1961-07-07

Mr. Speaker:: I have the honour to inform the house that I have received a message from His Excellency the Governor General, signed by his own hand, reading as follows: Government House, Ottawa 5th July, 1961
Members of the House of Commons:
I have received with great pleasure the address that you have voted in reply to my speech at the opening of parliament. I thank you sincerely for this address.
Georges Philias Vanier.



RAILWAYS. AIR LINES AND SHIPPING

[Stage Direction]
Second report of sessional committee on railways, air lines and shipping owned and controlled by the government-Mr. Smith (Simcoe North).


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, may I inform the house that I will be placing on Votes and
Proceedings today certain amendments to the bill to amend the Income Tax Act. To ensure that hon. members opposite will have earlier notice of the text of the amendments I will be sending copies over to them.



FINANCE

[Stage Direction]
REPORTED WITHDRAWAL OF FOREIGN INVESTMENTS On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, may I direct a question to the Minister of Finance and ask whether he has taken notice of an article appearing in the Toronto Globe and Mail of July 7 entitled:
Europeans sell Canadian investments The article continues:
Swiss and other Europeans have been withdrawing millions of dollars worth of investment funds from Canada during the past week, fearing inflation and lower bond prices are in store for the country later this year.
This statement has been made by Mr. Walter Keyser of Gairdner and Company, Toronto.
I would ask the minister whether the statement is accurate, and if he has any comment to make upon it.


Donald Methuen Fleming: I have not seen this article, I would, however, make this comment upon the observations of the hon. member for Laurier. There is no reason whatever for anyone to be fearful of inflation. The policies which the government follows and will continue to follow will be aimed to expand production and employment opportunities in Canada without disturbing the purchasing power of the Canadian dollar.
As far as bond prices are concerned, I might point out that since the budget was introduced on June 20 the bond market has been stronger than it was previously, and that the effect of the strength of the bond market has, of course, meant a corresponding reduction in interest yields.


Lionel Chevrier: May I ask the minister a supplementary question. Is it a fact that the exchange stabilization fund has purchased between $30 million and $40 million in Canadian dollars this week to keep the Canadian dollar from falling sharply?


Donald Methuen Fleming: It has never been the practice in this house to disclose individual transactions or transactions from day to day of the exchange control fund. There are statements issued periodically which indicate the balance in the fund, but it has never been the practice at any time since the institution of this fund to indicate particular transactions from day to day or particular balances over short periods.


Mr. Erhart Regier (Burnaby-Coquitlam):: Is the government in a position to announce what its plans are as to the financial needs of the government in the field of borrowing, and thereby restore some stability to the market?


Donald Methuen Fleming: The hon. member is evidently not acquainted with the market, because there has been more stability in that regard since June 20 than there was previously. With regard to the plans of the government with reference to the financing and meeting of its cash needs, I announced those plans, as is the custom, in the budget speech for the period covered by the present budget. As to particular issues from time to time.

Inquiries of the Ministry it has never been the practice to announce those individually until a particular issue is about to become available.

On the orders of the day:


Mr. W. H. McMillan (Welland):: I should like to direct a question to the Minister of Finance. In view of the reported heavy selling of Canadian securities by foreign investors, does he still deny my prediction in this house on August 10 last-


Mr. Speaker:: Order. I think the hon. member heard an earlier question along the same line, and as he continues it seems to me he is more intent on making a point than on getting information. I recognize the hon. member for Trinity-Conception.


William Hector McMillan: I want to ask the minister if he still agrees that there has been a flight from the Canadian dollar.


Some hon. Members:: Order.
(Translation):



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. Alfred Belzile (Mafapedia-Mafane):: Mr. Speaker, I should like to direct a question to the Minister of Transport following a telegram I received this morning from the secretary of the Trucking Association Inc., which reads as follows:
Mr. Alfred Belzile, M.P.
Ottawa, Ont.
Are informed C.N.R. is asking Quebec provincial transport board to acquire trucking companies stop We protest against railway interference in field of private enterprise stop On behalf of our members urgently request your intervention in favour of private enterprise against state monopoly.
(signed) Romeo Blouin
(Text):


Mr. Speaker:: Order. The hon. member is reading a telegram which gives certain information. If he has a question, would he please ask it.
(Translation):


Alfred Belzile: Yes, Mr. Speaker. Could the minister inform the house as to whether it is official that the C.N.R. intends to compete with private enterprise in the field of highway transport?


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, that is a decision for the authorities of the C.N.R. However, I should like to


assure my hon. friend that I will pass on to the C.N.R. officials the representations he has made in that connection.


Mr. Gerard Loiselle (St. Ann):: Mr. Speaker, could the minister take that opportunity to impress upon the C.N.R. that it should not enter a field which belongs to private enterprise, especially the trucking industry?


Léon Balcer: The final decision as to whether or not the C.N.R. will be allowed to purchase or operate a trucking business in the province of Quebec, rests with the Quebec transport board.


Mr. Alexis Caron (Hull):: Mr. Speaker, I should like to ask a supplementary question. If the C.N.R. takes over that trucking company, would it be possible to request the management not to indulge in a price war with private enterprise?


Léon Balcer: Mr. Speaker, my information is that the C.N.R. does not engage in a price war with private enterprise but rather in a fair competition with other carriers.
(Text):



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. R. C. Coates (Cumberland):: Mr. Speaker, I should like to direct a question to the right hon. Prime Minister. Is the Prime Minister in a position to comment in respect to a telegram he received from the Springhill citizens' industrial committee?


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, that question was asked as well by the Leader of the Opposition. I received a telegram from Mr. A. J. Mason, chairman of the citizens' industrial committee of Springhill, Nova Scotia, much along the lines of the suggestions that have been made in whole or in part by the hon. member for Cumberland earlier.
At the time I received this telegram referring to the special measures that were being taken by the federal government in the Cape Breton area to assist in providing jobs for the coal miners affected by the mine closures, a request was made that a similar program be introduced at Springhill because of the mine closures in that area and the fact that some of the miners were unemployed. The house will recall that the closing of the Springhill mines occurred several years ago, and at that time special measures of various kinds were taken, including assistance to coal miners in finding employment elsewhere.

On June 23 I made the following reply to Mr. Mason:
Your telegram of recent date has been receiving attention. As you know a new penitentiary has been established and a new mine opened at Spring-hill recently. In addition the Springhill area has this month been designated by order in council as a surplus manpower area in which double depreciation will be allowed for income tax purposes to new industries. Any further measures that may be taken from time to time by the government of Canada will be announced.
I received a further telegram from Mr. Mason on July 3 repeating the request of the earlier telegram and asking that the federal government provide assistance in the construction of a new hospital and a vocational training school, and for the establishment of a national park in the area. Furthermore, it was also requested that the Canadian National Railways take over from Dosco the spur line between Springhill and Springhill Junction.
Apart from the special measures of assistance mentioned in my telegram to Mr. Mason, the Department of National Health and Welfare has approved a hospital grant in the amount of $178,360 to the All Saints' hospital corporation. The question as to whether a vocational training school should be built in the Springhill area is a matter for the provincial government in the first instance, although, as the house knows, special legislation passed during this session is applicable to suitable vocational training schools anywhere in Canada.
As to the railway spur line, it is being studied by the Department of Transport, the Canadian National Railways and the government of Nova Scotia. I should add further that my colleague the Minister of Public Works recently announced plans for the construction of a new federal building at Springhill.


Robert Carman Coates: Mr. Speaker, I should like to ask a supplementary question directed to the Minister of Transport. I wonder whether he could make any comment in respect to negotiations between his department and the other parties concerned with regard to the spur line between Springhill Junction and Springhill.


Léon Balcer: Mr. Speaker, I am very pleased to be able to announce to my hon. friend that after his many and repeated representations my department has come to the following conclusion, and I am writing to Premier Stanfield today in this regard. The Department of Transport is prepared to take title to this railway line, and we will arrange for any continuing maintenance necessary as long as the province is prepared to underwrite this maintenance financing.
Inquiries of the Ministry TRANS-CANADA AIR LINES



REQUEST FOR REPORT ON LABOUR DISPUTE

[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: May I direct a question to the parliamentary secretary to the Minister of Labour or to the acting minister, and ask whether any information can be given to the house about the progress of negotiations between Trans-Canada Air Lines and the Canadian air lines flight attendants association.


Mr. R. D. Thrasher (Parliamentary Secretary to the Minister of Labour):: I do not
think anything can be added to what the minister said the other day.



PRESENCE IN GALLERY OF NATO PARLIAMENTARIANS

[Stage Direction]
On the orders of the day:
Mr. Louis Fortin (Monlmagny-LTslel):: May
I direct a question to the Prime Minister. Is the Prime Minister aware of the presence in the gallery of members of the standing committee of the NATO parliamentarians' conference who, for the first time in North America, are holding an official meeting in Ottawa?
(Translation):
The Prime Minister undoubtedly sees those distinguished visitors in the diplomatic gallery.
(Text):


John George Diefenbaker: Mr. Speaker, I thank my hon.
friend for pointing out this very obvious fact. By the reception given by hon. members the welcome has been fully indicated.
I may say that I was a member of the earlier NATO parliamentary association. The Minister of Citizenship and Immigration was among those on the delegation present at the first meeting, and I have since followed the deliberations of this body which has done much to bring about agreement on many matters on which there might have been disagreement, and has made stronger the unity of NATO without which freedom cannot be maintained. I am very happy, I am sure with the approval of the official opposition and the third party, to welcome this distinguished group of men. I am very glad they have chosen Canada for their meeting. They will see here that we believe in the maintenance and the strengthening of those ties, particularly at a time when the challenge to freedom appears to be more definite than ever before.


Hon. L. B. Pearson (Leader of ihe Opposition):: Mr. Speaker, as an old NATO hand-I beg your pardon, as a former NATO

Inquiries of the Ministry hand-and still a strong supporter of NATO, may I be permitted on behalf of my party to associate ourselves with the remarks of welcome of the Prime Minister to this distinguished group of NATO parliamentarians. As the Prime Minister has pointed out, their presence here brings to our mind the fact that NATO still remains the strongest bulwark against aggression.


Erhart Regier: Mr. Speaker, on behalf of the members of this group I should like to add our welcome to the distinguished visitors. We know that the NATO parliamentary association was originally organized in order to sponsor economic unity in the western world, and we wish them every success in their endeavours.



SALT FISH


[Stage Direction]
On the orders of the day:
Hon. George H. Hees (Minister of Trade and Commerce):: Mr. Speaker, on Wednesday last the hon. member for Bonavista-Twillingate asked for a report on the results of the efforts of my department to assist in the disposal of surpluses of salt fish. He also asked whether there had been any discussions with my colleague the Minister of Fisheries regarding action by the fisheries prices support board.
I am glad to be able to report that my department has completed, through the trade commissioners, a canvas of all salt fish markets and has given every assistance to the industry to increase its sales in foreign markets. All of this has resulted in the sale of nearly all the stocks of salt fish carried over from the 1960 production.
I am advised that stocks of salt fish at the end of June were only slightly higher than at the same time last year, when supplies were inadequate to meet current demand. There are also indications that export prospects are continuing to improve. I can also advise the hon. member that my department works in closest collaboration with that of my colleague the Minister of Fisheries.


Hon. J. W. Pickersgill (Bonavisla-Twillin-gate):: I should like to thank the minister for his statement. Could he say whether we are now getting back into the Cuban market?


George Harris Hees: Mr. Speaker, I am advised that there are prospects of an increased demand in the Cuban market for the supply of salt cod, and there is also an increased demand in the Dominican Republic for Canadian salted pollock.



CANADIAN PACIFIC RAILWAY


[Stage Direction]
On the orders of the day:
Mr. R. R. Souiham (Moose Mountain):: Mr. Speaker, I should like to direct a question to the Minister of Transport. With respect to the application of the Reston-Wolseley retention committee, which is now pending before the governor in council, to have the order of the board of transport commissioners of Canada to remove the Reston-Wolseley branch of the C.P.R. fully reviewed, and in view of the serious implications to the social and economic life of the people affected, can the minister say what action, if any, has been taken by the governor in council in this matter?


Léon Balcer: Mr. Speaker, the matter is before the cabinet at the present time, and I can assure the hon. member that the most careful consideration is being given to the strong representation he has made on behalf of the population served by this branch line.



HISTORIC SITES AND MONUMENTS


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Minister of Northern Affairs and National Resources. My question is based on a conversation with a young lady who is interested in national historic monuments. In view of a report in La Presse of July 4 concerning the repairs required by the old mill built in 1618 on Ile-aux-Coudres in Charlevoix county, would the minister consider getting in touch with the government of Quebec on this matter with a view to having the mill declared a historic monument?


Hon. W. G. Dinsdale (Minister of Northern Affairs and National Resources):: Mr. Speaker, this particular press item has not come to my attention; neither have I had the good fortune to be approached by the same young lady to whom the hon. member referred. However, I shall be happy to refer this matter to the historic sites and monuments board for their consideration.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Hon. Paul Martin (Essex East):: Mr. Speaker, may I ask the Secretary of State for External Affairs if there are any developments which

he feels he would like to report to the house regarding the situation in Laos, particularly in view of the fact that Canada is a member of the international supervisory commission.


Hon. Howard C. Green (Secretary of Stale for External Affairs):: No, Mr. Speaker, there is nothing further to report at the present time. Discussions are still under way with regard to the provision of equipment.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. J. R. Keays (Iles-de-la-Madeleine):: should like to address a question to the Minister of Fisheries. Because of the fact that salt codfish sold under the trade mark "Gaspe cured" is in short supply, will the minister give consideration to moving some of the fresh caught product from Newfoundland to the Gaspe peninsula to be treated?


Hon. J. A. MacLean (Minister of Fisheries):: Mr. Speaker, I am not technically qualified to pass judgment on the practicability of such a suggestion, but I will certainly refer it to my department for advice.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. J. R. Tucker (Trinity-Conception):: Mr. Speaker, may I direct a question to the Min-iser of Transport. Is the minister aware of the fact that more than 100 Newfoundland bound travellers were left stranded at North Sydney recently when they were unable to obtain passage on the car ferry William Carson, and that this marked the fourth consecutive night that travellers were left stranded at North Sydney? If so, what action has been taken?


Léon Balcer: Mr. Speaker, I was not aware of the unfortunate incident related by my hon. friend but I will certainly bring the matter to the attention of the management of the C.N.R., Who are operating the ship.


John Whitney Pickersgill: I should like to ask the minister a supplementary question. Can he bring to the attention of his department and perhaps of treasury board, where it has been resting since 1959, the proposal for an east coast ferry which would help to relieve the kind of situation referred to by my hon. friend from Trinity-Conception.
Inquiries of the Ministry


Léon Balcer: Mr. Speaker, in the very near future I am going to surprise the hon. member.



SHIPPING


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: May I ask the minister a supplementary question. Will the minister try to surprise us tomorrow by bringing forward the regulations for aid to shipbuilding?


Donald Methuen Fleming: What do you know about what is before treasury board?


Léon Balcer: Mr. Speaker, this matter of the regulations respecting shipbuilding has been raised a number of times recently. Unfortunately the regulations are not prepared. However, I have a statement that will be of interest to the house, I think. If it is agreeable to the house, I could read the statement at the present time.


John Whitney Pickersgill: On the aid to shipbuilding?


Léon Balcer: Yes.


Mr. Speaker:: If it is a statement rather than an answer to a question I think the minister might have leave to revert to motions.


Some hon. Members:: Agreed.


Léon Balcer: As hon. members will recall, I announced in the house on May 12 a new policy respecting government assistance to Canadian ship operators and shipyards. I also stated that the methods of determining approved costs for this purpose and other particulars relating to administration of this plan will be prescribed by regulations approved by the governor in council. We are making good progress in the drafting of these regulations, and I hope they will be ready in the near future.
However, in order to avoid delay in proceeding with projects in shipyards on the part of potential large purchasers, we have introduced an interim procedure by which prospective purchaser and shipyard jointly can write in to seek assurance in principle that the project they have in mind would be covered by the subsidy policy. Accordingly a provisional application for ship construction assistance has been prepared for the use of those who may wish to proceed with the formulation of an application at this time. This application form has already been given to the following associations: Canadian Shipbuilding and Ship Repairing Association;

Inquiries of the Ministry Canadian Shipowners Association; Dominion Marine Association; B.C. Towboat Owners' Association.
In writing to them in this connection I advised that respective applicants should be guided by the following general considerations:
1.	The approved cost of vessel construction would be the price at which a contract is placed as a result of competitive tenders. Where a contract is not placed with the lowest bidder, or where there is only one tender received, or where a contract is placed without the calling of tenders, the government might, after investigation, fix a lower figure as being the approved cost. In all cases a firm figure would be established upon approval of an application which would not be subject to escalation and would be payable to the shipyard in the customary form of progress payments.
2.	The proposed construction is to incorporate the maximum Canadian content that is practicable and consistent with availability and economy. If less than such maximum Canadian content is proposed, then the approved cost of construction may be reduced by such amount as the government may deem appropriate.
3.	The owner for whom the vessel is to be built must be Canadian, whether a person, partnership, corporation or provincial or municipal government, or agency of such a government. Such owner would be required to undertake to maintain the vessel on Canadian registry for at least ten years. Any disposal of the vessel during that period would be subject to appropriate governmental approval.
4.	The prospective owner and builder would be required to make joint application for the subsidy in accordance with the form "Provisional Application for Ship Construction Assistance", or such other form as may be prescribed.
5.	The applicants would be required to establish their respective financial responsibility to the satisfaction of the government. This would normally include a requirement to carry insurance to protect the government against bankruptcy of either applicant and to cover builders risk and such other contingencies as may be specified.
6.	Where a vessel is disposed of by a taxpayer and the proceeds or any part of the proceeds are used to finance or to assist in financing construction which is eligible for subsidy, such use would not qualify the taxpayer for the benefits set out in section 4 of the Canadian Vessel Construction Assistance Act, i.e. the portion of the proceeds so used would be subject to recapture of any excess depreciation that has been claimed.

7.	Other provisions affecting shipping and shipbuilding are being reviewed, including legislative provisions, and changes may be announced or recommended to parliament in due course, but the government does not propose any material change in those sections of the Canadian Vessel Construction Assistance Act which allow an accelerated rate of depreciation on the owner's net investment or which authorize the claiming of reserves for special surveys.
Mr. Speaker, I am pleased to say that already ship owners and shipbuilders have signed contracts on the basis of the foregoing prescription.


Lionel Chevrier: Mr. Speaker, may I ask the minister a question which I asked him during the course of his estimates, namely whether or not over and above the subsidy provisions covered by the regulations which he has just mentioned, the ship owner, ship operator or shipbuilder will also be entitled to the benefits of the vessel construction assistance act.


Léon Balcer: Yes, Mr. Speaker. As I said in my statement, there is no intention of making any major changes in the Canadian Vessel Construction Assistance Act.


Lionel Chevrier: From that statement does it follow that over and above the 40 per cent subsidy he will also be entitled to the depreciation under the various sections of the Canadian Vessel Construction Assistance Act?


Léon Balcer: Yes, Mr. Speaker.


Herbert Wilfred Herridge: Mr. Speaker, on behalf of this group I wish to thank the minister for this further information with respect to this very interesting and important legislation. I should like to ask the minister this question. When the final regulations are drafted and become effective, in view of the continuing interest in this subject will he inform the house of those final regulations and of any further developments to date? In conclusion I wish to say that we are very pleased to note that other levels of government are able to participate under this act and these regulations.


Léon Balcer: Yes, Mr. Speaker; I shall be very pleased to do so.



BANK OF CANADA


[Stage Direction]
The house resumed, from Wednesday, July 5, consideration of the motion of Mr. Fleming (EgUnton) for the third reading of Bill No. C-114, respecting the Bank of Canada.
John George Diefenbaker: Mr. Speaker, what I have said so far during the course of the debate was designed to show that the views expressed by the opposition regarding their affection for the bill of rights was but lip service to principles which they had disavowed so frequently and so wantonly during their period of office. What I am going to do today is cover in general some of the matters that have not been dealt with in extenso as yet.
At the same time I am able to say that the publication of a letter yesterday by Mr. Coyne, to which he attached various letters which have passed between him and the Minister of Finance, will in very considerable measure reduce the length of my remarks, for they themselves constitute an answer to many of the matters that have been raised by the opposition. Indeed they are a revelation of what the Minister of Finance had stated to be the fact, that there was a vast division of opinion between the views of the government and the views of the governor.
I think I should also say that the Bank of Canada Act contains schedule A-to which I will do nothing more than make the casual reference necessary to place it on Hansard- which is the oath of fidelity and secrecy. It reads as follows:
I,-do solemnly swear that I will faithfully, truly and to the best of my judgment, skill and ability, execute and perform the duties required of me as a director (officer or employee as the case may be) of the Bank of Canada and which properly relate to any office or position in the said bank held by me.
I further solemnly swear that I will not communicate or allow to be communicated to any person not legally entitled thereto any information relating to the affairs of the bank, nor will I allow any such person to inspect or have access to any books or documents belonging to or in the possession of the bank and relating to the business of the bank.
Sir, I am not going to enter into recriminations. I am not going to answer in kind. I have found myself to be subject of bitter personal attacks far and beyond the realm of criticism ordinarily accepted and necessary for our parliamentary system. I have never answered personal attacks. I do not intend to start on this occasion. I do say, however, that whatever feelings of some Canadians may have been at the beginning of this debate, the last two epistles sent out from the ivory tower, irresponsible and intemperate, sent out on the letterheads and in envelopes belonging to the Bank of Canada and delivered by a personal messenger of the bank, make one wonder.


Some hon. Members:: Shame.


