1961-05-03

CIVIL DEFENCE


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, with the leave of the house I should like to make a statement on the national exercise in civil defence to be held on Friday, the purpose of which will be to test the emergency measures being developed by the federal and provincial governments and the municipalities.
This exercise was announced in March. At that time I said in a press statement that the purpose was to practise those emergency measures which are necessary for national survival and the continuity of government at all levels, to test the preparations that have been made and locate whatever gaps exist in planning and preparations.
The threat of a nuclear war is a constant companion of all who occupy positions of responsibility and trust, and because of that fact this government has put forward every effort on behalf of disarmament. I know there are some who say that the taking of any defensive preparations in the military or civil fields amounts to an admission of the inevitability of war. We do not take that view. Rather it is a recognition of the facts and realities that causes us to make preparations to the end that we shall be ready in the event that war should take place.
The survival operations which will take place on Friday are designed, with the co-operation of the provinces and municipalities, to assure that as far as possible many who otherwise would be certain victims might survive. The exercise will commence with the sounding of warning sirens now being operated by the army. There will be a broadcast explaining the nature and purpose of the exercise, and the public will be informed by continuing statements by radio and television that what is taking place is only an exercise and that there is no need to take alarm. Indeed, this morning I heard one of those messages put over C.B.C. advising people well in advance so that nothing in the nature of fear could possibly overtake any of our people.
In this exercise the public is not being asked, however, to participate as individuals or as families. The main operation will
take place at a central headquarters and at ten regional headquarters. The central headquarters will be located at Camp Petawawa, and at that location the government will be represented by the Minister of National Defence, the Minister of Defence Production, the Minister of National Health and Welfare and possibly by one or two other ministers. I would appreciate it if Her Majesty's loyal opposition were to feel it could name one of its members to attend-I see a smile on the face of the hon. member for Essex East (Mr. Martin), who has always taken an interest in this regard-and perhaps members of the C.C.F. group would choose one of their number. They could join with the others at Camp Petawawa and see the operations at headquarters. There will be more than 150 officials from federal departments and agencies and from the army participating in the exercise at Petawawa.
At the regional centres which have been set up in connection with this particular exercise there will be representatives of the civilian side of the federal government, of provincial governments and of the army. In some cases ministers of provincial governments will be present. Senior army officers will be there to direct the work of the army in the field in connection with survival operations.
As I informed the house in August last, it is the intention in the event of war to designate in advance in each of the regional centres of government a senior representative of the federal government who will have authority to act on behalf of the federal government, particularly when communications with the national headquarters are interrupted or inadequate. Among the representatives of the government who will occupy the role of regional commissioners for the purpose of this exercise will be the Minister of Justice, who will do so at the centre at Nanaimo. The Associate Minister of National Defence will do so at Valcartier, Quebec; the parliamentary secretaries to the Prime Minister will perform this role at Camp Borden, Ontario, and at Fredericton, New Brunswick. The parliamentary secretary to the Minister of National Defence will do so at Aldershot, where the Nova Scotia headquarters will be. In Nova Scotia, I might point out, the defence aspects of the arrangement are of particular importance. For the three

Civil Defence Exercise prairie provinces the parliamentary secretaries to the Ministers of National Revenue, Veterans Affairs and Agriculture will represent the government in the provinces in which they normally reside. The federal emergency measures regional officers for Prince Edward Island and Newfoundland will serve as acting regional commissioners at the centres in those two provinces.
This major exercise- will require the cooperative efforts of hundreds, if not thousands, of persons in municipal, provincial and federal civilian services. The co-operation shown has been most commendable. We have to be prepared, and without having had any previous experience with anything like it there is only one way in which these preparations can be made. That is in the manner we intend to follow on Friday, to substitute for an actual experience which all of us hope will not occur in our country or in any country in the world.


Hon. Paul Hellyer (Trinity):: Mr. Speaker, like the government we believe every effort should be made to work out a world wide disarmament agreement while there is yet time, but in the interim we believe it is only prudent that we should plan for any eventuality which might occur. In this respect we have stated our position, that in the event we have to live in a world where two great powers face each other over a period of years or decades, each with a capacity to wipe out the homeland of the other, we must take such precautions as we can by way of passive defence.
The Prime Minister has said that this exercise is being sponsored to determine the extent to which the planning to date is effective, and to determine the gaps that exist in the planning. We will permit the Prime Minister a bit of poetic licence this morning. We suspect that the situation now is that the gap exceeds, so far, the concrete results which have been achieved.
There is, we understand, a fall-out pamphlet which has been prepared and is now ready for distribution. We should have thought it logical that this pamphlet would have been distributed in advance of the exercise so the public at large might have had the opportunity to peruse it and to make such preparations, and give the matter such thought, as would seem fitting to them. We understand, however, that it will not be released until after the exercise on Friday, and until after the Prime Minister has appeared on the television news program that evening.
The interest of the hon. member for Essex East in these matters is well known. He has

contributed much to the public interest, not only in the matter of disarmament but also in regard to steps which must be taken to prepare ourselves for any eventuality in our homeland. He has put forward a number of worth-while suggestions, and we are glad to see that the government has taken some of them into consideration. Those of us on this side have also shown interest in extending the plan. You will recall the dismay we felt last summer, when we learned that even the basic equipment necessary for civil survival had not yet been acquired by the government. We understand that some crash programming has been done in the meantime, and we now look forward to learning something of the extent of it as a result of the exercise on Friday.
We are glad to hear that so many members of the government will be participating in this exercise. It is also nice to know that it is the government's belief that at least one member of each of the opposition parties should be spared in the event of an attack. That does not seem an unreasonable ratio having regard to the distribution of hon. members in the House of Commons at the present time. All we can say is that we hope the facilities provided for survival at these particular locations, which have been so designated, will be such that the government members, and indeed the opposition members who are privileged to be there, will themselves have the opportunity to survive and join the rest of us after the exercise is finished.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, let me say that members of this group do not wish to make any political capital out of the unfortunate necessities of our time. We appreciate the action of the Prime Minister in informing the house of the plan and of some of the details of this survival exercise. We are also glad to know that the public is being well informed in advance. This is very necessary in exercises of this kind. However, Mr. Speaker, I am certain that all hon. members, regardless of party, hope that the efforts of the Secretary of State for External Affairs and all those associated with him in the United Nations and other gatherings to promote disarmament and work for peace will be crowned with success.
We in this group trust that this exercise will emphasize the necessity of increasing support for those who are doing their best under very difficult and frustrating international circumstances to make certain that the genuine article so far as survival is concerned will not be required.



PUBLIC SERVICE


John George Diefenbaker: I wish to table copies in English and in French of the first progress report of the royal commission on government organization. Copies will be made available today to members of the House of Commons.



NORTHERN AFFAIRS


Hon. W. G. Dinsdale (Minister of Northern Affairs and National Resources):: Mr. Speaker, I am happy to announce an expansion in the government policy for the construction of development roads in the Yukon and Northwest Territories. In doing so, Mr. Speaker, I should like to take this opportunity to welcome the hon. member for Mackenzie River (Mr. Hardie) back to his place in the house. This is an occasion that he can help to celebrate with us.
Hon. members will recall that since 1958 the government of Canada has been actively engaged in the construction of roads to encourage prospecting for and the development of resources. This policy parallels in the territories the roads to resources program in the provinces. It has resulted in a thousand miles of development roads now in use or in some stage of construction in northern Canada. Practical experience has shown that to keep pace with the upsurge in northern development, and also to meet the diversified needs of the north, greater flexibility is required in road construction policy.
Under the new policy, four categories of development roads will be recognized. There are area development roads, which open up relatively undeveloped regions, and mine development roads, which serve an area where two or more mining companies have made substantial progress toward large scale production. These will be financed entirely by the federal government. Mine access roads which serve the property of one mining company capable of achieving production on a large enough scale to warrant federal assistance will be financed two thirds by the federal government and one third by the company concerned. This parallels similar arrangements existing in the provinces under the roads to resources program.
The former policy made no provision for tote roads or trails. These are low standard roads, built to provide temporary, seasonal, or year round access to the property of an individual company to bring in supplies or equipment for exploration, development or
3,	1961	4275
Expansion of Northern Road Construction small scale production. To meet this special need parliament will be asked to approve annual grants in the amount of $50,000 to each territorial government, from which the territories may assist the companies concerned.
The new policy will provide assistance in the development of a number of mining prospects which are of great importance to the Northwest Territories, the Yukon and Canada as a whole.


Mr. M. A. Hardie (Mackenzie River):: Mr. Speaker, before I comment on the statement made by the Minister of Northern Affairs and National Resources, perhaps you would allow me to say a few words on a question of privilege, shall I say. In the past three months there were times when I had serious doubts of ever returning to this house. As hon. members know, cancer is a very emotional word. At the same time, I feel I have come through dark days and am now back in the house to stay for some time.
I want to thank you, Mr. Speaker, and through you the Prime Minister, the leader of my party, the leader of the C.C.F. and all other members of the house and their wives for what they have done for me and my family over the past few months. I am sure it had a great deal to do with my being here today.
At this time I should also like to express my sincere gratitude to my physician and surgeon, the staff of the Civic hospital and the doctors and staff of the Ontario cancer foundation. They treated me royally. They have done all they can and all I can do now is hope. I also want to express my sincere thanks to the staff of the House of Commons and members of the press gallery. I am sure that each and every one of my many friends in the house, along with my friends from coast to coast and the people of my riding, who sent me cards, letters and telegrams with words of encouragement and who offered their prayers for me have had a great deal to do with my recovery.
As a matter of fact, the other day I was feeling fairly good and I paid a visit to a woman I had met in the hospital a year ago. She told me about an old fellow of about 80 or 85 who lived near her. She said, "Everybody around here is praying for him to live and he should be dead". She said, "I told them to lay off". You know, this business of prayer snowballs. She said, "There is real power in prayer". Before I left she said to me, "Do you want me to put you on my list for a few prayers?" I did not refuse, of course; I said, "If you have that kind of faith and a man who should not be here is here, I would be happy to be on your list".

Starred Questions
I also wish to thank my wife who spent many hours waiting at bus stops on her way to and from the hospital to visit me once or twice every day. I say again, ladies and gentlemen of the House of Commons, that I am glad to be back, and I want to thank each and every one of you from the bottom of my heart. I do not think words can express the feelings I have for each of you.
With regard to the statement made by the Minister of Northern Affairs and National Resources, I am sure the people of the north will be very happy to hear of the new policy on development roads which will provide more flexibility with respect to companies that find ore, in the building of roads to their properties. I am sure the people of the north will agree with me today when I say that I am very happy to have heard the statement of the Minister of Northern Affairs and National Resources.


Herbert Wilfred Herridge: Mr. Speaker, it is very obvious indeed from the applause that all members of the house rejoice at the return of the hon. member for Mackenzie River to the house after a lengthy and severe illness. I am sure we all admire his excellent spirit and courage, and hope he will soon be restored to such health that we shall have no hesitation in criticizing him as usual when we differ. I think it was a happy coincidence that the Minister of Northern Affairs and National Resources should have made his announcement today. Knowing him, I judge it was a very kindly gesture.



STARRED QUESTIONS


Mr. Badanai: 1.	Who is the auditor of the following companies listed on page 27 of the Canadian National Railways 1960 annual report: Eastern Transport Limited; East-West Transport Limited; Empire Freightways Limited; Sydney Transfer and Storage Limited?
2.	When was he appointed?
3.	Was this appointment of auditor of these companies included in the C.N.R. system made and the fees set by parliament as prescribed by legislation?
4.	Under what authority was Mr. J. A. de Lalanne appointed, and who set his fees?
5.	What firm of public accountants represents Mr. de Lalanne in his capacity as government appointed auditor of the C.N.R.?
6.	What firm of auditors audited the books of East-West Transport Limited as shareholders' auditors immediately before the C.N.R. purchased the company?
7.	What firm of auditors did the C.N.R. engage to make an "independent" investigation of East-West Transport Limited before they bought it?
8.	Is it usual for the same firm of auditors to be acting for both sides in a sale, particularly when a crown corporation is the buyer and the
[Mr. Hardie.l
crown corporation's government appointed auditor has an interest in the auditing firm?
9.	Have proceedings been instituted by East-West Transport Limited against the C.N.R.?
10.	What is the nature of the proceedings, and has the lawsuit yet been disposed of?


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, the management of Canadian National Railways advise as follows:
1.	Mr. J. A. de Lalanne, chartered accountant, in the case of each company listed.
2.	The dates of appointment were as follows: Eastern Transport Limited, October 1, 1960; East-West Transport Limited, November 17, 1960; Empire Freightways Ltd., November 22, 1960; Sydney Transfer and Storage Ltd., September 30, 1960.
3.	No.
4.	By authority of the shareholders of each company. His fees have not yet been set.
5.	McDonald Currie and Company.
6.	The records of the company show Price Waterhouse and Company as auditors for the fiscal year ending February 28, 1959, and that McDonald Currie and Company were appointed by the then shareholders for the next ensuing fiscal year, in order to avoid a duplication of audit in view of the sale in contemplation.
7.	McDonald Currie and Company.
8.	Prior to the signing of the agreement of sale on March 16, 1960, McDonald Currie and Company were acting for the purchaser only, and not for both sides in the sale. See also answer to No. 6.
9.	An action has been instituted by the vendors of the shares of East-West Transport Limited and a counterclaim on behalf of Canadian National Transportation Limited. The action and counterclaim arise out of alleged lack of performance by the parties to the sale.
10.	See answer to No. 9.


ALLEGED MISSING INCOME TAX FILES
Mr. Herridge: 1.	Has the Minister of National Revenue been informed that income tax files, the subject of charges published by Samuel Morris of Vancouver, respecting certain individuals and companies, and relating to large-scale tax evasion, are missing from the Vancouver and Ottawa offices of the Department of National Revenue?
2.	Can the minister inform the house what has happened to these files?
3.	What investigations have been made as to the files and the charges?
4.	Were any recommendations made by officials of the department for prosecution against the persons and companies involved?
5.	If so, what action has been taken?


Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, the answer is as follows:
1.	The Minister of National Revenue is not aware of any income tax flies pertaining to

particular individuals or companies being missing in either the Vancouver or Ottawa offices of the taxation division or the department or, I might say, elsewhere in the country.
2.	Periodically, following well established policies and procedures, files may be destroyed after they have served their purpose.
3.	Although there was no knowledge of Mr. Morris of Vancouver having published any charges in respect of large scale tax evasion, certain representations as to tax evasion made by him in 1959 and 1960 to the Minister of Justice and to the Vancouver taxation office were duly investigated but no sufficient grounds were found to establish tax evasion.
4 and 5. Answered by 3.


HYCROFT VETERANS' HOME, VANCOUVER
Mr. Taylor: 1.	When were the lands and premises known as the Hycroft veterans' home, Vancouver, British Columbia, granted to the federal government?
2.	Who granted the premises to the federal government, and were there any terms or conditions that the premises should not, in turn, be sold by the federal government for commercial purposes?
3.	Has crown assets disposal corporation offered the premises for sale, and, if so, who is the highest bidder?


Hon. Noel Dorion (Secretary of Stale):: Mr. Speaker, the answer is as follows:
1.	November, 1942.
2.	The premises were granted to the federal government by Hycroft Limited, the grant being subject only to restrictions incorporated in a statute of the province of British Columbia. Amendments to that statute extended the restrictions to January 1, 1970.
3.	Yes, the name of the highest bidder being C.A.C. Construction Limited, 355 Bur-rard street, Vancouver, B.C.


C.N.R. LETTERING AND COLOUR CHANGES
Mr. Pitman: 1.	On what date did the Canadian National Railways make a major policy decision regarding the changing of the lettering and colour scheme for engines, passenger coaches, and boxcars?
2.	What is the estimated cost of this change?
3.	What has been the cost of this change up to December 31, 1960?
4.	What has been the cost of this change up to March 31, 1961?


Léon Balcer: Mr. Speaker, the management of Canadian National Railways advised as follows:
1.	No final decision has been reached with respect to proposed new design and colours for new locomotive and passenger cars, although certain experiments are now being conducted. A model of a locomotive in new colour is depicted on the cover of the 1961
90205-6-270
Starred Questions
timetable. New design and lettering for box cars was approved in November, 1960.
2.	There has been no significant change in the cost of repainting box cars. The new symbol is being applied to those cars only when and as they come up for repainting in the normal course of maintenance. There has been no change in the type of colour in the paint used on the body of the car. The new symbol requires only one colour as compared with the two used previously.
3.	See answer to No. 2.
4.	See answer to No. 2.


DIESEL ENGINE DAMAGE, C.N.R.
Mr. Howard: 1.	Since January 1, 1959, has any diesel engine of the Canadian National Railways been damaged by reason of overheating or by "burning up"?
2.	If so, when did each such damage occur, what has been the cost of making repairs, how many cars containing what types of goods were being moved at the time of the damage, and how many diesel units were being used at the time, and to what degree were the said units being operated?


Léon Balcer: Mr. Speaker, the management of Canadian National Railways advise as follows:
1.	There have been failures encountered in the normal course of operating diesel locomotives which involve, to some degree, the overheating of locomotive components.
2.	If the question refers to the overloading of locomotives there have been no cases of burning up of locomotives due to this cause.


C.N.R. MATERIALS SUPPLIED TO PRESIDENT'S PROPERTY
Mr. Fisher: 1.	In 1957, 1958, 1959, 1960, did the Canadian National Railways provide the property of the president at Lustre lake. Quebec, with materials such as naphtha gasoline or services such as laundry, carpentry, and plumbing?
2.	If so, what charges were made and paid in each of these years for such material and services?


Léon Balcer: Mr. Speaker, the answer is as follows:
1 and 2. Mr. Gordon advises that he has purchased items of supply from the C.N.R. as follows:
Naphtha and gasoline: 1957, $9.68: 1958, $41.23; 1959, $15.17; 1960, $14.85.
Laundry-records not available for 1957 and 1958: 1959, $30.83; 1960, $27.21.
Materials: 1957, $7.60; 1958, $25.60; 1959 and 1960, $378.29.
Labour: 1957, $90.00; 1958, $20.00; 1959 and 1960, $430.78.


JOHN WASLYCHEN
Mr. Howard: 1. Since July 24, 1958, was the late Mr. John Waslychen (No. 9511), while he was an inmate

Starred Questions
in the British Columbia penitentiary, charged with any crimes or misdemeanours within the said penitentiary?
2. If so, and with respect to each such charge, what was (a) the nature of the charge (b) the date that the charge was laid (c) the name and position of the person who laid the charge (d) the date that Mr. Waslychen appeared in warden's court (e) the verdict of the warden's court (f) the nature of the disciplinary measure, if any, meted out by the court (g) the date of commencement and termination of each such disciplinary measure which was one of placing Mr. Waslychen in dissociation, and the type of diet which applied in each case, and the duration of each such diet?


Hon. E. D. Fulion (Minister of Justice):: Mr. Speaker, this question seeks a good deal of information which is not available here in Ottawa and which will have to be secured elsewhere. Because it will require a lengthy and detailed reply may I ask that this question be made an order for return, which I assure the hon. member will be furnished as soon as possible.


Mr. Speaker:: Order for return.


NOVA SCOTIA LIGHT, HEAT AND POWER  GRANT
Mr. McWilliam: 1.	Was a subsidy or rebate, or grant made to the Nova Scotia Light, Heat and Power Corporation in 1960?
2.	If so, in what amount, or amounts, and to whom was it distributed?


Walter Gilbert Dinsdale: Mr. Speaker, the answer is as follows:
1.	Under the Atlantic Provinces Power Development Act and the agreements made thereunder, a subvention of 7.43 cents per million B.T.U.'s of heat value was paid in respect of maritime coal used in Nova Scotia's thermal power utilities. This subvention was paid to the Nova Scotia power commission as agent for the Nova Scotia government.
2.	I am informed by the Nova Scotia power commission that the amount paid by that commission to the Nova Scotia Light, Heat and Power Corporation for 1960 was $328,704.38 in respect to maritime coal used for the production of electricity.


HOG IMPORTS AND EXPORTS
Mr. Boulanger: For the calendar year 1960, how many hogs of any grade, or form, have been (a) imported from the United States to Canada (b) exported from Canada to the United States?


