Opposition, put on the statute books in 1956 when the Conservative party voted against it. This definition of equalization which the Prime Minister gave in very precise and very accurate language, was the principle of equalization about which he used these words:
I want to make this abundantly clear on behalf of the dominion government that whatever the ultimate decision may be the principle of equalization must be preserved.
Having said that, and so that there would be no doubt about it, the Prime Minister gave this definition of equalization which I have just read. Then, having said that, he also said this:
The government believes that the principle of fiscal aid and equalization to assist the less wealthy provinces stands on its own feet and is accepted on that basis, and is quite separate from the question of tax rental or tax sharing.
I think that is a principle with which no one would have any quarrel. I do not know that they need necessarily be separated in the statutes. In fact, they never have been and are not going to be now under the proposals before us. The fact is that they are two different elements of the matter and the Prime Minister rightly pointed that out. I have no quarrel with the statement made by the Prime Minister. In fact, the contrary is true. I went to that conference and I listened to that speech because I have always been greatly interested in this subject. I recall that day saying to a friend of mine who was with me, now at last one thing is quite clear and that is that the present government has accepted, in unqualified language,

Dominion-Provincial Relations
the principle of equalization as it is understood and as it is clearly defined. This is something on which the provinces can really rely. Well, the provinces relied upon it for how long? I believe it was from July until October.
Then, in October 1960, the Prime Minister came along at the next stage of the conference with what he was pleased to call a suggestion. This suggestion repudiated this definition of equalization that the Prime Minister had solemnly affirmed in July. If I may use his own words, he said:
I want to make this abundantly clear on behalf of the dominion government that whatever the ultimate decision may be the principle of equalization must be preserved.
This was not some vague principle, but was equalization as specifically and carefully defined by the Prime Minister in that paragraph to which I referred.
Then, in the month of October the Prime Minister came along with this suggestion, this new mix, which imported into the principle of equalization the notion of revenues from natural resources and the national average instead of the average of the two highest provinces, which was the principle of equalization the Prime Minister had undertaken to preserve. I say that if anybody understands the word "repudiation" in its ordinary meaning, this was a very clear repudiation in October. We described it as such from this side of the house and we have consistently so described it ever since. It was a repudiation of a solemn undertaking given to the premiers of the provinces at that time. This is a repudiation of a principle that was evolved and, as I said the other day when speaking on the income tax bill even Mr. Duplessis, with all his intransigence admitted, after the conference of 1955-56, that the principle of equalization was a great improvement on what had previously existed. This principle had been patiently evolved over the years, and now it has been repudiated.
We had, first of all, what was delicately called a suggestion in October, what became a proposal in February and what is now a "take it or else" attitude as indicated by this resolution. Without going into any of the details, sir, that is the record of this government so far as equalization is concerned.
I could not, of course, allow this motion to pass without saying something about one other element that is imported into this resolution. I refer to the so called additional annual grant of $8 million to the province of N ewf oundland.


James Stanley Speakman: Do you not agree with it?


John Whitney Pickersgill: Does the hon. gentleman dare to ask anyone on this side of the house that question? We remember that day when the Prime Minister came into this house and repudiated that, too, and the Leader of the Opposition got up at once and drew attention to the fact that this was a repudiation of the terms of union. This award was made by the McNair commission and it was intended to continue, just as the awards that were made the time of the original confederation were intended to continue. It was part and parcel of the terms of union. The Leader of the Opposition took that position then, and it has been the position of the Liberal party ever since. Our position on this is very simple and very clear. We intend to carry out the terms of union. We intend to stand by the pact of confederation with Newfoundland, just as we stand by the pact of confederation with every other province. While it is true that the sum of money here is exactly the same as the McNair award, it is given not as a matter of right but as an act of grace. This is not the right way to treat the constitution.
There are many other questions that were raised by the Leader of the Opposition and by other hon. members who have spoken. One would hope the Minister of Finance would deal with those questions and satisfy our curiosity about them. I had not intended to speak about them at this stage. What I intended to do was deal with these two matters of principle, the repudiation of equalization which the Leader of the Opposition pointed out in great detail this morning, and the repudiation of the constitution.
I say, sir, that this is a sad and sorry way to deal with a problem that was nearer solution in 1956 than it had ever been. I would add also that Mr. St. Laurent said at the time that this problem will never be completely solved. Its complexity is such that there will always be improvements to be made. He said also when anyone had any better suggestions to offer they would be considered by the Liberal party, and that is our attitude. When the Leader of the Opposition became the leader of our party in 1958, certain improvements were suggested and on subsequent occasions other improvements have been suggested by the Liberal party. I say that this is a very unfortunate and retrograde step. It is going back, to use the words of the premier of Saskatchewan, a long way toward the tax jungle of the thirties.


Paul Raymond Martineau: Will the hon. member permit a question now?


John Whitney Pickersgill: Certainly.
7962	HOUSE OF
Dominion-Provincial Relations


Paul Raymond Martineau: I want the hon. member to tell the house whether, in his opinion, there is any difference between a principle of equalization and a formula of equalization.


John Whitney Pickersgill: Well, of course there is. It does not require a great intellect to discover that. But when a pledge is given that the principle of equalization will be preserved and when the equalization is precisely defined immediately after that pledge, it does not mean "some" scheme of equalization. To an ordinary plain man who accepts the plain words and who does not try to read the fine print or to twist words, it means the principle of equalization embodied there in the definition. I can see the line of twisting-and it is so characteristic of this government; they all catch it from their front benches-turning and weasel-ing around. However, the fact is that every plain simple person accustomed to dealing with governments that put their intentions in plain language and keep their word, expected that undertaking to be kept in the words in which it was given and not in some other scheme.


An hon. Member:: Answer the question.


Robert Jardine McCleave: Shall the resolution carry?


Some hon. Members:: Carried.
Resolution reported and concurred in.


Gordon Minto Churchill: for leave to introduce Bill No. C-122, to authorize the Minister of Finance to make payments to the governments of the provinces and to authorize the government of Canada to enter into tax collection agreements with the governments of the provinces.


John Whitney Pickersgill: Before the motion is adopted, Mr. Speaker, can the minister say whether the bill is printed and ready for distribution?


Gordon Minto Churchill: Yes.


John Whitney Pickersgill: In both languages?


Gordon Minto Churchill: I will investigate and find out.


John Whitney Pickersgill: In these circumstances, I think perhaps the minister would not wish to have first reading given until the bill was available in both languages.


Gordon Minto Churchill: On the contrary. I think the practice of the house is to give first reading. It may well be that the copies are available.


Mr. Habel:: Where are they?


Gordon Minto Churchill: Surely I am not obliged to go to some other office to find out. This is the responsibility of the officials of the House of Commons and not mine. If the first reading


of this bill is given on this occasion, then the officials who are under the direction of Mr. Speaker will distribute them to hon. members.


The Acting Speaker (Mr. McCIeave):: Is it
the pleasure of the house to adopt the motion?
Motion agreed to and bill read the first time.



CIVIL SERVICE ACT

[Stage Direction]
The house resumed from Friday July 7, consideration in committee of Bill No. C-71, respecting the civil service of Canada-Mr. Fleming (Eglinton)-Mr. McCIeave in the chair.
On clause 1-Short title.
Mr. MacLellan:: Mr. Chairman, when I was speaking on this bill on the last day when it was before this committee, I had listed some of the advantages that will be made available by the bill if passed by the house to the civil service and to the civil service administration of the country generally. I had mentioned that under Bill No. C-71, the right to pay of employees of the government is recognized for the first time and that a wide system of appeal is now available to civil servants from administrative decisions within the departments in which they work. I had mentioned that the distinction between temporary employees and permanent employees has been removed and that now there can be a transfer from the public service to the civil service in appropriate cases. I had also mentioned that a very real preference will be set forth under the bill for bilingual people and that the bill provided for the admission of new Canadians to the civil service who under the old act were prohibited from giving service to the country in this way. I had come to the point where I was talking about the very major gain in the new relations between the civil service and the government in the provision of a consultation method and procedure and also the discussion in the committee as regards the setting up of arbitration facilities where disputes might arise.
In that connection may I say this. When the hon. member for Hull was speaking on Thursday, July 6, he said as follows:
The minister has referred to arbitration. He referred to it as something highly dangerous. He said he opposed it because he wanted to protect the rights of parliament.
This appears at page 5 of the translation of the debates of July 6. The hon. member was referring to the Minister of Finance at that time. I bring this to the attention of the committee because it is so palpably wrong and unfair, that it should not be allowed to go unchallenged. Actually when

the minister was before the committee he stated as follows, and I am referring now to the minutes of proceedings and evidence of the special committee on the Civil Service Act at page 537:
We do not wish to embark on any radical or untried form of legislative action, but we-I speak for my colleagues and myself-are willing to explore the possibility of developing in Canada procedures based upon precedent and fortified by good faith. I think it is recognized by all, Mr. Chairman, that any system of negotiation which might be considered will require considerable time, and no doubt patience, to develop along these lines. I am led to believe that the views of the staff associations themselves on matters of representation fall somewhat short of unanimity. I would respectfully suggest, therefore, that this whole question be carefully explored so that the rights of parliament will not be unduly abridged, and that all of us on our part and in our turn will be able to develop an approach to the question of consultation on matters of pay and conditions of employment which, being based upon precedent and experience, will stand the test of time.
That is certainly the opposite of the impression that was left with the committee by the hon. member for Hull.
Further, I find a completely different interpretation from that put upon the minister's words by the hon. member for Hull in a column written by Mr. John Stockdale of the Ottawa Journal, in the issue of that paper of Saturday, June 24. Mr. Stockdale followed the meetings of the special committee very closely and he as much as anyone is familiar with the bill and what it intends to achieve. What Mr. Stockdale wrote is as follows:
It may not all be spelled out in the new Civil Service Act, but the writing which will concede powers of negotiation and arbitration within the Canadian civil service is on the wall-if not in the bag.
The prophets who put it there are no less than finance minister Fleming and parliamentary secretary Dick Bell.
Reactions from staff organizations today are generally favourable, even if there are reservations related to the circumstance that techniques of discussion and negotiation remain loosely defined.
Mr. Fleming made it clear consultation with staff associations on pay and conditions was to be at all appropriate times. Mr. Bell was emphatic that, in a relatively short time, it was intended to achieve a Canadian version of Britain's Whitley procedure -and the cornerstones of the Whitley system are negotiation and arbitration.
The need to avoid legislative rigidity was stressed. If the elastic seams now incorporated within the bill are stretched sufficiently, most of the objectives of the major staff associations can be attained.
An established means of working together in harmony, understanding, mutual confidence, good faith. That was what Mr. Fleming regarded as the shape of things to come.
Neither the inquiring Liberals on the committee nor the staff associations could-if principle works out in practice-want more.
On June 28, after the committee had concluded its sittings on the bill and after the statement of the Minister of Finance had been
Civil Service Act
placed on the record, a press release was issued by Mr. Fred Whitehouse, president of the civil service federation of Canada. As all hon. members know, the civil service federation of Canada is by far the largest of the civil service staff associations and embraces some 80,000 civil servants. I quote from the press release of Mr. Whitehouse:
-it is apparent that the government in providing for compulsory consultation has moved a long way towards giving public servants a voice in determining their rates of pay and conditions of employment. This is especially true in view of the statements made by the Minister of Finance in committee that it was expected that the provisions for consultation would evolve into a system modified to meet the needs of the Canadian civil service, similar to the Whitley councils of Great Britain. Mr. Fleming felt this could be done without the restriction of legislation.
The minister went on to say that an important element in negotiation and consultation on these matters is to meet in a spirit of good faith and co-operation on the part of both sides. The civil service federation of Canada agrees with this statement and is prepared to meet with the civil service commission and officials of the government in a spirit of co-operation and good faith, always bearing in mind that co-operation is a twoway street and good faith on both sides must be the vehicle employed to reach our mutual destination.
The civil service federation of Canada agrees to the foregoing with a view that experience will lead both sides to the evolution of a system of negotiation and arbitration in the shortest possible period of time.
I also had a letter from Miss Frances E. Goodspeed, president of the professional institute of the public service of Canada. This is another of the large civil service staff associations, embracing I believe some 5,000 civil servants. This letter, dated June 27, 1961 reads as follows:
Dear Mr. MacLellan,
On behalf of my colleagues in the professional institute and myself may I express our appreciation of the opportunity which was afforded us to appear before your parliamentary committee on Bill C-71 and the careful consideration of our views on the subject matter of this bill by the committee.
Members of the professional institute who attended the sessions of your committee were greatly impressed with the very thorough and searching review which was given every section of the bill. We are confident that your efforts will result in a new Civil Service Act which will afford an opportunity to continue in the future the development in Canada of a public service which will give the utmost satisfaction to the public in the discharge of its duties, personal satisfaction to those who seek therein a challenging and useful career, and which will gain even greater regard abroad than it currently enjoys.
I believe that in yesterday's press there appeared an account of an interview with Miss Goodspeed wherein she stated that she was very satisfied with the progress that had been made toward the beginning of a system of arbitration for the civil service. I would

