1961-07-06

Hon. Alvin Hamilton (Minister of Agriculture):: Mr. Speaker, I should like to advise the house that initial payments for the basic grades of western wheat, oats and barley have been approved by the government and established for the crop year 1961-62. These initial payments have been set at the same level as those in effect for the present crop year.
The initial payment for wheat, effective August 1 next, is $1.40 per bushel, basis No. 1 northern, in store Fort William-Port Arthur or Vancouver. The initial payment for oats is 60 cents per bushel, basis No. 2 Canada western, in store Fort William-Port Arthur. The initial payment for barley is 96 cents per bushel, basis No. 3 Canada western six-row, in store Fort William-Port Arthur.
For all other grades of wheat, oats and barley the initial payments effective for the 1961-62 crop year will be established at a later date on the recommendation of the Canadian wheat board.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, not being well informed on this question I shall take this announcement as notice and refer it to my leader.



ANNOUNCEMENT OF INCREASE IN MAXIMUM QUOTA

Francis Alvin George Hamilton: Mr. Speaker, to show the concern of the Canadian wheat board over the drought situation in the west and the steps being taken to alleviate this problem, I wish to make the following statement. I wish to inform the house that the Canadian wheat board has announced that the maximum quota for the present crop year will be 7 bushels per specified acre. The first authorizations for the quota at points where sufficient space is available to warrant the increase have already been issued to the trade.
For the balance of the crop year, in so far as possible the Canadian wheat board will endeavour to give all producers an opportunity to deliver the maximum quota. Therefore effective Monday, July 3, the key agent
at a delivery point where producers have had an opportunity to deliver a 6 bushel quota and where space is available to warrant an increase to 7 bushels per specified acre should, with the consent of the other agents at the point, request the quota department of the Canadian wheat board, Winnipeg, to authorize an increase to that level.
It should be understood, however, that in authorizing a 7 bushel quota at such delivery points the board does not undertake that sufficient space will be made available to enable all producers to deliver the maximum quota. The significance of this, Mr. Speaker, is that the responsibility of requesting the 7 bushel quota now rests with the elevator agents.

On the orders of the day:


Mr. Jack McIntosh (Swift Current-Maple Creek):: Mr. Speaker, I should like to address a question to the Minister of Agriculture arising out of his answer this morning. I should like to break it down into three parts.
First, can the points of delivery take it that the minister's announcement is equivalent to a buying order for each point equal to 7 bushels? Second, what assurance have these elevator agents that box cars will be available for delivery? Third, what is the situation in the event that elevators of the key personnel to which he referred are full and the other elevators are empty or have storage space?


Mr. Chevrier:: Order paper.


Francis Alvin George Hamilton: Mr. Speaker, I have some difficulty in answering the first question, in so far as who is responsible. The main point of my statement was that once the 6-bushel quota has been granted by the wheat board the responsibility lies on the local agents to call for a 7-bushel quota.
We certainly cannot give assurance of box cars, but I think, with the co-operation we are getting from the railways and the terminals these days, we could meet pretty well all the requirements.
The third part of the hon. member's question about the key agent is a touchy one in western Canada. The key agent is usually the leading recipient of grain in that particular town. If his elevators happen to be full naturally he will tend not to request an additional quota. I think it is up to the other

Dominion-Provincial Relations agents to persuade him that they have space and that they should be able to get the cars. What we and the wheat board are really trying to do here is first of all to put the responsibility on the local elevator agents to decide whether or not grain should be moved out of that district; second, to put the responsibility on the agents to let the farmers know that the agents themselves decide whether they go to a 7-bushel quota.


John (Jack) McIntosh: A supplementary question. The minister referred to those stations or points that were on a 6-bushel quota. As he well knows, many points in Saskatchewan are on a 5-bushel quota. Does the same thing apply to a 5-bushel quota?


Francis Alvin George Hamilton: No, Mr. Speaker. I think the intention of the wheat board is that very shortly almost all points will be on the 6-bushel quota and we are assuming that the 6 bushels will be arrived at some time this week. From there on the local agents will have to decide whether they go up to 7 bushels.



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

Hon. Donald M. Fleming (Minister of Finance) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to authorize tax collection agreements with the governments of the provinces and to provide that the minister may pay to a province, out of the consolidated revenue fund, in respect of any fiscal year in the period commencing on the 1st day of April, 1962 and ending on the 31st day of March, 1967,
(a)	a tax equalization payment:
(b)	a provincial revenue stabilization payment;
(c)	additional annual grants of ten and a half million dollars to each of the provinces of Nova Scotia, New Brunswick and Newfoundland, and of three and a half million dollars to the province of Prince Edward Island;
(d)	a further additional annual grant of eight million dollars to the province of Newfoundland;
(e)	where a province does not levy a succession duty, an amount equal to the standard estate tax applicable to the province for the fiscal year; and
(f)	advance payments on account of amounts collected under a tax collection agreement that may be entered into with the province.


Mr. Speaker:: Is the Minister of Finance asking for leave to alter this order to read "later this day"?


Mr. Churchill:: No, Mr. Speaker, not later this day.


[Stage Direction]
Motion agreed to.


Hon. D. J. Walker (Minister of Public Works):: Mr. Speaker, may I revert to motions?


Mr. Speaker:: Has the minister leave to revert to motions?


Mr. Pickersgill:: Would the minister indicate why he wishes to revert to motions?


David James Walker: To make an announcement.


John Whitney Pickersgill: Agreed.


David James Walker: I am sorry; I was talking to my neighbour.


Mr. Speaker:: Has the minister leave to revert to motions?


Some hon. Members:: Agreed.


David James Walker: Mr. Speaker, the first six months period of the housing program of the government is now over. I have been asked by a great many hon. members to make a short announcement, which I have here. As you know, Mr. Speaker, the government of Canada have guaranteed hundreds of millions of dollars through this parliament and this matter is of great interest to all hon. members-


Some hon. Members:: Order.


Mr. Speaker:: Order. Before the minister proceeds, may I ask him whether the announcement is a statement of housing statistics for the past six months?


Mr. Mariin (Essex East):: It is a propaganda effort.


David James Walker: Statistics, of necessity, must be in the announcement, because I cannot make an announcement without giving statistics.


Mr. Speaker:: If it is simply a statistical announcement I think it should be made by leave of the house. If it is a matter of policy which the minister is announcing, he has the right to make such a statement.


John Whitney Pickersgill: It is just a piece of propaganda.


David James Walker: Mr. Speaker, with the greatest respect, there are no political overtones to this.


An hon. Member:: Undertones.


David James Walker: Everybody has been interested in housing and, with the greatest respect, I had no chance on the consideration of my estimates because my friend the hon. member for Nipissing was not here-


Some hon. Members:: Order.


Mr. Speaker:: Order. Having regard to what the minister said, has the minister leave to proceed?


Some hon. Members:: No.


An hon. Member:: Closure.


Mr. Robichaud:: You are waking up.



BANK OF CANADA ACT


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of ihe Opposition):: I wonder if the Prime Minister could explain to the house why we are not proceeding with the Bank of Canada legislation this day, a bill which the government once considered it was urgent to pass quickly?


Right Hon. J. G. Diefenbaker (Prime Minister):: I am very happy to answer that question. The hon. member for Essex East said the day before yesterday that the fight was going to continue for ten days, so we wanted to get some legislation before the house so that it would be available for the Senate at once.


Paul Joseph James Martin: You are afraid to go on. You are afraid to exercise the bill of rights.


Mr. Speaker:: The hon. member for Essex East has not been recognized, nor did he rise.


Paul Joseph James Martin: I said the Prime Minister was afraid to exercise the bill of rights.


Mr. Speaker:: I heard the hon. member, and may I say it was not proper for him to make such a remark from his seat.


Paul Joseph James Martin: I agree fully with Your Honour. Your observation is correct, but I will say this, that when the Prime Minister gives us the example in that particular it is understandable that other members should follow his abuse of the rule.



REPORTED FINANCIAL IRREGULARITIES RESPECTING FORMER SECRETARY OF STATE

[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: wish to address a question to the Prime Minister. In view of the statement of the Prime Minister on June 23 and the statement of the Minister of Justice on June 24 with reference to obtaining the transcript of evidence concerning the former secretary of state, now Senator Courtemanche; and in view of the fact that the commission finished hearing
Inquiries of the Ministry evidence on June 30, is the Prime Minister now in a position to state what course he intends to follow?


John George Diefenbaker: As I stated earlier, a full examination will be made of the transcript of evidence taken by the commission. My understanding is that the commission has now completed the hearing of evidence and has adjourned until September. We asked for the transmission not only of the evidence which was originally given but also of the evidence given subsequently by Senator Courtemanche and, I think, by one or two others.
That evidence, the latter evidence, came into the hands of the Minister of Justice some days ago and he was going to make, as is proper, a full and complete examination thereof. Unfortunately, as the hon. member knows, the Minister of Justice had to leave for his home by reason of personal bereavement. As soon as he comes back-I suggest there should be this necessary delay-and an examination has been made, a very definite statement will be made regarding this whole matter.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. R. J. McCleave (Halifax):: I have a question to ask the Minister of Public Works, of which I have given him notice. Can the minister give the house some information on housing construction in Canada during the first six months of this year?


Mr. J. R. Garland (Nipissing):: On a point of order, Mr. Speaker. Are the rules of the house to be used in this way, first to plant a question and then, in effect, to revert to motions to build up and create an impression-


Mr. Speaker:: If the hon. member will state his objection to the question I shall be glad to consider it.


John Richard Garland: This has come up so often that I hate to trouble the house with it, but when we ask similar questions we are ruled out of order.


An hon. Member:: Why?


Mr. Speaker:: Perhaps the hon. member would assist me by indicating the objection he has to the question itself.


John Richard Garland: It has always been my understanding that statistical information cannot be given at this particular time.


John Whitney Pickersgill: I wonder whether I may be allowed to say a word regarding the point of order, Mr. Speaker?

Inquiries of the Ministry


Mr. Speaker:: Order. I think I should first hear the hon. member who posed the question. I take it the point is that this is not a matter of urgency?


John Richard Garland: That is right, Mr. Speaker, This involves statistical information which the minister is seeking by devious methods to place on the record in order to create the impression that all is well when all is not well.


Robert Jardine McCleave: Mr. Speaker, without getting into any question of good news or bad news, I should say it has been the practice of this house on recent occasions when notice has been properly given-and I can assure the house that it was given this morning-the minister is allowed to make a brief statement.


An hon. Member:: You are all wet.


John Whitney Pickersgill: Mr. Speaker, Your Honour has been very rigorous in the application to this side of the house-by this side of the house I mean the opposition, and not the senior member for Halifax-of the rule that questions must be of an urgent nature. A summary covering the last six months respecting housing given today rather than tomorrow or on some other occasion by no stretch of the rules, except a desire on the part of hon. gentlemen opposite for party propaganda, could be regarded as an urgent matter.


Lester Bowles Pearson: Mr. Speaker, on the point of order-


Mr. Speaker:: Order. I think the Leader of the Opposition will find it unnecessary to speak, because I am of the opinion that this is not the type of question which ought to be asked on orders of the day, with all due respect to the interest which exists in this matter. The question concerns statistical information which is published by the dominion bureau of statistics and the minister's department and is equally available to all members and, therefore, should not take the time of the house at this time.


Mr. M. J. A. Lambert (Edmonton West):: Mr. Speaker, on the point of order, it has been ruled by your Honour on a number of occasions when members of the opposition have asked questions of a similar nature that if the minister is prepared to answer, and has received notice, the choice is left to the minister to answer or not. That has happened on many occasions. If the circumstances are the same today in Your Honour's estimation and the minister is prepared to answer, he should be allowed to do so.


