1961-02-21

Hon. Pierre Sevigny (Associate Minister of National Defence):: Mr. Speaker, I rise on a question of privilege. Yesterday during the orders of the day the hon. member for Laurier, in a supplementary question asked of the Minister of Public Works, stated that during a speech I made at Dorion last Friday I had protested the proposed route which is tentatively planned to go through lie aux Tourtres instead of lie Perrot in Vaudreuil-Soulanges.
The point of privilege, Mr. Speaker, is that I never protested this proposed route. In fact the only comment I made during the speech was that I would say nothing about this proposed route in view of the fact that I knew nothing about the matter. As usual the former member for Stormont was misinformed, and I wish to correct this matter.



MR. WOOLLIAMS    CLARIFICATION OF REMARKS IN DEBATE ON FEBRUARY 20

Mr. Eldon M. Woolliams (Bow River):: Mr. Speaker, I rise on a question of privilege in reference to a statement I made in debate as reported at page 2214 of Hansard of yesterday in connection with my remarks about Mr. Clarence Fines, former Saskatchewan provincial treasurer. I want to make it clear to all that I did not imply or intend to imply that any money which Mr. Fines may have made was made from his job or position as provincial treasurer of Saskatchewan.


Mr. Benidickson:: I think the hon. member has made a necessary statement.



RAILWAYS, CANALS AND TELEGRAPH LINES

[Stage Direction]
Second report of standing committee on railways, canals and telegraph lines-Mr. Howe.


Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker, I should like to make a statement concerning oil pollution off the Atlantic coast of Canada. On
September 1 of last year I issued a press release announcing that the government intended, under the international convention for the prevention of the pollution of the sea by oil, 1954, to extend to 100 miles, the maximum allowed under the convention, the zone off the Atlantic coast of Canada within which ships may not discharge oil. At the present time the zone is 50 miles.
I am pleased to inform the house that no other contracting government has opposed the extension, and consequently extension of the prohibited zone from 50 to 100 miles off the east coast of Canada will take effect on February 25.
It is to be sincerely hoped that the extension will have the effect of substantially reducing oil pollution on the Atlantic coast. Reports of oil pollution have indicated that hundreds of thousands of sea birds are being killed annually by floating oil in the Newfoundland area; that beaches, piers and craft are being fouled, and that damage is being done to lobster fisheries. The situation will be closely watched by the Department of Transport, the department responsible for administering the oil pollution prevention regulations, to see whether a diminution of pollution takes place after the extension comes into force. If not, more stringent international controls may be required to cope with the problem. In this connection it is proposed that a conference to revise the 1954 convention for the prevention of pollution of the sea by oil be held in the spring of 1962 under the auspices of the intergovernmental maritime consultative organization. This conference would permit Canada to suggest any changes to the convention which we deem to be necessary.
The intergovernmental maritime consultative organization is being kept fully informed of the degree of oil pollution in Canadian waters. I should like to mention that included with the official reports we have transmitted to the organization are reports prepared by the Canadian wildlife service and the Audubon society of Canada.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I want to comment briefly on the statement made by the Secretary of State for External Affairs. The members of this group were pleased to hear of the further measures being taken by this government to prevent the pollution of our coastal waters, and we support them wholeheartedly. We hope that the government will also use its

Inquiries of the Ministry best efforts and give some leadership in cooperation with the provinces in preventing the pollution of international and inland rivers and lakes.



THE PRIME MINISTER


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, all of us are very conscious of the reason the Prime Minister (Mr. Diefenbaker) is not with us today. At this sad time for him, I would ask the Acting Prime Minister if he will convey to the Prime Minister the deep and sincere sympathy of the members of the official opposition in the loss of one who has meant so much to him over so many years.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, on behalf of the C.C.F.-New Party group may I say that we should like to be associated with the remarks of the Leader of the Opposition. I am sure our thoughts go out to the Prime Minister, to Mr. Elmer Diefenbaker and the other relatives at this time of their great loss. We realize that the Prime Minister and his mother remained very close until the end. I am sure we speak for all Canada in expressing to the Prime Minister our deepest sympathy at this time of bereavement.


Howard Charles Green: Mr. Speaker, I am sure the Prime Minister will be highly appreciative of these thoughtful remarks by the Leader of the Opposition and the hon. member for Assiniboia. This is indeed a very sad time for the Prime Minister, but at the same time I am sure he has very many happy memories and derives a great deal of comfort from the wonderful relationship which existed between his mother and himself. We are very, very grateful to hon. members for their expressions of sympathy this afternoon.


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, may I make a suggestion, which I put forward in all humility. The office of prime minister is of the utmost importance; the mother of the prime minister is pretty wonderful too. I should like to ask the Acting Prime Minister whether, out of respect for the Prime Minister and his mother, on the occasion of her funeral next Wednesday the house might adjourn. Perhaps we might adjourn during those hours out of respect to her memory and to honour the office of prime minister.


Howard Charles Green: I appreciate the thought behind the suggestion made by the hon. member for

Vancouver East, but I think the Prime Minister would wish the house to carry on with its business and would not wish a course of this kind to be followed.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I should like to direct a question to the Minister of Transport. Has the minister received a letter from Mr. W. Danyk, secretary treasurer of the Canadian National Railways system employees' local federation of Edmonton, Alberta, in which he strongly protests the nation-wide lay-offs of employees scheduled to be implemented on March 17, 1961 by the Canadian National Railways? If so, is the minister of the opinion that this drastic action contemplated by the C.N.R. is contrary to the assurances of reinstatement of employment given by the minister during the discussion of Bill No. C-45?


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, I have not seen the letter referred to by the hon. member. I will check with my office, and if I have received such a letter I will at once communicate its contents to the management of the C.N.R., which is the course open to me in this circumstance.


Hazen Robert Argue: Mr. Speaker, I appreciate the minister's answer, and I might tell him that his name is the first one listed on the copy that was sent to me. Has this matter previously been brought to the attention of the minister? Is he aware of any impending move by the C.N.R. to institute this kind of wholesale lay-off?


Léon Balcer: No, Mr. Speaker.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. Hubert Badanai (Fori William):: Mr. Speaker, I should like to direct a question to the Minister of National Revenue, arising out of the awarding of a contract to a private station to televise the Big Four football games. It is now being stated that stations such as CFCJ-TV at the lakehead are doubtful whether they will carry the games this year.
My question is, will the minister look into this matter, which is causing considerable concern, and report to the house whether the Big Four football games will be available to stations which previously carried these football telecasts either through C.B.C. outlets or C.B.C. affiliated stations?


Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, I will refer this matter to the corporation and ask for information, and I will advise the house accordingly.



SHIPPING


[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I should like to direct a question to the Minister of Transport. I am sorry I could not give him longer notice, but only about two hours ago I had occasion to send him a copy of a telegram addressed to me which stated that a shipment of wheat for the order of the people's republic of China is today being loaded in a ship at Vancouver which has not been cleaned. Fuel oil is at the bottom of the ship. I have in mind criticisms made a year ago regarding certain shipments of wheat. I would ask the minister whether he has been able to investigate the truth or otherwise of this allegation.


Léon Balcer: Mr. Speaker, I certainly will, and will ascertain that ships leaving Vancouver are properly cleaned to carry good Canadian wheat.



SHIPPIGAN ISLAND-INSTALLATION OF MARINE AID STATION

[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: May I
ask the Minister of Transport if he is now in a position to reply to the question I asked him on Thursday, February 16, with regard to the installation of a Decca station on Ship-pegan island?


Léon Balcer: Yes, Mr. Speaker. In the light of the additional information the hon. member was good enough to give me regarding this question about a project for Shippigan island, I was able to make wider inquiries in the department.
I am now able to advise that we are planning to instal a Decca station on this island. The survey of the site has now been completed, and we are working on plans and specifications for the station, which will form part of what will be known as the Anticosti Decca chain. Funds have been included in the 1961-1962 estimates, and the target date for operation is the late fall of this year.
Inquiries of the Ministry TRANSPORTATION



ROYAL COMMISSION


[Stage Direction]
On the orders of the day:
Mr. O. J. Godin (Nickel Bell):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Could the minister advise the house whether the royal commission on transportation expects to make its report before the deadline date of March 31 this year?


Léon Balcer: Yes, Mr. Speaker. I have nothing to add to the information already given by the Prime Minister that the report is expected on or before March 31.


Osias.-J. Godin: Would the Minister of Transport check this matter and advise the house in due course?
(Translation):



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. Yvon Dupuis (St. Jean-Iberville-Na-pierville):: Mr. Speaker, I should like to put a question to the Secretary of State with regard to the statements he made in this house on November 18 and February 15 last.
Would he be in a position to table in this house the full text of the speech on immigration he made in the Labelle constituency and which he claims to have in his possession?


Some hon. Members:: Order.


Hon. Noel Dorion (Secretary of State):: Mr. Speaker, I see that my friend does not rely on the statements made by his own colleagues outside the house, and in that he is quite right.
The statements I made are actually correct and I object to the behaviour of certain members who sought to challenge my words. I have been practising law for thirty-three years and-


Yvon Dupuis: Mr. Speaker, I do not think I have said such a thing. I only asked-


Noël Dorion: Mr. Speaker, what I said is the real truth. There is no need for a text to bear out my words.
(Text):


Mr. Speaker:: The minister was asked a question about tabling a document. I am not sure that the document in question is one which relates to the hon. gentleman's administrative responsibility. If it is, he would be at liberty to answer the question. I trust that it does not involve more than an answer to the question.

Inquiries of the Ministry (Translation):


Yvon Dupuis: Mr. Speaker, I should like to know if the minister is prepared to table the text of the statement he said he had in his possession.


Noël Dorion: Mr. Speaker, I do not have to table it. What I said is exactly true and no one has the right to question my word.


Yvon Dupuis: Mr. Speaker, I should like to ask a supplementary question.
(Text):


Mr. Speaker:: The hon. member has asked a question and a supplementary, and it seems to me the answer is clear enough.


Yvon Dupuis: This is a new question I should like to ask.
(Translation):
I should like to ask the minister why the word of ten Liberal members would not be worth his own word in this house?
(Text):


Mr. Speaker:: Order. The hon. member's question is quite out of order.



RAND REPORT


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: I should like to direct a question to the senior minister from the Atlantic provinces, the Minister of National Revenue, in the absence of the Prime Minister. In view of the many communications that I have been receiving from interested groups in the maritimes with regard to the Vissac commentary on the royal commission report of Mr. Justice Rand, could the minister say, first, whether this report will be made public and, second, whether any action on the report is contemplated?


George Clyde Nowlan: I appreciate the implied compliment when I am referred to as senior minister from the maritime provinces. Then, again, perhaps it is a sign of old age. At any rate I will take the question under consideration, and I am sure that whatever may be said in answer to the details of the question, the report will receive full consideration and will be dealt with by the government following that consideration.


Hazen Robert Argue: Does the minister mean he will give me a further report at a later date?


George Clyde Nowlan: I shall be very glad to do that.



CAPE BRETON


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: May I ask the Acting Prime Minister if he is in a position to reply now to a question I addressed to the Prime Minister last Wednesday with respect to the request from the premier of Nova Scotia to the federal government for a general coal conference?


Howard Charles Green: No, Mr. Speaker. I will bring that question to the attention of the Prime Minister.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Harold Edward Winch: 1
wish to direct a question to the Secretary of State for External Affairs. Can the minister advise the house whether in view of the serious situation in the Congo and the problem now facing the security council it is his opinion, or the opinion of the government, that a call be made for a special session of the general assembly to take responsibility for the formation of policy and the issuing of instructions with regard to the Congo?


Howard Charles Green: Mr. Speaker, the hon. member for Vancouver East in my absence yesterday asked whether any consideration was being given to the report that a special meeting of the United Nations might be called to deal with the Congo situation.
As hon. members know, during the past week or so the situation in the Congo has been under consideration by the security council. I am happy to report that in the early hours of this morning the council adopted a resolution sponsored by Ceylon, Liberia and the United Arab Republic. The vote on that resolution was nine in favour and none against, with the U.S.S.R. and France abstaining.
The resolution, which with the permission of the house I shall now table and which perhaps could be printed as an appendix to Hansard-


Harold Edward Winch: Could it be read aloud, sir?


Howard Charles Green: -defines more clearly the role of the United Nations in the Congo. Among other things it urges the United Nations to take all appropriate measures to prevent the occurrence of civil war in the Congo including the use of force, if necessary, in the last resort. It urges the immediate withdrawal

Erom, and prevention of a further influx into the Congo of all Belgian and foreign military and para-military personnel and political advisers not under United Nations command, [t also provides for an impartial investigation into the circumstances of the death of Mr. Lumumba and his colleagues and the punishment of the perpetrators of these :rimes.
Part B of the resolution calls for the convening of the Congolese parliament, the reorganization of the Congolese armed units and their elimination as an element in the political life of the Congo.
The resolution does not provide all of the answers to the Congo crisis, but it does give reason for cautious optimism that order may be restored in the Congo and that conditions may be created which will allow the Congolese, through conciliation, to reach a solution to the problem themselves without unilateral interference from outside. Perhaps the most encouraging thing about this resolution is that it was initiated by African and Asian members of the council and has the full support of most of the Afriean-Asian group.
I think in view of these latest developments that the likelihood of an emergency special session of the general assembly to deal with this question has been reduced. There is, of course, an item concerning-and I quote from the United Nations agenda- "the situation in the republic of the Congo" which remains on the agenda of the resumed session of the general assembly which begins on March 7.
In answer to the second part of the question which the hon. member for Vancouver East asked yesterday, I cannot say when this item will be dealt with by the assembly, but I assume that its timing will depend on developments in the Congo.


Mr. Speaker:: Does the house concur in the suggestion that the resolution of the security council which the Secretary of State for External Affairs has filed be printed in Hansard perhaps as part of the answer which has been given?


Some hon. Members:: Agreed.
[Editor's note: For text of resolution above referred to, see appendix.]


Harold Edward Winch: A supplementary question, Mr. Speaker. Do I understand correctly that as a result of the decision taken by the security council the secretary general has been instructed to take a firm stand and if necessary to use the power and military force of the United Nations in order to bring about democratic conditions in the Congo and
Inquiries of the Ministry obviate the possibility of civil war there? Have I placed a correct interpretation on the decision of the security council?


Howard Charles Green: The hon. member with his experience at the United Nations will be able to place his own interpretation on the resolution. I do not think this is perfect, but it certainly should go far to strengthen the hand of the United Nations in dealing with the Congo crisis.
Hon. L. B. Pearson (Leader of Ihe
Opposition): Mr. Speaker, in view of the very far reaching and unprecedented character of this resolution, to which I am certainly not objecting, authorizing the use of international forces inside national boundaries for the first time in United Nations history, I believe, does the minister not think it might be useful to have this resolution of the security council, representing only a number of United Nations members, discussed and confirmed by the forthcoming assembly?


Howard Charles Green: Well, Mr. Speaker, it may be wise to follow that course, but the important thing is that this resolution has been passed by the security council without any members voting against it. There was considerable concern yesterday that the resolution would be vetoed possibly by two countries, but it has been passed with two abstentions and with no country voting against it. I think that is extremely important. I have no doubt that by the time the general assembly meets the situation in the Congo will have changed considerably and it may be that it will not be necessary at that time to have this particular resolution dealt with in the general assembly.


Hon. Paul Martin (Essex East):: Mr. Speaker, may I ask a question on this important matter. In view of the offer by the government of Malaya and the acceptance thereof by the secretary general, the further offer of the government of India to reinforce its personnel in the United Nations force in the Congo, and the decision of the British government to dispatch transport aircraft for the purpose of the operations of the United Nations in the Congo, can the minister say whether or not Canada has been requested to increase in any form its contribution to the United Nations presence in the Congo?


Howard Charles Green: No, Mr. Speaker, there has been no request for such an increase. There may have been requests from time to time for one or two men with particular types of training, but there has been no request for any general increase.

Inquiries of the Ministry HOUSING



USE OF PHOTOGRAPHS OF MINISTERS IN ADVERTISEMENT

[Stage Direction]
On the orders of the day:
Osias.-J. Godin: I should like to direct a question to the Minister of Public Works arising out of an advertisement that appeared in the Sudbury Star of February 17, a copy of which I have forwarded to him. Can the minister tell the house whether he has authorized the use of his photograph and that of the Prime Minister in an advertisement promoting a private enterprise to the detriment of other similar businesses in the area?


Mr. Speaker:: Order. Unless the advertisement is a public advertisement I think the hon. member's question would be out of order.


Osias.-J. Godin: I presume it may be the government.


Mr. Speaker:: Order. If the hon. member is prepared to take the responsibility for asking a question based on an advertisement that is published by the minister, I would then permit the question as being within his administrative responsibility, but if it is a private advertisement the hon. member has no right to bring it before the house.



TRANSPORT


[Stage Direction]
On the orders of the day:
William Moore Benidickson: Mr. Speaker, I should like to address a question to the Minister of Finance. Has the minister had his attention drawn to bill No. 15 of the legislature of the province of British Columbia, wherein it is stated that the federal government is expected to make a monetary grant in the amount of $19,812,500 to subsidize the Pacific Great Eastern Railway Company? If the government has a policy in this respect, will the minister indicate whether or not it has previously been announced as government policy and, if so, whether a similar concession would be granted to any other province?


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, the hon. member should be aware that, following the proper course in that respect, a similar question has already been placed on the order paper by the hon. member for Vancouver East. It appears in Votes and Proceedings for yesterday. It is a starred question and will be answered tomorrow.


Hon. J. W. Pickersgill (Bonavisla-Twil-lingaie):: Mr. Speaker, a very important question of privilege has been raised by the hon, member for Kenora-Rainy River in his question. The legislature of a province has a bill before it which asserts that it is expected that a grant will be made by the federal government before we have been told anything aboul it in the house. Surely we are entitled tc know whether this statement in the preamble to legislation of the provincial legislature is in fact a part of the policy of the government,


Donald Methuen Fleming: Mr. Speaker-


Harold Edward Winch: On a point of order, Mr, Speaker, may I say-


Mr. Speaker:: Order. I take it that the hon, member is raising as a question of privilege the absence of an answer to his question today. I am not sure that is a question oi privilege; in fact I think it is not. Whether oi not a question will be answered is in the discretion of the administration, and it is not customary to comment on the absence oi inadequacy of an answer even as a matter oi privilege.


John Whitney Pickersgill: Mr. Speaker, it was not the absence of an answer-


Donald Methuen Fleming: Mr. Speaker, there is a further point involved. It is whether, after an hon. member has followed the proper course of placing an involved question on the order paper, some other member should be permitted to come along, appropriate the question and ask for an early answer before the time has come for the answering of the starred question. The proper course will be followed in accordance with the rules of the house. Tomorrow is the day for answering starred questions, and I propose to regard this as the question of the hon. member for Vancouver East and to answer it tomorrow when you call for answers to starred questions.


John Whitney Pickersgill: Mr. Speaker, obviously 1 did not make clear the point I was seeking to make. I would not suggest that failure to answer a question until tomorrow was a question of privilege, but I was suggesting that when the government of a province introduces a bill in the legislature of that province purporting to commit the treasury of this country, this is a proper matter to be brought to the attention of the government in this place at the earliest opportunity, and that any government with a sense of responsibility would wish to clear up the matter at once.


Mr. Speaker:: A question has been raised whether this is a proper question to be brought to the attention of the minister, in

riew of the fact that a question is already an the order paper for answer. May I say I io not know of any rule against anticipation 3f a question that will be answered by asking m oral question in advance. However, I take t that the minister's explanation stands and .hat there is no further need to discuss the natter.

5T. VINCENT DE PAUL PENITENTIARY



INVESTI- GATION INTO USE OF BARBITURATES

[Stage Direction]
On the orders of the day:
Mr. L. D. Crestohl (Cartier):: Mr. Speaker, [ should like to address a question to the Minister of Justice. On February 7 I addressed ;he following question to him:
Will the minister report to the house on any nquiry being held in St. Vincent de Paul penitentiary on the use of barbiturates by inmates?
In the absence of the minister his par-iamentary secretary replied as follows:
There is a full investigation underway... and i report will be presented to the minister. I am certain that it then can be brought forward to the house-
I should like to ask the minister whether that report is now ready to be presented to the house.


Hon. E. D. Fulton (Minister of Justice):: Mr. Speaker, my attention was directed to the ion. member's question and the reply made ay my parliamentary secretary. I should point Dut to the hon. gentleman that the reply did lot state that the report as such would be presented to the house. What it does mean .s that the subject matter might then appropriately be discussed in the house.
In so far as a report is concerned, the only specific report that is being prepared relates :o the incident in which an inmate escaped, seized the wife of one of the guards as a lostage, held her hostage for over 24 hours, ind was subsequently recaptured after an incident involving considerable violence. The whole circumstances surrounding this incident lave been inquired into by one of the deputy commissioners of penitentiaries, and a report s in the course of preparation. I believe it .s still being prepared. If it has been completed it has not yet actually come to my desk, but I expect it shortly. It would not be lormal for me to lay this before the house, aut of course I would be prepared to discuss my matters in connection therewith on my estimates.
With respect to the question on barbiturates generally, there is no specific inquiry; but as is well known we have been concerned for a long time with regard to the situation at St. Vincent de Paul. As I said at Montreal
Inquiries of the Ministry last week, on the occasion of the opening of the Leclerc institution, steps have been taken by the new warden of St. Vincent de Paul which appear to be producing results. The steps appear to be effective. The traffic in barbiturates is not yet eliminated, but the indications are that it has been considerably reduced.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. C. W. Carter (Burin-Burgeo):: Mr. Speaker, I should like to direct a question to the Minister of Fisheries. I regret not being able to give him notice, but I received the communication on which my question is based just as I was coming into the house.
Has the minister received any complaints from Newfoundland fishermen in respect of foreign draggers dragging during the night time inside the 3-mile limit in the inshore grounds of the Port aux Basques-Rose Blanche area? If not, will he make an immediate investigation and take the necessary steps to safeguard the rights of the fishermen and protect their gear from this practice of foreign draggers?


Hon. J. A. MacLean (Minister of Fisheries):: Mr. Speaker, no such complaint has come to my attention as yet. There may have been one received during the course of the day but I am unaware of any as yet. I will have the matter investigated and inform the hon. member as to the situation.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I would like to ask the Minister of National Defence a question in regard to his statement of February 9, when he said that during the course of this year some four CF-100 squadrons will be phased out. I would like to ask the minister if he can explain that statement in the light of the Prime Minister's statement in Washington yesterday when he said that Canada does not intend to reduce her participation in the North American air defence.


Hon. D. S. Harkness (Minister of National Defence):: I do not think those two statements have a great deal of relationship to each other. As the Leader of the Opposition well knows, it was announced about a year ago, and certainly on two or three occasions during the last session of parliament, by my
2248	HOUSE OF
Inquiries of the Ministry predecessor in this office that these squadrons would begin to be phased out this year. In other words, my announcement that four of them would be phased out during this present year was not a new announcement at all, but was just confirmation of what had been said upwards of a year ago.