John George Diefenbaker: Sir, these letters reveal an attitude which, if accepted by the government, would result in two sovereignties in 90205-6-485
Governor of Bank of Canada Canada, the government of Canada and the governor of the Bank of Canada; but not in that order. They would set up a rival government. They have established beyond any question that the views of the governor and the policies of this government as revealed prior to and in the budget are incompatible. They have revealed, too, that the attitude of the governor and responsible government and its maintenance are not compatible. He has shown that there are irreconcilable differences on basic policies. Throughout the correspondence he has gone beyond the field of monetary policy and has declared himself in direct conflict with government policies on fiscal, financial and commercial matters.
To listen to the official opposition today one would think that was a recent attitude on his part. I would ask hon. members opposite to read Hansard of August 10, 1956, page 7351. The hon. member for Dufferin-Simcoe (Mr. Rowe), the then acting leader of the opposition, asked this question of Mr. Harris:
In view of the announcement last night by the Bank of Canada that its interest rate has been raised to the unprecedented high level of 31 per cent, will the minister advise the house what is the purpose behind this new move on the part of the Bank of Canada?
Mr. Harris replied:
The Minister of Finance was expecting to have his estimates called tomorrow, and I shall be glad to discuss this point at that time.
Mr. Harris went on to say, after a further question:
The duty of the Bank of Canada is to regulate the interest rate, which is commonly known as the bank rate. That duty and responsibility is imposed upon the bank and not upon the government, and it has not been customary in the past for any minister of finance to comment on the actions of the bank in discharging its duty.
When I hear the arguments of the opposition today I remind them of the declarations of Mr. Harris. I then asked a supplementary question:
-in connection with actions such as this on the part of the Bank of Canada which, in regard to house building and the like, may have a very detrimental effect, and also in connection with the fact that it raises the costs of production at a time when we are endeavouring to compete in other parts of the world. Is the government or any member of the government consulted by the Bank of Canada before a decision as momentous as this one is made?
The answer was:
I answered this question some two months ago by saying that the governor of the Bank of Canada is one of the several advisors to the Minister of Finance. In this particular matter, however, he has statutory authority to make his own decisions, that statutory authority having been conferred upon him by parliament. I think it would be correct to say, as I said on the former occasion, that I was advised of this course before it was taken.
768G

Governor of Bank of Canada
Then I asked the question:
Did the minister in any way suggest, having regard to the inflationary tendencies in this country today, that this action should be taken or might be taken by the bank?


Mr. Harris:: Mr. Speaker, X also answered that question two months ago by saying that this action is the action of the governor of the bank and his responsibility alone.
Then it went on, and it is well to read it. I do not want to read it all into Hansard, but finally I asked the prime minister this question, which is to be found on page 7352:
Will the Prime Minister, having had the reasons from the governor of the Bank of Canada, now give the house the benefit of what those reasons were?
The prime minister had stated that the reasons had been given. He answered:
No, Mr. Speaker, the Prime Minister will not undertake to have parliament or the members of the opposition act as a court of appeal from the decision made by the governor of the Bank of Canada-
The opposition have been founding their arguments on a principle which was disavowed by Mr. St. Laurent. Then Mr. St. Laurent added these words-somebody said, "Oh, oh"-
-unless and until parliament amends the act which now governs the Bank of Canada.
And at this point, a little later, the hon. member for Bonavista-Twillingate, who was so noisy and vociferous a few days ago- and then suddenly the flame snuffed out- said this:
This is degenerating into a debate.


Some hon. Members:: Oh, oh.


John George Diefenbaker: The ground rules of the Bank of Canada, as it were, were set out in the report of the royal commission on banking and currency in 1933 at page 63:
A central bank is at the same time an instrument and a force. As an instrument it is the means by which the state, which must necessarily retain ultimate sovereignty in matters respecting the currency, can give effect to the national policy.
That is the principle on which it was set up, and in volume 1 of the proceedings of the commission, at page 92, there is the evidence of Professor W. A. Carrothers, of Vancouver, as follows:
No one suggests that this board (that is, the bank) should become the governmental authority of Canada, but it should become the instrument through which a truly national policy can be carried out in such a federation as we have in Canada today ... Naturally, it would have to work in co-operation with the many policies of the country. You cannot have one institution working one way and another institution working another.
Whatever the views of the opposition may have been when the debate started, they are now in a position in which they admit that Mr. Coyne cannot stay; that for him to stay would be inconsistent with the

responsibilities that rest upon him, and with the welfare of Canada. I think it is of interest that the Leader of the Opposition and the hon. member for Bonavista-Twillingate should each have graduated from the field of public service, or the civil service, into public life. They have some understanding of the responsibilities of those who discharge the offices within the public service.
"I think it is always of interest to know what are the principles which should actuate a public servant." First of all there "is the constant and unfailing realization that he is a servant and not the master of the public." The second is that there should be a proper appreciation of the limits of the public servant's responsibility. "Under our system of responsible parliamentary government, public servants are not expected to take the responsibility for the policies they carry out. That is the responsibility of the politician." Our senior "civil servants" owe loyal and zealous service to their political chief so long as he enjoys the confidence of parliament. I think that is a principle which is acceptable. If they cannot give such service, even when they disagree with the policy they are not entitled to feel they are doing their whole duty."
Then, as far as civil servants are concerned, these words might be used, I think, to define their responsibility: "one way to put it is that civil servants, like children, should be seen and not heard."


Some hon. Members:: Hear, hear.


John George Diefenbaker: Hon. members may
wonder what I was quoting from. Well, I was quoting the immortal words of the member for Bonavista-Twillingate spoken on October 24, 1953 at Carleton College, in which the following personal remarks were interspersed:
I know that there are those who would disagree violently with this view-some people already have-*
And he quotes who disagreed.
-but I am vain enough to believe that I was a good public servant.
And do hon. members know who moved the vote of thanks for this address on the position of public servants, earlier and later? It was Mr. J. E. Coyne, the present governor of the Bank of Canada. It was a delightful dissertation on the subject from one who knew then and, I hope, in spite of some of the arguments he advanced during this debate, knows now.
We are in the position that the government is challenged, and the sovereignty of parliament is challenged. Mr. Dicey in his

book "The Law of the Constitution" explains the nature of parliamentary sovereignty in this way:
The principle of parliamentary sovereignty means neither more nor less than this, namely, that parliament, thus defined has under the English constitution, the right to make or unmake any law whatever; and that no person or body is recognized by the law of England as having a right to override or set aside the legislation of parliament.
Is there anyone in the opposition today who says that this legislation was not necessary or that it should not be passed? The hon. member for Essex East certainly agrees that such is the fact. Indeed, during the course of his remarks as reported at page 7071 he explained his position and relied on his earlier words of March 22, 1961:
I have always taken the position, as has the Leader of the Opposition, that there is no room in this country for two sovereignties and where there is a difference between a leading official in the public service and the government of the day there can be no public disagreement unless that disagreement is concurred in by the administration. We in this party have always stood for that principle.
I ask them to do so now. When this matter was discussed on February 21, 1961 the Minister of Finance said on that occasion:
There is nothing a government is in a position to do-
That is where there is a breach of authority or responsibility by the governor under any legislation-
There is nothing the government is in a position to do except to ask parliament to change the legislation or await the expiry of the term.
We placed the budget before the house. Is there anyone who will say after reading any one of those epistles to the universe, to members of parliament, to members of the cabinet, to officials here, there and in the other place and across this country-is there anyone who, on the basis of what is set out in these several letters, can say that there is not, and has not been continually disagreement which would make impossible the carrying on of government if we were to wait until the expiry of the term? I cannot quote the words that were used by the Minister of Finance when he introduced the budget, but I shall refer to his words of June 20 as found at pages 6666 and 6667, and shall summarize what he said on that occasion without quoting him.
He said that the financial and commercial proposals that he was laying before the house, and the international obligations, were such that in the face of Mr. Coyne's speeches, which were permeated with ultra-protectio-ism and isolationism, they would bring about a restrictionist "world of our own" rather than expansion. Furthermore he pointed out 90205-6-485i
Governor of Bank of Canada that interest rates are very important, and that Mr. Coyne's stand was that whether the interest rates were as high as Haman's gallows, they did not exercise any particular influence on the productive capacity of Canada.
Mr. Coyne in his annual report argued that interest rates had very little influence on economic development. He also stated that the exchange rate should be flexible to move with the times. Another stand he took was that budget deficits were not in keeping with the need to meet the unemployment situation that existed. I am going to refer in some detail to the appendix to one of his epistles.
Are not the words of Charles Dunning as effective today as when they were spoken? I refer to his statement that a long continuance of a policy that conflicts with a government view becomes impossible. Mr. Abbott said that the ultimate responsibility must fall upon the government. Mr. Mackenzie King said, and I am sure the hon. member for Bonavis-ta-Twillingate will accept what he said-this is only in the book, not by way of transmission-the following as it appears at page 4227 of Hansard for June 22, 1934:
I do not believe powers should be given any institution that would enable it to put itself in a position of opposition to a government that has been entrusted with great responsibilities of enforcing particular policies.
Then he went on to say at page 4228, on the same day:
What I should like to ask is: Are the institutions created by governments themselves to be made by their very constitutions so powerful that in the matter of national policies they can regard themselves as wholly beyond the direction of a government, where those policies are the result of the will of the people as expressed by their representatives in parliament?
No one but the opposition today has ever taken any other view than that which I have just enunciated as representing Mr. King's views.
The minister of finance of that day, Mr. Dunning, explained the situation in greater detail when he said, on June 8, 1936, as recorded at page 3480 of Hansard for that date:
Of course there is only one answer to that argument-
That was the argument to set up two governments in this country, one by appointment, placing it in supremacy over the government that brought about the appointment with approval of parliament. Mr. Dunning's statement continues:
Of course there is only one answer to that argument-the parliament of Canada, the House of Commons of Canada, must be supreme.
Mr. Mackenzie King on June 17, 1936, said the following as reported at page 3807 of Hansard of that date:

Governor of Bank of Canada
-the last word is not with the governor of the bank but with the governor in council, which is the cabinet, which represents the House of Commons, and which in turn represents the people of this country.
I have great admiration for the hon. member for Bonavista-Twillingate. He is a historian with wide, wide knowledge of the past. I do not want to go back as far as the burning of the parliament buildings in 1849, was it? I thought that was the year the hon. gentleman referred to. I go back, however, to 1936 to quote from a man who more than anyone else trained and shaped-I was going to say perfected-the hon. gentleman, but I think that would be going further than the circumstances demand. Later that day of June 17, 1936, as reported at page 3811 of Hansard, Mr. Mackenzie King summed up his opinion as follows:
I pointed out that what was necessary was that no institution, and least of all a great banking institution, should ever be created in this country with any such power, or be so constituted that it could be a force to oppose the will of the government of the day.
Out of the mouths of those who were their mentors I place these quotations before the opposition.
I must make reference to the press conference of some weeks ago and the words of the Leader of the Opposition, because they cannot pass unnoticed. However, I will come back to that in a moment. He was asked this question:
Do you think he should resign now, Mr. Pearson?
"He" being Mr. Coyne, and the Leader of the Opposition replied:
I say his usefulness is over as governor.
If his usefulness is over, what are we fighting about? I should like now to refer to one or two other observations of the Leader of the Opposition before I return to that appearance on television when Michael Barkway finally said "-I am confused-". That was a case of Mike confusing Mike.
The Leader of the Opposition said, as reported at page 2206 of Hansard for February 20, 1961, the following:
Why, since 1957, has monetary policy not made the contribution required by our legislation to mitigate recessions, and why does the governor feel that there is no special obligation in this respect, as he said recently in his speech in Newfoundland?
Those are the words of the Leader of the Opposition four months ago. Later on that same page he is reported as follows:
It is most regrettable indeed that the Bank of Canada has become the centre of the present controversy because it may weaken seriously the prestige and the authority of a most essential institution whose prestige and authority in this country since it was established have been strong and which has commanded the highest respect.
IMr. Diefenbaker.]
Then he went on to say the following:
I am quite sure that all hon. members in this house will agree that in our system of responsible government the general direction of monetary policy should not be turned over to any public servant.
That represents the wisdom of February which I ask the opposition to adopt as the wisdom of July. Then on August 10, 1960 the Leader of the Opposition, speaking in the house, again summarized the position of the governor vis-a-vis the government of the day, as reported at page 7926 of Hansard:
The minister indicated to us a few moments ago that the fiscal and monetary policies of the government are above reproach, indeed almost above criticism. Perhaps he will not be surprised if we do not take exactly the same view of them. He said also that not the government but the Bank of Canada is responsible for monetary policy.
In saying that he said in 1958, 1959 and 1960 what Mr. Harris had said in 1956 and 1957. Then he continued:
Of course that is written into the Bank Act and in a technical sense is undoubtedly true.
Well, if it is true in a technical sense under the law, what is the difference between something which is technically true in law and that which is actually true? Then the Leader of the Opposition went on to say this:
But the Bank of Canada can only operate in discharging its responsibility for monetary policy within the fiscal policies laid down by the government.
I underline these words because I am sure the opposition have not read them lately:
If there is any difference between the bank and the government on such fundamental matters then it has been made clear that the governor of the bank should resign or, less likely, that the government should resign.
These were the words of the Leader of the Opposition.


Lester Bowles Pearson: They are still our words.


John George Diefenbaker: They are his words on August 10, 1960. The alternative is there, Mr. Speaker; and we are staying. The Leader of the Opposition made a speech in Montreal on the question of responsibility of the government. This was a non-political speech delivered to the Canadian club and entitled "The Anatomy of Challenge". Let us look into this anatomy.
The government must take the responsibility in a time of financial crisis, not only for monetary policy but also for fiscal and trade policy.


Lester Bowles Pearson: Hear, hear.


John George Diefenbaker: I continue:
In my view it is damaging and dangerous for the government to relegate all responsibility for monetary policy to a central bank, while accepting full responsibility for debt management.

That is Mr. Coyne's exact position. In fact he goes further than that and says "I cover the whole field", by the kind of speeches he made and, forgetting the speeches, by that torrent of vituperation that has come to all of us in recent days through the medium of those letters. Then the Leader of the Opposition said:
If the bank, in monetary matters cannot operate within the broad policy laid down by the government. then, under this principle of responsibility, the governor of the bank would naturally expect to give way to someone who could conscientiously carry out the policy.
I stayed out of the debate because it seemed so absolutely apparent to me that the declarations of the past on the part of the opposition would not justify the evasions of the present. Indeed, when I place the former views of the Leader of the Opposition before the house, and the ones that he expresses today, all I can say is that the trumpet has an uncertain sound. They are different, diametrically opposite. I am not going to refer to the press clippings except one that may be of interest to the hon. member for Essex East. He is a little annoyed at the moment; he has not been referred to. I should like him to hear what the Windsor Star had to say about this.


Mr. Marlin (Essex Easl):: It is a very good paper.


John George Diefenbaker: A very good paper; does the hon. member approve of what it says?


Murdo William Martin: I said it is a very good paper.


John George Diefenbaker: It contains an article on the supremacy of parliament. The issue is dated June 29.


Murdo William Martin: Was it by Mr. Clark?


John George Diefenbaker: I continue:
Whether or not a person agrees with the economics of James E. Coyne, the outgoing governor of the Bank of Canada is now questioning the supremacy of parliament.
Oliver Cromwell did that in England in 1649 and in 1653 he became the Lord Protector, which was just a fancy name for dictator.
The commonwealth lasted from 1649 to 1660. Then, the people were fed up with dictators and the monarchy was restored.
Mr. Coyne defies the parliament. In so doing he has revealed things that went on. Ordinarily, it is doubtful if these so-called secrets ever would have been told publicly.
Then it goes on:
In our system of government, parliament is supreme.


Murdo William Martin: Hear, hear.


John George Diefenbaker: I have favourable support now for something the opposition have been denying for days. What members of this
Governor of Bank of Canada government were not able to do with the hon. gentlemen, the Windsor Star has done. Then the final words:
If Mr. Coyne is greater than parliament, then he becomes a dictator. Whether or not Canadians agree with Mr. Coyne's theory, are they ready to do away with parliament?
There is the simple issue. All the other matters which are dragged in are not relevant.


Some hon. Members:: Oh, oh.


John George Diefenbaker: I shall come shortly to the spurious argument of the opposition. When parliament acts, and the board of directors have acted, then the opposition take the position that of course the governor should not be there. The hon. member for Essex East said "a lot of things he stands for I do not agree with". He said the governor should have a further opportunity to give some additional reasons, following the deluge of propaganda that has been heaped on parliament and the people of the country. However, before I go into that field I do want to refer to the press conference at which the Leader of the Opposition appeared. If only the Leader of the Opposition could be himself, what a great man he would be. It was very obvious that the image of the man I know was subverted that evening to the demands of those who sit around him. I want to read from this document, and I turn to page 1:
I have already stated in the House of Commons that the usefulness of Mr. Coyne as the governor of the Bank of Canada has been destroyed by this unhappy and sorry controversy.
This was on June 22. Then he was asked this question:
Won't this only drag the unhappy business out to greater lengths and maybe drag on a controversy which will further damage the bank and the position of the governor?
The Leader of the Opposition answered:
I would hope not. I would hope that if this controversy is to go on, the air should be cleared. But I do agree that it should not have happened and that it should be ended as quickly as possible and I certainly don't want to say or do anything which would add to the controversy or extend it or prolong it because Canada's prestige has been damaged by this controversy.
Then he said:
We on the Liberal side have been, along with some C.C.F. members, the only persons who have in the House of Commons criticized some of Mr. Coyne's statements and some of Mr. Coyne's policies.
They criticized. The governor placed before the country certain representations that he made to the minister on February 24. On February 24 he set out his views, and I will refer to them and allow hon. gentlemen opposite to try and disentangle themselves from the position they are now in, that they stand behind the things for which Mr. Coyne stands.

Governor of Bank of Canada I want to make that very clear. This question was put to the Leader of the Opposition:
Mr. Pearson, you said that if Mr. Fleming could demonstrate to you or to the Liberal party that his policies and those of Mr. Coyne were in conflict that you would not support the governor.
That has been done by Mr. Coyne, and he has done it by publishing those letters that passed between him and the Minister of Finance.
I think that is in essence what you said in the House of Commons.
Then the Leader of the Opposition went on to say:
Why didn't Mr. Fleming take this action on behalf of the government two or three years ago-
That is not the attitude today. The hon. gentleman says that we should have acted two or three years ago; and there is no question about it that the continuing process, as revealed by the letters improperly brought out by Mr. Coyne, indicate that division most clearly and definitely. I am sorry; I have not given the names of the press men involved and I must mention who they were. Mr. Arthur Blakely was the chairman and the members of the panel were Mr. Clark Davey, Mr. Michael Barkway and Mr. Tom Gould. This question was asked:
Isn't it a fact there is really a greater gulf between Mr. Coyne and the views the Liberal party has been expressing-I am thinking particularly of Mr. Walter Gordon's speeches about expanding the money supply and deficit financing and bringing down interest rates-than there has been between him and the government?
Then the Leader of the Opposition said:
Indeed, we have criticized Mr. Coyne's policies ... Indeed, I have taken that position-
The question was:
Are you then saying, sir, that the government must take responsibility for monetary policy and must be in a position to dictate monetary policy to the governor of the Bank of Canada?
The answer was:
Indeed, I have taken that position in the House of Commons. I have got my statements here-that the government must take ultimate responsibility for monetary policy but not for the administration of policy and that if there is a dispute between the governor and the government, the governor should resign.
I ask the Leader of the Opposition to speak in the House of Commons as he spoke at the time he confused Mr. Barkway.


Lester Bowles Pearson: Mr. Speaker, of course the Prime Minister is reading selected pieces from my statement. Perhaps he would go on to read this bit which I have already put on the record, that Mr. Coyne "should have his day in court and by in court"-


Some hon. Members:: Oh, oh.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order. Unless the Prime Minister who has the floor yields it, the hon. member should not interrupt but rather can make his explanation at the end of the speech.


Lester Bowles Pearson: Mr. Speaker, my point of order is this, and I rise on a point of order. The Prime Minister-


John George Diefenbaker: I have the floor, sir.


Lester Bowles Pearson: -is selecting-


Mr. Speaker:: Order.


John George Diefenbaker: It is no point of order, and the hon. gentleman knows it. At the end he may bring in any portion of the record that he wishes. I am reading from his answers. I am reading fully and completely from page 6.


Lester Bowles Pearson: On a point of order-


Mr. Speaker:: Order.


Lester Bowles Pearson: -the Prime Minister now states that he is reading fully and completely. That is not true.


John George Diefenbaker: Mr. Speaker, there is nothing that hurts the hon. gentleman like the revelation of the truth. I am reading every word on page 6 with not one deletion.
Are you then saying, sir, that the government must take responsibility for monetary policy and must be in a position to dictate monetary policy to the governor of the Bank of Canada?
This was the answer:
Indeed, I have taken that position in the House of Commons. I have got my statements here-that the government must take ultimate responsibility for monetary policy but not for the administration of policy and that if there is a dispute between the governor and the government, the governor should resign.


Paul Joseph James Martin: That is right.


John George Diefenbaker: I continue:
I have said that in the House of Commons and when I said that I remember Mr. Fleming once intervened and said, "No, no".


Lester Bowles Pearson: That is right, too.


Donald Methuen Fleming: I did not say so.


John George Diefenbaker: I am not omitting one word, not one omission.


Mr. Harkness:: Try to keep quiet over there.


John George Diefenbaker: Mr. Speaker, I shall come to the day in court in a moment and will show exactly the position of affairs in that connection. At the moment I am reading from the record, page 6. This question was asked:
Who is to be the judge of whether there is or is not a dispute? If the government says yes, there is a dispute, and the governor of the Bank of Canada says he knows of none, whose judgment-[DOT]

The Leader oi the Opposition replied:
Oh, the government's views must prevail in these matters, the government of course.