Mr. E. L. Morris (Parliamentary Secretary to the Minister of Trade and Commerce):: Mr. Speaker, the answer is as follows:
(a) Imports of hogs are not separately classified.

(b) Exports from Canada to the United States calendar year 1960: Swine, pure bred, for improvement of stock (class 2025), 598; Swine n.o.p. (class 2080), 5,002.



HOG CHOLERA EPIDEMIC


Mr. Boulanger: 1.	Since September 1960, was there any restriction on the import of hogs from the United States to Canada on account of hog cholera epidemic?
2.	If so:	(a) what is the type of restriction?
(b) when was it applied?


Mr. W. H. Jorgenson (Parliamentary Secretary to the Minister of Agriculture):: There have been no new restrictions, but for approximately 50 years all importations of live hogs from the United States have been subject to United States veterinary certification and 30 day quarantine at the port of entry.



DEMONSTRATION OF UNEMPLOYED, OTTAWA

Mr. Carter: 1.	Did the Department of Labour or one of its employees make a head count of the unemployed who took part in the demonstration in front of the parliament buildings on Tuesday, April 25, 1961?
2.	Was the number counted 347 as reported in the Globe and Mail of April 26, 1961? If not, what was the actual number?
3.	Has the government investigated a statement attributed by the Globe and Mail to Mr. Pat Walsh that among the demonstrators were 72 full-time communists who were not out of work in any sense of the word but had taken leave to join in the demonstration? H so, with what results?


Mr. R. D. Thrasher (Parliamentary Secretary to the Minister of Labour):: Mr. Speaker, the answer is as follows:
1.	Yes.
2.	No, the actual count was 379.
3.	No investigation has been conducted by the Department of Labour.



DRUG INVESTIGATION


Mr. Howard: 1.	Has the restrictive trade practices commission or any other person provided copies of the statement of evidence of the combines investigation branch regarding the selling and pricing policies of certain pharmaceutical houses in respect of new types of drugs to any person, company, or government official, department, or agency (whether provincial or federal) ?
2.	If so, what is the name and address of each such person, company, or government official, department, or agency (whether provincial or federal) ?


Edmund Davie Fulton: 

AUTAIR HELICOPTER SERVICES


Mr. Chevrier: 1.	Did Autair Helicopter Services Limited ever have its insurance cancelled?
2.	If so, how often, and on what dates?
3.	With what companies, and for what reasons?


Léon Balcer: Mr. Speaker, the answers to this question are as follows:
1 and 2. Yes, on two occasions; August 7, 1959, and October 31, 1959.
3. The insurance underwriters, respectively British Aviation Insurance Company Limited and Lloyds, did not give any reasons.




Mr. Chevrier: 1.	Has an application been made to the air transport board for the transfer of the stock of Autair Helicopter Services Limited to Spartan Air Services Limited?
2.	Has it been approved by the board?


Léon Balcer: Mr. Speaker, in reply to part 1, the board has received notice only of the proposed transaction.
With respect to part 2 the answer is no.




Mr. Chevrier: 1.	Did Autair Helicopter Services Limited have any accidents with its aircraft equipment during the years 1959, 1960, and 1961?
2 If so, how many such accidents did it have, and what was the nature of each?
3.	What aircraft were involved?
4 Did the accidents result in partial or complete write-off of these aircraft?


Léon Balcer: Mr. Speaker, I would ask that this question be made an order for return.


Mr. Speaker:: Order for return.



UNEMPLOYMENT INSURANCE FUND

Mr. Robichaud: What was the amount to the credit of the unemployment insurance fund on March 31, 1961 as compared with March 31, 1957, 1958, 1959 and 1960?


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, the answer to this question is as follows:
March 31,	1957, 

$874,574,651.66;
March 31,	1958	$744,200,124.87;March 31,	1959	$499,811,157.51;


Mr. Martin (Essex East):: Not so fast.


Donald Methuen Fleming: -
March 31,	1960, 

$365,892,232.95;
March 31,	1961	$185,437,165.28,
the last being an interim figure.

Starred Questions



OIL DRILLING PERMITS NORTH OP LATITUDE 70

Mr. Badanai: 1.	How many permits have been issued for oil drilling in the Arctic, north of latitude 70?
2.	Has any actual drilling taken place, and, if so, by whom?
3.	What number of permit holders would qualify as Canadians?
4.	What is the number of other than Canadian permit holders?


Walter Gilbert Dinsdale: Mr. Speaker, the answer to this question is as follows:
1.	876.
2.	No.
3.	16.
4.	9.



NORTHERN AFFAIRS


Mr. Pickersgill: 1.	Has the Department of Northern Affairs and National Resources placed any advertising with the J. B. Neill Advertising agency of Brandon, Manitoba?
2.	If so, on what date was the first advertising placed with this agency?
3.	How long has this agency been in operation, and what are the names of its directors?


Walter Gilbert Dinsdale: Mr. Speaker, the answer to this question is as follows:
1.	Yes.
2.	December 30, 1960.
3.	This agency has been in operation since 1957 handling accounts for companies such as Anglo-Canadian Oils, Binkley Motors, Canadian Brown Steel Tank. Mr. Barry Neill is the proprietor.

On the orders of the day:


Paul Theodore Hellyer: Mr. Speaker, I should like to address a question to the Minister of Northern Affairs and National Resources. Can the minister assure us that we are correct in the assumption, based on his answer to starred question No. 304, that the J. B. Neill Advertising agency of Brandon, Manitoba, is a proprietorship rather than an incorporated company?


Walter Gilbert Dinsdale: That is correct, Mr. Speaker.



POST OFFICE, BEAUCEVILLE, QUE.

Mr. Racine: 1.	When will the lease concerning the premises of the post office at Beauceville expire?
2.	Is it the intention of the department, at the termination of the said lease, to erect a building to be used as a post office?

3.	Were options taken on any parcel of land in view of this proposed construction, and, if so, from whom were such options taken, what are the sites, and the amounts involved?


Mr. Y. R. Tasse (Parliamentary Secretary to the Minister of Public Works):: Mr. Speaker, the answers to this question are as follows:
1.	The lease expires August 31, 1961, with option to the crown to renew for one year on the same terms and conditions.
2.	No decision has been reached.
3.	No, not by the Department of Public Works.



JOHN BRODIE, JASPER  PETITION

Mr. Batten: 1.	Has the government received a petition from citizens of Jasper, Alberta, on behalf of Mr. John Brodie, a former garage foreman at Jasper?
2.	If so, what reply has the government made to the arguments in this petition concerning the reason for discontinuing Mr. Brodie's services?


Walter Gilbert Dinsdale: Mr. Speaker, a question on this subject in the name of the hon. member for Assiniboia has been made an order for return. This return will be tabled very shortly and will give all the information requested by the hon. member for Humber-St. George's.


Mr. Speaker:: Is the minister asking that this be included in the orders for returns?


Walter Gilbert Dinsdale: Yes, Mr. Speaker.


Mr. Speaker:: Order for return.



QUESTIONS PASSED AS ORDERS FOR RETURNS


COAL IMPORTS


Mr. Fisher: 1.	Are coal imports classified by any standards for customs or tariff purposes by the federal government?
2.	If so, what are the standards for anthracite coal?
3.	In 1960 and 1961, what was the amount of anthracite coal imported into the maritime provinces by volume and by standard?



JOHN WASLYCHEN

Mr. Howard: 1.	Since July 24, 1958, was the late Mr. John Waslychen (No. 9511), while he was an inmate in the British Columbia penitentiary, charged with any crimes or misdemeanours within the said penitentiary?
2.	If so, and with respect to each such charge, what was (a) the nature of the charge (b) the date that the charge was laid (c) the name and position of the person who laid the charge (d) the date that Mr. Waslychen appeared in warden's court (e) the verdict of the warden's court (f) the nature of the disciplinary measure, if any, meted out by the court (g) the date of commencement and termination of each such disciplinary

measure which was one of placing Mr. Waslychen in dissociation, and the type of diet which applied in each case, and the duration of each such diet?



AUTAIR HELICOPTER SERVICES


Mr. Chevrier: 1.	Did Autair Helicopter Services Limited have any accidents with its aircraft equipment during the years 1959, 1960, and 1961?
2.	If so, how many such accidents did it have, and what was the nature of each?
3.	What aircraft were involved?
4.	Did the accidents result in partial or complete write-off of these aircraft?
Division
Dupuis
Eudes
Fisher
Godin
Granger
Habel
Hellyer
Herridge
Howard
Leduc
Lessard
Mcllraith
McMillan
Martin (Essex East)
Martin (Timmins)
Meunier
Nixon
Peters
Racine
Ratelle
Regier
Richard (Ottawa East) Richard (St. Maurice-Lafleehe)
Roberge Tardif Tucker Winch-37.
++NAYS



JOHN BRODIE, JASPER  PETITION

[Stage Direction]
Messrs:
Mr. Bailen: 1.	Has the government received a petition from citizens of Jasper, Alberta, on behalf of Mr. John Brodie, a former garage foreman at Jasper?
2.	If so, what reply has the government made to the arguments in this petition concerning the reason for discontinuing Mr. Brodie's services?



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 113-Mr. Howard:
For a copy of the statement of evidence by the combines investigation branch regarding the selling and pricing policies of certain pharmaceutical houses in respect of new types of drugs.
Edmund Davie Fulton: Mr. Speaker, as I said previously in answer to tiie starred question to which I have just replied, the whole tenor and provisions of the Combines Investigation Act make it clear that it is the intention of parliament that proceedings and inquiries by the director under the act should be conducted in private. All relevant information is contained in the commission's report when that is compiled, and that of course is made public.
In the circumstances the house will appreciate that I am unable to accept the motion for the production of the statement of material of the director.


Mr. Speaker:: Is the hon. member prepared to drop the motion?


Mr. Frank Howard (Skeena):: No, Mr. Speaker. Part of this has been made public already, and if the act does not prohibit part of it being made public, I think the whole works should be made public.


Mr. Hubert Badanai (Fort William):: Mr. Speaker, I did not vote because I was paired with the hon. member for Medicine Hat (Mr. Brunsden), who is unavoidably absent. Had I voted I would have voted for the motion, and he agreed to reciprocate.



ORDERS IN COUNCIL WITHOUT STATUTORY AUTHORITY

[Stage Direction]
Motion No. 116
Mr. Regier:: For a copy of all orders in council passed between March 26, 1940, and June 1957, for which 10 statutory authority existed.


[Stage Direction]
Motion agreed to. f Translation):


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, may I ask the Minister of Transport whether he has reached an arrangement with the government of the province of Quebec with regard to the Soulanges canal?


Léon Balcer: Mr. Speaker, in a letter to the minister of game and fisheries of the province of Quebec, I have offered, on behalf of the federal government, a property about 13 miles in length along the Soulanges canal. In addition, we have set aside a certain area for industrial construction. I cannot say exactly how many acres are involved, but it extends about one mile along the canal. However, this proposal has been turned down by the provincial government, so we are now reconsidering the whole question.


Lionel Chevrier: May I ask a supplementary question? Since the discussions were started between the two governments, have any industrial corporations approached the government with a view to locating plants in the area set aside by the minister?
[Mr. Howard.)


Léon Balcer: Not directly, Mr. Speaker, but a number of chambers of commerce in the area have made representations to have this federal government property set aside so they may have time to approach various industries with a view to bringing industrial construction into the area.
(Text) :



NEWFOUNDLAND


[Stage Direction]
On the orders of the day:
Léon Balcer: Mr. Speaker, yesterday the hon. member for Trinity-Conception referred to an article in the St. John's Daily News in which I am quoted as stating that the question of a ferry service to the east coast of Newfoundland is still under study. As I stated some days ago in reply to a question by the hon. member for Cape Breton North and Victoria, the report of the interdepartmental committee on this matter is now under study, but in reply to the second part of the hon. member's question I cannot say at the present time when it is expected that the study will be completed.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, may I ask a question of the hon. member for York North who acts as chairman of the banking and commerce committee. Can he tell the house-


Mr. Speaker:: Order. Before the hon. member proceeds, I think I should ask him for his authority for putting a question to a private member in his capacity as chairman of a committee. Standing order 39 (1) provides:
Questions may be placed on the order paper seeking information from ministers of the crown relating to public affairs; and from other members, relating to any bill, motion, or other public matter connected with the business of the house, in which such members may be concerned.


Paul Joseph James Martin: Mr. Speaker, the matter about which I was about to pose a question to the distinguished member for York North had to do with a public matter of concern to this house. Your Honour has asked for the precedent. I would think the rule to which Your Honour has just referred would be my authority. Your Honour will recall that last year a similar question was put by me to the hon. member for Danforth (Mr. Small), a very distinguished member of the industrial relations committee, which has not functioned at all this year; nor did it last year,

in spite of the fact that it has one of the most efficient chairmen. That question was permitted last year. It had to do with whether the chairman would call that committee together so we could study the matter of unemployment. The question was permitted. If it was permitted last year, it ought to be permitted this year. The standing order to which Your Honour has referred is ample authority for my question. I am sure the hon. member is very anxious to reply.


Mr. Speaker:: Perhaps the hon. member should put the question and then we can determine whether it is a matter of public business of the house.


Paul Joseph James Martin: Mr. Speaker, may I ask the hon. member for York North, the chairman of the banking and commerce committee, when that committee will hold its next sitting, and will that sitting be before the Minister of Finance brings in the budget?


Mr. C. A. Calhers (York North):: Mr. Speaker, I shall take this question as notice.



COMBINES


[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, may I direct a question to the Minister of Justice. In view of the large number of mergers which have taken place recently in the financial, banking and industrial fields, and in view of the statement made by the minister in the banking and commerce committee last year when it was reviewing the merger sections of the Combines Investigation Act, is it the intention of the minister to introduce a motion in the house to refer either the subject matter of the merger sections of the Combines Investigation Act or the sections themselves to the banking and commerce committee for study?


Edmund Davie Fulton: This suggestion has not been considered, Mr. Speaker, in the course of our studies of this question.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breton North and Victoria):: Mr. Speaker, as the result of several communications from the area concerned I have a question for the Minister of Transport, notice of which has been given. Can the minister advise whether it would be possible to have an icebreaker go to Ingonish harbour, thus enabling the fishermen of this
Inquiries of the Ministry area to commence fishing operations which have been prevented up to this date because of unusual ice conditions?


Léon Balcer: Mr. Speaker, the department has no icebreaker small enough and at the same time powerful enough to go and clear this harbour. If we were to send a large icebreaker into this narrow harbour it would involve too dangerous an undertaking, I would say.



INQUIRIES FOR RETURNS

[Stage Direction]
On the orders of the day:
Frank Howard: On Thursday, April 27 I posed a question to the Secretary of State, as shown on page 4047 of Hansard. It reads as follows:
I should like to direct a question to the Secretary of State. As the minister is absent, perhaps my question could be drawn to his attention. This is almost the five months' anniversary of an order of this house pertaining to a question of mine about the travelling expenses of members of the cabinet. I wonder whether the Secretary of State would look into this matter and see why there has been this delay in complying with the order.
It was answered by the Minister of Transport, who indicated that he would pass on the information to the Secretary of State. Is the minister now in a position to answer my question?


Noël Dorion: It is
in the course of preparation, and I will produce it as soon as possible.


Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I should like to ask the Minister of Transport whether he can explain how he can provide an answer, as he did today, to starred question 268, and not provide by this time an answer to starred question 264, which he made an order for return two weeks ago, since a great deal of the information is overlapping.


Léon Balcer: Mr. Speaker, the answers to both 264 and 265 are being filed today.



SOURCE OF STERLING TO FINANCE


[Stage Direction]
On the orders of the day:
Mr. Lucien Cardin (Richelieu-Vercheres):: Mr. Speaker, in the unavoidable absence of the Minister of Agriculture I should like to direct a question to the Prime Minister. Can the Prime Minister assure the house that no part of the sterling that communist China is using to pay for its purchase of Canadian wheat was confiscated by the government of

Inquiries of the Ministry red China from British or other foreign nationals as alleged in a letter to the editor in this morning's Gazette?


An hon. Member:: Sour grapes again.


John George Diefenbaker: Mr. Speaker, I did not read the particular letter. However, naturally such assurances cannot be given by this government, since it is no part of its responsibility.
(Translation):



BARBITURATES


[Stage Direction]
On the orders of the day:
Mr. H. Pit Lessard (St. Henry):: Mr. Speaker, I should like to put a question to the Minister of Justice. Could he tell us whether amendments will be made to the Criminal Code during the present session in order to control the traffic of goofballs?


Edmund Davie Fulton: Mr. Speaker, would the hon. member kindly repeat his question?


H.-Pit Lessard: Could the minister tell us whether amendments to the Criminal Code will be introduced during the present session in order to control the traffic of goofballs?


Edmund Davie Fulton: Mr. Speaker, I believe that my colleague, the Minister of National Health and Welfare (Mr. Monteith) will be making a statement shortly on this subject.
(Text):



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Paul Theodore Hellyer: Mr. Speaker, I should like to direct a question to the Minister of National Defence. Can the minister assure the house that units of the Canadian militia have not been instructed by their commanding officers to organize groups to take political and other action against the supporters of nuclear disarmament, as alleged in a letter to the editor signed by Farley Mowat of Palgrave, Ontario, which was published in the Ottawa Citizen on April 22, 1961?


Hon. D. S. Harkness (Minister of National Defence):: Mr. Speaker, I should like to state categorically that no such instructions have been issued from national defence headquarters, nor is there any intention of so doing.


Moreover, the issuance of instructions along the lines suggested in the letter by any commanding officer of a militia unit would be contrary to regulations.
The writer of the letter, in his search for publicity, has on more than one occasion in the past resorted to innuendos and insinuations and has made allegations that have proven to be utterly false. One of the latest of these was hiis allegation that nuclear weapons were stored at United States bases in Canada.



AIRPORTS


[Stage Direction]
On the orders of the day:
Erhart Regier: Mr. Speaker, I should like to direct a question to the Minister of Transport. I regret that he has not received notice. Is the government contemplating the establishment of a public transportation system inside the monstrosity known as the new airport terminal at Montreal?


Léon Balcer: The answer is no, Mr. Speaker.
(Translation):



BATHURST


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, may I direct a question to the Minister of Transport. Has the government decided to build a runway at Bathurst and at Dalhousie, New Brunswick?


Léon Balcer: Mr. Speaker, delegations from both communities came here to meet with officials of my department, and asked how the Department of Transport could help them, since these are municipal airports. We gave them the necessary information and we are now waiting for their requests.


Lionel Chevrier: Does the minister intend to make a statement soon about this matter?


Léon Balcer: As soon as authorities of either of the two municipalities will again have got in touch with the department and indicated their intentions, there is no doubt that the Department of Transport will take those requests into serious consideration.

(Text):



TELEVISION


[Stage Direction]
On the orders of the day:
Léon Balcer: Mr. Speaker, on Friday last the hon. member for Bonavista-Twillingate inquired concerning a recent recommendation of the board of broadcast governors regarding the establishment of a new rebroadcasting or satellite television station in Saskatchewan.
The board of broadcast governors, at its eighteenth public hearing held on April 11, 12 and 13, 1961, in Ottawa, recommended to the Minister of Transport for approval an application for a licence to establish a new rebroadcasting or satellite television station at Stranraer, Saskatchewan, by A. A. Murphy and Sons Limited, to operate as a satellite of station CFQC-TV, Saskatoon, Saskatchewan. The board gave the following reasons for the approval:
The board is satisfied that the proposed satellite station will extend a satisfactory service into a substantial area of southwestern Saskatchewan. The board makes this recommendation subject to the condition that the applicant submits to the Department of Transport a satisfactory revised technical brief providing for a suitably designed directional antenna which will reduce the radiation in the southern sector of the coverage area of the proposed station in the direction of station CJFB-TV, Swift Current.
In response to the board's recommendation, the department has now received a technical brief which is considered to be technically acceptable and is being referred to the board of broadcast governors in accordance with section 12 of the Broadcasting Act. There have been no irregularities in the procedures followed by the Department of Transport.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, I should like to ask the Secretary of State for External Affairs whether he can give the house any information regarding reports of the successful efforts to arrive at a cease fire in the Laotian situation; and in that event can the minister say what will be the attitude of the international supervisory commission in connection therewith?


Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker, orders to cease all military operations from eight o'clock this morning, May 3, local time, have been issued to the Pathet-Lao and Kong Lae forces in Laos. The forces under the command 90205-6-271
Inquiries of the Ministry of the government in Vientiane had earlier indicated their readiness to give a similar order to their troops.
The appeal for a cease fire, which was made by the United Kingdom and Soviet governments on April 24 as co-chairmen of the Geneva conference of 1954, thus appears to have been answered. The difficult task of restoring order and ensuring that the cease fire is observed should now begin.
The international commission for Laos, on which, as the hon. member knows, India, Poland and Canada are serving, agreed on April 30 on the report which it was requested to make to the co-chairmen, the United Kingdom and the Soviet union, and this report was immediately dispatched through Indian diplomatic channels to London and Moscow. The commission is now ready to proceed to Laos, with the concurrence of the co-chairmen, in order to undertake its tasks of verification and supervision. I have as yet had no indication that the two co-chairmen have instructed the commission to proceed to Laos, but I should think such instructions would be given within a matter of hours. If a cease fire is established and is shown to be effective, I see no reason why the conference should not open as planned at Geneva on May 12.


Paul Joseph James Martin: I should like to ask a supplementary question. Has the minister any comment to make about the statement by the king of Laos that it was not in the interests of his country that the conference should take place, and that it might play into the hands of the Chinese communists?


Howard Charles Green: There is some uncertainty whether the report of the statement by the king was accurate. We have as yet had no definite word that that position actually was taken by him.


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: May I ask
the Secretary of State for External Affairs whether his attention has been directed to the statement by Premier Castro and the government of Cuba that they are going to close all religious institutions in that country, including some that are owned by and under the control of clergymen and congregations from this country.


Howard Charles Green: Mr. Speaker, the statement made by Premier Castro did not go so far as to indicate that this new rule would apply to any Canadians. We think it

Inquiries of the Ministry is intended to apply to the Spanish born clergy in Cuba. I do not believe it would be appropriate to speculate on the manner in which Canadian missionaries in Cuba may be affected by this contemplated legislation until more is known about its provisions. As I have said, however, I believe that the intention was to apply the new policy to the Spanish born clergy.
There are at the moment 46 Canadian Catholic priests and 64 Canadian nuns in Cuba, and we are endeavouring to get this whole question cleared up as quickly as possible.



THE BUDGET


[Stage Direction]
On the orders of the day:
Mr. W. M. Benidickson (Kenora-Rainy River):: Mr. Speaker, I should like to address a question to the Minister of Finance. In view of the numerous and varying conjectures since the minister replied to the hon. member for Winnipeg South the other day as to the probable date of the presentation of the budget, can the minister now be more specific as to the likely date of presentation?


Donald Methuen Fleming: No, Mr. Speaker.



PUBLIC BUILDINGS


[Stage Direction]
On the orders of the day:
Hon. D. J. Walker (Minister of Public
Works): Mr. Speaker, in reply to the question of the hon. member for Levis yesterday as to complaints about the Rouyn, Quebec, post office, may I say that complaints have been received by the department. The appearance of the building will be improved by the removal of a construction shack and the contractor's signs. Also, efflorescence on the brickwork will be removed, and a general cleaning up around the building will be carried out.


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to address a question to the Prime Minister. In view of the fact that he informed the house last week that he intends to make a statement as to the government's position with respect to the reservation of certain legislation by the lieutenant governor of Saskatchewan, would the Prime Minister tell the house when he will relieve us of the suspense from which we now suffer?


Right Hon. J. G. Diefenbaker (Prime
Minister): Mr. Speaker, I can understand the suspense of the hon. gentleman, representing a British Columbia constituency, and I hope his suspense will be relieved shortly because I do not want to leave him in such a position of uncertainty.

The house in committee of supply, Mr. Flynn in the chair.



DEPARTMENT OF TRADE AND COMMERCE

[Stage Direction]
General administration-
394. Departmental administration, including fees for membership in the international organizations listed in the details of the estimates (also includes the national industrial design council transferred from the national gallery), $3,275,445.
The Chairman:: This item will be found at page 74 of the blue book, the details at page 507.


Mr. Hees:: Mr. Chairman, when we reached five o'clock on Friday the hon. member for Athabasca was speaking. He has very kindly agreed to let me speak now in order to answer questions that were put to me by the hon. members who spoke that afternoon.
Before doing so, however, I should first like to clear up a misunderstanding which my opening remarks seem to have left in the minds of some of the hon. members who followed me in the debate, namely that I seem to believe that the economic picture is a rosy one and that all we have to do is continue in our present way of doing things and everything will work out for the best.
If I left that impression, Mr. Chairman, I am glad to be able to correct it now. In the speeches I have been making across the country since I became the minister of this department I have been stressing the fact that this country is up against the toughest competition for markets that we have faced since before the last war, and that we must do things a great deal differently than we are doing them at the present time if we are to successfully meet and overcome that competition.
This situation was brought about by the recovery of the countries of western Europe and Japan which were until recently customers of our products, and are now our toughest competitors. They have rebuilt their economies with the most modern plants and machinery, and are manufacturing products of good quality and design and selling at competitive prices. These products are displacing Canadian products, both in Canada and in the export market, in increasing quantities.
We have learned that there is no sentiment in the buying habits of the average Canadian

or of the citizen of any other country, for that matter. He or she will buy the best product at the lowest price, no matter where the goods are produced. If we want to make sales and thereby create jobs replacing the products that move off the retailers' shelves, we can do so only by producing products that people prefer to those offered by our competitors. They must be comparable in price, quality and design with what our competitors are offering for sale. If they are comparable, they will be sold in the markets of the world and in Canada, and Canadians will have jobs replacing them. If they are not comparable, they will be passed over and Canadians will not have jobs producing more of them.
Our trade commissioners told the businessmen who came to our trade promotion conference last fall that if they would come to their territories with samples of good quality and design, and willing to quote competitive prices, they would guarantee them sales. Surely you cannot get a better offer than that. Those who have made such selling trips and have taken good samples and quoted competitive prices, have made sales, and good sales; their plants have been kept busy and they have taken on extra staff to handle the extra business.
Sales have not materialized where quality, price and design were not competitive. There have also been many instances where the selling effort was not carried through by the company concerned. I am writing a personal letter of inquiry to the heads of all companies that have not followed through after prospective sales were initiated at the sales promotion conference, to ask why this has happened and urge that the selling effort be carried through.
Our trade commissioners will do everything humanly possible to promote sales, and they made that very clear to the businessmen who attended the conference. But the company must either send its salesman to the territory or, at the very least, send the samples and price lists that are needed for our trade commissioners to make the initial approach. As I have said, in all too many cases neither has been done.
In addition to putting forward a first class selling effort, it is up to our producers to turn out products that our salesmen can sell. The greatest salesman in the world cannot sell a product that is demonstrably inferior in design or quality, or obviously not worth the money that is asked for it. We must match what our competitors are offering the customers. I believe that the best way to make our products competitive is to follow the example of our toughest competitors, who brought themselves from the ashes of 90205-6-2714
Supply-Trade and Commerce war to peak prosperity and employment in just 15 short years. They did it by co-operation among management, labour and government, to bring costs down and improve quality and design.
It was to help bring about this kind of cooperation here in Canada that we recently called together the heads of the top 15 labour unions and the heads of the 15 largest management organizations. This group can have a great influence on those they represent, to bring about this desired result; but it will be up to the great mass of our people to decide that in their own best interests they should co-operate with their fellow Canadians to make our products competitive, and thus able to sell in the export and home market and provide jobs for our people. If they so decide, and get to work on the big job that lies ahead and give our salesmen products which will meet with customer acceptance around the world, then both our domestic and export sales will greatly increase.
The result can be full employment, and not the second highest but the highest standard of living in the world. But it is up to us, the people of Canada, to decide what we are willing to work for and whether we are willing to co-operate with each other to bring about the desired result. Surely we are willing to work as hard, and surely we are just as smart, as the people of western Europe who pulled themselves up by their own bootstraps in such spectacular fashion. I am confident that our people are more industrious, and are smarter, than the people of western Europe or any other part of the world, for that matter. The government has indicated clearly to our salesmen and our producers that we will work with them and help them in every possible and practical way in the big and very tough job that lies ahead. The time to start working together is now.
Some hon. members who spoke on Friday and in the debate last Monday and Tuesday expressed concern about the effects that the European economic community and the European free trade association would have on our trade with those countries. I share the concern of hon. members regarding the dangers to Canadian trade which could be inherent in the development of the European regional trading blocs, the Six and the Seven. Should the ultimate shape of these regional trading blocs eventually evolve in an inward-looking or protectionist trading form, then a backward step will have been taken in the progress of international trade. It is too soon yet to arrive at firm conclusions, although the final shape of our trading arrangements with western Europe is gradually taking recognizable form in the current

Supply-Trade and Commerce negotiations at Geneva. Nor do we yet know for certain what ultimate decision will be taken by the government of the United Kingdom concerning its future relationship with the European common market. This, too, is receiving and will continue to receive our closest attention in the weeks and months ahead.
These problems are under close and continuous study both in my department and interdepartmentally. Until our judgment dictates otherwise, this government will continue to follow a trading policy designed to expand trade with all countries to the greatest possible degree, and in so doing create the greatest possible employment for all Canadians.
In conclusion, Mr. Chairman, I am glad to once again assure the committee that if at any time my department and I consider that it is in the best interests not only of those engaged in export trade but of the Canadian economy as a whole for Canada to join a trading bloc or association, I will recommend such a course of action to my colleagues.
I should now like to answer the questions which were asked of me last Friday. First of all, the hon. member for Burin-Burgeo referred to our trade with the West Indies. I may say that the department is very conscious of the importance of our long standing ties with these territories whose economies are so complementary to our own. The newly emerging West Indian federation is our nearest neighbour in the commonwealth. In recent years it has taken about $40 million of Canadian goods annually, making it our fourth or fifth largest commonwealth market. The West Indies buy from us such staple fcommodities as flour, salt, cod and lumber, and a wide range of manufactured goods. Our main purchase from them is of course sugar, but we buy also such products as bauxite, petroleum, spices, cocoa and rum.
The department has given a great deal of attention to the West Indies in its trade promotion efforts. In January and February, 1959 we sponsored two highly successful trade fairs at Kingston, Jamaica, and Port-of-Spain, Trinidad. About 150 Canadian firms participated in one or other of these fairs, and it is estimated that they resulted in the creation of over $2 million of new export business. During our trade promotion conference last December the West Indies was one of the areas in which businessmen showed most interest. Of the 1,133 firms represented at the conference, 340 or almost one third expressed an interest in the West Indies. Our four trade officers in the area are now following up these interviews, and we hope there will be a significant increase in our export activity in that market.
We have been watching very closely the progress which is being made in the West Indies toward a customs union of the ten territories making up the federation. These territories have now reached broad agreement on plans for a customs union and will be submitting them soon to an intergovernmental conference for approval. When the West Indies have advanced sufficiently far with their own preparations for a customs union it will be necessary to revise the existing Canada-West Indies trade agreement of 1926, which provides for different margins of preference in the various territories. Meanwhile the department is proceeding with its own preparatory work so that it will be ready for this negotiation when the appropriate time arrives.
I was asked a question by the hon. member for Vancouver East regarding exports of sawn lumber to Japan. It may be that the figures he quoted apply to the individual exporter in British Columbia to whom he refers. However, export statistics show that Canadian shipments of sawn lumber to Japan have never reached 10 per cent of our total lumber exports over the past 35 years.
The chief reason for this is the fact that Japan has emerged as a leading world producer of lumber, ranking third only to the United States and Russia in total lumber output. Since the war Japanese lumber imports from all sources have been largely displaced by imports of logs and other round materials, principally from the Philippines. The total Japanese market for lumber has shown a marked decline in the post-war period and is currently running at some 40 million to 50 million board feet. By contrast, in the late 1920's Canadian lumber shipments alone to that market averaged nearly 200 million board feet.
The hon. member for Joliette-L'Assomp-tion-Montcalm reviewed in detail the changing scene in regard to measurement throughout the world. Some countries which are large world traders have moved to the metric system and, additionally, others which are reaching increasing stature as traders have made the same decision. Any decision by Canada in this connection must, however, be governed by the situation as it exists. As Minister of Trade and Commerce I regret, as does the hon. member, those instances where Canadian manufacturers have lost specific orders by reason of the factor of measurement entering into design. We must face the facts of life, however. If precipitate action were taken to change to the metric system our losses in our major markets, the United Kingdom and the United States, would create far greater hardships. I believe that the hon. member recognized this in his remarks.

While it does not appear, I think all will appreciate that the metric system is, and for many years has been, a legal system in Canada. There is therefore no reason why manufacturers and exporters should not use that system should it meet particular needs. To go further at this time and legislate or encourage a change would have so many ramifications that it would be extremely difficult to recommend a course of action without a formal review.
I am impressed with the joint report of the British association for the advancement of science and the association of British chambers of commerce, which suggested that this question should be reviewed periodically by the board of trade in conjunction with industry and commerce and in conjunction with the commonwealth and the United States of America. The stated object of the review would be "to study jointly significant world developments in the usage of metric and non-metric standards. . I shall be glad to examine the situation to determine whether the time is now opportune to institute a similar review for Canada.
The hon. member for Maisonneuve-Rose-mont asked me to explain what he thought was a conflict between the figures for the number of persons receiving unemployment benefits and the figures for the number of unemployed as given by the dominion bureau of statistics. The decision to use the figures we are now using was made after very careful study by the committee on unemployment statistics. I am sending across to the hon. member a copy of the report of that committee in the event that he may not be familiar with it. If, after he has had an opportunity to study it, he has any further questions, I shall be glad to speak to him about them and do anything I can to keep him informed.
During the discussion of my estimates on Friday the hon. member for Kootenay West asked several questions. He indicated that he was rather intrigued by the title of my department, namely trade and commerce, and suggested that he would like to have some explanation. I have looked up these words in dictionaries and find little difference in the definitions of the words "trade" and "commerce". As the department received its name many years before I was born, I am not sure just what was in the minds of those who named it originally.
The second question which the hon. member for Kootenay West asked was what is being done to develop co-operation among the various sectors of the economy to work toward improving our competitive position. In March the Minister of Labour and I called together
Supply-Trade and Commerce 15 leaders of business organizations and associations and 15 leaders of organized labour to discuss ways in which greater co-operation could be developed to increase the competitiveness of Canadian industry in both domestic and export markets. A very successful meeting was held, and the decision was made to establish a continuing tripartite committee in order to achieve greater cooperation.
Through the national productivity council, representatives of industry, labour, the general public and the government are also working together to develop programs to increase the competitiveness of Canadian industry. Similarly, the national design council will be made up of representatives of the various sectors of the economy. These steps have been taken so that all the various groups in the economy can unite their efforts and work together in improving the position of Canadian industry in markets both at home and abroad. I am sure that working together in this way we can achieve the same successful results as have the countries of Europe.
The hon. member for Kootenay West asked what efforts would be made by my department to achieve success in the export of various commodities to China and other Asiatic countries, apart from wheat. Our trade commissioner in Hong Kong has been very active in extending assistance to Canadian businessmen seeking contacts with the national trading corporations of the government of communist China which might be concerned with imports from Canada. As a result of his efforts, coupled with those of energetic Canadian businessmen, there has been quite a satisfactory improvement in the sale to communist China of our staple commodities. Exports to communist China for 1960 reached $8,700,000 as compared with $1,700,000 in the previous year.
As far as the other Asiatic countries are concerned, we have very active trade commissioner offices in Tokyo, Manila, Singapore, New Delhi, Bombay and Karachi. Our trade commissioners at these offices cover not only the country in which the office is located. Their territories also include contiguous countries and territories to which they travel and on which they report regularly. In this way our trade promotion efforts cover the whole of Asia.
The hon. member for Kootenay West also asked whether there had been any incidents involving Canadian subsidiaries refusing to accept orders from China or other Soviet bloc countries on instructions from the United States parent company, or because this was against the policy of the United States government. I can only say that there have been no such incidents brought to my attention.

Supply-Trade and Commerce
The hon. gentleman's fifth question was, has the minister read of the proposals by Dr. Keenleyside and has he given them his careful study and attention? If so, will he inform the committee as to his opinion of their practical nature and of the possibility, as a result of the application of Dr. Keenleyside's proposals, of improving somewhat our position with respect to trade and commerce in Canada and consequently the unemployment situation.
Mr. Speaker, the proposals to which the hon. member refers have been drawn to my attention, and you may be assured that these, as well as other proposals, have been given consideration. Our policy is to have maximum trade in every commodity in every possible market to provide maximum employment for Canadians. The hon. member may be assured that any practical proposals which achieve these ends will appear in our trade policy program.
The hon. member also asked for some explanation of the work of the small business branch and for information about the type of inquiries received and the publicity material it has available. Two projects of some significance presently under way in the small business branch are: (1) the compilation of the results of a survey of Canadian universities which was made to determine what management educational courses are now available, the dates and duration of these courses, and the fees charged. When this com. pilation is completed the results will be forwarded to the universities for checking and, eventually, more widespread distribution. This is part of a plan for stimulating interest in work now being done in this field and for helping in the further promotion of such work where the demand exists. (2) "Taxation Statistics", published by the Department of National Revenue, is being examined in cooperation with that department with a view to producing a supplement which will provide financial statistics in greater industry and size detail for the benefit of small businesses.
Apart from the publication "Selling to the Canadian Government", recently published by the small business branch, and the other two publications just mentioned which, incidentally, are available to hon. members, the small business branch has been able to cover requests for general information on other subjects from existing publications of the Department of Trade and Commerce, including the dominion bureau of statistics, other federal and provincial departments and outside sources.
Requests for information through interviews, telephone calls and correspondence have numbered in the thousands. These


queries are for all types of information on government legislation and regulations as well as for sources of information on markets, financing, starting a new business, etc. There is little pattern to these requests, and there are no so-called typical examples. Many are answered by the small business branch; others are referred to appropriate sources in other departments and agencies. The branch performs a useful clearing house function in this respect.
Numerous business associations contact the small business branch about more general problems, particularly in the field of financing. The branch plays an important part in co-operation with other departments of government in the preparation of background information for the framing of legislation in the whole area of the financing of small business.
In reply to a request from the hon. member for Grand Falls-White Bay-Labrador that I should take a sympathetic look at the fish industry in Canada, and particularly at the salt codfish industry, my department, through our fisheries division, has been very active in the field of trade promotion of Canadian fisheries products. Our trade commissioners around the globe report regularly on conditions in their respective areas for the information of the fishing industry. These market analyses are also followed up by on the spot appraisals by head office personnel who, in turn, maintain very close liaison with individual members of the trade. In addition, an interdepartmental fisheries trade committee, which includes senior officials in all government departments concerned with fisheries, meets at regular intervals to consider ways and means of assisting the fishing industry. When necessary, the manager of the Fisheries Council of Canada is invited to attend these meetings.
With respect to the salt cod industry, may I say that this matter is presently receiving very careful attention, particularly in view of the difficulties which the trade is encountering in marketing salt cod in Cuba. A fisheries expert of the department has visited different European markets twice in the past year, and a report of his findings was made recently to the Fisheries Council of Canada. I should add that the findings are very much more encouraging for the fresh frozen trade than for the salt trade. The position of the latter industry has been impaired by the difficulties which the industry is encountering in the Cuban market for salt cod. The situation is being kept under continuing scrutiny.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Mr. Bigg:: Mr. Chairman, at five o'clock on Friday afternoon I was speaking about the development of our great oil reserves in the Athabasca tar sands and their significance in the planning of Canada's future, and perhaps to the security of the western world. One of the essential steps in the development of this area would be the construction of a road between Fort McMurray and Edmonton.
You may wonder why I bring up the question of a road in respect to the Department of Trade and Commerce, but I do so because the provision of transportation facilities is very essential in keeping the cost of our materials down. If we cannot move them from the point of production to the markets we cannot compete in world trade. Today in our very complicated economy the various departments of government must have full co-operation. It is not good enough for the Department of Trade and Commerce to bring forward a plan to extend our trade unless it is done with the co-operation of the Department of Transport in order to develop roads, railways, air transportation facilities and shipping facilities. Therefore I do not hesitate today in bringing to the attention of the minister and the officials of his department, the suggestion that there must be co-operation in the provision of transportation facilities. The officials of the one department must co-operate with those of another. There must be co-operation between the Department of Transport and the Department of Northern Affairs and National Resources, in order to provide a road of some kind in this tremendous industrial field.
I was heartened to hear the Minister of Northern Affairs and National Resources say this morning that his department was ready to broaden the scope of the roads to resources program. The bottleneck seems to be that the provinces are either unable or unwilling to expend the money necessary to build roads across vast districts such as mine where populations are very small, and where there is no industrial development at the present time. Perhaps this is because the funds are not available at this time, but I am afraid if we wait for the Alberta provincial government to take this step we will be waiting a long time. I think we should stop being shy, and that the federal government should take the initiative in some of these fields. The north country cannot be developed unless we can get into it from the south. In the area from which I come there is a stretch of about 300 miles where there are no roads, railways or other facilities for transportation.
Supply-Trade and Commerce
Our vision of the north certainly will not come to fruition unless we take positive steps. The people there are not afraid to take a chance on the future and they have not lost time. There is very little unemployment there. Everyone is working hard and there is room for literally hundreds of thousands of people. If we accept the challenge and take the initiative, showing them we are really behind them in developing this country, I am certain the people will act accordingly.
Assuming we have a road we will then need capital to develop the area. I would suggest that capital should be made available perhaps through the industrial bank to what I refer to as the "in between" businesses. We now have the power of assisting small businesses to the extent of $25,000 for the improvement of their capital program. It is perhaps possible for very large companies to look after their own financial needs. The government has also made it possible for quite large companies to get loans from the industrial bank in some cases to the extent of $500,000. That is a lot of money, but presumably the security behind such a company, in stocks, is such that our government is willing to make this money available. However, there are a vast number of Canadian businessmen in the in between range who need money to set up local industries throughout our local areas, and I would make a plea on their behalf, that this government seriously consider widening the powers of the industrial bank in order to assist these businessmen in the medium category by making available loans between $25,000 and $100,000.
I would further suggest that we should get behind the local automotive repair shops and the larger garages throughout eastern and western Canada, enabling them to expand and hire local labour to repair automobiles and farm machinery in the small towns and villages where the breakdowns occur. I would like to see loans made available-


Jacques Flynn: Order. I must inform the hon. member that I do not see how he can relate his present remarks to the Department of Trade and Commerce. The hon. member has been dealing with the development of national resources; with roads to resources which are a matter under the Department of Northern Affairs and National Resources; and he has mentioned the industrial bank, which is a matter under the Department of Finance. I doubt that his remarks can be related to the items under discussion.