Lester Bowles Pearson: Mr. Speaker, does that mean there are to be five rather than nine squadrons for continental defence?


Douglas Scott Harkness: I think the Leader of the Opposition is capable of that simple arithmetic, Mr. Speaker.



ST. LAWRENCE SEAWAY REPORTED INCREASE IN INSURANCE RATES

[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I should like to direct a question to the Minister of Transport. Could the Minister of Transport comment on a report appearing in this morning's Montreal Gazette which states that ships using the St. Lawrence seaway this coming year will be forced to pay insurance rates which have been increased by from 17 to 100 per cent? Would the minister care to say whether this will contribute to an increase in freight costs to ships using the seaway?


Léon Balcer: Mr. Speaker, I have not read the article in question. This is definitely a very important question, and I will investigate the matter.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, I would like to ask the Minister of Agriculture a question based upon a statement he made in the city of Chatham, in the province of Ontario, about six weeks ago, that he expected within a few days to announce a government sugar beet policy. Is the minister in a position to announce that policy today or to give some indication when the policy will be announced in view of the fact that seeding is not too far away in Canada's most advanced part of the country?


Hon. Alvin Hamilion (Minister of Agriculture):: In reply to the hon. member for Essex East I would say that I am unable to give the date when the announcement will be made, but I think I can say that it will not be too far away.


Mr. E. W. Brunsden (Medicine Hat):: supplementary question with regard to sugar beets. Is it not true that the Minister of


Agriculture is taking advice from a greater authority than the hon. member for Essex East, namely the sugar beet growers from Alberta, Manitoba and Ontario?


Mr. Speaker:: I am sure the hon. minister will not take it as an administrative responsibility to express a preference.



STATEMENT RESPECTING ENLARGEMENT OF PUBLIC RELATIONS STAFF

[Stage Direction]
On the orders of the day:
Francis Alvin George Hamilton: I would like to reply to a question asked by the hon. member for Bonavista-Twillingate yesterday in which he asked whether the minister is making extensive additions to his public relations and information staff. The answer is no.


John Whitney Pickersgill: I wonder if I could ask a supplementary question. Has the minister seen the article by Mr. Victor Mackie which appeared in the Winnipeg Free Press of February 18, 1961, in which he says:
Agriculture Minister Hamilton is out to build up an efficient, high pressure and extensive public relations and information service for his department. He wants more publicity for his policies.
Has the minister any comment in that regard?


Francis Alvin George Hamilton: Yes, Mr. Speaker, I would like to answer that question by saying first of all that I have not seen the story, but that I think the farmers of Canada have a right to know what this government has done for them.


John Whitney Pickersgill: Could I ask the minister whether he has engaged someone from the Toronto Telegram at a very large salary to tell him how to inform the farmers?


John Whitney Pickersgill: I wonder, sir, if I might act as arbitrator in this geographical dispute, being about half way between, and ask whether the minister intends to answer my question.


Mr. Speaker:: I suggest that the hon. member put his question on the order paper.


John Whitney Pickersgill: I shall be most happy to do so, sir.

The house resumed, from Monday, February 20, consideration of the motion of Mr. Fleming (Eglinton) for committee of supply, and the amendment thereto of Mr. Pearson.



UNEMPLOYMENT


Mr. Frank Howard (Skeena):: Mr. Speaker, the amendment before us has allowed for a rather broad and sweeping type of debate upon a number of subjects, which we could reasonably expect to flow from the general wording of the amendment itself. This discussion has dealt somewhat with fiscal policies, somewhat with the objection that certain hon. members have to a particular provincial government in Canada, and somewhat with the question of unemployment, all of which matters are deemed to flow from the content of the amendment itself.
I can understand, of course, how the fiscal policy of the government and the unemployment situation may be directly connected with the amendment, but I fail to understand how references to the activities of any provincial government have anything to do with the amendment. It is therefore my intention to concentrate on the field of unemployment and the matter of our economy in the few remarks I have to make.
I think we have seen over the last few years a kind of blind refusal on the part of the government even to admit that there was something close to economic difficulty in the nation. I am sure we remember very well the famous statement of the Prime Minister in November of 1957, shortly after he took office, in which he said that unemployment is not a serious problem and that we need not concern ourselves with it. Ever since then it appears to have been the policy of the Prime Minister's colleagues and others who support his party to protect the Prime Minister from admitting having made an error in 1957, when he said that unemployment was not a serious problem and need not be dealt with.


Mr. Speakman:: I rise on a point of order, Mr. Speaker. Will the hon. member tell us where this statement appears?


Frank Howard: I should be glad to do so. I have in my hand a copy of the Winnipeg Tribune of Saturday, November 9, 1957 in which we find the following, and I am now quoting the words:
Prime Minister Diefenbaker has described the unemployment situation as "not generally serious"-
As I said, this was November of 1957. The action of the government since that time seems to have been to protect the Prime Minister in the erroneous assumption that he had made at that time. Certainly the Minister of Finance, at least up until the baby budget was born, juggled the budgetary items of the nation on the assumption that nothing too serious was wrong.
Government Monetary Policy
This is an extremely unwise course to follow. I think the government should be gentlemanly enough to admit their mistakes of 1957, 1958, 1959, and 1960 and face the fact that there is in this nation an unemployment situation that is extremely serious; that workmen and their wives and their families, many of them regularly unemployed every winter and stretching on into the summer, now are seriously suffering, are losing furniture and commodities they have bought on credit, and are obliged to exist at substandard levels on welfare or on unemployment insurance for extended periods of time.
I note that the Prime Minister, according to the Globe and Mail of this morning, was in a lengthy conference with the President of the United States and in fact had his picture taken with President Kennedy. What they discussed, of course, was accounted for a little bit yesterday; but at least President Kennedy, shortly after taking office, had the courage to face the fact that there is in the United States a difficult economic situation and he wants to deal with it. This government has failed to face even that problem, namely the fact that there is an economic collapse in the nation. Again we hear platitudinous phrases such as these: everything is fine, prosperity is just around the corner, and all we have to do is rest our faith and hope in the capitalist system and everything will straighten itself out.
Valentine day was not too long ago, Mr. Speaker. Usually on Valentine day we are supposed to have-sweet thoughts for people; it is a day for tender expressions of endearment. In recent years, unfortunately, this purpose has been distorted by the development of a so-called sick type of valentine which is really extremely unkind to the recipient. On February 15, the day after Valentine day, the workers of this nation and the unemployed people in this nation received from the government in office a valentine of the sick type; that was the day on which the latest statistics relating to the labour force were released. Those statistics have been mentioned in the house, have been distorted somewhat in many instances, have been compared with things with which they should not have been compared, and so on.
If one keeps in mind the fact that these statistics are now accepted as the only ones with which we should concern ourselves, and that they were developed and endorsed by the government in office, and if we think in terms of percentages of the labour force, I think we get a clearer picture of what is happening. From this valentine gift to the workers and the unemployed of this nation we find this, and perhaps I could just read briefly four or five statistics. We find that in
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Government Monetary Policy Canada as a whole and in every region in Canada this year, as compared with the same time last year, there has been a staggering increase in the number of people who are unemployed expressed as a percentage of the working force, the figures being 10.8 per cent for Canada as a whole; 14.9 per cent in the Atlantic provinces; 13.9 per cent in Quebec; 8.5 per cent in Ontario; 7.5 per cent in the prairie region and 13.3 per cent in the Pacific area.
Even if we go back only one year we find that this is undoubtedly the result of a kind of ministerial myopia on the part of the Minister of Finance when he presented the budget of last year. Hansard is full of warnings given by members of this house to the government in office over the last three or four years. The newspapers and economic magazines, including the Financial Post and others, are full of warnings to the government of Canada dating back over the last two or three years that an economic crisis was developing and that it would probably reach its full force and effect some time in the winter of 1960-61, and that is the winter we are in now. But our shortsighted Minister of Finance, obviously with the complete endorsement of his colleagues, refused to heed these particular warnings. Rather than heed them and listen to them, he was more prepared to be a gambler and gamble with the very lives and welfare of the workmen in industry and their wives and children, and place blind reliance on the fact that prosperity might be just around the corner.
This was the gist of the budget in 1960, that everything looked rosy for the future. The Minister of Finance still wore the rose-tinted, visionary glasses to which the hon. member for Timmins referred some time ago. The unfortunate thing is that in this gamble of the Minister of Finance the only thing he could lose was his seat and the seats of his colleagues. But the workers of the nation could lose their jobs, their incomes, their furniture, their refrigerators, cars and television sets, and in some instances the homes they had purchased on faith in the fact that we would have in Canada a government which would have some sense of decency in regard to their welfare and employment.


Mr. Macdonnell:: Mr. Speaker, would the hon. member permit a question?


Frank Howard: Gladly.


James MacKerras Macdonnell: The hon. member is
covering a great deal of territory with a great many generalizations. He has even used the word "collapse". Could he give us some references or quotations to support these, to me, wildly extravagant statements he is making?


Frank Howard: The one that comes immediately to hand is The Labour Force for the week ended January 14, 1961. This is a government publication. The third sentence of this publication reads:
Unemployment rose by 165,000 over the month.
I referred earlier to the percentage figures in this same statement. Rather than wade right through these figures, I have them here in tabular form.


James MacKerras Macdonnell: I am not questioning the percentages of unemployed that the hon. member gave. This matter is serious. We are all greatly exercised about it. But when he uses the word "collapse" I think that is a very extravagant word. As a matter of fact, several million people in this country are working and are producing a very great many things. The hon. member spoke about three or four years of bad times and everybody warning the government. We had a fairly stable period during that time, and at one time we all thought we were perhaps on the way up to a new boom. I suggest that to refer to a period of three or four years of bad times is just an exaggeration.


Frank Howard: I have a tremendous amount of respect and admiration for the hon. member, but in asking the question he made the statement that everyone was convinced that things were going well. Such is just not the case, Mr. Speaker. The point I am attempting to get to is this. This was what I consider to be a blind, unreasoning, illogical policy in our present capitalist economic system, and is not in fact a good policy to follow. This is the end to which I am leading.
I used the past three or four years as an example because this government was in office. But we could very easily extend that back to the time the Liberals were in office and the so-called 1949 recession, or rolling readjustment or whatever it was, and the 1953 decline-if the word "collapse" is not generally acceptable-in the economy, and the start of the collapse in our economy in 1957 and 1958.
When the Liberal party was in office it had the same blind, unreasoning faith and did absolutely nothing to deter this slump in the economic cycle. This was because it followed the theory that all we have to do in this type of economy is let business run rampant, let business do as it pleases, provide the sort of economic climate within which business can develop and provide employment, build up industries and expand, and so on and so forth. If this is done they believe everything will be fine and dandy and rosy. But history has shown that such is not the case. Perhaps, Mr. Speaker, I am getting ahead of myself. I did wish to lead into these thoughts

but the hon. member, by posing his question, somewhat anticipated my line of argument. However, it is perfectly all right.
We have been convincing ourselves that the correct approach to our economy is to provide, if I may use the phrase which has been generally used, an economic climate within which business will feel at home, will feel comfortable and secure. It is believed that this is all government has to do; that it should provide this sort of climate, whether it be by tax incentives, tax concessions, accelerated depreciation or lower stumpage rates in connection with the lumber industry, special concessions to the mining industry, royalties and that sort of thing.
All these things have been tried at one time or another. The theory is that this is all we have to do and business will function well, thereby the economy will function well and workers will be employed. But it does not happen that way. It occurs for short periods of time, and these periods of time have been decreasing as the years go by. This means that our business cycle is becoming faster, the slumps, the valleys and heights of business activity have become quicker and quicker in the last 20 or 30 years.
The reason this does not function too well is that business primarily is selfish. Any particular industry is selfish to the extent that it is in business and in operation to make a profit. This is the prime motivating force behind business function. The first and prime requisite of corporations, industries or a group of industries in concert one with the other is to make it a profitable enterprise. This is the first and foremost aim.
Following from that, these business organizations or industries have less concern for the effect of this policy upon communities that may be established in their areas. Let us look at the uranium industry. This was of course a government milk-fed group which believed in socialism for the uranium mining corporations themselves. But apart from that and it is not too correct a comparison to draw-they do not take into account too much the effect upon communities within which they are established, if the effect upon those communities is going to override the profit consideration. They do not take into account too much the impact upon the natural resources. The logging industry is a prime example of this. The policy in the logging industry for years and years and years was the old cut and clear policy: "Let us just mow the trees down one after the other, acre after acre, mile after mile, and let us not worry about posterity and whether there will be any trees left for posterity".
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Government Monetary Policy
It took the government intervention to stop this practice. Finally the government stepped in and said, "This cut and clear policy is not good. You will have to log in a certain way in order to promote the growth of trees in this same spot in later years, either by natural regeneration process or by artificial means. You will have to plant trees." The government stepped in to protect the interests of the people because of this cut and clear policy. This is one instance where the future of the people was endangered because of the selfish approach of the business corporate structure. I do not complain too much about them trying to do this; I complain about the type of economic system that pushes them into doing it. This is what I say is wrong.
They do not concern themselves too much with the effect upon the work force. When the welfare of that work force becomes a consideration overriding profits, profits come first. We all know of instance after instance of this type of thing happening. Examples extend right to the point where business says it is sorry, it has to curtail production, it has to lay people off and it has to shut down industry. Businesses say, "But we have to protect our profit picture as much as possible".
This is what I was leading up to when I referred to the last three or four years. These warnings were given time and time again, that it required government intervention, government planning, government regulation, government co-ordination of some sort to protect the welfare and interests of our people. We have to protect our workmen, because it is impossible for them to protect their own interests and those of their families. These are of paramount importance to workmen. We have to protect them against, for example, the C.P.R., the Aluminium Company of Canada, H. R. MacMillan and Bloedel or any other corporate structure.
The workman is not in the same class at all; he is just a cog in the wheel producing a certain commodity. He has no way of protecting his own right to work, his own job. If the economic situation becomes such that corporations decide to close down, it is unfortunate for such an individual. He has no way of protecting himself. The only element in society as we know it today which is capable of protecting such an individual, such a workman, is parliament, and I am using this term as being synonymous with parliamentary action.
Parliament, as we know, is in practice run by government. Only the government can introduce certain types of measures into the house, and so on. Initially, therefore, it falls on the government to adopt economic policies to deal with the shortcomings in our present system, and I think the government should

Government Monetary Policy adopt policies of a democratic socialist type, or policies based on a democratic socialist philosophy, introducing measures which will alleviate unemployment and protect workers in both industry and agriculture as far as this can be done. This is where the government has failed. It has followed blindly an unreasoning faith that prosperity is just around the corner, that business will quickly pick up again, and that this is all that is necessary to keep the economy going.
In January, 1958 the C.C.F. developed some ideas regarding what could be done to deal with the state of our economy as far as we could see the situation at that time. This was at a period when the Prime Minister of this nation was solely concerned about juggling things in order to get re-elected. One of the things we advocated then was: To undertake in co-operation with provincial and local governments work on public projects which could be started immediately. This would create new jobs in the quickest possible time.
Following that, we found the government had introduced a winter works program. Another thing we advocated at the time was: To undertake a joint federal-provincial program to set up facilities on a permanent, year-round basis to retrain those workers who have become unemployed because of technological changes in industry.
We have just, during this session, seen the introduction of legislation along those lines by the Minister of Labour in his vocational training bill. If this had been done three years ago it would have helped immeasurably at the present time. In 1958 we also urged the desirability of long-range planning and an attempt to co-ordinate activities in the field of business in order to protect the interests of workmen and their families, and to provide them with the highest possible standard of food, clothing, shelter and education, besides ensuring that their standard of living was not decreased because of the inaction of the government.
Well, a conference on unemployment was called. It was designed to bring together various economic groups in the nation, and it was hoped that something valuable would emerge out of the discussions. The only thing that developed was the national productivity council, which cannot do one blessed thing about unemployment right now; first of all because it does not even exist at present and, second, because it is a long range effort in any event.
The Minister of Labour has said that the problem of unemployment is not his responsibility. His responsibility ceased the day after the last election, but will be revived, I am sure, a few days before the next election, whenever that may come. The Minister
[Mr. Howard.l
of Labour, obviously with the complete approval of his colleagues in the cabinet, says it is now labour and management which should get together and set about overcoming our difficulties. It is a commendable and a desirable thing for labour and management to discuss their problems and attempt to reach some mutually satisfactory way of dealing with them in order to improve the economy and promote employment. But, I submit, the Minister of Labour is either speaking with his tongue in his cheek or he is particularly naive when he speaks in this vein. Management is not going to sit down with labour or anybody else and talk about fields of activity within the corporate structure. The stand taken by management has always been to resist every step of the way every attempt by a trade union to concern itself with what management calls its God-given right to manage, and to resist every step of the way the desire of unions to talk to management about anything.
You will remember, Mr. Speaker, that many years ago management did not even want to talk with trade unions. That was the position; and it took a law, introduced in the United States, to alter this position. That law said that management must sit down with labour and bargain collectively. That kind of contact arose, therefore, only out of force of circumstances and government protection.
Talk to management about discussing with labour these fields of productivity and prices, and they will tell you it is none of their business. They will not talk to the unions about their profit picture. That is something inviolate, something the corporations want to keep to themselves. They will not talk about the corporate debt picture and take suggestions from labour or anyone else as to whether they should finance their operations in a different way. They will not talk about the amounts placed in their depreciation accounts. They say this is their business and no business of labour. They will not talk about further borrowings, or dividend payments; they would never listen to suggestions that these were too great or too little. They will refuse to talk about expansion into the processing industries and a variety of other equally important subjects. This business oi labour and management sitting down and discussing the entire productivity question is s dream. As far as management is concerned, it is not in the least interested in discussing these things with labour, and this has beer the situation for many years.


James MacKerras Macdonnell: I apologize for interrupting the hon. member, and if he does not agree I will take my seat at once, but I should

like to ask him a question. The hon. member has been making, again, the most sweeping assertions, without any qualification, as to the attitude taken by employers toward employees. I have had a little experience myself -not very wide, but some-and I want to tell the hon. member that I am aware of cases where the situation he is suggesting is simply not so. Is the hon. member not speaking of a few cases where conditions may be as he has described? I suggest to him that to stand up and make assertions of such a sweeping character is not fair and, perhaps, even improper.


Hazen Robert Argue: That is hardly a question, especially coming from someone so experienced as the hon. gentleman.


James MacKerras Macdonnell: I appreciate that the hon. member has been very kind in allowing me to intervene.


Frank Howard: I do not object at all; I am sure I shall not lose my place on the floor. As far as I am concerned the statements I have been making are not unfair. They are statements of fact in the light of my experience in this field. If the Minister of Labour expects labour and management to sit down and find a solution to this unemployment problem, then the minister is talking through his hat and he is not going to get any results. It may well be that in some cases an industry or corporation will open its books completely and take suggestions about ways in which productivity might be increased. This might be done in an isolated case, but it would not affect the economy of this nation to any extent. So I say the Minister of Labour is merely abdicating his responsibility in this field.
This is a problem of primary concern because individuals are involved. There were some 693,000 of them involved as of January 14, and there are undoubtedly another 100,000 in addition to that, by now. We in parliament are expected to take steps to alleviate unemployment and lessen the burden on people in the bread lines, the unemployed, those who are on welfare and have no income, who are living hand to mouth almost begging for a bite to eat and something to go on.
It is a sorry shame that political parties will promise anything with respect to employment opportunities in order to get elected. There has been no better example than the Prime Minister with his promises of solving all our problems and providing full employment. This is an unfortunate occurrence. I could use stronger language but I do not want to be unparliamentary. Instead of shrugging off their responsibilities as they did last year and devoting their time to attempting to protect 90205-6-143J
Government Monetary Policy the Prime Minister for his past errors, I urge hon. gentlemen opposite to consider that it is not too late to give the question of unemployment full study, perhaps as is being done at the moment by a committee of the other place.
We cannot sit idly by when there are 693,000 unemployed together with their families and heaven knows how many others. The children of the unemployed, sorrowfully, are the innocent victims of this crisis. We cannot ignore this problem and say that if we wait a little while business activities will pick up, conditions will change and employment opportunities will open. This is the most unkind thing we could do to the unemployed.
The unemployed have a responsibility, too. They should protest their plight in every way open to them. They should march on the federal and provincial governments, carry placards, lambaste the government and take every step open to them to make known their plight and convince the government that action should be taken.
Perhaps I should stop there and move my subamendment. I move, seconded by the hon. member for Timmins (Mr. Martin):
That the amendment be amended by adding thereto the following words:
"and this house further regrets that the lack of constructive government planning in monetary and debt management policies has resulted in the deepening of the unemployment crisis".


Donald Methuen Fleming: Mr. Speaker, I should like to begin my remarks this afternoon by quoting with full approval the opening remarks made by the hon. member for Kootenay West (Mr. Herridge) yesterday, as recorded at page 2207 of Hansard. The hon. member was commenting upon the subject matter chosen by the Leader of the Opposition for his amendment to my motion to resolve the house into committee of supply. Drawing attention to the fact that everyone had been led to expect that the official opposition wished to discuss unemployment conditions in Canada, the hon. member said:
Without any question, that is an emergency. Repeatedly during recent days we have heard demands from the official opposition that the government have a day's debate on unemployment. We in this group have sat here with bated breath waiting for the cannon's roar on unemployment. We have been disappointed. We have just finished listening to the pop gun in respect to one segment of the problem that faces us at this time. We were surprised; we were amazed; we were disappointed.


Paul Joseph James Martin: Mr. Speaker-


Donald Methuen Fleming: Those are very apt words on the part of any hon. member in this house who was present yesterday afternoon.


Paul Joseph James Martin: Mr. Speaker, I rise on a point of order.

Government Monetary Policy


Donald Methuen Fleming: There is no point of order. The hon. member for Essex East is engaging in his old tactics again.


Mr. Speaker:: Order.


Paul Joseph James Martin: My hon. friend keeps lecturing me, but I am going to tell the hon. gentleman that I will take my lecturing only from the Speaker and not from him. My hon. friend says, Mr. Speaker, that we have decided to discuss monetary questions. Will the minister deny that this house was assured by the Prime Minister and by the house leader that we would call the labour estimates tonight and discuss them tomorrow and have a general discussion on unemployment?


Mr. Bell (Carleton):: That is nonsense.


Paul Joseph James Martin: That was a solemn commitment made by the government.


Mr. Speaker:: Order. The hon. member for Essex East may have a point to argue, but certainly it was not a point of order.