Lester Bowles Pearson: Read on, read on.


John George Diefenbaker: Oh, I could read forever.


Lester Bowles Pearson: Do; go on.


John George Diefenbaker: I will come back to that because I am going to deal with that particular phase.


Some hon. Members:: Oh, oh.


John George Diefenbaker: I sit here day by day
and there is never an interruption from me. Hon. gentlemen opposite talk about interference with free speech, but they have organized, apparently; and if they have not organized they are just as successful as if they had.


Lester Bowles Pearson: I wonder whether the Prime Minister would permit a question?


John George Diefenbaker: Will you sit down?
Who is to be the judge of whether there is or is not a dispute?... You take the position then that if the government asserts that there is a dispute the governor of the Bank of Canada must resign?
This was the reply:
I think that if there is a dispute of that kind the governor of the Bank of Canada should resign, of course.


Lester Bowles Pearson: Read on.


John George Diefenbaker: Oh, I am going to read on and I am coming back to this, too.
Do you think he should resign now, Mr. Pearson?
Watch this answer.
I say his usefulness is over as governor.
If his usefulness is over, why not pass the legislation?


Lester Bowles Pearson: Read on.


John George Diefenbaker: I am going to read on because this is the only part that the hon. gentleman wants me to read. But I am going to come back to this. The Leader of the Opposition want on to say:
But Mr. Coyne apparently is determined to defend himself against certain charges which he believes reflect on his integrity and that's why, surely, Mr. Coyne should have his day in court, and by in court I don't mean issuing statements which he feels are necessary because he isn't permitted to appear before a committee and which he states in one of his statements that he has not been allowed to appear before the banking and commerce committee to discuss the Bank of Canada report for four years.
Then the question was-


Lester Bowles Pearson: Don't let anybody hear that part.


Lionel Chevrier: Read a little faster.
Governor of Bank of Canada


John George Diefenbaker: I shall be returning to this portion.


Lester Bowles Pearson: Read a little more slowly, please.


Douglas Scott Harkness: Try to be quiet.


John George Diefenbaker: Before we are through with this we are going to have you all lined up with Mr. Coyne's thinking. That is the position you are putting yourselves in, and that is the position I want you to put yourselves in. Then somebody said:
He had his day in court before the Senate banking and commerce committee and had absolutely nothing to say. He evaded every direct question which was thrown at him on his views on what should be done for Canada right now.
The Leader of the Opposition said:
That was before this dispute broke out into the open. But I do want to repeat-
Hon. members opposite have been talking for days, and the hon. member for Essex East issued a threat of ten days.


Murdo William Martin: Weeks; weeks.


John George Diefenbaker: The hon. gentleman said:
But I do want to repeat that surely it is in the interests of all Canadians to get this matter settled, to get it settled quickly, and to get it settled decisively.


Lester Bowles Pearson: And fairly.


John George Diefenbaker: That is exactly what we are asking. I am not going into the other equally interesting portions of this interview, but I must say that I listened to it with great interest and enjoyment and also with the realization of how helpful it was to us. I followed this very carefully. I do not think there is anything more at the moment, and I will come back to the "day in court" question.
Those are the references to the necessity of action. It should be done now. He said it should have been done three years ago when he spoke in February, I think it was. Now when we are giving parliament the right to do it, what does he say? "Oh," he says, "there is something else I want to bring up. Mr. Coyne says he has not had the opportunity to clear the slur on his reputation that he got a pension". I am going to come to the pension question after I have dealt with the policy matter. There is no question here. It is a simple bill. It does not say there is any cancellation of the extraordinarily ample increase in the pension over which he had a veto-


Lester Bowles Pearson: Given by a Tory board of directors.


John George Diefenbaker: I repeat, over which he had a veto. Does the bill of rights apply?

Governor of Bank of Canada Over and over again we have heard that question. Legally there is no application of the bill of rights.


Some hon. Members:: Oh, oh.


John George Diefenbaker: On June 26 the Leader of the Opposition spoke of this procedure as a denial of the bill of rights. I am not going to rehearse what was said. It simply revealed the utter hypocrisy of the stand that is taken now in relying on the bill of rights which they spumed even as late as a year ago. He proceeded to invite the Minister of Justice to inform the house whether he had examined this bill in the light of the bill of rights, and whether it, in the light of the refusal of the government to permit a hearing by a committee, is consistent with the letter or the spirit of the bill of rights.
This bill was examined. I propose to show that it is consistent both with the letter and the spirit of the bill of rights. The hon. gentleman was obviously referring to section 2 (e) to which reference has been made on previous occasions:
(e) Deprive a person of the right to a fair hearing in accordance with the principle of fundamental justice for the determination of his rights and obligations.
I underline "rights and obligations". This provision clearly applies in indicating what a person's rights are not to the change of any rights by parliament. We took that stand in connection with the judiciary when we provided for retirement at 75 years, and there were some who argued at the time that in doing so we were interfering with rights. There is no inviolable right to continue to the end of any term in any position that comes under parliament.


Mr. Habel:: Even for the Prime Minister.


John George Diefenbaker: The hon. gentleman accepted that a few months ago I think, in connection with the judiciary. New tax laws, new amendments to the Criminal Code, as well as other acts of parliament may and do from time to time operate to modify or affect rights of persons; but it is never said and it cannot be said that a person is not bound by such laws or such statutes unless he is given an opportunity to come before parliament.
This idea is based on the distinction between the functions of parliament and the functions of the courts. These functions are different. The legislative function is concerned with the making of laws, a function which can be performed only by parliament or by bodies to which parliament has delegated authority. The judicial authority is performed by the courts and other tribunals established in accordance with laws passed by parliament.

When Mr. Coyne was appointed governor it was for the purpose of providing an efficient operation within the ambit of the Bank of Canada Act. The duty and right of parliament is to act when any responsibilities undertaken are not carried out; and it is obvious that they have not been carried out. One just has to read those letters. If the governor had not written any letters he would have been better off. I remember, Mr. Speaker, as a young lawyer, at the conclusion of my term, I said to my senior: "Would you give me some advice?" He said, "Oh, well, this is quite a thing. I will tell you what I will do. I will give you the advice I received when I got through. This advice was, do right and fear no man. Don't write and fear no woman." I simply say, "Don't write unless you intend to have used against you what you have written"; for that moving finger that has written these letters has itself made necessary the enactment of this legislation.
The duty of the courts is to ascertain the facts of a case and apply the laws as they exist at the time for the determination of the rights and obligations of the individual. It is in the course of this judicial process- and it is to the judicial process that the bill of rights refers-that a person who claims his rights or his fundamental freedoms have been adversely affected is entitled to have what he had not had previously, namely a fair hearing in accordance with the principle of fundamental justice.
Any rights in the case of the governor exist by virtue of an act of parliament. The amendment to the Bank of Canada Act passed in 1953-54 provided that the appointment should be for a period of seven years during good behaviour. The answer to the behaviour is in the letters.


Lester Bowles Pearson: You threw him out before the letters.


John George Diefenbaker: Does the Leader of the Opposition say those letters are proper?


Lester Bowles Pearson: No, Mr. Speaker.


John George Diefenbaker: No.


Lester Bowles Pearson: Mr. Speaker, the Prime Minister asked me a question. The answer to the question is that they threw him out before the letters were written.


Some hon. Members:: Oh, oh.


John George Diefenbaker: He is not out yet.


Lester Bowles Pearson: You tried to throw him out.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order.


Lester Bowles Pearson: I rise on a point of order.


Mr. Speaker:: Is the Leader of the Opposition rising on a point of order?


Lester Bowles Pearson: Yes. I confess that I made a misstatement.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: Mr. Speaker, I should have said that they tried to throw him out.


John George Diefenbaker: Mr. Speaker, if only the hon. gentleman could revise all the statements he made.


Lester Bowles Pearson: You are still trying.


John George Diefenbaker: I can just imagine how he would like to be revising some of the statements he made in February, a year ago and otherwise. Any rights in the case of the governor of the Bank of Canada exist by virtue of an act of parliament. I mentioned that there is nothing in the bill of rights to suggest that there is any limitation on the power of parliament to change or repeal a law enacted by parliament. The tenure of office of the governor has been created by that act, and r. underline and emphasize this fact.
There is another act that helps us in appreciating what the provision in the bill of rights means, namely the Interpretation Act. Section 18, subsection 1 of this act reads as follows:
Every act shall be so construed as to reserve to parliament the power of repealing or amending it, and of revoking, restricting or modifying any power, privilege or advantage thereby vested in or granted to any person, whenever such repeal, amendment, revocation, restriction or modification is deemed by parliament to be required for the public good.
I ask this question. Was action ever more necessary for the public good? The Interpretation Act provides that such revocation can be undertaken whenever parliament deems it to be required for the public good. It has been made very clear. Members of parliament, newspapers and radio stations across this country and officials everywhere are inundated with explanations. The volume increases daily. One wonders when the end will be.
I think the general summary is this. If there is any right, which there is not, I would refer the matter to the committee. But what would hon. members opposite do if it was referred to the committee? What would the committee do? Again I call on the hon. member for Bonavista-Twillingate, because he always gives the answers. At page 7085 of Hansard the hon. member asked himself a question and he got this intelligent answer:
Why do they not want this inquiry? The fact of the matter is that there is nothing substantial to inquire into.
Those are the words of the hon. member himself.


Lester Bowles Pearson: Wait till a little later.
90205-6-486
Governor of Bank of Canada


John George Diefenbaker: We have had a tissue of fantasy conjured up by the opposition. The hon. member for Essex East demands a committee hearing for only one reason; he is opposed to the pension. That is clear. I do not know whether that is the only reason. Other Liberal members say there is nothing wrong with the pension. What would a committee hearing achieve, in view of the fact that the Leader of the Opposition says that Mr. Coyne has outlived his usefulness?


Mr. Deschateleis:: What are you afraid of?


John George Diefenbaker: I ask this question. Would it result in his reinstatement?


An hon. Member:: You do not want the answer.


John George Diefenbaker: Hon. members opposite held the view months ago that his usefulness had passed its zenith. I ask whether a committee hearing would bring about his reinstatement. We have had all the evidence that the mind of my hon. friend has been able to bring forth.


An hon. Member:: We want the truth.


John George Diefenbaker: My hon. friend over
there has gone through all the documents, apparently; documents that had been laid away, never to be used, but they have been dug up. Has he missed anything?


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: The Prime Minister should talk about digging up anything.


John George Diefenbaker: I beg your pardon?


John Whitney Pickersgill: I said, Mr. Speaker, the Prime Minister talks about digging up documents.


John George Diefenbaker: Mr. Speaker, I am not going to answer that at the moment.


Lester Bowles Pearson: I wouldn't.


John George Diefenbaker: But the hon. member was surprised when I dug up something about Mr. Pitt and himself. It is inconceivable that a hearing be held under such circumstances in an effort to advise the government and parliament that its responsibility and supremacy in this connection shall not be discharged.
Then we heard that massive exaggeration when hon. members opposite referred to this bill as a bill of attainder. I was quite interested in the matter of a bill of attainder. A bill of attainder provided, of course, for the death of the individual and the loss of his civil rights. There was no pension involved in those days under bills of attainder.
Let me make one other reference to what Mr. Coyne has said. He says he has been
7694	HOUSE OF
Governor of Bank of Canada slurred, that his honour has been impugned and there has been a slander upon his integrity arising out of the fact that his pension was increased. True enough, and I admit this; the pension was approved by a board of 12 directors, four of whom were appointed by the previous government and eight by this government. We have here a pension of $11,900 a year which was increased to $25,000 a year. Why was that done? It was done in order to increase his independence.
There is nothing whatsoever in the bill about the pension. The governor had the right of veto in that matter. Is it impugning a man's integrity to say that he sat, knew, listened and took? Where is the impugning of integrity there? This matter is of interest on this whole question. The number of letters I am receiving on this question indicates that the people are beginning to think that these vast, swollen pensions deserve to be looked into.


Some hon. Members:: Hear, hear.


John George Diefenbaker: Right Hon. Louis St. Laurent, a man who gave devoted service to his country for the greater part of nine years as prime minister and who is today practising law, receives a pension of less than $3,000 a year. That is because he was a member of this house. Here we are considering a pension of $11,900 a year which was increased to $25,000 a year within the last two years of the term the governor was going to serve.


Lester Bowles Pearson: It was increased by action of a Tory board.


John George Diefenbaker: And at 51 years of age. The less I say about that, the better.


Lester Bowles Pearson: That is right.


John George Diefenbaker: I simply say this is put forward as the slur upon his character. I wonder whether the slur is the fact that in one of his speeches, the one delivered in Calgary on October 5, 1960 he said, "We should be living within our means by expanding our means to live better". Is that the meaning of that?
I have simply pointed out, Mr. Speaker, that the slur can only have been that, because there has been nothing else except the suggestion of disagreement. How many people in public life receive a pension of that size?
I have been in public life longer than Mr. Coyne. When I retire, no matter how many years from now it may be, I will be in the same position as Mr. St. Laurent.


Lester Bowles Pearson: Oh, that is the reason.


John George Diefenbaker: Yes.


Lester Bowles Pearson: Now we know.


John George Diefenbaker: That is true. I am glad the hon. member mentioned that, because he has given years of devoted service and I am prepared to admit it. I ask him not to answer this question. Does the hon. member think $25,000 a year is a fair pension?


Joseph-Alphonse-Anaclet Habel: It was up to the board to decide.


John George Diefenbaker: The hon. member says it was up to the board.


Joseph-Alphonse-Anaclet Habel: A Tory board.


John George Diefenbaker: He had the power of veto.


Mr. Browne (Vancouver-Kingsway):: He
would not accept the board's decision when they told him to resign.


John George Diefenbaker: He did not ask for it, hon. members opposite say. It is better to receive than to ask. He had the power of veto.


Joseph-Alphonse-Anaclet Habel: The Prime Minister should know.


John George Diefenbaker: And I am glad to see that hon. gentlemen opposite are now behind this pension. They have been against it all along.


Some hon. Members:: Hear, hear.


Lester Bowles Pearson: On a point of order, Mr. Speaker, the Prime Minister asked me a question and then proceeded to answer it. He asked me whether I thought this pension was excessive. In the first place, I am not worring about my own pension, as is the Prime Minister.


John George Diefenbaker: I know.


Lester Bowles Pearson: I say, Mr. Speaker, that this pension was excessive and the Tory board of directors should never have allowed it.


Some hon. Members:: Hear, hear.


John George Diefenbaker: I am not going to answer that question, Mr. Speaker, because the Liberal members of the board approved it also. I am pointing out that this man had the right of veto. What did he do? Until 1956 there was provision that all these matters had to be approved by the governor in council. It was on the occasion of the last amendment that some alteration was made to that provision. However, the provision still remained that it was to be published in the Canada Gazette. They hid if from the government, and when I say "they"-


Lester Bowles Pearson: What a cheap insinuation.


John George Diefenbaker: -I refer to Mr. Coyne. He did not mention it at any time, nor did anyone on his behalf mention it.


An hon. Member:: Incredible.


John George Diefenbaker: He not only maintained silence, but he did not publish the order in the Gazette until when? Until the information came out; and then he rushed to the Gazette about two weeks ago and made sure that he would get it, and that there would be no slip up in that connection.


An hon. Member:: Slurs.


John George Diefenbaker: What are you talking about? Slurs? I really thought he would have disavowed this action and would say "I don't want that". But instead of that, two weeks ago or three weeks ago-I can give the exact date if required-he proceeded to have it put in the Gazette to be sure it was legal after it had been revealed that he was in receipt of it. Then they talk to me about slurs.
Now I come to the last part of my observations. I intend to be brief, because I wish to conclude before one o'clock. Mention has been made of a document which was attached to one of the governor's letters, a document dated February 15, 1961. These are his proposals, and I shall have to read them in order that we may understand whether there is disagreement between the policies of this government and Mr. Coyne. As I said earlier, the opposition is increasingly placing itself in the position that it is behind these proposals. They are trying to evade it; they are talking about one subject and another, but that is their position. They, by taking a stand on this purely legal matter, this purely parliamentary matter, are placing themselves in such a position that I should point out what some of these economic recommendations were.
He is going to raise tariff walls a 10 per cent surtax on all imports. He is going to disavow international trade agreements; he is going to continue tight money whatever the consequence. I ask the opposition, do they want a governor who is going to insist on the prerogative right to impose these things from his position? Are they going to ask the government to have a governor who says that these are the proper courses to follow? Well, I might even quote from Maclean's magazine with regard to one of the lesser deities, Mr. Lamontagne. I did not mean lesser; I mean one of the greater. He said this:
The direction Mr. Coyne would like the Canadian economy to take would lead our country to a dead end.
They sit over there and take their advice from him, the advice they got from this dirigisme conference at Queen's. I ask them who is right, Coyne or Lamontagne? I ask the hon. member for Essex East when he replies, because he is getting ready-he is going to speak for ten days-whether he believes in a restriction on the free import of 90205-6-486i
Governor of Bank of Canada automobile parts up to 40 per cent of their value. That is what Mr. Coyne believes in.


Paul Joseph James Martin: Is the Prime Minister asking me a question?


John George Diefenbaker: Does he believe in the restriction of the free entry of tourist purchases and the imposition of a Canadian sales tax and the imposition of customs duties on tourist purchases? I only hope we hear from the hon. member about these things, because Essex will be interested. Do members opposite believe there should be a restriction on Canadian travel in the United States, and a restriction on automobile mileage lay a federal sales tax on gasoline and diesel fuel in order to finance a highway policy? Do they believe there should be toll charges on certain highways and bridges? These are some of the things about which Mr. Coyne says "This is the course to follow; behold, the road". This is the road he pointed out to the government.
Furthermore, do they believe in restricting the consumption of various luxury items by newer and higher taxes? Do they want an increase in the income tax and the corporation tax? That is what he suggests. Do they want the restriction of the "present indiscriminate three years' exemption of new mine operations from income tax", or a restriction of the present standard depreciation schedules?
These are the courses he would have us take. This government will not take many of his recommended courses, I can assure hon. members of that; and as long as we take that stand, this government intends to govern and not to have its direction determined by one who follows a course which we cannot and shall not accept.


Paul Joseph James Martin: In the half minute which remains I simply want to say this. The Prime Minister is, of course, a great talker. He can almost make you forget what you are supposed to be talking about or, if you are a visitor, what you came to see him about.
May I call it one o'clock?
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
Paul Joseph James Martin: Mr. Speaker, the Prime Minister began this morning by quoting the oath taken by the governor of the Bank of Canada. I wish to begin what I have to say this afternoon by quoting the oath of members of the privy council which is as follows:

Governor of Bank of Canada You ... do solemnly promise and swear that you will serve Her Majesty truly and faithfully in the place of her council in this Her Majesty's Dominion of Canada, you will keep close and secret all such matters as shall be treated, debated and resolved on in privy council, without publishing or disclosing the same or any part thereof, by word, writing, or any otherwise to any person out of the same council, but to such only as be of the council, and yet if any matter so propounded, treated and debated in any such privy council, shall touch any particular person, sworn of the same council upon any such matter as shall in any wise concern his loyalty and fidelity to the Queen's Majesty, you will in no wise open the same to him, but keep it secret, as you would from any person, until the Queen's Majesty's pleasure be known in that behalf.
The oath then continues, Mr. Speaker, but I do not intend to quote the remaining part of it. I will content myself at this stage with the recital I have given.
I do not rise to defend any disclosure made by the governor of the Bank of Canada, which may after proper determination be regarded as a violation of an oath taken by senior government officials. What I do say is that if the governor of the Bank of Canada was looking for a precedent for what he did, he has that precedent in the disclosure made in this house by the Prime Minister of Canada in January of 1958 when he unfolded a secret document which had been prepared for the use of members of the government. I refer to his tabling of the secret "Canadian Economic Outlook for 1957". Let there be no question as to whether that was a secret document.


Mr. Churchill:: No.