Civil Service Act
point out that in the meetings of the special committee there was at no time any suggestion that arbitration should not be something which we could look forward to in the future. There was a difference of opinion as to method. There were some who thought that by legislation we could accomplish arbitration more quickly, but the majority of the committee was of the opinion and agreed with the Minister of Finance that arbitration could better be gained by evolution, as was done ..in the United Kingdom, without direct legislation. I believe the passages I have quoted indicate that the majority of civil servants take the same stand.
In addition to the matters which I have mentioned, an eighth advantage to the civil service provided by the bill is in the establishment of a grievance procedure. This is another measure which the civil service has been requesting for many years. We were very pleased in the committee to amend this bill to provide for the establishment of a grievance procedure. This is something which I believe will also assist in the development of better relationships between the government and the civil service.
All in all, Mr. Chairman, I feel this new bill which is before the committee should be passed as soon as possible, as was requested by Miss Goodspeed in her statement of yesterday. By virtue of the bill a new, golden age will be ushered in as regards the relationships between the people of Canada and their civil service. Most of the problems have been removed and I am sure that the days ahead will illustrate the value of this bill to the civil service and the work they do for our country.
In closing, Mr. Chairman, I should like for a moment to pay tribute to the hon. member of the special committee who attended every meeting; who more than any other member of the committee carried the responsibility and the burdens of this bill; who more than anyone else understands the problems of the civil service and, I believe, who more than anyone else can be called the champion of the civil service in Canada. I refer to the distinguished hon. member for Carleton, the parliamentary secretary to the Minister of Finance, with whom it was my pleasure to work very closely during the months we were considering this bill.
I am sure hon. members on all sides of the house will endorse what I say, that the hon. member for Carleton is one of the finest lawyers and parliamentarians we have in the house and certainly is the best friend in court that the civil service has ever had. If I may say one thing to the civil service of Canada, and in particular to the civil servants who

live here in the Ottawa valley, it is that the best way to strengthen their own causes is to strengthen the hand of the hon. member for Carleton.


Some hon. Members:: Hear, hear.


Mr. Richard (Ottawa East):: Mr. Chairman, I am not going to try to compete with hon. members who have preceded me in congratulating the members of the committee and the chairman, except that I must say all congratulations offered to the chairman were well deserved. The committee proceedings were conducted fairly and well. I must also say that all members of the committee, and not only the hon. member for Carleton, were great friends of the civil service and were trying to do their best to ensure that the civil service of Canada would have a good deal.
I should also add that those who appeared before us were most helpful. I refer to the members of the civil service commission, the representative of treasury board, the members of the staff associations and those who sent in letters on certain problems for our perusal, including the question of bilingualism. These representations were very helpful. The meetings were conducted in a spirit of fairness and I think this is one committee which could serve as an example to some others which have sat during this and other sessions of parliament.
However I do not altogether give the credit for this to those of us who sat on the committee. It so happens that we were a group of dedicated people who were considering a very delicate cause. This legislation which is designed to improve the civil service is most important because in our time more than ever before a good civil service is absolutely essential to good government. The need for a growing and better qualified civil service can be attributed primarily to the increased role of government. As a result we have to rely more and more on an increasing number of experts and highly qualified administrators. The civil service in Canada is composed at all levels of men and women who are well qualified to perform their important functions and who are devoted to the service of their country, people who are entirely loyal to the government of the day. Those who give loyalty and service have a right to expect confidence, support and encouragement, in addition to conditions which will make them more effective in their work.
This bill is the result in part of investigations which began in 1957 with the then chairman of the civil service commission, Mr. Heeney, and his associates who were asked to make a report on the Civil Service Act.

That report was very full and it was discussed in committee last year. In part this present bill implements some of the recommendations of the Heeney report. However,
I do not want anyone to think that this bill implements the whole of that report. I should just like to put on record the case for a new concept in law which the chairman put in his report in 1958. He said:
The legal framework within which a public service functions is of importance because of its direct bearing upon quality and administrative efficiency. Law alone cannot guarantee good administration but it can and does have a real effect on the quality of the personnel who are recruited and it can provide incentives to good performance. As conditions change, there develops from time to time a need to re-examine legislative arrangements so as to determine whether the law is well suited to current needs. Forty years ago, the need was for a civil service free from what Sir Robert Borden called "the malign influence of patronage". Forty years ago, and this is all too frequently forgotten, the need was also for a public service free from nepotism, the coddling of incompetent favourites, the granting of promotions for consideration and similar internal abuses. Not much is gained if the "malign influence" of political patronage is replaced by bureaucratic patronage, which may be less apparent but which can be no less insidious and demoralizing. If both are to be kept in check, there is need for independent authority and control such as the commission was designed to provide. The effectiveness of the present act in protecting the national service from these traditional abuses is a convincing argument for the preservation of the essential legal safeguards of the merit principle. At the same time, in the vastly different social and economic conditions within which public administration must be conducted today, it has become evident that a monolithic merit system is not in itself enough.
Those were the broad principles of the Heeney report. As I said before, the Heeney report is adopted in part in this bill, but only in part, as we shall have the opportunity to see when we examine the clauses one by one. In case hon. members may be under a misapprehension let me say that this bill is not what could be called a bold, new approach embodying new principles. In many ways the bill is a 1961 version of the 1918 act in the light of practices which have developed over the years. It does not attempt, for example, to provide new and broad principles governing personnel administration and employer-employee relations which the service needs and which the service requests. This is probably one of the points of real importance which came up for discussion in the committee when it dealt with staff association representations. While clause 7, which embodies the principle enunciated by the government in this regard is a great advance, we must express our stand at this time and say that the principle involved in this bill in this regard is not satisfactory to the opposition. The time has come to face
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the issue of bargaining between the government and its employees squarely and frankly. As I said on March 7, in our country all municipal employees, including policemen and firemen have obtained the right to collective bargaining. In the federal field the majority of the employees of crown companies already enjoy such a right. But ordinary civil servants have no right whatsoever in this respect. This has become a serious anomaly and an unfair discrimination. In Great Britain, Australia and New Zealand the right to collective bargaining has been granted in one form or another to civil servants. In the United Kingdom, the national Whitley council agreement on arbitration for the non-industrial civil servant has now been in force for more than 30 years.
Our stand on this principle is still the one that I expressed some months ago. We believe that the present Canadian system which provides only for consultations-and that, after all, is all that is included in the present bill-[DOT] is completely inadequate to protect the fundamental right of the civil service to participation in collective negotiations. At the same time, our view is that the right to strike should not be granted to the civil service and that a strike should not be tolerated in the government service. We believe that civil servants should be granted the right to joint negotiations and arbitration provided the supremacy of parliament is safeguarded.
We do not intend at this stage to put forward a concrete and detailed proposal which would embody these rights, but I suggest- and this is in accord with proposals I made in the committee-that consideration of the question should be given in the present bill and that details should be worked out by negotiation and by arrangement between the staff associations and representatives of the government. Surely, if it has been possible to do so in other countries, and in one province within Canada, it is possible to do tbe same in the federal field. The act presently in force goes back to 1918, which is some 40 years ago. Surely, we shall not have to wait 40 years before our ideas become a little bit modern-we shall not have to wait that length of time to see whether the procedure enunciated in clause 7 of the present bill is satisfactory.
There are a few other points which come to notice, but I do not intend to deal with them at the present time. One is the increased power given to deputy heads of the departments under this bill. In this connection I should like to refer to the submission by the professional institute of the public service of Canada. In the last paragraph on page 1 it is stated that the point of

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concern is the trend toward delegation or transfer of authority from the civil service commission to deputy heads in matters concerning personnel selection, establishment, etc. The professional institute believes that certain rearrangements along the lines indicated will result in increased efficiency and therefore welcomes the proposal from this viewpoint. It has, however, become increasingly apparent to the institute over recent years that even the existing degree of local autonomy within and between departments has markedly affected conditions of employment. It is felt that any further decentralization of authority in the field of personnel management has to be accompanied by a system of monitoring and control much more effective than presently exists. Lacking such a system, the advantages of increased departmental initiative would be negated by damage to morale and even to the merit system itself.
Another aspect of this bill is the power which remains to dismiss any employee without cause. Of course, there may be some good reason for this revision but we were not told in the committee why such a power should remain in the bill. Of course, I shall have an opportunity to say something about that when we reach the relevant clause.
Another factor is that prevailing rate employees should somehow not be considered in this legislation. A way should have been found to treat them as other civil servants have been treated and bring them within the Civil Service Act. They should be given all the privileges enjoyed by other civil servants. This is an anomaly and a difficulty which we might as well face now.
There is another difficult problem which will arise during the discussion of the bill, namely the right of appeal. All of these things, Mr. Chairman, depend to a great extent on the regulations which will be made under the legislation. It is very difficult to discuss the effect of many clauses of this bill without knowing what the regulations are to be. When we were in committee I did raise the point that the regulations should have been brought before us for consideration. I was told that they had been drafted but the committee did not see them. Therefore, we cannot take any responsibility for any of the regulations which have been drafted already and which may form part of the legislation after it is passed.
I raise these few points at this time, Mr. Chairman, because we shall have ample opportunity to raise other matters of importance when we discuss the clauses. However, I welcome the improvements which have been made in the present act.

I have only this to say. Once again I repeat, the staff associations deserve our thanks for the manner in which they effectively presented their case. I must say that it would be much better if they united some day. If they could have one broad association representing all civil servants perhaps they could make their case much more effective.