Lester Bowles Pearson: Mr. Speaker, in regard to that point, if the minister in effect received notice of this question why did he try to anticipate questions on orders of the day by giving the information during motions?


Mr. Speaker:: Order. I may have come to a wrong conclusion, but I have come to a conclusion and have expressed it, and I think the house should accept it unless there is a desire to appeal my ruling.
(Translation):



INQUIRY AS TO NEW CONSTRUCTION POLICY

[Stage Direction]
On the orders of the day:
Mr. Remi Paul (Berlhier-Maskinonge-Delanaudiere):: Mr. Speaker, I should like to direct a question to the Minister of Public Works, of which I have given him notice.
Could the minister tell the house whether it is true that his department is considering a new policy to further promote housing construction in Canada?


David James Walker: Mr. Speaker, I am glad that the hon. member has asked that question. Unfortunately, the opposition has refused to let me break the good news about the first six months of 1961. I shall therefore have to pass it along to parliamentary correspondents. Let me say, however, that this problem is under constant review and that any new decision in the field of housing construction will be announced in the house.



TRANSPORT


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, I should like to put a question to the Minister of Transport (Mr. Balcer).
Is the minister in a position to make the statement he promised yesterday with regard to the Soulanges canal? In a word, I should like to know whether the government is now prepared to turn over that canal to the Quebec government.


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, I said yesterday that a decision had been taken and that it would be announced today.
It is still early in the day. The decision will certainly be made known today.

(Text):



EAST-WEST TRANSPORT LTD.    INQUIRY AS TO RATE CUTTING

[Stage Direction]
On the orders of the day:
Mr. J. S. Speakman (Weiaskiwin):: Mr. Speaker, I should like to ask the Minister of Transport a question based on a letter received this morning, probably by many members. My question is, does the minister know that the East-West Transport Limited, a crown owned, financed and subsidized truck line, is one of the largest rate cutters in the country?


Léon Balcer: Mr. Speaker, I have no particular knowledge of the detailed activities of the company in question, but I can assure the hon. member that I will bring this matter to the attention of the management of the Canadian National Railways.



INCOME TAX


[Stage Direction]
On the orders of the day:
Hon. J. W. Monieilh (Acting Minister of National Revenue):: Mr. Speaker, yesterday the hon. members for Hull and Laurier inquired in respect to reported activities on the part of taxation officials in the Montreal area. The report referred to concerned a written authorization to amend or cancel charitable receipts, and is part of the administrative procedure which is applicable everywhere in Canada where the issuer of the receipt is relying on information supplied him by the taxpayers. This procedure is being utilized after consultations by officers of the department with religious authorities, and requires no specific authorization from the minister.



LIVESTOCK


[Stage Direction]
On the orders of the day:
Mr. R. R. Soulham (Moose Mountain):: should like to direct a question to the Minister of Agriculture. In view of the heavy sales of livestock in the west during the past several weeks owing to the serious drought and feed shortages, could the minister indicate to the house why market prices have risen in the past week?


Francis Alvin George Hamilton: I think we are all aware of the fact that the market price has gone up on the Winnipeg market in the last two or three days. I understand the big reason for the stiffening of prices was my announcement last Sunday of our intention to use floor prices if necessary; second, is the fact that
Inquiries of the Ministry a large number of United States buyers have appeared on the market in the last while. I presume this is the reason for the stiffening of prices. I would like to add, Mr. Speaker, it would be advisable for the eastern feeders to step in and get some of these cattle before they all go to the United States.



ROYAL CANADIAN AIR FORCE


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to address a question to the Minister of National Defence. I apologize for not sending him notice, but I have just received the press dispatch from Vancouver. My question is based on the following paragraph which appeared in the Sun yesterday on information received from Flight Lieutenant Marshal Bluck:
Pots, Pans Shield R.C.A.F.
Pots and pans have become part of Canada's defences.
They were strung around 14 aircraft parked at seven secret sites in British Columbia Monday night in a mock defence exercise.
They clanged loudly enough for airmen to trip up 11 foreign saboteurs, the air force proudly announced today.
The operation was a test of security and vigilance according to the information received by the Sun.
Would the minister inform the house whether this operation and the purchase of the pots and pans was done with his sanction and knowledge?


Hon. D. S. Harkness (Minisier of Naiional Revenue):: Mr. Speaker, I do not know anything about this matter. I would therefore have to make inquiries and find out, but I would presume that the pots and pans in question show that there are more uses for pots and pans than cooking.



SHIPPING


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, may I direct a question to the Minister of Transport. Has the minister taken cognizance of a statement appearing in this morning's Gazette, attributed to one of his officials, that the lowering of the level of the St. Lawrence river below Montreal is causing serious concern, and in which it is stated that the level could fall to 34 feet this season, making the channel unusable for many vessels? Can the minister indicate the cause of this lowering of the level, and advise whether a study of this matter is being made by his department?

Inquiries of the Ministry


Léon Balcer: Mr. Speaker, the factors affecting the level of the St. Lawrence river from. Montreal down are very complicated, relating to power and navigation works, general climatic conditions as affected by land use, and so on. A complete statement on the subject would be a very lengthy matter.
I can assure the hon. member that the question of water levels at Montreal and below is receiving extensive study and, in fact, we plan over the next year to construct a major model of the St. Lawrence ship canal covering Montreal harbour and below, with a view to carrying on extensive tests which we believe will help us to deal with this matter.



INQUIRY AS TO REGULATIONS RESPECTING SHIPBUILDING SUBSIDIES

[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, I should like to direct a question to the Minister of Transport. Now that 20 days have elapsed since he gave the house an undertaking to announce in two weeks the regulations governing assistance to the shipbuilding industry, is the minister yet in a position to announce them?


Léon Balcer: The answer is no, Mr. Speaker.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I wonder whether the Prime Minister is in a position to answer the question I asked him on Tuesday about unemployment conditions in Springhill and the possibility of applying provisions similar to the program for Cape Breton island.


John George Diefenbaker: Mr. Speaker, I express regret to the Leader of the Opposition. I should have had an answer available, and I shall have it at the earliest possible time.


John Whitney Pickersgill: A supplementary question, Mr. Speaker. Has the Prime Minister yet received a report from the Canadian National Railways about the possibility of keeping open the spur line from the C.N.R. into Springhill?



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. H. W. Danforth (Kent, Onl.):: Mr. Speaker, may I direct a question to the Minister of Agriculture. Can the minister in-


dicate whether his department has yet arrived at a decision regarding the establishment of support prices this year on winter wheat and soybeans and, if so, what these prices might be?


Francis Alvin George Hamilton: Mr. Speaker, I had intended later today to make a formal announcement on this subject. I can now inform the house that the government has decided on this year's support prices for both soybeans and winter wheat. The price for soybeans will be $2.13 a bushel, which is 100 per cent of the base price. The price on winter wheat will be the same as last year, $1.39, which is 83 per cent of the base price.


Paul Joseph James Martin: May I ask
a supplementary question, Mr. Speaker. In doing so I thank the minister for answering the question which the house will recall I asked over five months ago.


John Whitney Pickersgill: And again yesterday.


Paul Joseph James Martin: Does the minister not realize that the price he has announced today is, of course, almost 35 cents lower than the price asked by the soybean growers of southwestern Ontario?


Francis Alvin George Hamilton: Yes, the minister is aware of the request of the soybean growers. I wish to point out to the hon. member for Essex East that he has never understood how this legislation works. What we do is put in a support price to let the farmers know that it looks pretty good for soybeans this year. We have raised it 13 cents over the price of last year to indicate to the farmers that it is safe to go ahead and produce a few more soybeans.


Paul Joseph James Martin: Mr. Speaker, now that my question with regard to soybeans has borne fruit-


Mr. Speaker:: I am sorry to interrupt the hon. gentleman, but I recognized the hon. member for St. Denis. The hon. member for St. Denis has indicated his intention to yield the floor to the hon. member for Essex East.


Mr. Marlin (Essex Easi):: Thank you, Mr. Speaker, but I recognize my colleague and yield the floor to him.
(Translation):



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Mr. Azellus Denis (St. Denis):: Mr. Speaker, I am in no hurry to ask this question in view of the fact that the minister to which it is directed is in no hurry himself.

Has the Secretary of State reconsidered the possibility of granting annual leave with pay to part time employees, in view of the fact that he recently promised to the hon. members for St. Henry (Mr. Lessard) and St. Denis (Mr. Denis) to consider the matter?


Hon. Noel Dorion (Secretary of State):: Mr. Speaker, as I have already indicated, that is a problem involving not only the Secretary of State department but a number of departments. In other words, it is really a matter of government policy. I can assure the hon. member that for my part, I have already begun to consider the problem and hope to be in a position to make a statement on the matter in the near future.


Azellus Denis: Could the Secretary of State indicate to the house when he thinks the cabinet will once more reconsider the matter?


Noël Dorion: Unfortunately, I cannot answer that question because the problem is not my sole responsibility.


Azellus Denis: I should like to know, Mr. Speaker, when the house can expect a statement of policy on the matter?


Noël Dorion: I have nothing to add, because, as I say, the problem is not my sole responsibility.
(Text):



CUSTOMS TARIFF


[Stage Direction]
On the order:
Consideration of the amendment made by the Senate to Bill C-72, an act to amend the Customs Tariff-the Minister of Finance.
Donald Methuen Fleming: Mr. Speaker, hon. members will not need to be reminded that Bill No. C-72, an act to amend the Customs Tariff, is one of the bills introduced arising out of the supplementary budget presented to the house on December 20 last. It is a bill that received extended discussion in this house before proceeding to the other place.


Lionel Chevrier: Mr. Speaker, may I interrupt the minister for a moment? We do not have the amendment. I think the amendments are normally on the table.


Donald Methuen Fleming: Mr. Speaker, the message of the Senate-
Customs Tariff


Lionel Chevrier: On a point of order, Mr. Speaker, I think we should have the amendment before the house.


Donald Methuen Fleming: The amendment is before us, Mr. Speaker, and has been since June 15. The message of the Senate containing the amendment which is proposed by the other place was received by this house on June 15 and is recorded in Votes and Proceedings of this house of that date at page 671. This, of course, is the practice of the house. When Senate amendments come to the house they appear in Votes and Proceedings but are not transcribed in extenso on the order paper of this house.
At page 671 of Votes and Processings the following passage from the message from the Senate will be found:
A message was received from the Senate informing this house that the Senate had passed Bill No. C-72, an act to amend the Customs Tariff, with the following amendment:
Page 1, lines 22 and 23: Strike out lines 22 and 23 and substitute therefor the following:
"(3) Subject only to an appeal to the tariff board, the decision of which board shall be final and in respect of which appeal the provisions of section 44 of the Customs Act shall apply mutatis mutandis, the minister shall decide the following matters:".
Hon. members accordingly will recognize that the Senate has proposed one amendment by which it is intended that a right of appeal in limited form should be extended; that such right of appeal should apply in the cases contemplated in Bill No. C-72; and that the appeal shall not be of the same nature as the appeal provisions now in effect, that is to say an appeal to the tariff board with further appeals in certain cases and on certain grounds to the exchequer court and the Supreme Court of Canada, but an appeal to the tariff board whose decision is to become final.
The issue therefore presented to the house is whether the house should accept or reject the Senate amendment. The government cannot accept it, and it asks the house therefore to reject the amendment proposed by the Senate.
Hon. members will not need to be reminded that the Customs Tariff is certainly a revenue statute. Bill No. C-72, to amend the Customs Tariff, is a fiscal measure. It was one of the budget bills. It is clearly a revenue bill. It is no answer to say that the particular amendment does not expressly relate in its terms to particular tax rates. The bill itself is a revenue measure. The main statute which it purports to amend is by any standard a revenue measure, a fiscal enactment.
I shall not delay the house, Mr. Speaker, by reminding it of the important place which this amending bill held in the government's program for enlargement of job opportunities in Canada, and of the stress that was laid