Paul Joseph James Martin: Here is the document that was tabled by the Prime Minister which as a privy councillor I have in my possession. I hold a copy in my hand. On the blue cover for everyone to see is marked the word "secret".
The Prime Minister this morning in his speech, which was full of diversion, which did not address itself to the point at issue, said that we had agreed that this legislation was no longer necessary because of the position we have taken in our statements that the usefulness of the governor had been impaired, and that his usefulness had been destroyed.
I say this to the Prime Minister. If the government had acted when it should have acted, when it first had a disagreement with the governor of the Bank of Canada, along the lines mentioned by the Prime Minister this morning it would not have been necessary to bring this legislation forward at this time. Moreover, this whole regrettable incident-an incident which touches the very essential character of our finance structure- should have been avoided, and there would not have existed this increasing measure of disquietude over financial policy, or over the

relationship of the central bank to the government of this country. All that could have been avoided if the government had taken, what the Prime Minister at long last acknowledged this morning, the proper course in the event of a dispute between the governor of the Bank of Canada and the government, not only in the field of monetary policy but in matters that touch fiscal, debt management and financial policy as well.
I say now that in view of the disclosures made yesterday by the governor of the Bank of Canada-and I am not now seeking to defend the method by which those disclosures were made-one would have expected the Prime Minister of this country, not to have to be asked to agree to the setting up of a committee for the purpose of examining this matter, but to have joined with the rest of us, in giving this house the lead, in demanding that an examination be made in a committee of this house of the disclosures, and particularly those mentioned by Mr. Coyne yesterday. No, Mr. Speaker, there was not any mention at all of the substance of the governor's statement of yesterday and of the three letters which accompanied that statement and which were made available to the public.
The Prime Minister has asked why all this fuss by the opposition at this time when the usefulness of the governor has ceased. He suggested that was what members of the Liberal opposition had affirmed. I say to the Prime Minister that the governor's usefulness now may have ceased, but we contend that his rights as an individual in Canada have not ceased.
We are not arguing, as the Prime Minister sought to suggest in the introduction of a red herring, that the supremacy of parliament is involved. No one questions the right of parliament, under section 91 of the British North America Act, to exercise whatever power, whatever act, whatever judgment, whatever disposition it wishes to make. Of course parliament is supreme, supreme over every emanation of the crown, supreme over the governor of the Bank of Canada. Parliament's word is final. There is no dispute about that.
The issue is a simple one. It is simply whether or not in a matter so complicated as this, where statements made by the Prime Minister are so diametrically opposed to those of the governor of the Bank of Canada, we are going to have a proper determination of that issue, not by the vote of a strong majority, but by the vote of a committee which conscientiously and objectively wishes to examine all of the facts.
We have based our contention upon the inalienable right that has been recognized in

this country and in all countries of the commonwealth, as well as in most countries of the western world, now for many centuries, and which has now been confirmed in the bill of rights introduced by the Prime Minister on July 1, 1960. The Prime Minister says that the bill of rights does not apply to non judicial processes. I have before me a copy of the bill of rights which bears the signature of the Prime Minister and a quotation from one of his speeches. This is the printed copy which is distributed throughout the country for the price of $1. This statement will be found in the copy of the bill of rights. It says nothing about judicial process; it says nothing about being confined to matters involving criminal law. It says:
No law of Canada shall be construed or applied so as to (e) deprive a person-
And the governor of the Bank of Canada is a person.
-of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations.
Are we to say that the bill of rights, this document which I hold in my hand, is something which applies only to those, as I said the other day, who are charged with a violation of the criminal law? If that is so, what we are saying then is that the bill of rights applies only to those who are charged with crimes, but it does not apply to those who are in the eyes of society guilty of something less than a crime; it does not apply to one who has served his country, as has the governor of the bank. Perhaps we will not all agree with his policies. We do not, but nevertheless he stands as a citizen honourable and fearless in the position that he takes. Are we to take the position that the bill of rights applies to a criminal and not to one of our top officials, namely the governor of the Bank of Canada? Are we to say that in this country, this free country, with our bill of rights? Are we to say with regard to the governor of the Bank of Canada that we cannot accord him the kind of treatment that is applied to other individuals in other countries? In Israel today, Mr. Speaker, a man is being tried for having done away with 6 million human beings. He is being accorded and afforded the right of a trial that is being denied in this instance by the government of Canada.
Apart altogether from matters that involve the position taken by the governor of the Bank of Canada there are others about which I am going to say something today and which I believe require further elucidation. I believe that the only way that elucidation can be provided is by the processes employed in a committee where the instrument of examination is afforded in a manner, not normal
Governor of Bank of Canada to our practices in this chamber, to find out, for instance, what are the circumstances surrounding this pension which, as the Leader of the Opposition said this morning, is excessive, to find out the circumstances that caused the board of directors of the Bank of Canada, a majority of whom were members of the Conservative party and appointed by the government to provide that pension.


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


Some hon. Members:: Sit down.


Paul Joseph James Martin: At the end of
my speech. We are entitled to ascertain why a close friend of the Minister of Finance, a man of character and integrity, took the initiative in providing this pension. Should this house be denied the opportunity of knowing what are the circumstances attending the initiative which he took in this matter? That and many other questions are involved in our request that through the instrumentality of a committee of this house an opportunity should have been provided to examine witnesses-something that is open to members of the other place. The Minister of Finance is a member of the House of Commons. He is a member of the banking and commerce committee. In any event, as the Minister of Finance, he would have the right to come before that committee and be accorded the fullest rights. This house composed of ladies and gentlemen elected by the people is the place to provide that committee. It is a right that should have been accorded, a duty that should have been recognized at once by the government of the day. That is the issue, not all these side issues that the Prime Minister has introduced. The main issue in this whole affair is that the government of this country, for some inexplicable reason, has refused to give us an opportunity to go before the banking and commerce committee so that we could have the fullest possible disclosure of all of the facts involved in this matter.
Yesterday the governor of the Bank of Canada issued another statement. I do not comment on the wisdom of that act except to say that we have the document before us and with it copies of three letters sent out, two by the governor to the Minister of Finance and one by the Minister of Finance to the governor-


An hon. Member:: Confidential letters.


Paul Joseph James Martin: -marked "private and confidential", just like the secret report to which I made reference a moment ago. We have had no comment by the Prime

Governor of Bank of Canada Minister on the substance of this statement or of these letters. I now wish to examine them.
During the course of the debate, particularly on July 4 and July 5, the Minister of Finance led us to believe that there had been only one meeting with the governor on the question of liquidity reserve assets of the chartered banks, which is the major cause of this whole dispute and without which, unless there is a full understanding, there cannot be a full appreciation of the problem involved in the dispute between the governor of the Bank of Canada, on the one hand, and the Minister of Finance, on the other. He said that the governor was flatly categorical and rejected his request to him with respect to the bank liquidity reserve requirements. The minister said that after that he referred to the act and to his surprise found that the government had no authority in the field of monetary policy. These words of the Minister of Finance will be found, first of all, at page 7523 of Hansard, where he said:
I had my talk with the governor in this respect, and I have told the house about the discussion which we had.
The minister's remarks continued in this vein at page 7524 of Hansard. Then, as found at page 7525, he said:
They were always prepared to explain it and to defend it. But, Mr. Chairman, the stage had been set at the very beginning at this meeting of 1957-58.
Not "in these meetings" but "in this meeting". The contention of the Minister of Finance, as I have revealed and will continue to show, was that there was one meeting between himself and the governor with regard to this matter of the liquidity assets ratio of the chartered banks. Then, at page 7554 of Hansard for Wednesday, July 5, the Leader of the Opposition said in the course of his speech:
Now the minister has told us there was one time- and he does not give us details of the time, place or circumstances-away back in the winter of 1957-58 when the governor angrily and firmly refused such a request.
The Leader of the Opposition said:
-he does not give us details of the time, place-
Not "times" and "places" but the time and the place. Then the Minister of Finance followed and said:
I shall not attempt to fix the date precisely.
He did not say "dates"; he said "date". Then he continued:
It would be November or December of 1957, and the occasion-
Not "occasions".
-was one on which I conveyed to the governor a request of the government for a reduction in the liquidity reserve requirements with reference to the chartered banks-


On the words of the Minister of Finance alone we have the suggestion that there was one meeting-


Donald Methuen Fleming: No.


Paul Joseph James Martin: -when in fact we know that there were more meetings and the Minister of Finance now confirms it by saying "no".


Donald Methuen Fleming: One where this incident occurred.


Paul Joseph James Martin: I ask my hon. friend to deny that there was a meeting on October 30, 1957, to deny that there was a meeting on November 12 of the same year, to deny that there was a meeting on November 14 at which not only was the governor present but also Mr. Beattie and the deputy minister of the Department of Finance, Mr. Taylor, and another meeting which took place on November 18 when there were present Messrs. Beattie, McKibbin, the Minister of Finance and the deputy minister of finance.
So that we have on this one point a contradiction between what the Minister of Finance said-


Donald Methuen Fleming: There is no contradiction.


Paul Joseph James Martin: -to us in this house and what are the real facts as revealed by this further disclosure through the statement of the governor of the Bank of Canada and now confirmed by the uttered acknowledgement of the Minister of Finance.


Donald Methuen Fleming: There is no contradiction there at all.


Paul Joseph James Martin: My friend says that there is no contradiction. Before I have completed what I have to say my hon. friend will find that there are other contradictions in which he has misled this house. Then the minister said, as found at page 7555 of Hansard:
No communication in writing passed between the governor and myself in relation to this incident.


Donald Methuen Fleming: This incident.


Paul Joseph James Martin: I continue:
Any communication of such a nature would, of course, have been confidential.
No communication passed between the Minister of Finance and the governor of the Bank of Canada regarding this question of liquidity asset reserves of the Bank of Canada.


Donald Methuen Fleming: No, no. Mr. Speaker, I am rising on a point of order.


Paul Joseph James Martin: When I have finished my hon. friend can reply.


Mr. Speaker:: Order.


Donald Methuen Fleming: On a point of order, Mr. Speaker, the hon. member has a passage and now he completely changes it when he goes on. The words were:
No communication in writing passed between the governor and myself in relation to this incident.


Mr. Speaker:: Order.


Mr. Walker:: Why don't you do it straight for a change?


Mr. Speaker:: Order. If there are statements which in the opinion of other hon. members require explanation, unless the member who has the floor yields it they should be deferred until the end of the speech.


Paul Joseph James Martin: Let there be no question that the incident is the incident of the meeting which the minister acknowledged took place in November, 1957, and which I say also took place on three other occasions-


Donald Methuen Fleming: You are just twisting things.


Murdo William Martin: -having to do with the question of the liquidity reserve position of the chartered banks. That is the incident to which we are referring, and there were communications-


Donald Methuen Fleming: You are just twisting.


Murdo William Martin: -notwithstanding what the Minister of Finance said and now seeks to say when he is caught in this particular predicament. First of all there is the letter of the governor dated November 19, 1957. There is the letter from the governor dated December 5, 1957. There is also the letter of November 21 of the Minister of Finance himself dealing with this incident, the issue involving the question to which I referred a moment ago, the liquid asset ratio of the chartered banks of Canada.


An hon. Member:: Signed by?


Paul Joseph James Martin: It is signed by the minister, "Donald M. Fleming". In his letter of November 21 the minister acknowledges the letter of the 19th and goes on to point out the following to the governor of the Bank of Canada. First of all I quote from the minister's letter part of a paragraph used by the minister based on the letter written to him by the governor of the Bank of Canada and which sets out what the true position of this matter was. The particular sentence from the governor's letter reads as follows:
If the banks were to suggest dissolving their agreement or changing it in a way that did not appear sound to the Bank of Canada then I would
Governor of Bank of Canada feel it to be our duty to urge the chartered banks to continue to adhere to what the Bank of Canada regarded as sound practice.
The important word there is "urge". The Bank of Canada took the position that the question of the liquidity position of the banks was a matter arranged for by the banks themselves and with regard to which the president of the Royal bank, Mr. Muir, said that he would regard it as being an arrangement from which he could voluntarily withdraw if the circumstances justified. It was not a policy arrived at by the Bank of Canada.


Donald Methuen Fleming: Yes, it was.


Murdo William Martin: It is true that the Bank of Canada in 1955 had suggested to the banks the desirability of this course but it was an act involving the banks themselves, and this was acknowledged by the Minister of Finance himself.


Donald Methuen Fleming: It was not.


Murdo William Martin: My friend says it was not. Let us see whether it was not. On April 28, 1959, here is what the Minister of Finance said in this house as found at page 3111 of Hansard when he spoke against reducing the 15 per cent minimum liquidity ratio. Here are the words of the Minister of Finance:
That is the statutory obligation of the banks, to maintain a cash reserve of 8 per cent measured in terms of deposit liabilities. In addition to that figure the banks of this country have for the past three years maintained an additional reserve of 7 per cent which has been held in the form of treasury bills and day to day loans... If the 7 per cent reserve that the banks hold in terms of treasury bills and day to day loans were reduced it would result in a liquidation of treasury bills and more pressure on the treasury bill rate in this country. But hon. members opposite did not have the frankness to face up to that fact yesterday or even to acknowledge it.
Yet the Minister of Finance said that this was a matter determined as the result of a statutory imposition by the Bank of Canada on the chartered banks when-


Donald Methuen Fleming: It was an imposition.


Paul Joseph James Martin: -his own statement is proof of the fact that this was an arrangement to which the banks voluntarily committed themselves. Here is the letter of the Minister of Finance and yet he said there was no communication that passed between him and the governor in this matter.


Donald Methuen Fleming: In relation to this incident.


Murdo William Martin: Yet there are the two letters of December 15 and November 19.

Governor of Bank of Canada


Donald Methuen Fleming: I said, in relation to this incident.


Paul Joseph James Martin: But, Mr. Speaker, this is not the only situation with regard to this question as to whose responsibility it was. My hon. friend will recall that at page 7556 of Hansard of July 5 he had this to say:
I have to say that this is a matter of the clearest kind of dispute between Mr. Coyne's version of what happened and the version of the chartered banks, because I had occasion in those days to confer with a number of the chartered banks on this question, and the answers I invariably received from them were that this was imposed upon them by Mr. Coyne and they did not agree to it. They firmly disagreed with the statement which appeared in the report of the governor of the bank which the Leader of the Opposition has read.
Notwithstanding that, I challenge the Minister of Finance to deny what the governor of the Bank of Canada said yesterday.


Donald Methuen Fleming: I do deny it.


Murdo William Martin: I have not even made the statement, so how can the minister deny it?


Donald Methuen Fleming: I know what he said in this respect yesterday, and I deny it.


Some hon. Members:: Oh, oh.


Murdo William Martin: The suggestion to reduce the liquid asset reserve was supported by the president of the Dominion bank, Mr. Ashforth. Mr. James Muir of the Royal bank did not think the suggestion of the minister of lowering the figure from 15 per cent to 13 per cent was desirable. He did not think it was necessary. We know that at that time it was not 15 per cent. It had gone over 15 per cent. It was as high as 17 per cent on some occasions.


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


An hon. Member:: Sit down.


Murdo William Martin: We know that Mr. Gordon Ball, president of the bank of Montreal had taken issue with the desirability of reducing the liquidity position of the reserves of the chartered banks in this particular. We know that Mr. McKinnon, president of the Canadian bank of Commerce had taken a similar position. And so the Minister of Finance who says that the bankers supported him in the position he has taken, is of course, denied by the disclosures made yesterday showing that the bankers, outside of Mr. Ashforth, did not believe it was a desirable thing.


Donald Methuen Fleming: I disagree.


Lester Bowles Pearson: No wonder the minister did not want a committee of the house.


Murdo William Martin: As the Leader of the Opposition said, no wonder the Minister of Finance did not want a committee of this house. It was not only the bankers. We know from this document given out yesterday by the governor of the bank that the deputy minister of finance did not agree with and support the position taken by the Minister of Finance. He did not think it was desirable. He did not believe that this was the responsibility in the primary instance of the bank. He thought that the position the bankers themselves concurred in at the suggestion of the bank in 1955 was a good one to maintain. So we have this further contradiction of the statements made in this house by the Minister of Finance.


Gordon Harvey Aiken: Will the hon. member permit a question?


Some hon. Members:: No.


Murdo William Martin: They are state ments that show a difference on vital points. After these disclosures there can be no justification for the government taking the position that this whole matter has been properly gone into when we have these contradictions, as well as contradictions to the facts as stated by the Minister of Finance, showing conclusively that what the Minister of Finance told us on July 4 and July 5 was not in accordance with the facts. But, Mr. Speaker, this is not the only question where there is a contradiction. This is not the only matter involving the credibility of what the governor of the bank said and the credibility of what the Minister of Finance has said in this house. This is the issue, and it is one which involves the determination as to which of these two gentlemen is telling us what really were the facts in all these matters.
In our suggestion that there should be an examination of this matter by a committee, and when we urged that the governor of the bank be called before a committee, it was suggested at one time in our argument that perhaps the governor on some occasion had asked for the opportunity to go before a banking and commerce committee in order to outline his views about the desirability of lowering this 15 per cent figure down to 13 per cent. The minister took the position that it was psychologically embarrassing to him at a time when there was a complaint about tight money for the banks to have this figure of their reserves at 15 per cent. The governor said, "Well, I should like to help you. I do not believe that this is a contributing factor to tight money. I should like to go and help you before a proper committee of the House of Commons." That is what the governor of the bank said. Yet the Minister of Finance

r
told us that at no time was any offer made by the governor of the Bank of Canada to go before a committee.


Donald Methuen Fleming: I would ask the hon. member to quote the actual words I used.


Murdo William Martin: I have before me here the minister's letter-


Donald Methuen Fleming: Quote from Hansard the words I used.


Murdo William Martin: I have before me-


Donald Methuen Fleming: Will you quote from Hansard the words I used.


Murdo William Martin: My friend can quote them. I am giving the statement.


Donald Methuen Fleming: You are misconstruing them.


Murdo William Martin: Give me the page and I will quote them for you.


Donald Methuen Fleming: You should have the page reference.


Murdo William Martin: All right. I made the statement. I said that the minister did say in this house that there was never any offer made by the governor of the Bank of Canada to go before a committee of this house. Let us see who was telling the truth in this situation. This is a copy of a letter sent by the governor of the Bank of Canada to the Minister of Finance on December 5, 1957, and I read from the second last paragraph of that letter:
If you feel it would be helpful I would, as I told you earlier, be glad to appear before the banking and commerce committee of the House of Commons to explain the facts of the situation or to discuss any matters on which you felt parliament should be informed.
Mr. Speaker, the only way in which the Minister of Finance can controvert the substance of what I have said regarding this letter is to say that he never received such a letter from the governor of the Bank of Canada dated December 5, 1957; and I invite him now to deny that he received it. If he did receive that letter, then the information that he gave this house when we were about to take a vote was not in harmony with the facts. It was not a statement made in accord with the truth. That is the fact and no amount of forensic talent will be able to disturb that fact.
So we have this situation. The governor of the Bank of Canada has successfully indicated that there was not only one meeting but that there were four meetings at which the deputy minister and others were present. He
Governor of Bank of Canada has further contradicted the Minister of Finance who said that there was no communication between himself and the governor of the bank. He has successfully established, from the action of the presidents of the banks themselves and from section 71 of the Bank Act, that the decision with regard to the percentage of liquidity asset reserves of the chartered banks was a decision which arose not out of any power residing in the governor under the Bank of Canada Act but as a result of a decision voluntarily entered into by the chartered banks themselves, first in 1955, and then continued on into subsequent years.
Then we have the further contradiction of the statement of the Minister of Finance by the governor who pointed out that the governor had offered to go before a committee of this house.
Are we not now faced with an unfinished situation, Mr. Speaker: The matter was not concluded with the final observations of the speech of the Minister of Finance the other day because since that time, as I say, we have further material before us, and it is material that takes serious issue in points of substance involving the credibility of two Canadian citizens, one the governor of the bank and the other the Minister of Finance. Are we now to take the position that this matter is over? Are we to take the position that this house is going to resolve this matter finally and send it to another place without having taken into account the circumstances involved in the further disclosures that have been made by the governor of the Bank of Canada?
I regret to say, Mr. Speaker, that in view of the information given the committee of the whole by the minister on July 4 and 5, information which has clearly been shown to be inaccurate, misleading and untrue, there is no course open now to the Minister of Finance under our system of government, if we want to live up to the traditions of the parliament in the United Kingdom, other than to turn in his seals of office.


Some hon. Members:: Hear, hear.


Murdo William Martin: If the minister does not take that position, that will be up to him; that will be up to the government as a whole; that will be up to the Prime Minister. Can the Prime Minister, in the face of this situation, now fail to not only join in the request but actually take a lead in seeing to it that this house, through the proper committee, is given an opportunity of hearing the governor, of hearing the deputy minister of finance, of hearing the Minister of Finance and of hearing the board of directors of the Bank of Canada? Then at long last we can settle once and for all the questions involved

Governor of Bank of Canada in this complicated and regrettable incident created as a result of the reluctance and the failure of this government at the proper time to exercise the privilege which a government should exercise, instead of abdicating its responsibility and not letting the governor of the Bank of Canada know three years ago that it was master in this house and in this country.
That is what the government should have done. It is because the government has not taken this course that we have this whole incident before us. So the two courses that are now open are clear. There is the one I have suggested with regard to the Minister of Finance himself and there is the other involving the right of this parliament, through the proper procedures and instrument, to arrive at the facts involved in this matter. To take any other course will be to leave this house, a year after the bill of rights was passed, saying that we were proud on July 1, 1960 to pass this measure confirming, as it does, the basic freedoms and human rights accorded to all Canadians. While we were proud to place this measure on our statute books, we regret that the government of the country, a government with a great majority behind it, was not prepared to take a step consistent with the implications of that bill of rights and afford the fullest hearing in this matter, thereby giving one individual the right -and giving the Minister of Finance the right -of having his side of the case properly exposed for final judgment before we pass this measure in final form on third reading.
Is that not the situation, Mr. Speaker? Hon. gentlemen opposite may not accept that course. If they do not, whatever red herrings they introduce they may be sure of one thing. This is now being echoed all across this country. While they feel that the governor's usefulness has ended; while they feel that perhaps some of his actions were unwise; while they do not fully agree with all his policies, the Canadian people, dedicated to freedom as they are, will hold this government accountable for having denied him the inalienable right of being heard by those who pass judgment on him.


Lionel Chevrier: Mr. Speaker-


Donald Methuen Fleming: Mr. Speaker, I rise on a question of privilege. I have no right to speak in this debate on third reading, having moved the motion for third reading. Under previous rulings of the Chair there is no right of reply accorded to the mover of the motion for third reading. But I rise on a question of privilege.


Mr. Speaker:: If the minister is concerned about that, my disposition would be this.
[Mr. Martin (Essex East).}
As he did not speak in moving the motion, and as I have permitted earlier in this session. I would allow him to speak, but of course not to close the debate. The same course was followed in a previous debate this session. If there is any contest about that of course the matter can be discussed, but the principle of the deferred speech of a mover has been recognized from time to time.


Lester Bowles Pearson: On this point, Mr. Speaker, you may recall that last session, I think it was, I was in a position technically the same as the Minister of Finance, having moved a motion. You said, and quite rightly, because the matter was brought to your attention by hon. gentlemen opposite, that I had no right to speak.


