1961-07-08

COMMITTEES OF THE HOUSE


Mr. Speaker:: I have the honour to present in English and in French the first report of the special committee appointed this session to consider procedure. This committee, in accordance with the recommendations of a similar committee appointed last session, has considered the procedural problem involved in bills for the annulment and dissolution of marriage and presents for the consideration of the house its unanimous report on this subject.
(Translation):



INDIAN AFFAIRS


[Stage Direction]
Mr. Lucien Grenier (Bonaventure) presented in English and in French, the second report of the joint committee of the Senate and the House of Commons on Indian affairs.
(Text):


Hon. L. B. Pearson (Leader of the Opposition):: I rise on a question of privilege. Yesterday, in criticizing the position of this party with regard to the Bank of Canada Act the Prime Minister, and I quote from this morning's Hansard-this is the first chance I have had to read Hansard-said as recorded on page 7687:
When this matter was discussed on February 21, 1961, the Leader of the Opposition said on that occasion:
"There is nothing a government is in a position to do. . . except to ask parliament to change the legislation or await the expiry of the term."
Those words were used on that day, and they will be found on page 2264 of Hansard. But they were used by the Minister of Finance, not by myself.


Right Hon. J. G. Diefenbaker (Prime Minister):: I rise at once to say to the hon. gentleman that in the course of reading the quotations I made that mistake. The hon. gentleman has been very reasonable about the matter, but if he was disturbed by it he ought to realize how much more disturbed 90205-6-488J
the Minister of Finance was to see words spoken by him ascribed to the hon. gentleman.
Mr. Speaker, I also wish to make reference to some errors in Hansard of yesterday and to refer to the hon. member for Kenora-Rainy River in particular. Errors happen when Hansard is pressed, as it is at this time. At page 7686 of Hansard for yesterday I am reported as having said:
Hon. members may wonder what I was quoting from. Well, I was quoting the immoral words of the member for Bonavista-Twillingate


Mr. Pickersgill:: I thought the Prime Minister quoted those words with approval.


John George Diefenbaker: I am making reference to the word "immoral".


John Whitney Pickersgill: That was the occasion of my remark.


John George Diefenbaker: I want to make it clear that the word should be "immortal".
I refer now generally to the portion from the beginning of the paragraph immediately preceding, which in part reads:
I think it is always of interest to know what are the principles which should actuate a public servant-
Down to the words:
-one way to put it is that civil servants, like children, should be seen and not heard.
Those words were, of course, quoted from the hon. gentleman's speech but have not been placed in quotation marks, as will be appropriately done in the corrected Hansard.


John Whitney Pickersgill: Mr. Speaker, before the Prime Minister leaves that subject I wonder whether he could tell me-I have not had time to look and am asking merely for information-whether he was quoting a press report or the text of my speech. I am not quarrelling with it, as I have not had time to read it, but I doubt if it is "immortal".


John George Diefenbaker: Oh, I think it is now. I was quoting from the Ottawa Citizen of that date.


John Whitney Pickersgill: I am sure the Prime Minister would think it is now immortal.


John George Diefenbaker: There is one reference I should like to make to the hon. member for Kenora-Rainy River, a good and long time friend of mine, because I would not want anyone to misunderstand my words as they
7728	HOUSE OF
Inquiries of the Ministry appear at the bottom of page 7720 of Hansard for yesterday. That hon. gentleman had1 been interrupting me-


Mr. Benidickson:: I had risen on a point of order.


John George Diefenbaker: -and at the bottom of that page I used the word "sober". I should like to assure the hon. gentleman and anyone else reading this that the significance of the word "sober", as I used it, is in the sense-I have to be careful now that another matter is before the Senate-of sober second thoughts, and with no other connotation in mind. Immediately following my use of that word the hon. member is reported as having said:
This is not a sober judgment on your part.
That indicates that he understood my use of that word in the way I meant it. I want it generally understood that is what was meant, as I would not want to say anything to hurt the feelings of the hon. gentleman or any other member of this house.



PUBLICATIONS


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I should like to ask the Prime Minister whether the consultations which he announced some days ago he was having with the government of the United States in respect to the recommendations of the O'Leary commission report are completed, and whether the government will soon be in a position to make a decision in regard to those recommendations.


John George Diefenbaker: Mr. Speaker, hon. members of the house will realize that in the last ten days or so all of us have been very pressed. I have not had the opportunity to look into that matter in recent days. However, I shall do so and will let the house know.



TRANS-CANADA AIR LINES REQUEST FOR REPORT ON LABOUR DISPUTE

[Stage Direction]
On the orders of the day:
Mr. Gerard Loiselle (St. Ann):: Mr. Speaker, I should like to direct a question to the Minister of Labour, or in his absence to his parliamentary secretary. Can the minister or his parliamentary secretary inform the house whether there are any new developments in the T.C.A. dispute? Is the labour department doing its utmost to prevent discontinuance of the service?


Mr. R. D. Thrasher (Parliameniary Secretary to the Minister of Labour):: I have nothing to add to what I said yesterday in reply to the hon. member for Skeena.
(Translation):



PUBLIC BUILDINGS


[Stage Direction]
On the orders of the day:
Mr. Alfred Belzile (Matapedia-Matane):: Mr. Speaker, I should like to direct a question to the Minister of Public Works. In view of the fact that new bilingual signs have recently appeared at various places in the House of Commons building to replace the former unilingual signs, could the minister inform the house whether it is his intention to have such work completed in all government buildings.


Hon. D. J. Walker (Minister of Public Works):: Mr. Speaker, I wish to thank the hon. member for Matapedia-Matane for giving me notice of his question. Following a suggestion made by the hon. member for St. Hyacinthe-Bagot, instructions were given for a revision of all signs in the parliament buildings. My department is now in the process of replacing all the former unilingual signs with bilingual ones, thus correcting an anomaly that the Liberals had never noticed in their 22 years of office.
(Text):


John Whitney Pickersgill: May I be permitted to ask the Minister of Public Works a supplementary question. On whose authority was the word "men" translated "messieurs"?


David James Walker: That is an interesting question. I knew the hon. member would think along the lines of the wash room. This has been recently corrected, and if he will notice he will find that the French sign on the door of each of the wash rooms is correct. That should satisfy even the sensibilities of the most precious flower of the House of Commons.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Hon. Paul Martin (Essex East):: May I ask
the Secretary of State for External Affairs if his attention has been drawn to the bombing of certain church and other property in Bolivia owned by the Canadian Oblate fathers. Can the minister say whether any representations are being made in this matter by the government, and if the diplomatic mission of

any other country, possibly that of the United Kingdom, is being used on Canada's behalf in this regrettable incident?


Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker, according to press and radio reports a radio station operated by Canadian Oblate missionaries in Bolivia was bombed during labour troubles three days ago. The Canadian ambassador designate to La Paz, Mr. Alfred Pick, who is our ambassador to Peru, will be presenting his letters of credence next week and will be in a position to report on this incident. In the meantime the Department of External Affairs has communicated with the British embassy in Bolivia to ascertain the facts. Until now there is no evidence that the lives of Canadian missionaries have been endangered.


Paul Joseph James Martin: Can the minister say whether the report is correct that the bombing has taken place at the insistence of and by groups who are supporters of the communist party in Bolivia?


Howard Charles Green: I am not in a position to comment on that at the moment.


FISHERIES
[Stage Direction]
NOVA gCOTIA

[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breton North and Victoria):: Mr. Speaker, may I ask the Minister of Fisheries a question, notice of which I sent to him a few minutes ago. Can the minister advise whether he is yet in a position to inform the house if an extension of the lobster season is to be granted in district 6B? I may say such extension has been requested unanimously by the fishermen concerned.


Hon. J. A. MacLean (Minister of Fisheries):: Mr. Speaker, the situation in this district is being watched carefully. By Monday or Tuesday I hope to have up to date figures on the production in that area available to me, and at that time a decision will be made whether or not there will be an extension.


PRESENCE IN GALLERY OF VISITING BOY SCOUTS
[Stage Direction]
On the orders of the day:
Mr. E. W. Brunsden (Medicine Hat):: I
should like to address a question to the Prime Minister. No doubt the Prime Minister has noticed in the gallery a large number of Scouts from Canada and the United States, and I wonder whether he would care to say a word of welcome to them.
Inquiries of the Ministry


John George Diefenbaker: Mr. Speaker, I shall say no more than that those who belong to that great organization, the Boy Scouts, do much for the building of good citizenship in all the countries in which scouting has a place. We are indeed happy to have with us the representatives of scouting in these two countries who have come here on the occasion of this general gathering. To them and through them to their respective groups I extend the warmest of greetings and the appreciation of all Canadians for what being a scout does toward the making of that type of citizenship which is the aim and purpose of all of us.


Lester Bowles Pearson: Mr. Speaker, I hope we on this side may be permitted to associate ourselves with the remarks of the Prime Minister in the welcome he has given. There is no organization, national or international, which does more for the production of good citizenship.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, the members of this group join with the Prime Minister and the Leader of the Opposition in extending greetings and a hearty welcome with a full appreciation of the work that this organization is doing on a world-wide basis for youth everywhere.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. W. M. Benidickson (Kenora-Rainy
River): Mr. Speaker, I should like to address a question to the Minister of Finance based on his announcement in the budget of the decision of the government to appoint a royal commission to examine Canada's financial structure and institutions. Has the government settled the terms of reference, and when may we expect an announcement of the membership of the commission?
Hon. Donald M. Fleming (Minisier of Finance):: In due course, Mr. Speaker.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, as we are coming, we are told, near the adjournment of the session, I wonder if I could ask the Secretary of State whether he would be good enough to see if it would be possible to furnish us in the next day or two with the usual list of orders for returns to which returns have not

Inquiries of the Ministry yet been made, so that it would be available for the convenience of hon. members in their work?


Hon. Noel Dorion (Secretary of Slate):: will try my best, Mr. Speaker.



COLUMBIA RIVER


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I should like to direct a question to the Minister of Finance. In view of the fact that the member for Kootenay West had the opportunity for a conversation with Premier Bennett of British Columbia during his visit to Ottawa, did the premier extend the same opportunity to the Minister of Finance?


Donald Methuen Fleming: No, Mr. Speaker, I had no conversation with Premier Bennett during his recent visit to Ottawa. I understand he was kept rather busy, being otherwise engaged and having come to Ottawa for rather different purposes than to discuss Columbia river financing.


John Whitney Pickersgill: I should like to ask the Minister of Finance a supplementary question. Is the minister yet in a position to table, as I believe has not been done so far, the most recent correspondence he has had with the premier of British Columbia?


Donald Methuen Fleming: Mr. Speaker, I have no objection to the tabling of that correspondence. I have not been asked to table it previously. Consequently I have no consent to table from Premier Bennett. If the house wishes that consent to be obtained, I certainly have no objection.


John Whitney Pickersgill: I think, sir, many hon. members would be most interested in seeing the rapid progress that is being made in these Columbia negotiations, and I would hope that on this occasion the minister would take advantage of the facilities of the telephone or telegraph instead of the post, so that we may hope to have this correspondence before we adjourn.


Donald Methuen Fleming: If the matter is regarded by the hon. gentleman as one of such urgency perhaps I may be permitted to express surprise that he has not put a notice of motion for the production of the papers on the order paper in these recent weeks, because I announced to the house some weeks ago that this correspondence had occurred.


John Whitney Pickersgill: Since the minister has chosen to make this observation, I might point out that if he will look back in Hansard he will find the question was raised by one of my colleagues the other day, and I understood at that time the minister was seeking permission of the premier of British Columbia.


Donald Methuen Fleming: I point out that I was not asked to obtain it. A question was asked about the correspondence and I was surprised, Mr. Speaker, that no hon. member had seen fit to ask that the necessary consent be sought in order that the correspondence could be tabled.



COMMONWEALTH RELATIONS


[Stage Direction]
On the orders of the day:
Mr. J. W. Kucherepa (High Park):: I should like to direct a question to the Prime Minister. Has the President of Ghana requested Canada to provide engineering assistance in connection with the building of the Volta dam?


John George Diefenbaker: I believe a couple of days ago the President of the United States, in a letter to Mr. Nkrumah, expressed the view that the financing of this great project was now in such a position that there was hope it could proceed shortly. Some days ago, I would say to the hon. member for High Park, President Nkrumah communicated with me and asked whether there was available in Canada an outstanding engineer whose qualifications would fit him to head the Volta river authority in Ghana. This was quite a tribute, I thought, to the international reputation of Canadian hydro engineers.
At the present time, as the hon. gentleman knows, the high commissioner for Ghana is meeting with various persons with a view to ascertaining whether or not there is available such a person as might meet the needs of Ghana. I hope he will be successful. We have some engineers who would be only too glad to undertake the responsibility provided they could be freed of their Canadian responsibilities, if only for the period necessary for the construction of the dam.



NATIONAL PARKS


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: I wonder if I might put a question to the Minister of Northern Affairs and

National Resources, and in doing so thank the minister for his courtesy in inviting me to attend the opening of Terra Nova national park next Saturday. The question I want to put to the minister is, has he thought of sending an invitation to his predecessor, who is now the premier of Quebec, and who was the founder of that park which has been such a blessing to Newfoundland as sources of employment and for the amenities it has provided?


Hon. W. G. Dinsdale (Minister of Northern Affairs and National Resources):: Mr. Speaker, I assure the hon. member for Bonavista-Twillingate that we have given consideration to inviting all the persons who are presently interested in Terra Nova national park.
(Translation):



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. Azellus Denis (St. Denis):: Mr. Speaker, may I put a question to the Postmaster General? Did the Postmaster General discuss recently with the Secretary of State the question of granting part time postal employees annual leave with pay, and, if so, would he care to inform the house of the results of the discussion?


Hon. W. M. Hamilton (Postmasier General):: No, Mr. Speaker, there were no discussions recently on the matter. However, I answered a quite similar question ten days ago, I think.
(Text):



CANADIAN NATIONAL RAILWAYS


Donald Methuen Fleming: the second reading of Bill No. C-121, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system for the period from the 1st day of July, 1961 to the 30th day of June, 1962 and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company.
He said: Mr. Speaker, I think there is probably little that I can usefully say concerning this measure on this motion for second reading. The matter was considered in committee at the resolution stage on July 6, and I think the necessary explanations were given at that time.
Canadian National Railways
Bill No. C-121 follows precisely the terms of the resolution. That resolution was in what has become something of a standard form. It is the same form as was used last year, with the addition of one clause which becomes necessary this year for special reasons which I explained at the committee stage. Since the resolution was reported and the bill given first reading the report of the sessional committee on railways, air lines and shipping owned and controlled by the government was tabled in the house yesterday and is available to all hon. members.


Hon. Lionel Chevrier (Laurier):: Mr. Speaker, the minister has made another short statement in connection with the second reading of this bill, but neither he nor the Minister of Transport has answered the questions which we put to them at the resolution stage. At that time we made it quite clear that we would object strenuously to the passage of this measure until we knew who the new directors of the Canadian National Railways were going to be and what was the status and position of the president.
After all, sir, the bill to increase the number of directors of the C.N.R. from seven to 12 was passed many weeks ago, and I think the house is entitled to know, by virtue of the doctrine enunciated by the Prime Minister in another debate yesterday, who these directors are going to be, when parliament is being asked to authorize the expenditure of vast sums of money by the Canadian National Railways. Notwithstanding the statement made by the Minister of Finance, no information has been given to us in that regard.
There was another complaint made from this side of the house. It had to do with the custom and practice concerning this refinancing bill for the C.N.R., namely that it should not have been introduced until the report of the committee on railways, air lines and shipping had been made. When the resolution was introduced that report had not been made. It has now been tabled. Again I repeat, this only points up the disorder and the delay on the part of the government in organizing the business of the house. The business of the house with reference to committees has been so badly organized that it was not possible for this important committee to meet until the dying days of the session, whereas the custom has been over the years for the committee dealing with the annual reports of the C.N.R. and T.C.A. to meet much earlier. As I indicated on a previous occasion, the committee has met in March and April but rarely, in my recollection, has that committee met as late as June, save and except when the parliamentary session was late in beginning its deliberations. I shall come tc that matter again at a later stage.

Canadian National Railways
The bill which is now before us and for which second reading is sought seeks to authorize the Canadian National Railways to meet certain expenditures for the period January 1, 1961 to June 30, 1962; next, to authorize the guarantee by Her Majesty of certain securities issued by the Canadian National Railways. That provision was broken down into six parts by the minister when he introduced the resolution. I will not go into all of those, but I should like to make a general reference to them.
The first purpose sought by this measure is to authorize the C.N.R. to incur capital expenditures not exceeding $179 million, roughly speaking, during the calendar year 1961; next, to authorize the company to make prior to July 1, 1962 such capital expenditures as may be necessary to discharge obligations incurred under the 1961 act. Third, the purpose to be served by the bill is to authorize the railways to enter into contracts prior to July 1, 1962 for new equipment.
There are also three other provisions in the resolution which have been referred to by the minister. They have to do with the capital revision of the Canadian National Railways. They have to do more particularly with extending provisions which were contained in enactments recommended by the previous royal commission on transportation way back in 1950, the Turgeon commission. They deal first with the intention on the part of the government to proceed with the re-examination and revision of the capital structure of the railway company prior to December 31, 1961. I should like to quote the minister's words, which are to be found at page 7640 of Hansard of July 6, 1961:
However, since the complete report of the royal commission on transportation has not yet been received it was considered advisable to make provision in the 1961 act for a one-year extension of the present capital structure.
The minister went on to say:
As the president of the C.N.R. indicated in the recent hearings before the sessional committee on railways, air lines and shipping, the capital structure is at present under study. This review will be continued in the light of the complete report of the royal commission once it has been received.
The report of the committee on railways, air lines and shipping, which was tabled yesterday by the vice-chairman of that committee, contains one passage which I think should be brought to the attention of the house in this respect. It is the one entitled "Deficits", and it reads as follows:
The committee noted with concern Mr. Gordon's evidence to the effect that consideration was given to asking the government of Canada to take over from $700 million to $900 million of the railways debt structure.
This proposal has two unusual aspects: (1) the royal commission of 1950 dealt at length with debt


problems of the C.N.R., recommending an alleviation which was carried out in 1952; (2) a most recent royal commission has completed its hearings without any evidence by the C.N.R. on the need for another debt revision. In the light of this, the committee suggests that the government examine such a proposition with great care.
There seems to be a difference between the statement made by the minister on the resolution and the recommendation made by the committee, and I wonder if the minister when he closes the debate would deal with this aspect of the matter.


Donald Methuen Fleming: I wonder if the hon. gentleman would be good enough to enlarge on that point so I might follow him more clearly. I should be glad to comment on it if I can, but I am not too clear as to where he finds any difference.


Lionel Chevrier: I shall be glad to do so as I go along. I am a member of this committee, but because of the debates on other matters which took place in this house I did not attend the meetings at which this report was prepared and drafted. Incidentally, in passing, I think those members who sit on this side of the house would wish to extend to the hon. member for Dufferin-Simcoe (Mr. Rowe) our commendation for the manner in which he carried on as chairman of that committee. Not only did he deal objectively with a committee which might well have brought in recommendations which could have caused serious concern to the national railways, but he dealt with the affairs of the committee in an orderly and efficient manner.
I should like also to say a word of felicitation to the vice-chairman, the hon. member for Simcoe North (Mr. Smith) who, when the hon. member for Dufferin-Simcoe unfortunately fell ill, carried on, particularly with the meeting having to do with the report. I am sure the members on this side of the house would wish me to extend to him our commendation. I should also like to say to the hon. member for Dufferin-Simcoe that we hope he will be quickly and completely restored to health.
Having said that, I come to the matter of the revision of the capital structure of the Canadian National Railways. The house will remember that in 1951 the Turgeon royal commission made certain recommendations, most of which were afterwards adopted by the government of the day, dealing with the capital structure of that company. These recommendations may be found at page 196 of the report and I have no intention of reading them, because they are lengthy. They can be seen by anyone who is interested. The Canadian National Railways had asked for these recommendations, or at least had made

representations directed towards these recommendations, and the government saw fit to implement them.
I gather from the statements which the minister made during consideration of this matter on July 6 that the revision of the Canadian National Railways capital structure was under consideration by the government at the suggestion of the C.N.R. and, further, that the matter was also under consideration by the royal commission on transportation. The committee report indicates, in a statement which I have already put on the record, that no evidence has been submitted to the royal commission by the C.N.R. on the need for another debt revision. While I take it that the terms of reference of the present royal commission, the MacPherson royal commission, are broad enough to deal with capital revision, I take it also that the commission would not deal with this subject unless representations had been made by the Canadian National Railways.
That is why I have indicated to the minister that I think there is a difference, slight though it may be, between the statement made by the minister and the recommendation which has been made by the committee, and I would ask the minister to clarify the position. Has the Canadian National Railways
(1)	made representations to the government having to do with this capital structure because of the loss of traffic and the debt position?
(2)	Has the government come to any decision with respect to a capital revision and, (3) has the government asked the royal commission on transportation to deal specifically with this matter on behalf of the Canadian National Railways? Since the royal commission has not yet handed down its second, and probably third, reports it may well be that if the government gives some instruction to the royal commission it will want to bring in a recommendation.
It is true, or I take it that it is true from the statement made in the report of the committee on railways, air lines and shipping, that no evidence was submitted by the C.N.R. to the royal commission, so I think the house should have from the minister a statement in connection with the whole matter. In the committee the Canadian National Railways made it clear that the position of the railways was very serious, and that the government was giving the matter consideration. Thus I think in the light of the report by the committee, and in the light of the reports of the royal commission still to be handed down, we should be given some indication by the minister of what the over-all picture is.