Donald Methuen Fleming: Mr. Speaker, I was going to come to that. It was a prickly conscience that prompted the hon. member for Essex East to rise to his feet and attempt to raise a point of order. The hon. gentleman talked about a solemn commitment. There was no such thing. The hon. member has completely overstated the facts. I shall deal with that. I am going to deal very fully with that subject.
I have said that the remark made by the hon. member for Kootenay West was a very apt remark for any hon. member of this house to have made under the circumstances. We have had on numerous occasions from the official opposition, and not least of all from the voluble hon. member for Essex East, assertions that there is an unemployment crisis, a national emergency.


Paul Joseph James Martin: There is no doubt about it.


Donald Methuen Fleming: We have had this dinned into us for days. It was only last Wednesday, February 15, that the hon. member for Essex East himself sought to bring this matter forward for discussion on a motion to adjourn the house. It will be found on page 2067 of Hansard of that date. The hon. gentleman asked leave to move the adjournment of the house under standing order 26, and I quote the hon. gentleman's words-
-for the purpose of discussing a definite matter of urgent public importance, namely the addition of 165,000 persons to the ranks of the unemployed during the past month.
After you had ruled against the motion to adjourn the house for this purpose, the Leader of the Opposition, as reported at

page 2069 of Hansard addressed a question to the Prime Minister, in these words:
Mr. Speaker, I should like to ask the Prime Minister whether he would request the house to give unanimous approval to the calling, immediately, of the estimates of the Department of Labour, so that we can discuss without any delay the serious unemployment situation.
That was the situation last Wednesday. There was a great enthusiasm and a great zeal on the part of the hon. gentlemen opposite to discuss unemployment. The official opposition was given a full opportunity yesterday to call the tune in respect to the subject matter of debate, an uninhibited opportunity. Let me remind the house of what the Prime Minister said by way of rejoinder to the Leader of the Opposition on the occasion to which I referred. The hon. gentleman said:
Mr. Speaker, there will be a supply motion on Monday, when every opportunity will be given to hon. gentlemen to speak on this subject if it is within the rules of the house so to do. If that motion is passed, and if the house so wills, among the estimates to be called will be those of the Department of Labour.
When the motion that I introduced yesterday to resolve the house into committee of supply is passed, as I trust it will be this evening, among the several departments the estimates of which will be called will be the Department of Labour. Let us examine what the hon. member for Essex East has added to this. The hon. gentleman said that there was a commitment to go on in committee of supply tomorrow.


Paul Joseph James Martin: No, no.


Donald Methuen Fleming: There was no such thing, Mr. Speaker. The subject was not even discussed. I say this, that when the Leader of the Opposition (Mr. Pearson) yesterday in his remarks sought to create this impression he had no basis in fact whatever for doing so. I was very interested in what the Leader of the Opposition had to say yesterday by way of trying to excuse himself for ducking, for sidetracking, for sidestepping a debate on unemployment. It was a completely deliberate choice on his part. Note the way in which he put his remarks in this respect. His statement is to be found at page 2198 of Hansard and it is a fine example of ambiguity. He said:
The Prime Minister told us last week-
Obviously he was referring to the incident to which I have just alluded in Hansard.
-that the labour estimates would be called tomorrow, so we have a right to expect a general debate on other aspects of the unemployment problem without delay, perhaps on Wednesday of this week.
Whether or not the Leader of the Opposition intended it, Mr. Speaker, I think that probably most people reading that sentence would

think the Leader of the Opposition was saying that the Prime Minister (Mr. Diefenbaker) had indicated there would be a right to expect a general debate on the unemployment problem without delay, perhaps on Wednesday of this week. But the Prime Minister did not say that at all.


Paul Joseph James Martin: The implication is clear.


Donald Methuen Fleming: The implication is not there and it never was there.


Lester Bowles Pearson: Don't try to duck out of it.


Donald Methuen Fleming: This is just an attempt on the part of the Leader of the Opposition to find an excuse for having deliberately sidestepped a debate on unemployment yesterday. Let there be no doubt that on the motion to resolve the house into committee of supply the Leader of the Opposition had the floor and it rested in his hands to choose the subject of debate. Yet he deliberately chose a different subject and in this way avoided a debate on unemployment.
So the house will be able to understand without the slightest difficulty, Mr. Speaker, just how anxious the official opposition is for a debate on unemployment, let me repeat that they had their opportunity for a two-day debate and they deliberately avoided it. I say that all this talk we have been hearing about a national emergency, about a situation that demanded immediate discussion in parliament, an immediate debate last Wednesday, has been exposed as sheer hypocrisy.


Paul Joseph James Martin: Do you deny that the emergency exists?


Donald Methuen Fleming: Listen to them now, Mr. Speaker. Listen to them. Yesterday the Leader of the Opposition took great offense because I asked him a couple of questions. Oh, yes, he was not to be interrupted, he was above that, but I have hardly begun and the hon. member for Essex East (Mr. Martin) has already introduced one of his typical bogus speeches under the guise of a point of order and now the Leader of the Opposition is leading the chorus of intervention.


Paul Joseph James Martin: You are very provocative.


Donald Methuen Fleming: It is an interesting commentary on tactics.


Lester Bowles Pearson: We are following your tactics.


Paul Joseph James Martin: You are a very provocative minister of finance.


An hon. Member:: Give us the floor.
Government Monetary Policy


Donald Methuen Fleming: The Leader of the Opposition can have the floor but I think before long he will be spreading himself on it.


Mr. Habel:: He will not need a flag for sure.


Donald Methuen Fleming: Mr. Speaker, the fact that this was a deliberate manoeuvre on the part of the opposition is, I think, further evidenced by the fact that the amendment now under debate is by no means new. This is not a brand new burning subject at all. To every intent and purpose this is a repetition of the debate that was held in the house two years ago on a similar amendment introduced at that time on behalf of the official opposition. They wanted to have a debate on this subject, they wanted to avoid a debate on unemployment and so what they have done now really could have been tagged on to any theme at all.
Let us not think this is evidence of great concern on the part of the official opposition about the matter of monetary policy in this country under present circumstances. Let me ask you, Mr. Speaker, to have regard to the amendment introduced in the house on April 27, 1959. There you will find that the official opposition moved an amendment to virtually the same effect. It was introduced on that occasion by the hon. member for Ottawa West (Mr. Mcllraith). The amendment was in these words, and I am reading from page 3073 of Hansard of April 27, 1959:
That all the words after "that" to the end of the question be deleted and the following substituted therefor:
"this house regrets the ill-conceived and irresponsible actions of the government in the held of debt management and monetary policy which have been characterized by:
1.	The errors and inequities associated with the conversion loan;
2.	The highest bank rate since the Bank of Canada was established;
3.	The largest expansion of the money supply in any year since the war;
4.	The greatest increase in peacetime in the national debt;
5.	The highest public debt charges in Canada's history.
That was the amendment introduced two years ago. The present amendment is to precisely the same effect and every one of the arguments we heard yesterday was relevant to the debate of two years ago. Indeed, the enumeration that appeared in the amendment of two years ago was the theme of the speeches by the Liberal opposition. They did not introduce new evidence. They simply threshed old straw that was threshed at very considerable length in the debate two years ago. So we have further evidence of the urgency which the official opposition attaches to a debate on unemployment. They did not turn to another urgent subject. They turned up another subject by exhuming the debate of
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Government Monetary Policy two years ago. The Leader of the Opposition made the same kind of speech as was made on that occasion by the hon. member for Ottawa West and the hon. member for Welland (Mr. McMillan) made the same speech almost verbatim as he made at that time and as he has made numerous times in the house.
This is a measure of the alleged emergency. This is a measure of the urgency in the minds of members of the official opposition in reference to the subject of unemployment. The Leader of the Opposition, deliberately avoiding a debate on unemployment, introduced instead a theoretical lecture on the subject of monetary policy-


Paul Joseph James Martin: Much needed.


Donald Methuen Fleming: -with all the Lamontagne earmarks attached to that lecture and the whole speech devoid of so much as one single constructive suggestion. It was buttressed not with new evidence but with stale assertions. So much for the alleged emergency, Mr. Speaker. Monetary policy was the subject that was chosen.


Lester Bowles Pearson: We will deal with unemployment tomorrow.


Donald Methuen Fleming: Another interruption from the Leader of the Opposition, Mr. Speaker. I did not catch it but it will be on the record-


Lester Bowles Pearson: I hope so.


Donald Methuen Fleming: -and that will warm his heart.


Paul Joseph James Martin: He said that we will be discussing unemployment tomorrow.


Donald Methuen Fleming: The subject of monetary policy has a bearing, of course, on economic conditions. It has at any time. I am sure that the importance .of monetary policy in its proper sphere will be denied by no one. The importance of monetary policy cam, of course, be exaggerated and it suited the purposes of the Leader of the Opposition yesterday, of course, to resort to this favourite Liberal tactic. I am not going to make extended comment on this particular aspect of the matter. I could say a great deal on this subject but I will simply put on the record for the instruction of the hon. member for Essex East-


Paul Joseph James Martin: Thank you.


Donald Methuen Fleming: -a statement made several years ago by the late James Muir, then president of the Royal Bank of Canada. I quoted this statement on August 11, 1956, as found at page 7460 of Hansard, and it is in these words:
Experience shows that monetary policy is more effective against inflation than against deflation.


But there are dangers. As I have already pointed out, the policy may go too tar. It may also be unselective, curbing healthy as well as unhealthy or excessive bank credit.
No less a person than Lord Cobbold, the governor of the Bank of England, said in a speech in Edinburgh on February 9, 1961:
I also accept-indeed it is a theme which I have myself argued for many years past-that monetary policy cannot cure all ills and that it is a great mistake to expect it to carry loads which should be carried in other fields of government policy.
Mr. Speaker, I think that these are words that will help to put this subject into its proper focus and perspective. However, Mr. Speaker, the issue that the Liberal opposition has chosen to raise in this debate is an issue as to where responsibility lies with respect to monetary policy in Canada. The Leader of the Opposition has certainly striven to the utmost to create maximum confusion on this subject and then exploit it. Let me leave no doubt in the mind of any hon. member in this house, Mr. Speaker; the government is always prepared to assume its responsibility. It will always measure up to that responsibility and will hold itself accountable to parliament at all times. We have given abundant evidence of that respectful relationship. And, sir, so far as I am personally concerned in this relationship that the minister of finance has with the Bank of Canada, I also give the house full assurance that any matters on which the minister of finance has responsibility, has any duty cast upon him, so long as I have the honour to hold this office that responsibility will be accepted. There will be no attempt to deny or reduce it. But, Mr. Speaker, I am not going to pretend before this house that I have the power in certain areas that I do not, as minister of finance, possess. I do not think it is proper on an issue of this kind for the Leader of the Opposition to pretend that the power or authority which exists is held by the government or the minister of finance when in fact parliament has legislated otherwise. The government is not omnipotent; parliament is, within the terms of the British North America Act and federal jurisdiction. The government's power in all matters financial is derived from parliament; it depends upon enactments.
Mr. Speaker, the Leader of the Opposition sought yesterday to create or present an issue as though it lay between the government and the Bank of Canada. I shall have something to say on this subject. I say, Mr. Speaker, and this is the keynote of what I am about to submit, that in the field of monetary policy parliament has given the essential authority to the Bank of Canada and not to the government or to the minister of finance.

When we look for the place where power resides with respect to money supply in Canada we find that parliament has given no power to the government. Therefore, Mr. Speaker, when the Leader of the Opposition criticized monetary policy yesterday he was not, as he tried to represent, criticizing the government; he was criticizing the Bank of Canada. The Leader of the Opposition added the pretence, for his own partisan purpose, that the government has the responsibility.
Mr. Speaker, I will be glad to examine that question and deal with it fully. Let me say at the outset that it is perfectly proper at all times that any question of this nature should be discussed right here in parliament. But, Mr. Speaker, let us be clear in relation to this basic question of where the power does lie and whether responsibility should be fixed on the government or elsewhere. May I remind the house, Mr. Speaker, that not every public institution is subject to the government, or responsible to it. I suppose another comparable example is the Canadian Broadcasting Corporation. In its operations and in its programs it is not responsible to the government. It has been fundamental, indeed it has been axiomatic in the relationship between parliament and the Canadian Broadcasting Corporation from the outset, that its responsibility was to parliament, not to the government. The view has prevailed in parliament that the government must keep hands off the Canadian Broadcasting Corporation.
The Leader of the Opposition yesterday was all mixed up on the subject of budgets, Mr. Speaker. I will have a word to say about that. He was outdone, of course, by his right bower, the hon. member for Essex East (Mr. Martin). Any time the Leader of the Opposition makes an error you may be very sure, Mr. Speaker, that the hon. member for Essex East will go him one better, and he certainly did yesterday.
In the case of the Canadian Broadcasting Corporation, it does submit its budget to the government. Parliament has provided, Mr. Speaker, in plain terms that the budget of the Canadian Broadcasting Corporation must be passed on by the government, and it is submitted to parliament along with all the other estimates submitted to parliament by the government. Yet, even in face of that fact, it is a firm and established rule that parliament shall not control the operations or programs of the Canadian Broadcasting Corporation. Where does the responsibility rest here, Mr. Speaker? Not with the government. Parliament has so dictated.
What then of the Bank of Canada? Mr. Speaker, the provisions that parliament has
Government Monetary Policy enacted in this regard are very clear. Parliament, in its wisdom, has conferred certain powers upon the Bank of Canada in plain terms. I shall detain the house only by reading several provisions which will be relevant to my later remarks. In section 18, subsection 3, these words appear:
The bank shall at all times make public the minimum rate at which It is prepared to make
loans or advances.
Section 20, subsections 1 and 2, read:
(1)	The bank shall act as fiscal agent of the government of Canada without charge and, subject to the provisions of this act, by agreement, may also act as banker or fiscal agent of the government of any province.
(2) The bank, if and when required by the minister so to do, shall act as agent for the government of Canada in the payment of interest and principal and generally in respect of the management of the public debt of Canada.
And then section 21, subsections 1 and 2 read:
(1)	...the bank shall, except as provided in the Bank Act, have the sole right to issue notes payable to bearer on demand and intended for circulation in Canada and may, subject to section 23, issue such notes to any amount: such notes shall be legal tender, and shall be the first charge upon the assets of the bank.
(2)	It shall be the duty of the bank to make adequate arrangements for the issue of its notes at its head office and at its branch offices and agencies in Canada, and to supply such notes as required for circulation in Canada.
Those are very plain terms, Mr. Speaker, and there is the legislative code provided by parliament for the determination of this question which has been so confused by the Leader of the Opposition. The bank acts as the fiscal agent of the government. The government is responsible for debt management, but it has the right to call upon the services of the bank in that regard. The bank is given the sole right to determine what is called the bank rate, as described in section 18, that is the minimum rate at which it is prepared to make loans or advances. This provision is fundamental in relation to the question of responsibility. In regard to the direction of the monetary policy, in section 21 it is provided that the bank has the sole right to issue notes payable to bearer on demand and intended for circulation in Canada.
Then in subsection 2 it is provided that it is the duty of the bank to supply such notes as may be required for circulation in Canada. There is no right reserved to the government under section 21 in regard to the money supply or notes in circulation. The crux of monetary policy is surely control of the money supply. This does not mean that the Bank of Canada is not responsible. It is not responsible in this respect to the government. It is not under the authority of the government. The government cannot give it

Government Monetary Policy orders in this regard. Because the government has not power to direct the Bank of Canada what to do in this respect or what not to do, it is not correct to hold the government responsible, as the Leader of the Opposition is seeking to do, for in this relationship the government has no power or authority whatever given to it by parliament in relation to the Bank of Canada. Parliament has chosen to retain this power and authority unto itself, as it has done in relation to the Canadian Broadcasting Corporation.
The Leader of the Opposition yesterday referred to the speeches that have been made by the governor of the Bank of Canada. Mr. Speaker, may I say that I have no right of censorship over the speeches of the governor of the Bank of Canada. He does not refer them to me. Why should he do so? This is a free country. He makes his own speeches and chooses his own themes. I read these speeches afterwards as does the Leader of the Opposition. It is sometimes forgotten by hon. members opposite that this is a free country. I trust that I am not to be held responsible for what may be said by the governor of the Bank of Canada when he exercises his right as a citizen to make speeches.


Mr. Mcllrailh:: He cannot make speeches on that subject as a private citizen. When he speaks on it he speaks as governor of the Bank of Canada.


Donald Methuen Fleming: There we have the hon. member for Ottawa West making another speech from a sitting posture.
The governor of the Bank of Canada does not speak for the government when he makes these speeches and he does not claim to do so.
We heard what was reported to be a review yesterday of the views expressed on this subject over a period of years by certain of my predecessors and these were put forward by the Leader of the Opposition as some authority, as he argued, for the assertion that the bank has an immediate responsibility to the government and an ultimate responsibility to parliament.
Let us put ourselves clearly on record right now, Mr. Speaker. What I say is this, and I have given chapter and verse in the enactments of this parliament to show it. I say that the responsibility owed by the Bank of Canada is to parliament. It is not an ultimate responsibility. It is a direct responsibility.


Mr. Marlin (Essex Easl):: We never questioned that fact; that is not the point and the minister knows it.


Donald Methuen Fleming: We have another interruption Mr. Speaker, another speech. This time it is from Essex East and I shall have occasion-


Lester Bowles Pearson: Will the minister permit a question on this specific point?


Donald Methuen Fleming: Yes.


Lester Bowles Pearson: Perhaps he would explain the statement he made on August 11, 1956.


Donald Methuen Fleming: Yes. I am coming to that matter. I am going to review these statements that were quoted yesterday by the Leader of the Opposition. I intend to deal with the one of mine that he read.
First of all, as his first argument or piece of evidence with which to buttress this assertion that the bank has an immediate responsibility to the government, the Leader of the Opposition yesterday made the statement that the bank submits its budget to the government. Here is his statement as found at page 2200 of Hansard, in the second column. I would ask you, Mr. Speaker, to note the relationship of these two assertions:
The bank, like several other public corporations, however, has an immediate responsibility to the government and an ultimate responsibility to parliament.
I would ask you to note what immediately follows, Mr. Speaker, namely his best piece of evidence for that assertion:
The governor and the directors are appointed by the government. They can be removed only by parliament, it is true. The budget of the bank is approved each year by the government.
Mr. Speaker, I listened to that statement with consternation and I rose in my place and asked the Leader of the Opposition this question:
Do I understand that the Leader of the Opposition is saying that the budget of the Bank of Canada is approved each year by the government?


Lester Bowles Pearson: That is what I said, Mr. Speaker.
Those were bold words, Mr. Speaker. Then, of course, Essex East was not satisfied with this bold declaration so we have this statement on the record-


Peter Francis Martin: I rise on a point of order, Mr. Speaker, the hon. member knows that when he refers to another hon. member he must, under the rules of this house say "the hon. member for" and give the name of the constituency he represents.


Donald Methuen Fleming: How does this most hon. member know that I was even referring to him? I said that Essex East was not satisfied with the statement of the Leader of the Opposition. So the hon. member for Essex East then put in his two cents' worth. He, having heard his leader say, "That is what I said", we read this on the record:


Paul Joseph James Martin: Surely that is the case.
Mr. Speaker, he was just about as right as he usually is. His batting average has been running rather high; the Martin bureau of

statistics is, I think, well in the lead in this house in terms of an all time record of errors.


Paul Joseph James Martin: It certainly worries the minister.


Donald Methuen Fleming: The fact is this. Contrary to the assertions of the Leader of the Opposition and his most honourable right bower there, the fact is that the Bank of Canada never submits its budget to the government or to the Minister of Finance. It never does so.


Lester Bowles Pearson: Will the minister permit a question on that point?


Donald Methuen Fleming: Yes.


Lester Bowles Pearson: Does the minister deny that certain expenditures of the Bank of Canada have to be approved by the cabinet and that the accounts have to be approved each year by the cabinet?


Donald Methuen Fleming: The situation is plain. The Bank of Canada sets its own budget. It never brings its budget to the government. All that it does in this regard is this: The audited statement of the bank, of course, is forwarded to the Minister of Finance.


Lester Bowles Pearson: Of certain expenditures?


Donald Methuen Fleming: No. The statement relates to their holdings of securities and things of that kind, the sort of thing that is normally covered by audit. This is extremely interesting, Mr. Speaker. The Leader of the Opposition now is crawling; he is trying to distract attention from this horrible bloomer that he uttered yesterday. We will not hold the Leader of the Opposition too directly responsible. He never was an economist. But I think that we can hold to account those who write these speeches of his and who are his advisers on economic questions.


Lester Bowles Pearson: I rise on a point of order. The minister has talked about persons writing my speeches. May I tell the minister that I write my own speeches, as he undoubtedly writes his in spite of the dozens of experts he has helping him.


Donald Methuen Fleming: Then, Mr. Speaker, we can understand why the Leader of the Opposition makes these frightful errors in his speeches.


Lester Bowles Pearson: Mr. Speaker, the minister is talking about this one statement about the budget because it gives him a chance to get away from important matters. But does the minister deny the statement I made a moment ago that certain expenditures of the bank must be approved by the governor in council each year.
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Donald Methuen Fleming: I have dealt with that subject and I have deal with it fully.


Lester Bowles Pearson: Answer the question.


Donald Methuen Fleming: I am not going to be distracted by the Leader of the Opposition. I am going on to read what was further said. I had asked that question in sheer consternation that an hon. gentleman who has been in this house many years and who sat as a member of the government for nine years, would rise in his place and make this extraordinary statement and then build his whole case on this error, and that another hon. member who has graced this house for 26 years now, would go the Leader of the Opposition one worse, yesterday. The Leader of the Opposition went on to say this:
Perhaps the minister will point out what the situation is when he replies.


Lester Bowles Pearson: That is what I am asking.


Donald Methuen Fleming: The quotation continues:
If the minister is now saying that the government of this country has no responsibility for the budget of the Bank of Canada, perhaps he will explain that statement when he speaks.
Let me explain that statement, Mr. Speaker. The statement made by the Leader of the Opposition is totally, utterly and completely wrong.


Lester Bowles Pearson: Answer my question.


Donald Methuen Fleming: There never was a time when the Bank of Canada submitted its budget to the government. So, on this foundation the Leader of the Opposition bases his statement which follows:
Therefore, although the bank has been given wide powers and specific and important functions, the government, as we see it on this side and as we have seen it for many years, must accept full and sole responsibility for the way in which those powers are exercised and the manner in which those functions are carried out.
I do not believe any minister of finance, Liberal or otherwise, has ever gone that far before. When the Leader of the Opposition says this is the opinion he has had for many years, I wonder why in the nine years he was a member of the former government he did not take the simple precaution of proposing an amendment to the Bank of Canada Act to legislate clearly and adequately on this subject for the purpose he had in mind. Why, after some very contrary statements were made by the Hon. Walter Harris, then minister of finance, in 1956 did not the Leader of the Opposition demand that the government bring in the necessary legislation to change the situation as it was described by the then minister of finance.
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Government Monetary Policy
We have it, then, that the Leader of the Opposition bases his assertion as to responsibility resting upon the government on the fact that the government appoints the governor and the members of the board of directors. These are facts, but the Leader of the Opposition has recognized that once they are appointed they cannot be removed by the government; they can only be removed by parliament. So where does the control by the government rest under those circumstances? All of this is the case that has been put forward by the Leader of the Opposition, with no evidence in support.
He referred yesterday to a statement made by Mr. Dunning in 1936. If you will examine the record, Mr. Speaker, you will see that Mr. Dunning was in this respect speaking on a rather different topic and was simply commenting on an interjection made at that time by Mr. Bennett.
In 1941 Mr. Ilsley made a comment on this subject in broad terms. In 1951 Mr. Abbott-


Paul Joseph James Martin: Read what Mr. Ilsley said.