Mr. Speaker:: Then I will hear the minister on his question of privilege.


An hon. Member:: Closure.


Lester Bowles Pearson: Perhaps I may say on that point, Mr. Speaker, that I do not want my remarks to be interpreted as suggesting that the minister should not be given the right to speak.


Some hon. Members:: Order.


An hon. Member:: Shut up.


Lester Bowles Pearson: If the ruling which applied in my case is the correct one, the minister will not have the right to speak, but all the house leader has to do is move the previous question, and the minister can then speak to his heart's content.


Donald Methuen Fleming: Then I rise on a question of privilege, Mr. Speaker. The hon. member for Essex East has made some very strong statements. He has said that I misled the house in certain statements I made in recent days during discussions on this particular subject. He has attributed to me statements which have been read out of context and twisted in their presentation. Therefore I shall deal with these several matters.
I think it is not unworthy of note, Mr. Speaker, that the hon. member has drawn his whole speech today from an editorial appearing today, as I am told, on the front page of the Toronto daily Star.


Paul Joseph James Martin: I never even saw it.


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: But I should like to see it.


Donald Methuen Fleming: Then there is some amazing telepathy going on here. There are other ways of learning about the contents of a newspaper than reading it.


John Whitney Pickersgill: Mr. Speaker, I rise on a point of order. The hon. gentleman has asked to speak on a question of privilege. We have asked to speak on a question of privilege. Your Honour has always been very precise in asking us to state specifically what the question of privilege was and making us stick strictly to the question of privilege.
I suggest that the same rule should apply to both sides of the house.


Some hon. Members:: Hear, hear.


Mr. Speaker:: From what has been said I think the situation is rather that of an hon. member rising to make a personal explanation and to challenge what has been said about the veracity of his statements. During the remarks of the hon. member for Essex East I did indicate that there would be an opportunity at the end of the speech for the minister if he would refrain until that time, to make his explanation. But it should be relevant to the remarks made and should certainly not be a speech in the debate.


Donald Methuen Fleming: Mr. Speaker, there were, as I gather, about three elements in my previous statements in this debate upon which the hon. member for Essex East has based charges that I misled the house. I shall be glad to deal with those.
In the first he says, in effect, that I said there was one occasion of my discussing with Mr. Coyne in late 1957 the question of the tight money policy. He now says there were, according to Mr. Coyne, four such meetings and there was correspondence. Here is a fine example of the way in which the hon. member for Essex East has twisted and contorted what I said. My statement is at page 7040 of Hansard of June 26, where I am reported to have said:
In the winter of 1957-58 I conveyed to him a request for an easing of the requirements respecting the liquidity reserves of chartered banks. That request, which was designed by the government to ease tight money, was rejected by the governor firmly and angrily.
The hon. member has undertaken now to say there were other occasions. Mr. Speaker, there was no occasion other than the one I referred to here where I conveyed to the governor the request of the government for a reduction in the liquidity reserve requirements of the chartered banks and where he at that meeting firmly, flatly and angrily rejected it. That is what we are talking about when we refer to this incident, and it is about that incident that I was asked this question by the hon. member for Essex East, or someone else. It was following the observation of the Leader of the Opposition as reported at page 7555 of Hansard of July 5, and here I should like to read, so that the
Governor of Bank of Canada house may understand, exactly what the Leader of the Opposition was saying:


Lester Bowles Pearson: Well, until this incident-
Please note the words, "this incident".
-the minister had thought he had some authority in this field. It was not very long before this meeting that he was very clear and certain about the authority of the government in this sphere. When this meeting took place he was of the opinion that he might have some authority, but then he discovered he had no authority or responsibility in the field of monetary policy, at least until last evening.
May I ask the minister whether this clash-and we certainly have the right to call it a clash in view of the terms of the minister has used, because this was a request which was firmly and angrily rejected by the governor-took place before or after November 13, 1957? Hon. members may recall that on November 13, 1957 the minister, replying to the hon. member for Coast-Capilano as reported at page 1063 of Hansard said he was not aware of anything that could be called a clash between the government and the bank.
I should like also to ask the minister, while we are on this basic incident, whether a record of any kind was made of this meeting, the conclusions of which were so important in the minds of the government that three and a half years later, based largely on those conclusions, they decided to introduce an act of parliament to discharge the governor of the Bank of Canada without giving him the right to be heard. This obviously was an important meeting. This is the incident upon which the government builds up its accusation. It was years ago, but it is on this basis that the government decided that the governor had to go. As I say, this was obviously a very important meeting because of the important and responsible people who attended it, and I ask if any record was made of this meeting, which the minister thinks may have taken place in December, 1957; whether there is anything which he could disclose from such a record.
I should also like the minister to deal with the other question I have asked him. I should like the hon. gentleman to tell us whether any further requests of this nature were made of the governor or of any servant of the bank, or of any of the banks; and if so, what was the result of any such request which was made subsequent to this meeting which took place some time in the autumn, presumably in December of 1957.
On that, I made this comment which appears in the second column of page 7555:
I am not sure that I followed all the points raised by the Leader of the Opposition, but if I overlook anything perhaps he will draw it to my attention. No communication in writing passed between the governor and myself in relation to this incident. Any communication of such a nature would, of course, have been confidential. I have drawn attention to this matter because it established very clearly the fact that the governor held a different view from the one I had entertained and had expressed while in opposition as to the relationship of the government to monetary policy.
There was no correspondence between us with regard to that incident. The governor has now released copies of correspondence- confidential correspondence-throwing aside the restraints which hon. gentlemen observe with regard to confidential communications. He has released letters. The hon. member for
7704	HOUSE OF
Governor of Bank of Canada Essex East now says: oh, look at these letters. These letters related to the subject of easing the liquidity and reserve requirements. But, Mr. Speaker, the incident is what I refer to here. It was the incident that the Leader of the Opposition was speaking about in the observations which preceded my reply.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: This was an incident-an incident which occurred in my office in the presence of the deputy minister of finance, in the presence of the governor and other representatives of the Bank of Canada. That was where I put that proposition to him, and where he angrily rejected it. That occurred at a particular meeting and there was no correspondence about that incident. The Leader of the Opposition asked me to produce records to determine the particular date. I did not keep records of the kind the governor was evidently keeping, records in which he has apparently sent down his version of communications which passed at a meeting of the most confidential nature and which he has now chosen to disclose according to his version of those communications. But when the member for Essex East undertakes to tell this house that I misled the house in making the statement I did, as recorded at page 7555 of Hansard, that no communication in writing passed between the governor and myself in relation to this incident, I say he is wrenching my remarks and that the misleading is not on my part, but on his.


Mr. Speaker:: Is the house ready for the question?


Some hon. Members:: Aye.


Donald Methuen Fleming: On the question of privilege, Mr. Speaker, I was going to deal with two other charges of the same nature made by the hon. member for Essex East.


Some hon. Members:: Oh, oh.


Mr. Speaker:: The minister has had a lengthy time in which to answer the accusations that he misled the house. He has dealt with the incident. If there is another episode of the same kind I trust that the hon. member can make his explanation briefly, because it would, in effect, be participation in the debate were he to continue at length.


Donald Methuen Fleming: I shall endeavour to be brief, although these are grave things which the hon. member for Essex East has said this afternoon. I shall be very brief, then.
The second question is this. Taking statements of Mr. Coyne-and he takes them as truth-the hon. member sets them against what I have said in regard to the views that 

had been conveyed to me, as I stated to the house on July 5, in relation to the attitude of the chartered banks concerning this matter of liquidity reserves. There was this difference of statement on Wednesday, July 5 when I was asked this question by the Leader of the Opposition and others. Mr. Coyne has said that the banks accepted this 15 per cent liquidity reserve requirement by voluntary action. I said, based upon the information conveyed to me by the heads of chartered banks, that it was imposed upon them by Mr. Coyne. I stand by the statement that I have made and I do not care if Mr. Coyne chooses to disagree with it.


An hon. Member:: You don't care.


Mr. Speaker:: The hon. member has denied the statement as he is entitled to do, but I think it would be out of order to debate the matter. Is the house ready for the question?


Some hon. Members:: Aye.


Mr. Pitman:: No.


Donald Methuen Fleming: I still have one of these charges to deny, Mr. Speaker.


Mr. Speaker:: I certainly would not refuse the hon. member the opportunity to make a personal explanation when he has been accused of misleading the house, and if there is a further incident of alleged misleading I will certainly hear it.


Lester Bowles Pearson: I think the minister should of course be given an opportunity to reply as a matter of personal privilege to any accusation which has been made which he considers not to be accurate, but when the minister replies in the terms in which he has spoken, and when he quotes in the course of his explanation at length from things I said as reported at page 7555 of Hansard in support of his case, I have the right to point out that if he had turned to page 7554 he would have had to quote himself in contradiction to what he said on the next page.


Mr. Speaker:: If the hon. member would state the other item before he proceeds with it perhaps I could come to a conclusion, but it does seem to me now that we are verging on a debate rather than personal explanation, although the line is not an easy one to make clear.


Donald Methuen Fleming: The other charge which was made by the hon. member for Essex East was that I had misled the house, as he said, in relation to the fact that Mr. Coyne, as he says now, contrary to what I said to the house, never made any offer to me to come before a committee of the house. That is a statement he has attributed to me.

If you will refer to page 7047 of Hansard of June 26, 1961, you will see I was there dealing with the statement made by Mr. Coyne earlier, which reads as follows:
He has also for four years refused to allow the banking and commerce committee of the House of Commons to study my annual report or to examine my views as to whatever extent might be desired by members of parliament.
Mr. Speaker, at that time I said the statement was not true; as will be seen on the same page as follows:
When the governor of the Bank of Canada makes this assertion that for four years I refused to allow the banking and commerce committee to study the annual report, what he is saying is not true.
I said further, as appears in the second column of that page, after reviewing the record of Hansard in that regard, as to my standing in the way of calling a meeting of that standing committee on banking and commerce, the following:
To what I have already said in reference to debates in this house, let me add this further comment on what the governor has said. Never once in all these years did the governor say anything to me about wishing to appear before the banking and commerce committee or wishing his annual report to be referred to the banking and commerce committee or to any other committee. This statement of June 19 is evidently calculated to give the impression that he was telling me he wanted to appear before the banking and commerce committee to discuss his annual report and that I did not let him.


An hon. Member:: Shame.


Donald Methuen Fleming: It is on that statement that the governor of the Bank of Canada undertook to say that I misled the house, and his words have been parroted in the house this afternoon by the hon. member for Essex East. He bases his charge that I mislead the house on a statement appearing in a letter of December 5, 1957, written by Mr. Coyne to myself in which he talks about tight money and discusses the 15 per cent minimum liquid asset ratio of the banks. Perhaps I ought to read the paragraph from the letter. It is as follows:
You have referred to the erroneous belief, which you feel is held by some people, that a condition of "tight money" was brought about by the adoption of the 15 per cent minimum liquid asset ratio by the banks and that it is necessary to change to a lower liquid asset ratio arrangement in order to convince people that monetary conditions have changed. I would hope that if there has been any public misunderstanding on this subject it is rapidly disappearing. If you feel it would be helpful I would, as I told you earlier, be glad to appear before the banking and commerce committee of the House of Commons to explain the facts of the situation or to discuss any matters on which you felt parliament should be informed.
You will observe that the letter relates to the question of the liquidity reserves of the bank and does not refer to the kind of
Governor of Bank of Canada statement on which I was commenting on June 26 when I said-


John Whitney Pickersgill: Pure quibbling.


Mr. Speaker:: Order.


Joseph-Alphonse-Anaclet Habel: Just a play on words.


Mr. Speaker:: I think the hon. minister has made his position clear.


Donald Methuen Fleming: Mr. Speaker, I at no time denied that there was an offer, as has been stated by the hon. member for Essex East. What I was dealing with on June 26, as clearly appears, was the question of the governor wanting to appear-wanting to appear-before the banking and commerce committee to study his annual report.


Joseph-Alphonse-Anaclet Habel: Get a flag.


Donald Methuen Fleming: I do not believe that the-


Mr. Speaker:: Order. I am sorry to interrupt the minister but I think he has had an opportunity to make his explanation and that I should now proceed to hear the hon. member for Peterborough.


Walter George Pitman: Mr. Speaker, this morning we witnessed a most incredible performance in this chamber.


Joseph-Alphonse-Anaclet Habel: You should get a flag.


Donald Methuen Fleming: The charge was false in every respect.


John Whitney Pickersgill: That is not what the public thinks now.


Lionel Chevrier: Your statements are incredible.


Mr. Speaker:: Order.


Walter George Pitman: I should like to deal with that speech of an hour and a quarter and particularly the three sentences which are of concern to this group. First, it is completely at variance with the facts to suggest that we have ever questioned the supremacy of this parliament. This government rose to power on the coat tails of Coldwell, Knowles and the present hon. member for Kootenay West (Mr. Herridge) who really fought the battle of 1957.


Some hon. Members:: Oh, oh.


Mr. Drysdale:: Where are they now?


Walter George Pitman: Second, we have never condoned a $25,000 pension. The Prime Minister's statement about not making a personal attack becomes rather ludicrous in light of the statement which struck at the honesty and good faith of a servant of the people in that particular regard.

Governor of Bank of Canada
Third, we have never associated ourselves with the proposals of the governor of the Bank of Canada. However, it is rather interesting that one of the proposals to which the Prime Minister did not refer this morning was the one in which the governor suggested that unemployment insurance payments be raised. If there is one thing that this government will not attack it is unemployment.
Those are the only three things to which the Prime Minister referred this morning. I repeat the issue is not whether parliament is supreme or the governor of the Bank of Canada is supreme. That question has been agreed upon by all of us in this house, as the Prime Minister himself indicated while spending most of his time reading portions from speeches made by the hon. member for Essex East and the Leader of the Opposition. The question is whether this parliament can deal with a situation without sufficient facts.


John Whitney Pickersgill: Hear, hear.


Walter George Pitman: The real issue does not even concern Mr. Coyne but concerns what will be the relationship between the Bank of Canada and the Minister of Finance of this government. Eventually this parliament will have to deal with that question and we will be dealing with it on the worst possible basis because of incomplete information, prejudiced statements and emotion packed news releases.
All through the speech of the hon. member for Essex East the Minister of Finance shook his head and said, "No, no, no". I suggest this parliament will never know at what point there was a variation of opinion. Indeed in his question of privilege which soon became a speech the minister did little more than make a play on words and stated, in effect, that the correspondence which dealt with the subject of the incident had no relation to the incidence. Mr. Speaker, I do not have a legalistic mind but that is hair splitting to an extent I have never before seen in parliament.
We have reached a point now where we cannot get the information in this house but must go to our mailboxes every day in order to find out what is going on. I suggest we can only deal with the relationship of the Bank of Canada to this parliament with knowledge which can be gained solely by questioning in a committee of this house. That is the only means by which we can gain knowledge which will allow us to come to a sensible conclusion. The issue is not a question of the supremacy of parliament, but one of the intelligent conduct of parliament. Perhaps Mr. Coyne as the governor of the Bank of Canada is not covered by the bill of rights, but Mr. Coyne as a man


should be heard because he is a citizen of this nation, and the bill of rights applies to him as a citizen.
We have been washing dirty linen in this parliament now for three days. We have now discovered that for four years the Minister of Finance has been sulking in his office because of an incident which took place in 195758. I suggest this whole problem could have been avoided or at least solved properly if we had amended the Bank of Canada Act. For four years we have had indecision and lack of co-operation during which the Minister of Finance refused to set his own house in order, with the obvious resulting disorder.
I am sure the people of this nation are going to wonder to what extent policy at the top has meant suffering at the bottom. We have had the highest unemployment rate in the western world this past winter. Families have been suffering and we are led to ask to what extent this has occurred because of chaos and confusion in this government, and its incompetence in putting its own house in order. Maybe after the names of Fleming and Coyne have disappeared the effects of what has been going on during the last few days will still be very much felt in this nation.
We have had this issue finally brought before parliament. Along with the hon. member for Essex East I would expect that on the other side of the house there would have been an even greater desire than on this side to have this thing aired, because we have had damning accusations and disturbing allegations which will remain on the record. What is going to happen to the confidence of the business community under these circumstances? How will the business community view the conduct of the affairs of this nation especially in terms of conditions over the past year? Referral of the bill to the committee will clear the picture of indecision and incompetence within this government. Surely it is in the interest of all those or the other side of the house to have this prob lem aired.
Probably never has the confidence of the people of Canada been at such a low ebb with respect to the government as a result of the debate in this house. Let us take this out of the realm of personalities completely. We remove the man whose good behaviour is not in any way in question. We are doing nothing in this same bill to improve the relationship of the bank, its governor and the Minister of Finance. We all know, Mr. Speaker, that the monetary success of this nation is based upon a delicate balance of power among the governor of the Bank of Canada, the Minister of Finance and the government. We realize that the final, overwhelming responsibility is in the hands of

this parliament; but the day to day balance must be there. As one member has said in the house, the road to totalitarian power begins with the exercise of irresponsible power over the day to day business of the Bank of Canada. We might well say that under the Conservative administration the balance of power has been allowed to rest to too great an extent with the governor over the past four years; but if this bill is passed the pendulum will swing to the other side. There will be no man who will take over the governorship of the Bank of Canada; that is, no man of courage or integrity-


Donald Methuen Fleming: Shame on you.


Walter George Pitman: -no man who will speak what he believes, who will take over the governorship.


Donald Methuen Fleming: That is character assassination in advance, of the worst kind.


Walter George Pitman: It is not character assassination, I suggest, because I do not know what character I am assassinating. What does this minister want, a minion with his hands on the machine to print the money?


Gordon Minto Churchill: Don't copy the hon. member for Essex East in your own speeches.


Walter George Pitman: I am not quoting him.


Gordon Minto Churchill: I said "Don't copy him".


Walter George Pitman: Does the minister wish a bootlicking slave who will have the power to print whatever money this government wants? We still do not know where that money is coming from. Is it going to come from abroad? No, because the exchange rate is going to rise. Is it going to come from the government's own people with the result that interest rates will go up? No. How is it going to come? The feeling of the people of this country must be that the government is going to print its own money with all the serious consequences that have taken place throughout the world when this irresponsible method has been used.
In conclusion, Mr. Speaker, I appeal to this government, on a non-political basis, to somehow or other put in a safeguard. The government has destroyed the delicate balance which should be maintained. I say to the government. What are you going to do between now and the time when the royal commission has brought down its suggestions for changing the Bank of Canada Act? Perhaps now, even more than in 1957, the opposition should carry out a filibuster in this house until the royal commission has brought down its report and the legislation has been put through because this country has never been as close to totalitarian power before as it stands today. Before this bill goes through this house, this parliament and this nation should receive some
Governor of Bank of Canada indication of what the safeguards will be because parliamentary democracy has been weakened. To use the words of the minister, it has been eroded.
In conclusion, Mr. Speaker, I suggest it is not the governor of the Bank of Canada who will be in the greatest danger when this bill goes through, but the people of Canada whose freedom will be in jeopardy.


Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, when the Prime Minister was speaking this morning I was interested in trying to catch in a personal way the thrill and the reaction in the public galleries and in the house to what was said. There is no question about it: He made the kind of speech that impresses people and moves them along a certain line with him, persuading his listeners that somehow this parliament had a case and that somehow the governor of the Bank of Canada had got in the way and was impeding the whole role of the elected representatives as reflected in this parliament. I wish to enter one caveat or reservation and say this from the point of view of an individual member.
I think it can be put in this form. There is a great deal of misunderstanding or, if you wish, nonsense talked about the responsibility of parliament and the supremacy of parliament. What is supreme in this particular parliament or in any Canadian parliament? Is it the Prime Minister? It seems to be that this is what it is; that the Prime Minister as the peak figure in the executive that is marshalled in this House of Commons feels that he is supreme in a sense and the rest of us, those of us who may not disagree, really cannot have or should not have in this forum, if he disagrees, the opportunity of finding out what parliament really means. It seems to me that what parliament really means is that each one of us has the right to examine and hear someone who is in power and carrying out his job as a result of the pleasure of this parliament.
I and many of my colleagues have felt on election night when the final totals are computed, that an incredible amount of power immediately falls upon the shoulders of the Prime Minister. I thought, in the campaign fought in the previous two elections, that the government were cognizant of this as a result of the stand they took in the debates in 1955 and 1956 but apparently they have very quickly taken over the conception of the supremacy of parliament which means the supremacy of the Prime Minister. This is one side of the Coyne-Fleming controversy. It seems to me we need some political thought and some political theory with relation to whether parliament as such, including all of
7708	HOUSE OF
Governor of Bank of Canada us, is a legal fiction or not, or whether parliament really means the supreme power, not of all of us but of the Prime Minister.
The other aspect of the Coyne controversy, Mr. Speaker, that is most intriguing, is the comic opera aspect of it. When I think what a small place Ottawa is, when I think that the Minister of Finance has an office just across the street from the governor of the Bank of Canada-with a strong throw you could easily pitch a rock over-when I think of the social milieu and the milieu of the officials and executives in Ottawa is not a tremendously great one; we are not like New York and Washington where hundreds of people are surging in all directions. These people are constantly meeting and bumping into each other, both in the executive and in the public service side of Ottawa. How we could have a situation going on as it is now revealed through the correspondence is nothing but comic opera. The Minister of Finance who really does not care for the governor of the Bank of Canada does not really do anything about getting rid of him until he is almost clear of him just through passage of time. This seems to me almost incredible. After 34 years, almost four, in this small world of Ottawa, where all these clashes are taking place below the surface the Minister of Finance never got together with the governor of the Bank of Canada and worked out either some rapport or some rapprochement between them or worked out some way of having his say in so far as monetary and fiscal policy is concerned.
I think there is confusion on the part of all of us with respect to this issue, and unlike some of the speakers on both sides of the house I do not know that the Canadian people have much of a clue as to what is involved in this issue. I think they are tremendously confused by it all. I do not think they are able to conceive of the confusion that must exist in a government that for 3J years will put up with a public servant who is going around the country talking on issues that quite obviously affect public and government policy. To wind up after all that with this kind of hassle involving letters being posted and confidences being broken in public means that the situation is simply a ridiculous one.
The only thing I can suggest as an individual and on behalf of our party is that perhaps the one way to get rid of the confusion, although for a time the situation may be made more confusing, is for the government to go to the people at once on this issue or on like issues that it feels are associated with it and we will get the matter


cleared up once and for all whether Canadians want to go on with a government that is so incompetent and so much given to procrastination.