Frederick Johnstone (Jack) Bigg: Mr. Chairman, I have had personal experience in attempting to raise loans

Supply-Trade and Commerce through the industrial bank for trade purposes, as a result of which I would suggest close co-operation is required with the Department of Trade and Commerce. I would go so far as to suggest that the industrial bank should either be controlled by the Department of Trade and Commerce or that at least there should be high ranking liaison officers operating between that bank and the Department of Trade and Commerce so that when an individual makes an application to the bank for a loan for trade purposes he does not meet with the blank statement that it is a matter to be directed to the Department of Finance. There must be co-operation between the senior officials of the various departments so that, during the hearing of an application for a loan, officials of the different departments could sit in to give advice and make a joint effort to assist these medium businessmen. We will never have liaison of the kind I am referring to, which I feel is essential, because money alone is not enough, if we do not take a step in that direction. The bottleneck in Canadian development has always been finance. It is very difficult to discuss transportation, trade or co-operation with the provinces for the development of our resources unless you concentrate upon and discuss the sacred cow of finance.


Mr. Winch:: I should like to ask the minister to comment on the foreign service personnel. As I mentioned the other day, I understand that some of his best and most highly trained men are leaving the service to take over managerial posts in private industry. In view of what the minister said only today with respect to the problems facing Canada in the competitive field, and in view of what I read in the press a couple of days ago and the statement of the Minister of Agriculture that he thinks we have been missing great opportunities to trade with Asia, it should be easily understood and recognized at this time that perhaps more than ever we need trained foreign service officers.
I believe we have been losing some because of their wages. I admit I was rather amazed, on looking over the details on page 509 of the estimates book, to find that we have 30 foreign service officers whose annual wages are between $4,380 and $5,880; 23 between $5,940 and $7,140; and so on. I would imagine that any civil servant in the foreign service is a relatively well trained officer. There are four classifications before you get to the salary range of $9,800. If this is the range of salaries, I can well understand why we are losing these experienced men. It is of the utmost importance that they be retained in the service. Can the minister tell us what is the

situation with respect to the retention of these trained men and whether or not it is the money factor which is driving them away?


George Harris Hees: I am glad to comment on that, Mr. Chairman. Morale among the trade commissioners is very high indeed, as I am pleased to say it is among the personnel of the department generally. It is inevitable that good men in the government service are lured away from time to time by business and industry. It is very regrettable that this is so because, as the hon. member said, in that way we lose very valuable men. We have lost two trade commissioners. I regret very much that this has happened. However, it is two out of several hundred people in that category employed by the department, all of whom are very able. Therefore the percentage of loss is not great. We would certainly prefer not to lose any. I agree with everything the hon. member says. It is to be regretted that any of these men are, as he said, lured away by business, but it always happens in the government service where we are limited in the amount of salaries that we can pay. When a man is outstanding he is often attracted away by a salary that the government cannot pay.
Once again I mention the fact that these are only two out of several hundred employees of that category. The morale in the department is very high and I think we loose relatively few of our good men.


Mr. McMillan:: Mr. Chairman, Canada's
trouble in the matter of trade is that we buy too much abroad; we buy more than we sell. In 1959, Canada bought $369 million worth more abroad than she sold there. Besides this, there is an amount of something over $1 billion that the minister did not mention the other day that we have to meet in the balance of payments. This amount is made up of such things as the expenses of people travelling abroad and the amount that we have to pay in interest and dividends on foreign investments in Canada, and so on. Our total adverse balance last year was very close to $1.5 billion. If a merchant continues to buy more than he sells he will soon go bankrupt and out of business unless somebody lends him money, and this is precisely what has happened in Canada. The United States investors mainly have put up the difference. As Canadian money has poured forth to pay for purchases abroad investors from abroad have sent money into Canada and have made up the $1.5 billion difference in 1959.
Over the last number of years our imports have gone up relatively more than our exports, and we have a deficit balance of trade. Certainly in the last three or four years there has been a relative slow-down in our

trade. However, I will say that in 1960 there was some improvement in our exports. They were up, as the minister said, some 5 per cent. Our deficit on merchandise account amounted to something under $100 million, I think about $97 million. This improvement was brought about by two things, by some decrease in the amount of our imports and also by an increase in exports mainly to Great Britain, to countries of the European common market and to Japan. This is largely offset by the decrease in our exports to the United States of 4.6 per cent.
For the last three months, the minister said, there has been a decrease of 17 per cent, compared with a year ago, in our total exports to the United States and 3 per cent in the total exports over all. According to the Globe and Mail of April 29, Canada's February trade deficit was $24.3 million. Our exports were down 13.5 per cent over all and to the United States by 19 per cent. It would seem to me that probably the Prime Minister has his proposal of the 15 per cent switch of trade almost within his grasp, except that our exports to the United Kingdom would need to go up 50 per cent from here in order to compensate for the 15 per cent cut-back in our exports to the United States.
During the course of last year I read several articles in the press, and I read some in the British press as well, complaining that Canada was not buying as much from Britain as we were selling there. I do not think we should try to switch any trade. We should not try to cut down our exports to any country. I was glad to hear the minister say today that he would try to sell in all parts of the world. At the time that the 15 per cent proposal appeared in the press we certainly got a bad press in the United States.
In 1957 when the Americans cut back the importation of crude oil into that country by exactly 15 per cent our oil exporters certainly were hurt, particularly those exporting oil to the northwestern United States. I have often wondered whether the Americans did not accommodate the Prime Minister by cutting back oil importations by 15 per cent.
A few years ago Canada was the third trading nation in the world and on a per capita basis the highest. Today we are the fifth trading nation in the world. In spite of the increases the minister told us about the other day, Canada is losing out relatively in world trade. According to the international financial statistics on world trade for April 1, 1961, Canada in the first nine months of 1960 had an increase of exports of 2.3 per cent compared with an increase in world exports of 9.3 per cent so that, relatively speaking, Canada is slipping in world trade.
Supply-Trade and Commerce
The minister himself has said that 25 per cent of all Canadians depend on world trade for their jobs. Therefore there is a direct relationship between world trade and employment in this country. Unemployment at the present time stands at something over 11.1 per cent of our working force and in this respect we are worse off than any other country in the western free world. There is only one other country that comes anywhere near us in that regard and that is Italy with unemployment amounting to 9 per cent of its working force.


An hon. Member:: Where did you get your
figures?


William Hector McMillan: After all, our production costs are the deciding factor in the selling of our products in foreign markets. Anything that increases our costs will tend to keep us out of foreign markets. The fiscal policy of the government has contributed to higher production costs because we tax industry more than we did before. Our fiscal policy has also pushed up interest rates and money costs our producers more than it did before 1957. Industries also pay local and provincial taxes and we know that local and provincial taxes have gone up because of the increase in interest rates.
I want to commend the minister for his efforts in trying to sell our products on foreign markets. I wish him well but I think he as a member of the cabinet could do something about keeping down governmental costs in this country and certainly he could see that they do not rise more because of further financial manoeuvring. I should like him to remember that we have the highest unemployment in the western world and that we have lost our position in world trade, having slipped back at least one position from the time of the last administration. The minister should also remember that our per capita production is down nearly 1 per cent. We hear much about the European trading blocs such as the European common market or inner six and the European free trade area or outer seven. In the case of the inner six where free or freer trade is in operation between these countries, there has been a great increase in trade. According to the last figures I saw there had been an increase of 28 to 30 per cent in trade between them.
The United Kingdom is most likely to join one or other of these free trade areas, and I hope our ministers will cease issuing threats to the United Kingdom and the members of the European common market with regard to any steps they may take in this respect. I know that the Minister of Finance has denied these threats, but I have here a clipping from the Toronto Telegram of September 29, 1960,

Supply-Trade and Commerce a newspaper which is never unfavourable to the government. The heading of the article is, "Keep Out or Else, Fleming Warns United Kingdom". It is a dispatch from London, England, and the first paragraph reads as follows:
Canadian finance minister, Donald Fleming, today warned that any discrimination against Canadian goods resulting from Britain's entry into the European common market might be answered in kind by Canada.
If that is not a threat, I do not know what a threat is. I have several more clippings here concerning threats to Great Britain and to members of the European common market, even one or two by the Minister of Trade and Commerce himself. I do not think these threats do any good. They only tend to alienate our friends abroad. There was an article in the Financial Post of December 10 last by Mr. Clive Baxter headed, "In Europe They Say That Canada Overrates Her Own Importance". He quotes Mr. Hugo de Grood, head of the North American division in the directorate general for external relations at European common market headquarters, and also quotes others. Among the quotations was the following:
You are going to have to live with us in the future, and to withdraw into an angry protective shell can only mean worse and worse trouble for your economy.
All I can say about that is that the author of those words must have heard one of the angry tirades of the Minister of Finance such as we often hear in the house and have long since learned to discount. With reference to the speech of the Minister of Finance the writer said:
It is not encouraging to report, but impossible to ignore, that the speech seemed to worry nobody in Brussels.
He has reference to the headquarters of the European common market. Finally, in an interview Mr. de Grood had this to say:
It seems to us that Canada overrates its own importance these days. We want to trade with you, but you must understand that if necessary we can get along without you.
The European countries are going to enter these trading blocs anyway so I do not think our ministers should be making public statements that only alienate them. Mr. George de Young, chairman of the productivity council, speaking in Toronto on Tuesday said in effect that all nations and blocs of nations are putting forth a highly organized effort to increase the economic status of their people. He also said that we are suffering as a result of this and that in Canada and the United States we have to get over the idea that we have a technological and economic superiority because in fact we do not possess it. I think there is an awakening among all groups in our population to the

fact that we must become more competitive in world markets if we are to survive. We must have the co-operation of all groups in the community. Above all, we must have the co-operation of the government to keep costs down.
I remember that, a year or so ago when we had before us a bill increasing our subscription to the monetary fund and to the international bank, at that time I called the attention of the house to the fact that this bank would be lending money to develop industries in some of these countries at a rate lower than that at which our industries could borrow money in this country, and I said I thought that was unfair competition. That situation has come about. I have inquired about the interest rate that has been charged by the international monetary fund. I find that some of the industrialists in some of these countries have been able to build plants and to get new machinery and that they have been able to do that with money obtained at a cheaper rate than that at which our industrialists have been able to borrow money in Canada. They make products that come here to Canada in competition with our own domestic products.
I just want to refer briefly to agricultural exports. I was interested in reading lately that in the fiscal year 1959-60 our agricultural exports to the United States stood at $184 million, down 24 per cent from 1959 and 30 per cent below the 1952-54 average. Many fruit and vegetable growers in my part of the country are greatly interested in the marketing of their products. According to the November, 1960 issue of The Grower reference is made to our dealing with the United States in respect to fruits and vegetables under the heading "Imports are Up, Exports are Down". In the first six months of 1960 our imports of fruits and vegetables were up by $9 million to $76.3 million, indicating a figure of $150 million for the full year. At the same time our exports to the United States in fruit and vegetables were down by $500,000 in six months or by $1 million for a full year to about $13 million in fruits and vegetables alone. Therefore there is a net cost to Canada of at least $135 million in balance of payments. This is enough to wipe out our whole trade merchandise deficit and to have a surplus left over.
The hon. member for Vancouver East some time ago was referring to the deterioration of the fruit and vegetable production in British Columbia. At that time he said that a number of United States interests have come over and bought up certain of their processing plants and have cut down the opportunity for their producers in that part of the country to

market their fruit as well as they did previously. That same thing happened in the Niagara district some two or three years ago. I heard about some United States interests coming over and buying some of the canning factories with the result that thereafter the fruit and vegetable growers had some difficulty in getting rid of their products. I think that the two senior governments-I refer to the federal government and the provincial governments-should co-operate in helping these producers to provide facilities for the processing of their fruits and vegetables in Canada. If Canadians could use more of these fruits and vegetables and could import less, it would help the Minister of Finance in his balance of payments.
I have here a list of imports of small fruits for the last four years. I find, for instance, that imports of apples hold about the same; strawberry imports are down somewhat but in respect of most of the other fruits imports have gone up markedly. That statement applies to apricots, peaches, plums, cherries and so on. Let us consider the situation with regard to peaches alone. Imports of peaches in 1957 amounted to 423,000 bushels while in 1960 the figure stood at 945,000 bushels or over double. No doubt in some years there is a poor crop but, generally speaking, if you look over this list of fruit imports, you will find that they are all going up year after year.
Our farmers must be able to sell their fruit and vegetables when they produce them. They have high local taxes. Their costs of production are high and their cost of living is high. The people of Canada should endeavour to help them because we shall at the same time be helping ourselves in that we shall be cutting down the balance of payments.
I often see in the press some reference to United States companies moving to Canada, taking as much as possible out of Canada and giving as little as possible in return. This is not true in my part of the country. One United States company I have in mind is the Atlas Steel Company. The Atlas Steel Company came to Welland some years ago. It was brought there by Mr. Davis who moved to Canada and made Canada his home. Several of the chief executives have taken an active part in local affairs and they contribute much to the industrial and cultural life of their adopted country and community.
Two men in this respect are outstanding in my district, and they are two among others. I will mention their names. One is Mr. Arthur Schmon, president of the Ontario Paper Company at Thorold and Baie
Supply-Trade and Commerce Comeau. The other is Mr. George de Young, president of Atlas Steel Company in Welland. Both these men were born in the United States and they chose to make Canada their home. They have given leadership in some aspects of community and national life as well as being leaders in their particular industries.
I am sure the hon. member for Lincoln would agree with me that Mr. Schmon, among other things, has been instrumental in providing the most modern hospitalization in our area. We all know that Mr. George de Young was lately selected to be chairman of the productivity council. I am sure he will devote to this activity the same zeal and determination to make a success of it as he has devoted to the production of stainless steel and other products in Welland.


Mr. Siinson:: In this debate on trade and commerce I wish to advocate increased trade on the part of Canadian businessmen with businessmen in the republic of China in Taiwan or Formosa as it is commonly called in the west. Before I get into that subject I wish to commend my old friend the Minister of Trade and Commerce on the initiative, drive and enthusiasm which he has displayed in the discharge of his extremely important duties. The reason that I think we should promote greater trade between our country and this country in the Pacific is that, in my opinion, such trade would be beneficial in a material way to both countries and would lead to a greater understanding between Canadians and the Chinese in that island.
There seems to be a lot of excitement in the House of Commons and elsewhere in this country about the recently completed wheat and barley deal with the communist administration of mainland China. I should point out to the committee that in my opinion the communist government in Peking has no interest in long term trading with this country, which would be of benefit to both countries, and certainly very little interest in building an understanding between Chinese people and Canadians.
In fact, and there is evidence of this out of the mouths of spokesmen of the government of Peking, they are determined to destroy capitalist countries by military or economic means. The only understanding they wish to achieve is an acceptance by us of the communist philosophy.
Therefore I say that I for one cannot share in the jubilation of those who think that this grain deal, which will bring in a few dollars to this country over the next several years, is a big thing for Canada.
The people of the republic of China in Taiwan-a country which I had the privilege

Supply-Trade and Commerce of visiting recently-are working very hard with relatively few resources to build up their country. As is the case in India, government has a greater role in the economy than in many western countries, but the economy in Taiwan is essentially a free enterprise one.
The rapid growth of population in this country, about 3.5 per cent per year, makes it very difficult to increase per capita consumption of food each year. Only a quarter of this rocky and mountainous island is suitable for farming. Therefore increased food production can be brought about only through the institution of irrigation projects, improving the seeds that are used and fertilizers.
I think hon. members may be interested in hearing something about the recent achievements of the people in this country.
I	shall be brief in this respect. In a few minutes I should like to show that the economy of that island is steadily growing, and it could become an important trading partner of Canada. This is no small country. Some
II	million people live in Taiwan and, as I have said, it is becoming one of the important free enterprise economies in the Pacific area.
I agree with the assistant trade commissioner for Canada in Manila, who writing in the April 22 issue of "Foreign Trade" had this to say:
Many Canadian exporters who have focused their sales efforts on Asia continue to ignore the expanding sales opportunities in Taiwan.
When the Minister of Trade and Commerce spoke this morning about the efforts of trade commissioners in the Asian countries, I was sorry that he omitted to refer to this country as an area in which Canadian business could be developed.
In the Asian countries one of the best indications of economic growth is the production of food. Through a co-operative effort on the part of land owners, tenants and agencies of government the Chinese in Taiwan have been so successful in this field that the consumption of food per capita in the rural areas is greater than in any other Asian country.
In 1959 livestock production was four times the level attained in 1946. The volume of production in other farm products was over two and a half times greater in 1959 than in 1946. These increases have been brought about through the land reform program initiated by the present vice president of the republic of China, which program has proceeded through three steps, a reduction of farm rent, the sale of public farm lands and the abolition of the tenancy system.
Since the land reform program was undertaken some 200,000 families who were formerly tenant farmers have become owners of

plots of land. Land owners whose land has been expropriated have been compensated with bonds which are redeemed in rice and sweet potatoes, and stocks in government-owned industries. Thus in a period of 11 years a quiet revolution has taken place in agriculture in that country.
I ask hon. members to compare this with the so-called land reform program on the mainland of China which, as everyone here must know, has been marked by violence, terror, loss of freedom, slave labour and starvation.
Agriculture is the main occupation in Taiwan, but industrial production is growing in food processing, chemicals, machinery, ceramics, textiles and other fields.
A good indication of the growth of industry is the expansion in the use of electric power. In this country eight times as much electricity was used in 1960 as was used in 1955. The great changes which have taken place in this country have occurred because of the hard work and the enthusiasm of the men and women associated with the government, and the response of businessmen, farmers and workers to the leadership which the government has given; and, of course, aid from the United States which has been given at the rate of something like $100 million a year.
I wish to express my admiration for the men and women to whom I have just referred, many of whom I had the privilege of meeting in Taiwan in January of this year. What they are doing for their country is not only of value to the Chinese people in that country but it is also of great value in maintaining the morale of political leaders in southeast Asia who are resisting the influence of the Soviet union and communist China.
In 1960 Canada sold to the Chinese in Taiwan goods of a value of $2,885,642, and imports to Canada from Taiwan came to $1,150,222. The Chinese in that country- and I know this from speaking to many of them-are anxious to increase trade with this country and become less dependent on the United States for machinery, electrical equipment and other things.
Therefore I recommend to the minister that at a very early date the trade commissioner now stationed in Manila should go to Taipei and meet government and business leaders of that country with a view to finding out what Canadians can sell there and informing the Canadian business community of the opportunities that are available.
I wish to advocate the establishment of a Canadian consulate in Taipei as a first step toward bringing about closer business relationships between Canadians and the Chinese of this country. I am sure these improved

relationships would be of commercial benefit to both countries. They would build friendships between Chinese and Canadians which would lead to a greater understanding by the people of this country of the culture and traditions of the Chinese people.
I hope that on the next occasion a minister of the crown makes a trip to the Far East- and I hope that minister will be the Minister of Trade and Commerce-he will be going to celebrate the opening of a Canadian consulate in Taipei, and that he will come back to this house and announce a trade agreement which will be to the benefit both of the people of Taiwan and ourselves. It seems to me this would help to reach the objective of the trade policy described by the minister on April 28 when he said it was to foster the development among trading nations of policies conducive to the development, growth and expansion of mutually beneficial trade.