Customs Tariff
upon that fact in the earlier debates of this session. I am sure that matter is fresh in the minds of hon. members. I therefore turn directly to the question presented to us by the Senate amendment.
I have to say in general that the amendment is an unworkable one and that it would result in frustrating the purposes of the bill to which it purports to be an amendment. It would result in delays that I am sure the house could not possibly condone. I make these brief observations before proceeding to a leading element that challenges the house in the light of the action taken by the Senate. The suggested amendment is open to these criticisms.
1.	The delays and uncertainty which would be brought about by having the questions of "normal Canadian consumption", "shelf" goods and whether goods are "custom made to specifications" subject to an appeal to the tariff board may discourage Canadian producers from taking an active interest in such new business.
2.	Notwithstanding what has been said regarding how swiftly the tariff board might be expected to deal with such cases-indeed, Mr. Speaker, it was said that they could be disposed of within a period of 60 days-the bald fact is that on June 13, to take a recent date, the tariff board issued a tentative schedule for the hearing of appeals in November and December of this year and in February, April and June of 1962. Such is the extent of the backlog, and such is the measure of the delay that must result in the inscription of any more appeals or the creation of procedure for more appeals under our statutes.
Included among these cases which have already been set down for hearing in this group of appeals now standing for hearing up to June of 1962 are three involving class or kind rulings. These are listed for hearing eight months to 10 months hence. Appeal No. 599, which was accepted by the board in November, 1960, is scheduled for hearing in February, 1962, while appeals Nos. 600 and 606, which were accepted in November, 1960 and January, 1961 respectively, are listed for hearing in April, 1962.
3.	The anomaly of having a portion of the class or kind provisions subject to appeal to the tariff board only while other features of the legislation allow the filing of appeals beyond the board to the Exchequer Court of Canada and to the Supreme Court of Canada. This anomaly, I am sure, requires little further comment.
Under the amendment, first, the normal Canadian consumption of shelf goods; second, whether goods are custom made to specifications; and third, whether adequate facilities exist in Canada for the economic production

of custom made goods within a reasonable period of time would be appealable to the tariff board only. The questions which could be taken before the courts include, first, whether shelf goods are of approximately the same class or kind as goods made in Canada; second, the determination of the amount of Canadian production; and third, whether the quantity manufactured in Canada does in fact constitute a minimum of 10 per cent of normal Canadian consumption.
The fourth ground of criticism and the fourth reason why such an amendment would be quite unworkable and accordingly unacceptable is the possibility that the phrase "custom made to specifications" may be construed as applying to a much wider range of goods than is presently contemplated, such as articles which may merely differ in quality, capacity, size, style, etc.
These observations are all that I am sure I need to detain the house in mailing in order to point out the unworkability of the amendment proposed by the Senate. However, I should like to pass now to something which is fundamental and which in effect presents the house with an issue with important constitutional implications. The house is aware of the rule in regard to the prerogatives of this house respecting money bills. This is the problem presented now in relation to this present bill and the amendment proposed.
Rule 63 of the house, Mr. Speaker, which you applied on a previous occasion, reads as follows:
63. All aids and supplies granted to Her Majesty by the parliament of Canada, are the sole gift of the House of Commons, and all bills for granting such aids and supplies ought to begin with the house, as it is the undoubted right of the house to direct, limit, and appoint in all such bills, the ends, purposes, considerations, conditions, limitations and qualifications of such grants, which are not alterable by the Senate.
Mr. Speaker, that rule was applied by yourself to an amendment to the Income Tax Act proposed by the Senate in the 1959 session. It gave rise to debate in this house on July 14 and July 18 of that session. May I just remind hon. members of the circumstances of that occasion, because there we have a complete precedent created by this present parliament. We do not even need to go back to statements on the question in earlier parliaments, although there are a number of them.
In the 1958 session this house had passed a bill, No. C-48, to amend the Income Tax Act. When that bill went to the other place the Senate introduced certain amendments. The issue before the house turned on a particular amendment. That amendment was not one that purported to state rates of taxation. It was an amendment to section 71 of

the act which raised the question whether so-called foreign investment corporations should or should not be continued with an open-ended clause, or whether steps should be taken to prevent the creation of more of such corporations with the privileged tax position which such corporations enjoyed. It was on that amendment, Mr. Speaker-an amendment, as I say, which did not purport to deal with a particular rate of taxation-* that this house took its stand.
When the matter came up on July 14 you, Mr. Speaker, raised the question of order under standing order 63 which I just now read. The matter stood over and came up for debate on July 18. At that time the house took its position by decision that I think can be regarded as unanimous. There was certainly no division in the house, and there was no contrary opinion expressed. The house stood on the ground that this amendment to the Income Tax Act affected a money bill and there was no power in the Senate, under the constitution, to amend a money bill. This was not a supply motion; this was not a bill relating to the appropriation of money; it was a bill to amend the Income Tax Act. So I say, Mr. Speaker, the case is completely on all fours with the case now under debate.
Again I remind the house that it was not a clause in the Income Tax Act which related expressly to the rates of taxation. It was a clause to determine whether section 71 should be permitted to have continuing effect in relation to foreign business corporations. The house took its stand on these matters. Reference was made to the position taken by Sir Wilfrid Laurier in other sessions. The Leader of the Opposition concurred in the position, this historic position on which the government took its stand, and the house asserted that the amendment introduced by the Senate could not be accepted because it infringed upon the prerogative of this house to deal with money bills, which are not open to amendment by the Senate.
For these reasons, Mr. Speaker, I accordingly move:
That a message be sent to the Senate to acquaint Their Honours that this house disagrees with the amendment made by the Senate to Bill No. C-72, an act to amend the Customs Tariff, for the following reason:
The amendment infringes the sole and undoubted right of the Commons to impose taxation; it alters the application of taxes and interferes with the public revenue.


Lester Bowles Pearson: Mr. Speaker, this motion has just been made available to us-


Mr. Speaker:: Order. Before the hon. member proceeds I should place the motion before the house, and I shall do so unless any hon. member wishes to raise a technical objection.
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John Whitney Pickersgill: Mr. Speaker, I wonder whether I might raise the point as to whether notice of this motion is required. I am raising the question solely for information and not to make objection.


Donald Methuen Fleming: Mr. Speaker, I think the rule is that notice is not required where the house is not accepting the amendment. The point which you raised on July 14, 1959 was that if a particular amendment was proposed to be accepted, notice must be given, but as to an amendment that was being rejected, no notice was required. When the matter stood over until July 18 for hearing you raised the matter again, as reported at page 6402 of Hansard when you said:
Before the Leader of the Opposition speaks, may I say this. I take it that the Minister of Finance considers that the proposed amendment does not now infringe on standing order 63 by reason of the fact that the remaining amendment does not alter any of the conditions, etc., of the grants involved.
To that observation I replied:
Exactly so, Mr. Speaker.
So when the motion simply stands upon and reasserts the provisions made by the House of Commons, no notice is required. Notice would be required if the house were being asked to accept an amendment introduced by the Senate. I think the rule is quite clear in standing order 63, and I may say it has always been the practice of the house that notice has not been required in cases where the house is standing on its original enactment and is not accepting the amendment proposed by the Senate.


Lester Bowles Pearson: Mr. Speaker, on the point with which the minister has been dealing, and which was raised by my hon. friend from Bonavista-Twillingate, the minister states that the motion is one of rejection of the amendment and not acceptance, and therefore no notice is required. I just bring to your attention, Mr. Speaker, the fact that the motion is not simply one of rejection, but it indicates the reasons for that rejection. We are asked 

and I am not at the moment complaining about this-to debate this motion immediately, without notice. The motion includes certain reasons why the amendment should be rejected, and these reasons have just at this moment been brought to our attention.


Donald Methuen Fleming: Mr. Speaker, I am sure the house will not need to be reminded that in cases where an amendment proposed by the Senate is rejected, it is the practice to send a message to the Senate and give the reasons for the rejection. This is the long standing practice of the house. There are many precedents.

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That does not touch the question of order that has been raised. That is to be determined on the question of whether or not the original enactment of the house is to stand. The position taken in this motion is that the enactment of the house should stand and the amendment should be rejected.


Mr. Speaker:: On the question of the necessity for notice, standing order 41, which applies to bills, etc., reads as follows:
Forty eight hours' notice shall be given of a motion for leave to present a bill, resolution or address, for the appointment of any committee, or for placing a question on the order paper; but this rule shall not apply to bills after their introduction, or to private bills-
And so on.
Notice has in effect been given to the house by the item being placed on the order paper under government orders, where it has stood for some time. It is, today, item 4, reading as follows:
June 15-Consideration of the amendment made by the Senate to Bill C-72, an act to amend the Customs Tariff-The Minister of Finance.
Note: Text of amendment printed in Votes and Proceedings of June 15 at page 671.
That is in effect the ordering of the consideration of this matter and it is open to the house, of course, to proceed in at least two directions. The item before the house is consideration of the amendment. This motion proposes to reject the amendment. Had the motion been to accept the amendment I might have been in the same position as I was in 1958, and would have had to bring to the attention of the minister that acceptance of the amendment would be contrary to standing order No. 63 and that, therefore, notice of the suspension of that standing order would have to be given. However, as the contrary course is suggested it would seem to me that notice and suspension of standing order 63 is not needed.
I am a little concerned about the motion in that it asks the house to disagree with the amendment rather than to reject it as being beyond the competence of the Senate, but that is made clear by the latter part of the motion, and I think I should place the matter before the house.


Mr. G. J. Mcllrailh (Ottawa West):: Before the point of order is left, I wonder if we might have some clarification of one part of Your Honour's remarks. I understood you to indicate that if a certain procedure had been adopted today, if a certain action had been taken, you would have had to indicate that rule 63 was applicable. Do I understand from this that Your Honour is making a finding that this proposed amendment by the Senate is in

fact in contravention of rule 63? It seems to me that this point has not been adequately dealt with.


Mr. Speaker:: I did not intend that to be a necessary implication of my ruling on the question of whether notice was needed. I did indicate that if the motion had been to accept the amendment then I would have had to consider that standing order 63 might be applicable and, therefore, would have to be suspended before the house, in accordance with its own rules, could properly proceed to discuss that proposition.


Lester Bowles Pearson: We had expected, of course, that this morning we would be discussing a bill which in due course would be referred to the Senate, a bill of great and immediate urgency, so we had been told. However, instead we are at this moment discussing an amendment to a commons bill which has been received from the Senate. As you have pointed out, Mr. Speaker, this matter has been on the order paper for some time.
We should be perfectly clear about the nature of this amendment. The bill itself, to which the amendment has been made by the Senate, is of course a money bill, and it received long and careful consideration in this house. In the course of that consideration we in the opposition did our best to persuade the government not to take away the right of appeal against the decision of a single minister and the officials of the department of that minister in respect to important matters. That question was decided by the House of Commons in favour of the position taken by the government that provision for appeal should be removed. The bill was then sent to the other place.
The Senate has passed the bill with the amendment before us which has nothing to do with the substance of the measure, nothing to do with the financial or tax or monetary provisions of the bill, nothing to do with any revenue considerations which may be involved in the bill. The amendment made by the Senate is to restore the right of appeal from the decision of a minister by giving the person affected by that decision in respect to these important matters the right of appeal to the tariff board. That is the nature, that is the purpose, and that is the content of the amendment; it is designed to restore the right of appeal, a right which should never have been taken from the citizen by the House of Commons in this bill. This right of appeal is restored in the amendment by making it possible for a person against whom a decision has been made by the minister or by his department to appeal to the tariff board.