BUSINESS OF THE HOUSE

Mr. Arnold Peters (Timiskaming):: Mr. Speaker, before you leave the chair could I ask the house leader whether the government would consider a proposal I should like to put forward. Last night the house leader gave us a certain order of business. I was wondering, if it is our intention to adjourn at the end of this week, whether the house leader would consider postponing discussion of the civil service bill in particular, and possibly the dominion-provincial tax relations resolution, not because the civil service bill is contentious but because those hon. members who have spoken on this matter have indicated that it is not an immediate problem.
This bill contains 85 clauses, which will take some time to discuss. If the government wished, I think an arrangement could be made in this regard. I can only speak for myself, but I would be prepared to extend the hours of sitting tonight and Saturday if the house leader is not going to ask us to handle any other business. I think we could make an arrangement for this Saturday night.


Gordon Minto Churchill: Mr. Speaker, the suggestion sounds very reasonable and perhaps we could have a few minutes to think it over and confer. We could then make a decision a little later, before six o'clock. If there is a possibility of adjourning on Saturday night it would be wise to sit this evening.


Lester Bowles Pearson: Mr. Speaker, I do not think we can come to any decision on this matter. It is worth considering, but there are activities going on in the other place which may determine the length of our sitting.
Civil Service Act


Mr. Speaker:: I am informed that the other place has adjourned until three o'clock tomorrow afternoon.



CIVIL SERVICE ACT

[Stage Direction]
The house resumed, from Thursday, July 6, consideration in committee of Bill No. C-71, respecting the civil service of Canada -Mr. Fleming (Eglinton)-Mr. Chown in the chair.
On clause 1-Short title.
William Arnold Peters: Mr. Chairman, last evening when we began the discussion on this bill I pointed out that one of our major concerns still remained unsolved and that we were not alone in speaking of this problem. Most of the associations are in agreement with us that there are two main reasons for changing the Civil Service Act. The first is that the act should be brought up to date and the wording changed so that the changes which have taken place over the years since 1919 in departments, in the organization of government and in the relationship of civil servants may be incorporated in the act.
It should be pointed out that in 1919 approximately 70 per cent of the employees of the United Kingdom government were classed as civil servants. Today less than 41 per cent of government employees are civil service employees. These figures were taken from the experience of the mother parliament. I am not aware that any figures are available for our own civil service, but there is a similarity between the two situations. This has resulted in most of these associations asking for one civil service; that all employees of the government should be brought under the terms of the Civil Service Act. This would bring our civil service numbers into a much higher percentage ratio than is the case at the present time.
The second point worthy of consideration is the fact that although the bill has been amended several times it does not point out, and the government has failed to point out, what the arrangement will be for negotiation such as would allow the establishment of a much better contract for civil servants. In this connection I should point out that the committee was informed on a number of occasions that we should not look on Bill No. C-71 as an agreement covering civil servants in their relationships with the civil service commission and with the government, but that these conditions, which would be normally reserved for a collective bargaining agreement, would be contained for the most part in regulations which would apply to the operation of this measure.

Civil Service Act
I feel that this is not a desirable situation, because I believe that civil servants should know with whom they are negotiating. They should know how far they must go before they can learn what the decision is to be in relation to requests made to the government and what appeal is possible from that decision. My personal opinion is that the civil service should deal first through their pay bureau and through the relationship with the civil service commission. They should decide on the rates for a particular classification. Of course, in the initial stages the associations will make their submissions and the departmental heads will, I presume, make counter submissions. But the full submission will be carried to the treasury board by the commission itself. Once the commission has taken the proposals to the government, and by government I mean either the governor in council or the treasury board as representative of the government, the commission should, in my opinion, step out of the picture as having fulfilled its function. It is in this relation that I think we have to make some improvement if we are going to have a satisfactory method of continuing associations.
The requests that are made, when they are presented to the government, will have to be considered of necessity in the light of the financial structure and financial condition of the treasury and of the government, and any requests which come from the civil service will have to take into consideration the ability of the government to pay the increases in salaries which are requested. It is in this field that I think we should have an impartial tribunal, possibly on the same lines as the arbitration tribunals in England, which would be able to make a final arbitration between the employee and the employer, in this case the civil service associations and organizations and the government or the treasury branch on the other hand. I believe that this decision should be conclusive because I am of the opinion that a strike is unlikely and is probably going to be unduly costly if it takes place in the civil service as a method of reaching a final decision. We have been learning in the last few days that the decision of parliament is final in all instances, but I think that rather than go to parliament, which would probably, in some cases, involve an action of the kind we have just taken in another field, there should be a more orderly manner of handling the final appeal and negotiations.
The civil service association recently indicated its views on this bill. It made it known that the association and its members are disappointed that certain basic principles of their position could not gain acceptance

in the committee or from the government.
The association stated:
We are as concerned with too rigid legislation as is the government. However, we do not feel that the position we took before the committee requesting negotiation, consultation and arbitration implied any rigidity whatsoever. We viewed these principles as minimum safeguards to the rights of civil servants.
The statement went on:
Our major area of concern is the lack of definition of what constitutes consultation and whether it is synonymous with negotiation as we view it. We are also concerned that there is no means whatsoever in the legislation to solve fundamental points of disagreement which must, from time to time, arise regardless of how much good faith is evidenced by the parties concerned. We thus feel that the refusal of some constitutionally acceptable form of arbitration will inhibit the staff associations in their representations.
Our other major concern is the government's belief that after so many years we can in effect only now begin to evolve a satisfactory system of dealing between it and its employees on matters concerning salaries, wages and working conditions.
They go on to point out that they do not think we should not, as in the present bill, leave this matter to evolution and the development of something which may arise from evolution. They think we should decide how we are going to arrive at a proper method of handling the matter of negotiations. They think that this should be implied in the bill and a date set for revision, if revision is not possible at the present time.
Most organizations were concerned also with the delegation of authority. The bill, unlike the previous measures, gives to the deputy heads considerable authority which they did not have before, and arguments were put forward on both sides of the question. Some said this would result in a much faster method of handling problems arising in the department, that it would allow a much closer examination of problems than might be undertaken by an impartial body not familiar with the particular problems in the department. On the other hand it was argued that this would allow for the delegation of authority down through the department and that this would in most cases prohibit any appeal from decisions. It was felt that the commission itself, which would be delegating its authority, does not exercise as much influence through this bill as the Heeney report suggested it should, and that this, its worst feature, could mean a great increase in what has been considered to be departmental patronage-patronage which may take place because of the likes and dislikes and the close working relationship of people within a department. This, of course, has happened in the past under the act and I presume it will happen again. There are two or three very good examples. I do not wish to go into

these now. They have been brought to the attention of the commission and of the department concerned and they indicate that what I am saying is true and that some change is needed. This was a problem in England on a number of occasions. The act there was changed to make the type of operation which we are considering today a possibility for a number of years, and then it was decided to go back to the system of Whitley councils and eliminate some of the delegation of authority.
I was interested to learn that a number of members of this committee were interested in continuing to give more than lip service to veterans preference. This preference in my opinion has been abused over the years not because it is not believed in but because other factors have been given more consideration. Where two equal individuals apply for the same position the preference is to be given to the veteran. I hope this situation will continue in order that those individuals who have served in the armed forces will have some advantage.
I was very interested in the speech made last night by the hon. member for Hull regarding bilingual training. This country is bilingual by constitution and I suggest there is a decided advantage generally to the Canadian people as a result. I feel that if an opportunity were provided to civil servants to become bilingual through a government implemented training program we would gain a tremendous advantage. I suggest such a training program should be adopted by the federal government so that individuals serving in government service could during working hours take advantage of learning the other language. Once those individuals have become bilingual they should be given a preference in regard to jobs, promotions and salaries. This program should be paid for and implemented by the federal government. Many individuals will not take advantage but there should be some preference given to those who do.
It is almost impossible to take an English speaking person from Ontario and place him in a job in the northern part of the province of Quebec where the English language is not spoken. The reverse of that situation is also almost impossible. I suggest if we are going to have a bilingual country we should think in terms of true bilingualism. If this were attained we would achieve the benefits of a real bilingual culture.
One of the clauses of this bill which did not seem to create much interest is that clause having reference to political participation. Individuals in this country have a right to belong to whichever political party they desire. In countries such as England
Civil Service Act
where pride is taken regarding protection of rights of individuals there has been adopted a system of declaring certain parts of the civil service as sensitive and non-sensitive areas. I think that is a reasonable and fair system. If a similar system had been adopted by this government much of the present problem with which it is faced would have been eliminated.
The political party to which I belong is supported by membership. All citizens have the right to belong to parties so supported just as individuals have the right to belong to churches of their choice and are not penalized by other churches which do not require their members to subscribe.
We should divide our civil service into critical and non-critical or sensitive and nonsensitive areas. Individuals working in areas classed as non-sensitive would then have the right to belong and support political parties. I am not suggesting that they should be allowed to take overt political action, as a number of civil servants in Ottawa have done on occasion. I do not agree with that at all and can state that on the occasion with which I am familiar when such overt action has occurred it has not been on the part of individuals who support the party to which I belong. Many of these individuals have taken this overt action in order to get jobs in the civil service.
While discussing the bill in this particular context we should give consideration to the freedom and rights of individual citizens, whether or not they are members of the civil service. They should be allowed to participate and support any political party they choose. They should also be allowed to vote in any provincial, dominion or municipal election. There should be a clause included in this bill allowing civil servants time off in order to do that. I believe they should also be allowed under this bill to enroll in a political party if they desire. I believe that the political affiliation of civil servants has little or no effect on the jobs they have and little or no effect upon the government. I suggest, for instance, a secretary in the pool carrying a membership card of a political party causes very little concern on the part of anyone. I hope the government will give consideration to this situation.
It might be interesting to note the changes which have been made in this regard by one of our provincial legislatures. Before referring to that particular change I should like to read the "Revised Statutes of Canada, 1952", chapter 48, which is an act respecting the Civil Service of Canada.


The Deputy Chairman:: Before the hon. member begins the quotation I regret to have

Civil Service Act
to advise him that his time has expired. Is the hon. member the first spokesman for the C.C.F. party?


Some hon. Members:: Yes.


Gordon Campbell Chown: Does the committee give unanimous consent to allow the hon. member to continue?


Some hon. Members:: Agreed.


William Arnold Peters: Mr. Chairman, I do not wish to abuse this concession but I should like to read from that portion of the revised statutes to which I have referred, the following:
(1)	No deputy head, officer, clerk or employee in the civil service shall be debarred from voting at any dominion or provincial election if, under the laws governing said election, he has the right to vote; but no such deputy head, officer, clerk or employee shall engage in partisan work in connection with any such election or contribute, receive, or in any way deal with any money for any party funds.
(2)	Any person violating any of the provisions of this section shall be dismissed from the civil service.
Part V-Exceptions and special cases
(1)	The provisions of this act do not apply to positions in connection with the government railways or any railway owned or controlled by Her Majesty, or to any position on any ship of Her Majesty, until parliament otherwise enacts.
(2)	In this section the expression "ship of Her Majesty" includes every description of vessel, however propelled, that is used in navigation or in the improvement of navigation and is the property of or chartered or employed by Her Majesty, or the cost of which, or any portion of the cost of which has been defrayed out of the consolidated revenue fund of Canada.
The provisions of this act do not apply to the position of postmaster of any revenue post office the revenue of which does not exceed three thousand dollars per annum; but the preference provided by section 28, in favour of the persons mentioned therein, shall be applied in respect of appointments to such positions.
It is interesting to note that Saskatchewan in 1953 revised its statute in this regard. I should like to quote a portion of that revision. Chapter 7, part IV (i) reads as follow:
No person in the public service shall;
(a)	be in any manner compelled to take part in any political undertaking, or to make any contribution to any political party, or be in any manner threatened or discriminated against for refusing to take part in any political undertaking; or
(b)	directly or indirectly use or seek to use the authority or official influence of his position to control or modify the political action of any other person; or
(c)	during his hours of duty engage in any form of political activity; or
(d| at any time take such part in political activities as to impair his usefulness in the position in which he is employed.
(2) Any person in the public service who desires to become a candidate for public office shall be entitled to leave of absence for 30 days prior to the date of the election.
[The Deputy Chairman.]
I think we should reconsider this section and include in the federal statute some of the protections that have been adopted in Saskatchewan. This is a real threat, Mr. Chairman. Under the federal statute, people are prohibited from taking part in an active way in politics; but in Saskatchewan protection is given against making civil servants take part in electioneering in a way in which they may not wish to do. I do not wish to go into a discussion of how that sometimes happens but I should like to mention just one case. In the last provincial election in my area-I give this only by way of explanation-the civil servants who worked in the liquor control board stores, in the department of highways, and in the department of lands and forests were all given the very broad suggestion that it would be appreciated if they would spend some time in seeing that the good work being carried on by their departments was furthered by the re-election of the government candidate. At that time the premier of the province went so far as to say to some of the leading people in that riding that if the government candidate was not elected he would resign as premier of the province of Ontario. I suggest that not only should we have the protection but people should not abuse it. I am completely in agreement with this. I do not want to see government officials going around in an official capacity and speaking on behalf of the government or working for any party. I think protection should also be given against those who may be forced to do this not of their own volition. I think this particular matter should get some further consideration, Mr. Chairman. I hope the government will not be influenced by the fact that the party to which I belong has always been financed by membership fees, which are a contribution and which would probably be illegal under this legislation.


Mr. MacLellan:: Mr. Chairman, my first words on this most important bill are to thank the Minister of Finance for his remarks last evening about the careful and intensive work done by the committee in considering the bill. I think all members who served on the committee can say with modesty that we worked many long hard hours both in committee and outside on the bill, learning of the problems of the civil service and of the administration, to bring to this house as good a bill as we possibly could.
In the course of our meetings-and there were some 23 of them-we made about 30 amendments to the bill and have brought these forward for the consideration of this committee.

I should also like to thank the hon. member tor Hull and the hon. member for Timiska-ming for their very pleasant remarks to me as chairman of the committee, in opening the debate on the bill last evening. I should like to express to them and to all members of the committee my thanks for the serious way in which they tackled the job of consideration of this civil service bill and for their co-operation at all times with me as the chairman, and with each other in the work of the committee.
I think one of the most important things about the committee, Mr. Chairman, is that it approached its task with a non-partisan attitude. All of us worked together to try to draft the best possible bill we could for the civil service and to assist the work which the civil service does for our nation.
On behalf of the committee, I should also, like to express our thanks to the civil service commissioners, the Hon. S. H. S. Hughes, Q.C., Miss Ruth Addison and Mr. Paul Pelletier, who came in day after day, and attended hour after hour, giving us so much of their time and their special knowledge and ability to assist and guide us in the work which was before us. We were also very ably assisted in very many meetings by Mr. Charles Mackenzie, the assistant secretary to the treasury board, whose advice and experience on the work of the civil service was very valuable to us in all of the months that we were working on this bill.
The briefs put forward by the civil service associations-every major civil service association in Canada brought forward briefs -were appreciated very much by the committee. The briefs were well prepared and in most instances were serious and responsible attempts to improve the working conditions of the civil service and to improve the administration of the service.
In particular I should like to compliment the members of the committee who came from the Ottawa area, the hon. members for Carleton, Hull, Ottawa East and Ottawa West, who gave considerable time and study to the bill.
While I realize that members of the committee would like to see the bill proceeded with as soon as possible, to see the improvements and advantages which flow from it made available to the civil service and to the country, I should like to take a moment to discuss a few of the improvements which will be made by the bill.
First of all, may I refer to the fact that this bill differs from the old act of 1918 in that it provides in clause 65 the right of the civil servant to his pay. This is a departure from the previous act and indeed from the general concept that the crown has no
Civil Service Act
obligation to pay any of its employees, that they receive pay as a matter of grace. As a result of this bill the civil servant has the right to go into court, come to this parliament or anywhere else to ask for his pay as of right for services rendered.
There was some commentary by the hon. member for Timiskaming and the hon. member for Hull on the widening of the powers of the deputy heads of departments. One of the purposes of the bill was to streamline the administration of the civil service and of government departments, and it was to this end that the Heeney report very strongly recommended that the powers of the deputy heads should be widened. You will note, Mr. Chairman, that coupled with the widening of the power of the deputy heads is a new provision not to be found in the old act which is there to protect the rights of the civil servant. I speak, of course, of the new appeal provisions which are to be found in the bill now before the committee. Under the old act there was no provision at all for the right of appeal except in the case of a suspension where the commission might review the situation and perhaps decide that the punishment inflicted was too severe. However, in this legislation a wide range of appeals is authorized from administrative decisions within the department and the security of the civil servant is much enhanced thereby.
A third improvement provided by this bill is in the fact that the distinction between temporary and permanent employees, which heretofore existed, has been removed. Now, even where appointments are not permanent, the employee who is in fact perhaps temporary enjoys the status and the advantages of a permanent employee of the civil service.
Another improvement which I think is noteworthy is the new clause which provides that people in the public service of Canada, in the armed forces and in the R.C.M.P., may now have the right to compete and transfer to the civil service. This was a recommendation of the Heeney report and is purposed toward the utilizing of the investment of the taxpayer in many public servants who could not otherwise follow careers in the civil service. This is an important change both for people in the R.C.M.P. and the armed forces who now have the right to transfer to the civil service and, indeed, for the people of Canada generally.
Moreover the new provision in respect of bilingualism is, I think, a very important one. When the hon. member for Hull was speaking last evening I noted that he said that he was not entirely satisfied with the provisions with regard to bilingualism. He referred to the French speaking people of Canada as poor relations. That is a phrase I have never heard

Civil Service Act
used before in speaking of the very large French speaking population of Canada and I do not think it should be accepted. He said that some preference should be provided for bilingual civil servants. The bill does in fact provide this, inasmuch as a new test has been introduced by the bill whereby when a person is to be appointed to an office he must have a knowledge of that language which is required, sufficient to serve the public of the area where he is to perform his duties. Apropos of that, Mr. Chairman, I should like to draw your attention to the comments of the Hon. S. H. S. Hughes, Q.C., chairman of the commission in speaking on this matter. He said:
Clause 47 of the bill lays upon, the commission the responsibility of seeing that this consideration-
That is the consideration that people working in an office where they will be serving both elements, French and English, should be bilingual, or in any case sufficiently so to serve the public whether French or English. I continue:
-is borne in mind not only in local positions but in head office positions of departments and not only in the language of the majority but in terms of the use of both languages where it is considered that their use is necessary to give effective service to the public. This will enable the commission in practice to give preference to applicants for positions and existing employees who are bilingual as circumstances may require.
There is in fact therefore a preference for bilingual people incorporated for the first time by the bill before the committee this afternoon.
Another change that is proposed to be made by this bill is to remove the prohibition against persons who have not been resident in Canada for five years serving in the civil service. While preference is given to Canadian citizens under the bill, where there are not persons available to fill positions within the civil service who have been in Canada for more than five years the commission can very properly turn to new Canadians who have the qualifications for the work.
I should like to turn now to what has been considered as one of the most important new provisions of the bill, and that is the construction of a new relationship between the government represented by the Minister of Finance and civil service employees. The civil service associations came before the committee asking that some form of direct consultation or negotiation should be set up between the Minister of Finance and the various staff associations so that the Department of Finance and the staff associations could gather around the table, without any intermediary, to discuss matters of pay and so on. They also suggested that some form of arbitration

should be established so that where disputes could not be settled under this new consultative process an arbitration board would be available to the parties concerned.
I am very pleased to say that at the request of these associations clause 7 of the bill was amended by the committee to provide for direct consultation between the Minister of Finance and the staff associations. It has been said that instead of using the word "consultation" the word "negotiation" should have been used. That was the position taken by the hon. member for Hull when he spoke last evening. Frankly, I see very little difference in the use of the two words. The most important thing is that clause 7 as now before the committee provides that, and I quote from clause 7:
The commission, and such member of the public service as the Minister of Finance may designate, shall from time to time consult with representatives of appropriate organizations and associations of employees with respect to pay-
And so on. In other words, the staff associations have the same right to come to the minister as the minister has to go to them to discuss pay and, through the commission, other terms and conditions. This is a very important step and I feel it meets the wishes of the great majority of the civil service in that regard.
As to the matter of arbitration, while the committee did not agree that an amendment should be made to the bill which would provide for an arbitration procedure by legislation, we are satisfied with the statements of the Minister of Finance that arbitration can be developed as it has developed in England along the lines of normal evolution.
I should point out, Mr. Chairman, that there is no need for words in the bill to establish the right of arbitration or the fact of arbitration. The bill is permissive. There is no reason why the staff associations and the Minister of Finance as parties to a dispute at any time cannot call upon an arbitration board to find a solution to their problems.
Progress reported.


Mr. Speaker:: It being five o'clock, the house will proceed to the consideration of public and private bills, the former having precedence.