Mr.   Mc@: I regret that on Friday afternoon when the minister made a speech introducing his estimates and submitting them to this committee for approval I was unfortunately absent. I want to assure the hon. gentleman that my absence was not due to lack of interest either in the speech or in the subject matter. It arose merely through some misunderstanding which had arisen the previous day about the business of the house and the impression which had been created that the debate on external affairs would continue on Friday.
However, there is one advantage in not having been here on Friday. I had the opportunity of reading the hon. gentleman's speech and perhaps that gives a better opportunity for analysing it. I shall try in my few remarks today to avoid traversing the ground which was covered in the want of confidence motion moved on Monday of last week and debated on Monday and Tuesday. I regard that debate as one of the most important we have had on the subject of trade for some considerable time. I think that today on the estimates of the department itself it would not be appropriate to repeat the arguments raised then, but if I do not repeat them I do not want to indicate any lack of opinion as to the importance of that discussion in the whole field of foreign trade. It seems to me that that debate did deal directly with the situation as it affects our foreign trade today.
The amendment to the supply motion was, it will be recalled, a motion expressing want of confidence in the government. I might remind the committee of its terms. It read as follows:
That this house regrets the protectionist and inconsistent trade policies of the government and its failure to develop a long term foreign economic policy to enable Canada to participate fully in the
Supply-Trade and Commerce
challenging new opportunities in the field of international trade by implementing a vigorous program to promote the expansion of our secondary manufacturing industries and by encouraging the development of an Atlantic economic community.
It seems to me that this amendment came squarely to grips with the issue and that the debate was, as indicated, the best debate on the subject we have had for some considerable time.
My remarks today, to the extent that they are critical, are critical of the government for its failure to place this situation in its proper perspective and its failure to develop long term policies which will be appropriate to meet the challenges that exist today in the field of international trade. The inconsistencies of the government's approach are already beginning to have a very damaging effect and very damaging implications for the future. The speech of the Minister of Finance at Ste. Adele on November 17 of last year, seemed to me to be the kind of speech that is destructive of the development of proper trading relationships with the other trading countries with which we are chiefly concerned. I was critical of it last Tuesday, as appears from the record in Hansard, and I may say I was somewhat amazed that the minister, rather than trying to deal with the criticisms of his speech and of the attitude taken in it, seemed to repeat it and to support it. Indeed, he even added to it. I think that was completely wrong.
It seems to me that the situation confronting Canada today has two or three main aspects. First of all, there is the Sino-Soviet bloc with its trade policies and all their implications for us. The implications of those trade policies are two-pronged. One has to do with upsetting the trade of particular segments of the western trade area, by one process or another, and the other prong, the other danger, lies in its implications to the underdeveloped countries by upsetting their economies. It is an unfortunate fact that a very large number of the underdeveloped countries in the world today possess economies which are largely dependent on the export of one or two basic commodities and that if anything happens in the trading world which leads to a sharp drop in the prices of those particular commodities then the economy of that country is seriously and immediately damaged. As a result of that damage we see a political development, and there is also, of course, an economic set back which makes the country less effective as a potential trading market and trading area. As I view the Russian development, it lies in those two fields.
Anything which can be done to assist these underdeveloped countries to develop their

Supply-Trade and Commerce economies on a wider basis is to our benefit and is to the benefit of the free world as a whole since it enables those countries to develop as free nations, with all the desirable implications contained in that statement, and also to form improved trade relationships with our own country. Thus, on two grounds it is very much in our interest to see these underdeveloped countries improve their conditions and improve them quickly. I have spoken now, about the development of the Russian-Chinese bloc in that sphere of world activity as I see it today.
There is another condition which holds some implications for Canada, a condition which if not handled carefully could be adverse to us. Our agricultural exports would be particularly affected, but it could also affect our exports across the board. I refer to the European trade blocs, the European free trade area and the European common market. These two trade blocs have been discussed a great deal in the house by hon. members on both sides. There seems to be a substantial difference of opinion about the implications attached to the development of the trade blocs.
The Minister of Finance and the Minister of Trade and Commerce have, in my opinion, a wrong appreciation of this subject and have failed to see what should be done about it. I wish to be sharply critical in this regard. I have read some of the minister's speeches two or three times, because the Minister of Finance, in particular, is always quick to accuse hon. members of misquoting him.
There is no doubt at all that the propositions contained in the speeches of the two ministers relating to that subject have been interpreted as threats of retaliation. Certainly I have interpreted them in this way, and this interpretation is reflected by articles appearing in the newspapers I have read. One article described these speeches as angry little retaliation speeches. Other similar adjectives have been used to describe them. It has been suggested that they contained negative approaches to the problem, and perhaps even destructive approaches.
I do not see how we can appropriately and efficiently develop an economic policy by angry little retaliatory speeches of this kind. These problems arise because of the Sino-Russian bloc and similar organizations in Europe. The implications of those blocs create the atmosphere in which we must develop our trade policy today.
I felt that the Minister of Finance, in seeking to accuse the Leader of the Opposition of dispensing with GATT, did less than justice to my leader's speech. I thought the Leader of the Opposition made a very able

speech and that it was quite unworthy of the Minister of Finance to reply the way he did.
The historical fact is that in 1947, when GATT was developed, the Liberal government of that day played a very important and active part in its development. If one relates the development of GATT to the conditions which existed at the time-at the conclusion of the last war-one will realize that this development was a farsighted arrangement which did much to meet the problems confronting the western world at that time. It provided the machinery through which world trade could be supported and started moving again and, as I have said, the government of that day played a very prominent part, which appears on the record, and speaks well, in my opinion, for that government.
The situation in which we find ourselves today is that the Minister of Finance is attempting to rely on the same machinery, in the form it was at that time, without developing it to meet the new conditions with which we are confronted today. GATT is of course a splendid concept, it embodies a consistent policy, but it is unlikely to fully provide the kind of farsighted development we require today.
In summing up the situation I would say that I felt there was a very apt speech made by the hon. member for Richelieu-Vercheres on Monday, April 24. I would like to read his statement as it is recorded at page 3951 of Hansard for April 24, 1961:
On the contrary, in the light of Canada's trade deficits and her increased difficulty in competing in her home markets as well as in foreign markets, because of the disruption of traditional trade relationships, because of the possibility of increased economic competition from the Soviet union and her satellites and because of the paramount necessity of aiding the underdeveloped nations of the world, Canada cannot afford to be without a definite, well-thought-out, long range foreign economic policy. The stakes are too high and the situation too tense for Canada to continue to indulge, as she is now doing, in off the cuff, hit-or-miss trade policies, in apologetic but none the less restrictive trade measures with all her hopes of solving her problems pinned on the loud-talking high pressure salesmanship of the Minister of Trade and Commerce.
It seems to me that this statement puts the issues, with which we are confronted in trade fields, very squarely, and perhaps in better language than I could use. This is the type of long term, carefully thought out foreign economic policy that is required today, and that is exactly what we are not now receiving from the minister.
That long term foreign economic policy must be developed on two fronts. The first is the taking of active, positive steps-not just

sitting back watching and criticizing-to better integrate ourselves with Great Britain and ultimately the United States and the two European trade blocs. We must play an active role in integrating these two blocs into a larger Atlantic trade community which will not be restrictive or inward looking, but will be outward looking. This is a step that will require active participation on the part of the government and the minister. We are not receiving this participation now.
Second, proper steps must be taken to assist our secondary industries, which have been dealt cruel blows in the last two years particularly. Those blows have resulted from two or three different causes. First, because of the increased ability of foreign competitors to produce efficiently and cheaply with the resulting natural competition. The second is because our government has not adapted itself to the changed conditions which secondary industry must meet, by assisting secondary industry in meeting the problems, but has, instead, retained certain tax measures that were developed at a time when conditions were completely different, with the result that increased burdens have been placed upon these secondary industries.
There has been no apparent appreciation by the government of these problems. I have been very critical of the Minister of Trade and Commerce for his failure to understand that secondary industry plays a part in our foreign trade policy as well as our domestic trade policy, and that it must be re-established to full, effective participation, because this is a field which provides a great portion of our employment.
I would like to read from the speech of the Minister of Trade and Commerce as reported at page 3945 of Hansard for April 24, 1961 where he was referring to the amendment to the supply motion, moved by the opposition. He is reported as follows:
It purports to speak on the one hand of a free or freer trade area within the Atlantic economic community and in the same breath it expresses regret because, it says, the government has failed to promote the expansion of secondary manufacturing industries in Canada. These two portions are contradictory and represent opposite ends of the economic pole.
They are not inconsistent; they are wholly consistent. One cannot effectively be done without the other. What requires to be done, as well as the things I have spoken about now, international trade, diplomacy, negotiations, and so on, is to take the appropriate steps to rehabilitate secondary industry in the light of today's circumstances.
Incidentally, if you analyse all these things that have happened since 1958 when world exports have gone up by some 16 per cent you will see that our exports have risen by 7 per
Supply-Trade and Commerce cent-I think that is the correct figure-or a little less than half. We are stagnating and losing our relative position. I do not wish to take the minister's individual statistics for two and three months periods, as he did in his speech the other day, and say they are wrong. I do not think they are wrong. Probably they are all correct. I have no quarrel with them, but I do want to point out to him that they must be put in proper perspective and it is this other matter that is really of significance to Canada. His attempt at trying to draw conclusions from trading statistics for two and three months periods is not the appropriate way of dealing with this subject at all. He could take any set of trade figures for any two or three months period and do a great many things with them, depending on what he wants to prove. I do not see that that solves any problem at all, nor is it of any assistance toward setting the country on the right course and, so far as I am concerned, it is important that the country be set on the right course and quickly because we have been losing our trading position and we have been losing our position in maintaining the rate of our development in our own economy internally.
I suppose I could reinforce my argument with quotations. I do not know that that is necessary but there is a particularly good editorial in the April 29 issue of the Financial Post, headed "Pearson's Plea Justifies Study". The editorial quoted part of the remarks of the Leader of the Opposition as follows:
The process of Atlantic integration must take place for political as well as for commercial reasons. It is necessary for the prosperity and growth of the Atlantic democracies. But it may soon be necessary also for their survival.
The editorial continues:
Pearson does not advocate any sudden, dramatic or immediate consideration of the Atlantic economies any more than does Prime Minister Macmillan who also believes such an integration is the west's only road to survival. This, like any other international combination, is a very long term proposition and should be regarded as such. President Kennedy has been talking in similar vein.
I could quote the whole editorial which is a particularly good one, but I do not think I should take the time of the committee to do so. There is another sentence that perhaps I should quote. It reads as follows:
If the European trade blocs merge, and all indications suggest they will, and if we on this continent fail to work out a new entente with western Europe, Canada will not for long retain any semblance of independence.
This is the view that the editor who wrote the article took of the importance of this subject. As I say, I could quote at great length. In another article in the same issue of this particular paper they go on and show

Supply-Trade and Commerce how the economy of this country has been stagnating. The editorial is entitled "The Spectre of Stagnation". It reads, in part:
The dollar totals suggest that our recent recessions are only trifling aberrations and that our certain course is progress to a life where everybody makes over $10,000 a year, and where three-car garages are a natural right for every Canadian.
Despite the 1960 recession, GNP-the total value of everything produced, including services and goods-advanced 3 per cent. Personal incomes were up 6 per cent. Consumer spending rose by 4 per cent. This new accounting of how the economy is making out shows GNP is now up fully one third in just five years.
What is important about GNP, however, is not the sometimes stunning dollar totals and their frequently quoted advances.
What matters to practical business planners and to responsible government officials should be real rates of growth. And here the GNP story reveals the spectre of stagnation.
Consider these comfortless figures:
Since 194V, GNP's average annual rate of increase has been almost 8 per cent. This, on the surface, is a remarkable performance. But the average hides the fact that between 1947 and 1956 the annual average was 9 per cent, while in the last four years the rate of increase has been only half as fast-4 per cent per year.
To see how small the real volume gains are, take out the effect of price increases. Then the annual 9 per cent gain from 1947 to 1956 turns into a 5.5 per cent advance and the 4 per cent increase 1956-60 slows to a 1.7 annual rise.
The editorial goes on to develop that theme. In attempting to deal with this subject, in answer to some questions, the minister today did not come up with a long term, well developed statement of policy. I could deal with the answer he gave this morning and puncture many holes in it. He talked about West Indies trade. He did not tell us that we are losing a relative portion of the total there. He did not tell us it was the inconsistent policy of the government of putting one more difficulty in the way that has helped to create more difficulties in this group of islands that are trying to work out a federation which will have full control of these things, a customs union, and so on. He did not tell us he was the very minister who in his other capacity of minister of transport was the one who in one of those short term, quick actions, taken on the spur of the moment, dispensed with the shipping facilities between Canada and the West Indies. He did not tell us that it was that short term policy that did a great deal to damage that trade.
In any event, the point I wish to make is that the minister has been looking at this whole thing under short term, day to day policies, rather than developing a long term policy. Today, in answer to another question, he exhorted management and labour to get together. He spoke about the necessity of management, labour and government getting together to develop productivity. That is very

true, and I am in accord with that statement. Then, he went on to make another typical, enthusiastic speech, exhorting management and labour to do the job. You could hear the speech being repeated so many times. He does this exhortation so well. Indeed, he did it in his football days. He is still at it; without the same characteristic effectiveness.
That exhortation to management and labour is all right. I have no quarrel with it. But he has failed completely to deal with that part requiring to be dealt with which falls under federal jurisdiction, that is what the government can do to assist the economy of the country to assist secondary industry to develop itself. He was completely silent on that subject. He did not give the kind of treatment to that aspect of the matter that would make his exhortations to management and labour effective in that they would know that the third party in this triumvirate was pulling its weight. Instead, we have resentment on the part of management and labour and a feeling that government has failed completely in the area with which it should concern itself.
The government can do and should be doing a great deal. It is the area having to do with the activities of government that should receive the attention of the minister. There should be action on the part of the government, action that so far has not been taken. We have the spectre of the government with its shortsighted policies placing added burdens on productive capacity and on productivity. It has done so in many ways. One way in which it did so was by failing to recognize the need to adapt the taxes that apply to production directly to meet the changed conditions that secondary industries mainly but production industries in general were faced with in the developing world situation. Not only did the government fail to do this but it also in fact increased the burdens that bear directly on production.
The minister did not explain the impact on secondary industries of the added cost brought about by the sharp increase in unemployment insurance charges imposed on both management and labour. One can argue about whether the increase was 35 per cent or what the amount was on each side. It seems to me that, depending on which category is being dealt with, it varied from 20 to 50 per cent. But if you take such an increase in the case of both management and labour, there is an increase in respect of that charge on production alone of somewhere between 40 and 100 per cent.
The minister has not explained at any time since the government took office the impact

of the 50 per cent increase in the old age security tax which was applied directly on production.


The Acting Chairman (Mr. Chown):: Order. I am obliged to interrupt the hon. member to inform him that his time has expired.


George Harris Hees: Let the hon. member go on.


Gordon Campbell Chown: Will the committee give unanimous consent to the hon. member for Ottawa West continuing?


Some hon. Members:: Agreed.


Mr. Mcllraith:: I want to thank hon. members and I will try not to abuse the privilege unduly. I wish to complete my remarks and I hope they will be of a constructive nature, however destructive of the government they may appear at the moment. The sales tax, which is a direct charge on most production, was increased 10 per cent by the government. The corporation tax has been increased. Other taxes have been increased by way of changes in their application. In the legislation most of these changes appear to be administrative changes and they are somewhat more difficult to describe.
In any event, we must examine immediately the whole field of the applicability of taxation as it applies directly to production with a view to providing the changes and incentives that will enable our productive industries, particularly our secondary industries, to become wholly competitive against imports into this country. That can be done best by making changes in the kind of taxes I have talked about and through the appropriate application of incentives rather than through the minor restrictive tariff measures that the government seems to have applied regularly from time to time since it came into office and which have seemed to do nothing but destroy our trade relations while at the same time rendering no help to those they are intended to help.
The type of tax incentive that has to be applied is a correct use of accelerated depreciation in the proper areas. In the baby budget the government brought forward a measure to provide accelerated depreciation for industries establishing in depressed areas. I have heard the word "phony" used with reference to that measure and while that is not my word it is an apt way to describe it. It is not an atempt to grapple with the problem at all. It does not deal with what is required. It is too restrictive and narrow and the additional allowance on depreciation account for one year is not nearly sufficient. It is simply a useless little measure in terms of what is needed.
Supply-Trade and Commerce
What we need is the use of the weapon of special depreciation on a broad front, first of all in meeting the depressed area problem we have in Canada and then in meeting our export problem. It has to be applied in a carefully planned way. There is quite a reservoir of experience in the application of special depreciation, and I am at a loss to understand why, when the government was dealing with one phase of the matter involving depressed areas, the Minister of Trade and Commerce did not take advantage of governmental experience in using this instrument to bring forward a policy that would be helpful. I suggest to him now that this matter must be examined immediately by the government and a provision for special depreciation brought forward and made applicable in a much wider field and in a wholly different way from what was done in the baby budget. I suggest to him that he will find there is a great deal of experience in the use of such a measure. It was very successful when used in the post-war years in another connection to bring industry into peacetime production. A remarkable job was done on that occasion and I am at a loss to understand why the same kind of job cannot be done now in relation to the problems that confront us today.
Then, of course, there are the problems of straight tax reduction and government waste generally. I think these matters could be more properly discussed either on the finance estimates or on the budget. I do not propose to develop them here other than to suggest that they have a direct applicability to this subject and that care must be used in the kind of policies that are brought forward so that they will not place needless burdens on productivity. I could be very critical of the Minister of Finance and the unemployment insurance fund so far as investments and so on are concerned. These matters must be examined. They are not only a responsibility of the Minister of Finance but, because of their implication, of the whole ministry and of the Minister of Trade and Commerce in particular.
Then there are adaptations of the sales tax. There are certain aspects of the applicability of the sales tax that must be examined again in the light of the problems confronting us today. It is a somewhat difficult tax to speak about because one has to deal with so many regulations and its applicability is not an easy thing to define in a few sentences. I am suggesting that it must be examined in relation to its applicability to all aspects of production. It is not just good enough to say that it does not apply to certain manufacturers and so on. A whole detailed examination is required.