It has been said before, and it has been repeated by the Minister of Finance this morning, that this would mean inordinate delay and frustrate the working of the act. I would remind hon. members that this right of appeal is not to the tariff board and, through the tariff board, to the courts. That is the position which we took in this house when this matter was up for consideration. We felt that the full right of appeal should be retained, to the tariff board and to the courts. The hon. gentlemen in the other place, perhaps impressed by the argument that an appeal provision of that kind might result in undue delay, have restricted the right of appeal to the tariff board only. That is the only change they have made in this bill.
The minister told us this morning that this change is not acceptable to the government because the amendment which embodies the change is an unworkable one. Once again he told us that the right of appeal granted to a citizen from a decision of a minister means delay, and we cannot countenance delay; delay would make the act unworkable. Well, that is the excuse that is uttered by every governmental authority that wishes to take arbitrary power into its own hands. The minister says, in effect, we cannot have appeals because appeals mean delay and we cannot tolerate delay; we must act at once, by ministerial dictate if necessary.
The minister has said that this would mean exhaustive delay, and the reason it would be exhaustive is the fact that the tariff board is away behind in its work. He gave us some indication of the number of appeals which have been before the board and have not been decided after weeks and months. However, if the tariff board is in such a condition that it cannot deal with appeals of this kind with reasonable efficiency and expedition, then it is the responsibility of the government to see that it is strengthened so it can do just that.


Some hon. Members:: Hear, hear.


Lester Bowles Pearson: It is no excuse to say that the tariff board has been permitted, because of the multitude of duties which it now has, to get into a position where it cannot hear appeals in time so as to avoid affecting the procedure and operation of the act. There is no excuse for the government in that regard, particularly in view of the fact that it has done nothing for the board in an attempt to make it effective in the hearing of these appeals. The proper way to deal with this matter is to make it possible for the board to hear the appeals quickly and effectively, not by taking away the right of appeal. The Senate by its amendment merely restores
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that right of appeal in a form which is less far-reaching and embracing than that which we on this side put forward when this bill was before the House of Commons earlier.
The minister has said a good deal about the constitutional implications of senatorial action in this matter. He has cited what are to him analogous precedents-they certainly are not analogous to us, and we will go into that matter later-to show that the Senate has no power to make this amendment. I seem to recall, though I have not all the details in mind, a couple of years ago the Senate making eight amendments to the estates tax bill, seven of which were accepted by the government when they came back to this house, yet at that time no suggestion was raised that it was unconstitutional for the Senate to make those changes.


Donald Methuen Fleming: Would the hon. member permit a question. Does he not recall that the house was informed at that time that in accordance with long standing practice the Senate had been requested by the Minister of Finance on behalf of the government to make those particular amendments when the bill was before the Senate committee?


Lester Bowles Pearson: I recall that very well, but is the minister now trying to tell us that he has power over the Senate so that he can ask the Senate to do something which, if he had not asked it to do, would be unconstitutional?


John Whitney Pickersgill: That is what he said.


Donald Methuen Fleming: Does the Leader of the Opposition not agree that this has been the practice which has been carried on for many years by my predecessors? That is, when the government was prepared to accept an amendment the Minister of Finance asked the Senate committee to make the amendments, particularly in respect to matters usually not of far-reaching importance.


Lester Bowles Pearson: It may be that has been the practice, but in the past I do not recall that the government of the day took exception to that kind of amendment by the Senate which did not deal directly with monetary provisions, such as that which the minister is saying now is unconstitutional. The minister may also remember-


Donald Methuen Fleming: You are quite wrong.


Lester Bowles Pearson: The minister may remember that while he did suggest some of these amendments to the members of the other place, there was at least one which the government had not suggested nor approved at

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the time, but accepted when it came back to the house. We can go into detail in this regard a little later.
The minister this morning has challenged the right ol the Senate to make an amendment to a bill which restores to Canadians the right of appeal from a decision of the minister. If that doctrine were established it would mean that no matter what provision was put in any kind of finance bill, even though it had nothing whatever to do with the financial clauses of the bill but a lot to do with other aspects, including rights of appeal, the Senate could never touch any portion of the bill dealing with such rights of citizens if the clause being amended was included in a money bill. That is the doctrine which the minister is trying to lay down in this House of Commons today.
So far as we are concerned, if the government wishes to alter beyond question the powers of the Senate in respect of this or any other matter, that is the government's responsibility. It will have a hard time proving that the Senate, in this particular case, does not have constitutional power to make this kind of an amendment, which is an amendment that does not directly concern any of these financial provisions but which is concerned exclusively with the right of appeal from a decision from the minister.
Mr. Speaker, if this amendment is not accepted by this house-and the government has made it quite clear that it is not going to be accepted-then presumably the house takes the stand that, having rejected the amendment, the bill is to be sent back to the Senate. I hope the normal and appropriate procedure will be followed in that case, and there will be a conference between the two houses in an effort to find a solution which safeguards the rights of the people by preserving the right of appeal in this case, but which will remove any legitimate objection the government could advance in respect to considerations of speed and efficiency of operation. That would be the normal course to follow if this amendment is rejected.
However, Mr. Speaker, so far as we are concerned we made our position very clear in regard to this matter when the bill was debated in the House of Commons earlier. We took the stand then that there should be an appeal and that the existing right of appeal should not be removed. We regret very much that it was necessary for the upper chamber to take steps to restore that right of appeal which had been removed by at least the majority of the representatives of the people in this house.


Mr. Erharl Regier (Burnaby-Coquitlam):: Mr. Speaker, I expect that the government is going to get its way in respect to this bill as it has in other matters, and I believe rightfully so. However, we are concerned as to the number of items in respect of which the government is beginning to get its way because of its obvious majority. I believe it was Lord Acton who said:
Power tends to corrupt; absolute power corrupts absolutely.
We have had a number of appropriate indications recently in this regard, and I need only refer to the debate which took place yesterday concerning the governor of the Bank of Canada. The original proposal of the government in this particular bill now before us was opposed by the opposition because in it we observed another indication of absolute power corrupting absolutely, in that the government was attempting to abolish the ordinary right of appeal to the tariff board.
I have always been of the opinion that one of the primary responsibilities of the other place as an institution is to ensure that no majority in this house is ever allowed to be used to the point where the rights of people, minorities and others in Canada, are abrogated arbitrarily.
I believe there is a very good reason outside of the obvious one why we are opposed to a minister of national revenue having final authority. A number of us in the opposition noted that a device which is proposed to give a minister complete and absolute authority might be used to raise tariffs by back door methods on the national scene. I believe the minister as much as admitted1 that when he spoke half an hour ago and indicated that the whole aim of the bill, which according to his contention is now being frustrated by the other place, was to enlarge job opportunities, employment opportunities in Canada. As the Conservatives of Canada have always used that term it has usually been allied with higher tariffs. It now becomes obvious that the reason the minister was to be given this arbitrary power was so he would have the right, as I said before by the back door method, to increase tariffs without Canadians really becoming aware that tariffs were in fact being increased.
I should like to endorse the proposal or contention of the leader of the official opposition. If the tariff board is so far behind in its work, our government is lacking in its responsibilities in that it does not ensure that the tariff board either is enlarged or other ways and means are discovered by which it can do its work with a little more dispatch than, in the words of the minister, it is now able to do.
The minister gave as an example of why he felt this amendment infringes the sole and

undoubted right of the commons to impose taxation. He went back to 1959 and said that example stands on all fours with the situation now before us. If I heard the minister correctly he informed us that in 1959 the other place was in fact attempting to tamper with the levels of revenue by seeing that certain corporations would not be able to take advantage of existing tax privileges.
I fail to see how the right of appeal stands on all fours with the right or otherwise of corporations to enjoy tax privileges. I hope before the debate ends the minister will look back into history, and if he does he may be able to come up with much sounder examples and precedents than the one he has given us.
The minister rather clearly underlined my basic contention when he admitted that the estate tax amendments were in a different category because in effect he, the minister, had asked the other place, according to his pronouncements today, to in fact exceed its authority and amend legislation having to do with the levels of revenue of the government.
I believe we shall have to continue to insist that the right of appeal to the tariff board, as proposed by the Senate, ought to be adopted by this house. I am glad that in this instance at least the Senate has performed a function which I had always been taught was one of the prime functions of the other place. Even though the government has a big majority in this house I hope if it really believes that the other place has any role to play at all-and there are many Canadians who are in doubt as to the validity of that proposition-then would it not agree that one of the prime reasons for the existence of the other place is to ensure that the basic rights of Canadians shall not be taken away from them by a majority in this house; and that therefore the other place is perfectly meeting at least one of its responsibilities when it attempts in this amendment offered to us to restore to Canadians the right of appeal which they have had over many long years.


John Whitney Pickersgill: Mr. Speaker, perhaps there is not very much one can add to what was said so well, so succinctly and so justly by the Leader of the Opposition. This is just another and an earlier example of what we have been witnessing in this house in recent weeks, the attempt of a government using, in the words of the Encyclopaedia Britannica in the article on the bill of attainder, a servile majority to establish a dictatorship in this country and to remove the individual citizen those very rights that the right hon. gentleman talked so much about only a year ago on this bill
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of rights, about which he boasts so much and which he spends public money to circulate, with his own statements attached to it, for propaganda purposes.


Mr. Speaker:: Order. I think I should question the course the hon. member is taking as being outside the scope of the discussion. We are dealing with a specific amendment. References to the bill of rights and other extraneous matters ought not to be brought into the discussion unless they apply to this amendment. Bourinot deals with the matter in this way in the fourth edition at page 535:
When amendments made by one house to a bill from the other house are received back, and are under consideration-
This is our position this morning:
-it is not regular to discuss the bill itself, or its principle, or the policy of the government thereon; but the debate must be confined to the amendments.
Bascially the amendment is the insertion of the right of appeal. I do not want to circumscribe the discussion, but I wanted to put in that cautionary word before the hon. member got too far afield.


Lester Bowles Pearson: Surely this amendment, as you have just said, has to do with the restoration of the right of appeal which was taken away from the citizen as a result of the legislation passed in this house. Surely, Mr. Speaker, the effort on our part to restore the right of appeal has some relationship to the bill of rights where the right of appeal is supposed to hold.


John Whitney Pickersgill: I understand that Your Honour made no ruling but just issued a cautionary word which I thoroughly accept, because as hon. members will recall I made the argument in the house when the bill was before us before it was passed by this majority-I will not repeat the adjective I used, but I do think it applies in this instance-


Paul Joseph James Martin: But I will.


John Whitney Pickersgill: I have no doubt that my hon. and eloquent friend from Essex East will have something to say about this, and he far exceeds me in his capacity to describe this act of tyranny with adjectives which do not exist in my limited vocabulary, an act of tyranny that is all the more astonishing coming from the government headed by the author of the Canadian Bill of Rights, one part of which I now propose to read:
Every law of Canada shall, unless It Is expressly declared by an act of the parliament of Canada that it shall operate notwithstanding the Canadian Bill of Rights, be so construed and applied as not to abrogate, abridge or infringe or to authorize the abrogation, abridgment or infringement of any of the rights or freedoms herein recognized and declared, and in particular, no law of Canada shall be construed or applied so as to

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(e) deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations;
Now, sir why does parliament exist? Why did parliament come into existence in the first place? It came into existence to give the consent of the people to taxation and to avoid having taxes imposed by the crown or the minions of the crown, as every minister is. This is what these ministers seem to forget. They seem to think that because, under our system of responsible government, they have a majority behind them, parliament no longer matters; that they alone were chosen by the people and not all of us in this house. They think they were chosen by the people to speak for the people and to decide what the taxes should be and how they should be levied. This, sir, is not true, and the tyranny of the Queen's ministers can be just as great as the tyranny of the Queen before she had ministers sitting in parliament.
I say that what is being sought here, as we said when the bill was being debated before and as hon. ladies and gentlemen in another place have said-I might stop and say parenthetically that I congratulate the hon. member for Burnaby-Coquitlam. He must have found it rather difficult, and I respect him all the more, for having done it knowing the views that he and his party hold on the Senate, to pay the tribute he did to these ladies and gentlemen who seem to be more concerned about our liberties and our rights than the majority in this house. This is the issue, and the only issue. The suggestion, sir, that the method of determining the nature of articles to be assessed and the accuracy of the facts is an aid or a gift is a perversion of the English language such as perhaps only the Minister of Finance could do, as through his recent tactics he has demonstrated he is capable of doing.