Mr. Nugent:: Mr. Chairman, since this bill was introduced we have had many individuals posing as the special friends of the civil servant. I know there are many members in this house who have had special duties in connection with these problems and who have a great many civil servants within their riding. However, I do think it is time to put in a word of caution on behalf of the long suffering taxpayers in this country. It seems to me that when the change in government took place in 1957 one of the complaints of the people was not just that the cabinet had become too hard to get along with or that the Liberals had got too arrogant. The whole service had got a little too stuck in that way of doing business. In some respects it had taken on some of the characteristics of its bosses, and. a complete change was needed. If I may say so, what has been said to me most often since I became a member of parliament is this. Those who have spoken to me have said that they did not see that change in attitude that they had hoped to see when we took over, or at least they did not see it change as much as they had hoped. I am speaking now just of people completely outside the civil service who have talked to me. The main complaints I have had about the failure to make a sweeping change in the civil service came to me from people within the civil service. There are in that organization, as there are in other organizations, the extremely intelligent, the extremely hard working and the ordinary. There are the loafers, as there are in other jobs.
The main source of their complaint seems to be that the method of doing business had become so stereotyped that the rule book and the way of doing things had become predominant. The attitude of "this is the way we do it; this is the way we have been doing it for years," had become so important that the ambitious, hard working civil servant found entirely too many stumbling blocks in his road to do the job as efficiently as he would wish. I repeat, Mr. Chairman, it is not my intention here today to complain about the civil service. I merely think it is necessary to point out that there is such a thing as giving the civil service too much protection from public opinion, by laying down the rules too hard and fast so that they become all-important, so that their main

function seems to be how to preserve, protect and extend their method of doing things as they have done them over the years rather than concentrating on the fact that they are there for the service of the public, and giving them more leeway to find more ways, and more efficient ways to be of benefit to the public.
For instance, I noticed that with respect to a change in position the legislation reads, "The deputy head recommends to the commission". I am very much afraid that this sort of provision is going to perhaps aggravate the sort of trouble about which the conscientious civil servant has complained to me.
After a good many years in the service there is bound to be the feeling "We have done this for years and we have done it this way", and even to the most honest and conscientious department head the suggestion by some of his staff, new staff particularly, that a new and more efficient method of doing things can be found is likely to be met with a good deal of resentment. If the department head happens to be a very intelligent man and a big man he is going to take it in stride; he is going to look at the suggestion very carefully, give the man credit and make sure that even a refusal of the suggestion is not going to discourage that employee from looking for improved ways of achieving more efficiency. If, however, the department head concerned happens to be an individual who has moved up despite his lack of ability over a great many years and who has become more and more set in his ways, the mere possibility of making a suggestion of changing the old method is going to leave that employee in a very awkward position in the department for a long time.
I am suggesting that it is not enough that the job be done in a certain way. It may very well be that the old method of doing things is very efficient; it might even be the most efficient way; nevertheless, the business of government is not run just like an adding machine. The government is always dealing with the citizens of this country and their feelings must be respected. I venture to suggest that it is not the business of this or any other government, or of the civil service, to continue to try to ram down the throats of the ordinary citizens those procedures that the ordinary man in the street finds annoying day after day, even if those procedures may be most efficient. I suggest that we have had too many barriers between the civil servant and the person he is serving, namely the ordinary taxpayer of this country. It has been most unfortunate in many respects; it has hindered the work of the civil service to this extent, that the taxpayer has failed to
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understand the civil servants and the civil servants have failed to understand the taxpayer. This lack of understanding has often resulted in a lack of co-operation, which hinders efficiency and which leads to bad feelings all around.
I am suggesting, Mr. Chairman, that if we insulate the civil servant too much from the minister who is after all responsible for having his finger on the pulse of the people, we are making it more difficult for the civil servants to perform their duties in a way which will please the public. It is more difficult for them to realize when the public are pleased and when they are not. I suggest, therefore, that the theory of protection of the civil servant from the politician has gone a little too far. We have, I suppose, to protect the civil servant from some politicians under some circumstances but I am suggesting to the committee that the putting up of more barriers is adding to the concept of the civil servant as something distinct and separate from the people. It has made his job more awkward and those who have talked to me have not liked the idea that they have been criticized by so many people over the years when they have been trying so hard to do their jobs. There is, I suggest, a lack of understanding, and I wish that we would allow just a little political influence to enter the picture so that civil servants can get closer to the people in understanding.
(Translation):


Mr. Pigeon:: Mr. Chairman, I want to say a few words on this measure because I have noticed that bilingualism gets a better deal under this bill. Here is what I see in clause 47 of the bill:
The number of employees appointed to serve in any department or in any local office of a department who are qualified in the knowledge and use of the English or French language or both shall, in the opinion of the commission, be sufficient to enable the department or local office to perform its functions adequately and to give effective service.
This clause represents a big improvement over the former act as far as bilingualism is concerned. I do want to congratulate the Minister of Finance (Mr. Fleming) for it.
We are all aware of a brief submitted by the conseil de la vie frangaise, which dealt with the situation of French speaking Canadians in the federal civil service. Here, from 1950 to 1958, the departments where the proportion of French speaking Canadians has increased are the following:
Veterans affairs, 3.2 per cent; agriculture, 1.1 per cent, but with substantial decreases in some services. In the auditor general's office,

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the increase has been of 10 per cent, but the staff there is very limited, so that the increase is slight there also; R.C.M.P., 1.1 per cent; fisheries, 1.3 per cent; national revenue, 1.6 per cent; secretary of state, 9.3 per cent; labour department, 1 per cent; national film board, 9.1 per cent.
On the other hand, there has been a decrease in the proportion of French-speaking Canadians, in the same period from 1950 to 1958: external affairs, 0.4 per cent; citizenship and immigration, 2.5 per cent; trade and commerce, 2.6 per cent; civil service commission, 2.6 per cent; national research council, 0.9 per cent; national defence, 1.2 per cent; finance, 0.6 per cent; printing bureau, 20.3 per cent; justice, 5.8 per cent; mines and technical surveys, 0.7 per cent; Post Office Department, 11.8 per cent; resources and development, 2.6 per cent; health and welfare, 6 per cent; transport, 2.1 per cent; public works, 16.8 per cent.
Mr. Chairman, I have taken those figures from the brief submitted by the conseil de la vie frangaise in which we find statistics for the period going from 1950 to 1958.
As I said a while ago, this bill is an improvement on the present act. It will encourage my people, the French Canadians, to apply for positions with the civil service in Ottawa. In my opinion, it is essential, in the interest of national unity, that nearly one third of the positions in the civil service-not only secondary positions, but key positions- be held by French-speaking or bilingual Canadians.
In a few years we will celebrate the centenary of confederation. It would most certainly be appropriate, in the interest of national unity, first that a greater number of my people apply for positions in the civil service-that is most important-and second, that a greater number of French Canadians be appointed to key positions in the federal service. It would certainly be possible to improve the situation so as to attract both English speaking and French speaking Canadians to the civil service and to make them better qualified to work for the Canadian government.
I wonder whether it would not be appropriate to consider the possibility of establishing a civil service school to train both French speaking and English speaking Canadians to work for the government. Such a school could be established by the civil service commission or by the Secretary of State department.

Moreover, although education comes under provincial jurisdiction, it would be a good thing if Canadian universities, and especially those from the province of Quebec, had a department where French-speaking candidates would be trained for positions with the civil service in Ottawa. In fact, if Canadian universities had such a department, we would have better trained civil servants.
We would then have better qualified people, something which, apart from being in the interest of national unity-it is always desirable to have a logical proportion of Frenchspeaking and English-speaking Canadians- would enable the country to have more qualified men to serve the Canadian people.
Mr. Chairman, those are the few remarks I wanted to make.


Jean-Paul Deschatelets: Mr. Chairman, would the hon. member allow me a question? He read a moment ago a table of the average French representation in the various departments, and I did not quite hear what was the average in the Department of Mines and Technical Surveys? Would he kindly repeat the figure?


Louis-Joseph Pigeon: Mr. Chairman, I shall gladly oblige the hon. member. There has been a drop in the proportion of bilingual Canadians in the Department of Mines and Technical Surveys, but that was from 1950 to 1958, or under the King-St. Laurent administration.


Jean-Paul Deschatelets: Mr. Chairman, I would ask the hon. member to repeat the exact figure which he quoted to the house a moment ago as to average French-Canadian representation?


Mr. Dupuis:: It will not be good.


Louis-Joseph Pigeon: I think it is 1 per cent; I do not recall exactly.


Mr. Boulanger:: Mr. Chairman-


Louis-Joseph Pigeon: Just one moment, please. I should like to reply to the hon. member for Maisonneuve-Rosemont. He is referring to the Department of Mines and Technical Surveys?


Jean-Paul Deschatelets: Yes.


Yvon Dupuis: Do not answer.


Louis-Joseph Pigeon: In the Department of Mines and Technical Surveys it is .7 per cent.


Mr. Comlois:: It was .07 per cent previously.


Samuel Boulanger: Mr. Chairman, I should like to ask a question of the parliamentary secretary of the Minister of Finance (Mr. Bell).

Could he tell me whether Bill C-71 has been printed in both languages, and particularly in French?


Louis-Joseph Pigeon: Mr. Chairman, I shall send a copy over immediately to the hon. member.


Samuel Boulanger: Mr. Chairman, I thank the hon. member for Joliette-L'Assomption-Montcalm (Mr. Pigeon) for sending me a French copy of Bill C-71. I directed my question to the parliamentary secretary of the Minister of Finance because there was no French version of the bill on the table.


Louis-Joseph Pigeon: Does the hon. member wish to have another copy?


Samuel Boulanger: Moreover, Mr. Chairman, there were no copies available at the distribution office. That is why I asked whether French copies of this bill were available.
(Text):


Mr. Bell (Carleton):: Mr. Chairman, I can only say that there must have been such great popularity for the bill that the stock has run out. It certainly was reprinted in both languages in the usual number.
(Translation):


Samuel Boulanger: Mr. Chairman, I thank the parliamentary secretary to the Minister of Finance for giving me such a satisfactory answer.
I now wish to add a few words, following the remarks of the hon. member for Joliette-L'Assomption-Montcalm to the effect that the situation has improved as far as French-Canadian representation in the civil service is concerned-


Louis-Joseph Pigeon: That is not what I said.


Samuel Boulanger: Mr. Chairman, for the past several years the Conservatives have been going about the province of Quebec speaking in favour of employment for French Canadians in the civil service.
I appreciate that there has been some improvement in that field under the Liberal government, and much more had been promised, since 1958, under a Conservative administration. However, we see today that the number of French Canadians in the civil service has decreased. Yet, we had some French-Canadian ministers who used to say, in the province of Quebec, that they were going to improve conditions in that respect.


Louis-Joseph Pigeon: They have improved.


Samuel Boulanger: Conditions have not improved.
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Louis-Joseph Pigeon: Yes, they have.


Samuel Boulanger: And among the many documents we receive from the government, some are not even printed in French, for instance the report of the Canadian wheat board-


J.-H.-Théogène Ricard: That report was not published in French either when you were in power.


Samuel Boulanger: I never said that it was published in French under a Liberal administration. I said it was still not published in French today in spite of all the promises made in the province of Quebec in 1957 and 1958 by the Conservative ministers and private members.


Yvon Dupuis: Daniel Johnson's promises.