Donald Methuen Fleming: -made a statement on this subject.


Paul Joseph James Martin: Read what he said.


Mr. Deputy Speaker:: Order.


Donald Methuen Fleming: Mr. Speaker, in 1951 Mr. Abbott was making a statement just in the course of discussion. He pointed out that he had not a copy of the Bank of Canada Act before him. This is to be found at page 4393 of Hansard of June 20, 1951:
Naturally the governor of the Bank of Canada-
This was just in the course of discussion in committee of supply. There was a running discussion:
Naturally the governor of the Bank of Canada, the Minister of Finance and his permanent officials operate in very close consultation, and the relationships are very close. The Bank of Canada has certain defined statutory responsibilities which, under the statute creating it, it is obliged to carry out. The government has other responsibilities, and among other things I suppose government policy can inevitably affect the value of currency, and to that extent could negative action which the bank might attempt to take. Frankly,-
Note these words:
-I did not come prepared this evening to engage in detailed analysis of the relative relationships between the Bank of Canada and the government. I have not the Bank of Canada Act here, but broadly speaking they are parallel responsibilities. The government, of course, if it were not satisfied with the action taken by the governor and the directors of the Bank of Canada, would have to change the management of the bank.


Paul Joseph James Martin: Hear, hear.


Lester Bowles Pearson: That is responsibility.


Paul Joseph James Martin: That is the very point you have been ignoring all day.


Donald Methuen Fleming: Isn't this interesting, another interjection from Essex East by the hon. member for Essex East. What is this great power that it is said the government has? We are told it would have to change the management of the bank. Can the government change the management of the bank? It cannot. Yesterday the Leader of the Opposition, as is reported at page 2200 of Hansard, recognized that changes can only be made, apart from the effluxion of terms of office, by parliament, not by the government. The government has no power whatsoever, once appointments are made, to change them; only parliament can do that. This is what the Leader of the Opposition said yesterday, as reported at page 2200 of Hansard:
The governor and the directors are appointed by the government. They can be removed only by parliament, it is true.


Paul Joseph James Martin: Who controls parliament?


Donald Methuen Fleming: The hon. member for Essex East is now trying to deny the statement of his own leader. Surely he will have a little respect for his leader-


Lester Bowles Pearson: Read what the governor of the bank said.


Donald Methuen Fleming: -and not make him look more embarrassed than he is. There we have an offhand comment made by Mr. Abbott in those days saying that he had not come prepared to discuss this subject and he did not have a copy of the Bank of Canada Act before him. It is quite evident that the Leader of the Opposition did not have a copy of the Bank of Canada Act before him when he wrote his speech.


Lester Bowles Pearson: I quoted from it.


Donald Methuen Fleming: The next reference that we heard yesterday in the interesting speech of the Leader of the Opposition was to the testimony of Graham Towers, then governor of the Bank of Canada, before the banking and commerce committee in 1954. I have a very lively recollection of this particular meeting, as I am sure my hon. friend the member for Greenwood (Mr. Mac-donnell) has, because we were very interested to probe the view of Mr. Towers in regard to this relationship between the bank and the government.
The Leader of the Opposition made reference to this subject yesterday. I wish to refer to what Mr. Towers said. There are double references here in the two-volume reports. This reference is at page 714 in the two-

volume report, and in the revised one-volume
issue it is to be found on pages 25 and 26 of the proceedings of the banking and commerce committee in 1954. This is the statement of Mr. Graham Towers, who was speaking out of years of experience. He had been the governor of the Bank of Canada from the outset, then some 18 years. He said:
The situation is that parliament has placed squarely on the shoulders of the directors and management of the Bank of Canada the responsibility for monetary policy.
It would be difficult to find a clearer statement than that.


Lester Bowles Pearson: Read on.


Donald Methuen Fleming: I continue:
It would be of no use for us to come before a committee of this kind-
That was the banking and commerce committee:
-and say in respect to certain actions which were criticized, we did not like that, but the government wanted us to do it. The proper answer would be; in what act has parliament said that you should do something in the field of monetary policy in which you do not believe? Therefore, we must and do take full responsibility for everything which we have done.
He was there referring to the bank:
Now, I think myself that the Bank of Canada Act is in this respect of very good act, and better than most, because it is clear. There is no alibi possible for the central bank.
Mr. Speaker, having described the responsibility of the bank in those terms Mr. Graham Towers went on to point out that eventually any change in this system rests with parliament; it has to come back to parliament. I am sure no one will question that the majority in parliament can always alter the legislation, and that is what Mr. Graham Towers proceeded to say.


Paul Joseph James Martin: Read the whole statement.


Donald Methuen Fleming: He said:
... the answer obviously is that the administration of the day, supported by a majority in parliament, can always alter the legislation.


George James McIlraith: Mr. Speaker, would the hon. minister permit a question?


An hon. Member:: You are out of order.


Donald Methuen Fleming: Having traced the situation on this subject in various countries, comparing countries in which the central bank enjoys independence with countries in which the central bank is in effect a department of government, he said:
Myself, I think that that is a sort of mongrel arrangement, and the central bank should be either a pure department of government and known to the public as such, or it should have independent responsibility.
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What the parliament of Canada has chosen is that the Bank of Canada should have independent responsibility.


Lester Bowles Pearson: Read on what he said.


George James McIlraith: Mr. Speaker, I wonder whether the minister would now permit a question on the quotation he has given?


Donald Methuen Fleming: Yes, but I wish to say that if there are any more of these observations and interjections from the Leader of the Opposition or the hon. member for Essex East from their seats in the house, they will be replied to, and suitably. But you see what happens? It is the same old thing. They are very touchy. Yesterday they would not have interruptions. They would not have questions, even when members were asking merely for an explanation. But now, when the shoe is on the other foot, there they sit. They are close to Hansard. The Leader of the Opposition gets off these wisecracks. It is debate by wisecrack as far as he is concerned, and then he goes on to lard up the record. If that is the way we are going to have the rules observed, then very well, but they must be evenly applied.


Lester Bowles Pearson: On a point of order. I have had the opportunity of looking at Hansard, that is quite true; but I have ascertained from Hansard that the minister himself made 24 interruptions when I spoke yesterday in an hour and ten minutes.


Donald Methuen Fleming: I think the Leader of the Opposition, if he is fair, will agree-


Lester Bowles Pearson: Yes, some of them were legitimate.


Donald Methuen Fleming: All right. We will say no more about that, because the Leader of the Opposition did yield the floor on occasion yesterday, as I have always done when the hon. gentleman has sought to ask questions, and I propose to continue to do so. Did the hon. member for Ottawa West (Mr. Mcllraith) wish to intervene?


George James McIlraith: I wanted to ask a question, but I am afraid we have been diverted. When the minister was quoting from the evidence given to the committee in 1954 he ended his quotation with the words: "There is no alibi possible for the central bank." Does the minister not think it would have been only fair to the house to have quoted the next sentence which has a direct bearing on the point?


Donald Methuen Fleming: I went on to stress twice the point in the next sentence and the next paragraph. I laid great stress on that. If the hon. member for Ottawa West cannot read

Government Monetary Policy this next sentence I shall be glad to read it for him, but it will not go one inch further:
On the other hand, there is no alibi possible for the government, because if government said: well, we disagreed with what the central bank did, but parliament has placed the responsibility on them, so what could we do? The answer obviously is that the administration of the day, supported by a majority in parliament, can always alter the legislation.
I quoted those words, and that is precisely what I said. The administration of the day, supported by a majority in parliament, could always alter the legislation.


Paul Joseph James Martin: That is not the
whole picture, and you know it.


Donald Methuen Fleming: It was the whole picture that Mr. Graham Towers put before the committee. With all respect to the supernatural omniscience of the hon. member for Essex East, I still prefer Mr. Graham Towers speaking with authority on the subject of the Bank of Canada. That will point very clearly to the fact that the government as such has no power to exercise over the Bank of Canada. It rests with parliament. Parliament can always alter the legislation. But short of that, the bank in these matters has the responsibility. That is the effect of the legislation enacted by this parliament as it has been in effect for many years.
Now I proceed to 1956. That was a very interesting time indeed, because there had been a good deal of debate on the subject of tight money, and the government had been holding back on that subject. Finally, on August 10 and 11, the minister of finance of that day was really cornered and we began to elicit from him some statements which have made very interesting reading since. The reference made yesterday to this subject by the Leader of the Opposition was highly selective. He chose to read his extracts from August 11, 1956. He did not choose to deal with what was said on the same subject on August 10, the day before. So I am going to refresh his memory. At page 7351 of Hansard of August 10, the hon. member for Dufferin-Simcoe (Mr. Rowe) who at that time was acting leader of the opposition pressed certain questions on the orders of the day, and on his second try he got this statement out of Mr. Harris, then minister of finance. The discussion at that time revolved around an increase made by the bank in the bank rate. Mr. Harris said:
The duty of the Bank of Canada is to regulate the interest rate, which is commonly known as the bank rate. That duty and responsibility is imposed upon the bank and not upon the government, and it has not been customary in the past for any minister of finance to comment on the actions of the bank in discharging its duty. As a matter of fact, however, without admitting some of the opinions or facts that have been stated in

the question, 1 may say that there is a considerable body of opinion in the financial world today that unless action of this kind were taken there might be more serious results than if no action were taken.
Then the minister was pressed further by the present Prime Minister (Mr. Diefenbaker) and he replied:
I answered this question some two months ago by saying that the governor of the Bank of Canada is one of the several advisors to the minister of finance. In this particular matter, however-
That is, the determination of the bank rate.
-he has statutory authority to make his own decisions, that statutory authority having been conferred upon him by parliament. I think it would be correct to say, as I said on the former occasion, that I was advised of this course before it was taken.


Paul Joseph James Martin: That is the point. He was advised. That is where the responsibility of the government comes in.


Donald Methuen Fleming: I presume that even the hon. member for Essex East may have been advised, too, Mr. Speaker. But he was advised of what the governor of the bank intended to do in exercise of the authority conferred upon him.


Paul Joseph James Martin: To make sure it was not contrary to government policy.


Donald Methuen Fleming: The babbling brook goes on forever.


Paul Joseph James Martin: Insults do not enrich your argument. All the hon. gentleman can do is add personal insult. Let him deal with this thing on its merits. The fact is that the governor of the Bank of Canada did seek the advice of those who have final and legitimate responsibility for government in this country.


Donald Methuen Fleming: You see, Mr. Speaker, the hon. member did not rise to ask a question. He did not ask me to yield the floor. He just stood up and proceeded to make a speech. That is an interesting commentary on his conception of the application of the rules of the house. They are binding on 264 members, but this exalted member is above all the rules of the house.


Mr. Chevrier:: You should have been around last night to see how well they were observed.


Donald Methuen Fleming: No doubt the same thing happened then. The hon. member has undertaken to say, presumably on his own authority, that the government was consulted and apparently took some responsibility in relation to approval. That is not what his former colleague, the minister of finance, said. The then minister of finance was pointing out that he was acquainted in advance of what the bank was going to do in the exercise of

its own statutory power and responsibility. May I now refresh the failing memory of the hon. member for Essex East because, you see, the hon. member has made another blunder; he has put his foot in it again.
There then followed this question from the present Prime Minister:
Did the minister in any way suggest, having regard to the inflationary tendencies in this country today, that this action should be taken or might be taken by the bank?
To which Mr. Harris replied:
I also answered that question two months ago by saying that this action is the action of the governor of the bank and his responsibility alone.
So, on the facts, you have to make your choice between the hon. member for Essex East, speaking now, some five years after this event with his usual irresponsibility and the minister of finance of that time speaking on August 10, 1956, because the statements made today by the hon. member for Essex East and by the minister of finance in 1956 are completely contradictory.


Lester Bowles Pearson: I was going to ask the minister if he is not aware that, while there is no question about the bank being responsible for policy action, in the evidence to which he has just referred-a part which the hon. gentleman did not read-the statement is made that if action by the bank was in conflict with the policy of the government, the governor would resign.


Donald Methuen Fleming: The Leader of the Opposition has pointed out to us that it is only parliament and not the government that has power in this respect in relation to the resignation of anybody, whether governor or bank directors, but the hon. gentleman is wrong again. I have not finished reading this. It is regrettable that hon. members opposite only read Hansard, of August 11 and do not look back at August 10. It is a selective habit they have.
As reported at page 7352 of Hansard of August 10, the then hon. member for Rose-town-Biggar, Mr. Coldwell, asked this question:
While it is true that the governor of the Bank of Canada makes the Anal decision in these matters, is it not a fact that the Bank of Canada was established In order that it might control the economy and carry out government policy in that particular? Is it not a fact that was the main reason for its establishment?
Let me interject here, Mr. Speaker, that had those questions been put to the Leader of the Opposition yesterday he would, of course, have answered yes to both questions.


Lester Bowles Pearson: Nonsense.
Government Monetary Policy


Donald Methuen Fleming: But observe the answer of Mr. Harris:
I do not think that is a correct interpretation of the statute,-


Paul Joseph James Martin: That is right.


Donald Methuen Fleming: I continue:
-though anyone can put such an interpretation on it if he so desires. I think the purpose was not only to vest ownership of the bank in the government, as has been done, but to vest in the officials of the bank independent authority-


Lester Bowles Pearson: Under government policy.


Donald Methuen Fleming: He did not say that.
He said, "independent authority".


Lester Bowles Pearson: Well, that is obvious.


Donald Methuen Fleming: The Leader of the Opposition has no right whatever to add qualifications to the statement made by the hon. Walter Harris in this house in 1956. Mr. Harris was quite capable of making his own statements and it is not within the right of the Leader of the Opposition or any other hon. member of this house now to qualify or contradict by qualification the plain statement made on that occasion by the then minister of finance.
The discussion proceeded further and the then prime minister, Mr. St. Laurent, was brought into the discussion. The present Minister of Justice (Mr. Fulton) asked this question:
Does the Prime Minister know the reason for
the increase in the rate and, if so, does he agree that it is necessary?
The then prime minister, Mr. St. Laurent, replied:
The Prime Minister is not the governor of the Bank of Canada, and while I hope that if he were perhaps the hon. gentleman would have more confidence in his decision than in the decision of the present staff, 1 can assure the hon. gentleman that the matter received very serious consideration and the government has not decided to recommended to parliament any amendment to the act which places that responsibility on the governor of the Bank of Canada.


Paul Joseph James Martin: That is right.


Donald Methuen Fleming: Yes, that certainly is right and it completely contradicts the assertions made here yesterday by the Leader of the Opposition and volubly supported from a seated position by the hon. member for Essex East.


Lester Bowles Pearson: Do not be so narrow and
legalistic.


Donald Methuen Fleming: The present Prime Minister then directed a question to Mr. St. Laurent in these words:
Will the Prime Minister, having had the reasons from the governor of the Bank of Canada, now give the house the benefit of what those reasons were?

Government Monetary Policy
In reply to that question the then prime *minister said:
No, Mr. Speaker, the Prime Minister will not undertake to have parliament or the members of the opposition act as a court of appeal from the decision made by the governor of the Bank of Canada-
Then there were cries of "Oh, oh," and the then prime minister added:

unless and until parliament amends the act which now governs the Bank of Canada.
Mr. Speaker, it is too bad that hon. members opposite have sought in this debate to pull the rug out from under the feet of Mr. St. Laurent, but Mr. St. Laurent's statement is there on the record. It is clear, it is incontestable and it stands as a statement of the effect and meaning and proper construction of the provisions of the Bank of Canada Act. It is not open to challenge by any hon. member opposite.


Lester Bowles Pearson: It has been challenged by the Minister of Finance.


Donald Methuen Fleming: No, not at all, Mr. Speaker. Mr. St. Laurent was plainly saying what I have contended in this respect and was also contradicting in the plainest terms the kind of specious but utterly empty and inane arguments put forward yesterday by the Leader of the Opposition.
The Leader of the Opposition referred yesterday to the debate which proceeded on August 11 and quoted a statement which I made in that debate. Let me make it very clear that if I had ever foreseen at that time that my remark was going to be wrenched and distorted in the way in which the Leader of the Opposition has sought to bend it out of recognition to serve his argument yesterday, it would never have been said in those terms.
I made my statement with reference to over-all financial policy in Canada. I do not think there is anything in that statement which ought to be interpreted as supporting the thesis put forward by the Leader of the Opposition yesterday that under the provisions enacted by parliament with respect to the Bank of Canada Act, the government has power to direct the Bank of Canada or to call upon the Bank of Canada to observe a position of responsibility to the government as such, rather than to parliament. The Bank of Canada, of course, has its responsibility to parliament.


Lester Bowles Pearson: Read the speech.


Donald Methuen Fleming: I have dwelt on that subject at some length. It was read yesterday by the Leader of the Opposition and referred to again today and I have made my own comment on it in what I think are plain and understandable terms.


From the time Mr. St. Laurent made his comment on the effect of the language of the act in 1956 until the present, the situation has not altered. The act has not been amended. Parliament has not seen fit to amend the provisions of the act and the matter stands there in the position in which Mr. St. Laurent described it in 1956. It is the legislation enacted by parliament that governs the relationships in this matter.


Paul Joseph James Martin: Will my hon. friend permit a question?


Donald Methuen Fleming: I refer, of course to the relationships between parliament, the government and the Bank of Canada. The decisions that are made in this situation are those of the governor and those of the bank and are not those of the government.


Paul Joseph James Martin: Will my hon. friend permit a question?


Donald Methuen Fleming: Yes, now.


Paul Joseph James Martin: I am seriously trying-


Donald Methuen Fleming: Let us have the question.


Paul Joseph James Martin: -to arrive at my hon. friend's position and to fully understand it. Does the hon. gentleman agree with the statement that was made by one of his own predecessors, Mr. Ilsley, who when speaking of a possible disagreement between the bank and the government said in this house in 1941 that in the event of a disagreement between the Bank of Canada and the government:
-it would be necessary for them-
That is, the bank. I continue:
*-to resign, and they would be replaced by others who were willing to accept the responsibility for the type of policy which the government believed to be appropriate.
Does my hon. friend agree with that statement made by a former distinguished minister of finance?


Donald Methuen Fleming: No, no, not in those terms. Not at all.


Lester Bowles Pearson: We do.


Paul Joseph James Martin: That is the issue.


Donald Methuen Fleming: Unless, in the event of disagreement, the governor and the directors chose to resign there is nothing the government is in a position to do in that situation except to ask parliament to change the legislation or wait for the expiry of their terms because, as the Leader of the Opposition said yesterday, referring to the governor

and the directors-I repeat once more-"they can be removed only by parliament." That was a direct statement.


Lester Bowles Pearson: Would the hon. gentleman permit a question? This is a very critical and important matter. I would ask the minister, then, in this situation, does he believe the governor of the bank can do or say what he likes in this field and that the government can do nothing about it?


Donald Methuen Fleming: Let us take the extreme case of a headlong clash, Mr. Speaker. In a situation of that nature the government would have no power whatever to terminate the terms of office of the directors or the governor. In that situation all it could do would be to go to parliament, as the Leader of the Opposition said yesterday in effect. That is all it could do. The government has not been given by parliament any power or authority over the bank or its senior officials or directors in that situation.
Let me now make some comments on the subject of money supply. Here again, the Leader of the Opposition drew a very long bow. Money supply consists of the total of issued currency and chartered bank deposits. May I remind the house of those words which I read from the Bank of Canada Act, that the bank has the sole right to issue notes payable to bearer on demand and intended for circulation in Canada. That is the effect of section 21. Nothing could be plainer. Parliament has emphasized that the Bank of Canada has the sole right in this matter. The bank alone determines what currency shall be issued and in this respect the legislative position is just as it was under the former Liberal administration.
The government has no voice whatever in this matter of money supply. Consequently, in whatever the Leader of the Opposition had to say yesterday by way of criticism in relation to money supply, those are matters over which the government has no control and whether or not the hon. gentleman realizes it-I think he must realize it-his criticisms were directed at the Bank of Canada and not at the government. The government has no power to add to or subtract from or change this money supply or currency that the Bank of Canada is given the sole power to create.
The Leader of the Opposition (Mr. Pearson) had something to say yesterday about the increase in money supply from April to October, 1958. I am not going to dwell on this subject but his criticism, if valid, was quite misdirected. He said that the increase in money supply during that period was the largest monetary expansion since world war II. It was in fact $1.4 billion not adjusted for
Government Monetary Policy seasonal factors. The increase for the whole year 1958, that is, from the end of December, 1957, to the end of December, 1958, was $1,324 billion or 11.1 per cent. It is customary, Mr. Speaker, to measure the increase by comparison of dates a year apart.
The Leader of the Opposition then went on to attribute to the government's debt management policies all of this increase in money supply and he said it was "too large for the needs and stability of the economy". May I remind you, Mr. Speaker, that between the end of December, 1954, and the end of December, 1955, when he was a minister of the government, the money supply was increased by 10.5 per cent despite the lack of any comparable conversion loan and, indeed, in the face of a net retirement of government bonds of over $300 million. But I realize, Mr. Speaker, that the interesting occurrence, which I should like to put alongside what the Leader of the Opposition said yesterday, took place before Mr. Harris denied responsibility for monetary policy.
The Leader of the Opposition also referred to the reduction of $300 million in money supply between October, 1958, and May, 1960, as "more severe than in 1956". He then spoke of the money supply from April, 1960, to August, 1960, only four months, as having been kept "almost stable". The fact is that it increased $117 million in those four months.
As to the adequacy of money supply, Mr. Speaker, the house will have to be the judge of that. For the information of the house on this point I simply draw attention to the extent of increase in money supply at the end of 1960 compared with the end of 1959. Here I give the extent of increase or decrease in various countries taking the money supply at the end of 1959 as 100:
United States	 99
United Kingdom	 99
Sweden	 594
Australia	 194
Canada	 495
Germany	 497
The Netherlands	 197
Switzerland	 199
At December 31, 1960, the money supply in Canada was substantially larger than it had ever been before. I will just give the figures at the year end in the following years:
Millions of
Year	Dollars
1953		 9,789
1954		 10,314
1955	  11,397
1956	  11,438
1957	  11,923
1958		 13,247
1959		 13,193
1960		 13,914

Government Monetary Policy
The figure at December 31, 1960, is by far the largest on record and it is 5.5 per cent higher than the corresponding figure at the end of 1959.
Yesterday the Leader of the Opposition made complaint about the striking of the bank rate.