Paul Joseph James Martin: I agree with that.


John Whitney Pickersgill: It seems to me that what is an aid or gift is the rate of duty, and the rate of duty is in no way affected by this matter. What is affected is the determination of the facts on which that duty shall be based and collected. It would be just as simple to say that the income tax that shall be paid will be whatever the minister of national revenue sees fit to exact from each individual Canadian; that is exactly parallel to what we are asked to do here. We are asked to say that the minister shall determine the conditions precedent, to use a phrase that is very dear to the Prime Minister, to the tax. The minister is to say of his own knowledge and in secret, because the facts are so secret- we know something about facts that are so 
secret, because we have learned something about them in the past few days-that they cannot be disclosed even to the tariff board.
This is what we were told by hon. gentlemen opposite during the course of the debate on this bill in this house. The taxpayer must not be allowed to know what the facts are on which he is being assessed; he has no right to know. The facts are so secret that they must be kept in the breast of the minister of national revenue, acting capriciously and beyond the right of appeal to any kind of tribunal.
This would have been serious enough if there had never been an appeal before, but there has been an appeal. This parliament over the years, and the Minister of Finance pointed this out in his presentation of the bill, has seen to it that the appeal was gradually strengthened. If I recall the circumstances correctly, and if I do not I would be very happy to be corrected by the minister, I think originally the appeal was from the customs officer who made the adjudication to a board which was merely an administrative board. This was not a very satisfactory form of appeal, but it was a form of appeal. Then Right Hon. R. B. Bennett set up the tariff board in its modern form, and there was an appeal to this tariff board which was a tribunal and court of record. From that time forward there has always been an appeal.
Now this house has decided, and is being asked to reaffirm the decision, that the right of appeal which less than a year ago was guaranteed by this parliament in the bill of rights, is to be taken away from the subject; that is the whole issue and the sole issue here. Why do hon. gentlemen want to do it? They do not tell us. They give the excuses, as the Leader of the Opposition has said, that every government seeking arbitrary power has always given; convenience, speed and secrecy. Dark deeds in dark places.
As a matter of fact, as I pointed out-and I was scoffed at by the treasury benches when I did so, but this was before certain revelations had been made in certain inquiries being held in other places-the Minister of National Revenue could make one adjudication for friends of the government and another adjudication for those who were not his friends. No reason would need to be given and there would be no access to any kind of information, no right of appeal to anyone. Not only do I say that could be done, but no one will believe that sooner or later, under some minister, it may not be done. I do not say it will be done; I am not saying any such thing, but I can remember speeches by the right hon. gentleman when he was sitting over here and did not have to account for his

words by his acts, when he could simply enunciate broad general principles without worrying at all about whether there was any conformity between his words and his deeds-


An hon. Member:: What are you doing now?


John Whitney Pickersgill: The hon. gentleman asks me what I am doing now. I am exercising one of the freedoms still left to us, the right of a freely elected member to speak in parliament. I notice an increasing number of the servile majority who think that right should be taken away from us, right in this chamber.
As I say, when the right hon. gentleman was sitting over on this side of the house, no one was more eloquent. He was far more eloquent, I think than anyone on this side of the house today, with perhaps one or two exceptions. I will not attempt to indicate who those exceptions are, except to say that I would not include myself. I, sir, am a plain man given to using plain language, to say yes when I mean yes and no when I mean no without resort to evasion or equivocation or dodging or squirming as hon. members opposite do. I say the right hon. gentleman, when he was over here, was always wont to point out, and about no one more than about me, that to give arbitrary power to ministers was the most dangerous thing that could possibly be done.
The right hon. gentleman made a promise in the election campaign. It was one of the many promises which he made and which are still just words. In the election of 1957 he promised that one of the first acts of the government of which he never expected to be the head would be to change the immigration regulations and the Immigration Act in order to deprive the minister of those arbitrary powers which he then had. Four years have passed and the only time that they attempted to change those regulations at all they were so laughed out of court that the hon. lady was obliged to come back and return to the regulations I had recommended to my colleagues. A promise in this regard has been made to amend the Immigration Act in every speech from the throne, but no change has been made.
The point I am making is this. If the minister of immigration should not have arbitrary powers-and it has been said by the right hon. gentleman that he should not have them-then considering the whole of English and Canadian constitutional history, and considering indeed the whole constitutional history of free countries, surely no minister should be given by any parliament the exclusive right to tax. Again to quote things that were often said by the right hon. gentleman when he was over here on this side of the chamber, the power to tax is the power to destroy;
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and the power to tax in this particular measure is peculiarly the power to destroy.
What is the minister going to do? The minister is going to decide in one case that something could be made in Canada and thereby probably destroy the business of someone who wishes to import that article. In another case he is going to decide that it could not be made and thereby destroy the opportunity that some manufacturer might have of making it in Canada. The only criterion on which these decisions will be made will be the colour of the gentleman's eyes the size of his brief, or perhaps the size of something else.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: Hon. gentlemen can fill in that third point for themselves. But having regard to the evidence we have as to how hon. gentlemen opposite have obtained some of the support they have obtained for themselves in recent elections, and having regard to some of the revelations that have been made in certain inquiries in the province of Quebec, I think the meaning of my words will be plain. I say that for us in this house to uphold the government in this attempt to restore to the crown the right to tax without the consent of the representatives of the people-a right that was taken away from the crown in the 14th century-is one of the most preposterous attempts at tyranny that we have ever witnessed.
Of course I do not think it was a conscious attempt at tyranny, but that makes it worse. Here is the Minister of Finance so oblivious of our history, so oblivious of our rights, so oblivious of all those things which are the foundations of our freedom that he comes in here and says that the convenience of this taxpayer or that taxpayer is more important than are the fundamental and immemorial of our rights, namely the right of the people through their representatives to consent to and control the taxes; and the right, moreover, of parliament-a right which has been very zealously guarded for over 100 years- to lay down precisely and surely the conditions upon which the subject will be taxed so that the tax exacted of one citizen will be on the same basis as the tax exacted of another citizen.
Under this bill there will not be the slightest assurance that such a thing will happen. In fact there will be absolute certainty that it will not happen. However wise the minister of national revenue may be-and I think the present minister is a great deal wiser than are most of his colleagues, but that is perhaps not saying a great deal-he is human and he is fallible. Out of his own wisdom, uncontrolled by any kind of inquiry, without

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being under the obligation to give any kind of reasons for his decision, it is absolutely certain that he will not make the same decision on two sets of facts. From time to time it is certain to happen that a decision will be given one way in one case and another way in another case, even in good faith.
I do not impute to the hon. gentleman who temporarily has these functions any lack of good faith. I do not do that at all. That brings me to another point which is very important, which also was stressed very frequently by the right hon. gentleman opposite. It is not a matter of the person of the minister; it is not a matter of the character of the minister; it is a matter of the giving of power to any minister, however trustworthy. I do not think even the Prime Minister would insinuate that any less trustworthy minister ever sat in this house than my right hon. friend Mr. St. Laurent, yet the Prime Minister only yesterday made certain imputations-


Paul Joseph James Martin: The hon. member means "more trustworthy".


John Whitney Pickersgill: Yes, I mean "more trustworthy".


Paul Joseph James Martin: Everybody agrees.


John Whitney Pickersgill: I hope everybody will understand that is what I intended to say. I hope that no one will ever seek to denature that accidental slip of my tongue. I say that no more trustworthy minister ever sat in this house than my right hon. friend Mr. St. Laurent. Yet the Prime Minister pointed out quite truthfully yesterday that in 1945 Mr. St. Laurent himself recommended an order in council which was, as a matter of fact, kept secret; and it was kept secret for reasons that were considered by the government of the day to be good and sufficient, because the safety of the state was involved, as the right hon. gentleman knows and he knows what it was about. It is true that on one occasion in this house-and I never attempt to denature these facts-Mr. St. Laurent denied that there was any such order. He subsequently apologized to the house and explained something that I know is hard to credit; but knowing Mr. St. Laurent I am certain it was true. He explained that he had completely forgotten about the existence of the order.


John George Diefenbaker: And all the members of the cabinet had forgotten. That is the interesting thing.


John Whitney Pickersgill: Is the right hon. gentleman suggesting that any attempt was made at that time to deceive the house? Is he making that suggestion? I put the question directly to him. Is he suggesting that any of those gentlemen acted in bad faith in that matter?


John George Diefenbaker: They all forgot.


John Whitney Pickersgill: Yes, I think that is quite true.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: I will tell you why, Mr. Speaker; I will tell you why they all forgot. The right hon. gentleman, who is not always too careful to state all the facts, has perhaps forgotten that that order in council in question was not passed in the full cabinet for the very good reason that it had to be kept secret.


Some hon. Members:: Oh, oh.


John George Diefenbaker: Did the ministers not trust one another?


An hon. Member:: Dark deeds in dark places.


John Whitney Pickersgill: That fact is a matter of record. It has been made public.


Mr. Hamilton (Notre Dame de Grace):: It
is now made public for the first time.


An hon. Member:: Dark deeds in dark rooms.


Donald Methuen Fleming: May I ask the hon. member a question?


John Whitney Pickersgill: Yes.


Donald Methuen Fleming: Can he tell us which of the ministers were trusted and which were not trusted?


Mr. Speaker:: Order. I think the question is not relevant to the matter under discussion, as I thought the discussion was becoming irrelevant. I trust the hon. member will bear that in mind.


John Whitney Pickersgill: I say, Mr. Speaker-


Gordon Minto Churchill: Answer the question.


John Whitney Pickersgill: I was seeking to make a point which seems to have impressed itself very much on hon. gentlemen opposite.


An hon. Member:: I'll say.


John Whitney Pickersgill: My point is this; that on an occasion when for the first time in our history, at a time when there was an acute threat of a third world war, we found a spy ring in this country; when it was absolutely imperative to maintain the utmost secrecy in the matter, the government of that day did take arbitrary action of this kind. I admit it, and I do not pretend they did not; but I say we should not make that part of our normal law. That is the whole point.


Mr. Benidickson:: Everyday law.


John Whitney Pickersgill: The right hon. gentleman has maintained on the statute books the act

of parliament under which that order in council was possible, the War Measures Act, and refused last year to modify it when we sought to have it modified.


John George Diefenbaker: Was that order in council passed under the War Measures Act?


John Whitney Pickersgill: Yes, it was passed under the War Measures Act.


Mr. Deschalelels:: Nothing has changed in the War Measures Act.


John Whitney Pickersgill: Certain other things were done under the War Measures Act in time of war that were not agreeable to most Canadians and certainly not to most Liberal-minded Canadians.


John George Diefenbaker: This was after the war.


John Whitney Pickersgill: It was the day of the
Japanese surrender, the very day.


John George Diefenbaker: No.


John Whitney Pickersgill: Yes, it was.