Samuel Boulanger: No French report was put out by the Canadian wheat board. Moreover, there are a number of other reports which are not printed in French, and when they are, it is two, three and even six months after the English edition has come out.


Louis-Joseph Pigeon: That is untrue.


An hon. Member:: Do not blame others for what you failed to do yourselves.


Samuel Boulanger: Mr. Chairman, I ask the government members who speak so eloquently on the French fact to say less and to act without delay.


An hon. Member:: That is exactly what we are doing.


J.-H.-Théogène Ricard: Mr. Chairman, following the remarks made by the hon. member for Drum-mond-Arthabaska (Mr. Boulanger), I should like first to point out to him that he has given no figures to substantiate his claims and especially his statement that the number of French-Canadian civil servants has gone down. I notice that he has been most careful not to say in what proportion the number of French-Canadian civil servants has decreased.
Moreover, he said that the report of the Canadian wheat board was not published in French. May I say that that report has never been published in French but that it will probably be next year.


Yvon Dupuis: You will no longer be here next year.


J.-H.-Théogène Ricard: Besides, I should like to point out to the hon. member that for the first time, this year, the annual report of the Department of Defence Production was published in

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both French and English and that lor the first time since confederation, the Department of Mines and Technical Surveys has issued an atlas in both languages.
Mr. Chairman, the Liberal members are disconcerted by those facts which bear evidence to the efforts we, of the Conservative party, have made to give an essentially bilingual character to our country.
Everybody acknowledges what we have done except the hon. members opposite who are lost in the clouds and who do not know what is happening in this house.


An hon. Member:: Twenty two years of incompetence.


Mr.   Mariel@: Mr. Chairman, as a-


Yvon Dupuis: Another expert.


Mr.   Mariel@: As a member of the special committee whose task it was to study the Civil Service Act, I think it is my duty to point out that the bill we have before us constitutes an improvement over the present Civil Service Act which, as everyone knows and as several members have said previously, had not been revised since 1918.
Mr. Chairman, I heard a moment ago some members of the opposition make statements on the civil service and on the fact that the bilingual civil servants are less numerous now than before. These members seem to forget that during the 22 years they were in power they did not improve that situation, far from it, as I will show in a few moments. On the other hand, the bill before us is calculated to correct this anomaly, thanks to a quite special clause which my colleague the hon. member for Joliette-L'Assomption-Mont-calm (Mr. Pigeon) has quoted and which I will discuss briefly in a few moments.
Mr. Chairman, we all agree that the part civil servants play in the administration of this country is becoming increasingly important, and that they are the ones who, in any well organized government, are responsible for research and study on which is based the government's policy and its preparation at the first stage, as well as the administration of the legislation passed by parliament. In fact, it is on them that we rely for these collective services which are, so to speak, the reason for the existence of the state.
They are also charged with the administration of controls, the collection of taxes, the spending of public funds; in short, they have an executive role given to them by the government in power.
[Mr. Hicard.l
The civil servants have always played a most important part not only in the administration of the country but also in the administration of each province and municipality.
As, nowadays, the responsibilities of the government are continuously increasing in the economical and social life of a country, and becoming more and more complex, the responsibilities of the civil servants are bound to take an increasing importance, and more and more civil servants are required all the time.
I do not have before me the last statistics concerning the total number of civil servants but, if my memory serves me right, I believe that there are more than 200,000 federal civil servants, irrespective of the staff of the crown corporations or of other departmental agencies which employ nearly 150,000 people.
It goes without saying that I am not including the members of the armed forces in these statistics.
On the other hand, Mr. Chairman, the citizens, and especially businessmen and professionals, must constantly keep in touch with the government administration.
Therefore, they take an immediate interest in the competence, efficiency, sympathy and understanding of civil servants. That is to say that the efficiency of the country's administration and the good relations between citizens and the government are at stake. This principle of efficiency in administrative services is based on the relations between the state and its servants.
In the course of its various meetings, the committee received many representations from different staff organizations. Their representatives had the opportunity of expressing their views and they were questioned by members of that committee.
I too should like to offer congratulations to the committee chairman who so ably conducted the proceedings and join with previous speakers who mentioned the matter.
I do not intend to point out all the evidence submitted before that committee, because hon. members will be able to read the various reports that have been published, but I should like to stress a few points and especially the one which was raised a while ago by the hon. member for Edmonton-Strath-cona (Mr. Nugent) and which deals particularly with the power given to deputy ministers under the present bill. I share his opinion. Indeed, I think the various organizations have made recommendations along those lines, namely that the bill grants exceptional powers to the deputy ministers. I am not saying

that the latter will abuse those powers or that some deputy ministers have done so in the past; I have not been in the house long enough to make such a statement. However, it could give rise to certain difficulties between civil servants, that is between higher officials and their subordinates.
1 wish to refer to a recommendation which was made by the conseil de la vie frangaise d'Amerique which testified before the committee last May 5. That organization precisely stressed the point that it would perhaps be dangerous to give too much power to deputy ministers.
It is obvious that the commission always has more or less a veto on these various authorities, but I still want to point out that fact, because I think some wrongs might have been done in the past. In fact, I have in mind a case about which information was given to me by a civil servant. As in the case pointed out by the hon. member for Edmon-ton-Strathcona, those complaints did not come from the general public but rather from individuals who had been employed in the civil service. My information came from a person who was a federal civil servant during a period of ten years. I will not identify them, but that person was employed five years in one department and five years in another one.


Yvon Dupuis: Name that person.


Mr. Martel:: I would not want to give the name, because that person is no longer with the government service. Still, it shows clearly that anomalies did exist at that time-


Yvon Dupuis: Another unproved statement.


Jean-Jacques Martel: -when our friends were in power-


Yvon Dupuis: Give us the name.


Jean-Jacques Martel: There is no need to give names in every instance and to lay charges as it is done now at the provincial level. I only want to point out anomalies to prove beyond doubt that there were injustices in particular under the former government and to show that now attempts are made to put the blame for all that on the Conservatives, who have been at the head of this country for only a few years.


Yvon Dupuis: Give us the name of that person.


Jean-Jacques Martel: And more particularly, in relation to the attitude of our opponents toward French Canadians or the bilingual employees. At that time, a suggestion was made to have French accepted as a communication language between offices located in the province of Quebec and those in Ottawa, or located in an area with sufficient French to warrant a bilingual staff. At that time this suggestion was not considered. On this point, I am happy
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to find that section 47 of the new act referred to a moment ago by the hon. member for Joliette-L'Assomption-Montcalm will do away with that anomaly. With your permission, Mr. Chairman, I am going to read this section into Hansard so that the opposition will be able to meditate on it, because I believe it will improve the situation which has prevailed until now:
The number of employees appointed to serve in any department or in any local office of a department who are qualified in the knowledge and use of the English or French langauge or both shall, in the opinion of the Commission, be sufficient to enable the department or local office to perform its functions adequately and to give effective service to the public.
I hope this clause will open a larger number of jobs to bilingual people. It has even been suggested during our discussion by a C.C.F. member that a course be given to present employees to enable them to acquire a better knowledge of both French and English. That was no doubt a good suggestion, but it is beside the point. The only thing that could be done to improve the situation would be to give French Canadians a better treatment, to give them their due share in the federal civil service.
Before I conclude my remarks allow me to quote from a book on Canadian dualism written by Mr. Mason Wade. This book was edited jointly in both languages by the University of Toronto and Laval University.
It deals with different viewpoints adopted on this matter by Canadians from various groups.
I only want to read an excerpt from page 270 of Mr. Wade's book. Here is a quotation from the article by Mr. Norman Ward in his book:
(Text):
Status in the national government is what the French Canadian really seeks, not only tor his language in parliament, public affairs, and national broadcasting, but also for himself as a citizen. Apart from parliament and the parties, this means that he has a special claim on the civil service of which the following, although the figures are now out of date, is a typical expression.
(Translation):
And Mr. Ward continues as follows: (Text):
"-in 1918, before the creation of the civil service commission under the federal administration, the proportion of French Canadian civil servants amounted to 21.58 per cent while in 1946 the proportion was down to 12.5 per cent-"
(Translation):
Naturally, these figures have now been compiled up to 1958. They were mentioned a while ago, and I am referring here to Mr. Ward, who goes on as follows:
(Text):
"-What is worse, with respect to salaries of $6,000 or more a year, the proportion of French

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Canadians fell from 25 per cent in 1918 to 9.52 per cent in 1946."
(Translation):
From 1946 to 1957, the last year of the previous administration, the situation was far from improved. Thus I should like to quote further comments by Mr. Ward. The statistics he gave were taken from a speech delivered in the house by Mr. Frederick Dorion who was then, I think, member for Charlevoix, on June 16, 1946 as found at page 1620 of Hansard for that year. Among other things Mr. Ward said:
(Text):
The interesting variant on the spoils system in modern administration that is implied in the quotation is no doubt an inevitable product of a bilingual situation such as ours. It is no accident that the French Canadian complainant correlated the decline of the French with the reform of the civil service beginning in 1918, for the expansion of the dominion government in the last few decades was at first characterized, as was the entire civil service after confederation, by exclusively English Canadian thinking. Applicants for civil service posts have for years been able to elect to write examinations in French or English anywhere in Canada, and French Canadians have always held a share of posts, usually among the minor ranks and especially in departments staffed by the patronage method.
(Translation):
This is what Mr. Ward, the author, said. (Text):
But as the technical requirements of the service have grown, and as English Canadians staff most of the higher ranks, the senior departmental officers have not unnaturally sought more English Canadians to work with, and until after the second world war the proportion of French Canadians in the total service was dropping steadily. As recently as the war a French Canadian cabinet minister could find himself marooned at the head of a predominantly English Canadian organization in which English was the only departmental language and only English Canadian ideas influenced the formation of policy and the organization of the department itself.
(Translation):
That is the end of my quotation, and I simply wish to draw the members' attention to the fact that this situation which prevailed in particular under the previous government was not improved at the time, as indicated by the author.
There is also the impression, which has spread among our population, that French speaking Canadians are not fit to fill positions in the federal civil service, or that they simply do not bother trying to get one. That will be said often, for instance, in the case of appointments made by the civil service commission to senior positions, following promotion competitions. In my opinion, that is not borne out by facts.

I have here an article in which it is said that very few French Canadian university graduates try to enter the government service. As pointed out in Mr. Ward's article, that is probably due to the fact that, when competitions are held for various positions, standards are used that fit the Anglo-Saxon mentality and which necessarily prevent those French Canadians who might wish to become federal civil servants to put forward their qualifications.
That anomaly has been stressed, in committee, by various bodies, namely the civil service association of Canada. A moment ago, a previous speaker-I think it was the hon. member for Ottawa East (Mr. Richard)-did refer to that. May I refer to page 7 of the submission of the civil service association of Canada, which reads as follows:
(Text):
We feel strongly that there should now he as much concern over patronage from within the ranks of the service as there was over political influence in 1918.
(Translation):
That fact was also stressed by Mr. Hughes, the new chairman of the civil service commission.
I refer here to an article which appeared on April 29, 1961 in the Ottawa Citizen, in which it is stated that there is still favouritism in the civil service. Perhaps that is just the reason. Perhaps that is the trouble, perhaps that is why the French Canadians do not have their fair share of jobs within the federal civil service.
Mr. Chairman, I should like to conclude my remarks by saying that confederation in my view, and this has often been said, is a pact between the two great races which founded this country. Many people, in fact, still consider the French Canadians not as equals but perhaps as inferiors or as the losers of a battle, and that is most unfortunate. But as long as this attitude will persist, we cannot consider ourselves as a great, united and independent nation where harmony prevails regardless of the religious or political opinions, or racial origins of its people, a nation where life is good, where western democratic freedom is intensely enjoyed every second, every minute, every hour, every day throughout the year, and for many years to come.
We were quoted as an example in the recent discussions between the French government and the Algerian rebels. I do hope those two countries will follow our example and will reach agreement.