Supply-Trade and Commerce
Then we have all the other taxes and their applicability. There is this whole problem of the development of the very latest and best facilities that are available for secondary industry and for productive capacity. We must examine this field at once in order to see what measures-mainly tax measures-we can take in order to see to it that instead of plants engaged in production for export and for use in Canada being obliged to carry on with what I can call roughly now, for the purpose of this point, second rate production machinery or machinery that is not quite the latest and best for its purpose, we must make it economically possible for them to replace that machinery and equipment with the very best that is available in the world. We must examine our tax applicable to that problem with a view to providing the incentive that would enable industry to take the steps I am sure we all desire them to take.
Then there is the question of our general corporation tax which is very high. When we are talking about a corporation tax rate of 50 per cent or 49 and three it will be seen that we have placed a very heavy direct burden on these corporations. If they are to provide the jobs required, we must examine this tax structure in order to see that we are not placing on them a burden that negates the development of their productive capacity for the production of goods and the provision of the jobs that our economy requires.
As to the rate of taxes, it is extremely hard to make a comparison. I for one have not been able to get in a precise way the comparable figures for other western trading nations because the taxes are not exactly comparable. For that reason I have avoided using specific rates. However, in trying to check into this subject I get the impression that in the great western trading nations there is probably no other country in which the implication of taxation in this field is so heavy. As I say, that is not something that I can support with precise statistics because I just have not been able to get them in a form in which I thought it was fair to put them forward having regard to the slightly different applicability. But as I tried to find out about taxation and the German production, the Netherlands production and British production I formed the impression, at least in my own mind, that ours is much heavier in its implication and that, if we are to enable our secondary industry and our other production industry to compete successfully, we must make the adjustments necessary to meet that situation.
The committee has been very kind to me in allowing me to complete these remarks about this aspect of the matter. I feel very strongly that this aspect of the matter must
[Mr. Mcllraith.l

be dealt with as part of our plan, that it is useless to talk about trade in today's circumstances without talking about that aspect of it as well as the other matter of duties and volume of merchandise exports and imports.
I hold the view that the kind of thinking that is required now is bold and imaginative thinking if we are to retain our position among the foremost trading nations of the world. As far as I am concerned nothing less will do. To me it is shocking that we have the extent of unemployment we have in this country. To me there are direct reasons for it. I know that there is some easing of the situation in the United States but to me a great part of it exists by reason of policies within our own country that we could control. I am not content to have that condition exist and to have the short term, hit-or-miss policies that the present government has applied to trade. It seems to me that any narrow, isolationist or increasingly protectionist policy is completely out of step with history or developments today in the world.
I have been sharp in my criticism of the present government under the present Prime Minister for adopting confusing and contradictory trade policies. I have made that matter clear every session. I could recount the starting from 1957. There was Mont Trem-blant and the 15 per cent trade diversion speeches. They are just a series of shortsighted contradictory little statements. That thing is taking this country into a period of economic stagnation. We are receding in our world position in trade and there is no need for it. As the minister correctly said this morning, our industrial management and our Canadian people have the capacity for something much better than that. The government must provide the atmosphere in which they can do what they have the capacity to do.
We debated another subject here for some eight days this year and it seemed to me that none of the lessons of this country in the first half of the 1930's were learned by the present government.


An hon. Member:: Oh, oh.


George James McIlraith: The hon. member interjects but I can recall to him that I am perhaps one of the few members here who saw the government of that day in operation. I am not going to go back and traverse that ground again but I could not help but think in the customs tariff legislation the concept of trade of the present government had too much of the concept of trade of the government of that day and trade policies which were proved to be wrong and which history and our own experience repudiate. That government brought us into a blind alley. I hope this government will not do that. I want to

make my remarks today a warning to the government and a request that they look at these things and examine them closely.
In those days the unemployment figures were not mere statistics to most of the older members although they may be that to some of the very young. However, to most of the older ones they are not that. They represented very real suffering in that era. They are shockingly high in this era again. It is true that we have social security that prevents the hardships from showing up and becoming apparent as they were in those days. Nevertheless, the problem is there just the same. The destructive value to individual human life is there just the same and we must deal with it. We must not allow blundering policies of this kind to be carried on through default in our criticism here to impel the government to change. We must bring forward these criticisms, as I see it, in order to impel the government to examine the problems and to make changes. We must, of course, try to be constructive in doing it.
The ways in which we can be constructive in it are, as I say, among many others by the government developing a carefully thought out, long term foreign economic policy for this country; by the government taking positive steps at the ministerial level to build up a good working relationship with the trading countries of western Europe which are in the two European trading blocs, with a view to bringing those countries in a larger and better relationship with the whole Atlantic community, in which we will take our full and active part. This will involve the United States, of course, and many of the other related countries.
When that is done, we must see that this long term objective keeps that Atlantic trading area an outward looking area, because if it succeeds in that it will solve this problem about which I spoke very briefly. I refer to the problem of the underdeveloped countries. It will provide the kind of trading area in which those underdeveloped countries can get stable markets for their commodities. It will remove that fluctuation of price of their commodities which is so destructive of them. It will do more to assist those underdeveloped countries than these very good, but direct contributions which the western world makes to them.
It seems to me that this kind of policy would be more helpful to these underdeveloped countries than the direct contributions which they are receiving. This direct aid is necessary, and I am not criticizing it; but it is this kind of positive policy that will meet this problem.
It is this kind of policy that will again bring us back into a position and keep us
Supply-Trade and Commerce in the forefront of the world as a country offering the best opportunities for our young people who are born here, and for young people of other countries who wish to come here to join with us in the development of the best possible life for individual human beings.


Douglas Mason Fisher: Mr. Chairman, I think the compliments one usually gives to the minister can be largely by-passed at this time. I should like to say that I have noticed one difference in the Department of Transport since the Minister of Trade and Commerce left that department. When he was minister it used to be that you could get a reply to a letter in two or three days. It now takes anywhere from two to three weeks for the department to reply to a letter. However, we are not dealing with the estimates of the Department of Transport and I will leave this matter until a later time.
The minister's remarks were almost nonexistent on the small business branch and its operations. When one looks at the number of people employed in the small business branch, when one tries to find out what its budget is, and when one reads the rather obscure outline in the minister's annual report of what the small business branch is trying to do, one begins to question very much certain promises of this government.
I think all hon. members of this committee, whatever their party, have been intrigued by the statements of the Prime Minister that the Kennedy administration in the United States has really looked to Canada for its example; or if not that, if a more restricted explanation is given, Canada-the Conservative party-has been in the forefront in measures to meet our present economic difficulties and the United States are following along behind. This is almost ridiculous when one looks at this particular aspect of the government's promises and its field of operation, and I refer to the small business section.
The Minister of Finance gave us an indication the other day of just how relatively small a response or opening there has been as a result of the small business loan legislation enacted this session. Certainly in the first month and a half of operation there was a most discouraging rate of interest in this legislation.
Then we look at what the small business branch of the Department of Trade and Commerce is doing. I do not know, but the minister could probably tell us just how much the branch costs. I see that they had fewer employees last year than they had two years ago. We have seen little indication that the

Supply-Trade and Commerce branch has done anything other than publish these two pamphlets, which have their value but are not unduly exciting. I refer to the "Small Business" manual and "Selling to the Canadian Government".
In the annual report some claims are made, in connection with the small business branch, to the effect that it is handling a great many inquiries; that it is becoming a clearing house for business inquiries. As a former librarian who kept statistics on the number of people who came into a library and the questions they asked, I know that statistics are not going to necessarily reveal a true pattern of what the branch is doing. However, I think the minister should tell us just what these six people handled in 1960, in terms of inquiries. What kind of inquiries were they, and how much effort went into replying to them? I should like to know how much duplication there may be in what is being done by the small business branch and by other government branches in terms of providing information. I can put it most bluntly by saying this to the minister. You have a branch here with six employees, and the branch is set up to handle business inquiries from the whole of Canada. This is nonsensical. Is the minister going to tell us, or would he argue that six people can answer the business inquiries that may properly be raised by small businessmen throughout the country?


Mr, Drysdale:: What about your party?


Douglas Mason Fisher: I am quite prepared to acknowledge that perhaps these six men are handling it at the present time, but the only reason they are doing so is because the country does not know anything about the branch and the functions it is carrying out. I have yet to meet a small businessman who has really heard about this branch and the role it is playing. What liaison does it really have with the people?
The report says this branch has been working with associations, and so on; but what can six people do? We had this big hullabaloo from the minister and his department in relation to the foreign trade drive. This is excellent, I believe. I think most of us believe it has filled a role. However, when one goes through the estimates and looks at the tremendous sums required to keep offices going in Beirut, Belfast, Berne, Bogota, Bombay, Bonn, Boston, Buenos Aires, and so on, and then one looks at this little pittance here of six people working in an area where the Conservative party made a great many promises when it was not a government, when it was seeking election, one cannot help but be struck by certain paradoxes.
The minister has never really dealt with this matter. What is this government doing through this branch? Why bother to set up something as petty as this? I think we deserve some explanation in this connection. While he is at it, the minister might tell us, since according to his report this small business branch did provide the background information for the Small Business Loans Act, why loans under the act seem to be moving so slowly. Why is it that I hear complaints from small businessmen to the effect that, really, the act has not opened up much for them at all.
The next matter upon which I should like to touch relates to the census and the whole question, not so much of the operation of it but the controversial part of it.
I do not think any member of this committee need be ashamed of being a Canadian nationalist. I happen to be one, and as a Canadian nationalist I am still very much bothered about the census arrangements and about the changes that took place. I could agree with the changes and I would not quibble about the cost of them in so far as it suited one element of the population which believed it was entitled to, or needed, certain kinds of information. But I put it to the minister this way. When the census enumerator comes around I am going to tell the census enumerator, whether it is question No. 10 or the next question, that I am a Canadian and that this nonsense of ethnic origins in terms of so many of the people of this country does not mean a thing.
I hope the minister has read an article by Mr. McGeachy called "Goats, bathtubs and Christmas trees-they're all in the census". He makes one point in connection with question No. 10 which I think is important. He is talking about the census inquiry regarding ethnic origin and he says:
For some citizens this is a realm of sheer conjecture or family legend. But even correct answers don't, as a rule, mean a thing. For instance, Mr. Diefenbaker will no doubt have to answer "German" to the question (so would Queen Elizabeth if she lived here) but is there anything noticeably Germanic about the P.M.? Does he still belong to a Germanic "cultural group"? He's rather a solemn man; but this trait may well come from his maternal Scottish ancestry.
Mr. McGeachy is having a bit of fun, but it is still a very important consideration and I should like to put this question to the minister. When are we going to have a chance in this country to be Canadians and to forget about this ethnic nonsense? I should like to read to the minister a poem which appeared on this subject in the Fort William Times Journal. I think that in terms of metre it might be better than one usually finds in

newspaper columns. It is by a writer called Lloyd W. Zapfe and the title is "Reveille". It goes:
"Breathes there a man", the poet said and questioned if his soul were dead enough, to care not to extol, the virtues of his "Better Ole".
But what of this fair land of snow? where self-made men may come and go unfettered; paradoxically Canadians they cannot be!
Dieppe and Vimy knew them well;
The North Atlantic's cold grey hell and Europe's skies, they took in stride.
Yet they must show not native pride.
Five generations count for nought;
The Redman scarce deserves a plot, for stranger is he not? Forsooth!
He but arrived with Sabre tooth!
Now Nordic, Latin, Slav, take heart, perchance someday you may be part of this great land; so justly famed:
A first class citizen; acclaimed!
Countdown.
Damn the politician's crust!
Let's shoulder ballots if we must and storm this Fortress Ennui; raise up our colors. All to see our native land attenuated, our citizens un-hyphenated.
This particular attitude is one which I share completely. I do not want to overstate the issue. As a political issue it certainly should not be approached on partisan lines. But I should like to ask the minister again: when, in Canada, are we going to be able to declare ourselves Canadians and not in terms of citizenship? I think this is a matter about which the hon. gentleman should come out into the open. We grant the compromise which has been made. We are not critical of the compromise if a certain group in French Canada wants certain kinds of information, but I fail to see why the fact that they want this information about their ethnic group should mean taking away from a large number of the rest of us the right to identify ourselves as Canadians. Good Lord, I have not the vaguest idea of the ethnic group to which I belong, but, if we are to go far enough back into the past, Mr. McGeachy has shown that the Prime Minister and the Queen are wonderful examples of the ridiculous side of this whole question.
It seems to me that the basis of approach to a matter such as this has always been compromise. I should like to suggest to the minister that there are a tremendous number of people in English Canada who are ready to see an end of compromise in this situation. I would also like to suggest to him that if the area I represent is any criterion there is building up a very strong sentiment against the negative aspect of the census. I say it is a negative aspect when after five and six
Supply-Trade and Commerce generations you are still searching through your father's line to find out what your ethnic origin might be.
One other aspect of the census has already been touched on a number of times in the house. The shorter hon. member for Halifax gave us a statement reported at page 4012 of Hansard concerning the qualifications of the census commissioners. We were all amused when he said:
Each of these commissioners met the following qualifications: a good education with subsequent professional or business experience in a supervisory capacity-
Then the hon. member for Trinity interjected:
Good loyal Conservatives.
After which the hon. parliamentary secretary went on:
-intimate knowledge of the census district; proven executive and organizing ability; tact, good judgment and ability to deal with the public. The salary is $1,200.
I have brought this point to the attention of the minister before. There are smart Conservatives and there are dull Conservatives and there are stupid Conservatives. There are needy Conservatives, there are some in moderate circumstances and there are some who are affluent. Without going into the situation that all the census commissioners in the constituencies of Port Arthur and Fort William are, to my personal knowledge, good Conservatives, some of whom did attend the Conservative party rally here, I am wondering, in relation to the commissioners selected, whether they really did fill the bill in terms of being smart, or being needy, or being competent.
I am not going to single out names but I have certainly very serious doubts as to whether some of the census commissioners at the lakehead possess these qualifications and I would just like to say to the minister that if he is going to appoint Conservatives, if he sets up an organization in co-operation with Mr. Grosart using the services of his parliamentary secretary to make the arrangements across Canada, if he has a census organization based upon the Conservative party, why does he not accept a certain responsibility for seeing that he gets good and smart Conservatives for the job? I am willing to accept that there are good Conservatives and smart Conservatives. But if you want to search at the lakehead you will find Conservatives who have more ability than the ones who were picked, and Conservatives who are in greater need. I suggest to the minister that not only in his role as a minister of the crown but as an important figure in the party he has a direct responsibility in this regard.
4306	HOUSE OF
Supply-Trade and Commerce You might say, Mr. Chairman, that to talk about Conservative party organization on the estimates of the Department of Trade and Commerce is out of order. I insist that the minister himself and his parliamentary secretary have made it an integral part of the Department of Trade and Commerce. I was expecting that. I think the members of our party expected that. We are experienced enough to know that as long as we have this government in power we are going to have this pragmatic approach. I come back once again to the point I have made. There are smart Conservatives and there are dull Conservatives. There are affluent ones and there are needy ones. Why the tendency seems to be to give these jobs always to the affluent and to the dull is a little beyond my comprehension. I suggest this may reflect weakness in the Conservative party organization, and, with an election coming up, this might well prove very dangerous for the party. I think that when we come to the relevant part of the estimates the minister might take us into his confidence and tell us just how these people were picked. I know it has been easy in most of the constituencies because there are 207 representatives of the Conservative party here and their liaison with the shorter member for Halifax has been close. I have noticed the interchange of communication and the change in reputation of the smaller hon. member for Halifax as a result of this important role. I am thinking more of the constituencies not represented by Conservatives; the unfortunate places. I would like the minister to tell us where he received the advice as to the appointments. I am not suggesting that he should have come to me, or the hon. member for Fort William. I would not like to accept the responsibility of passing judgment on the dullness or smartness of Conservatives. However, I think it might have been better if he had turned to the national employment service for this information.
I also wonder if the minister has talked this over with the Minister of Labour. The minister may find that by by-passing the national employment service he has done an injustice to one of his colleagues. I have had many inquiries from individuals who would like these census jobs, particularly students.
I always advise them to telephone Art Shewchuk, the president of the Port Arthur Conservatives constituency association. I would like to ask the minister if I am giving them the right advice. I was dealing earlier with the small business branch. Everyone likes to run an efficient operation and I want to make sure I am sending these individuals to the right horse's mouth.
[Mr. Fisher.l

I do not intend to say anything further about this but I do hope the minister can tell us more about the matter. Where should these people who are scrambling for jobs go? I think the smaller member for Halifax told the house that these individuals should apply to the census commissioners themselves but I have a hunch that they need clearance from the local constituency association, and that is why I have been sending them there. If I have been committing an error I would like to know so that I may correct it. I hope the minister will straighten out this situation for me.
The last point I wish to touch upon in connection with the minister's department relates to information about the expenditures of this department. I would suggest that one really does not get as much information from appendix F in the annual report as one might like regarding the operations of this department. Since the public accounts are always somewhat in arrears so far as presenting a pattern, and since the estimates give a very incomplete picture of the costs involved in operating the various aspects of the department, I wonder whether it might be possible for the minister to expand on that information. Perhaps I could make this clear to him by pointing out to him that under heading no. 2 "Expenditures by Main Item Only" there appear some very large figures. However, when one turns to statement No. 1, expenditures for fiscal years, where one is supposed to find the details, there is not a very adequate breakdown. If an attempt is made to understand the very complex role carried out by the standards branch, and there are a number of functions that branch performs which may be complementary but are quite distinct, one cannot really ferret out this information. I pointed out the small business branch earlier as another example which, as the minister will remember, started its first year of operation with $35,000. I do not know whether that total amount has been spent, and I would like to know how much the operation of that branch costs, and what plans there are for the expansion of its expenditures. I would like to know how much of this money is represented by salaries to staff, and how much is represented by the cost of reference work.
In conclusion I would like to say that the minister's speech in regard to the whole question of trade, which he made at the lakehead about a month ago, received good response from the businessmen there. Those businessmen accepted the remarks he made because they felt the minister intended to do something about trade policy. I have on a number of occasions since heard criticisms, and have witnessed a change in attitude, which now

seems to be that the minister has a lot of pep and enthusiasm; however, what is the government doing in a practical or concrete way to carry forward this enthusiasm and exhortations to do better?
The minister came into that area of Ontario where we live and made some challenging and enthusiastic statements but I do not think he can leave the situation at that. We would like to see some follow through in this regard. When are his officials going to arrive in that area to follow up that pep rally the minister attended? The hon. member for Ottawa West in fact asked the same questions although he cast them in a more general but complicated manner relating to the department's trade policy as a whole. I would like to ask the minister now how he is going to follow up this picture of his so that something is filled in around the general hosannas and florets?


George Harris Hees: Mr. Chairman, I would like to answer some of the questions put to me by the hon. member for Port Arthur. First of all he asked about the total outlay of the small business branch. The total amount is $70,000. The allocation of that $70,000 is, to staff $65,500, but the actual expenditure there at the present time is about half that. There are six individuals working in that branch and the total allocation is for 13.
The hon. member asked if I could tell him something about the activities of the small business branch itself, and I will now try to do so. The small business branch serves as a focal point for the small businessman to come to discuss his problems and to receive assistance and advice. The present rapidly changing economic conditions often pose particular problems for small businessmen. The branch was established in order that it might provide a specialized service to help small businessmen in dealing with these problems. The small businessman receives assistance and advice from the branch on such matters as the establishment of a business enterprise, capital and other financial requirements, unfair business practices, government procurement, government services generally, accounting, and other fields of business management. The branch actively studies the problems of small business and, in co-operation with other departments, advises the government on possible courses of action to alleviate such difficulties.
The branch serves as a clearing house for small businessmen, in that, if it cannot provide information from its own resources, it directs the businessman's inquiries to the appropriate government departments and agencies which have the required specialized knowledge. The branch can also provide
Supply-Trade and Commerce businessmen with information on federal government procurement and, in this connection, has published a manual entitled "Selling to the Canadian Government". The business community has requested more than 10,000 copies of this document. In co-operation with manufacturers' associations, the branch prepares other types of business publications aimed at assisting small business.
I would be very interested if hon. members would tell me of any small or large businessman who has made inquiries of this branch but has not received satisfactory information or service. We in the Department of Trade and Commerce pride ourselves in doing everything that is humanly possible to give the service and information that is asked for. We may not give all that is asked or perhaps even satisfactory information, but we attempt to do so. If we do not, then we want to kno why. I would appreciate hearing information in detail from any hon. member regarding any incident as to how we have let any small businessman down in regard to information which he has asked for but has not received.
The hon. member also asked for information regarding the small loans program. I have just been handed some information in this respect. From January 19, to March 31, 1961, there were 334 loans to a value of $2,034,628. The average size of such loans was about $6,000. This emphasizes the small loan feature.
The director advises me that loan activity is expanding very rapidly. For instance, in March the loans were about three times the number of those in February, and expansion is expected to continue at a similar rapid rate. He explains that, after all, it takes some time to get these operations going, but activity is stepping up all the time.
The next thing the hon. member asked about was the census itself. He emphasized the desirability of a Canadian being able to say that he or she is a Canadian. This is one of the prime purposes of the revised census form. If the hon. member will look at question No. 9 he will see that it reads as follows:
Country of citizenship.
Are you a Canadian?
I do not know of any better way that a Canadian citizen can say that he is a Canadian than by being asked "Are you a Canadian?" and answering "Yes". If there is any better way of saying it, I should like to be advised of it by the hon. member.
The hon. member then said he regretted that ethnic origins are asked for. I wish to advise him that there are some 18 million-odd people in Canada and a very large proportion of those find it very important to

Supply-Trade and Commerce know the ethnic origin of the people of Canada. That is the reason why the question is asked.
The hon. member asked if I could tell him how a Canadian citizen goes about becoming an enumerator for the coming census. The simple answer is that he applies to the census commissioner in his area. They are the ones who will decide who will be the census enumerator.