Donald Methuen Fleming: I shall be glad to do that.
Canadian National Railways


Lionel Chevrier: I thank the minister for that interjection. I pass on to another matter which I think is of importance to the house. The other day when I spoke on the resolution I said the government had no right to bring in a measure of this nature until we in this parliament knew who the directors of the Canadian National were going to be, and until parliament knew who the president of the C.N.R. was going to be.
Now, sir, for more than nine months the president of the C.N.R. and some of the directors of the C.N.R. have been carrying on from day to day with their services being continued on sufferance and, to use a brutal expression, not knowing when their heads were going to be chopped off. This is a situation which I do not think should be allowed to continue under a free parliament such as we have in this country. How can any enterprise be well managed amid such uncertainty? There is no group of shareholders in any corporation who would stand for this kind of conduct for one moment. How can the affairs of any corporation, whether it be a private corporation or a public corporation, be properly administered and carried on if the shareholders do not know what kind of directors it is going to have, what their competence is and what their business ability-


William Moore Benidickson: With $700 million expenditure.


Lionel Chevrier: -is in administering, as the hon. member for Kenora-Rainy River points out, the affairs of a corporation, particularly this one having to do with the expenditure of some $700 million or more? I submit hon. members of this house are entitled to have that information.
Backbenchers on the government side of this house have sniped and snarled repeatedly at the president of the Canadian National Railways when he was not here. The president of the Progressive Conservative association in the other house has suggested, and it has been repeated by the press all across the country, that the Canadian National Railways management is going to be divided into two parts, one head having to do with the management and the other having to do with the chairmanship of the board of directors. If that is going to be the policy of the government; if one half of the responsibilities of the C.N.R. is going to be taken away from the president of the C.N.R., we should know about it.
The friends of the government have sought to undermine the management of the C.N.R. They have called the president a dictator and many other names, yet the government
7734	HOUSE OF
Canadian National Railways has put up no defence. The Minister of Finance is not chiefly responsible for the administration of this corporation and I shall leave my reference to him to one side for the moment. However, the Prime Minister and the Minister of Transport have not at any time risen in this house to defend the president or the directors of the Canadian National Railways. The only member who did so was the hon. member for Greenwood (Mr. Macdonnell), who at one time rose to say that he was not going to sit in his seat in the light of his experience in this house and allow those charges to be made without any answer.
The Minister of Transport, I regret to say, is not in his seat at the moment. I am sure he is busily engaged on matters concerning the affairs of the country. However, he or the Prime Minister should have risen in this house to give some indication of the position of the government, and in defence against the charges of arbitrary conduct and dictatorship on the part of the president and directors of the C.N.R.
However, yesterday in another debate the Prime Minister said there can be only one sovereignty in this country. No one for a moment would disagree with that affirmation. We on this side of the house agree that there can be only one sovereignty in this country. The Liberal party takes the position that parliament alone is sovereign in matters of this kind, and that the will of parliament must in the last analysis prevail. The Prime Minister seems to think that he is parliament and that parliament must accept his say so, because we are refused information, at the moment we are being asked to vote huge sums of money, as to who the directors are going to be who will spend and administer this money, and who the president is going to be who will be responsible for the direction and administration of this corporation. It is suggested that we must accept the Prime Minister's say so because he refuses to tell parliament who the head of this institution is going to be and who its directors are going to be.
The Prime Minister asks us in effect, and this is the long and short of it, to rubber stamp and authorize unknown men to spend millions of dollars of public funds. No doubt when parliament is adjourned he can then thumb through the long list of defeated Tory candidates and other friends of the party and hand out these kinds of plums, such as the C.N.R. directorships.


Mr. Browne (St. John's West):: It is not
as long as the Liberal list.


Lionel Chevrier: In so far as the Canadian National Railways is concerned, I need not


repeat what I said the other day when I put on the record the Conservative list; but if the same practice is going to be followed in the appointment of the new directors as was followed in the appointment of the old, there is no doubt that the Prime Minister is going to take out his list and make use of it on this occasion.
Even more important than that is the fact that here we have the president of a large corporation who is still on sufferance and does not know from day to day what is going to happen to him or to his position. I say that parliament should be told what is the position. Let this government remember what it used to say when it was in opposition. When it was in opposition it used to say that government is the servant of parliament, not its master, and that parliament should not be asked to vote large sums of money-or sums of money no matter how large or small- without knowing who is going to spend it. We have a position exactly similar to that which was taken by those individuals who are now in the treasury benches, who said when on this side of the house that they wanted to know who was going to spend this money. We say that we should not authorize the expenditure of one cent of the public's money until we know who those individuals are who will spend it.
If the government has lost confidence in the president of the Canadian National Railways it is not obliged to reappoint him, but it should let us know. The government should tell us whether his successor is to be a competent person who has the business ability to run a railway. The government should also tell us whether the directors who will be appointed as a result of the increase in number from seven to 12, as well as those present directors who will be reappointed, are men who are competent and capable of administering the millions of dollars of public funds which will be spent for the railway.
What is the attitude of the Prime Minister, sir? His attitude is that this is not the business of parliament, and that all we are here to do is to rubber stamp the government's bills and then go home. Why can the government not make up its mind in this regard, as it has not been able to make up its mind in regard to so many other matters? I suggest, Mr. Speaker, that this cat and mouse game, this treatment of public servants, is what is demoralizing the public service of this country more than anything else. That is why there has been such an exodus of public servants from Ottawa since 1957. I do not suggest, sir, that all of them have left

exclusively because of the way the government has treated them, but there is an amazing list, and I should like to put on the record some of those individuals who have gone.
There is Mr. Clarence Shepherd, former chairman of the board of transport commissioners; Mr. Hector McKinnon, former chairman of the tariff board; Mr. George Mclvor, former chief commissioner of the board of grain commissioners; Mr. Davidson Dun ton, former chairman of the Canadian Broadcasting Corporation; Mr. Allan Jarvis, former director of the national gallery; Mr. W. J. Bennett, former president of Eldorado and Atomic Energy of Canada; Mr. Mitchell Sharpe, former deputy minister of trade and commerce; Mr. Charles Gavsie, former president of the St. Lawrence seaway authority; Mr. Jean C. Lessard, former vice-president of the St. Lawrence seaway authority, and Mr. Alphonse Ouimet, who while he has not been affected or has not gone has certainly been slapped in the face by the recommendation of the committee on broadcasting. Is that the way, sir, to treat public servants? Is this the way in which to deal


Mr. Deputy Speaker:: Order. I think the hon. member for Laurier is going a little too far in this respect, because this could easily turn into a completely irrelevant debate if we were to discuss the number of public servants who have left the service. I appreciate that the hon. member may mention it in passing, but he is now doing more than that.


Lionel Chevrier: Mr. Speaker, I say to you with deference that I am building up an analogy with the position of the president and directors of the Canadian National Railways, and I am saying that the manner in which the president and the directors of the C.N.R. are being treated is analogous to the manner in which 10 or 12, in fact 20 others that I could put on the record have been treated. I am not dealing with the others, save to mention them in passing, and I submit to you with deference that I have the right to do that. What about the position of the under secretary of state? I asked questions of the Prime Minister on that and he knew absolutely nothing about it.


Mr. Deputy Speaker:: Order.


Donald Methuen Fleming: May we have the rules of order observed?


John Whitney Pickersgill: More gagging of parliament.


Mr. Deputy Speaker:: Order.


Donald Methuen Fleming: The hon. member tried yesterday to prevent me from making a proper statement in the house.
Canadian National Railways


Mr. Deputy Speaker:: The hon. member for Laurier indicated that he wanted to establish an analogy between the case of the directors of the C.N.R. and other public servants who have left the service or who are going to leave it, but now he discusses each case in detail. This is what he has been doing with regard to the president of the C.B.C. Now he is discussing the case of the under secretary of state. This is where I think he is going too far.


Lionel Chevrier: Mr. Speaker, I am not discussing each case. I disagree with you respectfully. I have put these 12 names on the record and I was going on to build up an analogy between them and others. If I were to discuss the cases seriatim I could spend many minutes on each one but, as I said a moment ago, I do not intend to do that. But what I do intend to do is to draw an analogy between the treatment of the president and directors of the C.N.R. and other public servants, and to establish a fact which I think is unchallengeable, that there is great uneasiness in the public service today.


John Whitney Pickersgill: Just a reign of terror.


Lionel Chevrier: I had stated a moment ago the position-


Mr. Hellyer:: A terrible reign.


Lionel Chevrier: -of the under secretary of state and the reply-


An hon. Member:: Talk about the seaway.


Lionel Chevrier: -which the Prime Minister gave to me on that occasion. This prompted he Droit to write an editorial on July 5, a very recent editorial, entitled:
(Translation):
An alarming exodus.
(Text):
The first sentence reads as follows; (Translation):
Mr. Charles Stein's resignation from the Secretary of State department is most unfortunate.
(Text):


Donald Methuen Fleming: Order. I rise on a point of order, Mr. Speaker. In defiance of your ruling the hon. member is proceeding now to try to make something out of the resignation of Mr. Charles Stein. His letter was read in this house some days ago, and the reasons for that resignation were given by him in his own letter, indicating that he considered he had been well used and was leaving to enter private practice. Is the hon. member now to be permitted to discuss this case? What has the resignation of the under secretary of state to resume the practice of law to do with a bill relating to the financing and guaranteeing of the financial obligations of the Canadian National Railways? We could go around the whole spectrum of the public service if that were the case.
773G	HOUSE OF
Canadian National Railways


John Whitney Pickersgill: On the point of order which the Minister of Finance has smuggled in, to use his own word, for the purpose of making his own speech about this matter and indicating the government's point of view, that, of course, is just what we have witnessed for days in this house when the minister alone was allowed to give evidence. But I am not dealing with that; I am dealing with the minister's point of order. Before he heard whether or not what my hon. friend had to say was relevant to the matter, merely because someone's name was mentioned the minister presumed to anticipate his arguments. Now, surely in this free assembly it is for us on both sides of the house to decide what arguments we consider are valid to make our points, and no hon. member should be interrupted by the most arrogant of ministers-


Mr. Deputy Speaker:: Order. The hon. member will realize that he is doing exactly what he is reproaching the minister for doing.


Lionel Chevrier: I want to rise on a point of order.


Mr. Deputy Speaker:: Order. I am considering a point of order now. I indicated my view previously, and I think really that the hon. member for Laurier is going too far. I do not mind him mentioning cases, but now he intends to go on and discuss each case in detail. When he started to discuss the case of Mr. Ouimet he added something which to me was irrelevant, and he was proceeding to do the same thing with regard to the under secretary of state. I do not mind his building up an analogy, as he said, but to discuss each case in detail is certainly not necessary for his analogy, nor is it relevant to the debate.


Lionel Chevrier: Mr. Speaker, I rise on a point of order for two purposes. First I should like to say that I think the treatment-and I say this to you with great respect-having to do with the application of the rules of the house should be meted out to hon. members on both sides of the house with equal fairness. I am not saying that is not the case at the moment. What I am saying is that when a point of order is raised by a minister there is a tendency not to give those of us who sit on this side of the house an opportunity to deal with that point in the manner in which it should be dealt with.
The next thing that I should like to deal with is the minister's statement when he raised his point of order to interrupt my mention of the under secretary of state. He said that the matter had been settled because-


Donald Methuen Fleming: I did not say it had
been settled.


Lionel Chevrier: All right. Let me put it this way, that it had been dealt with-


Donald Methuen Fleming: No.


Lionel Chevrier: -by the Prime Minister reading into the record the letter of resignation of the under secretary of state. He said he considered he was well used. Well, I am not going to sit in this house and accept that statement. I do not believe that such letter, any more than many of the other letters that hon. ministers on the other side of the house have received, is necessarily an indication at all of the good treatment which those public servants have received. But I do believe this-


Donald Methuen Fleming: Order. I rise on a point of order.


Lionel Chevrier: I am on a point of order.


Mr. Deputy Speaker:: I will hear the hon. member for Laurier.


Lionel Chevrier: Thank you, Mr. Speaker. I do believe that when distinguished public servants have to leave either because of the treatment that is being meted out to them-


William Joseph Browne: On a question of privilege-


Lionel Chevrier: -because of the fact-


William Joseph Browne: On a question of privilege, Mr. Speaker-


Lionel Chevrier: I have the floor, and unless I am told by the Speaker I will not sit down.


Mr. Deputy Speaker:: Order. I do not think a question of privilege may intervene when a point of order is being discussed, but I will hear the hon. member later on. However, at this point I just ask the hon. member for Laurier not to discuss at too great length the facts when dealing with the point of order. I should like him to point out exactly what is his point of order in relation to the point that he is now discussing, because he will realize that we are going to have a debate within a debate if we continue in this way.


Lionel Chevrier: On the point of order, the second matter with which I was dealing and which goes to the root of the point of order is the right of any member of parliament to make a comparison between the treatment of one public servant and the treatment meted out to another. I was proposing to do that by indicating that notwithstanding the letter showed that the public servant was-


An hon. Member:: Happy.


Mr. Carter:: Well used.


Lionel Chevrier: -well used, as the minister stated, there is a reason for such a letter being written, and I know it too well.


Mr. Deputy Speaker:: Order. I understand the point which the hon. member for Laurier is making, but I think he is discussing the ruling of the Chair. I will agree with him, however, that the Minister of Finance should not have taken the opportunity when he rose on the point of order to explain why the under secretary of state is leaving, but I must say with all due deference to the hon. member for Laurier that he had started to discuss in detail the case of the under secretary of state and now he is continuing to do so. That is exactly the danger in a case like this. If the hon. member for Laurier wants to build an argument he does not need to discuss each case in detail, because if he does that the result will be that we will be discussing this problem which is a side issue to the present bill. There is no doubt about that.
I am not telling the hon. member that he cannot make a comparison. I am not saying that these matters cannot be discussed in the house, but the most difficult problem for the Chair recently and in fact throughout the whole session has been that hon. members seem to want to discuss things when it is not the proper time to do so. If the Chair has no co-operation from all sides of the house, and I am not pointing to any side in particular, I think it is going to be very difficult to conduct an orderly debate and be fair to everybody. I assure the hon. member for Laurier that the Chair has only one intention, to be fair and to give equal treatment to all. But the Chair will not be able to do that if there is no co-operation.


Mr. Valade:: On the point of order-


Mr. Deputy Speaker:: Order. The hon. member for St. Mary will agree, I think, that the Chair has made a ruling now and that this point of order has been sufficiently discussed.


Georges-J. Valade: Mr. Speaker, this arises from another issue which the hon. member for Laurier mentioned before. He has referred to a list of civil service employees who have left the employ of the government. As you have just said, Mr. Speaker, if this latitude is granted to one member advantage could be taken of it by other members. Will we also be allowed in this debate to mention the names of civil servants who left-


Mr. Deputy Speaker:: Order. The Chair will make a decision when the time arises.


William Joseph Browne: Mr. Speaker, I rose on a question of privilege because after you had made your ruling the hon.
Canadian National Railways member for Laurier proceeded to bring out the argument that he had ready in the first place. It seemed to me that it was an infringement of the privileges of the members of the house that he should depart so far from the ruling with irrelevancies of the nature he was discussing.


Lionel Chevrier: Mr. Speaker, I am extremely sorry that I have offended the sensibilities of the Solicitor General and prompted him to rise on a question of privilege. Apparently the Solicitor General is a little embarrassed by this list. Apparently the Solicitor General is embarrassed not only by the list but by the treatment that is being meted out by himself and his colleagues to prominent members of the public service of Canada. Otherwise he would not have objected. It seems to me that the Solicitor General should not be nearly so sensitive. After all, if there is no objection there is nothing to hide, and surely the government should have no objection to allowing me to make a comparison between the treatment meted out to the C.N.R. directors and president and that meted out to some of the members of the public service.


John Whitney Pickersgill: They do not like to be reminded of the heads that have rolled. (Translation) :


Mr. Johnson:: Tell the truth, do not be a hypocrite.
(Text):


Lionel Chevrier: It appears, Mr. Speaker, that what I am saying is not very palatable to those who sit on the other side of the house.


Donald Methuen Fleming: It is so unfair. (Translation):


Paul Léo Maurice Johnson: We find hypocrites amusing.


Mr. Deputy Speaker:: Order. I have heard a term which is certainly not parliamentary. I do not know whether it was directed at a member of the house, but if that is the case, or in any event, I would ask the hon. member for Chambly-Rouville (Mr. Johnson) to indicate that he was not referring to an hon. member of the house.


Paul Léo Maurice Johnson: There are many hypocrites who criticize when they are in the opposition but do worse things when they are in office. The little brothers of the hon. member for Laurier in Quebec are an example among others.


Some hon. Members:: Withdraw.


Paul Léo Maurice Johnson: They are hypocrites and pharisees.
(Text):


Lionel Chevrier: Mr. Speaker, the other day when I used a similar expression with respect to the Minister of Finance I was called to order at once and I had to withdraw it. I think the inference here is quite clear.

Canadian National Railways (Translation):


Mr. Deputy Speaker:: Order. I asked the hon. member for Chambly-Rouville to make things quite clear, and he answered that he was not referring to the hon. member for Laurier (Mr. Chevrier). But I do not know whether he was referring to other hon. members, and in that case, I would ask him to make it quite clear that the term did not apply to any member of this house.


Paul Léo Maurice Johnson: First of all, Mr. Speaker, I should return to my seat, because I am not now at my regular desk. If you will allow me, I shall return there. Otherwise, I might be called to order.
If Your Honour will allow, the hon. member for Laurier, with his usual and acknowledged ability, tried to relate the discussion to Ottawa. I was speaking of pharisees and hypocrites in Quebec, not in this house. I was speaking of the Liberal hypocrites in Quebec, not in Ottawa.


Mr. Deputy  Speaker. Order.@Text: 


Lionel Chevrier: Mr. Speaker, this is a diversionary tactic such as we have become accustomed to in the house. I now return to the article which appeared in Le Droit on July 5, and I should like to read one paragraph having to do with the resignation of the under secretary of state.
(Translation):
The resignation of Mr. Charles Stein, the under secretary of state, is most unfortunate. Not only does it cause consternation but it increases the unrest which was already great following the recent resignation of high public officials.
The present government should do a serious selfexamination. It should ask itself whether it is not at least partly responsible for that exodus, and if all the changes that have been made or which are forthcoming are likely to reinforce government administration and serve the interests of the Canadian people.
(Text):
What I want to do, Mr. Speaker, is to compare the attitude taken by the Prime Minister and the Minister of Transport in connection with the directors of the C.N.R. and the attitude taken by the Secretary of State for External Affairs when he was minister of public works. In 1957 and 1958, when it was suggested1 repeatedly that heads were going to roll in the Department of Public Works, he rose in this house and without the slightest hesitation made it quite clear that in so far as he was concerned the officers of his department had his confidence, that the heads of the officers of his department were not going to roll, that the officers of his department were administering the affairs of that department with efficiency, and that he had perfect confidence in them. I think he even went one

step further and said that in so far as he was concerned all government servants were of the same calibre.
Why can we not have a repetition of that now? What has happened in the period between 1957-58 and 1961 to bring about such a change of attitude on the part of the government and its supporters? We feel it in the air. We see it in the reports of committees. We see what goes on in this house. On the part of those who sit on the other side of the house there seems to be a tendency to challenge the efficiency and loyalty of those men and women who are in the public service of Canada. The time has come to obtain a fresh outlook-


Mr. Macdonnell:: What evidence is there of that?