George James McIlraith: Before the minister leaves these figures, I think he said that the figure at the end of December, 1960, was by far the largest. I take it he meant the largest compared with the same date in the previous year.


Donald Methuen Fleming: Oh, it is away higher than any previous date. The money supply moved up steadily in the second half of 1960.


George James McIlraith: It was higher a month earlier, for instance.


Donald Methuen Fleming: There are bound to be fluctuations from week to week.


George James McIlraith: What I wanted to get was that the minister's figures were all based on comparable dates in previous years.


Donald Methuen Fleming: Yes, and if the hon. member will compare the November, 1960, figure with the November, 1959, figure he will find a similar increase over the 1959 figure.
Yesterday the Leader of the Opposition talked about the bank rate. Again, Mr. Speaker, I emphasize that the determination of the bank rate is the responsibility of the Bank of Canada. The government has nothing whatever to do with it, and that was recognized by Mr. Harris. I give the reference, 1956 Hansard, page 7351.
It was on November 1, 1956, that the Bank of Canada adopted what has come to be known as the floating rate. It was a decision of the Bank of Canada and the Leader of the Opposition has criticized that decision. He criticized it in the face of the very plain terms of section 18, subsection 3, of the Bank of Canada Act. I quote:
The Bank shall at all times make public the minimum rate at which it is prepared to make loans or advances.
Mr. Harris said in the reference I have just made that it is the bank that determines the bank rate. The government has no control whatever over the rate that the bank sets or over the method it chooses by which to set this rate. If the Leader of the Opposition disapproved of this so-called floating rate, the rate attached by decision of the Bank of Canada to the 91-day treasury bill rate, then he had something like eight months in office to do something about it and he did not do anything about it. It was in his day

as a minister that this floating rate was adopted by the Bank of Canada.
I say that the government has no power whatsoever to interfere with the action of the bank in determining this rate or in choosing the method by which it shall determine the rate.
The Leader of the Opposition chose yesterday to make reference to what happened on August 20, 1959, and he described it as an interference with monetary policy on my part. That statement will bear some examination, Mr. Speaker. Here are the words of the Leader of the Opposition as found on page 2202 of Hansard:
After all, the minister and the government did not hesitate to interfere with the operations of monetary policy by the bank, so they should not attempt to evade responsibility for policy-
When this fell on my astounded ears I asked:
Mr. Speaker, to what is the Leader of the Opposition referring?
He then said:
I am thinking of the intervention of the government in the bank auction of treasury bills some time ago, which had an influence on the rate on treasury bills. The minister knows all about it. He knows all about the cabinet meeting which was held and the auction being postponed an hour or two so the government could make up its mind what to do.
It is on this statement that the Leader of the Opposition accuses the government and accuses me of interfering with the operations of monetary policy by the bank. I give to his assertion, Mr. Speaker, an unqualified contradiction. There was on that occasion not the slightest interference with the bank's monetary policy. Since this government came into office there has never been the slightest interference with the bank's monetary policy.
What happened on August 20, 1959, was that a decision was taken, and I take full responsibility for it, that the government would not sell all of the treasury bills for which it had invited tenders on that particular Thursday because I thought that the prices being offered were unsuitable. In effect, the discount that was applied at that time was, I thought, too high, and I was not prepared under those circumstances to have the government of Canada pay that high a price for 91-day treasury bill money. It was a decision in relation to the price the government was prepared to pay on its own borrowings on the 91-day treasury bills. That is what it was. It was not done with a view to affecting the bank rate at all. It was not, as the Leader of the Opposition says, an interference with monetary policy. It was open to the bank at that time to strike the rate at anything it decided upon. It was open to the bank to detach its rate from the

treasury bill rate. The purpose of this decision, which I made over in the Bank of Canada office when we saw what the bids were, was in relation to the price on these treasury bills. That was its entire purpose. Whatever bearing this may have had on the Bank of Canada rate for that week was entirely incidental; that was something that the Bank of Canada could set or change in any way it chose. There was on that occasion, and on all other occasions, no interference with the bank or with the bank rate.
Mr. Speaker, one could go on dealing with this subject and others related to it at some considerable length, but it seems to me that the essential issue here is this question of responsibility. Therefore I will pass over some intervening remarks that I had intended to make and take up what the Leader of the Opposition undertook to say about the interest rates. Here he was much less definite; much less effusive than he was in his unfounded assertions about the responsibility in relation to decisions of the Bank of Canada within the scope of monetary policy. He was seeking evidently to argue that the government in some way had raised interest rates. I wish again to make firm contradiction of any such statement. As long as the present government is in office you may be sure it is not going to pay one cent more interest on the moneys that it has to borrow than is strictly necessary. Interest rates are determined in this country-in this free economy -in the light of thousands of transactions. It is a matter of the operation of the forces of supply and demand within quite limited statutory restrictions. The situation in this regard is precisely the same as it was when the former government was in office.
If there has been a fluctuation in the interest rates, Mr. Speaker, I can only say that interest rates are constantly fluctuating; they had risen steadily for two years before we came into office. The rise was substantial, and the consequent drop in market values of issued bonds was very great. There were quoted reductions in values of 14 and 15 points before the former government went out of office. Interest rates declined following the summer of 1957 and they rose beginning in the summer of 1958. There was a rise until the autumn of 1959. After a period of stability they then began to decline again. This is the sort of thing that is going on in the markets of this continent. This also depends on the influence of the bond market in New York.
Now lest the impression be created in the minds of some hon. members that the government has brought about high interest rates let me point out that interest rates in this
Government Monetary Policy country, while they are higher than the government would like to see on borrowings that it has to make, are lower than the interest rates in the United Kingdom and have been close to the 1960 rates of interest in the United States, that country which is the largest reservoir of capital in the world and whose rates traditionally are lower than the interest rates in Canada. Let me just run quickly over some figures, Mr. Speaker, in respect of the 91-day treasury bill rates in Canada. Let us take the last three quarters of 1960 and compare them with the last three quarters of 1960 in respect of the United Kingdom.


Lester Bowles Pearson: And the United States.


Donald Methuen Fleming: All right, I will read right across the page, and the figures will be in this order; Canada, U.S.A., and the U.K.
For the second quarter of 1960; Canada, 3.05; U.S.A., 3.09; U.K., 4.70. For the third quarter: Canada, 2.53; U.S.A., 2.39; U.K., 5.56. For the fourth quarter: Canada, 3.23; U.S.A., 2.36; U.K., 4.85. Those are treasury bill rates. The house is aware that treasury bill rates in Canada have declined since then.
Let us now take the quarterly averages of comparison of the long term interest rates, and again I will take just the last three quarters of 1960. Using the same order, the second quarter: Canada, 5.15; U.S.A., 4.11; U.K.,	5.41. For the third quarter:
Canada, 4.81; U.S.A., 3.82; U.K., 5.57. For the fourth quarter: Canada, 5.04; U.S.A., 3.90; U.K., 5.53.
Mr. Speaker, the Leader of the Opposition yesterday talked about the loss of confidence in the bond market. If confidence has not been lost in the value of government of Canada bonds it is not because the statements of the Leader of the Opposition have contributed anything to the confidence in this country. His effort in this respect has been destructive at all times, and I include what he said in respect of this subject yesterday. Surely the best test of whether there is confidence in the markets of Canada is to look at the figures of the public's holdings of Canada bonds. I could give the figures for some distance back but let me begin with those for 1959. I am giving these by quarters in respect of the general public holdings of government of Canada direct and guaranteed securities. For 1959, March 31, $9,499 million; June 30, $9,934 million; September 30, $10,132 million; December 31, $10,725 million. The same figures for 1960 beginning with March 31, $10,971 million; June 30, $10,800 million; September 30, $10,466 million; and December 31, $11,079 million, an all-time high. There

Government Monetary Policy is the answer to the Leader of the Opposition when he talks about loss of confidence in Canada bonds.
Let us look at the recent results. Even since December 20 when the supplementary budget sought to direct Canadians to do more of their borrowing in Canada, what has been the result? The fact is that provinces, municipalities and business have floated issues in the first six weeks of the year, or a little less, aggregating $200 million. The government of Canada put out an issue of $150 million, and none of this financing was done in New York. Has there been any disturbance in the interest rates in Canada in 1961, Mr. Speaker? No, there has not. The Canadian market has absorbed these issues and the market is even a little stronger today, and interest rates are a trifle lower than they were in the beginning of 1961, or on the date of the supplementary budget, being December 20, 1960.
After all this, the Leader of the Opposition yesterday expressed pious regret that the Bank of Canada has become, as he described it, the centre of the present controversy. Here are his words as found at page 2206 of Hansard:
It is most regrettable indeed that the Bank of Canada has become the centre of the present controversy-
Then he went on to say that it would weaken the prestige of an essential institution. I ask the Leader of the Opposition what he has done to prevent a weakening of the prestige of the Bank of Canada by bringing it into the centre of controversy? Is this any constructive contribution to understanding, fair play and fair judgement?
Then he had something to say on debt management. Debt management is an extremely important subject. It is a factor that is of importance to every person in Canada, no matter what may be his walk of life. This is clearly an area in which the government is responsible, as I have said on many occasions.
The Leader of the Opposition went on to charge that monetary policy has been subordinated in order to serve the interests of debt management. I do not believe that the Bank of Canada has subordinated monetary policy, which is its field, in order to serve the interests of debt management. As I have said, there has been no interference with monetary policy. Monetary policy can never operate in a modem country without regard to debt management policy. This government has applied definite, constructive and beneficial debt management policies. We certainly needed to do so because when we came into office we were bequeathed a doubtful legacy of debt with an extremely short term to it.


When we came into office the average term of Canada's debt was slightly over six years. Here are the figures. At June 30, 1957, in terms of general public holdings of direct and guaranteed securities, excluding Canada savings bonds and perpetuals, the average term to maturity was six years and eleven months; and in terms of government of Canada, direct and guaranted issues, excluding non-market issues and perpetuals, the average term to maturity of the outstanding holdings at June 30, 1957, was six years and two months. However, we went to work with a view to correcting this unsatisfactory situation which, under some circumstances, could even become dangerous. Our efforts to this end were made necessary as well as desirable by the condition which we inherited. When the Leader of the Opposition talks about timing, I think he had better go and examine in this respect his own nest that he bequeathed to us.
I do not think it would be profitable, Mr. Speaker, to go over the whole story again in reference to the conversion loan. I went into the history of the conversion loan at, I regret to say, considerable length in speaking in this house on April 28, 1959. My review of the conversion loan and the benefits which it brought begins at page 3113 of Hansard of that date and continues. Just to summarize it rather than to repeat, may I say that in that operation five outstanding victory loans that were overhanging the market and involving maturities that were going to begin the following year -the year after the conversion loan, in 1958-and aggregating $6,416,000,000, were the subject of the conversion loan. So great was the success of this most important and largest of all Canadian government financing operations that 90 per cent of those outstanding issues were converted and the result was a substantial contribution to stabilization of the bond market.
We completed this tremendous conversion undertaking none too soon because the market suffered on this continent a continued weakness running into the autumn and to the end of 1958; that weakness stemmed from New York. It was a great weakness in the New York market. Canada was not immune from it. Canada could not, in the nature of things, be immune from it. When the Leader of the Opposition attempts to attribute to the conversion loan the weakness that occurred in the markets on this continent in the autumn of 1958 his statement is fantastic nonsense. Is the Canadian government to be held responsible for a great weakness that developed in the New York bond market through the summer and particularly in the autumn of 1958?

When those crocodile tears course down his furrowed cheeks, Mr. Speaker, let us remember that everyone who converted his bonds not only obtained the advantage of a higher interest rate, the result of his own free decision in relation to conversion, but he also obtained the benefit of better market quotations on the new conversion bonds. Those bonds, with scarcely an exception at any subsequent time, were quoted at higher prices than were the victory loan bonds that were left outstanding in the hands of the owners.
The Leader of the Opposition, Mr. Speaker, has dredged up something that occurred three years ago, namely a great undertaking which he praised in generous terms in this house when it was announced in the summer of 1958. I was extremely grateful to him for the constructive statement he made on that occasion; it was a patriotic statement. It was just about the last constructive statement the Leader of the Opposition has made in this house.


Lester Bowles Pearson: That was before we knew how the minister was going to mess it up.


Donald Methuen Fleming: No. It was not
messed up. It was a great success.
The Leader of the Opposition yesterday talked about experts but he could not find any experts to quote. There are many experts in this field, people of acknowledged authority, who praised this operation and who in various countries expressed envy of the great and beneficial results of this enterprise in Canada.


Lester Bowles Pearson: How many has the minister quoted?


Donald Methuen Fleming: When the Leader of the Opposition says as he did yesterday, that the conversion of the ninth victory loan cost hundreds of millions of dollars, he is talking plain nonsense. If any conversion loan was to be undertaken at all, it was absolutely essential that it should cover all five victory loan issues. It would not have been an adequate undertaking otherwise; it would have been a piecemeal undertaking. What is more, it would have not been equitable, efficient or economical. It would have been simply a piecemeal approach at very great cost to have simply converted the first two of those five victory loans. What is more, in the light of what happened in the bond market afterwards on this continent as a result of weakness in New York, Mr. Speaker, there would have been heavy increases in the interest costs to be met if we had not brought about that conversion and if we had allowed those victory loans to run to maturity and had then faced the problem of conversion. This was a
Government Monetary Policy farsighted and courageous attempt to meet the problem and it resulted in great benefits to Canada and in terms of debt management.
Let me set alongside those figures I gave earlier as to the average length of debt to maturity what was the situation after this conversion loan had been carried out. Whereas with respect to general public holdings at June 30, 1957, the average term was six years and eleven months, at September 30, 1958 it had risen to 14 years and nine months. In respect of outstanding government of Canada, direct and guaranteed securities, excluding non-market issues and perpetuals, the comparisons are as follows. At June 30, 1957, the average term to maturity was six years and two months; at September 30, 1958, it was ten years and six months. Is it any wonder that this great undertaking won praise in other countries which were envious of the tremendous improvement that had been brought about in our debt position in Canada?
The Leader of the Opposition, yesterday undertook to say something about the unemployment insurance fund, and he said some really weird things in this regard. He said in effect that when the conversion loan was undertaken, not only should the investment committee, operating under the Unemployment Insurance Act, not have converted but it should have turned everything into a virtually liquid position. Ninety-one day treasury bills; this was his theme. He said they should have looked far forward and seen that there would be heavy drains upon the unemployment insurance fund which would have to be met in cash.
It is too bad that these hon. gentlemen, when they were in office, did not have the prescience that they expect of others who follow them. The fact is that the illiquid position of the fund was not new. It merely reflected a continuation of the policy instituted several years earlier under the previous government.


Lester Bowles Pearson: But there was no drain on the fund.


Donald Methuen Fleming: For the fund to obtain liquidity to the extent of one half of its holdings, as the Leader of the Opposition urged yesterday, would have required a forward view of continual high levels of unemployment which it would have been hard to justify in the summer of 1958 and would have involved the sacrifice of interest earnings on bonds that the unemployment insurance commission chose to hold and to acquire.
The fund did in fact convert the Canada victory loan bonds that it held, but it did not take the longest maturity of the new bond; it took the shortest maturity available

Government Monetary Policy to it. To suggest it should have sold all its victory bonds at the time of conversion surely implies support of the market by the Bank of Canada of the most massive kind.
The Leader of the Opposition apparently now thinks there should not have been a conversion. If there had not been any conversion and the fund had held its victory loan bonds, selling them when it needed, it would have suffered greater loss than indeed it did experience in selling its conversion bonds.


Paul Joseph James Martin: Not if they had sold them between July and October.


Donald Methuen Fleming: Yes, should they have been able to look two years ahead and know exactly what was going to happen? If the hon. member for Essex East had been able to claim that kind of prescience I am quite sure he must have made a fortune at that time. If he could have seen what was going to happen two years ahead in the market he would have been the richest man in Canada today, as rich as Croesus.


Paul Joseph James Martin: Would the hon. minister permit a question? Does the minister agree that if the investment committee had permitted the sale of its securities between July and October, because the government guaranteed those bonds at par, at their full original value, they would not have lost as they did when they were forced into conversion?


Donald Methuen Fleming: It would have been a most improvident act by any proper standard for the unemployment insurance committee at that time to have sold out, without knowledge that would have needed the hindsight that the hon. member for Essex East enjoys so much today. It would have been improvident for it under the existing circumstances to have sold those bonds and denied itself the benefit of the higher interest yields that were available to it on the bonds. And in selling, it would have sent the market crashing.
You could not put holdings on the market for sale as massive as those of the unemployment insurance commission at that time without shaking the market to its foundations. That is the kind of policy, Mr. Speaker, that these authorities on the other side of the house are putting before us today as the one the unemployment insurance commission should have followed at that time. This is a most fatuous assertion and contention on the part of the official opposition.
The fact is that since October, 1958, the monthly average prices of victory loan bonds in the hands of the holders, those that remain, have been below those of the conversion bonds for all but seven months in this


whole period. The figure used yesterday by the Leader of the Opposition would assume that the fund would have liquidated back in 1958 not only its holdings of victory loan bonds but indeed all its holdings. He would in effect have asked the unemployment insurance commission to wreck the market by liquidation at that time of huge holdings that the bond market could not possibly absorb.
He would have destroyed the bond holdings of holders of Canada bonds to the extent of probably scores and scores of millions of dollars. That is what the Leader of the Opposition and the hon. member for Essex East say the unemployment insurance commission should have done; they say the unemployment insurance commission should have embarked on the liquidation of bond holdings running between $500 million and $1 billion at the time.
Can you imagine, Mr. Speaker, anything more utterly destructive to the bond market and to public confidence? The Canadian people will have reason to be thankful that the affairs of this country were not in those days, or since, in the hands of such utterly irresponsible people.


Lester Bowles Pearson: A $70 million dollar loss.


Donald Methuen Fleming: I would have thought-


Paul Joseph James Martin: The most serious violation of a trust fund in Canada's history, and you know it.


Donald Methuen Fleming: -the greatest mismanagement that could have occurred is the one suggested by the hon. member for Essex East in his utterly irresponsible way, when he concurred with the Leader of the Opposition who, if he does not know better himself, at least has advice available to him to guide him in these matters. I refer him to the former president of the Liberal association of Canada. He certainly would not have told him it would have been a responsible act for the unemployment insurance commission to attempt to liquidate between $500 million and $1 billion of Canada bonds that it held in 1958, throwing them on the market and wrecking the values of the bond holdings of other Canadians.


Lester Bowles Pearson: Why did you force them to sell?


Donald Methuen Fleming: Nothing could be more utterly shameful than a suggestion of that kind. How can anything be more utterly irresponsible than a proposal of that kind? I would think the hon. member for Essex East would want to hang his head after advocating anything as damaging and harmful to Canadian bonds as that.


An hon. Member:: Oh, oh.


Donald Methuen Fleming: Evidently you have not appreciated the utter folly of what was proposed yesterday by the hon. gentleman. Mr. Speaker, I had hoped to conclude my remarks long before this. I will say in this belated conclusion that we have had a most interesting kind of contradiction on the part of the official opposition.
Yesterday the Leader of the Opposition delivered what, having regard to the responsibilities, was quite clearly an attack on the governor of the Bank of Canada.


Lester Bowles Pearson: Mr. Speaker, on a point of order, the minister has no right to say that. I delivered no attack on the governor of the Bank of Canada. I delivered an attack on the government because of its irresponsible attitude in this matter. They abdicated their responsibility in this matter. I did not attack the governor of the Bank of Canada.


Mr. Bell (Carlelon):: That is not a point of order.


Donald Methuen Fleming: That, in the mind of the Leader of the Opposition, is supposed to be a point of order, a point of privilege. It is just an abuse of the rules of the house, Mr. Speaker, but the Leader of the Opposition-


An hon. Member:: You are an expert on that.


Donald Methuen Fleming: But I still feel toward the Leader of the Opposition the respect that a former student owes to his professor,-


Lester Bowles Pearson: I thought that would come in.


Donald Methuen Fleming: -a respect which lingers. I recall what a good lecturer he was in history, even though economics never came within the scope of his learning.
I do not say this was a personal attack on the governor of the bank, but it was an attack upon the policy of the bank, upon the policy followed by the governor of the bank-


Lester Bowles Pearson: It was not.


Donald Methuen Fleming: -because the policy he was condemning and criticizing so strongly yesterday is the policy of the bank and of the governor of the bank.


Paul Joseph James Martin: You accept the policy.


Donald Methuen Fleming: I put that alongside what was said in this house by his deskmate, the hon. member for Laurier (Mr. Chevrier) on December 8 last as reported at page 609 of Hansard. The hon. member for Laurier rose to ask me a question in these words:
May I direct a question to the Minister of Finance, and ask whether in view of the statement
Government Monetary Policy made by several economists of Canadian universities concerning the governor of the Bank of Canada, as headlined in this morning's press, the minister proposes to make a statement expressing confidence in the management of the bank.
The hon. member for Laurier thought the management of the bank was entitled to an expression of confidence. The Leader of the Opposition yesterday attacked hip and thigh the policy of the Bank of Canada, which is the governor's sole responsibility. So I say that here we have two deskmates-


Lester Bowles Pearson: Don't crawl out from under.


Donald Methuen Fleming: -who are apparently completely at loggerheads. It is a great pity that they cannot get their heads together.
Now we have before us an amendment by the official opposition which attempts to put on the record of parliament something which is a denial of the facts. It attempts to say that the government of Canada, regardless of the fact that parliament has legislated otherwise, is responsible for monetary policy in Canada. It has been the decision of parliament from the outset, when this bank was set up, that monetary policy should be the responsibility of the Bank of Canada and that the government cannot interfere in the bank's management of monetary policy. Therefore, this Liberal amendment invites parliament to contradict itself, and I am sure the House of Commons has no intention of doing so.
I think the subamendment introduced this afternoon by the hon. member for Skeena (Mr. Howard) merits only one very brief comment. It asks the house to add to this contradictory thesis expressed in the Liberal amendment a further expression of regret that the lack of constructive government planning with regard to monetary and debt policies has resulted in the deepening of the unemployment crisis. It has not resulted in any deepening of the unemployment crisis. The government has followed a consistent and proper course in this matter. It has recognized that parliament has already legislated in this matter of responsibility concerning the management of monetary policy. This government does not place itself above parliament. It recognizes its responsibility to parliament. This kind of amendment could emanate only from those who still retain the imprint of that government which went out of office in June 1957, because it had lost all sense of responsibility to the sovereign House of Commons.