Harold Edward Winch: The minister should see how it was done in Vancouver East.


George Harris Hees: The hon. member asked if we could expand the details given in appendix F in the annual report. I am glad to be able to say that we shall be happy to look into the possibilities of doing that. We want to give all the information possible without having the document too unwieldly, and we shall do everything possible to give more information in that appendix.
The last question asked by the hon. member was what follow-up is my department giving to what he described as the pep talks that I am giving around the country. After listening to the hon. member for Port Arthur and the hon. member for Ottawa West I seem to get the impression that they think there is something bad and distasteful about being enthusiastic and trying to enthuse other people into a greater selling effort and a greater producing effort. That is what I have been trying to do across this country since I took over as minister. I have been trying to point out what the citizens of this country must do in order to help themselves. This is what I have been trying to point out and I will be doing this further at trade conferences which are being conducted in various provinces across this country at the invitation of provincial governments, chambers of commerce, and so on. I shall be indicating to the businessmen who are attending those conferences, and who have already attended them in very large numbers, exactly what services this government department has at the beck and call of businessmen who are interested in going into the export market, and to try to induce more to go into the export market, telling them how we can help them.
At least half of those conferences are going to be devoted to the problems faced by individual businessmen in the domestic commerce of this country; in other words, trying to sell their goods and services here in Canada.
I spoke in the hon. member's home town of Port Arthur a few weeks ago. He was present at the meeting. Evidently he thought of my speech as a pep talk and nothing more. Some of the businessmen who attended thought it was useful. He asked me what our

department is going to do to follow up, and when my officials are going to go up there again. I can assure him that I have not enough officials in this department to go often to every city in Canada, much as we would like to do so. We operate what we think is an efficient department here in Ottawa. Our doors are always open. We try to give them all the information possible. I have tried to do so in my speeches to businessmen generally across Canada and to anybody else who would like to come here and talk to us. I have tried to tell them that we have a tremendous number of services available to businessmen right here in Ottawa. We cannot go to every city; we cannot talk to all of the businessmen in their places of business, but we have services available to them here, and if they have not the desire and the initiative, when they have problems, to ask us about them, to write to us or to come here and talk to us, then I am afraid that is their own concern.
But a great many businessmen have that kind of interest. A tremendous number come to us every day in the week and we try to give them all the services that we possibly can to help them do their job better, to make sales, to make jobs available to Canadians. If the hon. member, or any other hon. member, knows of any businessmen who have come here and found that we did not give them service, that our services were not available to them, that we were not as helpful as we should have been, I would honestly appreciate it if he would give us the information or let me know because I want to check up on those particular branches which are not giving the service. I know that all of my staff are equally interested to hear of any information of that kind. We pride ourselves on trying to do a good job. We intend to keep on trying to do it and any help the hon. member or any other hon. member can give us in assisting us in this regard will be most appreciated. I think I have answered the hon. member's questions.


Douglas Mason Fisher: I have a couple of questions. First of all, on the citizenship matter, the minister says that the census form allows one to state very clearly that he is a Canadian, but under what framework? This is my quarrel with the form. Question No. 9 under "country of citizenship", asks "Are you a Canadian? If not of what country are you a national or a citizen?" I do not see how one can look at this question without turning to question No. 10 which reads:
To what ethnic or cultural group did you or your ancestor (on the male side) belong on coming to this continent?

I am just suggesting to the minister that one question demeans from the other, and the necessity of a question such as "Are you a Canadian" under the label "Country of citizenship" to me is unnecessary.
The comments by the minister in part of his rather fighting-back attitude were along the lines of asking did I know of any examples of people who had a poor response from the small business branch. I do not. That was the point of my argument. My point was, if you have a branch of six members dealing with problems of the whole country there must be a certain inadequacy in the kind of service they perform. If businessmen across the country are responding and asking questions, how can six men do the job? I am just suggesting to the minister that there is a certain irony in the fact that we spend $52,000 in Beirut and $65,000 in Berne, and so on, and yet in this very important aspect of our work the minister has six members in Ottawa.


George Harris Hees: Perhaps I can answer that. We could enlarge the number of people employed in that branch up to double the number and more than that any time we wish to, as soon as the pressure of business justifies it. That branch is there. As far as I know it is well known to businessmen across the country. When I go to speak in the various provinces in the weeks ahead I am going to re-emphasize the fact that the small business branch is available to give service. We want as many small businessmen in Canada as possibly can to come to us, write to us, and ask us questions. There is nothing I would sooner do than quadruple this staff and I will do so as soon as the pressure of inquiries from small businessmen asking for information justifies it. I am not going to enlarge the branch just for the sake of enlarging it. I will do so as soon as there is any justification for doing so. I would love to see the branch consist of 50 people working full time. That would make me very happy because it would show that we were able to give small businesses a great deal of help of the kind they need to enable them to do more business and employ more Canadians. If the hon. member can act as a salesman for us in any way by telling people what we have available and if all other hon. members will do likewise, I will welcome it very sincerely indeed.
With regard to the census questions, I am afraid I cannot explain that matter any better than I have. The question is asked, "Are you a Canadian", and you say "Yes". If that does not give you a chance to say you are a Canadian, I do not know what does. I cannot think of how you can put it any more clearly. The next question has nothing 90205-6-272
Supply-Trade and Commerce to do with being a Canadian citizen because it asks, "What ethnic group did you belong to before you came to our shores?" You cannot be a Canadian citizen before you come to the shores of this country. These are two completely different questions. They were thought out carefully and I hope they are satisfactory to the Canadian people. I do not know how we can make them any more satisfactory.


Douglas Mason Fisher: As to the last rebuttal of the minister with relation to his appearance at Port Arthur, I think he misunderstood me. He said that he went to the lakehead and made his speech and he thought there was an enthusiasm that I apparently did not see. The minister is mistaken. I was glad he came to the lakehead and made his speech, and there is nothing wrong with putting on a pep rally. It was especially fortunate that it came at the time it did because, as the minister knows from the remarks he heard there, our area has suffered very severely from unemployment this winter. I give the minister credit for raising the spirits of the people who were at the meeting. I was simply suggesting to him that there needs to be a following up and building up of the kind of liaison that the minister is establishing in a very popular way. If I can do anything to advertise any of the services of his department, I will be only too glad to do so.
The last remark I would make is that there comes a point of diminishing returns in generating enthusiasm. All the generation of enthusiasm in the world will begin to taper off and the fillip will go out of it unless there is some concrete success in relation to it. Whether the minister is a success as Minister of Trade and Commerce we have no clue yet. I think there are indications that we are going to have to wait a bit longer to find out, and I would simply suggest to the minister that we will not know the measure of his success or the measure of the success of his rallying enthusiasm until we see some changes and developments both in regard to external trade and in helping small businesses. I do not think I can put it any more fairly than that.


George Harris Hees: I do not want to carry on this debate interminably but I do want to point out that in the speeches I have made since I became minister I have tried not to be simply a pep rally leader or somebody going throughout the country in that way, and I tried to point that out this morning in my opening remarks. I took it that some hon. members who heard me speak in the house on Friday got the idea that I thought everything was fine, that all we had to do was to
4310	HOUSE OF
Supply-Trade and Commerce carry on doing what we are doing and everything would work out for the best. I said that I wanted to correct that right away and I did.
I have tried to point out that all across the world, as I said once again this morning, we face the toughest competitive situation this country has faced since before the last war. It is a very serious competitive situation because countries that were formerly our markets are now our toughest competitors. I have tried to outline what the government is willing to do, can do and is doing to help business. I have tried to point out what management and labour must do in co-operation with the government, that this is a three-way operation involving government, management and labour and that we all have a big job. Nobody can turn to the other fellow and say, "It is your job; it is not mine".


Paul Joseph James Martin: That is what the Minister of Labour has done.


George Harris Hees: It is a job for the 18 million people in the country. I have not tried to make out that all you have to do is to hold pep rallies and everything will be fine. I have tried to point out that we are up against a very tough situation. I have tried to point out what has to be done and to urge people to do it. I hope they will do it. If they do, if we can work together in the way of the peoples of Europe and Japan did in pulling themselves up out of the slough of the war to the top of the heap in 15 years, then we, like them can have full employment. We can have our very high standard of living, the highest in the world, I believe. But I say again that it is up to us and that people cannot simply sit back and wait for some miracle that the government is going to create. Nobody is going to create any miracles.


Paul Joseph James Martin: Let the government give some leadership.


George Harris Hees: We all have a job to do. The sooner we recognize it, the sooner we are going to get under way and the sooner we will be at the top of the heap where the countries of Europe now find themselves as a result of such efforts.


Paul Joseph James Martin: Why does the government not give leadership?


George Harris Hees: That is exactly what the government is doing.


Lionel Chevrier: Give us an example. (Translation):


Mr. Caron:: Mr. Chairman, I think the Department of Trade and Commerce is probably one of the most important departments for


settling, not temporarily but permanently, the unemployment problem, provided the department is properly run in relation to Canada's needs.
Let me say at the outset that I think the minister has made a worthy effort; he has tried to inject some life into Canada's business and industrial community. However, I think his effort has not been enough, has not produced what we had a right to expect from the Minister of Trade and Commerce because in my view, the main cause of unemployment is the lack of outside markets in which to sell our surplus production.
We need new markets. We are told at one point that our exports have gone up, and a month later we are told that they have dropped. Perhaps it is true, but one sure thing is that Canada, with a population of 18 million, produces much more than it can consume. We must find markets outside Canada, throughout the world, for this surplus production.
Has there been a real effort made in that direction up to now? We know we are selling abroad. Just recently, we sold some wheat. That is fine, and we welcome it. However if you take a closer look at the statistics, you find that 40 per cent of our exports are agricultural products, approximately 40 per cent are raw materials, and only 20 per cent are manufactured or semi-manufactured products. When we sell raw materials abroad rather than manufactured or partly manufactured products, this works to the benefit of the workers in other countries and to the detriment of our own workers.
I was reading recently in the Financial Time for March 17, 1961 an article written by Mr. Rae, vice president and general manager of the North American Division of Atlas Steels Limited. Here is what he had to say on the particular point I was just making:
(Text):
The only effective solution to Canada's small market for most of our industries is active development of markets outside Canada.
(Translation):
That, in my view, is what the Department of Trade and Commerce should do: it should tackle this task earnestly so as to find new markets; otherwise, we can expect steady unemployment for years to come, and I do not think the Canadian people, no matter how good-natured they are, will be prepared to put up with such a situation much longer.
There are those who claim that to get a better share of the foreign market, we would have to step up production, as this would probably lower the cost of our goods. How

can we step up production when we already have surpluses that cannot be sold? It does not make sense. We must find new markets, and reliable markets.
Here is another quotation from the same article:
(Text):	,
Because we make products used almost entirely by industry, not directly by consumers, our major export markets are the world's industrial areas such as the United States, United Kingdom and Europe.
(Translation):
This means that we are losing here the jobs we should be giving to our workers. There are plenty of markets, of course, but our prices are perhaps too high and that is a bad thing.
Indeed, the minister himself pointed this out, because the same writer said:
(Text):
On February 7th, here in Toronto, our minister of trade and commerce said it was necessary for industry to reduce its costs to be competitive overseas.
(Translation):
That is something we admit. But how can we manage to cut down the cost of our products? There might be a way, if some emergency forced us to use it, and that would be to establish some sort of controlled economy which would settle everything. But this does not seem quite in order in a democracy such as we conceive it. However, the government could, as did certain other governments, provide grants to enable our prices to meet those of other goods on the foreign market at least for the first year. This policy would enable those industries to decrease costs by increasing their production so that, after a year, or perhaps two or three, Canadian manufacturers could sell their goods on the foreign markets at a competitive price.
Has this been done? I do not think so. I hold that this is one of the first points the present minister should watch.
As a matter of fact, in his Toronto statement the author finds that our attitude is contradictory, and he says:
(Text):
Two weeks later he was reported to have said increases in taxes were inevitable in 1961. I find it impossible to justify these two statements or to believe he does not consider taxes are a cost item.
(Translation):
And this is true, as the member for Ottawa West (Mr. Mcllraith) pointed out earlier. Therefore, the entire department should look carefully into our whole taxation system, because something must be done.
90205-6-2721
Supply-Trade and Commerce
Canada cannot wait any longer. Even though the minister did all he could, if it is not enough, he should seek counsel from the other ministers to determine what are Canada's needs at this time, because, let us not forget it, unless we find some way of disposing of our surplus production, no matter what government is in power in a few years from now, because of the present emergency we shall have to resort to a controlled economy. I do not believe that Canadians are too anxious to see that happen. We had to do it during the war because that was an emergency; we controlled prices and production costs; we controlled everything, in order to maintain a war-time economy. That can be done in cases of emergency, and if the situation remains as it is today-as reflected by the serious unemployment-and if the government fails to increase our markets, we shall be compelled to implement a trading policy which, as I said earlier, is not considered appropriate for Canada.
In the same article, Mr. Rae had this to say also on the subject:
(Text):
In order to manufacture our products at prices that will enable us to meet competition from imports we have to have modern, high-volume, efficient equipment. In order to justify purchasing such equipment, we have to have markets much larger than Canada alone provides.
(Translation):
And that is a fact. The whole question revolves around the matter of finding ways of disposing of our surplus production.
Mr. Chairman, we find ourselves in the midst of a situation that did not exist 10, 15 or 20 years ago. We see the idea of a common market gaining ground in Europe and involving in certain parts a free trade area. This will necessarily affect Canada's foreign trade.
Now what is the government doing in the face of such a situation?
We were approached by the British at Mont Tremblant. We were invited to consider the matter of free trade among the British nations. Did the government at least take the trouble to study the suggestion, to determine whether there was anything in it that might improve our situation? I do not blame the government for not accepting it immediately, but I do blame the government for failing to give it serious consideration, for failing to set up a committee of qualified people to study the matter, so that we might have known definitely whether it was possible for Canada to join a free trade area.

Supply-Trade and Commerce
We are now witnessing the development of the common market. And I will say this, Mr. Chairman. The Conservative party, which had always been considered as more empire-minded than any other party, will probably be responsible for breaking the commonwealth ties, in view of its stubborn refusal to recognize the situation facing the U.K. at the present time.
Faced with the common market, the United Kingdom has to keep in step. Last week, the United Kingdom indicated that it would necessarily join the common market, but before doing so, would have to consult with the commonwealth countries in view of the preferential tariff prevailing between those countries. Therefore, Canada will have to follow the suggestions which have been made both to the minister (Mr. Hees) and to the Prime Minister (Mr. Diefenbaker), and try not only to develop a common market area with the United Kingdom and other commonwealth countries, but try to develop a common market within the 15 NATO countries. Instead of trying, through increased tariffs- whether disguised or not-to protect a dwindling industry, the government should try to widen its perspective and find a means of selling our goods on other markets by reaching agreements not only with the United Kingdom and with the commonwealth countries, not only with the European common market, but with all 15 NATO countries which are prepared to take and accept the necessary steps to help their industry.
I do not wish to pursue the matter any further, but I hope the minister will take the trouble to study the situation so that Canada may know where it is going and what it can expect.
(Text):	.


Mr.   Carier@: When I replied on Friday to the minister's statement I chided him a bit for some omissions that occurred in his speech. After reading the Hansard record of Friday's debate I discovered that I myself made one or two serious omissions. I should like to take a few minutes now in order to repair those omissions, to avoid any misunderstanding that may arise and also to correct any wrong impression that may have been created.
Hon. members will recall that I compared the Minister of Trade and Commerce to a general who had called his troops in for a briefing to acquaint them with the facts of life of world trade. Among those facts of life in the world of trade I cited Russia's efforts to increase and accelerate her own industrial expansion while at the same time
[Mr. Caron.)
doing everything possible to hinder the industrial expansion of the free world.
I also referred to Russia's efforts to secure economic control of other countries and to integrate their economies into a trading bloc which would be complementary to her own. In addition I referred to Russia's economic aggression and penetration, and her increasing tendency to disrupt normal trading relations.
To counteract that action I made two suggestions. First I suggested that we should take action internally to protect ourselves against aggression and penetration and encourage other countries to do the same. I suggested that we should also take action externally to prevent trade disruption. In that connection I was thinking in terms of an association of free nations in the world of trade which would be somewhat similar to NATO in the realm of defence. Such an association would be able to buy up surpluses which Russia might use to disrupt world trade.
My first omission was the failure to point out that this in itself would not be enough, that what is actually needed is a dynamic, positive program, as was pointed out earlier this afternoon by my hon. friend from Ottawa West. The measures I was suggesting were by nature anti-communist, and I do not think there is any percentage in merely being anticommunist.
The military defeat of communism is something that cannot now be contemplated, and even were it possible, it would be useless because the evils that created communism would still remain. That is the real battle that has to be fought.
I think I pointed out to the minister last Friday some of the defects in our free enterprise system. I pointed out some of the weaknesses. Unfortunately these weaknesses are traceable to weaknesses in ourselves as human beings. If we are really going to do anything about this, we must come to grips with what is wrong in ourselves.
On Friday I spoke of the need for new goals. My second omission was the failure to call attention to what I consider should be our main goal at this time. That goal arises from a fact of life in the world of trade which is just as significant as the struggle for world domination in trade. This fact of life which I omitted is the gap in living standards between the industrialized countries and those countries we refer to as underdeveloped.
The people who live in the countries of Asia, India, Africa and other underdeveloped parts of the world, such as Latin America, have suddenly become increasingly aware of this gap. This has generated a wave of

nationalism in an effort to try and do something about it. They have before them examples of what Russia has accomplished in the space of 40 years. Even with the interruption of two world wars, we know that the Soviet union has developed from a backward nation to one of the foremost nations in the world as far as technological progress is concerned.
The people in these underdeveloped countries of Asia have another example in red China trying to achieve in 20 years what Russia achieved in 40 years. The industrial development of China is just as significant a fact in the world today as that of Russia.
In this connection Japan plays a very significant part. We know what it is to have on our borders a large trading nation. Japan is in exactly the same position and is experiencing the same pull economically as we are experiencing from the United States. Indeed, one of the main objectives of the policy of red China is to secure control of Japan in order to harness the industrial capacity of Japan to the manpower of China and the natural resources of southeast Asia. If China can succeed in doing this, she will outstrip the progress made by any nation in the world.
This afternoon the minister referred to Japan as an example of a nation which had risen from the ashes and had become one of our toughest competitors. This is of course true. However, we must not think of Japan only as a competitor. We must realize that Japan is also an ally of the free world and a key country in the survival of western democracy. Should the economy of Japan become dependent upon that of red China, the chances of survival for the free world would be very seriously impaired. Therefore, while we acknowledge Japan as a competitor we must conduct our trading relations with her as a country whose economy is vital to our own security.
The minister spoke this afternoon about the importance of design, quality and right prices. He said that if we paid attention to these matters we could achieve not only the second highest standard of living in the world, but even the highest standard of living. That is possibly true. However, I think there is the great danger that we might be tempted to make this our goal. If we did, we would do so at great peril to our survival as free peoples.
Certainly we must try and raise the living standards of people in our own country whose standards are still far below the national average; but to increase the over-all average of our standards of living in the western
Supply-Trade and Commerce world would serve only to increase the gap which exists between ourselves and these underdeveloped countries.
It is certainly in our interest that we should do everything possible to close that gap and assist the underdeveloped countries as quickly as possible. My colleague the hon. member for Ottawa West made that clear this afternoon. This is the goal at which I feel Canada and the free world should be aiming at this time and it is one of the things which I believe the minister should include in his briefing of his commissioners, businessmen, and all the contacts he makes as he attends trade conferences. It is a goal which all the people of Canada must be brought to accept. This is the kind of leadership which is required at this time. It is the kind of leadership that Canada could and should be giving in the world of trade, and I hope the minister will do everything in his power in that direction.