People seem to forget, Mr. Chairman, that Canadians of French descent gave their lives for Canada's independence, more than a century and a half ago, when two attempts to take over our country were made, by our neighbours to the south.
Other French Canadians died on the field of honour to defend the freedom and interests of our common homeland, Canada, from the south African to the Korean war, making in the meantime an active and efficient contribution to the last two world wide conflicts.
I dare say that all those sacrifices have not been in vain and that the convention on which this confederation is laid is a pact under which certain rights are recognized to English and French Canadians alike, not only because the latter are to be tolerated, but because we have a full right to be here, and because we consider ourselves as equal partners.
On the other hand, if some persist in maintaining a hostile attitude towards French Canadians, always accusing them of being a vociferous, inferior and discontented lot while closing the door to higher posts before them by all sorts of intrigues which are humiliating for them, limiting their part to that of translator, it may be very unfortunate, but the confederation might get into difficulties, as recent happenings among certain groups in the province of Quebec would indicate. However, I sincerely hope that such turn will never take place, and I think that the new Civil Service Act will, on the contrary, help to improve conditions.
I shall probably have other remarks to make in committee on various clauses proposed in this bill.
(Text):


Mr. Carter:: Mr. Chairman, as I used to be a civil servant myself I have a special interest in this bill and I should like to take advantage of this opportunity to make a few observations on this clause. The civil service is a most essential part of the machinery of government. Governments may come and go, but the civil service ensures continuity in the administration of the affairs of our country.
The importance of this was impressed upon me most forcibly not long ago when I had an opportunity to visit France, for which opportunity I am greatly indebted to the Minister of Veterans Affairs. I was surprised, almost amazed at the extent of prosperity I found prevailing in France, and in particular 90205-6-503
1 Civil Service Act
at the outlook and attitude of the people. It is the attitude of a young country and one might say that the country has become rejuvenated. I made inquiries about this from responsible officials, having in mind the numerous changes of government which have taken place in France right up to recent years. I asked how this could possibly have been achieved. I was assured that in large measure it was due to the excellence of the civil service of France which, although governments had changed frequently, had provided the continuity essential for maintainnig development.


Mr. Macdonnell:: Mr. Chairman, may I ask the hon. gentleman what was the year of his visit? What year is he talking about?


Chesley William Carter: I am talking about two weeks ago. I think about two years ago the estimates committee, of which I was a member, held some hearings into the civil service commission and a number of problems were brought to light. I presume this new act which is before us has taken care of most of those problems. At that time we found there were numerous categories of civil servants. There were permanent civil servants, temporary civil servants, casual civil servants and prevailing rates employees. There were alsc semi-civil servants, such as employees of the crown corporations, who were employees of the crown and were amenable to civil service regulations but nevertheless did not enjoy civil service status. One of the things that impressed me most was the fact that a civil servant could be temporary for as long as ten or 15 years. I was surprised to learn how many civil servants had been in that category for a very long time. I think one of the recommendations of the committee was that the number of temporary civil servants should be reduced. I have not had an opportunity to examine the bill since it was presented to the house a few minutes ago, but I do hope something has been done to meet that situation.
The civil service commission was set up as one of the safeguards of our freedom by ensuring integrity in the civil service and by eliminating undue political influence in connection with civil service appointments. The opportunities for patronage in the public service of Canada are now relegated to rather minor positions such as revenue postmaster, river guardian and a few minor, temporary jobs of that kind. I suppose that no matter how we set up our ideals we can never achieve them fully, but I was impressed by what was said by the hon. gentleman on my left who preceded me in this debate about patronage from inside the civil service. I do

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not see how that could be taken care of by any type of legislation. I do, however, feel that we have not used the best methods of recruiting people for the civil service of Canada. Indeed, I have felt that some of the methods we employ perhaps defeat their own purpose.
Most hon. members receive copies of notices of civil service competitions requesting applications for certain vacant posts. On looking them over, one finds that the salaries offered are very often not in line with the qualifications and experience required or set forth in the notice. I have come across a number of cases where this has worked against the best interests of the public service of Canada. A very honest person will look at the requirements and say: well, I do not have those qualifications and therefore it is useless for me to apply for the position; and he does not apply. However, another person, perhaps not so modest, will decide to apply and it very often happens that the choice is finally made from a group of people who are not of as high a calibre as those who neglected to apply in the first place because they were discouraged by the high standard set out in the competition notice.
Then there is the matter of boards of selection. Unless the application form has been changed recently there is a space on it somewhere in which the candidate is expected to list all his previous jobs-the name of the employer, the length of employment and so forth. It seems to me that very often the more lines of employers a man can fill in on that form the better his chances are, because that is taken as being experience. Here again, I think the form is defeating its own purpose, because it is not how much experience a person has had that is important. The important thing is the kind of experience a person has had together with its quality. Very often this is not apparent from the application form.
Again, most competitions for jobs which carry an average salary require an applicant to come before the board of selection. I may say that I know something about this work because I used to serve on such a board before I became a member of parliament. I was a representative of the Canadian Legion on selection boards to make sure that veterans got a fair deal and that veterans' preference was preserved. I noticed two things during that short experience. One was that the questions asked by the person conducting the proceedings and by the government representative very often had no relation whatsoever to the job which was being offered. Often no real attempt was made to bring out information which was not apparent from reading the application

form. Often this resulted in the applicant being placed at a disadvantage because, naturally, he had been expecting to be asked questions about his knowledge of the job he was supposed to follow. It can be very disconcerting when a person is asked a lot of other questions which, to him, are not related at all to the job for which he is applying.
The other thing I noticed was that an opportunity obviously existed for whoever was representing the department concerned, to frame his questions so as to favour one candidate more than another. I think this is done more frequently than should be the case. In the final analysis this boils down to the integrity of the people serving on the board. If a person has made up his mind in advance, after reading application forms, that he wishes a certain person for a particular job it is not difficult for him to favour one applicant, or to frame questions to which one applicant can reply, and then to eliminate another applicant by asking questions which have no relevance or which that other person is not likely to be able to answer.
About a month ago a case arose in my own province where a number of applicants were before the selection board. They were kept waiting for a while and the very suspense of waiting for half an hour or an hour to be questioned is likely to be nerve wracking. It happened that one of the applicants at that time was under great stress because of some situation at home; his wife was ill, and there were other problems. When he went before the board he had a complete mental blackout. As a former teacher I can understand how that can happen because I have encountered the same thing when school children, who know what the answers are to certain questions, find their minds a total blank when they are called upon to give those answers on the spur of the moment. That is what happened to this person. He was a candidate for a job which he was qualified to do. As a matter of fact he had been doing it for a number of years to the satisfaction of his superiors. Yet, when he went before this board, because of the situation I have just outlined, he had this mental blackout and failed the competition.
I mention these things because I think great care should be taken by everyone who has the responsibility of sitting on these boards of selection. Then, again, since coming to parliament 12 years ago, I have encountered numerous cases of people in the civil service who have come to me and told me about their grievances. There may be some clash of personality, or the superior may like somebody else better. This person has been brought up and advanced ahead of

the person who has been on the job for a longer period and, according to the evaluation certificates, has done very good work. That, of course, is very upsetting to morale. I have known several people who have been on the verge of breakdown because they have been up against this sort of treatment. It is intangible. They do not know how to fight it. They feel they cannot fight it successfully anyway and so they exhaust themselves emotionally and nervously and come to the verge of a breakdown.
The other point that I should like to make has to do with remuneration. If we are to have the kind of civil service that we want for Canada we shall have to pay our top civil servants and all civil servants on the same basis as private enterprise pays its employees. There used to be a time when civil service salaries were much lower than those which prevailed in industry, and this was justified by what was supposed to be job security. I do not think that the job security argument was ever a good one because I think the person who is so much concerned about security that he would take a lower paying job is not the right type of person anyway.
As far as pensions are concerned, nearly all the big companies have their own pension plans and we are looking forward to the day when those pension plans will become portable. Therefore so far as pensions and security at retirement are concerned, the security argument had no foundation at all. However, as an employer I feel that the government of Canada should follow the principle of equal pay for equal work. This is not being done. It is causing a great deal of injustice. To prove my case I will cite what is happening on the Department of Transport vessels. The Department of Transport operates a number of icebreakers and lighthouse tenders and boats of various sorts. The captains and officers of those boats all have the same responsibilities and in many instances the boats are of practically the same size and are doing the same work; they are even doing it in the same waters; and yet because the crew of one ship is recruited in one province and the crew of another ship is recruited in another province there is a discrepancy in the salary paid to the officers and men on the different ships. I submit this is something that should not be tolerated; it is something that cannot be justified. The captains and crews are all carrying exactly the same responsibilities; they are doing exactly the same work; they are on ships of comparable size and they are not even confined to one particular water. They move back and forth in different waters.
90205-6-503J
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Newfoundland icebreakers very often are employed in the gulf of St. Lawrence and vice versa. It seems to me there is no justification whatever for having one scale of salaries on one ship and a different scale on another. What I have said about the Department of Transport applies equally to boats operated by the Department of Mines and Technical Surveys.
There is also the question of pensions. We are still faced with the problem of many civil servants who retired long years ago when the dollar was worth much more than it is now and who did not receive a very big pension. I think we have some obligation here. I do not know whether it is taken care of under this legislation or under some special legislation.


Mr. Bell (Carlelon):: My hon. friend realizes that it is not a matter for the Civil Service Act but for the Public Service Superannuation Act, an entirely different measure.


Mr.   Carier@: It may be under a different act but it is part of our responsibility toward the civil service of Canada and I do hope that something will be done about it.
There is one final point I should like to make before I sit down. I refer to morale in the civil service. I think we cannot place too much emphasis on the necessity for maintaining the highest possible morale in the public service of Canada. We have seen what has happened in many countries where subversion has entered in and people in sensitive posts have betrayed their countries and passed over vital information to the countries which are seeking to bring about our downfall. We may try to isolate what we call sensitive posts but that sort of thing is not confined to people in sensitive posts; it is a part of the general morale of the whole service. I think it is something that requires special consideration; it is something for which we are all responsible and it will in great part result from the type of people we select to administer this legislation and the way it is carried out.