George James McIlraith: The
house has just listened for almost two hours to the Minister of Finance (Mr. Fleming) dealing with the amendment to his supply motion, an amendment which reads, in part:

Government Monetary Policy The house regrets the refusal of the government to accept and discharge its proper responsibility in the field of monetary policy and its demonstrable incompetence to manage the public debt in the interests of the Canadian people.
If any proof were needed of the timeliness and validity of this amendment it is to be found in the speech which the Minister of Finance has made this afternoon. The hon. gentleman chose for 20 minutes of the time taken by him to avoid discussing the subject altogether and to point out that the opposition should have chosen another subject for discussion. Throughout the rest of the time allocated to him-and the hon. gentleman has no time limit to observe, while the rest of us are left with a limitation which is somewhat severe at times-


Mr. Hamilton (Notre Dame de Grace):: Your
limitations are not only those of time.


George James McIlraith: I appreciate the bright
remarks of the Postmaster General but I am sure the subject is of no interest to him. Perhaps he could allow those who are concerned about it to debate it. Hon. members on the other side may differ from my conclusions, and others may agree with them, but I am entitled to make them and, surely, the Postmaster General could discharge his duty as a minister of the crown in a better manner than by making remarks and interjections of that kind.
The point I was making is that even if there were no confusion in the public mind about the government's responsibility in the field of monetary policy in the past, there is now because of the hon. gentleman's pronouncements this afternoon. I take it to be implicit in the minister's speech that the government does have a responsibility for fiscal policy. I think that is common ground between us. I take it, also, that the hon. gentleman admits that the government has responsibility in the field of debt management. That, also, is common ground. I take it that it is only when we get to the area of monetary policy that we differ. The minister says that has been given to the Bank of Canada, and that the government no longer has responsibility over it. It is on that point that we differ, and differ very sharply.


Harold Edward Winch: Who has responsibility, then?


George James McIlraith: The government did, and the government still has responsibility over monetary policy. It is unthinkable that any government of any sovereign nation should not have responsibility for monetary policy and it was never suggested otherwise until the present minister was made Minister of Finance. Then he changed his views on the matter and advanced the theory he outlined this afternoon. In the few minutes I have

left to me in which to deal with this question I intend	to	quote briefly	what	some	ofour ministers	of	finance have	had to say	onthe subject. In 1936, Mr. Dunning, dealing with the Bank of Canada legislation, had this to say	as	reported on	page	3262	of
Hansard of that year:
The bank may and should resist temporary gusts of public fancy, but in the long run it must show responsiveness	to	public opinion. In	the long
run, the bank in the performance of a vital sovereign function must be responsible to the sovereign will expressed through government. There cannot be two sovereigns in a single state.
That was the position taken in the debate in 1936. Then we come to the discussion of this subject in 1941. Mr. Ilsley, on June 13 of that year, had something to say on the subject and I quote him from page 3936 from the Hansard of that date. I should like to quote at greater length but hon. members will forgive me if I quote only parts of what was said. I will give the page reference in each case so that members can read further if they wish. On June 13, 1941 Mr. Ilsley said:
The point which I would like to emphasize is that the responsibility with which the governor and board have been charged by parliament does not in any way relieve the government of responsibility for the monetary policy being pursued by the bank, nor in any way militate against public control of monetary policy. The monetary policy which the bank carries out from time to time must be the government's monetary policy, but the government must leave the carrying out of that policy-
Note that-"the carrying out of that policy".
*-the choice of ways and means of executing it, to the management of the bank in whose judgment it has confidence.
If the government is satisfied with the policy which is being pursued, there is obviously no quarrel between it and the bank. Let us suppose, however, that the management of the bank and the government do not see eye to eye in the matter of monetary policy. Let us assume that after the usual careful consideration of the pros and cons, a serious difference of opinion remains. In such a case there can be no question whatever as to the outcome of the dispute. The government's views will prevail.


Lester Bowles Pearson: Here it is. That is the difference. That is responsibility.


George James McIlraith: The views of Mr. Abbott will be found on page 4393 of Hansard of June 20, 1951. After a question had been pressed upon him, Mr. Abbott replied:
The government, of course, if it were not satisfied with the action taken by the governor and the directors of the Bank of Canada, would have to change the management of the bank.
After an interjection of the word "yes" by Mr. Low, Mr. Abbott concluded:
So that I suppose it is fair to assume that the ultimate responsibility must fall upon the government.

The minister referred to the questioning of the then governor of the Bank of Canada, Mr. Graham Towers, in the banking and commerce committee in 1954. I refer hon. gentlemen to pages 714 and 715 of the unrevised committee reports of March 18, 1954. On that occasion the governor of the bank dealt with this subject. Hon. gentlemen will recall that the minister quoted part of this and that I asked the minister a question about it. He had stopped at a certain point in the quotation and I asked him to read the subsequent lines. The portion of the statement I requested the minister to read is as follows:
On the other hand, there is no alibi possible for the government, because if government said, well, we disagreed with what the central bank did, but parliament has placed the responsibility on them, so what could we do? The answer obviously is that the administration of the day, supported by a majority in parliament, can always alter the legislation. In fact, I doubt whether a disagreement would ever necessitate such a thing, because there are various ways and means by which directors and management can be got rid of. I am sure that in the case of a serious disagreement that is what would take place.
Mr. Towers then went on to elaborate on that subject. Under examination by the present Minister of Finance, who was then the private hon. member for Eglinton and a member of the official opposition, Mr. Towers made it perfectly clear that the government had the ultimate responsibility and that if there were a disagreement, the governor of the Bank of Canada would have to resign. That is perfectly clear.


Lester Bowles Pearson: He has changed his mind now.


George James McIlraith: The minister then made reference on this point to a statement made by Mr. Harris, I believe on June 10, 1956.


Donald Methuen Fleming: August.


George James McIlraith: The minister quoted from Hansard of that date. I wish to point out one or two features of the question and answer period on the orders of the day of August 10, 1956 to which the minister made reference earlier. One feature is that Mr. Harris made it very clear that he was advised of the action-taken. The then prime minister went on to make it clear that the government of the day had complete confidence in what was done. The government was in accord with it. There was no confusion about a possible difference of view.
I am not certain if the Minister of Finance quoted the following statement made by the then prime minister as found at page 7352 of Hansard of August 10, 1956 in answer to one of the many questions that arose on that occasion:
-I can assure the hon. gentleman that the matter received very serious consideration and the government has not decided to recommend
Government Monetary Policy
to parliament any amendment to the act which places that responsibility on the governor of the Bank of Canada.
It was made clear in that question and answer period that the issue that was being dealt with was that the action should be taken through the Bank of Canada. I do not think anyone has contested that. I have re-read that debate very carefully today. As I read it there was no suggestion that the government could abdicate its responsibility in the field.
It is interesting that at the conclusion of the question and answer period-and I remember the occasion well because there was some heat generated in that period-


Mr. More:: Mr. Speaker, would the hon. member permit a question?


George James McIlraith: No. I have only 17 minutes left. If the hon. member would like to direct his question to me when I conclude my remarks I will be happy to deal with it.


Richard Albert Bell: That is a good way of not dealing with it.


George James McIlraith: I am really perfectly happy to accept the hon. member's question but I have only 17 minutes left at my disposal. In that time I want to develop my argument as best I can. I will be quite happy to deal with questions at the conclusion of my remarks.
I was about to point out that at the conclusion of the question and answer period the request was made that the then minister of finance deal with this subject on his estimates next day. The next day, on his estimates, the minister did deal with the subject at some length. He made it abundantly clear that the government did have the responsibility, and spoke also of the government's agreement with the decision taken by the bank. The references to this matter will be found mainly at page 7457 of Hansard of August 11, 1956. Let me place on the record a statement made by Mr. Harris on that occasion:
The government is satisfied, and I believe that the vast majority of informed observers are satisfied, that under the economic conditions of the past 12 months it was desirable to moderate the rate of monetary expansion. I know of no responsible person who argues openly for inflation as a solution to the problem of excess demand.
Further along Mr. Harris said:
It is right and proper that our fiscal system at this juncture should emphasize additional restraint in public spending wherever possible. It is equally appropriate that monetary policy should assist by exerting a moderating influence on the expansion of credit.


Lester Bowles Pearson: That is taking responsibility.


Paul Joseph James Martin: He did not shirk his responsibility.
2274	HOUSE OF
Government Monetary Policy


George James McIlraith: No, there was no question of his shirking responsibility. If hon. members will read the evidence given in the banking and commerce committee of 1954, they will find that there was no suggestion made then by the then private hon. member for Eglinton who is now Minister of Finance of the government shirking responsibility.


Peter Francis Martin: Or by the hon. member for Greenwood (Mr. Macdonnell).


George James McIlraith: Yes. Indeed, the hon. member for Greenwood was most eloquent about the sovereignty of parliament at that time.


Lester Bowles Pearson: The hon. gentleman certainly was.


George James McIlraith: This subject has always been treated in that way up until the time the present government took office. The situation is different now. The Minister of Finance seems to seek to say today that this is all the responsibility of the Bank of Canada. Notwithstanding his physical vigour in speaking and his pugnacious qualities, the minister attempts to depict himself as a poor little help'ess man. The Minister of Finance has nothing to say about this policy and could not have any part in it, poor little creature. This is the Minister of Finance who displays great physical vigour in argument, perhaps in an attempt to conceal the lack of careful reasoning that should be applied to a subject of this kind.
The minister in support of his argument chose to quote from the Bank of Canada Act and I should like to place on the record some of its references to the governor in council.
Mr. Speaker, may I call it six o'clock.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
George James McIlraith: Mr. Speaker, when the house rose for the dinner adjournment at six o'clock I had started to make reference to the treatment of the legislation, the Bank of Canada Act, by the Minister of Finance (Mr. Fleming). We had the extraordinary spectacle of the Minister of Finance on this subject making no reference at all to the request of the opposition that the whole matter of the operations of the Bank of Canada be referred to the committee on banking and commerce. Instead he took the position that the government had no responsibility whatever in the field of monetary policy and said, that the subject matter of monetary policy belonged exclusively to the Bank of Canada.
[Mr. Martin (Essex East).!

The minister made some references to the Bank of Canada Act. In the few moments at my disposal I propose to show some of the authority left in the governor in council or the Minister of Finance, as the case may be, under the Bank of Canada Act and to show that the Minister of Finance was not, as he pictured himself this afternoon, bereft of all authority over the Bank of Canada.
The first section I should like to refer to is section 4(2) under which branches and agencies of the bank can only be established with the authority of the governor in council. Under section 5(2) the deputy minister of finance is made a member of the board of directors. He does not have the right to vote but either the deputy minister of finance or such other officer as the minister may designate is made a member of the board. Obviously that is for the purpose of keeping the minister fully informed. Under section 6(1) the governor and deputy governor can only be appointed with the approval of the governor in council. In section 6(3)(a) provision is made for tenure of office of the governor and deputy governor and under paragraph (c) the remuneration of the governor and deputy governor can only be set with the approval of the governor in council.
Under section 9 the minister appoints the directors for terms of three years, so he has exclusive control over that. The removal of directors because of incapacity can only be done with the approval of the governor in council. Then there is a very important provision in section 14. The governor of the bank may veto any action of the board of directors or of the executive committee and if such veto power is exercised the veto must be submitted to the Minister of Finance and the governor in council may confirm or disallow the veto. That is an absolute and very wide power over any action taken by the governor in that connection.
There are other such provisions. Section 17(1) provides that the amount of the capital of the bank is controlled by the governor in council. Section 17(2) provides how the capital shall be divided into shares and that all the shares will be issued to the minister. He is the only shareholder. Under section 20, subsection 2, the bank, when required by the Minister of Finance to do so, shall act as the agent of the government in certain respects concerning the management of the public debt of Canada.
The minister made a lot of section 21(1) which reads as follows:
The bank has the sole right to issue notes payable to bearer on demand and intended for circulation in Canada-
And so on. He argued that that had something to do with his authority vis-a-vis that

of the bank. It is nothing of the sort. When the bank legislation was first enacted each chartered bank could issue its own notes and this provision took away the right of the chartered banks to issue their own notes and gave it to the central bank. The conclusion drawn by the minister from that provision is not an accurate one at all. As a matter of fact, the section goes on to give the governor in council control over the denominations of these notes. The minister's argument on that point is quite specious.
Under section 22(2) the governor in council has certain authority over suspension of the bank to sell gold. In section 23(3) the governor in council is given the power to suspend the gold reserve requirement. In a couple of places in section 24 the receiver general has certain authority over the rest fund, the receiver general, of course, being the Minister of Finance. Section 25(1) gives the governor in council the right to appoint auditors. Section 25(4) gives the minister the right to require the auditors to report to him from time to time. Section 26(1) deals with weekly statements of assets and liabilities. The minister can require such statements and he can prescribe the form. Under section 26(2) a weekly statement of notes is required. Section 26(3) provides for monthly statements of assets and liabilities. Section 26(5) gives power to the governor in council to amend any of the schedules.
Under section 27(2) the governor in council or the minister may require certain other statements. Section 27(2) has to do with the annual report and statements of that type. Section 33(1) deals with the bylaws of the bank and they can only be enacted with the approval of the governor in council.
In other words, the minister struggled very hard to show that the act gives all the powers to the Bank of Canada and leaves him as minister-a man of such energy-bereft of any power in this field. As I have shown by these references to the legislation, the act does nothing of the sort.
The minister also made some references to the conversion loan. Let me tell him that the conversion loan was a monument to his failure in the field of debt management. He should never have included the seventh, eighth and ninth victory loans in the conversion loan and because of his doing so there was incurred some $330 million by way of added interest and carrying charges, as well as a great many other adverse effects. Because he included them in his conversion loan it was necessary for him to make his debt management policies override all other policies and encroach on them in a way that was never imagined before.
Government Monetary Policy
One of the fields where monetary policy was subjected to his debt management policy because of his wrong handling of the conversion loan by including all these victory loans was the unemployment insurance fund. This afternoon the minister gave figures and a picture that were quite misleading to the house. I do not say he did so intentionally but he put an interpretation on the position taken by the Leader of the Opposition (Mr. Pearson) that was wholly wrong. The Leader of the Opposition never for one moment suggested that the conversion loan bonds should all be dumped on the market at one time and depress the market. What happened there was that some half of the assets of the unemployment insurance fund at the time of the conversion were victory loans. Of that figure some $90 million were due within two years; that is, they would have matured within a two-year period and have been paid off at par. Of course, if at the time of conversion the victory loans had not been included in the conversion loan their maturities would have met the fund requirements and their value would have held up. I want to point out that the minister in that action made the management of the fund subservient to his debt management requirements, having all public funds converted rather than fulfilling his duty as trustee of this fund, which is provided by employees, employers and taxpayers of Canada. This accounted for the loss, as will be seen from an answer appearing in Hansard of February 15, and from a sessional paper tabled December 21, 1960. This loss by reason of converting the bonds amounted to something in the neighbourhood of $70 million. That misuse of his duties in the field of debt management overrode his duty as trustee. The minister's responsibility as trustee of the fund became subservient to the minister's responsibility in respect of debt management policies of this government. Had he been in a private field outside the government, this wrong action would have left him liable for the loss resulting therefrom. This untenable action-


Richard Albert Bell: It was certainly not untenable.


Paul Joseph James Martin: It is untenable, that is a true statement.


George James McIlraith: The minister is trying to make the house believe that he has no authority and no responsibility in the field of monetary policy. He says that parliament can deal with these things. Under our constitutional procedure when parliament has responsibility-I do not subscribe to his view of it at all-surely it is the responsibility of the government and the minister concerned

Division
to bring forward the legislation. The minister was so timorous in that field that he did not tell us anything about any responsibility that he does have in this field. He also did not tell us, having taken the position that he is not responsible, although he is the minister of the crown with the responsibility in the field of finance, whether he agrees or disagrees with the monetary policy in Canada that has been carried out since August, 1957-


Mr. Speaker:: Order. I am sorry to interrupt the hon. member. It being 8.15 o'clock it is my duty pursuant to section 4 (d) of standing order 56 to put forthwith the question on any amendments now before the house.
The question is on the amendment to the amendment.


Mr. Speaker:: I declare the amendment to the amendment lost. The question is now on the amendment to the main motion.



COAL-REQUEST FOR ACTION ON CLOSING OF MINES

Hédard-J. Robichaud: On
March 3, 1959 I introduced in this house a grievance based on the failure of the government to take adequate action to meet the demands of the coal industry. On that occasion I pointed out the seriousness of the coal situation which, since this government took office in June 1957, has reached the proportions of a major crisis calling for immediate action and appropriate measures of adjustment to cope with an urgent situation.
My reason for rising this evening is strengthened by the inability of the government to meet its pre-election commitments and its persistent failure to solve the problems of the coal industry. In the course of my remarks I intend to call attention to the inconsistency of the government's actions, its failure to appreciate the seriousness of the situation and its lack of understanding of a serious problem which must be met face on and handled with a bold and comprehensive determination to undertake a social adjustment in a depressed area where a segment of our population is menaced with grave financial distress and a most insecure future.
As long ago as June 30, 1958, I introduced in this house a motion condemning the government for backing away from its commitment to promote and develop the industry in the Atlantic provinces, and especially for its failure to prevent or avert shutdowns in the Nova Scotia mines. Reference was made to my motion by the Minister of National Revenue (Mr. Nowlan) and on page 1800 of Hansard for July 1, 1958 the hon. gentleman said of it:
This is one of the great motions of want of confidence in the House of Commons, one of the six motions to go into supply when the substantial omissions of the government are brought to the attention of the house. If this is all the opposition could arraign this government on, then certainly the record of the government is very good indeed.
These were the words of the Minister of National Revenue when we sought to direct the attention of the government to a situation which, we believed, was heading for a major crisis. That crisis exists today. When we in the opposition were urging the government to act without delay to solve a problem affecting an important segment of the population of the maritime provinces we were told that

Coal Industry
we were attacking a matter which was of minor importance. We were told that we were paying attention to a subject which, in the minister's view, was of very little significance-hardly worth while as the subject matter of a grievance raised on a supply motion.
On that particular occasion we were told by the Minister of National Revenue that the stockpile of coal was roughly 1,400,000 tons but that there were orders for 4,600,000 tons and that orders were still coming in. Here are the minister's own words as reported at page 1801 of Hansard for July 1, 1958:
It is going to take months, perhaps into the winter, perhaps even into next spring before the whole stockpile is liquidated: and liquidated it will be, because the company will see to it that it moves out and, as I have said, the orders are recurring and multiplying.
And further on the minister went as far as to say, and I quote again his own words which will be found on page 1804 of Hansard for the same date:
The government believe that the future of the Nova Scotia coal industry can be re-established and is reasonably bright. We have seen an example within the last few days, when the Ontario hydro commission chairman said that within a year or two he would be buying well over one million tons of coal and that within 10 years, even after making allowances for the St. Lawrence seaway and all the other developments of hydroelectric power-he, or rather the hydro commission, would be buying over 10 million tons of coal according to the present expansion program for Ontario.
What is the situation today? Where is that
4,600,000	ton order? Where is that one million ton order for Ontario, referred to by the minister in July, 1958, almost three years ago? Where are all these orders which were recurring and multiplying?
The Toronto Globe and Mail for December 7, 1960 reports as follows:
Hydro denies coal commitment.
The Ontario Hydro-Electric Power Commission must buy its coal at competitive prices and has made no commitment to purchase Nova Scotia coal, a commission spokesman said last night.
I know that government speakers will outline with some personal satisfaction what they have done since taking office to assist the coal industry. I know that in July of 1958 the government took some temporary measures, such as extending the existing subventions in order to prevent more extensive layoffs in the industry.
The fact remains, however, that the government has failed to introduce adequate measures and has shown that it was not capable of grappling with a problem of this magnitude. The present government has been dragging its feet. It has failed to come up with a well thought out program; it has failed once

more to recognize the seriousness and importance of a situation affecting 8,000 to
10.000	miners and a population of close to
150.000	people.


Edwin William Brunsden: Mr. Speaker, I rise to a point of order. It is my understanding that the rules of this house provide that an hon. member should not read his speech. I submit to you that this hon. member is reading his speech.


An hon. Member:: That is right.


Hédard-J. Robichaud: Mr. Speaker, I have extensive notes and extensive quotations and I am following those quotations word for word.
On June 30, 1958 I warned the government of the seriousness of the situation. On page 1757 of Hansard of that date I am reported as having said:
The present government's policy gives no assurance whatsoever to the coal mines of the Atlantic provinces that at the end of the present year the excess carryover and stockpile accumulated will not force a further lay-off which could be much more serious than the shutdown now taking place.
That is exactly what is happening today. We were accused of being prophets of gloom and doom, of exaggerating the situation. Eight months later, on March 3, 1959, I reminded the government of its failure to meet the demands of the coal industry. I brought to the attention of this house the meeting which was held on February 2 with the Prime Minister and other federal ministers and a delegation from Nova Scotia headed by Premier Stanfield. On that occasion the premier urged increased subventions on an emergency basis as the best means of staving off further lay-offs.
I warned the government that subventions and subventions alone would not keep the miners of Nova Scotia and New Brunswick at work, and would not prevent some of the mining towns of Nova Scotia from becoming ghost towns. I offered suggestions then-concrete suggestions-which at the time were sneered at by representatives on the government side of this house, of areas which are directly affected by the decision recently arrived at concerning certain mines in the Cape Breton area.
The very same hon. member of this house who said on March 3, 1959 as reported at page 1575 of Hansard of that date that my solution meant "fewer miners, less production, no surplus"; the same hon. member who said that my suggestion meant "train fare out of the country" for displaced miners, that very same hon. member is now urging the government to take action on the suggestion which I made in this house two years ago. That hon. gentleman is asking the government to intervene with the Avro company, and Dosco

in an effort to persuade them to establish in Cape Breton and not near Montreal their proposed steel rolling plant.
I wish now to refer to an article which appeared in the Halifax Chronicle-Herald. of February 20, 1961 under the headline, "Cape Breton MP's Call for Immediate 'Crash Program' The article reads, in part:
An eight-point program to stimulate Cape Breton's economy involving increased expenditure in five government departments and a new conference with Dominion Coal Company aimed at averting or delaying the shutdown of three major coal mines was placed before Prime Minister Diefen-baker Sunday.
Instead of supporting our concrete suggestions in this house, hon. members opposite prefer sundry meetings with the Prime Minister.
Here is what I had to say about this project, not in 1961-not when it is too late-but two years ago on March 3, 1959 as reported at page 1574 of Hansard:
The Avro company should have been influenced to establish in Cape Breton and not near Montreal their proposed steel rolling plant. The government should have intervened and provided the company with every argument and if need be even financial assistance in order to influence it to open this new mill in the Atlantic provinces in the vicinity of the coal mining area.
Instead of sneering at my remarks, hon. members opposite, and particularly those from the areas affected should have used their good influence with the government for the realization of this project, when it was still not too late to intervene.
Hon. members opposite must admit, in view of recent events in the coal industry, that action should be taken at once, even if it means substantial tax concessions or other forms of assistance to provide new industries, preferably with coal as their basis, which would at least restore the economy of the industry to its 1957 level and alleviate this atmosphere of uncertainty and insecurity, this fear and gloom which prevails in Cape Breton today.