John George Diefenbaker: September 5, 1945 I think was the date.


Donald Methuen Fleming: August 15.


John Whitney Pickersgill: The Japanese surrendered on September 6, if I remember correctly. The final surrender was just at that very time.


Some hon. Members:: No, no.


John Whitney Pickersgill: In any event, if the right hon. gentleman is now saying there was no danger to the state at that time and it was not necessary to take action about that spy ring, he can say so. But he did not; he took good care not to say that at that time and for a long time afterwards. There are those who were very brave long after the event.


Donald Methuen Fleming: Are you looking at the hon. member for Essex East when you say that?


John Whitney Pickersgill: What I am saying here is that it is one thing to do, in time of war and under the threat of war and in the face of a spy ring, things that are distasteful to us all. It is quite another thing to clothe a minister, not even the governor in council but a minister, with the power to tax in an arbitrary and capricious manner. That is what the right hon. gentleman is asking us to do, because it is his responsibility. The Minister of Finance, as we have seen in recent times, does what he is told. He has become an errand boy. It is the Prime Minister who takes the responsibility for this, as he does for every other act of government. I say that to ask this house to concur in what is clearly an act designed to give arbitrary, 90205-6-481
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dictatorial and capricious powers to a single minister, in time of peace, and for no other reason-


Mr. Cardiff:: You are repeating yourself.


John Whitney Pickersgill: Well, it bears repetition because it seems only with the greatest difficulty to penetrate some minds. To give that power in time of peace-


Lewis Elston Cardiff: You have stood there for half an hour and repeated yourself over and over again.


Mr. Speaker:: Order. I can only hear one hon. member at a time.


John Whitney Pickersgill: I say again, sir, and I think it bears repetition-perhaps the hon. member for Huron would not grasp it no matter how often I repeated it, but one would hope it would make some impression on the minds and on the historic recollections of some hon. members opposite-that there was a time in this country when we were concerned, genuinely concerned, about the right of the people to consent to every tax they had to pay; when we were concerned, and genuinely concerned, that instruments of the crown, creatures of the crown-as ministers are-should not have powers that were not under the control of the representatives of the people. I know that historically the party led by the right hon. gentleman opposite fought hard against responsible government; they resisted it-


Lionel Chevrier: Hear, hear.


John Whitney Pickersgill: They fought for the maintenance of these arbitrary powers of the crown. They fought right up to 1849, and then then they went out and burned the parliament buildings in Montreal because the governor of that day had accepted the views of the majority. Not only that, they also signed an annexationist manifesto in that same year. One of the signatories of that manifesto was Sir John Rose, who was later minister of finance in Sir John A. Macdonald's government, and another was Sir John Abbott, the third prime minister of Canada.


Donald Methuen Fleming: Would the hon. member permit a question?


John Whitney Pickersgill: I am of course limited as to time-


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: -and when I have completed what I have to say I will be glad to listen to the hon. gentleman's question, but not now.


Donald Methuen Fleming: It is just a short question.

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John Whitney Pickersgill: However short it is, I would ask the hon. gentleman to allow me to continue with what I have to say.


Donald Methuen Fleming: Budget by radio.


Paul Joseph James Martin: Breaking the rules again. Always breaking the rules.


Some hon. Members:: Oh, oh.


Lionel Chevrier: More respect tor parliament.


Some hon. Members:: One o'clock.


Mr. Speaker:: Order.


John Whitney Pickersgill: Mr. Speaker, when I was interrupted by the Minister of Finance with that old world courtesy which so endears him to the house, I was pointing out that in the days when we in Canada were fighting for responsible government the predecessors of hon. gentlemen opposite were fighting to prevent us from having responsible government. But I have thought, sir, that Sir John A. Macdonald repented of all that and reluctantly accepted responsible government.


An hon. Member:: Oh, sit down.


Mr. Speaker:: Order. It being one o'clock I do now leave the chair.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
John Whitney Pickersgill: Before we adjourned for the luncheon interval I made some reference to occasions in the past, some of them regrettable, when ministers held and sometimes exercised powers which it was necessary, though regrettable, to exercise in time of war. I had pointed out that those conditions were very different from normal conditions, normal taxing statutes in peacetime, as this present bill is. No one will pretend that this is a measure for the safety of the state.
There are sharp differences in the house about whether this bill is even good for the state, but that is not at issue, as Your Honour properly pointed out. We are not concerned now with whether or not this taxing statute in itself shall prevail, because it is going to prevail. We are concerned with whether or not, in the interpretation of this measure, the determination of what articles shall be taxable, and at what rates shall be done in the open with a right of appeal such as has existed for a long time, or whether that right shall, in defiance of the bill of rights, be taken away. That seems to be the sole issue here.

I do not think anyone in the country will be much impressed by hon. gentlemen arguing, as they are apt to argue whenever they have a weak case, that their predecessors may have done arbitrary things, or things which in their view were arbitrary, and that they therefore are at liberty to proceed in any way they please. I do not think such arguments would be effective, and for this reason; that they campaigned all across the country saying they were going to end that period of arbitrary rule and restore the rights of the people. I hope that neither the Prime Minister nor any of his colleagues will do what the Prime Minister seemed to be doing in another debate and suggest that because somebody else seemed to be doing something at some other time which, in his view, he was not justified in doing, the government is justified in doing wrong now.
That is the point. That is invariably the argument of hon. gentlemen opposite on occasions such as this. They seem to feel that the opposition in this house has no rights; no right to express an opinion because, they allege, at some time in the past, when some members of the present opposition were in office, it may have done some things which they felt were arbitrary. It seems to me that this kind of argument is only used by someone who has the weakest of weak cases. Yet I shall not be at all surprised if it is used again to provide another smokescreen, because that is the normal method by which this government evades, or seeks to evade, responsibility. It works for a while, but the public is gradually getting wise to it. This country is gradually realizing that the government is, in the first place, incapable of continuous and steady action of any kind and that it seeks, whenever things get out of hand, to find someone else to blame for its own incapacity.
But there is far more than incapacity involved here. This is a deliberate attempt to restore the ancient right which the crown claimed before parliamentary supremacy was established, the right to tax without the consent of the representatives of the people. Once that power is vested in a single minister, uncontrolled, unanswerable to the courts, as the government is seeking to do in this bill, the old control exercised by parliament will be gone. The government is seeking to go back to the days of ship money-


Mr. Bell (Carleion):: Would the gentleman permit a question?


John Whitney Pickersgill: When I have finished. I am following the example of the hon. gentleman the other day, remembering the helpful intervention which he made on another occasion.

I was saying that the government is seeking to go back to things like ship money, seeking to go back to the Bate case, seeking to go back to the days when the crown sought to impose arbitrary levies on people in order to get parliament out of the way. I suggest that maybe we are going to see the same sort of thing again, the same overriding of parliament, the same hope that parliament's right to tax will be forgotten.


An hon. Member:: Would you permit a question-


John Whitney Pickersgill: Hon. gentlemen opposite do not seem to like to hear the argument. That is perhaps the next right that is going to be taken away from us, the right of members here to speak in this house without interruption so that a consecutive argument may be made. I say that in the government's refusal to accept this amendment we have an attempt to turn back the clock-not the clock, because this goes back to the days before there were clocks-but an attempt to turn back the centuries to the days of the old feudal monarchs before the people had any say, before the people had any right to decide on the aids they would give to the crown. Under the guise of convenience, under the guise of safety, under the excuse that things must be kept secret, they say we must trust one minister, and he must not be questioned in what he does. We must trust him to decide what is taxable and at what rate, because by deciding what is taxable he is deciding at what rate it will be taxed.
Surely anyone who has any belief whatever in the rule of law, any belief whatever in the right of a subject to a fair hearing, any belief there should be no taxation without real representation, and any belief in the rights of parliament to make the tax laws in open parliament and not by the cabinet or a minister in secret, could not conceivably support the kind of legislation the government has advanced.


John George Diefenbaker: Mr. Speaker, I am pleased to hear from the hon. member for Ottawa West, whether I agree with him or not on occasion, because he at least presents his arguments in a way which is logical. We have just listened to a typical outburst on the part of the hon. member for Bonavista-Twillingate which was theatrical, hysterical, interesting and deliberate in a way that shows the depth and degree of reformation that has come to that man in the last few years in the House of Commons. I thank him for opening the doorway into the privy council chamber a 90205-6-4814
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bit by telling us what happened in September, 1945, when the ministers among themselves apparently had some doubt of each other and therefore found it necessary to have a little coterie within that cabinet to pass an order in council that swept aside the rights of individuals in Canada to a degree which had never before taken place in the entire history of confederation.
Indeed, the interesting thing about that order in council was the fact that it swept aside the right of habeas corpus and provided in effect that an individual might be imprisoned and held incommunicado because it provided that no one, however wrongfully held and whatever the circumstances, had the right to challenge his incarceration in the courts. When the matter came up, and I am speaking from my recollection of that year, the then minister of justice, Right Hon. Louis St. Laurent, told me that there was no secret order in council. He maintained that position until the end of December, 1945. In February of 1946 the then prime minister, Mr. King, rose one day and said he had an order in council, the one that the minister of justice had forgotten about. That was the order in council which had swept aside all the rights of Canadians in a way that was unjust, unfair and, to use my hon. friend's words, tyrannical to a degree that is almost beyond conception today.
I do not intend to go into the past, but I did appreciate that fact coming from the hon. member because he had knowledge of what took place in the cabinet and was able to reveal it today. How it came about has been something we have been wondering about all through the years, and I know the historians of the future will pay their tribute to this historian for the contribution he has made today.
I am not going into the arguments as to the merits of this legislation, because they have been dealt with. Whether hon. members agree or not, the House of Commons dealt with this matter, and dealt with it at much length. All the arguments that have been advanced today were advanced then, possibly not as spectacularly or in as an illogical manner but none the less they were brought before the house. I am not going into that argument at all because it has been dealt with over and over again, but what I intend to deal with is just one matter, and that is the right of the Senate of Canada to interfere with legislation respecting taxation passed by the House of Commons.
I thank the hon. gentleman for having said that this is a taxation measure. Hon. members will remember how he enlarged upon that in saying that the power to tax is the power

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to destroy. My recollection of that statement is that it came from a former prime minister of Canada in the person of Sir Wilfrid Lau-rier.


John Whitney Pickersgill: It is older than that.


John George Diefenbaker: Having now the approbation of the hon. gentleman, my memory is indeed proven to be correct. Sir Wilfrid Laurier said that. I am glad that the hon. member participated in the debate, because he emphasized that this is a taxation measure.


Paul Joseph James Martin: That is not be point.