Frank Howard: Mr. Chairman, I have only one general theme to deal with at this timp and it is somewhat the same as I have dealt with in speeches during other sessions and by way of introduction of bills during other sessions. I refer to the question of bargaining rights. I made two or three different proposals which have met with some objection in the past. One was that the current Industrial Relations and Disputes Investigation Act should apply to employees in the public service negotiating with their employer, with certain exceptions, such as the

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right to strike, and that arbitration proceedings be employed instead of conciliation proceedings as they are known under the Industrial Relations and Disputes Investigation Act. A variation of that this year was also proposed by myself by way of another public bill which in essence said that parliament would be the final arbiter of those matters and would in fact receive the report of the conciliation board under the Industrial Relations and Disputes Investigation Act and would make the final decision on any points which were contained in the report.
Other suggestions have been made and I would think the employees themselves who are concerned with this question of their right to negotiate particularly with their employer are not wedded to one particular system of bargaining as opposed to another. In essence I think what they want to have is the right of determination of their own destiny to the extent that that is possible by way of developing a collective agreement. They want the right to know who their employer is in the sense of whom they are bargaining with, and there is some doubt about that at the moment. Whom should they approach with respect to, first, the development of collective agreements or systems that exist governing wages, hours and working conditions and the like and, second, the processing of grievances?
I am quite sure that even the top officials in the various employee associations are not sure from time to time in their dealings on these matters whether they are dealing with the civil service commission, with the government or whether it is treasury board with whom they are dealing so far as having the final say is concerned or whether it is the parliamentary secretary to the Minister of Finance with whom they should be dealing. Many of them are not sure from one day to the next, depending on the problem, who it is that has the final say with respect to the points that they want to discuss. There appears in that sense, as I said, to be no employer but some murky group of people who at different times have certain things to say about different matters.
As I have said earlier and also on other occasions, in industry employees are governed by the Industrial Relations and Disputes Investigation Act and an employee in industry knows who his employer is. When his organization or association or union sits down on his behalf either to bargain for a collective agreement or to process a grievance it is known who has the final determination. It may be true that in the preliminary stages or in all stages a union or association in private industry will deal with a lawyer representing a particular company or with

some employers' association representing a number of employers or possibly with industrial relations consultants. Apart from that, however, there is one person who is the employer. Behind the lawyers and employer associations there is a corporate structure. There is a general manager or a president and board of directors. There is somebody tangible with whom the employees can deal even though in an indirect way, and there is some difference between that system and that which exists within the public service so far as the relationships of the employees with their employer are concerned.
In private industry employees have the right to determine their own course collectively, to have some part collectively in the decision as to what will be their wages, hours of work and working conditions and how various grievances will be processed and dealt with conclusively. Whether or not the decisions are in favour of the employer or employee is immaterial to the point that there is some place where these differences of opinion can be determined.
This is not so in the public service of Canada or in the public service of a number of provinces. So far as the question of dealing with their employer is concerned, civil servants so-called-I do not care for that name but it is the one which is used regularly-employees in the public service of Canada are in fact, as I have said on many occasions, treated as second-class citizens. They are in a different class from other employees. They are in a different class even from employees of crown corporations who have the right of determination and the right of collective bargaining.
In addition to the suggestions I have mentioned, there have been other suggestions made so far as collective bargaining is concerned and some of these should be accepted by the government. I cast no reflections upon the committee that dealt with this matter but I think it is extremely unfortunate that the bill was introduced in the form it was in the first place, that it was reported back to committee of the whole from the standing committee in the form that it was and that there is no adequate or sensible provision for collective bargaining contained in the bill now before us. So long as there is no satisfactory system of collective bargaining there will continue to be difficulties. Employees of the public service are going to continue to have their wages depend upon the whims of a minister of finance and the manner in which he might be able to juggle the books. They are going to have to depend to a certain degree on governmental decisions, some of which may be made on a political basis depending on the relative nearness of

an election. They are going to have no formal, sensible approach so far as their dealings wth their employer are concerned, and this is going to continue to cause difficulties.
We passed a bill of rights last year which said in effect or was supposed to say that we believe in equality before the law, but the government does not believe in it when it comes to the public servants of Canada. I am paraphrasing the belief of the government in this regard because I do not think that anyone will say that the bill of rights has any effect or that it covers the activities of the government in its dealings with the public servants of this country. Yet this is the base from which we should start. These individuals should have the basic right that other people have to bargain collectively, to know who their employer is and to be able to deal with him in such a way as to bring about a conclusive result with respect to their grievances, requests and demands from time to time.
Inasmuch as we have a civil service commission that over many years has gathered a great deal of information, statistics and records about relationships of wages and so on in the civil service, it has been suggested that the commission should remain as it is with some alterations, that it should be the agency to which the various employee associations should present their proposals for a collective agreement or for changes and that the civil service commission would in effect be something akin to a conciliation board so far as private industry is concerned. It has been suggested that after the civil service commission had heard arguments from the employee associations and certainly after hearing the arguments from the point of view of the government representing the crown, which in essence I suppose is the employer, it would be in a position similar to that of a conciliation board and would make a public report and recommendations governing the provisions of a collective agreement. The public would have knowledge of this report in the same way as the public now has knowledge of conciliation board reports which are released by the Minister of Labour.
It is further suggested that if the terms of the recommendations were not acceptable to the government or to treasury board, whoever it is that happens to make the final determination, the civil service commission should then step out of the way. Suppose it is thought desirable to establish a negotiating committee of cabinet. This negotiating committee would then be able to meet with the representatives of the employee associations to bargain collectively upon the points at issue.
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A few years ago we had some experience along this line in British Columbia when the provincial government said it was going to solve everything for the civil servants of that province by establishing a cabinet committee to meet with civil servants for purposes of negotiation. Everyone thought this was going to be a fine idea, but in one instance it took the British Columbia government employee association over 18 months to even get a meeting with the cabinet committee to talk about one grievance relating to a stationary engineer employed at the old folks' home. When I suggest a cabinet committee as the negotiating arm of the government, I am not suggesting that it follow the course established by Premier Bennett in British Columbia when his negotiating committee of cabinet took 18 months to even sit down with the representatives of the employees.
I think that the negotiating team of the cabinet or committee of the treasury board, whatever seems to be the desire of the government should be governed by some statutory requirement in connection with its meetings with civil servants, just as employers in private industry and unions must meet within a certain period of time if either side opens negotiations toward a collective agreement. I feel that there should be some time limit. In addition to that, I feel that if no agreement is reached at that stage there should be some form of arbitration to finally determine what the provisions of the collective agreement are going to be.
As I have said, a number of proposals have been made in this regard. These proposals have obviously been rejected by the government in office because it would obviously want to maintain the amount of control which now exists and retain the right to prevent public servants in Canada from having what should be their right, that is the right to be heard and the right to freedom of determination of their own affairs. It is obvious from the various refusals and arguments that have been made from the government side, that the government is not interested in extending, in a decent fashion, the right of collective bargaining to the public service of Canada. It is obvious that this government is not interested in even remembering the bill of rights, let alone extending it or making it apply to people to whom it should apply. It is quite obvious from all the comments that have been made that this government wants the Minister of Finance to be able, as he did about a year ago, to hand pick groups of people within the public service and say, you will get so much an hour more and you will get so much an hour more. This government wants

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to venerate the Minister of Finance and exalt him to a position of being next to, if not in place of, God himself.
This is not good enough. The other day the hon. member for Greenwood upheld the Minister of Finance as being a truthful and honest person. No one disagreed with what he said at that time. Perhaps subsequent events made some alteration in his opinion, I do not know. The fact of the matter is that the Minister of Finance should not have-


Richard Albert Bell: That is a totally unworthy insinuation.


Frank Howard: What is an unworthy insinuation?


Richard Albert Bell: What the hon. gentleman has just uttered.


Frank Howard: What have I insinuated?


Richard Albert Bell: The hon. member has insinuated that subsequent events have, in some way, cast some doubt upon the veracity of the Minister of Finance.


Frank Howard: I did no such thing.


James MacKerras Macdonnell: Of course you did.


Frank Howard: Here we have three or four people now taking part in this. This is typical of this government. They jump to conclusions and are thin skinned. All I am asking you to do is listen.


Mrs. Fairclough:: All you want us to do is listen while you talk.


Frank Howard: If the hon. lady wants to get into a debate with me about a variety of things happening in her own department, I would be quite happy to oblige her. However, this is not the place to do it.


Ellen Louks Fairclough: I will answer any questions you wish to ask any time.


Frank Howard: A question was asked of the hon. lady more than a year and a half ago and she promised the member for Burnaby-Coquitlam that she would provide certain information for him and she has not done it yet.


Ellen Louks Fairclough: That is a lie.


Frank Howard: She says, that is a lie. I would not even give you the pleasure, madam, of asking you to withdraw, because I know you would think about it anyway. All I said was that the other day the hon. member for Greenwood objected to me making reference to untruths and the like about the Minister of Finance, which I withdrew. I said that perhaps subsequent events would lead the member for Greenwood to change his mind, not that the Minister of Finance was telling

falsehoods or anything of that nature. What the hon. member for Greenwood does is his own business. The point at issue is this. The touchiness of hon. gentlemen opposite indicates very clearly that they do not want the public servants of Canada to be on the same plane and have the same rights, freedoms and responsibilities as everyone else has. They want to continue to treat the public servants as second-class citizens, to be able to juggle their wages, hours and working conditions as it is politically expedient so to do and keep them in a condition of subjugation. They want to continue to force them to be the cap-in-hand people who come to the cabinet or perhaps the Minister of Citizenship and Immigration, with all her graciousness, and ask, please, madam, would it be possible to have a change in our working conditions?
I do not think that is good enough for the people in the public service of this country. As I said earlier, it is extremely regrettable that the government did not have the courage to bring in this sort of bill in the first place so that these people who have been treated as second-class citizens for many years by previous governments, could at long last be brought out of that condition and brought to realize that perhaps the bill of rights does mean something to them. The civil servants might be brought to realize that the bill of rights is not a fanciful group of words about which the Prime Minister likes to become emotional from time to time.


Mr. Tardif:: Mr. Chairman, on July 7, 1961, at page 7686 of Hansard, the Prime Minister gave a definition of the bill of rights as it applies to the civil service. This is one reason why I, as a member of the committee, am still worried about the lack of the right of arbitration in the bill that is now presented to the committee. I am not going to read what the Prime Minister said about the obligations or responsibilities of civil servants. However, I am going to read an outline of the effect that apparently the bill of rights will have on civil servants. He said:
Then, as far as civil servants are concerned, these words might be used, I think, to define their responsibility; one way to put it is that civil servants, like children, should be seen and not heard.
Actually, that is the one thing that is missing from the bill that is presented to us now.


James MacKerras Macdonnell: Mr. Chairman, would the hon. member permit a question? Do I understand that when he used that phrase which he just used about civil servants being seen and not heard, he attributed that phrase to the Prime Minister; is that correct?


Paul Tardif: Yes.


James MacKerras Macdonnell: Does he not know-he must know-that the Prime Minister quoted that as a phrase used by the hon. member for Bonavista-Twillingate. How can the member be so utterly unfair as to try to leave the impression again that those were the Prime Ministers' own words?


Paul Tardif: Actually, from what I read at page 7686, there is no indication that the Prime Minister was quoting anyone else. I shall read it for you, if you will listen.


James MacKerras Macdonnell: May I ask the hon. member a question? Does he not know that those words were used by the Prime Minister as a quotation from the hon. member for Bonavista-Twillingate? Does he know that? That is the question.


Paul Raymond Martineau: May I speak to the point of order, Mr. Chairman? I think the hon. member has been most unfair. He knows very well that those are not the original words of the Prime Minister, they are a quotation. It is in plain letters here when the Prime Minister continued, as found at page 7686 of Hansard and said:
Hon. members may wonder what I was quoting from. Well, I was quoting the immortal words of the member for Bonavista-Twillingate spoken on October 24, 1953, at Carleton College,-
Surely the hon. member knows that he is creating a false impression by attributing to the Prime Minister the authorship of words which immortally belong to the hon. member for Bonavista-Twillingate.