Lionel Chevrier: What is that?


James MacKerras Macdonnell: Can you adduce any
evidence of any kind for what you are saying?


John Whitney Pickersgill: Look at the heads that have rolled.


Lionel Chevrier: Let me deal with the statement of the hon. member for Greenwood (Mr. Macdonnell). He says, what evidence is there? Why did he rise in the House of Commons the other day to defend the president of Canadian National Railways after members of his own party rose and attacked him? The hon. member did so because the government did not have the courage or the decency-the Prime Minister or the Minister of Transport -to support these public servants who have rendered a great service to Canada.
There are other very clear indications. When I am asked to produce evidence, I may say there is a difference between evidence that is produced in a court, as has been said so often from the other side of the house, and extraneous evidence. There exists a good deal of extraneous evidence to the effect that members of the public service feel themselves thwarted and frustrated, and feel uncertain in so far as their future position is concerned.


James MacKerras Macdonnell: Will the hon. member permit a question?


Lionel Chevrier: Yes.


James MacKerras Macdonnell: To show how unfair it is to adduce the names in this list, I point out that included in the list is Mr. Hector McKinnon. Mr. Hector McKinnon, as is well known, reached the end of his service, retired and had to be persuaded by the Minister of Finance to come back into the service to assist in the negotiations at Geneva. Second, we are asked to believe that a letter which was read in this house the other day from a public servant, giving a reasonable reason

for his going back to private practice, was not true. Does this make sense, all this kind of talk?


Lionel Chevrier: The hon. member has asked me a question, and I am going to answer his question. The first question had to do with this long list. I did not say that all those people were dismissed or fired.


Some hon. Members:: Oh, oh.


James MacKerras Macdonnell: That was the innuendo.


Lionel Chevrier: Well, now, my hon. friend either was not in the house or he did not hear what I had to say. I have the notes of what I had to say right here. Here is what I said. That is why there has been such an exodus of public servants from Ottawa since 1957. I do not say that all of them left exclusively because of the way the government treated them, but listen to the list of those who have left. Then I read that list without any comment whatever.


James MacKerras Macdonnell: Including the name of Mr. Hector McKinnon, and in his case the hon. member had every opportunity of knowing that there was no reason for his inclusion in that list.


Lionel Chevrier: I do not believe I need to add anything, save and except to say that it was quite clear that Mr. Hector McKinnon, notwithstanding what the hon. gentleman has said, was maligned on more than one occasion.


Donald Methuen Fleming: I rise on a point of order, Mr. Speaker, to say that is utterly untrue. No member of this house, either in this present parliament or any previous parliament, has ever spoken in more glowing terms of praise and admiration of Mr. Hector McKinnon than I have.


John Whitney Pickersgill: The hon. gentleman has risen on a point of order, but I would say we have heard this same hon. gentleman malign Mr. McKinnon by accusing him of disregarding the law of Canada for ten years.


Donald Methuen Fleming: There has never been a more false statement made in this house than that one.


John Whitney Pickersgill: We listened to it over and over again.


Lionel Chevrier: I want to deal with the other point, having answered the first question asked by my hon. friend. I should like now to deal with the point he raised with regard to the letter of the under secretary of state. Hon. members know very well that when a public servant leaves the service of the government of Canada, either to go back to private practice-and particularly in order to go back to private practice-
Canadian National Railways or to go into some other field, he is not going to write letters other than of the kind which was written by the under secretary of state; because he has to practise law in his community, and he will probably have to come back to Ottawa and deal with the government. What the under secretary of state did, I think, was the right thing to do under the circumstances, as many others whose names I have mentioned in this list did when they resigned from public office.
But I do know, and many of us on this side of the house do know, that public servants are not being treated in the manner in which they should be treated by this government. The greatest proof of this lies in the treatment of the directors and president of the Canadian National Railways.


William Joseph Browne: Will the
hon. member permit a question?


Lionel Chevrier: Yes.


William Joseph Browne: Does the hon. member for Laurier suggest that the under secretary of state has been driven out of office?


Lionel Chevrier: The Solicitor General did not listen to what I had to say, otherwise he would not have asked that question; because it is not even pertinent to the issue.


Mr. Drysdale:: Translated, that means you have not got an answer.


Lionel Chevrier: I say, sir, that there is a great change of mind on the part of those who sit on the other side of the house from the days when the former minister of public works used to rise in this house and repeatedly state his confidence in government officers and public servants, and the conduct of the government in connection with the president of Canadian National Railways and the directors. Surely, sir, before we pass this measure, before we vote on this measure if that need be, we are going to be told and we are entitled to know, in a free parliament, whether the president and directors of the Canadian National Railways are going to remain in their positions or who are going to replace them. We are entitled to know who these men are who are going to spend these hundreds of millions of dollars so we can determine for ourselves whether or not they are competent and efficient and possess the necessary business experience.
If we do not, then it is not parliament that is sovereign. If we do not there was no meaning whatever in the words of the Prime Minister in a former debate. If we do not, then it is one man who arrogates unto himself all the powers of parliament, and I hope that day has not yet arrived.

Canadian National Railways


Mr. D. M. Fisher (Pori Arthur):: Mr. Speaker, I hope I can get through my remarks without points of order such as those that have been flying around here recently. The railways, air lines and shipping committee report has been tabled, and this gives us an opportunity to both use the evidence that was presented before that committee and to speak with more information with regard to this measure.
Let me say that we support the measure. We think it is a routine financial measure, and we support it. There are a considerable number of comments, however, I should like to make.
The report that was tabled yesterday took cognizance of a number of points that came up. First, there was a mild-at least it is my interpretation-slap on the wrist of the president for his attack in the committee on members of parliament. Second, there were some general remarks about the financial position of the Canadian National, and there was critical comment about the way in which Canadian National Railways got into trucking operations. There were some suggestions with regard to the United States operations of the C.N.R.; there was a paragraph on pensions and a suggestion how that particular problem should be handled, and there was a brief paragraph relating to the morale of the employees.
The position of the C.C.F. party with regard to the Canadian National Railways might be worth stating again, since as our party spokesman in the house on the C.N.R. I have read and heard the accusation in certain places that I have been out to chop down or destroy the Canadian National Railways. We support the Canadian National Railways as a public institution, and will go on supporting it. I have here G. R. Stevens' book "Canadian National Railways". In the introduction to this book there is a brief paragraph that I think covers the great value of the C.N.R. and all railways in Canada. It says:
The economic value of a railway to the community is determined not by the railway's income account and balance sheet, but by the social dividends the community receives from the reduced cost of transportation. The primary dividend is the money saved by using rail transport rather than any other kind. In the middle of the last century the difference in cost was astounding, at least twenty times that of providing railway service. Even in these days of motor vehicles, this dividend is still a vital force in our economy; money that is saved for the community by the use of rail transport is at least three times the total expenses of the railways, including interest on capital. Not infrequently the income account and balance sheet of railways indicate something less than financial success; but they scarcely reveal the impact of railways on the economy of the country.


We know there is a great necessity for the Canadian National Railways. In the part of the country which I represent there is a tremendous amount of C.N.R. mileage. That mileage is not only an integral part of the whole economy of our region, but it is part of that bridge that links the west and the east together. The Canadian National Railways as a crown corporation of the 1960's is the kind of organization that we support. We only expect from that organization that it is run on the best possible basis in terms of both business efficiency and public service. When those two factors come into contradiction-that is, efficiency and public service-then we believe it is the responsibility of the government which owns the corporation to indicate just how we are going to deal with the problem.
One issue that always comes up in connection with the Canadian National Railways, and it has been brought to the fore by the Financial Post recently, is whether we are ready in Canada for an amalgamation or what is sometimes called a rationalization of the two major class 1 railways. Our party position in regard to this matter is that it is a subject that is so pertinent and relevant at the present time that I want to make it perfectly clear that if the matter is to be studied, we feel it should be studied with the emphasis on the Canadian National Railways taking over the railway lines of the Canadian Pacific Railway.
Mr. Speaker, I now want to talk in much greater detail about the appearance of the president of the Canadian National Railways before the committee, because as an individual member of parliament I was involved in a way that was in some ways unique so far as members of the committee were concerned. I should like to make one point in contradistinction to what has been said by the hon. member for Laurier. Mr. Gordon had his period, if one wants to call it that, in court before the shareholders, if one wants to call them that. Mr. Gordon is not in a similar position to Mr. Coyne in this regard at all. It would seem to me that with regard to the argument that public servants are frightened or scared at the present time, the hon. member for Laurier may be able to make that an issue in certain areas, but I believe that in the area of the president of the Canadian National Railways this does not apply.
I would go along with the hon. member to a degree, that we need to know whether the president of the Canadian National Railways is going to be reappointed. I think he knows our views on whether or not this should happen. But I feel, as an individual trying to judge the situation, that it is perhaps one of

the best things possible for the Canadian National Railways at the present time to keep Mr. Gordon in some kind of suspension, because I think it will result in a better job of management of the Canadian National Railways. I would not advocate it as a permanent feature.
The performance of the president of the Canadian National Railways before the committee was to quite an extent in marked contrast to his previous appearances. If I could make some kind of a simile or metaphor it would be that this time it was as though he was appearing at a cocktail party rather than in the locker room. He was much milder and much more informative than ever before. I think all hon. members who sat on this committee in other years will agree that in the past Mr. Gordon did not give the impression of having a team working with him. He dominated all the evidence; he gave almost all the evidence, and we had to search very far to find evidence from other people who supported him in his so-called management team.
This year we had many more people in the committee in support of the president of the Canadian National Railways. It was quite apparent that they were being encouraged to give more evidence, to fill in more background and so give the members of the committee much more information. They had this information at their fingertips for us. To me this was a victory in the sense that this year we got both a more informative presentation and a wider presentation from the president of the Canadian National Railways. It seems to me this change is all for the good, and I certainly had the impression that the members of the committee were impressed with the fact that we received more information.
I should like to deal with the fact that during the committee hearings we were all aware that Mr. Gordon's position had been attacked in this house. I suggested, and other members of the committee also suggested, that he be given a full opportunity to state his case. He did so, on a number of aspects of the work, and he spoke particularly in relation to charges of members of parliament relating to him. I wish to touch on a number of these, Mr. Speaker, because it seems to me they affect all members of the committee and all hon. members of the house.
One of the things Mr. Gordon said was that McCarthy-like tactics had been introduced. I should like to make this point, that McCarthy-like tactics usually relate to indicating that someone is a subversive. I received a letter yesterday from somebody by the name of Pat Walsh suggesting that I am a subversive
Canadian National Railways because I sent letters to hon. members of the house advertising a nuclear radiation hazards meeting. This, it seems to me, is a McCarthy-like tactic.
Mr. Gordon felt he had been treated with McCarthy-like tactics. I do not know of any hon. member of this house who is critical of Mr. Gordon in the sense of thinking he is a subversive. I do not believe Mr. Gordon is a communist. I am certain he is not. I am certain he is not even a C.C.F.'er. I do not know what his politics are. I suspect them, but I do not think it has anything to do with the job he does. If Mr. Gordon is a Liberal, I do not think that is a factor which is at all relevant to the job he may do as president of the Canadian National Railways. It seems to me this was a most unfair, gratuitous way to come back at criticism, to suggest that people who criticize him were using McCarthy-like tactics. It seems to me his politics were never called into question at any time.
I now wish to deal with the matter of Mr. Gordon being called arrogant, haughty and dictatorial. I went to the trouble of reading what I had said about Mr. Gordon in the House of Commons. I have never at any time called him arrogant, dictatorial or haughty, as has been suggested. The strongest words I have ever used in this house about Mr. Gordon were that he was a man of brutal candour. But what I did suggest-and this seems to have caused a reaction on the part of Mr. Gordon-was that he should be fired. Perhaps this is a vicious criticism; but surely, Mr. Speaker, when you reach the stage that you think someone who has had 12 years to do a job is not doing it very well, there is nothing wrong in getting up and quite fairly saying that you think the man should be fired.
Apparently Mr. Gordon felt I was the central figure in the attacks upon him, because he came to the committee well prepared, I think, to take several rounds out of me. I want to comment upon a couple of these; because while I will not say that Mr. Gordon was untruthful in a couple of his charges, it does seem to me that he did not give all the factors in the situation. I should like to point out to hon. members

I hate to bring up this individual matter-that I was accused in this committee of being a lawbreaker, which is a fairly serious charge; of being a braggart, which is more of a political charge than a serious charge. I was accused of conniving at thievery, and of being a smearer. I should just like to analyse the charge of lawbreaking first, because to me this is typical of the inability of the president of the Canadian National Railways to react to criticism.

Canadian National Railways
It all arose from a statement made by the president in the committee last year. The hon. member for Kenora-Rainy River brought up a very difficult situation which had developed in a community in his constituency, one which was causing a great deal of dislocation. We were given, I understood, an undertaking by Mr. Gordon that if such a situation threatened to develop again as a result of changes in the railway which were really going to dislocate a community, he would see that the community concerned was informed well ahead of time. Well, last year a group of men representing several railway communities came down here and showed that they had nine days' notice of the introduction of a form of service which would vitally and drastically affect the population and the well being of one community in my constituency and one community in the constituency of the hon. member for Nickel Belt (Mr. Godin). The hon. member for Nickel Belt and I talked the matter over with these men and asked them what could be done. They had been to the Minister of Transport. Their general chairman had been to see the management, and the management intended to go ahead with its plans.


William Moore Benidickson: You talked it over with me, too.


Douglas Mason Fisher: No doubt. The men were in a great deal of distress over this, and they kept insisting that they just could not go through with this change in service which meant running through two divisions. They felt that from the point of view of safety it was unsound, and having regard to their own personal positions they did not have time to straighten out their affairs in these communities. They felt so strongly about this that I said "Well, what can you do? What can you do if you have got to accept this?" And they said "We just will not go to work". I said, "Well, you cannot pull a wildcat strike". The general chairman there said "If they pull a wildcat strike they will go to jail". At that time I noted these words very well. I said "If you feel so strongly about it you should be prepared to go to jail. After all, I do not think there is any greater test of your feelings about something than whether you are prepared to go to jail about it".
This, apparently, is the lawbreaking that I did. This is the advice which Mr. Gordon feels is lawbreaking. Well, what happened as a result of the fact that the men announced that they were going to pull themselves out of service was that the railway postponed for a short while putting its plan into operation and accepted the compromise which the men suggested. Here is the irony. Mr. Gordon

accused me of costing the C.N.R. money because of my role in this matter. He accused me of lawbreaking. I was up in those communities last week in order to get all the particulars of the situation and talk it over with the men. They do not think I am a lawbreaker. They do not think I cost the C.N.R. any money. As a matter of fact they pointed out to me that right in the bulletin books of the divisional point at Capreol there was a letter from the management of the C.N.R. congratulating them on the wonderful way this service, as it had been introduced according to their compromise, was going. The letter said they were making better time and giving better service than other places on the Canadian National Railways system. Now, the management of the C.N.R. does not go to those lengths to compliment its employees if something is not working well, and in the light of this fact I think Mr. Gordon's charge that I had cost the railway a great deal of money and am a lawbreaker was nonsensical.
There is one other aspect of this which is much more important to me than to anyone else. Mr. Gordon accused me of conniving at thievery. I think all members are aware that they get communications from people in many diverse forms. During the committee hearings I received long distance telephone calls; visitors came to my office; I received several hundred letters. A great deal of information comes to us, and in almost every aspect of our work a great deal of this information comes to us in confidence. I had been presented by a person, who at one time had a connection with the trucking operations of the Canadian National Railways, with a statement regarding the performance of these operations in the year 1960. Because this document was given to me in confidence I had no intention of revealing the source, and I was not using the document in any other way except that I just kept asking the president of the C.N.R. whether it was not true that his truck lines lost money in 1960. I suggested an estimated figure.
Well, as you probably know, Mr. Speaker, he wanted to know where I was getting this information, and when I suggested that I had this paper here it wound up on the table. We had a little bit of a wrestling match over it, and that document became part of the record. Mr. Gordon identified the document as a document stolen from the files of the Canadian National Railways. I doubt very much whether it was a stolen document in any very real sense in relation to the way in which I got it. I still feel that I am privy in not revealing the name of the person who gave it to me. Anyway, the document was recognized as part of the record.

Now I should just like to suggest to hon. members that if one is going to be informed with regard to the many matters which arise, one must accept, with a certain critical approach, the various people who come to one and give information in confidence. If this led me to being in possession of what was said to be a stolen document, I have no support or flattery to put forward to the person who provided this to me, but I take strenuous exception to the suggestion that I either connived in obtaining a stolen document or, knowing that it was stolen, used it in any vicious or nasty way.
There is one other criticism which the president made. He said he did not feel that the head of a $3| billion corporation should have to stand the kind of criticism that he received in the House of Commons from members of parliament. I asked him to make a statement in this particular regard because I felt he should have his day in court, as one says. He took off, and the committee has noted that he did and questioned his wisdom and propriety in doing so.
It seems to me, despite the talk the hon. member for Laurier gave about the treatment of civil servants and so on, that it is sometimes difficult for civil servants and public servants to recognize that we as members of parliament have a certain responsibility. Although I disagreed with the hon. member who succeeded the late secretary of state for external affairs in some of the remarks he made about Mr. Gordon, what was there wrong about his standing up here in his place, to which he has been elected, and giving his opinion in this respect? I see nothing wrong with it; and the charge that this has undermined the morale of the Canadian National Railways by calling the management into question is a substantial charge, but I wonder if we should accept it. Each of us, through our constituents and the public organizations which work in our constituencies, becomes aware of certain opinions, certain views; we come to certain conclusions about the work of government organizations. I cannot see anything wrong in this particular case with a responsible member getting up in the house and stating what he thinks about how a government organization is run, and expressing his opinions about the individuals who run it.
One of the unfortunate things in regard to the appearance of Mr. Gordon before the committee-this has nothing to do with him personally-occurred because of the rather juvenile attitude taken by many members of the press. I was telephoned on at least five occasions one day by a newspaperman who was attempting to determine my height, chesl
Canadian National Railways measurement and so on apparently in an effort to write a story comparing me in size with Mr. Gordon, almost as though there was to be some kind of a Patterson-Johann-son bout.


John Andrew W. Drysdale: A bout of overweights, not heavyweights.