John George Diefenbaker: That is the foundation upon which I build my argument, and nothing can be more beneficial than to use the arguments of those opposite for the purpose of establishing one's own argument. This is a taxation measure, and it being a taxation measure what are the rights involved? The Minister of Finance referred this morning to standing order 63 of the House of Commons, which reads in part:
All aids and supplies granted to Her Majesty by the parliament of Canada, are the sole gift of the House of Commons-
All through the years from the earliest times the Senate took the stand that it could make amendments, and it followed that course periodically and regularly. That was not the situation in the United Kingdom. We adopted in Canada a constitution similar in nature and kind to the British constitution. In the United Kingdom the position has been made very clear throughout the years, and was established centuries ago. The House of Commons has complete control of revenues and expenditures, and the House of Lords has no right to either initiate or amend money bills. Until about 1910 or 1911 the House of Lords did have the right to reject money bills, but that right was taken away by the parliament act of 1911. In the United Kingdom today money bills normally do receive the assent of the lords, but machinery is now available whereby money bills and other bills can become law without the concurrence of the House of Lords.
The hon. gentleman referred to antiquity and the foundations of parliament, and dealt at some length with parliamentary powers and prerogatives. It was on July 3, 1678, that the position of the commons and the lords was set out in a resolution of the house of commons of that day.
All aids and supplies granted to His Majesty in parliament are the sole gift of the commons, and all bills for the granting of any such aids and supplies ought to begin with the commons, and it is the undoubted right of the commons to direct, limit

and appoint in such bills the ends, purposes, considerations, conditions, limitations and qualifications of such grants which ought not to be changed or altered by the House of Lords.
Through the years, even as late as 1918, the Senate of Canada took the attitude that it could in fact amend bills which were in the nature of taxation measures. I recall the late Right Hon. Mackenzie King and the manner in which he spoke of the Senate of his day, and I make no apology for referring to the Senate as such rather than the other place because I find that in the course of the arguments Mr. King advanced he invariably referred to that place as the Senate of Canada. I go back to July 19, 1924. As far as I am able to ascertain, this was the first time that Mr. King made any suggestion as to what he had in mind respecting the rights of the non-elected representatives of the people to thwart and interfere with, to amend, abrogate or otherwise alter the power of the House of Commons. This is what he said:
Having in mind the action of the second chamber with respect to the measure which has just been amended and also the fate of a number of bills adopted by the commons and defeated in the Senate, I think hon. members will agree with me that the time has come when the commons in Canada should seek to gain rights and privileges with respect to legislation originating in this chamber similar to those which have obtained by the House of Commons in the parliament at Westminster. I may say that the government had under consideration, prior to the opening of this session, legislation with this end in view-
I stop to point out to the hon. member for Bonavista-Twillingate, the Boswell of Mr. Mackenzie King, that this was in 1924, and Mr. King had in mind at that time that something would be done. I refer to what he said:
The government had under consideration, prior to the opening of this session legislation, with this end in view, but we were anxious the public should feel fully convinced of the necessity before pressing it on the attention of parliament. 1 desire to assure the house that when parliament reassembles steps will be taken by the government to obtain, if possible, means whereby bills may be enacted by and with the advice and consent of the House of Commons under conditions similar in principle to those which have been sanctioned for the parliament of the United Kingdom.
The hon. gentleman referred to the carrying out of promises. That was in 1924. The year 1925 came. The hon. member will recall that in the election of that year the reformation of the Senate was a major matter; it was indeed the pre-eminent issue.


An hon. Member:: Oh, no.


John George Diefenbaker: He continued in power until 1926, and then for a short interval he was out of power. He returned to power. The Senate was going to be reformed. A little later on he told Canada quite candidly

how the reform came about, namely by substituting live Grits for dead Tories. That was the nature of the reformation. This went on, and then he entered into an arrangement whereby each of his appointees to the Senate was required to sign an undertaking as to what he would do after he got there.
Well, in 1947 Mr. King referred to the nature of those undertakings. I do not want to clutter up the record too much, but each and every one, as appointed to that body, was asked a question by Mr. King. He was asked for an assurance of support of such measure of Senate reform, in conformity with the requirements of the constitution, as might be introduced by the Liberal administration. He went on to say that this assurance had been given by all who had accepted appointment to the Senate within the time mentioned. Well, that was the last we ever heard about that subject, except in subsequent elections. Now we are in the position where the House of Commons of Canada has spoken. Whatever arguments are advanced today- and they were advanced before, and I am not here for the purpose of answering them- this legislation is taxation legislation. Again I thank the hon. member for Bonavista-Twillingate; I wish to repeat the thanks. I am sorry he did not continue in law, because after all he has given his opinion-based not only on his experience as a law student but also as a former clerk of the privy council and as a minister of the crown-that this is taxation legislation. He has made that clear. This house passed it. The purpose in mind was the provision of jobs and the assurance that unnecessary delay would not take place in regard to a matter which has to a considerable extent crippled the productive and industrial capacity of Canada. I refer to the bringing into Canada of goods of a class, or so close to a class or kind, manufactured in Canada so as to permit evasion of the legislation which exists for the preservation of Canadian jobs in Canadian industry.
I am glad to see hon. gentlemen opposite on the side they are on this matter. The hon. member for Bonavista-Twillingate said, "we did this and that, but those were days when things were serious." If I were to believe what hon. gentlemen opposite have endeavoured to lead the Canadian people to believe, I would think we were living in one of the most serious economic days that Canada has ever seen.


Paul Joseph James Martin: That is true.


John George Diefenbaker: They have been asking for action. Having listened just yesterday to the hon. member for Essex East, I wondered whether he could maintain silence. It is very difficult.
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Paul Joseph James Martin: This is the most serious time in Canadian economic history.


John George Diefenbaker: I seem to remember another time that was fairly serious for the hon. member for Essex East, but I am not going into that now. I am pointing out this is a taxation measure. There were a few Liberals in the Senate who saw the situation as it was.


George James McIlraith: I should like to raise a point of order.


Mr. Speaker:: The hon. member for Ottawa West is rising on a point of order?


George James McIlraith: It is on the question of relevancy. Item No. 4 on today's order paper reads:
Consideration of the amendment made by the Senate to Bill C-72.


Mr. Starr:: Liberal closure as usual.


An hon. Member:: Obstruction again.


George James McIlraith: If we can get some order I can state the point of order. The amendment made by the Senate deletes a certain sentence in the bill and substitutes the following:
Subject only to an appeal to the tariff board-
That is the essential part of the amendment. Now, as to relevance; surely the argument must relate to the amendment. Surely it cannot go over the rather interesting field that the Prime Minister has been discussing, however interesting that may be for discussion on another occasion when other subjects are before the house.


John George Diefenbaker: May I simply suggest that possibly the hon. gentleman was not here when the hon. member for Bonavista-Twillingate dealt with the subject.


Lester Bowles Pearson: On the point of order, Mr. Speaker, may I say that I think it would be helpful to get your guidance as to whether, on this particular amendment from the Senate, we can discuss the main bill and whether we can discuss the reform of the Senate and the powers of the Senate.


Mr. Speaker:: Perhaps if I read the motion before the house it will help to answer the question which has been raised in the point of order, namely the relevance of what has been said about the Senate. I did indicate this morning that in so far as the bill is concerned, the matter which is before the house for discussion is only the amendment to the bill made by the Senate. The motion which is before the house is broader than that; it calls for a message to be sent to the Senate to acquaint Their Honours that this house disagrees with the amendment made

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by the Senate to Bill No. C-72, an act to amend the Customs Tariff, for the following reasons: The amendment infringes the sole and undoubted rights of the commons to impose taxation; it alters the application of taxes, and interferes with public revenues. I think it puts directly in issue the right of the Senate to make the amendment which it has made.


John George Diefenbaker: Mr. Speaker, I think I had arrived, when I was given a rest by reason of an interruption that had no basis, at the point of saying that the House of Commons dealt with all the arguments. Hon. gentlemen expressed themselves strongly. They talked for nine days. This reminds me also of the fact that the hon. gentleman who just finished speaking said we were getting to the point where they could not express themselves. Yet we had nine days of talk. There was a careful examination, very helpful and beneficial.
I can also say to the hon. gentleman that the newly found reformation on his part is welcome after the way in which freedom was crucified in this house by the closure imposed when those four hon. gentlemen over there were members of the government. I have made an error, Mr. Speaker; I included the hon. member for Laurier, who was absent at that time in better climes.


Lionel Chevrier: It would not be the first error you have made.


John George Diefenbaker: I pointed out the fact that this bill was discussed and went over to the other place. A few members of the other place saw otherwise, but they decided that they were going to amend a taxation bill. Let me make this clear. We are not going to accept their amendment of this taxation bill.


Lester Bowles Pearson: Down with the right of appeal.


William Moore Benidickson: To hell with the bill of rights.


John George Diefenbaker: They have all got the
same refrain, Mr. Speaker; the bill of rights. The thing they ridiculed they now found all their arguments upon.


Lester Bowles Pearson: No, you have torn it up.


John George Diefenbaker: I do not want to enter into conflict with them, I simply want to state the facts. Their leader in the Senate chose to immediately give an indication of what would be done. I say this, and I repeat it; that the question as to whether or not the Senate of Canada is going beyond that responsibility which it has discharged and can discharge with effectiveness under the

constitution is a question that the Canadian people will have to decide sooner or later.


Jean-Paul Deschatelets: We will meet you halfway.


John George Diefenbaker: I notice that in response to that remark there was but one lone voice over there, and he used the top of his desk. Otherwise there was silence at that moment.
The other place has over and over again in the past four years made amendments that have been beneficial and helpful in the discharge of its joint legislative responsibility. The bills have come back here amended and we have accepted them. On one occasion, at least, the amendments were very close to the line, if not over the line. We made it clear there was no precedent being created thereby.
In this case this government takes its stand. We shall not, as the Minister of Finance has said, accept the authority or right of the Senate to make this amendment. I hope the house will agree with that stand. The bill will be sent back to that body. If they choose to stand on what they have done this legislation, beneficial to the Canadian people, legislation that has universally been requested, can only pass out of existence, for we on our side will not accept the amendment. In the days ahead we shall ascertain the constitutional rights of this country in the only way in which they can be ascertained.
I said a moment ago that that would be sooner or later. I remember so well another occasion when the challenges were given as to what was going to happen-"and soon"- so I say this. This is a major matter. It was discussed in detail for nine days. Whatever the demerits, every argument that could be advanced was advanced by the opposition, strongly and fearlessly. This house, if we are to maintain the Canadian constitution, cannot in taxation matters be subject to the untoward interruption and interference of the other house. I make that clear.


Lester Bowles Pearson: May I ask the Prime Minister a question. Is the position he takes that the government refuses to accept the restoration of the right of appeal from a decision of the minister, and is willing to stand or fall on that issue?


John George Diefenbaker: Mr. Speaker, even the Leader of the Opposition should understand clearly what I have said. There was none of that equivocation, and fence straddling, for which he has become famous.


Lester Bowles Pearson: Will the Prime Minister now answer my question?


John George Diefenbaker: It is answered.


George James McIlraith: Mr. Speaker, unlike the Prime Minister, I shall endeavour to address myself to the question before the house.


Some hon. Members:: Oh, oh.


George James McIlraith: I admit at once, of course, that I do not have the skill of the Prime Minister in the art of irrelevance and trying to throw up a smokescreen so as to mislead anyone who will read his remarks. If I had that skill, Mr. Speaker, I assure you that I should not desire so to use it.


David James Walker: You are safe.


George James McIlraith: The interjection of the Minister of Public Works was one that I did not hear. Perhaps it is just as well that I did not hear it.


David James Walker: Do you want to hear it?