Mr. MacLellan:: What kind of industry does the hon. member want to locate there?


Hédard-J. Robichaud: I will give more detail about that later on in my remarks, Mr. Speaker.


The Acting Speaker (Mr. Rea):: Order.


Hédard-J. Robichaud: I say that if 2,000 or 3,000 miners have to be retired from the mines, they must be provided with work at industrial plants located at the pitheads and only then will the problem be solved for years to come.
If two years ago those hon. members who are today urging the government to take action had used their good influence to have this steel rolling plant located in the Sydney
Coal Industry
area it would have taken care of at least
1,000	of these miners. Will the Prime Minister (Mr. Diefenbaker), will the Minister of National Revenue (Mr. Nowlan), will the silent Minister of Mines and Technical Surveys (Mr. Comtois) once more attempt to convince the population of Cape Breton that they have been deeply concerned with their problems? Will the Prime Minister convince the population of Cape Breton that, as he stated in the house on June 27, 1958, as found on page 1689 of Hansard, "every sympathetic consideration will be given to assure the bringing about of a state of affairs which will ameliorate to the maximum degree possible this very trying and serious problem"?
The present government, Mr. Speaker, in its election promises in 1957 and again in 1958 gave great hopes, great expectations to the coal mining population of Nova Scotia and New Brunswick. The fact remains, however, that on August 20, 1959, 14 months after we had introduced our supply motion in the house, the Prime Minister announced the appointment of a royal commission on coal. In making the announcement the Prime Minister said that the government felt that the coal problem was a special one and so urgent as to require a special inquiry rather than to be considered by the Borden commission on energy. The Prime Minister admitted at the time, over a year and a half ago, that, and I quote his own words, "subsidies alone were not a final answer to the coal problem", and he indicated that a thorough study of the long term market outlook was required. There again the Prime Minister admitted that a readjustment of coal production had to be made in such a way that the industry would serve its future markets efficiently and economically.
The coal problem was an urgent one when we introduced our motion on June 30, 1958. The coal problem was critical when the Prime Minister announced the appointment of the Rand commission on August 20, 1959. The coal situation had deteriorated further when the report of the Rand commission was made public late in September of last year.
The report of the Rand commission, Mr. Speaker, has now been in the hands of the government for over five months. For months Dosco had made it clear that three mines employing 2,600 men will definitely close this year. The dates have now been fixed at May 31, July 1 and August 12 respectively. For months the government has been aware that the Caledonia mine, the Florence and No. 16 will be closed during 1961.
What has been done to take care of this emergency? On November 23 the Minister of Mines and Technical Surveys saw fit to give

Coal Industry
the house a statement concerning the implementation of the report of the royal commission on coal. What did he have to say on that occasion? Here are the minister's own words as recorded on page 111 of Hansard:
In short, the Rand report is the type of public document which demands the most serious study from each of us.
I agree with him on that.
It is also the type of document which demands the most serious, systematic and meticulous study by the government. I can inform you that such a study by the government is in progress. It is occupying the attention of an interdepartmental committee consisting of senior officers of the Department of Finance, the Department of Trade and Commerce, the Department of Labour, the privy council office, the national energy board and the dominion coal board, under the chairmanship of a senior officer of mines and technical surveys.
The committee has been given clear and specific instructions. It is "to study and report to the cabinet on the recommendations of the royal commission on coal relating to subsidies and research" and on such representations as have been received by the government.
I hope, Mr. Speaker, that the minister has in mind making public the Vissac report which we have been asking the government to table for over a week. Those were the words of the Minister of Mines and Technical Surveys. The Rand report had been in the hands of the government for two months, and once again we have a government unable to take a decision, a government seeking more delaying tactics before making up its mind. It was a delaying tactic, as I said a while ago, when the commission was appointed on August 20, 1959. It was again a delaying tactic when an interdepartmental committee was appointed in the fall of 1960.
What has the government been doing in the meantime to protect the coal industry? As was so well said in a recent editorial in the Casket of Antigonish on February 9:
The mood of the average Nova Scotian at the moment is one of lack of faith in the power of the federal government either to recognize fully the problems which face us or to tackle the problems with the required vigour. We feel that Ottawa is either not interested in the problems of a province which, after all, has only 12 seats in a 265-seat House of Commons, or that it is simply not capable of grappling with a problem of this magnitude. In either case, Nova Scotians have every right indeed to be very disappointed with the lack of action at Ottawa.
What has the government done since the appointment of the interdepartmental committee to study the recommendations of the Rand report? On January 9, in an attempt to distract attention from another important event which was taking place in Ottawa on that day, the Minister of National Revenue and the Minister of Mines and Technical Surveys issued a joint statement to the press. Their statement said that Caledonia No. 4 in
Glace Bay, due to close January 14, would be kept alive until May 31 and that the Florence mine and No. 16 at New Waterford would continue operations until July 1 and August 12 of this year respectively.
In other words, the government has officially announced that it is prepared to accept the closure of three mines in the Cape Breton area; that it is prepared to accept the laying off of close to 3,000 coal miners, thus wiping out the means of livelihood of tens of thousands of our population. This action of the government has made a farce of the Rand report. It has made a farce of the interdepartmental committee appointed last fall to study this report. The government has repudiated that part of the Rand report on page 30 which stated:
We cannot cut this island off, and Canada acting with Nova Scotia must, in my opinion, provide conditions to enable it to regain confidence and affirm its will to a new vitality.
The government by this action has repudiated that part of the Rand report on page 42 which stated:
The need exists in Cape Breton to build up alternative means of productive wealth; and the necessity also of facing up to such a possibility as well as the planning for the minimum disruption in the substitution. It is to try to avoid severe dislocation even within ten years that the recommendations provide for graduated action.
The position of the present government on this matter of vital importance is ambiguous. It is one of delayed action, one of uncertainty and insecurity for the miners and the population generally. The government is acting with regard to this problem in the same uncertain and inactive way it dealt with the Arrow, with Elliot Lake, with Springhill. What has it done for the displaced miners of Springhill, for this unfortunate community which through no fault of its residents was almost overnight forced by a tragedy into the state of a ghost town? It is not a prison farm, it is not $10,000 in winter works, to which the federal government will contribute about $3,000 and which will employ about 14 men for a few days, that will take care of the displaced miners of Springhill. The present government, I repeat, is dragging its feet. It is shirking its responsibility. It is refusing to take adequate measures to solve the coal problems of the maritimes. It has agreed to accept the closure of at least three mines without making any move to find alternate jobs for the miners who will be laid off by such closures. It has agreed to accept closures of three mines when an interdepartmental committee of its own appointment was studying the recommendations of a royal commission. What are we to expect next? Probably an announcement by the Prime Minister or a joint statement by the

Minister of National Revenue and the Minister of Mines and Technical Surveys to the effect that the government has decided to appoint a royal commission to study the report of the interdepartmental committee on its study of the report of the Rand commission.
I repeat, Mr. Speaker, this government has made a farce of the interdepartmental committee appointed to study the Rand report. This government is refusing to take an overall approach to the whole problem of the coal producing areas. The postponement for a few months of the closing of the three mines in Cape Breton is by no means a permanent solution to these problems. This government has failed to introduce plans for the situation that will arise when apparently the mines must be closed. No steps whatsoever have been taken to relocate the displaced miners, no plans are being made for the future. This is typical of the day-to-day attitude of this government.
The coal industry of Cape Breton will not subsist on subsidies and on subsidies alone. Instead of its sit back and wait attitude, this government must wake up from its lethargy and face the facts. This government must agree to contribute a substantial sum for capital projects in the Atlantic area to be spread over a relatively short period of years.
As I have said before in this house, the government by transferring the coal problem to a committee of civil servants is shrinking away from its responsibility; it is announcing postponement after postponement in dealing with the urgent problem of the coal industry. The government has asked Mr. Rand to make recommendations. Mr. Rand presented his recommendations. Now the government is asking another committee to make recommendations on what it should do with the Rand recommendations. Why is the government stalling; why is it dragging its feet? Is it because there is division; there is disunity among cabinet ministers on this vital problem? I know that some of the recommendations of the Rand report, if implemented, would be detrimental to the coal industry in New Brunswick. The spread in the subsidy payments between Nova Scotia and New Brunswick is too apparent for any government to act according to that particular aspect of the recommendations. The Minister of Forestry (Mr. Flemming), during his by-election campaign last fall, committed himself in no uncertain terms as to the position he would take on the Rand report recommendations. Is this sufficient reason, however, for the government, for the Minister of Mines and Technical Surveys, to refuse to state their attitude, their policy on the coal situation?
As I have already said, in my view the recommendations in the report do not provide
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a satisfactory answer to the human and social problems that are involved in the cut-backs and now in the contemplated closures in the Cape Breton coal fields, nor to the requirement of the coal industry in the province of New Brunswick. Once again I want to put forward a number of suggestions which in my mind the government ought to consider, and consider now, in relation to the urgent problem of the Cape Breton coal area. First, if the government accepts the views of Commissioner Rand that mine closures must take place within the foreseeable future-and this the government has already accepted according to the joint statement from the Minister of National Revenue and the Minister of Mines and Technical Surveys which I have referred to earlier-then I maintain that these closures cannot be permitted to occur abruptly and suddenly, because no prior planning has yet been made. The government was warned about this almost three years ago but to date it has refused to act.
As the government has now accepted the view that closures are inevitable, such closures should be allowed to occur only gradually and over a period of time during which, if necessary, the government should underwrite losses of the company to the break-even point. This interim period would provide an opportunity for further planning and investigation as to what can be done to meet the unemployment problem that would surely follow closures. This would give the government the opportunity to do now what it should have done three years ago.
Second, I believe that the government should direct the dominion coal board to explore with the company the economies of a new development at the Lingan area of Cape Breton and, especially, whether federal assistance in opening a new mine might be justified in the long run through substantial reduction in production costs that would make coal more competitive as a source of energy.


Mr. Horner (Acadia):: Would the hon. member permit a question?


Hédard-J. Robichaud: When I am through with my remarks, Mr. Speaker.


John (Jack) Henry Horner: I was just going to ask him who wrote his speech.


Hédard-J. Robichaud: Third, I believe further that the government should set up at once a committee of practical men who would be given the job of finding new industries that might be located in the Cape Breton industrial area.
The need exists to build at once, to build now and not in three or four years from now, alternative means of productive wealth which would result in a diversified economy for these areas.

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These, Mr. Speaker, are positive proposals, proposals which if implemented would result in positive action. The time has passed for Ottawa to pass up opportunities to act, to regard such problems as just another stage in the process of putting off the day of reckoning.


Mr. Donald Maclnnis (Cape Breton South):: Mr. Speaker, we have just witnessed a display that I cannot rightly name, other than a reading room address possibly prepared by a research director from-


Hédard-J. Robichaud: On a question of privilege, Mr. Speaker.


Mr. Deputy Speaker:: Order. The hon. member for Gloucester is rising on a question of privilege.


Hédard-J. Robichaud: The hon. member who has the floor has stated that the remarks I have just made were prepared by someone other than myself. These remarks were prepared by myself and represent my own work 100 per cent.


Malcolm MacInnis: To that, Mr. Speaker, I suggest that we throw away the notes so that we can see who knows what about the coal industry.


Edwin William Brunsden: On
a question of privilege, Mr. Speaker-


Mr. Deputy Speaker:: Order. The hon.
member for Medicine Hat is rising on a question of privilege.


Edwin William Brunsden: I suggest we throw away Beauchesne's rules of the house and allow members to read every speech from now on.


Lester Bowles Pearson: We should throw away some of the interrupters.


Hédard-J. Robichaud: Most of them on the government side.


Mr. Deputy Speaker:: Order. The hon. member for Cape Breton South has the floor.


Malcolm MacInnis: The member who has just taken his seat has referred to his knowledge of the coal industry. If there is anyone in the house that doubts his statement just ask the member from Gloucester (Mr. Robi-haud), because not too long ago he arrived in the town of Glace Bay and advertised himself in the Cape Breton Post as the official coal critic for the official opposition. Later that same day, while visiting one of the mines in that area, in a discussion with the newspaper people who were covering his visit he candidly admitted that this was his first visit to a coal mine of that type. Following that admission he expressed no surprise at the cost of production. Here we have a

man who claims knowledge of the coal industry, and who arrives in a coal mining town advertising himself as the official critic for the official opposition in respect of coal, and then admits that it was his first visit to a coal mine.
The hon. member has taken it upon himself to read many quotations. In fact, his speech was made up mostly of quotations from what somebody else had said about coal in the past. He went so far as to give the members from Cape Breton a pat on the back for what they had been trying to do and I thank him for that gesture. But I would remind him that, while he was on his feet, at no time did he take any exception to the fact that New Brunswick is about to burn oil in the thermal plant. He did not take his government to task for that fact. The miners in New Brunswick are riding on the backs of the Cape Breton miners who came up here to Ottawa to make representations on behalf of the Cape Breton coal miners. The miners of New Brunswick had every advantage of it. The miners of Cape Breton, through their representation, are helping to carry on the coal industry in New Brunswick. Further than that, Mr. Speaker-


Hédard-J. Robichaud: Who was premier of New Brunswick?


Malcolm MacInnis: This man who rises in his place and asks questions about the mines, and concerning the coal problem has yet to show his face at any one coal conference and add anything to any coal conference. This is the man who professes interest in the matter. He has never shown his face at one coal conference.


Hédard-J. Robichaud: I rise on a question of privilege. The hon. member has said that I at no time attended a coal conference. That is not true. I attended two coal conferences and I attended the coal commission.


Mr. Deputy Speaker:: Order. May I indicate to the hon. member that this is not a question of privilege but a matter of controversy.


Malcolm MacInnis: I will consider it to be a question of privilege for the benefit of the hon. member. He has yet to attend any coal conference since this government came into office. I have never missed one, and I have never seen him in attendance. If he wishes to do so, he can take that as a question of privilege. I will not withdraw my statement, because I will not withdraw from the truth.
He has made reference to what has gone on in the coal industry. From 1946 to 1956 34 coal mines closed in Nova Scotia. I should like to see where on the record he has raised any objection about his administration. Let me tell you something else about

his administration, Mr. Speaker. The former prime minister went into his own province and told the people of Nova Scotia and New Brunswick to leave the coal in the ground for the benefit of future generations for the manufacture of synthetic articles. He said that in New Brunswick. I do not care what was said by the hon. member who represents Bonavista-Twillingate. I said "represents"; he does not come from Bonavista-Twillingate. I do not care what he said. He has been called upon by the public press to apologize for denying that statement and he has not agreed to withdraw it. He has been asked in the interests of journalism in this country to withdraw the denial because it is evident that the former prime minister told the people of Nova Scotia and New Brunswick to leave the coal in the ground. That is another question of privilege for him if he thinks he can get away with one.
He referred to the coal industry in the years from 1946 to 1956 and what his government did about the use of coal, without one coal conference and without one objection at all from those supporting the government of the day. Let me tell you this, Mr. Speaker. In 1957 through the action of this government the trend that was in progress between 1946 and 1956 was brought to a halt; and it was brought to a halt by the actions of this government. It is granted that there have been a few closures of mines in Nova Scotia, primarily because of disaster and to prevent future disasters. I refer now specifically to No. 25 colliery in my area. It was obliged to close. Otherwise more men would have lost their lives through drowning, as had happened there previously. This mine absolutely was forced to close.
He referred to the action of this government. He referred to the fact that the government announced closures. Let me for a moment come to his aid in putting across his knowledge of coal mines. I will read him a quotation from a former Liberal candidate- and I say former Liberal candidate advisedly -in the last provincial election in Nova Scotia. The quotation is that of James P. MacNeil of New Waterford. As I say, he was a candidate for the Liberal party in the last election. When this propaganda or publicity came out on the part of the government announcing closures, here is what the Liberal candidate in the last provincial election had to say about it:
Mayor James P. MacNeil of New Waterford, a miner employed In No. 16 colliery charged that the dates for closing of the mines were set by Dosco and not "by an agreement between Dosco and the government."
That is a direct quotation from one of the Liberal adherents in Nova Scotia. That is
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the truth. It is too bad that the rest of hon. members opposite cannot get up and tell it. As I said when I rose in my place, here is a man who claims to be a coal authority. He criticizes this government for the action it has taken in preventing further closures in Cape Breton. As the indication was that January 14 was the deadline, that matter has been taken care of by this government. The unions got what they asked for at this stage. They got that date shifted back to May 31. It is my hope, and that of every other Cape Breton member, that we can bring about further delay.
The hon. member for Gloucester referred to the Rand commission report. He has indicated that he did not think it was the solution to the problem. I might say that when the last coal conference was held expressions of opinion were voiced of the Rand report. There was not one representative from Cape Breton who took objection to those representations made about the Rand report. It is only in the last couple of weeks that there has been any advocacy of adopting the Rand report. I have to agree that I did not see anything in this Rand report that was beneficial to the miners of Cape Breton, except the one problem they went into, namely the delaying of closures over a period from five to ten years. This is something with which I fully agree and I would advocate the adoption of such a plan.
Let me tell you this, Mr. Speaker, and let us get this straight. This government has offered to go further with Dosco but Dosco will not or would not accept this offer from the government. They have made up their minds. Why did not the hon. member for Gloucester get to his feet and criticize this company? Why did he not do that? He did not do it because he had no knowledge of what the situation was. Why did he not get to his feet and criticize the fact that they are closing No. 4 colliery in Glace Bay? The reason why he did not do that is that he does not know the score. He does not know what is going on in connection with coal.
The fact remains that No. 4 colliery in Glace Bay is not an uneconomical colliery. It is among the top ones, as far as economics is concerned. The company has promoted the idea that it is an uneconomical mine they are closing. That is not so. Caledonia mine in Glace Bay is an economic colliery by their own admission. What happens when you catch the company on this score is that they immediately revert to the argument that it is the quality of the coal. It is the same quality of coal that has been sold from this colliery for 60 years. Caledonia coal can be sold for 57 cents a ton less than other types. There are those companies that desire a lower quality

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of coal if conditions are right. That only means one thing, namely, price. Caledonia coal could be set up as a separate commodity and sold at 57 cents a ton less than the price which is an economic proposition, 57 cents a ton below the average cost.
There has been no denial at the conference by the company of this argument. Yet the executive officers see fit to feed their propaganda against me for repeating this. They did not stand behind me on that program. Neither did they stand behind me on the other argument concerning coal. They caught Mr. Albert Fairley thoroughly off base, out in left field, but they never stood behind me on that one. Yet they see fit to criticize the actions I have taken on behalf of the miners. All I can say is this. I will stand up in any public assembly and I will fire back what the absolute truth is on this situation. The miners in Caledonia are not getting the support they deserve. The hon. member for Gloucester- the coal critic of the official opposition; the man with particular knowledge of coal; the man who never attended any coal conference -gets to his feet, and what does he say? He rambles on about what somebody else said with regard to coal. He skips what his own prime minister had said about coal. He forgot that he said they should leave it in the ground. He has nothing to say about the criticism I offered to the great champion of labour from Essex East, who did not see fit to answer the correspondence I sent out on coal, but who rises in his place and tries to put himself up on a pedestal as far as the miners of Cape Breton are concerned. He did not himself have enough interest to answer a letter concerning a coal problem, and I think that if he had got together with his colleagues in the house they could have taken action that would have been beneficial to the coal miners.
With reference to the hon. member for Gloucester I am going to make a remark here which, in all fairness, I will give him an opportunity of denying. I understand that he himself has looked for an oil agency in New Brunswick, if not for himself, for somebody in his family. He is perfectly at liberty to deny that.


Hédard-J. Robichaud: Mr. Speaker, on a question of privilege, I do not think the hon. member has any right to say I have been asking an oil agency for myself or my family.


An hon. Member:: Is it true?


Hédard-J. Robichaud: It is not true.


Malcolm MacInnis: The hon. member has had his opportunity on the question of privilege and he has not denied it. After all, oil has to come into the question. Everybody else

brings oil into the question of the coal problem, so why should not I bring it in? Why has the hon. member offered no criticism of the administration of the day in New Brunswick which is going to use oil in the thermal plant there and by-pass considerable assistance from the federal government? In the event that they used coal in the Saint John thermal plant this government would have assisted to a great extent. They have by-passed that assistance in favour of using oil. I need not go on to explain why the hon. member is probably very much aware why they have by-passed coal.


Hédard-J. Robichaud: Do you want an explanation?


Malcolm MacInnis: I want no explanation from the hon. member because I have already told this house, and I will tell it to the world if necessary, that the hon. member is not in possession of any information on the coal problem that I do not possess. In fact I have stated here flatly that the hon. member is not in possession of any information on the coal problem. He does not have an interest in coal, and it is only a hypocritical attitude on his part to get up in the house and say he has.


Mr. Deputy Speaker:: Order. May I draw to the attention of the hon. member that he must address the Chair, and I must also warn him about his last words.


Malcolm MacInnis: Mr. Speaker, I think I have clearly indicated my stand in the house on the statement I have made. If I am asked to withdraw it, you might as well save your breath because here is one member who does not withdraw from the truth.


Hédard-J. Robichaud: Mr. Speaker, the hon.
member has used the word "hypocritical". I think that is an unparliamentary word and should be withdrawn.


Mr. Deputy Speaker:: I agree that if the word was used in reference to the hon. member for Gloucester, it should be withdrawn, but I understood the hon. member to indicate he was willing to withdraw that word.


Malcolm MacInnis: Mr. Speaker, I was referring to an attitude which I firmly believe is true and I do not propose now to withdraw from the truth of any statement which I feel I can truthfully make.
Som


a hon. Members:: Oh, oh.


Mr. Deputy Speaker:: Order. If the hon. member used the word mentioned in connection with the hon. member for Gloucester I am sure he will realize that this expression is unparliamentary, and on reflection he will

understand that for the dignity of debate in this house he should withdraw the word unconditionally.


Malcolm MacInnis: I do not intend to further this argument. I made the statement to the effect that the hon. member's attitude was hypocritical. I do not see why I have to withdraw that in respect to any personalities who may be involved, because my statement has reference to an attitude and was not in reference to the hon. member. I had referred to the attitudes adopted not only by the hon. member but by his party as a whole.


Mr. Deputy Speaker:: I will put it this way. If the hon. member was referring only to the hon. member for Gloucester, he must withdraw that word.


Edwin William Brunsden: Mr. Speaker, on a point of privilege, I have listened very closely to the hon. member for Cape Breton South. He did not say the hon. member for Gloucester was a hypocrite. He was referring to a hypocritical statement.


Mr. Deputy Speaker:: The word was mentioned in a statement by the hon. member concerning the hon. member for Gloucester. I am sure the hon. member for Cape Breton South will clarify the situation and say that he did not refer to the hon. member for Gloucester in this connection, or if he did, he withdraws the word.