Douglas Mason Fisher: The hon. member may be right, that this was a bout of overweights, but I suggest it is this kind of wrong association in respect to committee meetings which causes the kind of criticism which we certainly do not deserve.
I should like to make one final point in regard to the personal charges against the president of the C.N.R. by myself. I reiterate that all my questions directed to the president of the C.N.R. were direct questions and not criticisms. The only criticism I made in the house was that he should be fired and that he possessed a certain brutal candour. If the president of the Canadian National Railways cannot stand up to that type of criticism that is all the more reason why he should go.
Mr. Speaker, I should like at this point to say something about what I think are Mr. Gordon's failures as president of the Canadian National Railways. The irony of the situation is that we have a banker as head of the railway. He is a man who was going to bring to the railroad a great understanding of financial matters, such as bonds, capital, and so on. This is a man who is a great financier with great experience, particularly during the last war; and who did, as we have been told, a magnificent job in respect to one aspect of government operations. He has been head of the railway for 12 years and now comes up with a $900 million bombshell. It apparently has taken him almost 12 years to discover that the financial picture of this railway does not look good because there should be a shift in bookkeeping entries of $900 million from the debt structure to the government of Canada. He suggests that once that has been accomplished he will be able to present a very good financial picture.
As the hon. member for Acadia said, I am a simple boy from the bush, and this does not quite make sense to me. He was referring to this great banker spending 12 years with the railway and then coming up with $900 million bookkeeping shift to put the financial picture of the Canadian National Railways in a wonderful light. That is the capital revision that the Minister of Finance is going to have to consider.
The point I should like to make to the hon. member for Laurier is that the reason the committee said in its recommendations that

Canadian National Railways in the light of this suggestion the government should examine the proposition with great care is that we have already had two large capital revisions in the Canadian National Railways. We have had a royal commission which sat for a year and a half, with evidence piled quite high, at which the C.N.R. was well represented by a capable solicitor, and on some occasions more than one; yet during all that time there was not one word said by any representative of the Canadian National Railways regarding this $900 million shift. As a matter of fact we have not as yet received a complete report from that commission, although we have the first volume. It seems to me that this royal commission had the responsibility of studying the whole railway transportation picture, yet Mr. Gordon did not find it necessary to mention this $700 million to $1,200 million difficulty at any time during its sittings.
Mr. Gordon, the man who, as I have said, was a banker with some experience and who has now been in charge of the railway for 12 years, at this late date has decided that the explanation for the Canadian National Railways deficit lies in a bookkeeping shift. I suggest there has been irresponsibility here in this regard, because the royal commission has suggested that subsidies be paid in the amount of $100 million per year. What is the relationship between those subsidies and the fact that if Mr. Gordon is successful in his suggestion something between $40 million and $50 million of the C.N.R. deficit will disappear? Surely in that event there will be created a completely different picture. Perhaps if we allow this bookkeeping change we will not need to adopt the royal commission's recommendations as to subsidies. I do not know the answer, but suggest that because Mr. Gordon has only at this stage come to this conclusion, this is a failure on his part.
One other point I should like to touch upon has regard to the tremendous management reorganization of the Canadian National Railways. By this change completely new areas and regions will be created. The results of this change may be excellent and responsive to the needs, but it is coming only now after an 11 or 12 year occupancy of the president's position by Mr. Gordon. This change is being made, as the president himself admitted, without adequate preparation and information, particularly in regard to employees, with the result that morale has been demoralized. Employees have not been adequately informed or prepared in respect to this proposed change. Mr. Gordon himself seems to oscillate between the position of not informing the employees, because they just


get their backs up and get excited, and working out better public relations.
Mr. Gordon has already begun to use his public relations resources. Not long ago on his return to Montreal, according to the press, he was greeted by a crowd of 800 employees. Hon. members will remember the picture of him coming through the door being greeted by this crowd of 800 employees. I received a letter from an individual who was in that crowd, informing me that he had received notice from his supervisor to be in attendance at this spontaneous welcome. As a consequence of this information I asked that individual how big the crowd was, and received information that it was not more than about 300. I do not know which newspaper reporter made the estimate but I am surprised, because I thought newspaper men were quite able to make accurate estimates.


John Andrew W. Drysdale: Maybe a train had just come in.


Douglas Mason Fisher: I asked that individual how many employees attended this welcome, how many were employed in this magnificent headquarters of the C.N.R., and how they were all crowded into the lobby. I was informed that not more than one sixth of the employees of that building were present at this welcoming demonstration. It is obvious that the public relations program is beginning to work again, and I suggest that similar operations be commenced in my part of the country where the employees are in fear of losing their jobs and have very low morale.


Mr. Speaker:: Perhaps this would be a convenient place to break.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
Douglas Mason Fisher: Mr. Speaker, it is unfortunate that I was so discursive earlier that I did not have time to deal with a number of points. I should have liked to touch on the glowing messages that Mr. Gordon read into the committee proceedings from such men as Mr. Smith, the head of the Canadian brotherhood of railway and general transport workers. The irony is that if one compares this sycophancy with the old magazine produced by that gentleman's union and their strong editorial criticism of Mr. Gordon, coming at the very same time, plus their very complimentary remarks about the views of the member for Port Arthur on the railway situation, one sees that perhaps that union is not as solid as it may appear to be. It is a pity

that we could not go into what was revealed about the Canadian National Railways trucking operations, because here you have a situation where one year after going into the business of these trucking operations you seem to have a couple of them that are in very bad financial straits.
As far as we are concerned, Mr. Speaker, there is going to be an end of calling for Mr. Gordon's resignation. We feel it is apparent that the government is not going to get rid of him at this time because of other circumstances that are occurring. This is the government's decision and it is the government's right, but we shall follow with care how Mr. Gordon performs in the next year. I personally think that this king of all the Canadian cabbages will be much less wrapped up in himself as the result of what has taken place.
I think out of it will come a better deal from the management for the employees and those many good, fine people who work on the Canadian National Railways.


Herbert Wilfred Herridge: Will the hon. member permit a question? I was very interested in his reference in the earlier portions of his speech to the welcome home reception staged by employees of the Canadian National Railways for Mr. Gordon. Will the hon. member explain whether he thinks it reflects the attitude of the railway unions toward Mr. Gordon?


David James Walker: We cannot hear this Mr. Gallagher and Mr. Sheen dialogue.


Mr. Speaker:: Would the hon. minister like to have it repeated?


Mr. Churchill:: No; I heard it.


David James Walker: No.


John Whitney Pickersgill: I wonder whether I could ask the hon. member another question which he could answer at the same time. Is it the old party asking a question of the New party? Or is it the New party asking a question of the old party?


Douglas Mason Fisher: Let us put it this way in answer to the question. This is the Hazen Argue wing of the New party working in concert. In answer to the hon. member's question about the reception, I should like to say I am not in a position really to comment on whether the fact that 800 people allegedly arrived in the lobby so fortuitously at the same time as the cameraman and the president is an indication of complete union support for Mr. Gordon. All I can tell the hon. member is that I was in two railway divisional points last week; while the employees did not sing "For He's A Jolly Good Fellow", the reception was very warm and friendly.
Canadian National Railways


Mr. E. J. Broome (Vancouver South):: Mr. Speaker, I should like to take a few minutes to put a few comments on the record in regard to the operation of the United States lines of the Canadian National Railways. The total deficit of all United States lines in 1960, after other income is added but before fixed charges, was $6,856,583, as reported at pages 182 and 183 of the minutes of proceedings and evidence of the sessional committee. On the same basis there was a deficit of $6,473,732 for the entire C.N.R. system, including the United States lines. Therefore, if the United States operations had been excluded from the C.N.R. statement, the C.N.R. would have shown a profit before fixed1 charges.
The deficit on the U.S. lines after fixed charges was approximately $11 million, as against a total system deficit of $67 million. These are rather fantastic figures when you take them in the context in which I am placing them, because the total investment in United States lines is $186 million against a total system investment of approximately $3,767 million. The United States investment is therefore 5 per cent, but it contributed over 100 per cent of the deficit before fixed charges and 16 per cent of the deficit after fixed charges.
The contention of the railroad is that onward freight received from these United States lines is so valuable and so lucrative to the C.N.R. that it not only wipes out this deficit but provides a profit in the over-all C.N.R. operations. This argument is made on the basis, I assume, that if the C.N.R. did not own these lines it would not have any chance for that freight. Since they have the only tie-in with the United States lines and since they should be somewhat equivalent to the C.P.R. in the efficiency with which they solicit freight and with which they service their customers, I cannot see the validity of that statement.
Furthermore, in the evidence given before the committee one of the chief complaints of the president of the C.N.R. with regard to the difficulty of operating the C.N.R. system in a profitable manner was the fact that the system is a conglomeration of bankrupt railroads and was not built as a single economic entity in the same way as the C.P.R. and that because it is a conglomeration of half a dozen railroads it did not really make economic good sense in many respects.
I suggest, Mr. Speaker, that these pseudopods stretching down into the United States, these United States lines owned by the C.N.R., are part of the polyglot system and that there has been no effort made by management really to streamline this system in the way of getting rid of these particular lines to which I have referred. It seems to me that

Canadian National Railways it would have been good wisdom to have tried to sell those lines and if they could not be sold then a study should be made of their abandonment and the recapture of whatever can be recaptured from the sale of equipment and real estate because the figures have shown that if we actually gave these lines away the Canadian taxpayer would be in a better position inasmuch as these lines are to all intents and purposes foreign companies that do not contribute anything to the Canadian economy except by way of the onward movement of freight about which the president talks. We are asking and the management have asked the Canadian taxpayer to subsidize to the extent of many millions of dollars a foreign operation. I would say that the management must be prepared to prove what they say. They were asked to give proof and they did not do so. Supposedly there is a report of 150 pages covering a study of this problem, and the key figure in that study must be how much revenue the C.N.R. in Canada derives from the operation of the United States lines. We could not get that figure.
I say that the management should take a good look at the report of the sessional committee and that they should be prepared next time to be able to answer that committee's questions with regard to management. I do not apologize in the least for what somebody criticized as interference with the function of management because I think this loss on United States lines was so glaring and so obvious that it should have been studied a long time ago and the answers should have been clear cut and equally obvious to the committee when the committee members asked these questions.
I do not wish to take any further time except to comment with regard to Trans-Canada Air Lines. In no place have I noticed the fact highlighted that $6.8 million in the surplus account disappeared down the drain because of the rush the air line was in to convert to an all-turbine fleet. We have the first all-turbine operation of any major air line in the world and we have to pay a price to be in that position. That price is the elimination of $6.8 million of a surplus and a deficit of $2 million. This is the real story behind the deficit of T.C.A. Very high depreciation charges have had to be taken. There was the purchase of two Super Constellations for approximately $5 million with a life of seven years but a use under the plan to convert to an all-turbine fleet of only three years. These are the things that are behind the statements and which result in the end in a red figure.


William Moore Benidickson: Mr. Speaker, first of all, I wish to be fair to the Minister of Finance. When we were discussing what was involved in the measure at the resolution stage we had a little controversy about the wording of the resolution. I wish to say to my colleagues in the house that I was wrong, that the changes in wording of the resolution were at the end of the resolution and not at the beginning.
The point is that this year we have come to the time when we have to take into account some of the decisions made by parliament a long time ago. I refer to the Canadian National Railways Capital Revision Act of 1952. In sections 4 and 6 there were intimations that after a ten-year period parliament would be asked to review the capital set-up of the C.N.R. I think those features account for the change in the resolution which I criticized the other day.
Hon. members will recognize that this very important measure has been brought before us unduly late in the session. I believe that the resolution only appeared on the order paper on July 6. When we were at the resolution stage the other day I said that I had not been a member of the committee although I had read the relevant portions of the committee's proceedings. I said that the C.N.R. was a key industry in Canada and that, despite what the Minister of Finance might have said in his budget speech, I continued to be alarmed about the C.N.R. because it had not been estimated that in 1961 its revenues would even increase at the rate of 3 per cent. Those of us who are called upon every year to examine this legislation are obliged to look forward to what was forecast by the president of the railway, a deficit very little less than last year, a deficit of $64 million compared with a deficit of $67 million last year.
Last year at this stage of the debate in the House of Commons I said that the Minister of Finance was unrealistic. The last word that he gave us, up to the presentation of this kind of bill, was that the deficit of Canadian National Railways would be between $24 million and $25 million. I said this was wholly unrealistic, having regard to the experience that any one of us sitting here could have observed in the published statements relating to Canadian National Railways and if we were to use as a yardstick the earnings up to that time of Canadian Pacific Railways. I said then, having regard to the earnings of Canadian National, that the deficit would prove to be about three times $24 million. I may have exaggerated a little, but the end result was that the net earnings of Canadian National Railways in 1960 resulted in a deficit of $67 million. I was not too far out a year

ago when I said that, having looked at the first four months of operating revenues and expenses of the railroad.
Yesterday the hon. member for Port Arthur referred to something he called a bombshell, and I think that word is worth repeating. I was not a member of the committee on railways, air lines and shipping, government owned, this year. In that committee, as the hon. member for Port Arthur has stated, the president of Canadian National Railways indicated that there might be another writeoff of the borrowings of the Canadian National to the extent of perhaps $700 million or $900 million. This follows the very important capital revision of this national asset which was made in 1951, and the legislation introduced in 1952. I wonder if the Minister of Finance has advice to give to his colleagues in the House of Commons on this point, as we again have a bill before us to guarantee to this crown corporation a very substantial debt that the corporation might incur in connection with further capital expenditures.
I, of course, have complained, as has the hon. member for Laurier, that this legislation which is an annual item has come to us late in the session, later than I can ever remember as a member of parliament. Because of the lateness we are entitled to expect from the minister, and from the Minister of Transport an up to date report as to the net earnings of this important crown corporation for the first half of 1961. I should like to know whether they are better or worse than the earnings for 1960. When the committee was assembled, we were told the deficit would be $3 million or $4 million less than in 1960. However, I believe that when we are dealing with a bill of this kind we should be told whether or not the earnings for the first six months of this year are better or worse than those of 1960.
I said last year that the Minister of Finance had completely miscalculated or ignored the Canadian National when he told us in parliament that he would have a surplus of $12 million. His calculation at that time was based on a Canadian National deficit of $24 million. Hon. members can see how wrong he was, because the deficit in 1960 proved to be $67 million. I am following in this debate the representative of a neighbouring constituency of mine, the hon. member for Port Arthur, who has taken a great interest in the affairs of Canadian National, just as I have in the past. He is not in his seat, but is apparently hearing what I am saying. I was not a member of the committee on railways, air lines and shipping, government owned, this year, but I was a member of that committee last year for the reasons to which the hon. member for Port Arthur referred,
Canadian National Railways namely the introduction of lay-offs by the Canadian National which were being inaugurated in my constituency and in particular in the town of Sioux Lookout.
I wish to know where the hon. member for Port Arthur stands in connection with some of these matters because they refer to the requirement for capital murder under the bill before us. When I was a member of the committee last year I asked the committee to hear, not the Sioux Lookout representatives of labour unions and organizations, but regional representations from western, eastern and other areas. This can be confirmed by looking at pages 19, 20 and 22 of the report of the hearings of the committee last year. As I have said, I was not a member of the committee this year, but apparently the hon. member for Port Arthur wished to hear union representations in connection with turnaround rights and pension rights. He wanted these people to be heard by our House of Commons committee. Last year, as is indicated by reference to page 19 of the committee report, he voted against the motion that I made asking that unions be heard with this matter in mind.
A great many suggestions have been made with regard to improving the efficiency of the Canadian National Railways. There was a suggestion from the government that we should have another write-off of capital obligations. According to the evidence of the president of the C.N.R. before the committee, this might involve $700 million or $900 million. At a rough guess, with tight money this might involve an annual income responsibility of $40 million. Therefore when the committee was asked to consider a deficit of $64 million for 1961, in the future they might be able to write off $40 million of debt because the capital obligation had been transferred from the crown corporation to the Minister of Finance. I ask the Minister of Finance to speak about this. There was a large write-off in 1951. Is there in contemplation another write-off of this volume?
I have here a sessional paper which was produced in the House of Commons when the present Minister of Finance sat on this side of the house. It was moved by Senator Pouliot, the then member for Temiscouata. There are many questions on this sessional paper but I propose to read only one or two. Question No. 1 reads as follows:
Did the cancellation of capital stocks and certain indebtedness of the Canadian National railway system to His Majesty, in virtue of chapter 22 of 1 George VI (1937), amount to more than $1,200,000,000, and what was the exact amount of that cancellation?
The answer provided at that time was that indeed it did; it amounted to a reduction of

Canadian National Railways $900 million. The hon. member for Port Arthur has referred to a possible further reduction of obligation and of debt to the extent of somewhere between $700 million and $900 million. If one refers to the minister's remarks of July 6 one finds that there is apparently crossing his mind the idea of doing this all over again. We were persuaded that if we introduced new capital into the C.N.R., which over a period of perhaps ten years amounted to an increase in capital of approximately $1 billion, it would result in efficiency, earning power, and so on of the railways that would produce not a deficit but a surplus.
What is the answer to this question? Does the Minister of Finance agree with the hon. member for Port Arthur that perhaps, as was suggested by the Right Hon. R. B. Bennett years ago, we should have amalgamation of these two railways? Certainly it was clearly the view of the hon. member for Port Arthur when he said on February 27, 1961, as reported at page 2479 of Hansard:
*-the whole railway operation in Canada should be consolidated under a government corporation.
What is that going to do with respect to employment? Are we going to eliminate competition between railways in this country? Is that what the hon. member for Port Arthur had in mind when he said that what we want is consolidation of the two railways of this country under a government corporation?
I say that is tantamount to accepting what was turned down by the electorate in 1935 when the late Right Hon. R. B. Bennett proposed the same thing and was voted out. When we read the minister's remarks in introducing the resolution we have what I call an apology, a procrastination, a deferment that is typical of this administration. The minister points out that under the decisions of parliament in 1951 or 1952 we decided there would be deferment of certain debt obligations of the Canadian National Railways, but parliament said that they would start to bear interest after ten years. Those decisions like the proverbial chickens have come home to roost this year.
What the minister is proposing in this bill is that he should have another year to procrastinate and not make a decision. I say that must be considered before we approve the bill before us. This means another year of procrastination. I refer to section 3 of the Canadian National Railways Refunding Act of 1955. This refers to the matter the minister mentioned in his resolution speech with respect to the $200 million opportunity of the railway for freedom in this field.
In addition I refer to the $100 million item to which the minister referred in his speech

on July 6. There again is an extension for one year of freedom from any obligation on the part of the Canadian National Railways to pay interest on the $100 million item. This is typical of this government. They are just procrastinating and deferring, until after an election, decisions that I suggest have to be made now.
I ask the minister, this government and all supporters of this government whether or not they have looked or are continuing to look at the balance sheets of these two competing national railways, C.P.R. and C.N.R. I pointed out last year that the capital expenditure asked by the competitor to our national railroad was $83 million, including $25 million for their air arm, which would bring down that amount considerably. I asked how the cabinet, which must approve these things, compared that with the requirement for which we were asked, which I think on a comparable basis, including T.C.A., was $197 million. Are we getting results from decisions of this kind which have to be approved by cabinet? I know that this crown company has certain opportunities. I also know the minister has said in this house that any crown company must be treated in the same way as any other corporation. On that basis, is this capital being generated and provided under intelligent and careful supervision by the cabinet of this country? This information would be interesting to all members of this House of Commons and of particular interest to those who support this government.
We hear that within a year there may be a possibility that the obligation to subscribe for preferred stock of the Canadian National Railways based on the act of 1951 and based on the company's annual earnings may be discontinued. I hope the minister will make it clear what kind of careful study has been made with respect to this. The statutes are clear. It is now ten years since the statute was enacted in parliament, and two or three at least of these chickens have come home to roost. The minister is taking an attitude which, I say, is typical of this government. He and his colleagues are deferring a decision. They have nothing to tell us, except that in the last three or four clauses of this bill they ask for another year in which to make up their minds.


Herbert Wilfred Herridge: just wish to make a few brief observations in view of some remarks made by the hon. member for Kenora-Rainy River and in fairness to the hon. member for Port Arthur.
The hon. member for Kenora-Rainy River charged my hon. friend for Port Arthur with inconsistency during the hearings of the committee on railways, air lines and shipping last year inasmuch as he did not support

the proposal that certain representatives of the employees of the railway should appear before the committee. I wish to draw the attention of the house to the fact that the request of the hon. member for Kenora-Rainy River that certain employees from Sioux Lookout-


William Moore Benidickson: I referred to regional representations.


Herbert Wilfred Herridge: -and other points, was not, as I am informed by my hon. friend from Port Arthur, a very practical suggestion at that time because it was not possible during the committee's consideration of the report of the Canadian National Railways, in the time allowed, for all those employees from the various communities concerned to arrive and to be heard and to have their proposals given consideration.


William Moore Benidickson: They were sitting in the committee room at the time.


Douglas Mason Fisher: Just those from Sioux Lookout.


William Moore Benidickson: No. Regional and national.