BUSINESS OF THE HOUSE

Gordon Minto Churchill: Mr. Speaker, at this point I wonder whether I could give our answer to the question that was raised by the hon. member for Timiskaming, I believe about 45 minutes ago with respect to whether we might meet tonight and tomorrow evening with the intention of attempting to adjourn tomorrow

night. We are prepared to do so and we have reduced to a bare minimum the items which we think might be considered by the house before adjournment. They consist of four items, the C.N.R. financing bill, the Income Tax Act to the extent of passing second reading but not consideration of the bill in committee stage, an appropriation act, as I mentioned last night, to appropriate funds in respect of the 11 departments which have passed the committee and then interim supply to carry us on during the course of the adjournment. A fifth item might be a report from the committee on rules and procedure. As far as the government is concerned, those are the four matters that we consider could be dealt with today and tomorrow, and adjournment tomorrow night.


John Whitney Pickersgill: I regret to say that I have not any mandate to make any commitment as far as we are concerned. I am quite prepared to consult with my friends and to give an answer at six o'clock. However, I would have very grave doubts about our willingness to sit this evening. It seems to me that there are enough people having enough heart attacks around this place now without having any addition to them. I should just like to make sure that I understand correctly what the proposition is. As I understand it, the proposition is to take only the second reading of the income tax bill and the appropriation bill about which we had been given no notice until last night, I believe, something which is a very unusual procedure.


Donald Methuen Fleming: It has been done before.


John Whitney Pickersgill: It may have been done before but I repeat, Mr. Speaker, that it is a very unusual procedure in the years I have been observing this house since 1938. We should want to know why this unusual procedure was being followed. I am not quite sure of the items. There was the C.N.R. bill. Is that the suggestion?


Gordon Minto Churchill: The C.N.R., income tax bill second reading, appropriation bill.


John Whitney Pickersgill: The appropriation bill and interim supply. I may say that I am not in the least sanguine about this proposition, but I do not feel I am competent to say yes or no at this stage.


William Arnold Peters: I thank the house leader for his consideration of this proposal. I believe we are all anxious to get out. I am sure that I can speak for our group in this respect. If this is the business-and I agree that it is important business that is of necessity before us-we would be agreeable to a proposal to extend the hours tonight until
Private Bills
10.30 and we would be willing to sit tomorrow until this business was finished.


Some hon. Members:: Agreed.


John Whitney Pickersgill: Mr. Speaker, I wish to be absolutely sure about the matter before I talk to my friends. I wish to be absolutely sure that the government has no intention of going beyond second reading of the income tax bill; in other words, this great expansionist budget is so unimportant that it does not matter whether or not we pass this Income Tax Act amendment.


Some hon. Members:: Oh, oh.


Gordon Minto Churchill: If the decision should be reached to go on tonight, Mr. Speaker, we would take up the C.N.R. bill this evening at 7.30. I judge that at about five minutes to six o'clock we shall be able to get a response from the opposition.


Mr. Speaker:: May I inquire then what the proposal is, in view of the discussion back and forth? Is it proposed to proceed with public and private bills?


Gordon Minto Churchill: As far as we are concerned, we are prepared to continue with the discussion of the Civil Service Act during this hour.


John Whitney Pickersgill: Mr. Speaker, I think we should not abridge the ordinary rights of hon. members.


Mr. Speaker:: Then the house will proceed to the consideration of public and private bills.



CRIMINAL CODE


[Stage Direction]
On the order:
Second reading of Bill C-38, an act to amend the Criminal Code (Capital Punishment).-Mr. Drysdale.
John Andrew W. Drysdale: Mr. Speaker, in view of the fact that the majority of the suggestions contained in my private member's bill have already been adopted in government legislation I would ask the consent of the house that it be withdrawn at this time.


Mr. Speaker:: The hon. member is quite entitled to withdraw his bill before it has been placed before the house.


Some hon. Members:: Agreed.


Mr. Speaker:: It will therefore be noted as dropped.
Bill withdrawn.

Private Bills



AMENDMENT TO PROVIDE FOR APPLICATION BY TRUCKERS TO TRANSPORT BOARD ON COMPETITIVE RATES

[Stage Direction]
On the order:
Second reading of Bill C-39, an act to amend the Railway Act.-Mr. Browne (Vancouver-Kingsway).
John Ferguson Browne: Stand.


John Whitney Pickersgill: Mr. Speaker, there is not unanimous consent to let this bill stand. It stands in the way of other bills that are on the order paper. If the hon. gentleman does not wish to proceed, it should take its place in the queue.


John Ferguson Browne: I
should like to explain that there is a technical matter that has arisen in the procedure on the bill. Hon. members will recall that a similar bill having to do with the Transport Act went through the house a short time ago and is now before the other place which has taken the position that it is doubtful to proceed with this bill until the royal commission have completed their hearings. I believe this could very well be cleared up before next week when it would arise again and that I would then be in a position to go ahead with the matter.


Mr. Speaker:: If the hon. member does not wish to proceed, he is not obliged to do so, as I understand the rules; it is only where the debate is proceeding and the motion has been proposed and is in the possession of the house. Is the government prepared to let the bill stand?


Gordon Minto Churchill: Yes.


Frank Howard: There is another matter with which I should like to deal, perhaps on a point of order. I am not objecting to the government request that this bill stand but it is a new departure from the procedure the Minister of Veterans Affairs (Mr. Churchill) announced a few weeks ago with respect to private members' bills, in that the government would not request that they stand merely for the convenience of the member. If the house leader is changing the rulings and decisions he made some months ago with respect to the hour devoted to consideration of public and private bills, that is one thing; but, if it is merely a question of playing favourites, it is another thing.


John Whitney Pickersgill: I should like to say a word on that point, Mr. Speaker. There are some of us who have private bills on the order paper and who have been waiting

patiently all session. It seems quite unreasonable that certain hon. members who are not prepared to proceed at a certain time should keep priority and thus prevent others from getting their bills before the house. It certainly would not be very agreeable to us to have the government seeking consent for the bills of its friends and not doing so for the bills of hon. gentlemen on this side of the house. I think that usually these things have been done by agreement. When they are done by agreement and the government gives the technical consent, that is fine. However, I agree completely with the hon. member for Skeena that there should not be one law for one side of the house and one for the other side.


Gordon Minto Churchill: Mr. Speaker, there is not one law for one side and one for the other. This is a whole bunch of nonsense that we are hearing again. If the record is examined, it will be found that far more bills emanating from the other side of the house have been allowed to stand during the course of this session than bills sponsored by government members. At this stage of the session, as the very reasonable request put forward by the hon. member for Vancouver-Kingsway means only a delay of perhaps one week, I asked that it stand. It was for that reason I suggested that this bill stand.


Mr. Speaker:: No. 2 stands.


Frank Howard: Does that not show that you have played favourites?
Order stands.



CANADA ELECTIONS ACT


[Stage Direction]
On the order:
Second reading of Bill C-41, an act to amend the Canada Elections Act (Age of Voters)-Mr. Racine.
Mr. Mcllraith:: Stand.


Mr. Speaker:: Is the hon. member not prepared to proceed?


Joseph-Alphonse-Anaclet Habel: Stand.


Frank Howard: I would point out if I may, Mr. Speaker, that a bill attempting to do the same thing has already been entered for second reading and debate has started on it. It is a bill that stands in my name. Second reading was moved some months ago and it is down here somewhere for resumed debate. I cannot pick it out right at the moment. However, it deals with precisely the same subject matter.


Mr. Speaker:: In the absence of the hon. member and in the absence of a request by the government that it stand, the bill is bypassed.
Order stands.



FRASER RIVER


Mr. A. D. McPhillips (Victoria, B.C.) moved: the second reading of Bill No. C-43, respecting navigation and salmon fishery on the Fraser river.
He said: Mr. Speaker, in rising to move second reading of this bill there are two things with which I wish to deal preliminarily. I have been asked why the hon. member for Victoria should be so greatly concerned about the Fraser river which, after all, is some distance from my own constituency. If the geography and habits of the Pacific salmon are understood, the reason I am concerned is readily apparent. In addition to that, I have a great many fishermen in my constituency; and I am a British Columbian and I am very proud of our Pacific salmon fishery.
Every fish caught by the fishermen who reside in my constituency is on its way to the spawning grounds of the Fraser river and its tributaries. With regard to federal jurisdiction, Mr. Speaker, some hon. members have said the Fraser river is entirely within the province of British Columbia and have asked how the parliament of Canada can have anything to do with it. There again the answer is very simple. At the time of confederation and for many years before that the Fraser river was a navigable river. Under the terms of the British North America Act the parliament of Canada has control over rivers that were navigable rivers at the time of confederation. Also, the parliament of Canada has control over the deep-sea fisheries off our coasts and the attendant inland fisheries which result from those deep-sea fisheries. Therefore on two counts the parliament of Canada has every right to deal with the Fraser river and what goes on in the Fraser river, both from the standpoint of navigation and fisheries.
The average value of the Pacific salmon industry is approximately $90 million per annum. In 1962, when there will be the great Adams river run again-Adams river is a tributary of the Fraser river-the industry will be worth a great deal more; but it averages $90 million. This is to say nothing of the huge investment in fishing vessels, nets, equipment and all the money paid out 90205-6-487
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in wages for building those ships, nets, equipment and paying all the people employed in the fishery.
There is something else, Mr. Speaker, that I think this house should know if it does not know it already. The Fraser river of British Columbia is the greatest salmon river in the world. Prior to the industry on the Fraser river there had been a salmon fishery on the Columbia river in the United States, on the coast of Oregon and in the upper regions of that river. It was not as large an industry as ours; it was not nearly so valuable, but it was valuable earlier. The Fraser river fishery was developed and the techniques existing on the Columbia river were followed.
I know that when I was a boy the term "Columbia river boat" was commonly used. This was the type of boat that nearly all our gillnetters used and was a boat that had been developed in connection with that fishery on the Columbia river. It is common knowledge that the fishery on the Columbia is ruined. It is true that a few fish spawn in the Priest river, one of its tributaries. However to all intents and purposes the great fishery on that river is ruined. It was ruined because of the construction, at the time of the late President Roosevelt and his new deal, of two new dams on that river, the Bonneville dam close to the mouth of the Columbia and the huge Grand Coulee dam which is very much further up the river.
At that time the president of the United States was worried about it, and I will deal with that later. But we had a procession of professors and engineers who assured the president of the United States, "There is nothing to this. Salmon and dams can exist on the Columbia river". I have every respect, and always have had, for professors and engineers, but when it comes to a spawning river I have a lot more respect for the Pacific salmon.
In the case of Bonneville, because of the treaty signed many years ago between Canada and the United States, the United States agreed that they would not interfere with navigation on the Columbia river and a ship canal and lock were built on the Bonneville dam. Would you believe, Mr. Speaker, that some of the professors and engineers said, "Well, that is how the salmon will get up. When the canal gates are open to let a ship in, the salmon will swim in with it; and when it is taken up, the salmon will swim out"? They did not know much about the Pacific salmon, because that certainly did not happen.
I have a work here which is really the only work on this subject in the form in which it is written. It is a book written about the Columbia river fishery by Anthony Netboy

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entitled "Salmon of the Pacific northwest. Fish v. dams". I am indebted to the hon. member for York-Scarborough (Mr. McGee) for bringing this work to my attention. In effect this book is an apologia, because Netboy was one of the men who thought this thing could be accomplished on the Columbia river and he afterwards wrote a sort of apologia. At page 10 of the foreword-which was written by the late Senator Neuberger of the state of Oregon, who was a great proponent of the maintenance of the fishery in that river -there is found this passage:
"Go and investigate the fish v. dams question," Mr. Netboy was told by Henry Alderman, then the assistant to Dr. Paul J. Raver, Bonneville's administrator.
So Mr. Netboy did go and make some investigations, but regrettably he came up with the wrong report and is now apologizing for it. At page 42 of this work, under the heading "Enter the federal dams", there are a few excerpts which I should like to read:
The diminishing runs of salmon, resulting from numerous and complex causes, had long worried the fishery industry when a new and potentially adverse factor entered the picture-start of construction in 1933 on Bonneville dam, followed shortly by ground-breaking for mammoth Grand Coulee dam. Bonneville was located on the Columbia 145 miles from its mouth, Grand Coulee 597 miles from Astoria.
That is a city at the mouth of the Columbia.
Bonneville was to have a 60-foot head, Grand Coulee 316 feet. Never before had a major salmon run been required to hurdle an obstruction as formidable as Bonneville.
The first barriers constructed in the Columbia river watershed were primarily irrigation dams. They were not the massive structures that came into being with the development of the river's hydroelectric potential. Some of the earlier dams built on the tributaries for power and irrigation diversions did not include facilities for passing fish migrating upstream. Consequently, a terrific toll was exacted at these points on certain races of Columbia river salmon. In fact, entire runs into several tributaries were almost completely wiped out.
In addition to dams without fish passage facilities, many other dams were built in the Columbia river basin that had provisions for passage of adult fish, such as the low dam at Willamette falls (Oregon City). But even here no safe passage was provided to the downstream migrants-the tiny fish.
That is the fingerlings that have to come down:
When the Bonneville project was authorized by President Roosevelt as a public works project, Frank Bell, U.S. commissioner of fisheries, was requested to find some way of getting the salmon over the dam. "I wrote to every civilized country in the world," said Mr. Bell, and "at no place... could we find where they had passed fish over as high a dam as Bonneville would be."
Naturally there were widespread-almost hysterical-fears that Bonneville would spell the end of the Columbia river salmon runs and confine the fishery to the lower river, thus wiping out part of an industry then valued at some $10 million

annually. In an article in the Saturday Evening Post in November, 1937, when the dam was nearing completion, Richard L. Neuberger wrote:
That is the late senator I mentioned before.
"Prevalent throughout the principal salmon-producing region of the world today is the almost unshakable opinion that within a few years the fighting fish with the flaky flesh will be one and the same with the dodo bird-extinct". Not only were commercial fishermen, anglers, and the salmon industry generally apprehensive, but scientists and conservationists from distant parts of the country felt obliged to voice their fears. For example, Arthur Newton Pack, president of the American nature association, declared that the dams being built on the Columbia would kill a fishing industry providing employment to more than 25,000 people annually. E. D. Clark, secretary of the association of Pacific fisheries, claimed that the dams would be disastrous. He foresaw the end of the runs of the giant Chinook.
The Indians were equally pessimistic. According to Neuberger, George Red Hawk, aged chief of the Cayuse Indians, who was spearing salmon on the river before the railroads had even reached the Columbia gorge, "looked grimly at the surging river. 'White man's dams,' he said, 'mean no more salmon.' "
Such strenuous objections were raised by fishery people to the blockading of the river by Bonneville dam that the corps of engineers was forced to include fish passage facilities in the plans for this structure. At first they were to consist of only four conventional ladders of moderate size-like those at Oregon City-estimated to cost $800,000. When fishery biologists demonstrated that they would be palpably inadequate to handle the large fish traffic using this stretch of the river, an elaborate system of traps, locks, elevators, canals and ladders was devised which added $7 million to the cost of the dam.
Notwithstanding that expenditure the Columbia river fishery has been ruined and that great source of food no longer exists. That, as I say, appears in this author's book, which is an apologia for his previous advice which he now admits was faulty.
Today in British Columbia we have engineers coming up again with the same sort of applesauce as they fed to President Roosevelt. I have an example right here. This is from the Canadian Press of June, 1961 under a Vancouver dateline. It appeared in just about all the papers in British Columbia and, I think, throughout Canada generally. The heading is: "Both Power Systems and Fish Possible in B.C. River System" and the article reads:
British Columbia can have both fish and power from its fast-flowing river systems, the engineering institute of Canada was told today.
Papers presented at the institute's annual meeting indicated that the baffling problem of building power dams and at the same time allowing salmon to get to their spawning grounds, has at last reached a stage of solution.
The papers indicated, too, that with proper measures the salmon yield can be substantially increased. At the same time, continued and increased research was urged.
Val Gwyther, Vancouver consulting engineer, stated:

"The present policy of retardation of power development in a watershed, due to our inability to produce the answer to beneficial fish migration, is in the past, and these watersheds now are open in development of both fish and power."
There is no doubt, Mr. Gwyther said, that we now can produce salmon species in great quantities, jointly with other resource values, and with economy.
Mr. Gwyther's paper went at length into the problems of fish propagation. Rearing capacities of natural and impounded lakes should be utilized by artificial fertilization and incubation of eggs to give a yield far in excess of that from natural spawning grounds.
There again, all we have is a pious statement from this engineer that everything is now all right. But you never see any concrete statement as to how it is going to be done. What bothers me at the present time, because of the difficulty existing in British Columbia, because of the attitude of that government in British Columbia, the trouble with the Columbia and the Peace river, is this: I am fearful that we are going to wake up one day and find that the premier of British Columbia has given a water licence on the Fraser river. The British Columbia Electric Company is ready now and has been ready for years. They have all the plans ready. They can jump on the Fraser tomorrow and build two dams. That is what faces us, and that is why I think, now, that the parliament of Canada has a right to put an end to this thing forever and keep this great source of food, this great river and the industry which depends on it safe for Canadians now and forever. We should do that now before we lose it. I bespeak the support of hon. members for the passage of this bill.



PRIVILEGE


John George Diefenbaker: I should like to rise on a question of privilege in connection with the blues of today, page W-5. I shall have to read this statement I made and then the interruption. I am reported to have said:
I have simply pointed out, Mr. Speaker, that the slur can only have been that, because there has been nothing else except the suggestion of disagreement. How many people in public life receive a pension of that size? I have been in public life longer than Mr. Coyne. When I retire, no matter how many years from now it may be, I will be in the same position as Mr. St. Laurent.'
Then there was an interruption by the Leader of the Opposition:
Oh, that is the reason.
The record continues:


John George Diefenbaker: Yes.


Lester Bowles Pearson: Now we know.
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Question of Privilege


John George Diefenbaker: That is true. I am glad the hon. member mentioned that, because he has given years of devoted service and I am prepared to admit it.
What I understood the hon. gentleman to say was: "I am in the same position".


Mr. Benidickson:: On a point of order, Mr. Speaker. May I speak to a point of order?


John George Diefenbaker: I am speaking to a question of privilege.


William Moore Benidickson: I rise on a point of order with respect to the question of privilege.


Mr. Speaker:: I think the point of order would intervene; if the Prime Minister would allow me to deal with it-


William Moore Benidickson: In connection with a question of privilege, it always does.


Mr. Speaker:: Order. Would the hon. gentleman please resume his seat? In my view, where a point of order is taken on a question of privilege it should be dealt with before the question of privilege is completed.


William Moore Benidickson: Mr. Speaker, my point of order is that not all hon. members of the house have the privilege of looking at what the Prime Minister refers to as blue sheets. I certainly do not.


An hon. Member:: You can get the white
ones, though.


William Moore Benidickson: No.


Mr. Speaker:: What is the hon. member's point of order?


William Moore Benidickson: My point is that I have never known an occasion when during the day while a debate was taking place any member has risen in his seat, in my experience, to change something that he has found in the text of Hansard on the blue sheets.
Mr. Speaker. Order. I do not see a point of order there. If the hon. member disagrees with the question of privilege he will have the right to comment afterwards.


William Moore Benidickson: I wish to say, on the point of order-


Mr. Speaker:: I have found no point of order and would ask the hon. member to allow the Prime Minister, who has the floor, to complete his statement.


William Moore Benidickson: I am rising on a point of order.


Mr. Speaker:: I have heard the hon. member.


William Moore Benidickson: No. My point of order is that we are dealing with private member's legislation during this hour.

Question of Privilege


Mr. Speaker:: That is true.


William Moore Benidickson: The Prime Minister has interrupted the ordinary proceedings of debate.


Mr. Speaker:: That is another point entirely. It is true, but if the hon. member will refer to the rule he will find that a question of privilege which is immediate may be raised at any time when an hon. member can get the floor.


John George Diefenbaker: I do not fear the interruptions. I thought the Leader of the Opposition said: "I am. in the same position." Reading it that way, the house can-


George James McIlraith: May I raise a point of order?


Mr. Speaker:: I am sorry, but there is another point of order intervening.


An hon. Member:: The hon. gentleman has just come into the chamber.


George James McIlraith: My only point is this. The Prime Minister was in the chamber a few moments ago when the Leader of the Opposition was here. Surely, since the Leader of the Opposition is being referred to in this way, and a correction made on account of his interjection, he should be sent for. I see that since I have risen on this point of order the Leader of the Opposition has taken his place, and perhaps the matter should be restated. I think that is a fair procedure.


John George Diefenbaker: Mr. Speaker, I have said I thought the Leader of the Opposition said "I am in the same position" instead of "Oh, that is the reason". The record shows the following exchange:


John George Diefenbaker: Yes.


Lester Bowles Pearson: Now we know.


John George Diefenbaker: That is true.
I paid a tribute to the Leader of the Opposition which clearly indicates that 1 misapprehended his interruption, because I then said:
That is true. I am glad the hon. member mentioned that, because he has given years of devoted service and I am prepared to admit it.


William Moore Benidickson: What has this to do with the private members' hour and the Prime Minister's intrusion upon it?


Mr. Speaker:: Order.


John George Diefenbaker: Keep quiet and be sober for a change.


William Moore Benidickson: This is not a sober judgment on your part.


Mr. Speaker:: Order. Would the hon. member please allow this matter to be dealt with in an orderly manner. The Prime Minister has drawn attention to a misunderstanding

of an interruption and has made his explanation as a question of privilege, which he is entitled to do at any time of the day. If any hon. member wishes to comment or discuss the question of privilege, particularly the Leader of the Opposition whose intervention is the one concerned, I am prepared to hear him.