Hazen Robert Argue: That is just the way the Prime Minister acts.


The Chairman:: Order.


George James McIlraith: On the point of order raised by the hon. member for Pontiac-Temiscamin-gue I would point out that the words were taken by the Prime Minister as his own and used in debate. Then later he referred to the source of the words. I wish to put on record the whole of the quotation, not just the part read by the hon. member for Pontiac-Temiscamingue.


An hon. Member:: What is the point of order?


Jacques Flynn: Order.


George James McIlraith: The point is this. The Prime Minister was referring to the Bank of Canada and he went on to say this:
Then, as far as civil servants are concerned, these words might be used, I think, to define their responsibility: one way to put it is that civil servants, like children, should be seen and not heard.


Some hon. Members:: Hear, hear.
The Prime Minister then continued and the hon. member for Pontiac-Temiscamingue
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quoted him from there on. I should repeat that quotation so that it will be complete:


John George Diefenbaker: Hon. members may wonder what I was quoting from. Well, I was quoting the immortal words-
The word appearing here is "immoral" but it was corrected later by the Prime Minister.
-of the member for Bonavista-Twillingate spoken on October 24, 1953, at Carleton College, in which the following personal remarks were interspersed:
Then appears the quotation:
"I know that there are those who would disagree violently with this view-some people already have-"
And he quotes who disagreed.
"-but I am vain enough to believe that X was a good public servant."
From the whole quotation it will be seen that the Prime Minister had adopted the words and used them as his own. He then went on to say from where he had obtained them and to attack the hon. member for Bonavista-Twillingate. That was the whole burden of his argument.


John George Diefenbaker: I was absent, Mr. Chairman, when the hon. member for Russell had his say in this connection, but I am glad to have been present during the concluding remarks of the hon. member for Ottawa West. May I say immediately that I was quoting the words of the hon. member for Bonavista-Twillingate. I placed those words before the house as an example to which reference was made during the course of that memorable address by him to Carleton university back in 1953. The remarks can be found in the Ottawa Citizen of that day. I was not in any way appropriating them. I was simply pointing out that the hon. member for Bonavista-Twillingate had used these expressions and that it was of great interest that the mover of the vote of thanks on that occasion was Mr. Coyne, governor of the Bank of Canada. I am extremely glad of the opportunity of saying that the words are those of the hon. member for Bonavista-Twillingate. They are not accepted in any way by us but are quoted simply as indicating the attitude of one who at that time had occupied a prominent position in the civil service and was speaking apparently with the authority that position would merit.


George James McIlraith: Oh, no; nothing was said about his speaking with the authority of that position. I think the Prime Minister will agree that statement was not in his remarks.


Paul Tardif: My quoting these words of the Prime Minister certainly created some sensation. I was not in the house when the Prime

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Minister said that. Yes; I was in the house when the Prime Minister made that speech.


Some hon. Members:: Oh, oh.


An hon. Member:: You had better get your story straight.


Paul Tardif: It still creates quite a bit of sensation. I was in the house when the Prime Minister said that, and he said that with a great deal of pride. Then all of a sudden somebody said "Hear, hear" and the Prime Minister immediately corrected it. He said, "I don't want you to believe that I said that; I am just quoting what the hon. member for Bonavista-Twillingate said." I was going to point that out if hon. members had given me a chance to do so without interrupting me.


Some hon. Members:: Oh, oh.


Paul Tardif: Just a moment; let me finish.


Jacques Flynn: Order.


Paul Tardif: It is true that after some members drew to the Prime Minister's attention the fact that this was an improper statement to make, a statement that would probably stay with the members of the civil service staff for a long time to come, he corrected the statement. However, that is the action of the government. We just saw in the past few days an instance-


Some hon. Members:: Oh, oh.


Paul Tardif: -where a civil servant or employee of the dominion government can be seen and should not be heard. The last employee of the government that was heard, of course, was heard by a Senate committee.


Some hon. Members:: Oh, oh.


Paul Tardif: There is no question, Mr. Chairman, that even if the Prime Minister attributes-


Mr. Valade:: I rise on a point of order, Mr. Chairman. The hon. member for Russell has just said that the Prime Minister corrected that sentence after that interjection. May I say that the Prime Minister never corrected it. He had a clipping from a newspaper from which he quoted this statement by the hon. member for Bonavista-Twillingate.


Paul Tardif: I thought I was being quite bold in quoting the Prime Minister and I was not under the impression that he needed any help. As a matter of fact, I am sure he does not need any help to defend himself.


Georges-J. Valade: Not from the hon. member.


Paul Tardif: I accept the explanation of the Prime Minister and I tell the Prime Minister that actions speak much louder than words.

I personally think that in this bill presented to the house today there should have been included a clause that permits the civil service to go to arbitration. If it were possible for civil servants to go to arbitration it would eliminate many problems for them. There is no question that private industries and the leaders of private industries in Canada recognize collective bargaining. I wish to refer to a speech made by the president of Ford Motor Company of Canada, delivered before the British Columbia chamber of commerce on May 15, 1961, in which, with regard to collective bargaining, he said that he believes it is vital for business leaders to reaffirm their belief in the principle of collective bargaining as a device by which management, employees and union represented employees can represent divergent views in order to provide solutions with which both can live. Acceptance of this principle by management must be predicated, of course, he said, on collective bargaining rendering service to the whole economy.
The same thing exactly, Mr. Chairman, could apply to the employees of the civil service, namely that they be permitted to go to collective bargaining and that they be permitted to present their views in a manner that will be beneficial not only to the employees but to the economy of the country also. It would also prevent the government from procrastinating in making decisions in connection with salary adjustments, vacation adjustments or any other working condition that apply to civil servants. I know that the ministers or the hon. members across the floor will say that there is not procrastination. The last time an increase was granted to civil servants it was after demands that were about two years old. If they had collective bargaining or permission for collective bargaining, they would immediately apply to the board and prevent this procrastination that is a recognizable attribute of the present government.
There is another injustice that was done to civil servants at the end of a period of two years of procrastination. It was the fact that salary adjustments had been made to departments at different periods. It is my opinion and that of many of the people who sat on the committee that the adjustment in salaries should apply to all civil servants at the same time. If, because of an increased cost of living or because of other conditions, there is necessity to adjust salaries for civil servants, the necessity should apply to all civil servants at the same time, not to one department in January, another department in May and another one in November. All civil servants should be treated in exactly the same manner. There should

be no discrimination, as there is in some departments, in keeping them waiting longer for the adjustments they deserve and which have been agreed.
The hon. member for Edmonton-Strath-cona said that in his opinion civil servants were getting too much protection. Unfortunately I find that is the attitude of the government; they think civil servants are getting too much protection. Every time a minister or a member of the government speaks to an audience they talk of the efficiency and the quality of our civil service, and in the House of Commons they say these civil servants are getting too much protection.
I can advise the hon. member and the government that not only are civil servants not getting too much protection, but they are not getting the protection that is given employees in private industry. Civil servants are at the mercy of the government in respect of decisions that are made. For instance, while this may not be a very important example although the last statutory holiday was part of this bill, it was not granted to civil servants because the bill had not been passed in the house. I hope the necessary arrangements will be made so that the next statutory holiday will be given to civil servants and they will not be forced to lose it as they were last time.
There is another provision that should have been included in this bill but which has been omitted. While I think the bill is an improvement over the measure that was in force and had been in force for a great number of years, there are still many things which should have been inserted in the bill to make it more appropriate. Temporary civil servants should be entitled to the 2 per cent holiday pay as are employees in industry. This provision should apply not only to employees who work for a short period of time but also to employees who work for a number of days every week and are considered temporary employees.
The hon. member for St. Denis, as reported at page 4717 of Hansard, asked the Postmaster General whether it was true that temporary post office employees were asked to pass examinations. The Postmaster General answered-I can quote his answer if the committee wishes, but I do not think it is necessary-that temporary employees were asked to pass examinations because their salaries had been adjusted and they were receiving the same salary as clerks doing an equivalent job. He said their salaries had been raised from $1.26 to $1.72 an hour.
As reported at page 7183 of Hansard of June 28, the hon. member for St. Denis asked the Postmaster General whether temporary 90205-6-504
Civil Service Act
employees were going to be granted holiday pay. The Postmaster General said no, it did not apply to them. So the Postmaster General will not think I am misquoting him I will read his answer:
Mr. Speaker, I can understand the hon. member's preoccupation with holidays at this stage in our parliamentary session. I think many hon. members are preoccupied with the same consideration.
That was one of the humorous remarks that the Postmaster General usually makes perhaps to prevent a straight answer to a straight question. He continued:
In this particular case these people are working three or four hours a day. It is not full time employment. They are perfectly free to arrange for holidays if they wish.
In industry, whether or not an employee works only two or three days a week, he is entitled to 2 per cent of his salary as holiday pay and he is the man who decides when he is going to take a holiday. The fact that he is a temporary employee does not prevent him receiving that percentage of his pay for holidays. With respect to part time civil servants there seems to be no obligation under our present regulations to pay them for holiday time.
Industry in the province of Ontario pays 2 per cent of the salary to employees whether they are part time or full time. In this case employees are being asked to pass the same examinations as permanent employees if they are going to work two, three or four days a week regularly throughout the year, and it is my opinion that they should be entitled to 2 per cent of their salary as holiday pay. I deplore the fact that this provision was not included in the bill.
At that time the Postmaster General could not understand why these people should not take examinations and yet be treated differently from regular employees. I think the government should certainly have considered this question and included this provision in the bill presented to the house. If some of these provisions had been included in the bill I am sure our civil servants, who are recognized not only by the government but by the opposition as being the foremost civil servants in the world-this is agreed by everybody-would be a lot happier. I do not think it would cause any great headaches to the government and I think it would eliminate many of the problems that the civil servants of Canada have to face.


George James McIlraith: Mr. Chairman, in the discussion on clause 1 of this bill in committee of the whole house it is perhaps appropriate that I should make some preliminary remarks about the standing committee to which the bill was referred after second reading.

Civil Service Act
I wish to make it clear that for my part I felt the committee made remarkably objective study of the bill. I should like on my own behalf to express to other members of the committee my appreciation of their objectivity in trying to deal with what is of necessity a somewhat complex problem. The chairman of the committee conducted the hearings in a way that tried to take full account of the rights of all members of the committee and of all the associations which wished to be heard or make representations. I must say I found this a very pleasant relief from some experiences I have had in other committees this year and last year. But I am not going to discuss that aspect of the matter here. It was a very satisfactory experience to have that approach taken by the chairman and all hon. members from all parts of the house who were serving on the committee. I wish to express that thought at the very outset of my remarks. I think it should be expressed and I am quite happy to do so.
There is one interesting sidelight to the work of the committee. It seemed to me that the result of the rather lengthy and thorough studies given by the committee was to make us appreciate all the more the splendid work performed by those who drafted the original act in 1918. When one remembers that the act is now some 43 years old, the changed circumstances of the times, the changes in the civil service, the great growth in the civil service and the many new problems which have arisen, one cannot help but have an appreciation of how well the principles in the relationship of government-civil service matters were laid down in the old act. I for one am perfectly prepared to acknowledge that. I am happy to acknowledge it and to express appreciation to those who were concerned with the draftsmanship and sponsorship of the bill at that time.
It was a coalition government. I have expressed the thought previously on this bill that the original bill could probably not have been passed had it not been for the fact that there was a coalition government. It is rather interesting that the two people who were mainly concerned with the carriage of that bill later became judges in very high positions in the judicial system of this country. There is no doubt at all about the fact that it was the coalition government which passed that bill, and it was because it was a coalition government that it was possible to get so many clauses, strong clauses, I may perhaps call them, inserted in the bill. It was a very good thing. I, personally, take some pride in the fact that the two ministers who had so much to do with it were Liberals,

but the hon. member for Greenwood would probably say this was a mere accident.