Herbert Wilfred Herridge: I was not a member of the committee but I understand that this year the committee gave consideration to pensions and other benefits and that it was strictly within the terms of reference for these employees to be heard. The hon. member for Port Arthur was very anxious that they should have this opportunity.
In conclusion I may say that knowing the great interest which my hon. friend has taken in the welfare of the employees of the Canadian National Railways and other railways, as well as in the welfare of employees in industry generally, one could not fairly accuse him of not taking any course of action which would in his opinion be to the greatest advantage of those employees concerned.
(Translation):


Mr. J. P. Deschateleis (Maisonneuve-Rosemoni):: Mr. Speaker, the purpose of this bill is to enable the C.N.R. to meet certain expenditures. As it happened on several previous occasions this bill, and it is an important bill, is introduced in the dying days of the session.
The hon. member for Laurier (Mr. Chevrier) rightly observed this morning that never did a committee sit so late in the session.
The government likes to boast about the work done in the committees. It certainly has no reason to rejoice in the fact that the report of this committee was tabled so late in the session, to the inconvenience of everybody.
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Canadian National Railways
The hon. member for Laurier mentioned that a bill to increase from seven to 12 the directors of the C.N.R. was passed by both houses.
I feel it is quite normal to inquire about the names of those who will be appointed to the C.N.R. board of directors.
On that point, I find the following on page 7644 of Hansard for July 6:
(Text):
There are many other things I should like to inject into the debate, but I should like to conclude on the note with which I began. It is that before we are asked to vote these huge sums of money the house should be taken into the confidence of the government and parliament should be told who are going to be the directors of the Canadian National Railways and, by inference, some of the directors of Trans-Canada Air Lines also. Until we are given that information the house, in all decency, should not be asked to adopt this resolution.
(Translation):
I strongly support the remarks the hon. member for Laurier made in that regard. I find it most extraordinary, indeed, that the minister should not have given us any information yet concerning those appointments.
I should like to touch upon another point connected with this bill. Not too long ago, the Prime Minister stated that at the next election-which, we hope, is not too far off- the voters will be faced with this alternative: private enterprise versus socialism.
Now, we have further proof of the government's lack of sincerity, especially as regards what it claims to be its concept of and regard for private enterprise.
Indeed, all hon. members received yesterday a telegram protesting against the C.N.R.'s interference with private enterprise, namely with the trucking industry.
To avoid any mistake I should like to quote in full the telegram the Minister of Transport (Mr. Balcer) received.


Mr. Ricard:: What about the hon. member for Matapedia-Matane (Mr. Belzile)?


Jean-Paul Deschatelets: No, no, I am speaking of the telegram which the Minister of Transport received here. I will have something to say about the hon. member for Matapedia-Matane later on. As it appears on page 7726 of Hansard of July 7, the telegram reads as follows:
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.
That was part of a question asked by the hon. member for Matapedia-Matane. This is what the Minister of Transport replied:

Canadian National Railways
Mr. Speaker, that is a decision for the authorities of the C.N.R. However, I should like to assure my hon. friend that X will pass on to the C.N.R. officials the representations he has made in that connection.
The hon. member for St. Ann (Mr. Loiselle) asked the following supplementary question:
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?
This is how the Minister of Transport replied:
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.
The hon. member for Hull (Mr. Caron) rose then to ask another supplementary question:
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?
The Minister of Transport replied:
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.
Well, if an election were called and our hon. friends, especially the Prime Minister, had the gall to choose as their electoral platform "private enterprise versus socialism", especially after the position taken by the Minister of Transport, I hope the hon. member for Matapedia-Matane would support us when we hold this government responsible for the competition private enterprise has to put up with in the province of Quebec and which is made possible by the subsidies or moneys voted in this parliament.
Mr. Speaker, did the Minister of Transport come to the defence of private enterprise yesterday? He dodged the issue. He preferred defending the trucking business in the province of Quebec.
I wanted to bring out this fact which, I feel, is most important: the government claims to be the promoter of private enterprise; yet, at the first opportunity, it abandons private enterprise, leaves it defenceless and the hon. member cannot even rise and blame the Minister of Transport and the government for having let such a fine opportunity go by without helping private enterprise in the province of Quebec.
Mr. Speaker, I should now like to say a few words about the dismissal by the C.N.R.
[Mr. Deschatelets.l
of the people who worked in the international aviation building.
It will be recalled that the C.N.R. sold its property on McGill street in Montreal, dismissed most of its cleaning and maintenance staff and awarded a contract to a private company which immediately employed other people, at better conditions, to look after the maintenance of the new building.
I have blamed the C.N.R. for that action. I have also blamed the minister for not having taken his responsibilities, for failing to insist that the C.N.R. company keep at its service those old employees who have given it the best years of their lives.
I was most disappointed with the results we obtained from the C.N.R. and I should like to say here that the Minister of Transport has not given us the support we expected from him in the matter.
At all events, like in many other instances where the government failed to bring help to those requiring it, all that will be settled in due time, and I hope it will be soon.
Mr. Speaker, I should like to touch on a rather delicate subject. It has to do with the French speaking citizens' representation on the staff of the C.N.R. and especially among the vice presidents, of which I think there are 17. I must admit that this situation has been the same for 22 or 23 years. But a time will come when a definite stand will have to be taken in order that the French speaking Canadians may be adequately represented on the board of directors and more particularly among the vice presidents of the C.N.R.
I have here an article published in La Presse on May 25, 1961, which brings out this problem. It says:
-why is it that a French Canadian was never appointed among the numerous vice presidents of that crown corporation, for the maintenance of which French Canadian taxpayers, as well as the others, through the taxes they pay Ottawa, have often made good substantial deficits.
And the article goes on to say:
Are we going to be led to believe that, in the whole history of the C.N.R. since 1923, there has never been an engineer or other expert with the required qualifications to become one of the numerous vice presidents of that government service?
Mr. Speaker, the answer we get from the C.N.R. authorities on this matter is always the same. It is a case of promotions. If ever

French speaking citizens are appointed to higher positions in the C.N.R., it is quite obvious none of them will ever get any such promotion.
A superb opportunity was lost recently. It was a case of appointing a vice president, following the death of Mr. W. H. Kyle. I understand there were at the time three excellent candidates: Mr. Eugene Gauthier, director of the Quebec division, Mr. Omer Boivin, of Montreal, vice president Kyle's assistant, and Mr. J. A. McDonald, general manager of the St. Lawrence region. Mr. McDonald is said to have been selected. I do not want to play politics with that matter-


J.-H.-Théogène Ricard: Oh, no.


Jean-Paul Deschatelets: -as I said a moment ago. But, after all there is one thing that must be taken into consideration. In 1957-58, our hon. friends were telling us: "We shall do better than you did". That is what they said-


J.-H.-Théogène Ricard: And that was not done?


Jean-Paul Deschatelets: -"We shall do better than you did."-


An hon. Member:: Today, there are more unemployed.


Jean-Paul Deschatelets: We are now in 1961, and the situation is not the same, it is indeed worse than it was before-


J.-H.-Théogène Ricard: You were in office for 20 years and you did nothing.


Jean-Paul Deschatelets: -I am talking about the Canadian National Railways. I said at the beginning of my remarks that I did not want to talk politics or to criticize anyone in particular, but I say this: The day will come when definite steps will have to be taken by the authorities-


An hon. Member:: Sit down, you have nothing to say.


Jean-Paul Deschatelets: -so that we obtain in the higher positions of the C.N.R. the representation to which we are entitled. That is what I had to say-


J.-H.-Théogène Ricard: That is what the Conservatives are doing.


Mr. Bourque:: The hon. member for St. Hyacinthe has no importance at all.


Jean-Paul Deschatelets: The hon. member for Outremont (Mr. Bourque) spoke ahead of me;
I was to say about the same thing. In any case, I have put on the record my views on that matter.
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Mr. Speaker, we should be fair about this and recognize that C.N.R. vice presidents are appointed by the C.N.R. board of directors.
I must confess that it is not possible to criticize directly any former minister, no more than it is to criticize the present minister, for not having done what is in fact a responsibility of the C.N.R. management, the matter is entirely different as far as the directors are concerned.
Appointments to those positions are purely political matters. I am now referring to the vice presidents. I am of the opinion that something should be done as soon as possible so that our people may have a fair representation on the board of directors of the Canadian National Railway, and I put that responsibility mainly on the shoulders of those who told us three or four years ago: "We shall do better than you"-


Georges-J. Valade: Which we actually did.


Jean-Paul Deschatelets: Mr. Speaker, that was all I wanted to say at this stage.


Azellus Denis: For example, the forestry department.


Georges-J. Valade: Mr. Speaker, would the hon. member permit a question?


Jean-Paul Deschatelets: Certainly.


Georges-J. Valade: A moment ago, the hon. member suggested that the C.N.R. was competing with the private trucking industry. Does he know that the president of the C.N.R., Mr. Gordon, is the one responsible for this policy, and that Mr. Gordon was nominated under a Liberal administration?


Jean-Paul Deschatelets: Mr. Speaker, it is obvious that the decision came from the management of the C.N.R. But, on the other hand, there was the stand taken by the Prime Minister (Mr. Diefenbaker) and also by the Minister of Finance (Mr. Fleming), who stated that the present government is the defender of private enterprise. My comparison, therefore, is between these two absolutely contradictory stands, and my conclusion is that if the present government cannot solve this problem, it has not the right to proclaim itself the defender of private enterprise. This is what matters really.
(Text):


Mr. L. D. Cresiohl (Carlier):: Mr. Speaker, I wish to make a few observations on this legislation and deal with some of the basic contradictions that appear in it. Not only are there contradictions but to some extent there

Canadian National Railways are confusions. It is possible that these confusions appear in other pieces of legislation. No doubt when the minister replies he might be able to deal with some of these contradictions that I shall point out.
In clause 3 of the bill-I am not dealing with the clauses directly but only with the general spirit of the contradictions-and also in clause 9 there are some very glaring contradictions. In clause 3 there is a statement which fixes the limit of the funds which are made available to the C.N.R. for the purposes of this legislation. Peculiarly enough, subclause 6 reads:
No amount shall be spent for a purpose mentioned in this section in excess of the amount authorized by this section in respect of that purpose,-
And so on.
We see that this subclause fixes the limit which is also fixed by the explanatory notes opposite page 3. In the explanatory notes there appears a statement listing the amount requested and the reasons for the request. Yet we find in clause 9 of the bill that the lid seems to be lifted off the limitations that are fixed in clause 3. I should like to read clause 9 to reinforce my argument.


Donald Methuen Fleming: Is this not a matter for the committee stage of the bill? There will be ample opportunity in committee to discuss the clauses of the bill. It is not a matter for second reading.


Leon David Crestohl: May I point out that if I wait until we get to clause 9 we shall then have passed clause 3?


Donald Methuen Fleming: Yes, but on clause 3-


Leon David Crestohl: I will not be able to read clause 9 when we are discussing clause 3.


Mr. Speaker:: If there is difficulty in reconciling the clauses in respect of the amount that is authorized to be spent, guaranteed or lent, I think the hon. member would be able to deal with it more effectively at the committee stage. The same thought occurred to me, but I allowed the hon. member to proceed because I thought he might have a general principle that is applicable to the whole bill. If there is a problem of inconsistency in the clauses which does not affect the principle, the principle being support of the C.N.R. by voting money, then I think he should leave it until the committee stage and deal with it there.


Leon David Crestohl: I was under the impression, Mr. Speaker, that in dealing with the thing in its ensemble, we should find out whether there are basically any inconsistencies or contradictions which interfere with the principle that the bill intends to establish. The 
government seeks approval of the right to vote this money, but we are entitled to point out contradictions; that is why I am-


Mr. Speaker:: I appreciate the hon. member's difficulty. The contradictions are verbal and do not have to do with the principle. I think the hon. member will find a better opportunity to raise these matters in the committee, particularly as he seems to have to quote the precise clauses to support his argument. I think the point is well taken. Unless the hon. member has other matters to bring up he should leave this until we reach the committee stage.


Leon David Crestohl: All right. I shall certainly bow to your ruling, Mr. Speaker, and reserve this for the committee stage.
Another point which strikes me is the reference in the measure to Trans-Canada Air Lines. I point out that nowhere in the long title of this bill is Trans-Canada Air Lines referred to or mentioned, nor is it referred to in the interpretation clause of the bill.


Mr. Speakman:: It says "Canadian National Railways".


Leon David Crestohl: But it does not say this includes Trans-Canada Air Lines.


James Stanley Speakman: It is not included.


Leon David Crestohl: Trans-Canada Air Lines are referred to in the bill. Why is there not a separate measure to finance Trans-Canada Air Lines in the same way as the C.N.R. is financed by a bill which comes before the house?


John Andrew W. Drysdale: It is a wholly owned subsidiary of the C.N.R.


Leon David Crestohl: I wonder why T.C.A. is
brought into this piece of legislation by the back door method and not directly. For example, in the statement filed permission is asked for to make investment in affiliated companies, Trans-Canada Air Lines and others. I presume that "others" means other affiliated companies. Why are they not directly referred to? I think the house is entitled to know-probably the minister will inform us-exactly what other affiliated companies are referred to? Why should they not be set out in the measure?
I should also like to refer to the fact that advances to Trans-Canada Air Lines are to be without any limit or ceiling whatsoever. I would have to refer to the section of the act to deal with that more fully, but I would point out that we are being asked to vote on a measure authorizing the advancing of funds to Trans-Canada Air Lines with no limit whatsoever whereas in the case of the C.N.R.

the advances are limited. As someone has very properly said, parliament is being asked to grant authority for the issuing of a blank cheque. We are authorizing the payment of amounts without any fixed limit to what is referred to as an affiliated company. We fix a ceiling in the case of loans to the C.N.R. but we provide no ceiling with respect to one of its affiliated companies.
I think it is somewhat unfair that parliament should be asked to grant authority to advance funds to an affiliated company without any ceiling whatever especially when a limit is imposed in respect of the principal company involved. I cannot see myself voting in favour of the measure without the amount in the case of T.C.A. being fixed and properly authorized. I certainly cannot see why parliament should be called upon to issue a blank cheque.
I have one further observation to make with respect to the head of the C.N.R. I hold no brief for him but I think it is very difficult to expect anyone to do a thorough job and discharge his responsibilities properly with the sword of Damocles hanging over his head. A man who is expected to do a thorough job should be quite fearless and should not be in a state of terrorization for fear that tomorrow or the next day the sword of Damocles will fall upon him.
I think the government should declare itself in one way or another and inform the house who the new directors will be. As honourable as these gentlemen may be, it is unfair to expect parliament to pass a measure granting them authority to spend such vast sums of money without parliament being taken into the confidence of the government with respect to who these men may be. No doubt the government already knows who they are. Why should parliament not be given the information to enable it to judge, on the basis of the experience and knowledge of its members, whether in its opinion, right or wrong, these men are competent and able?
When parliament is asked at times to vote on measures involving different departments we know who the people are who are in charge of the administration but here we are being asked to vote vast sums of money which will be administered by men whom we do not know. Parliament knows nothing about them and the government refuse to take us into their confidence and give us the opportunity at least to voice an opinion on the matter. From the point of view of the best administration of any organization, any crown corporation, I say that administration cannot be as efficient if the head of that crown corporation is living under a cloud and, as I said a moment ago, possibly living
Canadian National Railways in an atmosphere of terrorization with no idea of when the sword of Damocles may fall upon him.
Our public servants and civil servants have to have a feeling of security so that they may be able to carry out their responsibilities fearlessly and with frankness and honour. Of course, it may be that it is the intention of the government, as the hon. member for Port Arthur said, to follow a policy that will keep public servants in a state of suspense. The hon. member said that at times perhaps it might be wiser to keep a public servant in a state of suspense because it will keep him on his toes and he will do a better job. That is a matter of opinion, a matter of philosophy, of study, of approach. Certainly I am not of the same opinion. When you keep a public servant or a civil servant in a state of fear-


Mr, Speaker:: Order. I hesitate to interrupt the hon. member but this bill deals with Canadian National Railways and does not deal with the civil service generally. It seems to me that he is wandering afield a bit in making his point about the railway.


Leon David Crestohl: I was addressing myself strictly to the position of the president of the C.N.R. and I referred to him as a public servant. However, I think I have made my point. Whether the president of the railway is to be Mr. Donald Gordon or someone else, for the sake of efficient administration I urge the government to make a permanent appointment. In my judgment the situation would be improved if a determination were made because the head of that organization would not be in a state of suspense.


Chesley William Carter: Mr. Speaker, I was not able to participate at the resolution stage of the bill and although I am a member of the sessional committee on railways, air lines and shipping I took very little part in the proceedings of the committee because there were a number of members of the committee who had already voiced severe criticism of the C.N.R. and its management. I thought that they should be given every opportunity to carry out the kind of questioning that they wanted to and for which they were prepared so that they would be able to satisfy themselves and the public as to what the real facts of the situation were. Although there were many questions I should have liked to ask involving matters of special interest to my own constituents and to my province due to the fact that the committee hearings lasted several days longer than usual, I refrained from taking part for the reasons I have given.

Canadian National Railways
I should like to take this opportunity to make a few comments which under other circumstances I would have made either on the resolution stage or in the sessional committee. I should like to begin my remarks by joining with those who have paid a tribute to the chairman and vice-chairman of the sessional committee for the excellent job they did. One can appreciate that the committee met under circumstances which in some respects made for more difficulty than in previous years and which perhaps meant a more trying time for the presiding officers of the committee. I think every member of that committee came away with a feeling that he had had every opportunity of exploring whatever questions he wished and securing as full information as possible. As some hon. members have already testified, on this occasion they did succeed in getting much more information than before. The committee, in my opinion therefore, was an eminent success. This fact, I believe, was in large measure due to the two hon. members who presided over it, and I should like to pay my respects to them at this time.
While I am on this subject, I think I should take advantage of the occasion to pay tribute also to Mr. Gordon, the president of Canadian National Railways. If hon. members will refer to the committee proceedings they will find that from pages 299 to 306, most of the space is taken up with comments and observations by members of the committee by way of congratulating Mr. Gordon for his attitude toward the committee. I believe these words can be regarded as an expression of confidence in Mr. Gordon. I would have liked to have joined in these expressions at that time but six o'clock arrived and the committee had to rise so I was again prevented from having that opportunity. I should like to repair that omission at this time by expressing my accord with what was said and that can be found, as I have already mentioned, at the pages of the committee proceedings to which I have referred.
Mr. Gordon has been severely criticized during this session. I can recall that I have had my own differences with Mr. Gordon. There have been times when I, too, have not found myself in agreement with him on certain points. However, I believe that on this occasion the criticism has been quite unfair.


John Andrew W. Drysdale: Are you referring to the hon. member for Port Arthur?


Chesley William Carter: No, I am not referring to any hon. member in particular. I think my remarks apply equally to all, and if you will bear with me for a few minutes I will try to explain why I say that. We all acknowledge

that it is the duty of every member to represent his constituents in this house and to put forward their grievances and their requests. We should do that, I think, in a reasonable manner and we do not portray a reasonable picture to the public when we place on Hansard a picture of a small part of the situation without projecting that against the background of the whole picture. We all receive letters from our constituents Which set forth certain grievances as they appear to our constituents. Very often these letters present only part of the evidence. If we are going to present a picture to the public, I think it is only fair to the C.N.R. and to the public as well to place alongside of that the picture as it appears to the management.
We all know that Canadian National Railways face very severe problems, and these problems are rooted in history. In the eastern part of Canada, the maritime provinces, these problems go right back to confederation because one of the terms under which the maritime provinces agreed to confederate with Upper Canada was that a railway should be built. It was envisaged that that railway would link up central Canada with the eastern seaboard to transport the products of central Canada to the east coast. In this way the eastern seaports would be built up, and this would be beneficial to all. However, that did not happen. It was ten years before the railway was built, although that was one of the terms of confederation.
When the railway was built, it was not built in accordance with economic requirements, but mainly for military purposes. The railway did not serve the economic needs of the area. Various other lines came into existence which could not possibly be operated economically and so, in time, they went bankrupt. Pressure was put on the central government to take them over. Finally, these bankrupt lines, with their overhead and their debts, became part of the financial structure of the Canadian National Railways. Before things could be straightened out, wars intervened. During the last war when steel was scarce and could not be spared to build up the railway lines, these lines became rapidly exhausted. After the war, the Canadian National Railways was faced with broken down lines and with all the problems arising out of the accumulation of these bankrupt lines. In addition, the railway was faced with increasing demands from employees for better wages, better working conditions and the demands that we, ourselves, make in this house from time to time.
It is too much to expect that any human being could overcome all these difficulties, modernize all the broken down equipment,

meet the wage demands, and still operate without a deficit. I think the fact that this was done in some years is in itself a testimony to the efficiency of the C.N.R. management. I say that because when we consider that the C.N.R. comprises nearly 35,000 miles of track, 104,000 employees and an expenditure of over $700 million per year, the very vastness of that organization is almost beyond the average person's comprehension.
The Canadian National Railways is a vital part of our communications system. It is a part of our lifeline. In my own province it is our lifeline. Transportation problems are difficult in every country, but in a country like Canada, with such vast areas to be served and with such a small population distributed in a very thin line along the southern border, those problems are much more difficult than we perhaps find in any other country of the world with the exception of China.
We must endeavour to find the best solution we can to these problems. The solution found must be fair to other segments of the transportation industry. I am thinking particularly of the truck lines. Canadian National Railways has been more or less forced into the trucking industry, in the public interest, to keep its deficits as small as possible and to meet the competition of the trucking industry. I do not think anyone wants the C.N.R. to get into the trucking industry and compete unfairly with the private segments of that industry. That was a major concern of some members of the committee.
In this connection I wish to say that our leader has received a number of telegrams from the trucking industry on this subject. We thoroughly agree that there should be no cut rates for the sake of unfair competition which might endanger the private sector of the trucking industry. Mr. Gordon himself gave an assurance in this regard, as recorded at page 271 of the report of the proceedings of the committee. The hon. member for Van-couver-Kingsway (Mr. Browne) said:
I want to bring to your attention that I have had some concern and have had a number of representations from employees in the trucking industry who have expressed the feeling that in some circumstances some of the firms, who knew they would be acquired by the railway, were quoting low rates.