Edwin William Brunsden: He did not.


Malcolm MacInnis: Mr. Speaker, I want my stand to be clearly understood. My criticism and my reference to "hypocritical" was referring to an attitude. If the hon. member feels, when anybody on this side of the house makes a reference to an attitude, that it applies to him alone, it only further indicates to me his earlier thinking, when he indicated that he is in possession of a great many facts and a great deal of knowledge.
Does this mean he has all the knowledge of the Liberal party, all the knowledge on all statements that are made? My remarks were to the effect that the statements were hypocritical and there was no reflection on any one hon. member when I said that.


Lionel Chevrier: On the point of order, Mr. Speaker, may I say that the rule is quite clear. It is standing order 35, which says- without reading the whole of it-that no member shall use offensive words against any member of the house.
The words used by the hon. member were "the hypocritical attitude of the hon. member for Gloucester". The hon. member for Cape Breton South, in explaining his position, said he referred to a hypocritical attitude, but he 90205-6-1454
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did not add the additional words, namely "the hypocritical attitude of the hon. member".
Those words, in my opinion, according to Beauchesne's, are unparliamentary and should be withdrawn unreservedly.


George Clyde Nowlan: Mr. Speaker, the hon. member for Cape Breton South said a moment ago, just before the hon. member for Laurier rose in his seat, that he was not referring to the hon. member who had made this address or to any other particular hon. member. He said he was referring to an attitude, and he stated specifically that he was not referring to any particular hon. member.
That is exactly what he said and I am sure Hansard will bear out when we see it tomorrow. If that is the situation there is nothing the hon. member has to withdraw, I submit with deference, because he has said he was not referring to an individual but to an attitude.


Mr. Deputy Speaker:: It was not very clear to the Chair that the hon. member said he was referring to an attitude of an hon. member. If he wishes to repeat that he was not referring to the hon. member, I think the incident could be closed.


Leon David Crestohl: Mr. Speaker, on this question of privilege, under citation 298 of Beauchesne's second edition it is clearly stated that the following expressions have also been ruled out of order, "hypocritical lovers of liberty" and "hypocrites" even when used without referring to any particular statement by anybody. The expression used is unparliamentary and the hon. member should withdraw it.


Mr. Deputy Speaker:: Order. I have already indicated very clearly that the expression used concerning an hon. member was not parliamentary. That is very clear and there is no need for discussion on that. I have asked the hon. member, if he used the expression about the hon. member for Gloucester, to withdraw it unreservedly. If he claims he did not use it in connection with the hon. member for Gloucester perhaps he would make it clear that he was not referring to the hon. member.


Malcolm MacInnis: That is exactly what I did before I resumed my seat.


Mr. Deputy Speaker:: Perhaps we could settle the question of privilege raised by the hon. member for Gloucester before any other problem is raised.


Malcolm MacInnis: I have indicated, as I said before I took my seat, that my reference was to a statement or statements, and that it was

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not directed to any one member. How much Mr. Robichaud: I accept your ruling, Mr. further am I required to go to satisfy this Speaker, but I reserve the right tomorrow childishness?	to refer to Hansard.


Mr. Deputy Speaker:: If the hon. member for Gloucester is satisfied with that statement it would be satisfactory. What I tried to indicate to the hon. member for Cape Breton is that if he used the words "hypocritical statement" as applied to the hon. member for Gloucester, then that expression was not parliamentary and should be withdrawn unreservedly. That is what I am asking the hon. member for Cape Breton to do.


Malcolm MacInnis: That is exactly what I have done. I have said that the statement I made was not directed to the hon. member for Gloucester.


Mr. Deputy Speaker:: I have not before me the exact expression used by the hon. member for Cape Breton but I must say that if he claims now that this statement was not directed to the hon. member for Gloucester, I think the house has to accept the denial and therefore the matter of privilege is closed.


Leon David Crestohl: With all due deference, Mr. Speaker, it makes no difference whether or not the expression is directed to one individual or another. The expression itself is unparliamentary. Citation 298 gives a list of expressions which are unparliamentary, and the words "hypocritical" and "hypocrite" are contained in this list.


Mr. Deputy Speaker:: I think I have made myself clear. The hon. member for Cartier is arguing the same thing as he argued before, and I have explained that these words are unparliamentary if applied to a member of the house. However, if they concern an attitude generally or anything that is not connected directly with an hon. member they are not considered to be unparliamentary. I think the incident should be closed, because the hon. member for Cape Breton has made it clear that he did not apply this expression to the hon. member for Gloucester or to a statement made by the hon. member for Gloucester. I think this closes the incident.


Hédard-J. Robichaud: Since it was said that I had made hypocritical statements I want to be sure that the record is not changed tomorrow.


Mr. Deputy Speaker:: The hon. member knows that the record cannot be changed. It may be that on consulting Hansard tomorrow he will find it is something else, but the hon. member has stated his remarks did not apply to the hon. member for Gloucester and the hon. member, for the time being, should accept that.


Malcolm MacInnis: I should just like to wind up my remarks-there has been some delay -and refer for a moment to what the executive of the united mineworkers of America feels about the action taken by this government in delaying any action on the part of Dosco. As I have indicated, I have felt that the attitude of Dosco requires some investigation and some considerable study because it is my belief that the attitude taken by them towards the miners in Cape Breton and the community as a whole is not one which can be accepted. I myself do not for a moment accept the reasons given for closing No. 4 colliery in Glace Bay. Mr. Fairley has at times made statements in reference to this colliery and, as I have said before, not only has he been caught off base but he has been caught out in left field. He has indicated that there has been no development going on in the west side. But miners have told me that this development work is 85 per cent complete. Mr. Fairley tells me there has been no development on that side of the mine. I have on occasions reminded Mr. Fairley that this is not so. The facts are very easily proven by press releases from his own company. However, among the excuses for closing, there is the statement that no development work has been going on. I have made statements which have been severely criticized. The members of the opposition have been receiving newspaper clippings from the local paper in my constituency which severely criticize me. That is part of public life. We all have to stand up to a certain amount of criticism, and I can take it when I consider the source.
I have here a newspaper clipping whose heading says: "Marsh, Dolhanty, say Statements are Inaccurate". They are the president and vice president of UMW District 26. I am a member of the union, a member of the Caledonia Local, a paid up member. The clipping is here for everybody to see, and I face up to the situation every time. They go so far as to say my statements were immoral, and when they say that they are referring to a remark I made at Sydney when I said that 800 miners at Caledonia colliery were not getting the support from their union executive that they could rightfully expect. This is the statement that brought on all the criticism. They say it was immoral. I went on to say I thought the union executive would be satisfied with fewer contented miners rather than a large number of discontented miners. This was the statement they referred to as being immoral. Yet I pointed out clearly that this was exactly the practice followed

by John L. Lewis, formerly president of the union in the United States. He advocated the closing of uneconomic mines. Strictly on a business level that idea might have merit. It does not have merit when applied to the Caledonia colliery at Glace Bay because that colliery is economical. Anybody who withdraws from the argument because of that consideration is withdrawing from the truth. It can easily be proven, but this is one portion of the argument which the union has failed to put forward on behalf of the miners of No. 4 colliery.
Now I should like to call the attention of the house to what the executive members of the UMW think of the action taken by this government. In criticizing me, Mr. Dolhanty says:
I only hope that he is not voicing government policy. We have worked very closely with both the provincial and federal governments over the years. They have given us much help.
I have placed on the record what the UMW executive has said about this government. They have worked very closely together and this government has given them very much help. Those are the words of vice president Dolhanty. There they are in black and white.
I notice that the hon. member for Essex East (Mr. Martin) is finally back in his seat. That hon. gentleman saw fit to rise in this house and ask direct questions of the Minister of Mines and Technical Surveys. The hon. member is very seriously concerned about the situation in Cape Breton, so seriously concerned that he failed to answer a letter I sent to him on behalf of these same miners. So seriously concerned with this matter is the hon. gentleman that I have never seen anything that he has said that takes opposition to the policy enunciated by the former leader of his party and then prime minister of Canada. I will remind him what the former prime minister said. Since the hon. member is late in arriving, I will repeat it for his benefit. The former prime minister said, in effect, leave the coal in the ground for future generations so they can manufacture synthetic articles.
One of the hon. member's colleagues took exception to this and has been severely criticized editorially for so doing.
It is my hope and I am sure it is the hope of every hon. member from Cape Breton and Nova Scotia that the closing down of mines in Nova Scotia and Cape Breton can be further delayed. I might say that the action taken by this government has had the effect of continually setting back this date. Attempts have been made for some considerable time to close the mines. A trend of closing mines gained impetus from 1946 to
Coal Industry
1956. This government brought that trend to a halt. Regardless of what is said by hon. members of the opposition, this government is the only government that has taken a genuine interest in the miners of Nova Scotia.
The very determined effort on the part of Dosco to close out No. 4 colliery on January 14, has again been delayed to May 31. It is my hope that something will develop between now and that date which will bring about a further delay of these proposed shutdowns.
I wish now to speak briefly about the so-called new party. Apparently it operates under the delusion that it is going to be the saviour of the Cape Breton miner. The new party has a certain element of the Cape Breton miners believing that this new party is capable of saving the industry. I do not know how beneficial the new party will be, but I remind the Cape Breton miners that there is no hope of salvation to be found in the new party. I think there is very little hope of the new party finding itself elected anywhere. As far as I can see personally, it is simply not going to go over. In fact, I draw that conclusion from some of the remarks that have been made from time to time by hon. members down in the corner of the chamber.
I do not mean to hurt the feelings of the hon. member for Assiniboia (Mr. Argue). I have been given to understand through the press and other media that the man who could have the leadership of the so-called new party merely by snapping his fingers is Mr. Douglas. All that is required, apparently is that he accept the leadership of the so-called new party. I do not really get the drift of this matter. They were labour, they became the C.C.F. and now they are merging with labour and farmers to become the new party. I hope they get the name straightened out before too long so we will know exactly what they are.


Mr. Marlin (Timmins):: Mr. Speaker, I rise to a point of order. Would the hon. gentleman let us know what Premier Douglas has to do with the coal industry?


Mr. McIntosh:: We also have coal out in Saskatchewan.


Malcolm MacInnis: Mr. Speaker, I am very pleased that the hon. member has given me this excellent opportunity to bring to his attention what the potential leader of the so-called new party has had to say about the coal industry.
Hon. members will recall that not too long ago a new party seminar was held in the city of Montreal in which Mr. Douglas played a prominent part. For the benefit and interest

Coal Industry
of the hon. member who directed a question to me I will now quote from newspaper reports relating to that seminar:
Premier Douglas asked what point there would be in nationalizing coal mines or railways when they were obsolete.
Mr. Douglas wanted to know what would be the point in nationalizing the coal industry when he considers it obsolete. How much faith can the miners of Cape Breton, Nova Scotia or any other province in Canada place in the future of coal if this would-be leader ever realizes his ambitions? Of course, I cannot say with certainty what his ambitions are. I am not sure if it is his ambition to lead this group comprised of labour, the C.C.F., the new party or whatever they choose to call themselves. However, Mr. Douglas has flatly gone on record with respect to his attitude toward the coal industry in Canada.
I am very much surprised that Mr. Douglas would tie in the coal industry and the railways. I should hate to think of the position the province of Saskatchewan would be in without the railways. Mr. Douglas has clearly indicated his stand on the coal question. He considers that the coal industry is obsolete and that there is no point in nationalizing it. I am sure that if Mr. Douglas is going to look for any support among the executive of the UMW, which has consistently supported the C.C.F., he will have a lot of explaining to do with respect to this policy.


Mr. Fisher:: He is a good Baptist. He can explain it.


Malcolm MacInnis: I am afraid that even though he is a good Baptist this policy will not be acceptable to the executive of the UMW. I am afraid that Mr. Douglas, even as a good Baptist, will have difficulty explaining this policy to the members of the executive of the UMW. I almost said "members of the executive of the C.C.F." but that would have been all right because the two are practically synonymous.
Nationalization is what the leader of the UMW is promoting right at this moment. He is promoting it on the basis of the Rand report.
This is something I fail to understand. Mr. Sheppard, a so-called authority, recommended that a committee should go from Cape Breton to study production methods in England. That was the suggestion made in this regard. Mr. Sheppard, the expert, recommended that a committee should study production methods in the old country because they have increased their production by 50 per cent as a result of the production methods employed there. Nobody took into consideration, however, that even with a 50 per cent increase in production the industry in the old country is still behind

the production capacity of the Cape Breton mines. It is a ridiculous suggestion to urge that a committee go abroad to examine the production methods in a country where the industry does not have our production capacity per man ton per day. Nevertheless this is the recommendation at which they jumped and which they followed through.


Mr. Speaker:: It being ten o'clock it is my duty, pursuant to section 3 (f) of standing order 26 as provisionally amended, to interrupt these proceedings and put forthwith the question on the motion now before the house.
Motion agreed to and the house went into committee, Mr. Flynn in the chair.
The estimates of the following departments were first taken up and entered for consideration:
DEPARTMENT OP LABOUR General administration-
178. Departmental administration including a grant of $10,000 to Frontier College and the expenses of the international labour conferences, $1,373,104.



DEPARTMENT OF PUBLIC WORKS

[Stage Direction]
329. General administration including a grant of $2,000 to the Canadian Good Roads Association, $10,667,720.
DEPARTMENT OF TRADE AND COMMERCE General administration-
394. Departmental administration, including fees for membership in the international organizations listed in the details of the estimates (also includes the National Industrial Design Council transferred from the national gallery), $3,275,445.
Proceedings reported.

Lionel Chevrier: Mr. Speaker, may I ask the house leader if in announcing the business for tomorrow he will be good enough to state that he will bring in the estimates of the Department of Labour which were called just a moment ago?


George Clyde Nowlan: Mr. Speaker, as has already been indicated I believe, tomorrow the house will deal first with the bill relating to the Mattagami railway which I understand has been reported back from the committee although it is not on today's order paper. If that is the case, it will be the first item dealt with tomorrow. The second item will be No. 9 on today's order paper, the setting up of a sessional committee on railways, air lines and shipping. Having concluded those two items, we will then deal with item No. 8 on today's order paper, the resolution to increase the number of members of the board

of directors of Canadian National Railways from seven to 12. That is the business for tomorrow.


Lionel Chevrier: May I ask the acting house leader whether he will give us the assurance that the estimates of the Department of Labour will be called on Thursday or Friday, as soon as we dispose of these three items?


George Clyde Nowlan: I cannot give any such assurance. In fact, I would inform the hon. member for Laurier and the house that the intention is to deal on Thursday with the estimates of the Department of Citizenship and Immigration including all facets of that department, all matters for which the minister may be responsible such as the national gallery, the film board, the archives and so on. When these are completed on Thursday we will then start to deal with the estimates of the Department of Agriculture and will continue with the estimates of that department on Friday.


Lionel Chevrier: In view of the discussion that has taken place earlier, and I refer particularly to that which took place on February 15 and the questions and answers that were given then, may I ask the acting house leader why the government will not call the estimates of the Department of Labour so that we can discuss certain matters that come under that department?


George Clyde Nowlan: There was a discussion on February 15 in which reference was made to the calling of the Department of Labour. At that time the Prime Minister said:
Business of the House
-if the house so wills, among the estimates to be called will be those of the Department of Labour.
Monday came and we had a supply motion but the question of labour was not dealt with directly. No promise or suggestion of a promise was made by the Prime Minister, and we are proceeding with the estimates of the departments as I have outlined.


Lionel Chevrier: In view of what was said and what the minister has read, I wonder why he will not give us the opportunity to discuss the estimates of the Department of Labour?


George Clyde Nowlan: The Department of Labour was called tonight. There was an opportunity to discuss labour matters in the last two days, and it is considered to be in the interests of the administration of the business of the house and in the public interest to proceed with the departments I have outlined.


Lionel Chevrier: I do not want to prolong this unduly but we did not have an opportunity to deal with this matter as we would if the estimates were called, because when they are called the minister is before the committee with his officials and we then have an opportunity to put questions and get answers which we could not do on a motion to go into supply. That is the only reason I was pleading with the minister to call them.


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

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

Mr. White: 1.	How many non-operating employees were with the Canadian National Railways as of January 1, 1950?
2.	Of this number, how many were engaged in a supervisory capacity?
3.	How many non-operating employees were with the Canadian National Railways as of January 1, 1960?
4.	Of this number, how many were engaged in a supervisory capacity?
Answer by: Hon. Leon Balcer (Minister of
Transport):
The management of the Canadian National Railways advise as follows:
1.	Monthly data for 1950 are incomplete, and for this period annual figures have been substituted. Comparable annual data for I960 will not be available for another month but the average for the first 11 months of 1960 will permit a reasonable comparison to be made. The average number of non-operating employees for the year 1950 and for the first 11 months of 1960 were as follows:
Year 1950, 75,114; average, Jan.-Nov. 1960, 67,671.
2.	Since many supervisory personnel have jurisdiction over other employee groups as well as the non-operating group, it is not possible to identify separately those who have supervisory jurisdiction only over non-operating employees. The total number of supervisory personnel (union and non-union) on the payroll was as follows:
Year, 1950, 8,669; average, Jan.-Nov. 1960, 9,839.
These figures do not include those supervisory personnel who are not separately identified as such in the Canadian classification of railway employees in accordance with which personnel statistics are maintained. The numbers involved, however, are relatively small and are omitted in each of the three periods covered, thereby providing some measure of consistency to the data to permit comparability.
3. Answered by No. 1.
4. Answered by No. 2.


C.N.R. PERSONNEL
Mr. Chevrier: 1.	What was the number of non-operating employees of the Canadian National Railways in January, 1939, January, 1942, and 1960?
2.	What was the number of supervisory officers engaged in supervision of these employees in 1939, 1942 and 1960?
3.	What was the total number of supervisory officers on the payroll in 1939, 1942 and 1960?
4.	How many non-scheduled employees (nonsupervisory) were there in 1939, 1942 and 1960?
5.	How many "methods" employees are currently employed by the company?
Answer by: Hon. Leon Balcer (Minister of
Transport):
The management of the Canadian National Railways advise as follows:
1.	Monthly data for 1939 and 1942 are incomplete, and for these periods annual figures have been substituted. Comparable annual data for 1960 will not be available for another month but the average for the first 11 months of 1960 will permit a reasonable comparison to be made. The average numbers of non-operating employees for the years 1939 and 1942 and for the first 11 months of 1960 were as follows:
Year, 1939, 51,146; year, 1942, 60,604; average Jan.-Nov. 1960, 67,671.
2.	Since many supervisory personnel have jurisdiction over other employee groups as well as the non-operating group, it is not possible to identify separately those who have supervisory jurisdiction only over non-operating employees.
3.	The total number of supervisory personnel (union and non-union) on the payroll was as follows:
Year, 1939, 6,972; year, 1942, 7,394; average Jan.-Nov. 1960, 9,839.
These figures do not include those supervisory personnel who are not separately identified as such in the Canadian classification of railway employees in accordance with which personnel statistics are maintained. The numbers involved, however, are relatively small and are omitted in each of the three periods covered, thereby providing some measure of consistency to the data to permit comparability.
4.	As pointed out in answer to question No. 3, personnel statistics are maintained in accordance with the Canadian classification of railway employees and do not permit separate identification of non-scheduled employees (non-supervisory). In addition, since company check-off of union dues commenced on April 1, 1953, prior separate identification of non-scheduled employees as opposed to scheduled employees was not possible.
5.	As at September 1960, there were 175 "methods" employees employed by the Canadian National Railways on Canadian lines. These include work study analysts, methods analysts, machine analysts and material handling analysts.


INDIAN BAND TRUST ACCOUNTS
Mr. Howard: 1.	What is the amount of money held in trust for Indian bands under (a) capital account, and (b) revenue account?
2.	Is any of this money invested in securities, and, if so, how much, and in what securities?
3.	Have any changes been made in such securities since January 1, 1955, and, if so, (a) what specific
Questions
changes? (b) have any losses been incurred, and, if so, what losses, and on what dates?
Answer by: Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):
1.	(a) $23,802,924.84, (b) $3,550,910.02, (as of January 31, 1961).
2.	No.
3.	Not applicable.
90205-6-146


APPENDIX
[Stage Direction]
The security council
Having considered the situation in the Congo,
Having learnt with deep regret the announcement of the killing of the Congolese leaders, Mr. Patrice Lumumba, Mr. Maurice Mpolo and Mr. Joseph Okito,
Deeply concerned at the grave repercussions of these crimes and the danger of widespread civil war and bloodshed in the Congo and the threat to international peace and security,
Noting the report of the secretary general's special representative (S/4691) dated February 12 bringing to light the development of a serious civil war situation and preparations therefor,
1.	Urges that the United Nations take immediately all appropriate measures to prevent the occurrence of civil war in the Congo, including arrangements for cease-fires, the halting of all military operations, the prevention of clashes, and the use of force, if necessary, in the last resort;
2.	Urges that measures be taken for the immediate withdrawal and evacuation from the Congo of all Belgian and other foreign military and para-military personnel and political advisers not under United Nations command, and mercenaries;
3.	Calls upon all states to take immediate and energetic measures to prevent the departure of such personnel for the Congo from their territories, and for the denial of transit and other facilities to them;
4.	Decides that an immediate and impartial investigation be held in order to ascertain the circumstances of the death of Mr. Lumumba and his colleagues and that the perpetrators of these crimes be punished;
5.	Reaffirms the security council resolutions of July 14, July 22 and August 9, 1960 and the United Nations general assembly resolution 1474 (ES-IV) of September 20, 1960 and reminds all states of their obligation under these resolutions.
[Stage Direction]
The security council
Gravely concerned at the continuing deterioration in the Congo, and the prevalence of conditions which seriously imperil peace and order, and the unity and territorial integrity of the Congo, and threaten international peace and security,
Noting with deep regret and concern the systematic violations of human rights and fundamental freedoms and the general absence of the rule of law in the Congo,
Recognizing the imperative necessity of the restoration of parliamentary institutions in the Congo in accordance with the fundamental law of the country, so that the will of the people should be reflected through the freely elected parliament,
Convinced that the solution of the problem of the Congo lies in the hands of the Congolese people themselves without any interference from outside and that there can be no solution without conciliation,
Convinced further that the imposition of any solution, including the formation of any government not based on genuine conciliation would, far from settling any issues, greatly enhance the dangers of conflict within the Congo and the threat to international peace and security,
1.	Urges the convening of the parliament and the taking of necessary protective measures in that connection;
2.	Urges that the Congolese armed units and personnel should be reorganized and brought under discipline and control, and arrangements be made on impartial and equitable bases to that end and with a view to the elimination of any possibility of interference by such units and personnel in the political life of the Congo;
3.	Calls upon all states to extend their full co-operation and assistance and to take such measures as may be necessary on their part, for the implementation of this resolution.
[Stage Direction]
Wednesday, February 22, 1961