James MacKerras Macdonnell: Well, God moves in a mysterious way, his wonders to perform.


George James McIlraith: That is another pleasant debate which we shall leave for another occasion.
I wish to place some observations on record about the original act because I think it is proper to do so. The bill before us now does not change the basic concept of this original act at all, but it does make many improvements which the passage of time has shown to be desirable and necessary. The committee was able, because of the way in which it approached this problem, to have many amendments made in the committee. I think the bill which has come back to us from the special committee is very much improved as compared with the one that went to it. I have not a note of the number of amendments which were made in the committee but it was sufficient to warrant the reprinting of the bill. I think that is all to the credit of the committee. I think it indicates that people were willing to treat the subject objectively. For my part, while the amendments have not granted all I would have wished, they certainly are improvements and I am the first to acknowledge it.
There are many questions which I could raise. The hon. member for Inverness-Rich-mond, speaking earlier this afternoon, indicated that with the passage of this bill a new golden age would be ushered in for the civil service. I wish to point out that there is one flaw in that reasoning. Golden ages for the civil service, whatever is meant by that-and I presume the hon. member means good relations, high efficiency, high morale, and so on-will not result merely from legislation. They result from the treatment received at the hands of the government in office from time to time. Good legislation is a great help but it is not legislation which makes what the hon. member calls a golden age for the civil servants. That condition is brought about by a proper appreciation and understanding on the part of the government from day to day, whatever government might be in office, of the role of the civil service in carrying on the activities of government, an appreciation of the necessity of a strong administrative arm in any government if that government is to perform efficiently and well, and of the necessity of a strong and efficient civil service if the policies of the government are to be efficiently and well carried out from day to day.

That relationship is not easy to define in precise terms but it does require an understanding and appreciation which is not always given in an equal degree by governments. Indeed, if hon. members would look at the history of the civil service since the predecessor to this bill was passed in 1918 they will see that the low periods, the periods which were not in any sense a golden age of the civil service, were brought about not because of any change in the legislation at any point in that period of time but rather because of the changing attitudes of governments from time to time. The point I wish to make is, in other words, that not only must we have good legislation on the subject but we must have a good understanding of the problems of the civil service and a good working relationship and direction from the government, whatever government it may be. I must say I regretted part of the line taken by the hon. member for Joliette-L'As-somption-Montcalm and the hon. member for St. Hyacinthe-Bagot. It seems to me both of them had lost their objectivity in dealing with what must remain a difficult and delicate subject, though a most important one in a country constituted in the way our country is. I think the problem they were seeking to deal with, the question of bilingualism in the civil service, was treated by the committee in its study as one requiring a great deal of attention, one of real importance. But it was treated as a question of bilingualism in this country because of the rights of the two languages and because of the historical origin of those rights and the need to preserve them fully in spirit as well as according to the letter of the law. Regrettably, the hon. mem-
Business of the House bers to whom I referred used the term "French Canadian" in this context. Indeed, one of them used the term "French Canadian" almost exclusively instead of using the term "bilingualism". Then they sought to digress into party warfare on the subject. As a matter of fact, the members who sat on the committee reached, I thought, a remarkable degree of unanimity on that point and on the necessity of trying to get the kind of legislation with regard to this aspect which would be satisfactory.
May I call it six o'clock?
Progress reported.



BUSINESS OF THE HOUSE

John Whitney Pickersgill: I wonder whether I might ask the leader of the house if he can indicate what business the government intends to put forward tomorrow and for the rest of the week?


An hon. Member:: Why not next week, too?


Gordon Minto Churchill: I did not anticipate that the opposition wanted to sit here for the rest of the week. I shall simply announce that tomorrow we shall carry on with what we are doing today. The order of business-if it is to be changed I will notify the opposition in good time-will be consideration of the Civil Service Act with which we have been dealing in committee, followed by interim supply. If it is possible to reach some solution to the problem of the divorce cases, we might have something to say with regard to that tomorrow.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
90205-6-504J
7984	HOUSE OF
Questions

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

Mr. Pitman: 1.	What are the names of all municipalities which have applied for designation as surplus manpower areas up to and including June 30, 1961, and in each case what was the size of the labour force?
2.	What are the names of all municipalities which have been accepted as surplus manpower areas up to and including June 30, 1961?
3.	What percentage of months between May and November between 1953 and 1960 did all the areas in the answer to question 1 have surplus manpower available?
4.	In which of the areas found in the answer to question 1 have the industrial employment conditions generally deteriorated since 1953?
5.	How many industries within municipalities designated as surplus manpower areas are at present receiving double depreciation allowance?
Answer by: Hon. Michael Starr (Minister of
Labour):
1.	The names of the areas and localities that have applied for designation under the special capital cost allowances program are as follows:
Alberta: Drumheller.
Manitoba: Carberry.
Ontario: Cornwall, Morrisburg, Elliot Lake, Fort William, Windsor, Essex county.
Quebec: Chandler, Jacques Cartier, Louise-ville, Matane, New Richmond, Richmond, St. Jerome, Tracy.
New Brunswick: Campbellton, Dalhousie, Shippegan, County of Gloucester, Chatham, Newcastle, County of Northumberland, County of Saint John, Grand Falls, Milltown, Moncton, Dieppe, Port Elgin, Sackville, Sussex, County of Westmorland, Woodstock.
Nova Scotia: Amherst, Louisbourg, New Glasgow, County of Antigonish, Trenton, Pic-tou, County of Guysborough, Springhill, Yar-

mouth, District of Yarmouth, County of Cape Breton, Mahone Bay.
Estimates of the labour force of 16 areas and localities for which investigation has been completed are as follows:
Cornwall, Ont. N.E.S. area, 32,100; Elliot Lake, Ont. N.E.S. area, 5,500; Windsor, Ont. N.E.S. area, 96,100; Amherst, N.S. N.E.S. area, 5,100; New Glasgow, N.S. N.E.S. area, 22,300; Springhill, N.S. N.E.S. area, 6,900; Milltown, N.B., 700; Grand Falls-St. Leonard, 4,500; Richmond, Quebec, 1,200; St. Jerome, Quebec, N.E.S. area, 7,200; Jacques-Cartier, 15,400; Chandler, Quebec N.E.S. area, 8,000; District of Yarmouth, N.S., 1,900; Yarmouth, N.S., 2,300.
Estimates of the labour force in other areas and localities that have applied for designation are not available until the investigations of the Department of Labour are completed.
2.	The following national employment service office areas have been designated under the special capital cost allowances program:
Cornwall, Ont. (includes Morrisburg), Elliot Lake, Ontario, Windsor, Ontario (includes part of Essex county), Amherst, N.S., New Glasgow, N.S. (includes Pictou, Trenton and all remaining parts of counties of Antigonish and Guysborough), Springhill, N.S.
The following localities have been designated under the special capital cost allowances program:
Milltown, New Brunswick, Grand Falls-St. Leonard, New Brunswick.
3.	A record of labour market classifications for the period 1953-60 is available for areas served by local offices of the national employment service, but not for particular municipalities or counties. For municipalities and counties that have applied for designation under the program, the corresponding N.E.S. offices, and the percentage of the 48 months May to October 1953-60 that these N.E.S. areas were classified in a surplus labour market category are as follows:
Municipality or county
National employment service local office area
Months classified in a surplus labour market category as a percentage of total
Cornwall	
Morrisburg	
Elliot Lake....
Fort William...
Windsor	
Essex county...
Drumheller	
Carberry	
Chandler	
Jacques Cartier Louiseville....
Cornwall....
Elliot Lake.. Fort William
Windsor	
Drumheller..
Brandon	
Chandler.... Montreal.... Louiseville...
50Q)
88
2
35
(:) Covers the period May to October, 1959 and 1960.
	JULY 12, 1961	7985
	Questions	
Municipality or county	National employment service local office area	Months classified in a surplus labour market category as a percentage of total
Matane	
New Richmond	
Richmond	
St. Jerome	
Tracy	
Campbellton	
Dalhousie	
County of Gloucester....
Shippegan	
County of Northumberland.
Chatham	
Newcastle	
County of Saint John....
Grand Falls	
Milltown	
Moncton	
Dieppe.
Port Elgin.
Sackville.
County of Westmorland. Sussex.
Woodstock	
Amherst	
District of Yarmouth...
Yarmouth	
County of Cape Breton.
Louisbourg	
New Glasgow	
Antigonish county....
Trenton	
Pictou	
Guysborough county___
Springhill	
Mahone Bay	
Matane	
New Richmond
Sherbrooke....
St. Jerome...
Sorel	
Campbellton___
Bathurst	
Newcastle...
Saint John... Edmundston. St. Stephen..
Moncton.
Sussex...
Woodstock Amherst..
Yarmouth. Sydney___
New Glasgow
Springhill.. Bridgewater
60
50
71
88
25
71
42
27
83
29
4.	In 16 areas and localities for which investigations have been completed, it was found that employment conditions had generally deteriorated over the period 1953-60 in Cornwall, Windsor, Grand Falls, Milltown, Amherst, New Glasgow, Springhill, Jacques-Cartier and St. Jerome. No employment statistics are available for Elliot Lake prior to 1958. Since that date employment has generally deteriorated.
Employment trends in other areas and localities that have applied for designation are not available until the investigations of the Department of Labour are completed.
5.	No firms are receiving double depreciation allowances at present. Applications from firms intending to produce new products in designated areas are being reviewed by the Department of Trade and Commerce.


LETTER BOX INSTALLATIONS, MONTREAL ISLAND
Mr. Denis: In each of the counties on the Island of Montreal, how many new letter boxes have been installed since January 1, 1958, made of (a) metal (b) plastie (c) any other material?
Answer by: Hon. W. M. Hamilton (Postmaster General):
7986	Questions	HOUSE OF COMMONS	Metal	Plastic	Other material
Jacques Cartier-La Salle Notre Dame de Grace....
Papineau	
Mercier	
Outremont-St. Jean	
Maisonneuve-Rosemont.. St. Laurent-St. George..
Laval	
Mont Royal	
Hochelaga	
St. Antoine-Westmount..
Dollard	
St. Denis	
Ste. Anne	
St. Jacques	
St. Henri	
Ste. Marie	
Lafontaine	
Cartier	
Verdun	
Laurier	
128	1
23	1
7	Nil
91	it
16	li
23	M
23	U
79	it
56	if
9	it
17	1
51	Nil
13	ii
11	it
4	it
9	ii
7	a
5	a
1	a
2	a
2	a
Nil

577	3	Nil

Thursday. July 13. 1961