Mr. Gordon:: I think I can give you this positive assurance that it is no part of our policy to engage in unfair competition, or unfair competitive practices in the trucking industry. It is my own belief that the entry of the railways, and particularly the Canadian National Railways into the trucking industry, will have a most salutary effect in regard to the ethics of the business. I am talking about maintenance of rates, overloading, the observance of franchise requirements, and so on. I can certify that the Canadian National does not in any way break the law and will not. We have already found some practices which we could not countenance and we have changed them. I would repeat
Canadian National Railways what I have said, that our entry into the business will have a very beneficial effect on the whole standard of the industry.
Some hon. members may hold a different opinion, but I think we have here a clear statement of policy on behalf of the management of the C.N.R. It is not only a statement of policy but an assurance that there will be no unfair competition in the trucking industry. If evidence accumulates to the contrary, then of course there will be another opportunity at the next committee hearing to pursue further questioning on that point.
The second question which concerned the committee a good deal was the morale of the employees of the C.N.R. I believe everyone will agree that morale is important in every industry, but in no industry is it perhaps more important than in the Canadian National Railways. The morale of any industry is certainly the duty of the management, but it is no less the duty of the employees. Particularly it is the duty and responsibility of the leadership of the employees and employee organizations. It is no less our duty in this house to contribute to that morale. We do not contribute and in fact I think we tend to undermine morale in the Canadian National Railways when we make attacks based on faulty or incomplete evidence and when we speak in an intemperate manner. We are not contributing to the morale of the Canadian National Railways by the way in which we are now treating the present president and the board of directors.
As was pointed out this morning by the hon. member for Laurier, we are being asked to vote large sums of money without knowing what is going to happen to the present president; without knowing who will be in charge of the spending of this money. We do not know who will be on the board of directors, directing the management and the affairs of the railway. I do not think any conscientious person can say that is contributing to the morale of the employees of Canadian National Railways.
There is also another aspect of this matter. It is an affront to parliament itself. We have heard much in recent days about the supremacy of parliament, but parliament is not merely the executive; it is not merely the Prime Minister. Parliament is all of us in this house and the other place. Hon. members on the other side of the house have just as much responsibility as we in the opposition to see that the rights of parliament and the supremacy of parliament are preserved. Therefore if we really believe in the supremacy of parliament, certainly the information as to who is going to be the president of the railway and who are going

Canadian National Railways to fill the extra seats on the board of directors should be made known to parliament before this bill is passed.
I think the morale of the Canadian National Railways could make a great contribution to the morale of the country as a whole, because the C.N.R. is in a very special position in that it extends right across the country from east to west; it serves all sections and all districts of our country, and if we had in the C.N.R. a high level of morale, that would be an example for other industries to follow and it would also, I think, inspire and uplift the morale of the other parts of Canada.


John Andrew W. Drysdale: You mean, Mr. Gordon should be fired?


Chesley William Carter: No, I am not saying that Mr. Gordon should be fired. I rather took it from the testimony given by the members of the committee and particularly from the testimony given by the hon. member for York North-


John Andrew W. Drysdale: You said morale was important, and I was wondering whether you were backing the hon. member for Port Arthur.


Chesley William Carter: I think morale is important, but I think we all have a responsibility for it. The attitude of the hon. member seems to be that Mr. Gordon is responsible for low morale.


John Andrew W. Drysdale: No. I was just trying to get some clarification of your views.


Chesley William Carter: The point I wish to make is that it is not only Mr. Gordon who is responsible. The leaders of the employees organizations and we ourselves, as members of parliament, are also responsible. I would judge that the tributes recorded at pages 299 to 306 of the committee's report constitute an expression of confidence in the management of the Canadian National Railways. As far as morale is concerned, the employees themselves could do more than they are doing.


John Andrew W. Drysdale: Do you think Mr. Gordon should be retained? Is that the stand?


Mr. Habel:: Is this a private conversation?


Chesley William Carter: We learned from Mr. Gordon in the committee that very often the employees themselves neglect to act in their own interest, particularly with respect to pension contributions. It was only a few years ago, after trying all voluntary methods without success, that Mr. Gordon and the management found it necessary to make pension contributions compulsory. As long as contributions were not compulsory a large percentage of the employees neglected to make 
their contributions, though it was clearly in their own interest that they should do so.
I have a great deal of sympathy for the former employees of the C.N.R. and, indeed, for all civil servants who retired at a time when pensions were small. We are now faced with a problem in this respect and I believe parliament will have to deal with it, particularly in connection with those who retired on $25 a month. Some 40 years ago, $25 a month might have been a significant sum, but today it is not even pin money and it is clearly not possible for people to exist on such a pittance; it must certainly be supplemented from charity. I think we have an obligation in this direction, but in many cases these situations arise out of the failure of the employees themselves to act in their own interest.
I said that the Canadian National Railways was of particular importance to my own province because it is the only railway we have. Transportation is the greatest problem we face with respect to the industrial development of our province. We have many small, secondary industries, which are capable of competing in the mainland market as far as their operating costs and efficiency are concerned, but when the freight rates are added the picture is changed and it is made impossible for them to compete. We know that this problem of freight rates is under study and we hope that this study will produce a solution which will replace the present system of horizontal increases in freight rates. That practice, which has been carried on, now, for many years, has practically destroyed the original benefits of the Maritime Freight Rates Act. We are also in need of increased services in my province although, as the manager of the C.N.R. pointed out to us, considerable debt is incurred on the services we already have. But our population is increasing. When we became a part of Canada in 1949 our population numbered approximately 350,000 people, and now it is nearly 500,000. That means more services and we must depend on the C.N.R. for those services. Not only must those services be improved, but they must be made available at a much lower cost than at the present time.
We learned from a question asked in this house a couple of days ago that the William Carson is now unable to handle all the traffic between the port of North Sydney and Port-aux-Basques. I examined that situation myself last summer and something will have to be done about it. We are trying to build up our tourist industry. We cannot expect to develop a tourist industry unless we are able to bring tourists into our province and look

after them while they are there. This necessitates not only increased rail and transportation facilities but better hotel accommodation as well. The Newfoundland hotel operated at a profit last year and we hope the management will appreciate the necessity of expanding the facilities of that hotel. Mr. Gordon promised to have a hard look at it, but he appeared to be very non-committal in his references to that problem.
Then there is the question of an east coast ferry. We have been waiting now for two years-


An hon. Member:: Since 1949.


Chesley William Carter: An east coast ferry? I have never heard anything about an east coast ferry before two or three years ago.


Some hon. Members:: The last election.


John Whitney Pickersgill: It was before the electorate in 1959. The Tory leader said it was before the treasury board.


Chesley William Carter: That is right. I remember it was promised in 1959. But it has not materialized, and as I say, with the increase in our population it is becoming a necessity. So I hope that this will receive consideration in a favourable light both from the government and from the management of the Canadian National Railways.
Before I sit down I should like to direct to the attention of the government and through it to the attention of the management of the Canadian National Railways the need for improved services between St. John's and Argentia, which is the terminal for coastal services that serve my home riding. I think that is the worst piece of railroad in Newfoundland if not in the whole of Canada. It is only 80 miles in length but it takes six hours to traverse. There are no meal facilities on the train and few rest rooms along the route.


Paul Theodore Hellyer: What do you do if you have to go?


Chesley William Carter: Well, it is a very poor service which should receive priority of attention, and I ask the government to bring this situation to the attention of the management in an attempt to get action as quickly as possible.
(Translation):


Gérard Loiselle: Mr. Speaker, we are being asked by the government to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system for the period from the 1st day of January 1961 to the 30th day 90205-6-490
Canadian National Railways of June 1962. As this is a crown corporation, we must of course give full consideration to the matter.
In considering the problem, we should take into account the plans of the C.N.R., as well as the situation of the trucking industry in the province of Quebec and in the whole of Canada.
In that connection, Mr. Speaker, I received a telegram on July 6-I think a copy was sent to all hon. members-signed by Mr. Romeo Blouin, secretary general of the Quebec trucking association incorporated. The telegram reads as follows:
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.
Mr. Speaker, after receiving this telegram, a member on the government side asked a question on the subject to the Minister of Transport, and here is the minister's reply, as recorded on page 7680 of Hansard for July 7 1961:
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. Speaker, following that reply from the minister, I asked the following question:
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?
And the Minister of Transport answered:
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.
So the Minister of Transport promised the hon. member for Matapedia-Matane (Mr. Bel-zile) that he would make appropriate representations to the Canadian National authorities, and I very much hope that my brief remarks this afternoon in connection with this matter will prompt him further to communicate with the Canadian National authorities to make them understand the need of that industry, of which all hon. members are aware.
Mr. Speaker, the Canadian National Railways Company has already started to acquire some trucking companies in the country. The trucking industry is apprehensive of its fate at the thought that the C.N.R. will become, if it is not already, a competitor in that field.

Canadian National Railways
That association worries the more about the present situation as it is made up of representatives of the whole trucking industry in this country.
The Canadian trucking association incorporated last June presented a brief to the Prime Minister and to the members of the cabinet. In the introduction to this brief can be found the names of the various member organizations throughout the country. As the brief says:
The provincial trucking associations comprise over 6,000 trucking companies, including interprovincial and extra-provincial trucking firms.
Those companies provide every imaginable service with regard to renting local and long distance transportation for goods.
The total volume of commodities moved from city to city by renting transportation companies, according to the brief, and as indicated by the dominion bureau of statistics, amounted to 140,504,000 tons in 1958. Those figures mentioned in the brief were supplied by the dominion bureau of statistics.
I need not add, Mr. Speaker, that the industry receives no assistance whatsoever either from the provinces or from the central government. A subsidy is granted to the crown corporation which operates a railway service and now wants to buy out trucking companies. The government is thus being prejudicial to the trucking industry. Let nobody in the government tell us that they are promoting private industry. The Prime Minister may voice high sounding statements to the effect that the next election platform will be the protection of private enterprise against socialism, but he is only misleading the people.
Unfortunately, I do not have before me that newspaper item containing the statement I just quoted. But he publicly stated that the next election would have as its theme: "private enterprise versus socialism."
If the Prime Minister is ready to defend private enterprise, the members of his cabinet, and more particularly the Minister of Transport (Mr. Balcer) should not wait until election time to set an example.
I remember a recent letter from a transport company in Winnipeg, complaining that another carrier, the east-west company, transported goods at prices which might mean bankruptcy for other carriers. We should not only help these firms not to founder, but we should protect them against those who, for some reason or other, are willing to work


under conditions which others could not afford. Moreover, the government has the responsibility to protect private companies against crown companies or even against the Canadian National Railways, who want to interfere in the trucking industry.
I should like to draw hon. members' attention to the following view which is to be found on page 3 of the brief:
-it has already been suggested that the trucking industry did not pay its fair share of road costs, and consequently, that it is subsidized by the Canadian taxpayer. The trucking industry does not travel free of charge on Canada's highways. And the industry is not subsidized, whether directly or indirectly. In registration and licensing fees and gasoline taxes, the commercial road carrier contributes much more, proportionately, to the revenues of government treasuries than the private car owner. And contributions will continue on such a scale, as all informed Canadians know.
The members of this association, Mr. Chairman, do not object to the C.N.R. authorities doing business in transportation. They accept competition, but want fair competition. On the other hand, they claim-and I support this contention-that crown corporations should not try to cut the throats of those who pay taxes in order to pay for the deficits of crown corporations.
Mr. Chairman, mention is also made in the same brief of a statement of principles made by the province of Quebec. It appears on page 6 of the brief, and also in the official record of proceedings of the royal commission on transportation, volume 124, page 20664. I quote:
We believe that the problem facing the people of Canada and the people of Quebec is not a matter of favouring one method of transportation at the expense of another. Rather than that, we should ask ourselves what is the most efficient means of providing useful transportation services, on a long range national basis, and what is the best way of providing the services at the lowest possible cost to the consumer without adding to the load of the Canadian taxpayer. We therefore believe that each of the five main types of transportation are the instruments of national policy, and that economic and national interests should be the guiding criteria.
I shall not delve further into the subject, hoping that the Minister of Transport, who promised this week to bring the situation to the attention of the C.N.R. management, will take the necessary action and perhaps will be able to persuade the C.N.R. to change its policy in this field.
Now just a few words on another subject. Under the bill now before us, we are asked to vote something close to $179 million,

including $19,700,000 for the financial needs of Trans-Canada Air Lines.
This morning, I asked a question of the minister to find out how things stood with regard to the work stoppage at T.C.A., which is to take effect on July 21.
I hope, as I mentioned this morning, that the government will do its utmost to prevent this strike, which would deprive thousands of citizens of this transportation service for an indefinite length of time.
I hope the government is giving serious consideration to this matter and will be much quicker in providing a solution than it has been in fulfilling its promise to tackle the unemployment situation which is now plaguing the country.
(Text):


Mr. John R. Malheson (Leeds):: Mr. Speaker, in speaking of the terms of this bill one of the earlier speakers referred to the necessity of government making up its mind. These past four years of drift have been years of sharp decline. Now we have the president of our greatest business in Canada living on day to day sufferance. I think one member spoke of the cat and mouse game being played by this government. I am too new here to know very much about the merits of Mr. Gordon's reappointment. I do know Donald Gordon. I see him as a giant of a man who in 1946 was offered the office of president of the international bank of reconstruction and development, the world bank. At that time nations such as the United States, France, Germany and India were among the large subscribing members but throughout all the world one of the people first sought for that high office was a Canadian, Scot-born but Canadian by adoption. This man held international confidence and respect. If the government do not want Donald Gordon they should let him go. Those who have been released by this administration have managed to go far, and often their release from the public service of Canada has been to their immense material advantage.
In my view Donald Gordon is a giant in thinking ability, administrative skill and integrity. We do not really need to worry about his future. His only reason for staying in Canada has been great devotion to this country of his adoption.


An hon. Member:: At $50,000 a year.


John Ross Matheson: I greatly appreciate the language used by the universally respected member for Greenwood in his remarks which can be found in Hansard of May 13, 1961. He said, as some other hon. members did, it is unfortunate that our committee members are so sensitive about a president on 90205-6-490J
Canadian National Railways occasion speaking back to the members of this house. Whoever we have in this important office-and the appointment should not be delayed-should be a man and not a mouse. If that kind of man is appointed I am sure that after the next election the new administration will be very happy to work with him, just as former Liberal administrations were able to work so co-operatively with outstanding men such as Clifford Clark and Graham Towers who were appointed by a Conservative government. We want a man of courage and independent judgment. This is the type of person we want right throughout our public service and heading all our crown corporations.
I should like to quote a few words that Adlai Stevenson used on television a few months ago. He said:
More important than winning the election is governing the nation. This is the final test of a political party, the acid final test. When the tumult and the shouting die there remains the stark reality of responsibility.
I feel, sir, that governing a country, with problems as complex as those of Canada, calls for skills and ability on the part of key public servants probably exceeding those that are necessary even to preside over ministries.
May 1 turn to a matter of historic interest, namely the Brockville railway station. This is a subject that has commanded the attention of this parliament in years past. George T. Fulford and my predecessor, Hayden Stanton, both expressed themselves in strong terms about our station. While it is of considerable interest to local historians we feel that this building erected I think in the month of June, 1856, as the terminal of the Grand Trunk Railway, has perhaps outlived its functional usefulness. Now we would like to present it to Upper Canada Village.
I was able to find in the library of parliament a book entitled "A Souvenir of Brockville". Judging by the costumes, the bicycles, the hoop skirts and so on depicted in the illustrations I think it was probably produced about the time of Queen Victoria's jubilee. I see parasols in sailboats, paddlewheels and things of that kind. The only thing in those photographs of early Brockville that really reminds one of the Brockville of today are the islands and, of course, the post office which the Minister of Public Works has so recently promised to replace very shortly and our station.
I spoke to a telegrapher who went to Brockville in 1901. He tells me that in those days the station looked exactly as it does today. I think that is not quite correct because, fortuitously, between July 26 and August 3, 1910 there was a Grand Trunk strike during which some damage was done

Canadian National Railways to the station. I say fortuitously because after the windows and the doors were repaired our station was smartened up just a bit. Since that time, except for the addition of flush toilets, there has been no change for the better.
Now we see certain changes that are disturbing. We find that the yard office, which is being discontinued, now occupies a comer of the old station. In place of two waiting rooms we now have one. The express depot at the station is being shifted to a freight shed. The car repair division of the Manitoba yards and the brake inspection department are being cut down and the operation of shops curtailed.
We do recognize that certain things must give way to progress. It may be that there have to be fundamental changes affecting our railroad families, but there was a time when in Brockville there were 700 to 800 railroaders. These were great people. They are the people who laid the foundation of my Thousand islands city, and their descendants have contributed very largely to the progress of this country. We now have fast diesel freights going right through Brockville, and whatever happens in the future earnest regard must be given to what will happen to the railroaders of Brockville who are involved.
In 1854 Brockville was the end of the line for anyone travelling to western Canada from Montreal. People then took a boat and travelled by water up the river past Kingston to Belleville. But now the situation is different. Brockville is almost midway between the two great metropolitan areas of Montreal and Toronto. I put it to the house earnestly that Brockville is in the most exciting area for new industrial development in Canada. We have the facilities in eastern Ontario for far reaching industrial expansion. If any part of Canada is bound to go forward in the next decade, it surely is this part, I urge the administration to please give us a new station and very soon.


Mr. Deputy Speaker:: The hon. member for Levis.


Mr. Bell (Carleion):: You will soon run out of members.