Lester Bowles Pearson: Mr. Speaker, I feel that if a change of this kind is to be made-and I am not quarrelling with the Prime Minister's right to suggest a change-it should be made after Hansard has appeared when hon. members who are concerned, as well as the Prime Minister, have had a chance to see it.


Some hon. Members:: Hear, hear.


Lester Bowles Pearson: Mr. Speaker, in view of the fact that the matter has arisen let me say this. The Prime Minister made a statement this morning, which I should like to correct as a question of privilege of the same kind, in which he-I was going to use the word "charged"-me with using certain words, and he gave the page in Hansard. I found it very difficult to believe that he had actually used my name, but when the blues were sent to me, because I had intervened, I found not only that the Prime Minister was mistaken in attributing these words to me but that they were words of the Minister of Finance. I was going to rise on a question of privilege tomorrow morning after Hansard had been printed to bring this to the attention of the house. I think the Prime Minister could have followed the same course.


Mr. Speaker:: As I understood the Prime Minister he was making an explanation of his comments and not asking for a change to be made.


John George Diefenbaker: I am not making a change, I was simply saying, Mr. Speaker that-


William Moore Benidickson: You were interrupting the routine proceedings of the house during private members business hour.


John George Diefenbaker: -I had paid a tribute to the Leader of the Opposition on the basis of what I thought his interruption was, namely, that he was "in the same position" and would not receive any more than $3,000. I then went on to pay a tribute to him for his great service to the country, and that fact is true. As it is worded in Hansard it is obvious that is what I had in mind.



FRASER RIVER


[Stage Direction]
The house resumed consideration of the motion of Mr. McPhillips for the second

reading of Bill No. C-43, respecting navigation and salmon fishery on the Fraser river.
John Andrew W. Drysdale: Mr. Speaker, in rising I hope I am referring to the right bill.


Lionel Chevrier: Are you referring to the Aeronautics Act?


John Andrew W. Drysdale: Are we dealing with the fisheries bill?


Mr. Speaker:: We are dealing with second reading of Bill No. C-43.


John Andrew W. Drysdale: I just wanted to make sure that I was referring to the right bill. As the seconder of the bill sponsored by the hon. member for Victoria I thought perhaps I should indicate what my interest is in this matter.
My constituency, and particularly the Richmond portion of it is situated at the mouth of the Fraser river. It should also be obvious to all hon. members present that I am interested in this particular measure because of the existence of the community of Steveston, which is a fishing community located very close to the mouth of the Fraser. At the peak of the fishing season approximately 10,000 fishermen actually base their salmon fishing activities in that area.
First, I felt I should point out that although I am the seconder of this bill and approve of the principles enunciated therein, I do not think it goes far enough. When I spoke earlier in respect of this bill, actually in 1959, I said at that time that although I endorsed the principles I felt that the bill did not perhaps go as far as I should have liked.
In the first part of the bill the sponsor has drawn attention to the fact that there should not be any hydroelectric power dams or other navigation dams which would obstruct salmon fishing. However, in the second part of the bill it is suggested that this would not apply to any project of the government of Canada dealing with navigation, flood control, river bed erosion, current control and so on.
During one of the meetings of the fisheries committee the sensitivity of this salmon fishery was very forcefully drawn to our attention. The only point that concerns me about the hon. member's bill is that the government of Canada, despite how well meaning it is, may nevertheless create the very difficulties which the sponsor of this bill is attempting to obviate.
The second report of the fisheries committee of 1959 at page 85 states as follows:
Your committee held seven meetings, one of which was devoted to the consideration of a preliminary report on flood control and hydroelectric
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power in the Fraser river basin in British Columbia, particularly in respect of fisheries and certain relevant aspects referred to in the said report.
This report then states:
Your committee recommends that the government consider the advisability of hastening the re-appointment of the Fraser river board in conjunction with the government of British Columbia in order that the said board achieve its aims, specially with reference to the protection of fisheries in all its aspects.
The committee went on to make this further important recommendation unanimously:
Your committee expresses the opinion that no dams should be built on the Fraser river, or any of its tributaries, where such dams will, in the opinion of the Minister of Fisheries, interfere with, or be detrimental to anadromous fish runs.
I think the very important point raised there is that the control and supervision should be in the hands of the Minister of Fisheries (Mr. MacLean) and his departmental officials because it seems to me that there is a patent loophole in the second part of this bill which would make it possible for irreparable damage to be done to these particular fish runs.
I think that the sponsor of this bill indicated the legislative justification for the amendments contained in this bill when he drew attention to the fact that it came within the British North America Act. This particular phase of the situation does specifically come within section 91 (2) of that act which deals with coastal and inland fisheries. The matter of jurisdiction in this regard is recorded in the Canada Year Book for 1960 at page 630. I should like to read a portion of what is stated there, as follows:
The British North America Act gave the federal government full legislative jurisdiction for the coastal and inland fisheries of Canada and under this act laws are made for the protection, conservation and development of the fisheries throughout the country. However, the provinces have, by agreement, assumed administrative responsibilities in varying degrees. Consequently, though all the regulations governing fishing are made by the federal government, the work of administering the fisheries (enforcing the different laws and regulations, inspecting fish products, issuing licences, etc.) is done without duplication of staff either by federal or by provincial officers, according to arrangements.
That is further supported by the contention that the Minister of Fisheries and his department must have very strong supervision, which is referred to at page 631 of the Canada Year Book. The responsibilities of the Department of Fisheries are set out very succinctly there. I should like to quote a paragraph which deals with these responsibilities, as follows:
The chief responsibilities of the Department of Fisheries throughout Canada are, in brief: to conserve and develop Canada's primary fishery resources: to encourage the development of the

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fishing industry in the national economy; to inspect fish products, establish standards of quality and promote the optimum utilization of the resource; and to develop a proper public understanding of the resource and the industry.
We had indications during the hearings of the fisheries committee that the value of the fishing industry on the Fraser river was some $34,500,000. This is a very important industry and every effort should be made to maintain it properly. I believe the fact that we have two other great rivers in British Columbia- the Columbia which has a potential of some 3 million horsepower and the Peace which has a potential of some 4 million horsepower -should warrant the protection of salmon fishing on the Fraser. The enactment of legislation such as is before us now would force individuals in British Columbia who are interested in developing power, first of all, into using the potentialities of those two rivers. I would suggest that by that time we would possibly not require any further development or utilization of a river such as the Fraser. We have seen the tremendous developments that have gone on in atomic research. At the recent hearings of the research committee it was drawn to our attention that they expect very soon to have the CANDU power unit installed at Rolphton which will be producing some 200,000 kilowatts. First of all I think we should exhaust those rivers, the Columbia and the Peace, and then see what progress is being made on atomic power. At that time it might be possible to take a further look at the Fraser river.
During the proceedings of the committee in 1959, in dealing with this matter of research and what can be done, I was interested in the statements we had from Dr. Pritchard. On questioning him I was particularly interested to find out whether it would be possible to hurry up the process by concentrating perhaps more scientists on this particular problem. He indicated to me that there was in total in the neighbourhood of some 75 scientists and engineers working on the problem and they are spending approximately $3 million on research alone. I think it is fair to say that despite all the engineers, biologists and so forth working on this particular project there had been developed to date no clear-cut and adequate solution to the problem of getting the fish up over the dam and then getting them downstream safely. That, of course, is simplifying the problem.
There have been some statements and arguments that the fisheries people in British Columbia are opposed to the development of hydroelectric power. I think it would be
[Mr. Drysdale.l
only fair, Mr. Speaker, to reiterate the remarks in the brief that was put out by the fisheries association of British Columbia, dated February 1, 1958. On page 2 of this brief we find the following;
The fisheries association of British Columbia takes this opportunity of stating unequivocally that it is not opposed to the development of hydro power but rather believes that the sources of electricity should and can be developed under careful and judicious planning so that the runs of fish in the salmon bearing rivers will not be obstructed or otherwise harmed. If it could be shown conclusively by the fishery engineers and biologists that those biological problems which will result from the development of hydro sites on fish bearing rivers could be overcome with certainty then, and only then, would we have no objection to the construction of power dams on such rivers. Today, the best advice available from the fishery biologists is that the construction of dams on the diversion of rivers into salmon bearing rivers will create consequential physical and biological problems which will destroy the fish.
In this same brief they go on to make several specific recommendations which I think might be of interest to hon. members. At page 4 they say:
In order to ensure that there will be an ever increasing supply of power available to the industrial and domestic consumers in the province of British Columbia, it would appear advisable that the responsible public authorities should ensure that the following steps be taken to utilize all the natural resources of this country in an orderly, considered program of development:
(a)	The development of hydro sites on non-fish bearing streams should receive the first attention of those parties engaged in the production and distribution of electricity. In addition, the public utility companies should ensure that presently developed sites are brought up to maximum production.
(b)	The fact that western Canada is endowed with a great wealth of gas, petroleum and coal, thus ensuring an alternate source of energy for the production of power, should be recognized and such alternate sources of energy should be utilized to the fullest in conjunction with the development of hydro sites as previously mentioned.
(c)	A responsible agency should cause a provincewide power grid system to be developed with connections to Alberta and the United States, the purpose of this grid system being to enable a local region having a surplus of power, and such a situation exists today, to conveniently transmit such surplus to another region having a shortage. This exchange of surplus power back and forth would ensure that those hydro and thermal sources already developed would be utilized to their fullest advantage.
We believe that if these complementary steps are taken we will find nuclear and atomic sources of power available and feasible in time to meet growing needs for power and avoid destruction of the fishery resource.
I think it is particularly timely that the hon. member has brought up his bill at this moment. Because of the many discussions of power sites in British Columbia, I think the bill, if it should pass, would do an exceedingly great service to British Columbia by serving

to concentrate power development on the nonsalmon bearing streams, thus ensuring that the fish runs of the Fraser river will be maintained through perpetuity.


John Ferguson Browne: Mr. Speaker, I am sure not many members of the house will find themselves in disagreement with the principle of this bill which is that nothing should be done by way of placing obstructions in the Fraser that shall damage this great food source. In view of the ever increasing world population and the shortage of food it becomes more important with the passage of time. I think also we should not look at it entirely from the point of view of the value that is there at the present time because this is not only a renewable resource but one which can be vastly increased. A fairly intensive study has been made of this subject by the Fraser river board which was set up for the purpose of studying flood control and hydroelectric power in the Fraser river basin. I should like to refer to two or three statements in that report. At page 142, in dealing with the value of the fishery on the Fraser river-and I think perhaps it may be of interest to the house to have on record something of the value of the British Columbia fishery as a whole and the position of the Fraser river in relation to it-we find the following:
In addition to the fish taken by Canadian fishermen there was a catch by United States fishermen of salmon of British Columbia origin which at 1957 prices had an average annual value of $15,525,000, of which $13,651,000 was of fish originating in the Fraser river. Therefore, the average annual value of the salmon catch originating in British Columbia waters (1952-55) at 1957 prices was $68,665,000, of which the Fraser river contributed $34,574,000, or 50.3 per cent.
That is, 50.3 per cent of the total fish production of British Columbia. To go over something of the history of the Fraser river it should be noted that it is only in very recent years that we have got anywhere near the potential of the river, because back in 1913 during the construction of the transcontinental railroad, there was a blockage of the stream which to a large extent prevented the fish from getting up to spawn. It is only in very recent years indeed that we have made a little headway in overcoming that problem. The report to which I referred previously reported on that matter as follows:
The rock obstruction in the Fraser canyon at Hells Gate caused by the construction of a transcontinental railroad in 1913 resulted in a serious blockage to the passage of salmon at certain water levels which decimated the early migrating sockeye runs to the Chilko, Quesnel, Stuart and Nechako systems in subsequent years. The pink salmon run in 1913 was also seriously affected by the obstruction-
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The paragraph goes on in that vein. I simply draw it to the attention of the house to show what any obstruction in this river can do to the runs of salmon. In 1945 and 1946 this was partially corrected by fishways which were constructed at Hells Gate where the river had been blocked. The board had the following statement to make in regard to it:
Since 1946 the commission has been responsible for regulating the commercial fishery for sockeye so as to obtain adequate escapement consistent with the commission's objectives and at the same time divide the allowable catch equally between fishermen of both nations. After removing the obstructions, scientific principles were applied to managing the fishery, the results of which have been outstanding. In two cycles following the completion of the Hells Gate fishways the commercial catch of sockeye increased from 6,478,000 in the period 1947-50 to 18,246,000 in the period 1951-54.
I am sure the house will appreciate the record increase that took place in the production of fish from that river after the obstruction was removed. The report goes on to state further:
It is expected that the total cyclic catch can be increased to at least 46 million fish when all the runs are fully rehabilitated.
Of course, Mr. Speaker, these runs cannot be rehabilitated if there are going to be obstructions placed in the Fraser river. For that reason I am fully in accord with the bill. I wish to refer to the report made by the fisheries committee in 1959, which has already been referred to by the hon. member for Burnaby-Richmond, because I think that the suggestion made by the committee might have been taken into consideration in the bill. The report reads in part as follows:
Your committee expresses the opinion that no dams should be built on the Fraser river, or any of its tributaries, where such dams will, in the opinion of the Minister of Fisheries, interfere with, or be detrimental to anadromous fish runs.
I think that provision might well have been incorporated in the bill. That could be done, of course, if the bill were referred to a committee for study. However, whether or not that provision is added I certainly am fully in support of the bill and I would recommend it to the house.


Mr. Harold Hicks (Fraser Valley):: Mr. Speaker, I do not believe that previous speakers have pointed out the fact that the Fraser river, one of the three great rivers in the province of British Columbia, the other two being the Columbia and the Peace, is the only one of the three that is completely within the province of British Columbia. One feature of the bill that has not been mentioned is the diking or flood control of the river.

Business of the House
As I see the situation, there are three problems, the protection of the salmon, prospective power use and the control of flooding, the last problem being connected in every way with the other two. Hon. members will recall that in the 1948 and 1950 floods very great damage was done in the lower Fraser valley. When I refer to the lower Fraser valley I mean the area from Hope to Vancouver or to the coast, a distance of 100 miles.
After the flood of 1948 work was immediately started to put the dikes into proper shape and it was considered as being completed in 1950. Since then, however, the dikes have been eroded. The current has cut under some of them and at the moment the people of the Fraser valley are very much concerned about what will happen during the next flood.
The boards of trade of Hope, Chilliwack, Agassiz, Mission and Abbotsford are all concerned about this matter and these boards are all represented in the associated boards of trade of the Fraser valley. A great deal of damage was done in that year and the boards of trade, as do many of the residents, feel that now is the time to put these dikes into proper shape. If the dikes go out the Fraser will run rampant and do damage again.
Hon. members may not know that every year there are two dredges working all the time between the mouth of the Chilliwack river where it empties into the Fraser about 12 miles west of Chilliwack and the town of Hope. These dredges work continually year in and year out which is an indication of how much damage is done by rubbish, trees, stumps, sand bars, gravel bars and so on in the river. The river has to be kept open for the transportation of logs from Hope right to the coast. Several companies are involved in this business and it is a great industry in the Fraser valley.
The Fraser river flood control report has suggested dams in places where they will not interfere with the salmon. I believe that the one location that is most suitable for flood control is at Clearwater north of Kamloops on the Thompson river. Apparently this would not damage the Ash in any way.


Mr. Speaker:: Perhaps this would be a convenient time to interrupt the hon. member, as it is six o'clock.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I inquire what the business will be for tomorrow?


Gordon Minto Churchill: I made a suggestion at five o'clock, Mr. Speaker, with regard to the business of the house. I suggested then that in

the view of the government we would like to adjourn tomorrow some time, perhaps tomorrow night, if the house sees fit. We have reduced to a bare minimum the items which we feel should be considered before an adjournment should take place. In answer to the hon. member for Timiskaming, I also said that we on this side were prepared to sit tonight.
With these propositions before the house, the order of business for tomorrow would be as follows: The C.N.R. bill, which it is necessary to complete, the Income Tax Act, which would be carried to the completion of second reading but would not be considered in the committee stage, an appropriation bill for the supply which has already passed through the committee, and interim supply. I said that there might also be a report from the procedure committee, which has been sitting under the chairmanship of Mr. Speaker, dealing with certain matters pertaining to divorce. I should like an expression of opinion from the other side of the house with respect to whether that report might be tabled and considered tomorrow or whether under the circumstances non-contentious divorce bills would be considered and passed by the house tomorrow.
I put three propositions before the house for consideration: First, whether or not we should sit tonight; second, whether on the basis of attempting adjournment tomorrow night we might consider the four items of business I have outlined and, third, whether or not the divorce bills should be considered and the non-contentious ones passed or whether the report of the rules committee on that matter should be brought before the house for consideration.


Lionel Chevrier: Mr. Speaker, I think the second suggestion should be taken first. In so far as that is concerned, I think we would have to say to the house leader that I do not see how it would be possible for the other place to deal with the three matters that are now before us and to complete them by Saturday night if they sat until twelve o'clock. I understood His Honour, the Speaker, to say that the Senate had adjourned until three o'clock tomorrow afternoon. That would leave a very short time in which to deal with (1) the Senate amendments, (2) the industrial development bank bill, and (3) the Coyne matter-


George James McIlraith: And the C.N.R. bill.


Lionel Chevrier: -and other matters such as the C.N.R. bill and the bills that would go through the house tomorrow. It is therefore rather difficult for those of us who sit on this side of the chamber to see how they could dispose of those important items of legislation in such a short time. I think

that deals with the second item, namely the matter of sitting tonight. I do not think we could give consent to sit tonight.
So far as the non-contentious divorce matters are concerned, I presume that matter would be taken up tomorrow and I would rather rely on the opinion of my friend the hon. member for Bonavista-Twillingate on matters of divorce than give my own opinion on it. But in so far as the items mentioned by the house leader are concerned, namely the C.N.R. bill and the bill to amend the Income Tax Act, may I say that I can see no reason why we could not deal with those tomorrow. However, I should like to get an explanation of two other matters, namely why it is thought necessary to bring in an appropriation act. It has been the custom to bring in an appropriation act when all the estimates have been disposed of, but not when only a portion of the estimates have been disposed of as is the case at the present time.
Finally, in so far as interim supply is concerned, can the house leader indicate how much would be required?


Gordon Minto Churchill: I have just one or two comments to make. As to the activities of the other place, may I say that I am not entirely familiar with their course of procedure. However, I assume that their adjournment which was reported to us this afternoon was based on an understanding of the business which would be coming before them, and I reached the conclusion that they had considered that they would have sufficient time tomorrow in which to deal with these matters. They have no automatic adjournment and can sit just as long as they wish to sit.
The two questions with regard to the appropriation act and interim supply could more appropriately be answered by the Minister of Finance. As I understand it, the appropriation bill is simply to deal with supply which has already been approved by the house for 11 departments. They have gone through committee. The total amount of money there would be summed up in an appropriation bill and would be voted. As to interim supply- and there again the Minister of Finance would be able to give the answer to that question- may I say this. It has been normal for us to ask for two months' supply at a time. Perhaps the house might consider it to be wiser to grant it for a longer period than that. I do not know; it would be up to the house to determine that matter.


John Whitney Pickersgill: If I might accept the suggestion of the hon. member for Laurier that I should make a reference to this matter of divorce, may I say this. It is a well known fact that in our party we regard this matter 90205-6-488
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as one of individual conscience. Any proposition that may be put before the house I am sure will be treated respectfully in that way. I think perhaps I need say no more about that matter.
I have had a word with my hon. friend, while the house leader was speaking, about the proposed appropriation bill. This is an unprecedented suggestion or, while there may be some precedent somewhere, it is certainly an unusual suggestion. I suggest to the government that they should not proceed with this idea for this reason. This appropriation bill will preclude any possibility on the part of the opposition of raising on a subsequent appropriation bill any of the matters connected with all those departments of government where supply has been voted. It seems to me that, after all, the most sacred of all our rights in the opposition is the right of airing grievances before we grant supply. The government will be in no better position after having passed this bill than they were before it was passed. They will have interim supply to last them until such time as we come back. We would feel that the more urgent business of the country should be given priority over a measure of this sort that does not seem to serve any purpose whatsoever. As for the interim supply, when the Minister of Finance indicates what his desires are in that matter I am sure my friend the Leader of the Opposition will be prepared to give his views on the matter.


Gordon Minto Churchill: With regard to the appropriation bill may I say this. I will take into consideration with my colleagues the suggestion made from the other side. It may be possible to meet their wishes in that regard. May we hear from the C.C.F. with regard to these proposals or certainly with regard to the divorce bills?


Frank Howard: I think the thoughts of the C.C.F. were expressed by the hon. member for Timiskaming with regard to sitting this evening and looking towards recessing or adjourning tomorrow. That possibility of sitting in the evening does not exist now.
As to the question of divorce, this is a latter reference of the minister and I understand it involves a report of a committee under your chairmanship, Mr. Speaker. I think it would be unwise now to make any comment on the contents of that report, as it has not yet been presented to the house. Perhaps this is something we can approach tomorrow.


[Stage Direction]
It being 10 minutes after six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Question

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

Mr. Regier: 1. What have been the expenditures of the Royal Canadian Air Force for the lower mainland of British Columbia for each of the last four fiscal years?
2. How many members of the (a) regular, (b) reserve, R.C.A.F. were stationed in this area as of March 31 of each of the past four years?
Answer by: Hon. D. S. Harkness (Minister of National Defence):
1. 1957-58, $7,752,640; 1958-59, $6,721,990; 1959-60, $7,654,425; 1960-61, $7,422,400.
	(a)	(b)
1957-58	1,100	7891958-59	910	6591959-60	941	5771960-61	740	548
Saturday, July 8, 1961