Mr. McGee:: I do not wish to delay the passage of the first item on the minister's estimates but I have a few comments to make in connection with the conference of trade commissioners last fall and the subsequent action taken to complement that activity by the establishment of export credits.
I am wondering about the limiting factors in the operation of our trade commissioners, the obvious position being that the trade commissioners cannot in fact write an order on behalf of a particular manufacturer in Canada and in particular on behalf of the smaller secondary manufacturers. I am wondering, further, if any of the associations with which the minister has been dealing have evolved a method of sending abroad representatives of perhaps groups of industry within the same field or groups coming from a specified commercial area. I understand certain persons have given considerable thought to this and I wonder if the minister can tell us if he has encountered any efforts along these lines in his travels.
I wonder, too, if in approaching this problem of trade in the vigorous way in which the minister has approached it he has had the staff of his department examine specifically the procedures that were followed by Germany in the post-war years and in more recent years in developing the aggressive export trade pattern that they have evolved.
One other thought did occur to me, and I am wondering just how much consideration has been given to it, though perhaps it is being held in abeyance to await the impact and effect of the activities to date. I am wondering if something in the way of incentive has been considered in a broad or specific way to various industries which can

Supply-Trade and Commerce develop certain important increases either in our export trade generally or in certain selective areas.
X would appeciate very much hearing from the minister about these few matters.


George Harris Hees: In answer to the hon. member's questions, may I say that the board of trade for Vancouver send a trade mission overseas every year. This year they are sending a mission to Italy. Last year one went to Japan. I am advised that the Canadian chamber of commerce in 1959 sent a trade mission to the West Indies and that in 1960 they sent a trade mission to Australia and New Zealand. The Halifax board of trade recently sent a trade mission consisting of 128 persons for a two weeks trip to the United Kingdom and they have just returned from that market.
We are very happy indeed to co-operate closely with any chamber of commerce or board of trade that wishes to send missions overseas, or with any trade association. We encourage that very strongly. We make our trade commissioners available to them everywhere they would like to go, and this link between the department and these missions is a fruitful one indeed. It leads to directly increased trade and it enables people to go abroad in a group and develop trading opportunities.


Frank Charles McGee: Are these people qualified to write an order? That is the question which was in my mind. Are these people simply duplicating the activities of our trade commissioners?


George Harris Hees: The businessmen themselves must write the orders. There is nothing to stop a business firm appointing as an agent for the trip another businessman who happens to be going and telling him to accept or place orders under certain conditions. That could be done very easily, but it would be up to the individual firm to designate its own appointee.


Frank Charles McGee: Supposing a businessman
wanted to appoint a trade commissioner as an agent for a certain transaction, would he be precluded from doing that?


George Harris Hees: A trade commissioner could not enter into trade negotiations. He could do a tremendous amount of the preliminary work leading to a sale, but the actual signing of the contract must be done by the representative of the business itself.


Herbert Wilfred Herridge: I have very few words to say but they are of great importance to some of my constituents, as usual. I want to thank the minister for his replies to the questions I asked last Friday and tell him I am sorry I could not be here earlier this


afternoon to listen to the debate. My attendance was required at the external affairs committee to see that the affairs of the country were being run properly.
However, I do want to bring to the attention of the minister a question which I have raised in this chamber before. I have been asked by a number of my constituents to raise it again and then to make certain suggestions to the minister. The subject I have in mind is the unethical practices of a number of United States lumber and forest products industries particularly in the Kootenays in recent years. There have been 20 or more of these companies established. They operate for a year or so, show a profit in some cases and then owners or management disappear across the border while the employees, the creditors and others are left holding the bag.
The latest case involves the Hilco Lumber Company, Limited, near Fruitvale, British Columbia, whose activities I brought to the attention of the house on an earlier occasion. This company has been in operation for two or three years, and it succeeded in showing a profit of more than $43,000. In 1960 it ceased operations just prior to Christmas and showed total current liabilities of $141,893.46. Not only were the wages of employees unpaid for two or three months-some employees were owed up to $1,200-but a large number of business people had been defrauded. Provincial government assessments had been left unpaid. Money was owing in respect of the social service tax, the British Columbia property tax and other taxes.
There was, for example, the income tax deducted in respect of employees. The department is, I think, owed nearly $9,000. This money was deducted from the pay of employees and it belongs to the Department of National Kevenue. There are other taxes, accounts and so on owed all over the country. These men were left without a cent, and, to make it worse, when they went to collect their unemployment insurance they found that although this company had been operating for two or three years it had not paid a cent of unemployment insurance contributions. Here were these poor chaps left on the rocks without any entitlement to unemployment insurance benefits because the company had not purchased the stamps.
I understand that after a review of the circumstances had taken place provision was made for a considerable number of these men to receive unemployment benefits. I have received a good number of letters on this subject. The clergy of the churches of various denominations in the area have written to me, as have a number of other people, because they are aware of the circumstances

and of the plight caused to these employees by this dishonest management.
In addition to that I received a letter from a pioneer rancher who accumulated quite a large estate but who suffered the loss of a great many of his assets in recent years through the unethical practices in bankruptcy of the Wesley Lumber Company and the Ray Ragsdale Lumber Company. This is one illustration of what has happened at Golden, in areas along the Crowsnest Pass west of the Alberta border, around the Lardeau district, in the area of the upper Arrow Lakes, and in the Revelstoke area. This situation has become a blight in recent years. I want to emphasize the importance of this to the people in those areas concerned, as well as in other constituencies than mine. I was asked to take this matter up in the house and I have done so.


George Harris Hees: I thought the hon. member had finished. I was going to say that I am very interested in what he has said, and assure him that I will take this matter up very seriously. It does sound quite serious to me. I will discuss it with my appropriate colleagues to see if we can get to the bottom of this situation.


Herbert Wilfred Herridge: I appreciate the minister's co-operation and thank him for it. I intend to outline the story, but I will write the minister fully giving him photostat copies of the correspondence I have, as I am sure he is concerned with this situation.
The commercial attache to the United States embassy noticed some remarks which I made earlier this session, as they appeared in Hansard and, as a consequence, very kindly telephoned me stating that he was very disturbed about the situation and would do everything he could to assist. He has done that. An investigation was carried out in this regard. I will not deal with my correspondence with the commercial attache fully but will send copies to the minister. That individual has gone to considerable trouble instigating an investigation into the companies concerned in the United States. The results of that investigation are not of very much credit to the companies or individuals concerned.
I have also taken this matter up with the superintendent of bankruptcy who is also concerned with these repeated occurrences in my area as well as, I assume, other areas. I should suggest that these losses could be avoided with the co-operation of the department because they are occasioned by the lack of information and guidance. Honourable people living in isolated spots, not used to consulting lawyers or bankers, witness a man driving a Cadillac-this did happen on one occasion-spending a few thousand dollars
Supply-Trade and Commerce for a week or so and think he is a millionaire. I am not as easily taken in as some individuals in my constituency have been. I would suggest that perhaps the minister should look at the situation and, with the co-operation of other departments and the commercial attache to the United States embassy, who I am sure is very willing to co-operate, could supply the information in order to curb this rash of fraudulent operations in bankruptcy. Perhaps an amendment to the Bankruptcy Act, will be required.
The superintendent of bankruptcy wrote me a letter dated April 21, 1961 from which I would like to quote a paragraph which reads as follows:
However, unfortunately, the Bankruptcy Act as now constituted does not seem to contain a remedy and I must confess that the solution is not immediately apparent. Should you have any suggestions, I shall be only too pleased to receive them and to give them due and proper consideration in conjunction with a study of the present provisions.
While it may be possible to amend the Bankruptcy Act so as to have stricter control over these things, I am of the opinion that the most effective approach must be made through the minister's department, with the assistance of the commercial attache to the United States embassy. I urge the minister to give this his consideration, to see what can be done either by distributing information to various organizations, such as the chambers of commerce and farmers' bodies, advising them of the steps that can be taken, or perhaps by an amendment to the Bankruptcy Act. I shall be very pleased to assist the minister in any way I can and give him any information I have in this regard.


George Harris Hees: Mr. Chairman, I will be very glad to look into the matter as soon as I receive that information from the hon. member.
(Translation):


Mr. Ricard:: Mr. Chairman, in rising to take part in this discussion, I cannot but congratulate the Minister of Trade and Commerce (Mr. Hees) and express my admiration for the work he has accomplished since he was appointed to this department. Needless to say my admiration also goes to the staff of that department.
Bold legislation has been initiated under the minister and is beginning to give results which certainly may give some encouragement to our people.
Of course, the minister alone cannot be responsible for solving our problems. All concerned should be ready to make every effort of which they are able. There should also be some contribution on the part of governments,
4316	HOUSE OF
Supply-Trade and Commerce provincial, municipal and federal, of industries, business and the workers themselves. Without such co-operation, all work proposed to stimulate business at home will give only-partial results if it does not lead to complete bankruptcy. Governments should co-operate in order to create a climate favourable to trade between the various countries.
As for industry, it should try to explore all avenues to ensure that the work and products offered to their customers are of the highest quality.
Businessmen, on their part, should as much as possible promote the sale and distribution of Canadian products, so as to give employment to the greatest possible number of Canadians.
As far as the workers are concerned, they also should make every effort to cut down losses, and thus help manufacture goods as economically as possible.
On the other hand, consumers must, I think, give preference to Canadian made goods; this will promote employment at home and give work to a greater number of Canadians who depend on that type of activity.
I also believe that it would be well for our chambers of commerce and trade unions to promote a "Buy Canadian" campaign.
Such an attitude would allow our economy to recover its strength, as it is only normal that Canadian products be first absorbed by those who manufacture them and by the taxpayers of this country.
As the minister stated this afternoon-and I think it bears repeating-some countries which formerly, and more particularly during the war, were among our customers, have in the last two years become our competitors. That is our position now. To my mind, the best way of settling the issue would be to compete in the most efficient manner with those who were formerly among our best customers. Those countries have conquered markets we would like to have ourselves.
This afternoon I listened with sustained interest and attention to the remarks of the hon. member for Ottawa West (Mr. Mcllraith). He painted a very dark picture of economic conditions supposedly prevailing in Canada.
In turn, I should like to show the other side of the picture and point out what is happening in particular in my own home town. I have here a copy of the Southern Canada Power Review for March 1961, on


page 8 of which, under the heading "Industrial Development in the Eastern Townships in 1960", one can read:
The following is a list of the industries established in the territory served by Southern Canada Power in 1960. There are 64 of them a number of which provide work for a hundred or more people. Also included in the list are the industries whose facilities were extended during the year.
Well, Mr. Chairman, I believe that expansion requires new industries. Businessmen must have faith in our future, in the leadership of the government and particularly that which the Minister of Trade and Commerce exercises within his own department. I see on page one-


Paul Joseph James Martin: It is not probable that they are wrong.


J.-H.-Théogène Ricard: Is it possible that Mr. Crump is wrong?


Paul Joseph James Martin: Possible, but hardly probable.


J.-H.-Théogène Ricard: On page 1 of the magazine, I see the following:
Eberhard Faber in full expansion in Acton Vale.
And the president of that company said:
The Eberhard Faber Company is happy to have contributed to the economic growth of the city and hopes to do much more in that connection with this modern and larger plant.
And here is the last paragraph:
The Eberhard Faber Company believes that a growing market requires increased production. By taking in more employees now in Acton Vale, the company is showing that it has faith in the future of the Canadian economy.
In my own town of St. Hyacinthe, according to municipal statistics, 11 new industries have been established since the coming into power of the Conservative government. This has meant jobs for 413 workers. It is said that a worker in a plant provides a living for about four dependents; so, a simple calculation will show that a certain number of my fellow citizens rely on industries that have been established under the present administration.
I am at present undertaking a survey of the economic situation in St. Hyacinthe. I have sent to 200 merchants and manufacturers of that city a questionnaire in which I ask especially this: has there been any increase or decrease in your turnover in the last three years? Of the 51 answers I have received so far, 36 say that their turnover has increased by 2 to 25 per cent, while six report a decrease in their turnover. However, nine of the merchants I have contacted say that their turnover has remained unchanged.

I note here in an article from Le Courrier of St. Hyacinthe, for September 1, 1960, some figures that this paper has obtained from Sales Management, of New York. The article in question is headlined as follows:
Up to $30,109,000 spent in St. Hyacinthe in 1959.
This represents an increase of $2,929,000. Well, Mr. Chairman, that will be all for now, because I would not like to delay the adoption of the first item of the estimates of the Minister of Trade and Commerce. But before I resume my seat, I should like to pay tribute not only to the minister and his staff, but to all those who help him, Canadian businessmen, manufacturers, industrialists and workers who, in considering it their duty to face their obligations, are contributing to the development of Canada and displaying their confidence in the future of their country. (Text):


George James McIlraith: I should like to ask the minister one or two questions on one subject. It will be noted that the large wheat sale to China announced yesterday is to be paid for in sterling. I want to ask the minister first whether the acceptance of payment in a currency other than dollars indicates any change in policy as it affects exports other than this particular sale?


George Harris Hees: Mr. Chairman, I am advised that this is the first time we have accepted sterling. Sterling is fully convertible and therefore I can see no disadvantage in our accepting sterling in this case. In order to make this important transaction it was necessary for us to accept sterling and the government had no hesitation in doing so.


George James McIlraith: I was not questioning that part of it. I wanted to know whether it represented any change in policy beyond what was involved in the particular transaction because, as the minister knows, the practice was to have the purchaser convert the currency and pay in dollars. This has always been our practice up until this transaction, with the exception of one or two very special transactions immediately after the war.


George Harris Hees: The reason we did business in United States currency in the past is that most other currencies were not convertible. Now they are becoming fully convertible and I can see no disadvantage in doing business in those currencies.


George James McIlraith: I do not want to develop an argument as to how fully convertible currencies are. It would be a long, rather technical argument. But any sudden increased
90205-6-273
Supply-Trade and Commerce demand on any country's reserves of a particular currency does or may create a problem, and I want to know whether there is a change of policy as it affects exports other than this special wheat sale? I think it is clear from the minister's answer that there is not.
My second question is, are there any implications in accepting such a large amount of sterling in this transaction on the increased sale of our manufactured products in the sterling area, or any other implications that the minister sees in the fact that we have accepted such a large quantity of sterling in this one transaction?


George Harris Hees: I do not see any. There may be, but I do not see any.


William Hector McMillan: May I ask one question. I notice that the minister's predecessor had an economic adviser and a senior economist. Does the minister intend to get along without a senior economist and a senior economic adviser? Is there any economic report in the department?


George Harris Hees: I take it that the hon. member is speaking about Dr. Firestone. He has, as hon. members know, gone to the University of Ottawa. He is still on contract with the department. We have considerable use of his services.


Mr. Peters:: I should like to make a few remarks. I have looked through the duties and responsibilities of this and other departments. I am not completely sure whether we are going to be talking about what is in the department or what should be, but I am interested in the matter of the development of secondary industry in certain areas of the country which have not that development, and will express some of the conclusions I have come to in this regard.
The minister said this afternoon that the small business bureau of the department has received some impetus in the last few months and that it is now growing greatly-


George Harris Hees: If I may correct that, the change was in the volume of small loans to business, which were introduced in the baby budget.


William Arnold Peters: Of course, the major impetus to the development of small industry would be through loans. This has been the big change in the bureau itself, its function as a tool in developing business compared with its former practice of merely telling businesses how to look after themselves.
The problem that we are now facing in many parts of the country has to do with the vital need to change our economy from the development of primary industry to the
4318	HOUSE OF
Supply-Trade and Commerce development of secondary industry, and we have no machinery or means to accomplish this end. Some people look to the small business bureau because it is in a position to give some encouragement to the development of certain types of secondary industries, but in the main it would seem to me that much more could be done to provide such an impetus by following the suggestion in the bill of a private member whereby money would be made available and assistance and even direction given in the redevelopment of certain areas and relocation of industry.
England has had this same type of problem. The problem simply is that in parts of Canada where we did have commerce and industry we no longer have these activities because the industries concerned have not been able to find the right markets or their resources have become depleted to the degree that it is no longer economic to operate them. I am particularly interested in the lumber and mining industries in my area, both of which reached and receded from their peak some years ago. Towns like Kirkland Lake are faced each year with a loss of another mine and the income derived from it. We regard with envy Toronto and some of the other major cities that are situated close to the markets for their products because while we are losing our resources these areas are overexpanding until it has become detrimental to many of the people who live there. It seems unrealistic to me that a person has to get up three or four hours before he is to start work and drive for two or three hours to get to his place of employment when we in other parts of the country have facilities very close at hand and would welcome plants that could be located almost in the backyard of the employees' residential areas.
It seems to me that we are going to have to do in Canada what has been done in other countries. I should like to refer to Great Britain as an example. I am told that recently when the Ford Motor Company asked for permission to expand in the location in which they were then situated they were told that they would be given a permit to expand but their expansion would have to take place in Liverpool because Liverpool had a surplus of labour and it was advantageous to have the new development carried out in that area.
I suggest that this is the type of development we need in Canada. There should be some leadership from the Department of Trade and Commerce in the establishing of secondary industry in those areas where there is now none and will not be unless there is government intervention, either through rendering assistance in the form of a subsidy
[Mr. Peters !

or in the form of direction by telling a company that it cannot have a licence to establish a plant in a certain town because the government wants the company to establish it in another town. The company could be told that it would be given a licence and encouragement to establish in the other town. If this is done, we will be able to share the wealth, so to speak, much more evenly than at the present time.
I should like to use the example of the town of Matachewan in my riding. No doubt many members of the Conservative party were interested in the past in the stocks of mines such as Young Davidson, Matachewan Consolidated and other producing mines in that area. The town has four or five grocery stores, a couple of drug stores, a small hardware store, a police station, a fire brigade and two or three schools, but the facilities available are not now being used. The town does not even have the money to pay for caretakers for some of the public buildings. The town is bankrupt for the simple reason that there is no industry there.
It seems rather unreasonable that new factories should be allowed to locate in a high wage area such as Toronto where agricultural lands are being taken over for the building of homes. There are many reasons why that also should not take place, but people are living so far away from where they work that in some cases the situation is becoming ridiculous. Yet this is happening while at the same time a municipality such as Matachewan will provide free land for the establishment of industries and will make every reasonable concession, tax or otherwise, to get firms to establish factories there. There are many natural resources in the area of Matachewan that would lend themselves to the establishment of secondary industry. The authorities there will grant every reasonable consideration just to get an industry to establish there so that the people of the area will again be employed and will be able to maintain their community in a reasonable degree of prosperity.
I think it is not unreasonable to ask that the small business bureau of the Department of Trade and Commerce undertake such a program in conjunction with what it is now doing because in my opinion it is going to be vitally necessary. The junior member for Halifax, who is parliamentary secretary to the minister, has a somewhat similar situation in the area he represents. We continually hear complaints from the maritimes that they have a problem quite similar to the one to which I have referred in connection with

northern Ontario. As one of his colleagues has mentioned, assistance is going to have to be given.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I inquire what the business is for tomorrow and the rest of the week?


Mr. Churchill:: The objective is to complete the estimates of the Department of
Business of the House
Trade and Commerce, those of the Department of Northern Affairs and National Resources which have been under consideration earlier and those of the Department of Fisheries during the course of this week. If we conclude earlier than six o'clock on Saturday, I am sure the house will be pleased to rise.


Lionel Chevrier: That is a good touch.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
90205-6-273|
[Stage Direction]
Questions