Mr. Maurice Bourgel (Levis):: It does not not look like it. A couple more are going to speak.
(Translation):
Mr. Speaker, the remarks of the hon. member for Carleton (Mr. Bell) are most surprising, considering that we are discussing a bill which involves an expenditure of over $200 million. I find it strange that the parliamentary secretary to the Minister of Finance,

whose department is directly responsible for ensuring that the funds voted by this house are properly spent, should object to our taking a few hours of the time of the house to scrutinize this bill, as members conscious of their responsibilities should do.
In addition, I find it strange that he takes exception to the fact that we look fully into a bill which represents an expenditure of almost one quarter of a billion dollars. I suppose that the hon. member for Carleton made his objection without thinking and that now he regrets it.
(Text):


Azellus Denis: Shame, shame.
(Translation):


Maurice Bourget: Mr. Speaker, as I said earlier, the matter at hand involves public funds exceeding $200 million to enable the C.N.R. to make capital expenditures during the calendar year of 1960 in the amount of $178 million and at the same time to authorize expenditures of $76 million for 1962, in addition to other expenses of $44 million.
Those amounts include expenditures with regard to road property and, if I am not mistaken, this means the maintenance of many miles of railway tracks owned by railway companies, including the C.N.R., as well as the bridges scattered over thousands of miles of railways belonging to that company.
Well, I have a point I wish to bring to the attention of the Minister of Finance (Mr. Fleming) and, in this matter, he would want to relay our suggestions and recommendations to the Minister of Transport (Mr. Balcer) who is more directly responsible for consulting with C.N.R. authorities. It is a most important matter which I think has not been raised in the house. It has to do with passenger safety.
I had the oportunity, in 1958, to remind the house that in my district alone, that is the Levis district, there had been 80 section gangs and that, in the autumn of 1957, their number was reduced from 80 to 50. As an engineer and one with some experience in the construction of bridges, I am well aware of the dangers of leaving bridges in such a condition that they constitute a threat for the travelling public. In fact, each year there are millions of persons travelling on our trains, trusting that railway authorities do their best to keep bridges and railways in good repair.
Well, when you find that a division comprising 80 sections or 80 gangs looking after

the tracks, has been reduced, you wonder whether passenger safety is being adequately provided for today. It is a known fact and I know it in my capacity as an engineer that, particularly in the spring at flood time, the water in a river will often erode the abutment piers of a bridge. That is why I find it deplorable that the number of these maintenance gangs has been reduced.
You know by experience, Mr. Speaker, what care is taken by air lines and how everything is checked before the plane leaves.
I wonder why the same precautions are not taken in the case of railways on which, as I say, millions of passengers are travelling each year. I draw once again the attention of the minister to this point for I believe it is an important one. It may be said that there has been no serious accident so far. That may be so. But, on the other hand, who knows what the future holds? That is why I ask the minister to get in touch with the management of the C.N.R. and to make them understand that if they must cut down some expenses they should not however endanger the security of the travelling public.
I should like to draw the attention of the house to another aspect of the question. It concerns a recommendation in the report of the sessional committee on railways, air lines and shipping-unfortunately, I do not have the French copy with me-to the effect that continuous efforts be made in order to increase the corporate feeling and the confidence among employees. I believe that this is an important aspect of the question. I do not intend to belabour the point for it seems to me that the relations between management and labour have their importance in a company which numbers nearly 100,000 employees.
I am glad to see that the committee has particularly drawn the attention of the railway authorities on this subject, and I will not deal with it any longer. I have had the opportunity in the past to prove that the morale of the employees is low at the present time, for the simple reason that when statistics tell them that each year 4,000 or 5,000 railway employees with 15, 20 or 25 years of service are fired, they have reason to fear, for they live in uncertainty, not knowing what tomorrow holds for them.
Well, as I said, I am glad that the committee has drawn that problem to the attention of the railways, and I hope that the
Canadian National Railways management will not only read the report, but that they will carry out its recommendations.
I believe that all companies today have their personnel division. Well, I think steps will have to be taken in order to give railway employees the feeling they are doing a worthwhile job and that they are in no danger of losing their jobs at a moment's notice. Because we know that there are not many railways here in Canada, and when a railroader loses his job, it is quite difficult for him to rehabilitate himself in another company.
There is another point with which I should like to deal, sir, that of the administrative system reorganization. I mentioned that in January and I mention it again today because, apparently, nothing has been done about it.
In the past, we had three regions: the Atlantic region, the Central region and the Pacific region. Today, we have five: Atlantic, St. Lawrence, Great Lakes, prairies and mountain.
In January I pointed out-I cannot repeat all I said then-that due to management reorganization, a section in the province of Quebec was attached to the Atlantic region.
I make that remark because the hon. member for Westmorland (Mr. Creaghan) seemed to think at that time that I was opposed to the headquarters for that region being in Moncton.
Such thoughts were far from my mind because in my opinion the place I just mentioned is truly the logical center of operations for that region.
However, there is a fact I oppose, and I am not the only one who takes that position.
Mr. Speaker, you had an opportunity yourself to see in the newspapers of our district representations made by the municipal councils and various public bodies concerned giving the reasons for their action. Those reasons had nothing to do with matters of language nor were they inspired by fanaticism.
The matter was only of an administrative nature which could bring more benefits to the district extending from Riviere du Loup through the Matapedia valley, to Campbell-ton and Gaspe. I hope that even though the Minister of Finance (Mr. Fleming) is not here, my remarks will reach the Minister of Transport (Mr. Balcer).
7762	HOUSE OF
Canadian National Railways
I hope that this matter will again be taken up with the railway authorities so that this section I mentioned earlier may become a part of the St. Lawrence rather than of the Atlantic region.
Those Mr. Speaker, were the few remarks I wanted to make. I tried to make them as short as possible.
And as they usually say on the government side, I hope those matters will be duly and seriously considered by the government.
(Text):


Paul Theodore Hellyer: This afternoon we are considering in this bill the requirements of Canadian National Railways, a great national enterprise. It is an enterprise, however, which has operated under great difficulties for a number of years. It is a federation of many companies put into business for various reasons at various times, and has assumed liabilities which put it in a uniquely difficult position to compete, not only with the other major railway system in this country but also with other forms of transportation. Canadian National has a capital structure which is complicated and, in the opinion of many people, onerous.
To those, Mr. Speaker, who are interested in state planning, the growth and development of the railway systems of this country makes an interesting story. The technical changes which we have seen throughout the years were impossible to foresee. Not only do we have in many places an excess of rail capacity, but new modes of transportation have arisen to provide competition which could not possibly have been anticipated during the period when the railway systems were inaugurated. Who could have foreseen, at the turn of the century, what the future would hold? Who could foresee what the advent of the airplane would do to travel concepts?
In 1959, Mr. Speaker, we celebrated the 50th anniversary of powered flight in Canada. From a time when an airplane was able to fly only a few yards across the ice, we have now come to the point in the evolution of this miraculous machine where airplanes can travel thousands of miles at very high speeds. May I say in passing that I regret the recent death of the pilot of the first aircraft, Air Commodore McCurdy.
Air transportation has undergone a gradually explosive evolution. I remember as a boy on the farm those beautiful silver winged aircraft, the DC-3's, as they passed over en route from Buffalo to Detroit. I recall the glamour that they had and the spirit of adventure which seemed to lay behind them. I watched with great interest the evolution


which has taken place in the aircraft industry since that time. The DC-3 was the first great workhorse of the air lines, the aircraft which really put modern air line companies into business. It has just recently been retired from service on our major air lines in Canada but is still in service elsewhere throughout the world. Each successive aircraft has been more comfortable and faster. We have had in this country a succession of aircraft designs to the point where Trans-Canada Air Lines now boasts the position of being the first all-jet air line.
We have all heard the stories from the second world war of those hair-raising flights across the Atlantic ocean in bucket seats, with oxygen masks. We have heard some of the interesting and exciting tales of dangerous and unforgettable flights not only into danger in the service of this country in the pursuit of winning the war. Since then aircraft have been designed and put into service which make those aircraft seem like antiques of another age. Turbo jet and pure jet engines have made a tremendous contribution to the development of not only safe but comfortable air travel. Trans-Canada Air Lines main fleet of turbo jet aircraft is capable of flying at speeds in the range of 285 to 350 miles per hour. This reduces the air travel time between points in Canada very substantially indeed.
Then of course with the advent of the pure jet engine more recently-the DC-8's with speeds of approximately 550 miles per hour- the travelling time has been almost cut in half from that of the turbo prop aircraft. Today we have very comfortable air travel at very high altitudes. This, again, is a departure from previous days and has only been made possible with the pure jet engine. When flying at altitudes of approximately 35,000 feet one usually flies above the weather on a smooth course and with all the luxury and comfort of home or the club.
Of course, the end is not yet in sight. Supersonic aircraft are on the drawing boards which will triple the speed of existing jet air-liners. Aircraft with speeds of 1,500 miles per hour are now in military service and it is only a matter of a few short years until aircraft of comparable speeds will be introduced into commercial air line service. When that becomes a reality it will be possible to fly from Ottawa to Europe, for example, in two hours, or from Ottawa to Vancouver in a comparable time. We will have a two-hour flight from coast to coast or from one side of the ocean to the other side of the ocean. It is almost unbelievable, and yet this has all taken place within a period of a few decades.
As the speed of aircraft increases the ground time due to inadequate planning and traffic

congestion is becoming an increasing proportion of the total travel time. But notwithstanding this confusion on the ground it is still possible to travel very great distances in relatively very short periods of time. All this has a direct bearing on rail transport. People who in previous times travelled by train now prefer to travel by air. Just as the automobile and the autobus have provided1 great competition for trains on short runs, so the airplane has largely supplanted long range train travel. As wages and salaries rise time becomes more valuable, and time saved' by air travel on long hauls more than compensates for any small difference in the fares.
In addition to air travel the trains are now subject to another form of competition. With the opening of large sections of the trans-Canada highway the casual traveller who is not in a great hurry can enjoy the flexibility of scenic highway travel in the luxury of his own auto. This great Canadian achievement inaugurated, as most great Canadian achievements have been, under the previous Liberal administration is adding tremendously to the flexibility of Canadian transportation. We hope it will not be too long before it will be possible to drive from coast to coast on the trans-Canada highway.


Thomas Miller Bell: Inaugurated by you people.


Paul Theodore Hellyer: We started it and I would not be surprised, bearing in mind the speed with which the present government is progressing, if we are able to open it also. With the completion of large sections of this highway it is possible for truck transport to compete more favourably with other forms of transportation. The net result of these various forms of competition is a falling off of passenger traffic for our railroads and the occurrence of heavy losses. Indeed, we have been told that the day of the trans-continental passenger train may be near an end. This raises a feeling of nostalgia for anyone who has ever travelled across the country by train. It also raises the very real question as to whether or not in the national interest it is desirable to maintain at least a minimum rail service on the main routes.
There are many questions involved. For example there is the question of weather. As any air traveller knows, there are sometimes periods of days, sometimes stretching into a week or more, when the weather at a terminal point is not satisfactory for air travel and when landing conditions are such that air travel is not allowed because of safety requirements. During these periods it is often
Canadian National Railways necessary for travellers to avail themselves of train services regardless of their usual travelling habits.
There is also the question of national safety and survival. What would we do in the case of nuclear attack, for example? Would the railroads be required to move personnel and supplies? Just what precautions should be taken in the national interest in order to keep a minimum service available in case it is required? This question should be investigated and a decision made with all the factors in mind. If a subsidy is necessary to maintain a service, the cost will have to be equated with the benefit. At least at the outset the question of whether or not a minimum service should be maintained on the major national routes should be determined. If it is considered in the public interest that such a service should be maintained, then the financial aspect should be taken into consideration. If it requires subsidies, this is something that would have to be done as a result of the national policy.
In their freight services, too, the railroads are subject to much competition. It was not long ago that many of us had the opportunity of travelling to Montreal to witness the opening of the St. Lawrence seaway. It was a grand occasion, with Her Majesty the Queen and the President of the United States in attendance. Visiting dignitaries from both sides of the border joined hands in a great international transportation project. It was a day which will long be remembered in the history of this country. But it was not just the day which will be remembered. It was the work which went into that great project, the culmination of a dream of decades-the culmination of an engineering project which taxed the imagination of the whole world. Now the St. Lawrence seaway ranks as one of the great engineering marvels of the world and contributes to a great internal waterway as part of the Canadian transport system.
In addition, there has been phenomenal growth in the trucking industry. This has proved to be a very flexible form of cargo handling. It has many advantages. A truck can be loaded and unloaded at the points of origin and destination without the cargo having to be transshipped. On many types of haul it is cheaper as well as more flexible to use this type of transportation. With the opening of large sections of the trans-Canada highway, the growth of the trucking industry will undoubtedly increase, and as it does so competition between the trucking industry and the railroad will become keener.

Canadian National Railways
I have received a number of complaints with respect to subsidies granted by parliament to the railroads. But it should be remembered that the railroads are not the only form of public transport to have been subsidized by the Canadian taxpayer. Almost since the early days of this country it has been necessary for the public to subsidize one form of transportation after another beginning, first of all, with the canals. The canals of this country were built at great expense. For example, until the St. Lawrence seaway was opened no tolls were charged on the Welland canal even though its construction had involved a considerable initial capital outlay. Even since the opening of the seaway the recovery from tolls on the canal has been designed to recoup only the additional cost of making that canal suitable for shipping of deeper draught which is now able to use the canal. By and large, throughout the history of this country, tolls have not been collected on our canal system. In addition, dockage charges have in no respect been sufficient to recover for the federal treasury the large capital outlays which were required to build them in the first instance. The fact is that the whole of our canal and shipping facilities, which have required a tremendous capital outlay, were in the first instance provided as a public service to contribute to the growth and development of our transportation system to serve all the Canadian people.
The second major development was the railroads. Here again, millions of dollars have been involved in subsidies from the time when the railroads were first built. It was a deliberate decision based on national policy that the Canadian people should make capital and land available in order to permit and encourage the development of railroads in order that there might be a Canadian nation. This remains national policy. It is part of the price of Canadian nationhood.
Now I turn to the trucking industry. Here again, highways from coast to coast have been built at public expense. There are few, if any, toll collections on Canadian roads. There are some, as you know, Mr. Speaker, in the United States. They have a number of toll "thruways". It has been suggested that it might be a good idea if we were to follow their example and build some toll roads. But the Canadian temperament thus far has been of contrary mind. Thus far it has provided roads as a public service and made them available to all the citizens of this country as well as to visitors who come here from other countries. But in so doing, the Canadian taxpayers, through their various levels of government, national, provincial and municipal, have been obliged to pay hundreds of millions of dollars in order that


an acceptable network of roads and highways through our various provinces, and now from coast to coast, might be built. It is true we do have a few bridges, including international bridges, on which tolls are collected, but these are an exception rather than the standard practice. Hundreds of millions of dollars in subsidies are involved in the roads which are a foundation of the trucking part of our transportation industry.
Finally, I turn to air travel. Again, very heavy public subsidies have been required. These subsidies, if they have not already done so, will soon run into hundreds of millions of dollars. One need only examine the cost of new terminal facilities at our great travel centres, such as Montreal, Toronto and the other great cities across the country to realize this and to realize also the cost of building and extending runways to meet the needs of modern jet transport.
I remember Mr. Justice Abbott when he was minister of finance talking of the very heavy public participation in the building up of an air transportation system in Canada. Again, this was a matter of national policy. It has always been a matter of pride that our national air line, Trans-Canada Air Lines, has been able to pay its way, having many surpluses during the course of its operation. This has been a matter of pride to the shareholders, the Canadian nation, but it must be realized that in order that this might be done it has been necessary, first of all, to give Trans-Canada Air Lines the privilege of a monopoly arrangement in serving the major traffic areas of this country. At the same time, no effort has been made to collect tolls which would be sufficient to pay for the terminal facilities and runways at our Canadian airports. These have been paid from the public purse.
It is not conclusive for any one form of transportation in Canada to complain about the subsidy of any other. In order to be able to consider these complaints with some objectivity it would be necessary to have some basis for comparison. To the best of my knowledge transportation subsidies have usually been treated on an ad hoc basis. Perhaps this has been inevitable as our country grew and developed from infancy. However, I feel now the time has come when we should seek some over-all comparative standard.
I am not suggesting it is desirable or nec-cessary to try to equate the subsidy in each. I do not know; it may be desirable to try to do so, then again it might not be desirable. At least it would be helpful to have some sort of standard at which to look. I would, therefore, recommend that a royal commission be appointed to examine into

the history and development of the major forms of transportation in Canada, and in particular to determine in so far as possible the extent of public subsidy involved in each existing major form of transportation.
I realize that such a study would not be easy. The difference in purchasing power of currency from time to time, for example, would have to be equated, but I am convinced that would be a worthwhile exercise and that the result would act as a guide to parliament and to the Canadian people when considering public transportation policy. It might also provide some interesting information to those persons engaged in the transportation field who believe that each of the competing systems is subsidized unfairly to the detriment of their own particular position.
In recommending the appointment of a royal commission I would say that I should not expect it would make a report before the next general election, and that after the election it would report to a new government not only capable of benefiting from the information but capable of taking action if action seemed to be necessary following the report.
This bill before us today also involves an ad hoc measure. It commits the government of Canada to very sizeable obligations and the question arises as to where the money will come from. The Minister of Finance in his very interesting budget speech of a few days ago outlined to the house not only a budgetary deficit of some $650 million arrived at on the basis of a growth potential which the minister declined to make public, but in addition to that, the further need of several hundreds of millions of dollars for other requirements such as Central Mortgage and Housing Corporation, the industrial development bank, the exchange fund, this bill before us and other measures. The minister has not yet, however, satisfied this house as to where the capital can be obtained. The minister knows full well, as has been disclosed, that the generations of savings on the part of the Canadian people is not sufficient to meet all of the demands. It is not sufficient to meet the demands of private development when added to that figure is the public capital expenditure, the public current deficit and the other cash requirements such as those I have just mentioned, including those set out in the bill now before us.
Mr. Speaker, you shake your head with incredulity-


John Andrew W. Drysdale: I do not blame him.


Paul Theodore Hellyer: I do not blame Mr. Speaker either because there is simply no source from which this money can come. There is, of
Canadian National Railways course, the possibility that it may be made up by the inflow of capital from the United States of America as has been happening in the past, but as the minister has said, it is no longer of the policy of this government to encourage capital inflow and control-


Mr. Depuiy Speaker:: Order. May I just indicate to the hon. member that I am glad he mentioned the movement of my head because I should not want the record to show that I approved of the relevancy of his remarks.


Paul Theodore Hellyer: Mr. Speaker, I appreciate your interest in this scintillating debate. If capital inflow were encouraged perhaps that would make up the difference between the savings generated and that amount of money required to meet not only the private but public capital expenditures. Even at the old rate of inflow, let alone at the lesser figure, it will be insufficient to meet all of these various needs. How is the gap to be closed? The minister has yet to tell us. Is he going to print money and inflate the Canadian currency? Is that how he is going to make up the difference between the savings generated by the Canadian economy and the requirements of public and private investment in Canada?


Donald Methuen Fleming: Order.


Paul Theodore Hellyer: Is it going to be made up by further capital inflow from the United States? Surely the minister should explain to the house just how the difference is to be reconciled.


An hon. Member:: He already has.


Donald Methuen Fleming: Order.


Paul Theodore Hellyer: Mr. Speaker, I hear from the benches opposite that he has already explained, but that is not the case. He has not indicated how he can reconcile the discrepancy between the savings available in Canada for investment both public and private, and the requirements for investment both in the public and private sectors of the economy. That is the great mystery behind this current budget, and that is the thing which has not been explained to the satisfaction of the financial world or to the satisfaction of this house.
There is little wonder that, under the circumstances, we hesitate to agree without considerable objection to these measures put before this house by the minister.


Donald Methuen Fleming: Are you going to vote against this bill?


Paul Theodore Hellyer: This is a matter of the utmost urgency.


Donald Methuen Fleming: Are you going to vote against it?
776G

Canadian National Railways


Paul Theodore Hellyer: Where is the money to come from? By what sleight of hand does the minister intend to make it available? By what measure of hocus pocus can he reconcile figures which are hundreds of millions of dollars apart? How is he going to pile on top of the savings generated by the Canadian economy the hundreds of millions of dollars necessary to meet the difference required by his budgetary deficit?


John Andrew W. Drysdale: Are you against it or in favour of it?


Paul Theodore Hellyer: The Minister of Finance completely refuses to make this information available; he completely refuses to tell the Canadian people how it can be done. Is it any wonder that we have a financial crisis in this country unprecedented in the history of the Canadian nation? Is it any wonder that people all across the face of the earth are losing confidence in the Canadian economy? Is it any wonder that there is a push on the Canadian dollar? Is it any wonder that we have reason to ask the minister to explain to us where he intends to raise the money required to meet the obligations set out in this bill? This has not been explained and the minister has made no attempt to do so.


Donald Methuen Fleming: I am full of explanations if I can get a chance to make a reply.


Paul Theodore Hellyer: You are full of something but I am not sure it is explanations.


Donald Methuen Fleming: You do not want them.


Paul Theodore Hellyer: The minister is full of this cold invigorating Ottawa air which comes down from the north.


John Andrew W. Drysdale: It is better than hot air.


Paul Theodore Hellyer: Regardless of which it is, the government has plenty of it.


Mr. Browne (Vancouver-Kingsway):: Talk about the bill.


Paul Theodore Hellyer: Mr. Speaker, to come back to the bill, let me say this. We are asked to incur obligations here involving many millions of dollars. As has been so brilliantly pointed out by those who have spoken on this side, we have not yet been told who is going to run the railroad.


Donald Methuen Fleming: Is this the first time or the twelfth time?


Paul Theodore Hellyer: We have not yet been told who the board of directors will consist of. Surely the minister has terrible gall to come before parliament and ask for this commitment when he refuses to say who the chairman of the board will be.


John Andrew W. Drysdale: Do you feel Mr. Gordon should be fired?


Paul Theodore Hellyer: Will the chairman of the board and the president of the railway continue to be one and the same person, or does the government intend to separate these two functions and have two persons, one the president and the other the chairman of the board? Is the minister willing to answer these questions for us?


Donald Methuen Fleming: Yes, as soon as you sit down.


Paul Theodore Hellyer: I will sit down in a moment. I hope you will answer these questions and all those asked by my honourable colleagues. Will the president continue to be the chairman of the board? When will his reappointment take place? When will the appointment of the other members of the board take place? I refer to those who have not been reappointed.


Donald Methuen Fleming: If the hon. member sits down I will answer the questions.


Paul Theodore Hellyer: If I really believed the minister, if I thought my sitting down would speed up the reappointment of the chairman of the board and those of the directors who have not been reappointed I would quickly do so. I do not think it really would. I do not think this government is capable of meeting any of the real commitments which face it. I think it is so involved in the web of its own chaos that it does not know which way to turn and this bill we have before us is just one more example.


Lionel Chevrier: Procrastination.


Donald Methuen Fleming: After this filibuster?


Paul Theodore Hellyer: Chaos and financial crisis; that is the situation in which we are placed.


Donald Methuen Fleming: Don't talk about procrastination.


Paul Theodore Hellyer: A deficit of hundreds of millions of dollars on current account; cash requirements of hundreds of millions of dollars on other accounts; tens of millions of dollars required for the Canadian National Railways and no indication of what the deficit of the Canadian National Railways is likely to be in the year ahead.


Donald Methuen Fleming: Yes.


Paul Theodore Hellyer: Yes?


Donald Methuen Fleming: There is evidence on that.


Paul Theodore Hellyer: Has the minister read the latest figures that show that freight car loadings are away down in the first six months of this year?


Donald Methuen Fleming: Did the hon. member not hear the evidence before the committee?


Paul Theodore Hellyer: The minister has refused to tell us the rate of growth that he expects in the Canadian economy. How then can we judge for ourselves the accuracy of the figures? What was the figure the minister used to work out his anticipated deficit of $645 million? Was it 5 per cent? Was it 6 per cent? Was it 7 per cent? Am I getting hot?


Donald Methuen Fleming: You never were hot.


Paul Theodore Hellyer: How close am I? Is it twice the figure of 3 per cent? What is it? On what basis does the minister arrive at the conclusion that his current deficit will be only $650 million?


John Andrew W. Drysdale: After all, it is only five minutes to six.


Paul Theodore Hellyer: How does he intend to reconcile the cash requirements with the savings available to meet them? These are the great unanswered questions of today. These are fundamental to the controversy raging in the country. These are fundamental to the loss of confidence in the minister and these are the reasons which prompted the hon. member for Essex East and others to call for the minister's resignation.


John Andrew W. Drysdale: Your finest hour.


Paul Theodore Hellyer: Surely we are entitled to know the anticipated growth in the Canadian economy. Surely we are entitled to know the figure the minister has used. How else can we determine what is likely to be the requirement for rail service, how else can we tell if it is wise to put this further capital into our transportation system?


Donald Methuen Fleming: Don't you know?


Paul Theodore Hellyer: We do not know what the minister is doing; we have doubts whether the minister himself knows what he is doing.


Donald Methuen Fleming: Don't you know whether or not it is wise to put this money into the system?


Paul Theodore Hellyer: The minister has not yet made it clear whether or not the growth of the Canadian economy is going to justify the expenses he has in mind.


Donald Methuen Fleming: You want to stunt the system?


Paul Theodore Hellyer: The thing that is stunted is not the system; the thing that is stunted is the growth of this country.


John Ferguson Browne: Do you
think it is unwise to do this?
Canadian National Railways


Paul Theodore Hellyer: This is a sad commentary-


An hon. Member:: Hear, hear.


John Andrew W. Drysdale: The hon. member realizes it, too?


Donald Methuen Fleming: How right you are.


Paul Theodore Hellyer: I am full of sadness for the minister when he has to come before parliament without any answers to the real questions of the day and, with the gall that only the minister has, ask hon. members on this side of the house to vote for a bill without any of the real questions being answered.


John Andrew W. Drysdale: Are they going to do it?


Donald Methuen Fleming: I thought hon. members wanted some explanations and some answers, Mr. Speaker. I am ready to give them. I cannot speak until all the other members have spoken. Therefore, I will give way.


John Whitney Pickersgill: Then just sit down and don't take up time.


Donald Methuen Fleming: I thought they wanted an explanation.


Paul Theodore Hellyer: We will give you a few extra minutes to get the answers ready.


Lionel Chevrier: He would not answer the questions anyway.


John Whitney Pickersgill: If the minister did answer, what credence would we place in the answers?


Miss Judy V. LaMarsh (Niagara Falls):: There remain but a few moments to discuss on behalf of those in the Niagara riding the bill now before the house. I have the honour to represent a riding which at one time contained a large railroad town namely the town of Fort Erie; but in the past few years there has been an increasing cut in the services which are provided and a concomitant cut in the number of individuals employed in the railway yards at Fort Erie. Unhappily this state of affairs has not been confined to Fort Erie, since it has extended also to the other end of my riding of Niagara Falls and indeed all across Canada.
All hon. members appreciate, as do most people in the country, the necessity of conversion from steam to dieselization, the necessity to speed up service in order that the people of Canada will be obtaining for the vast sums which each year they vote an efficient and economic service. But, Mr. Speaker, on this occasion we are again being asked to vote an immense sum of money for which it is difficult to see a return to the Canadian people.
This afternoon I do not intend to discuss the cessation of service in my riding. I have mentioned this before, both in committee and

Canadian National Railways in the house. I do, however, wish to bring to the attention of this house a matter with respect to the Canadian National system as it affects my riding and areas close to it. It has been referred to in the committee also and previously it was referred to in this house by my colleague, the hon. member for Welland. It is unfortunate that the hon. member for Lincoln is not in his place, since this has considerable reference to his constituents, at least those who work in his riding although many of them live in my riding.
I am referring to pensions, although I almost hesitate to use the word because of what the Prime Minister said in the past two days and what the Minister of Finance has been saying. However, I dare now to say I wish to speak this afternoon on pensions, Mr. Speaker. I will admit that the question of pensions of the type to which I wish to refer arose previous to the question of those to which we have been referring lately. I hope that this government which already has, through the Minister of Finance, indicated that it is interested in the portability of pensions by setting up a commission to study the matter, does not mean by "portability", as we might have gathered in the last few days, doing away with pensions. Indeed, those individuals to whom I wish to refer have had their pensions abolished.
Last night I watched television and I heard Mr. Richard Jackson of the press gallery speak. He is often said to be a fair man and one who has the Prime Minister's ear. This afternoon I saw his article in the Ottawa Journal in which he indicated that, because of a reference made yesterday by the Prime Minister, top civil servants in this city, in my riding and in other places have need to fear the loss of their pensions because of the remark of the Prime Minister when he said not this pension but "these vast swollen pensions deserve to be looked into". I refer to the Prime Minister's remarks as reported at page 7694 of Hansard. To those who might say-


Donald Methuen Fleming: On a point of order, Mr. Speaker, it is quite improper to refer to what has been said in another debate this session which has been concluded. The house has concluded that debate and it is quite against the rules of the house to make reference to something said in that other debate.


John Whitney Pickersgill: More closure. More gagging.


Donald Methuen Fleming: The closure is from this irresponsible member who stopped a member on this side from speaking.


Julia Verlyn (Judy) LaMarsh: I bring in this matter because it has relevancy to the pensions of the Canadian National to which I wish to refer.


Mr. Deputy Speaker:: Order. The hon. member may make reference to but she may not discuss the problem which was raised in the other debate. I hesitate to give any direction to the hon. member because she is not much more out of order than most of those who have already spoken.


Donald Methuen Fleming: Mr. Speaker, there is the other point too. It is a matter of relevancy. The Prime Minister was speaking about something entirely different. The hon. member now is attempting evidently to apply what the Prime Minister said on an entirely different subject to the matter of C.N.R. pensions. The Prime Minister was not talking about C.N.R. pensions or anything resembling them.


Lionel Chevrier: Why don't you accept the ruling of the Speaker?


Julia Verlyn (Judy) LaMarsh: I was seeking to point out that in the case to which I am referring pensions were done away with and this appears to be what the Prime Minister has indicated he intends to do in the case of civil servants.


Thomas Miller Bell: That is total nonsense.


John Whitney Pickersgill: By his favourite press man.


Mr. Bell (Carleton):: It is preposterous misinterpretation.


John Whitney Pickersgill: By Jackson of the Journal. You had better read your favourite press man.


Edwin William Brunsden: Further to the point of order, Mr. Speaker, is it in order for an hon. member to quote local newspapers and the C.B.C. as authority for statements?


Julia Verlyn (Judy) LaMarsh: Mr. Speaker, the pensions to which I have reference are those which have been done away with lately involving 75 individuals in St. Catharines. Within the last few years another 150 employees of the Canadian National have been unjustly deprived of their pensions. These three groups of individuals, one located in the riding of the Minister of Labour, one in the riding of Lincoln and one in Niagara Falls, were employees of street railways originally and then street bus lines which were operated by the Canadian National. The employees were included in the pension plan as is every other employee of Canadian National Railways.
About two years ago Canadian National decided to abandon its franchise in the city of Oshawa. It gave notice to this effect and a private bill had to be enacted in order that


the municipality could take over the operation of the buses. The same thing happened in Niagara Falls and in Stamford in the riding of Niagara Falls last year. At that time, before I came to this house, I drafted a private bill which incorporated the greater Niagara transit commission and I dealt in some detail with the matter of the pensions of the employees who were suddenly thrown out of work by the actions of the C.N.R.
Very shortly, Mr. Speaker, on the 1st of September the same thing will occur in the riding of Lincoln where the city of St. Catharines has received notice from the C.N.R. of the abandonment of its franchise. That city is now required to seek special legislation to set up its own transit commission and, if possible, to employ those who are no longer employed as bus drivers by the C.N.R.
Under the provisions of the pension plan there are two types of pensions. One is payable by the C.N.R. in the amount of $25 a month whether or not there has ever been any prior contribution and each of these employees is, of course, entitled to that. This is a maximum of $300 a year. There have been other pension plans set up, however, and that most recently in effect is a contributory one. I should like to refer to the pension plan booklet which is issued to employees coming under the plan and which contains questions and answers with respect to the rules. I have reference to rule 11 and in the booklet there is the following question:
What do I receive if my service is terminated?
This is the answer:
If your service is terminated and you do not qualify for pension benefits, your own contributions will be refunded, together with interest to the date your service is terminated if that date is a year or more from your last entry into service. Your service will not be considered terminated if you are laid off but only when you leave or are discharged.
There is no provision within the pension plan for service which is discontinued and is not replaced. Because the C.N.R. has no comparable service anywhere else in Canada, it is not possible to retain these people in service, and only a very few out of the three groups in Oshawa, Niagara Falls and St. Catharines have been retrained and used elsewhere.
The problem is, of course, that when a municipality is called upon to give a bus service and sets up its own transit commission it does not do this as a profit making venture. Indeed, no municipality would go into the field if there were any way of avoiding it. The ground upon which Canadian National has abandoned these services is that
Canadian National Railways they are uneconomical. Although the municipalities have tried very hard, they have been unable to find anyone who will undertake the service or incorporate a new company and operate the service unless it be done under a subsidy. Because it is not considered a good proposal, all three municipalities in question have in fact set up their own municipal corporations to operate these bus services. They are asked to take over the employees of the C.N.R. who, at a time of great unemployment in southern Ontario, are without employment and without any hope of employment. Some of these people, Mr. Speaker, as of the time they are laid off are only a matter of weeks away from regular retirement on a full pension.
I think everyone in the house knows what the problem is, how are these people to retain the benefits of the pension to which they have contributed for many many years? When they are retired they receive payment of their contributions with interest, of course, but they are not able to take this amount and enter into a brand new pension scheme with their new municipal employers and obtain the same benefits at the same date of retirement.
Representations were made in Oshawa and strenuously in the Niagara area and have been going on for months now. In fact, solicitors on behalf of the unions and solicitors on behalf of the city have attended on the Minister of Transport and the president of Canadian National Railways with requests that some consideration be given in this regard. I raised the matter in the sessional committee and I was told at that time that it was being considered. In fact it had been considered on two prior occasions and both times the portability element was rejected.
At this time there is only a matter of a few weeks remaining in which some action may be taken in order that the pension portion paid by C.N.R. into the fund or at least credited as a bookkeeping entry shall be transferred to a new pension scheme to be operated by the municipality. If not, Mr. Speaker, the result will be that another set of taxpayers, the ratepayers in the communities of St. Catharines and Niagara Falls, will themselves through their taxes be required to subsidize the new pension scheme. This means, of course, that the subsidy principle which Canada has adopted and which we are furthering in this bill, whereby the cost of C.N.R. services across the country is borne by all Canadians, will have been breached for there will be a shifting from all Canadians to individual Canadians in a particular limited area. The position taken by the union, and I respectfully suggest to the house it was a proper one, is that the
7770	HOUSE OF
Canadian National Railways amounts paid in on behalf of the employer, the Canadian National, are amounts which were in effect fringe benefits to the employees, and having been paid in they are part of the wages to which those employees were entitled.
The minister said in his budget speech that he approved of the principle of portability. I ask the minister to consider that here is perhaps the first place within the government service that portability might be applied. There is, Mr. Speaker, little more that I can say in respect of this. These requests have been taken to the Minister of Transport, to the house, to the committee and to the president of Canadian National. This is a matter which applies to a limited number of people and which has worked a very great injustice. It will further work a great injustice upon these people in the community who may now have to take on these former employees in a new service. I ask the Minister of Finance to consider the appropriateness of this subject since he, and the right hon. gentleman who shares his seat, have already taken a position in respect of other pensions, and about getting rid of these other pensions.
Is the fact that the government stood idly by and allowed these 75 people to have their pensions taken from them, some indication of what the government intends in respect of the governor of the Bank of Canada and other senior civil servants, as was reported in this evening's Journal? If so, not only are these railway employees now without jobs in my area to be frightened that all the money they have paid into the pension has gone for nothing, that their contractual rights are disregarded by the government, but other senior civil servants in the service of Canada must also fear whether what they have paid in by way of contribution in the past will be, by this government which has paid lip service to the bill of rights, disregarded in the same way.


John Whitney Pickersgill: Mr. Speaker, I am rising to support the position taken at the beginning of the day on this measure by the hon. member for Laurier. I refer to the disgraceful attitude of the government with respect to Mr. Donald Gordon and the directors of Canadian National who, for nine months and eight days, have been kept in suspense as to whether or not they are to retain their positions.
Yesterday in this house we watched the leader of the government wield the axe. Today, we are discussing a genlteman who has given long and great service to this country, who for nine months and eight days has been kept under suspended sentence, not knowing upon which day the axe 

will strike his neck or whether he may get another reprieve. How anyone can expect the greatest railway on the North American continent to be run well under circumstances of that sort, I cannot understand and neither can any other reasonable person in this country. It is just more evidence, if any more were needed, of the total incapacity of Her Majesty's present ministers to come to any decision on anything except when the Prime Minister gets into one of those hysterical rages and makes a decision, as he so obviously showed yesterday had happened in the case of the governor of the Bank of Canada.
The position on which I rest our case is the position of the hon. member for Laurier. It is this parliament that is sovereign and not the right hon. gentleman. It is this parliament that is in final control of the affairs of this country and not the right hon. gentleman and his messenger boy colleagues. It is this parliament that has a right to know how all these affairs are going to be carried on before money is voted. It is this parliament that has the right, before hundreds of millions of dollars are committed to a company, to know who is going to be the head of that company. As the hon. member for Laurier has said, we only know who will be the head perhaps until Monday. I do not suppose the government will have a cabinet meeting on Sunday and change the head of the railway, although they might. If they act in the way in which they usually act, they will wait until parliament is out of the way before they do this. They will show the respect for parliament which they have shown in every other matter, and which they showed when the Minister of Finance tried to go behind the back of parliament on another occasion about an officer who was responsible not to him or to the government but to parliament, and tried to subvert the rights of parliament.
The president of the Canadian National is in a different category. The president of Canadian National is the head of a crown company, but not an officer of parliament. The government, it is quite true, has the right, under the statute, to appoint the chairman; but we, sir, this sovereign parliament, have the right to know who that chairman is going to be, and whether or not we should give confidence to a government that appoints that kind of chairman before we are asked to vote this kind of money. This is the principle of responsible government. We heard language yesterday in this house, and if we had closed our eyes, it would have sounded like language that was heard before 1939 in the Reichstag.


Mr. Speaker:: The hon. member is making about as many references to the debate of yesterday as he is to the bill. By doing so he invites reply in connection with yesterday's debate which has been concluded. I would trust the hon. member would confine himself to the Canadian National Railways, its direction and management of affairs.


Lionel Chevrier: I rise on the point of order, Mr. Speaker, to bring to your attention the fact that this morning, on an earlier occasion, the Speaker who occupied the Chair permitted a number of references in order to draw a parallel between what was happening in this case and what was happening in other cases. There was a long harangue in connection with the point of order, but it was allowed. I bring it to your attention now so that there will not be two rulings on the subject matter. I submit with deference to Your Honour that-


An hon. Member:: Six o'clock.


Lionel Chevrier: -the hon. member for Bona-vista-Twillingate is in order, and is doing exactly what I was allowed to do earlier today.


Mr. Speaker:: It is six o'clock.


John Whitney Pickersgill: I may call it six o'clock, now.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I inquire from the house leader what the business will be on Monday?


Gordon Minto Churchill: On Monday we will start with the income tax bill, followed by the one we are on now, the Canadian National financing bill; then, the resolution concerning dominion-provincial tax-sharing arrangements. If that is completed, then we have the Civil Service Act and interim supply. I propose moving, either Monday or Tuesday, if we are still here on Tuesday, concurrence in the report on procedure which was tabled today.
May I just add that when I mentioned the Income Tax Act, this is not now under the restriction which I mentioned for today, which was on the basis that if we adjourned today we would go only as far as second reading. Not having adjourned today, we shall continue with all stages of that bill.


Lionel Chevrier: On that point, Mr. Speaker, I would bring to the attention of the house leader the statement which he made during the course of the debate yesterday when he rose on business of the house to say that all stages of this bill would not be taken, but
Business of the House to indicate that second reading only would be taken and it would not go into committee.


Gordon Minto Churchill: It was dependent on adjournment tonight, and the adjournment did not take place tonight for reasons which are well known to the entire house.


Donald Methuen Fleming: An all-day filibuster here.


Lionel Chevrier: The adjournment did not take place tonight for the very simple reason that this house had a perfect right to deal with the measure before it-


Donald Methuen Fleming: An all-day filibuster.


Mr. Speaker:: Order.


Lionel Chevrier: I submit, with deference, sir-


Mr. Harkness:: The Speaker is on his feet.
Can you not observe the rules?


Some hon. Members:: Sit down.


Lionel Chevrier: I intend to-


Some hon. Members:: Sit down.


J.-H.-Théogène Ricard: The Speaker is on his feet.


An hon. Member:: Filibuster.


Mr. Speaker:: Order. Would the hon. member permit me. A debate is not permissible at this stage of the day. The house leader expressed an intention with respect to the income tax bill. If there is further discussion of the matter I suggest it be taken up when the bill comes before the house.


Lionel Chevrier: Mr. Speaker, surely I have the right to ask a question-


Some hon. Members:: Six o'clock.


Lionel Chevrier: -and indicate to the leader
of the house-


Some hon. Members:: Six o'clock.


Lionel Chevrier: -that he is saying today the exact oposite of what he said yesterday, because yesterday he said that-


Mr. Speaker:: Order.


Douglas Scott Harkness: Order. The Speaker is on his feet again.


Mr. Speaker:: Order. I thought the hon. member had commented on the position taken by the leader of the house that the arrangement announced the day before referred only to the possibility of adjourning today. If the hon. member wishes to say something further about that, I shall hear him; but I understood him to be arguing in order to justify something else that had nothing to do with the business of the house.

Business of the House Mr. Chevrier: I was asking the house leader-and with your permission, Mr. Speaker, I will ask him now-why he has reversed his position from yesterday, wherein he stated that we would not take all stages of this measure but just second reading, and would not go into committee.


Gordon Minto Churchill: I have given the reason. It was based on the supposition that we might adjourn today. We have not adjourned today. Therefore that business does not hold for next week.


Lionel Chevrier: You cannot make your mind up on anything.


Mr. More:: We can make up our mind when you make up your mind. You do not know what you want to do. You are waiting on the Senate.


An hon. Member:: Run by a bunch of senators.


[Stage Direction]
It being four minutes after six o'clock the house adjourned, without question put, pursuant to special order.
[Stage Direction]
Monday, July 10, 1961