George James McIlraith: I should not like to have to answer my old classmate and colleague in the way in which he should be answered and dealt with.
The business before the house is consideration of the amendment made by the Senate to Bill No. C-72, an act to amend the Customs Tariff. As is indicated on the order paper, the amendment of the Senate is contained in June 15 Votes and Proceedings at page 671. I should like to read it in order to make my point. It goes on to say:
A message was received from the Senate informing this house that the Senate had passed Bill C-72, an act to amend the Customs Tariff, with the following amendment:-
Page 1. lines 22 and 23: Strike out lines 22 and 23 and substitute therefor the following:
"(3) Subject only to an appeal to the tariff board, the decision of which board shall be final and in respect of which appeal the provisions of section 44 of the Customs Act shall apply mutatis mutandis, the minister shall decide the following matters: ",
It will be noted that the only significant change in that amendment is with reference to the right of appeal from the minister. The minister's power to decide is left unhampered.
The Minister of Finance this morning in dealing with this matter, when he set it out, indicated to the house that he proposed to reject the amendment of the Senate. It is quite the privilege of the house, if it wishes to do so, at any time to reject a proposed amendment of the Senate. But he went on to say this, and I think this motion should be read again to the house because it completely ignores any relationship to the amendment before us. As I said earlier, the Prime Minister seemed to me to completely ignore the whole matter before the house in an effort to find an issue where he could drag up, for some purpose of his own, the question of
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Senate reform. That is a subject that I might be very interested in discussing on a proper occasion. The motion now before the house, without notice, by the Minister of Finance is the following:
That a message be sent to the Senate to acquaint Their Honours that this house disagrees with the amendment made by the Senate to Bill No. C-72, an act to amend the Customs Tariff, for the following reason:
The amendment infringes the sole and undoubted right of the Commons to impose taxation; it alters the application of taxes and interferes with the public revenue.
It is elementary, of course, that the Senate have no right at all, or that the House of Commons has the sole and undoubted right, to impose taxation. That is elementary. I do not know why that reference is put in this motion before us now. It is irrelevant. I perhaps should have pressed the point harder earlier when Your Honour was putting the question, but it seems to me that it has no relationship to the business before the house at all and that that part of the amendment is irrelevant to the subject matter before the house. If such commentary is permitted in a motion rejecting an amendment of this sort, the one before us dealing with the right of appeal, then of course we could add any other commentary. We might add some facetious commentary such as, for instance, that we did not like the names of the hon. senators or any other comments we wished to add. Neither the minister nor the Prime Minister made any attempt whatever to relate that part of the motion to the amendment proposed by the Senate. They glossed it over and talked about Senate reform and other matters that are not before us on this occasion.
The Minister of Finance did the house a real disservice in his argument when he made reference to the income tax amendments proposed by the Senate in 1959. As I recall it the situation was this. Since I did not know the line which the Minister of Finance was going to take in dealing with this Senate amendment I have not looked the matter up, but I think my recollection of it is correct. The house had proposed a change in section 71 of the Income Tax Act closing the class of companies that could be called foreign corporations, formerly called 4-K companies. I believe that was the terminology. The significance of that was that no companies incorporated in the future would do other than pay income tax or corporation tax in the ordinary way. That type of corporation with which we were concerned on that occasion, namely the foreign corporations, paid only a nominal type of tax. I think it was $100, but I am subject to correction as to the amount.


William Moore Benidickson: That is right.

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George James McIlraith: In any event, the house dealt with that taxation matter. The Senate proposed an amendment striking out that part of the provision in the amending bill.


William Moore Benidickson: The whole clause.


Mr. Speaker:: I wonder whether the hon. member for Ottawa West will allow me to interrupt him. There is a good deal of conversation going on, and I think a good deal of it comes from the corridor. If hon. members cannot moderate their voices I suggest that they go into the lobby, as it is very difficult to hear what is being said.


George James McIlraith: The Senate amendment on that occasion struck out the clause in the bill, and the effect of it was virtually to exempt from corporation taxation all companies of the type which 1 have described or which might be incorporated in the future.


William Moore Benidickson: And it changed the revenue.


George James McIlraith: In other words it related to the imposition of taxation on the companies with which we were concerned on that occasion, and there was no question at all but that they were seeking directly to undo the imposition of taxation imposed by this House of Commons. There can be no question in the mind of anyone so far as I know that they had no right to do that. Certainly I am not aware that anyone in this House of Commons suggested that they had the right to pass such a clause.
The matter before us today has no such connotation at all. It is a very narrow point. What the Senate chose to do is this. Although from reading the debates I believe that some of them did not like the legislation, they chose to accept any parts of the legislation that had any implications of taxation at all. They completely ignored that point, and they dealt only with the right of the taxpayer to be heard by way of appeal from the arbitrary decision of the minister. The essential part of the amendment is in adding the words:
Subject only to an appeal to the tariff board,-
They dealt with that one matter, and that alone. I ask the house-


William Moore Benidickson: In open court.


George James McIlraith: -where that infringes or has any relationship to taxation. Where does it deal with taxation? This resolution with which the house is now dealing goes on to give reasons for rejecting the amendment:
The amendment infringes the sole and undoubted right of the commons to impose taxation-
Is the Minister of Finance suggesting for one moment that an appeal to the tariff board from an arbitrary finding of a minister is

imposing taxation? If he is, then he is suggesting-and this is implicit in his argument- that the minister concerned in making that decision acted not in accordance with the law and the definitions spelled out in a statute, but that he broke the law and did something under his arbitrary powers that was not in accordance with the statute.


Lester Bowles Pearson: That is the issue.


George James McIlraith: Then the minister asks us to reject the Senate amendment for the following additional reason:
-it alters the application of taxes-
The application of taxes is clearly set out in the bill and in the act; every detail of the application of taxes is set out there. The Senate has not dealt with any aspect of the bill relating to the application of taxes. The only conclusion that can be drawn from the minister's motion is that the minister is suggesting that an appeal to the tariff board deciding what the law was in its application might show that the minister had broken the law and the tariff board had brought him back; that the appeal authority under the provisions of the act was altering the application of taxes. Surely the minister is not going to ask this house to believe that the whole purport of this legislation, the whole purport of giving this final right of decision to the minister was so that the minister could act arbitrarily outside the legislation. Yet that is what his motion means.
Then the minister argued that taking an appeal from the minister's decision to the tariff board would interfere with the public revenue. If the tariff board decision upheld the minister it would be difficult to see how the right of appeal would interfere with the revenue. But if the tariff board overruled the minister because the minister had made a wrong finding in fact, or had misapplied1 the law, would that be interfering with the public revenue, or would that be interfering with a wrongful action taken by a minister contrary to the law enacted by this House of Commons? That is the point at issue here. In other words, the minister's reasons as given in the motion which is before us are completely specious and irrelevant to the rejection of the amendment to this bill received from the Senate.


Lester Bowles Pearson: Another smokescreen.


George James McIlraith: It is a complete non sequitur
and is not to be related to the Senate amendment at all.


Paul Joseph James Martin: Just to hide the Coyne issue.


George James McIlraith: My seatmate gives a good reason as to why it was done. I would perhaps

be called to order, Mr. Speaker, if I were to elaborate on why it was done. It is obviously done to divert the attention of the House of Commons from the real issue.


Lester Bowles Pearson: Hear, hear; for no other reason.


George James McIlraith: The real reason for the motion before us is whether the Senate amendment giving a right of appeal to the tariff board from the minister's arbitrary decision will be accepted or rejected by this house. That is the real issue.


Paul Joseph James Martin: To divert attention from the Coyne affair.


George James McIlraith: This attempt to drag in all these extraneous matters is one that I am afraid has been used all too often these days by the Prime Minister and the Minister of Finance. Perhaps I had better not enter into the debate of yesterday, when we saw the Minister of Finance struggling hard1 for what many of us thought were diversionary tactics.


Lester Bowles Pearson: He thinks he has got a reprieve.


George James McIlraith: In answer to this point-


William Moore Benidickson: The fishing is not any better.


George James McIlraith: In regard to the matter before the house today the Prime Minister chose-and I regret that he has left the house now, because I would have liked him to be here when I deal with this-to deal with an order in council passed just at the conclusion of the last great war, at a time when this country had many hundreds of thousands of troops in other parts of the world. We were looking forward to bringing them back here. They had fought a very long, hard war. I need1 not remind hon. members of this house about that; a great many hon. members are familiar with that in a personal way.
That order in council was dragged into this debate today by the Prime Minister as a red herring. That order in council which was passed related to a matter of the security of this nation having to do with a world spy ring having been discovered, and an urgent attempt being made to deal with that situation. The issue was whether or not the war was over; whether we were immediately likely to be engaged in another war. That matter concerned our whole security.
Just before I came into the chamber at 11 o'clock this morning I had delivered to my office the text of the speech which the Prime Minister made only the day before yesterday-


William Moore Benidickson: To the Kiwanis clubs.
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George James McIlraith: -in which he devoted a great part of his time, practically the whole of it, to the serious threat of communism at this time, and made all kinds of strong remarks concerning the leadership of Mr. Khrushchev. I could not believe my ears, knowing the substance of that speech, when I heard-


David James Walker: On a point of order, Mr. Speaker, with regard to the rule that my learned friend has just invoked as to what is in order and what is not, is he not at the moment hoist on his own petard? This is completely irrelevant.


Murdo William Martin: Why don't you go back and build a bridge?


David James Walker: Why doesn't my hon. friend from Essex East sometimes speak with even a kernel of truth?


Murdo William Martin: On a point of order, Mr. Speaker, would you kindly contain the Minister of Public Works and send him back to digging ditches.


Lionel Chevrier: He makes himself ridiculous.


Lester Bowles Pearson: He has never dug a ditch in his life.


Mr. Speaker:: I shall keep in mind the point of order as the hon. member proceeds.


George James McIlraith: Mr. Speaker, I thought the Minister of Public Works was not in the chamber when the Prime Minister was dealing with this order in council. I merely want to contain my remarks within the limits of the point raised by the Prime Minister, who raised this matter in some illogical way that I could not understand as a reason for rejecting this amendment from the Senate. I could not see the relevance of the two. I did not understand what that 1945 order in council about which the Prime Minister spoke had to do with the right of appeal to the tariff board and the arbitrary decision of the minister. The Prime Minister was permitted to make reference to it and I thought I should be permitted the same latitude in replying to the argument he raised in regard to that order in council.
The Prime Minister was regrettably very careful not to give the house the subject matter with which that order in council was concerned or the situation in which the house found itself at that time. As hon. members who were here in those years will recall, the War Measures Act had regrettably to be used during the five years from 1940 to 1945. I think it was not other than distasteful to hon. members that the circumstances at the time made that practice necessary, but the point I was seeking to make was the complete

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irrelevance of the Prime Minister's attempt to relate that order in council to the question which is before us. The matter of the reform of the Senate is also, of course, completely irrelevant to the point before us now. The message from the Senate contains a simple amendment having to do with the right of a citizen or, perhaps I should more correctly say, a taxpayer, to appeal to an administrative board which has grown up over the years and the authority of which has been so extended that it is now a court of record. It has to do with the taxpayer's right to an assurance that the taxation law as applied to him will be applied in accordance with the statutes of this land. That is all this amendment contains-nothing more, and nothing less.
The Prime Minister would have us believe there is some greater justice in having the taxation law of the land applied by the minister alone without right of appeal and without his being obliged to give any reasons for the decisions he takes in cases of this type where matters of fact have to be determined. The Minister of Finance, in the course of remarks which were singularly brief for him, went on to give as the reason for the position taken by the government the greater speed and efficiency which would result. In the argument which he addressed to this point the hon. gentleman used language which was identical with the language used in this country in the late 1930's by those persons who were apologizing for the fascist regime in Italy. I could not help but recall how many times some people in this country-fortunately, a minority, not a majority-used as an apology for that regime of that day the fact that they got the trains running on time. That was the theme of the small part of the argument put forward by the Minister of Finance which was relevant this morning, the only real reason he gave for not wanting taxpayers to have the right of appeal to the tariff board.
The Prime Minister, in his concluding remarks, seemed to adopt and approve this argument used by the Minister of Finance, as indeed, I would expect him to have done, but I point out to the Prime Minister that mere efficiency or ease of administration is not the test when you are applying onerous taxation to the citizens of this country. Surely something better than that should be the test.
For my part, I must say it is a matter of regret that the Minister of National Revenue (Mr. Nowlan) is not with us today. I wish to express my personal regret at his illness and his absence. I wish he were here, and I hope his colleagues will convey my regrets to him. I, for one, have never been convinced in the course of this legislation that the Minister of

National Revenue knew that this provision was in the bill in the first instance.


Donald Methuen Fleming: Oh. He stood up in this house and supported it.


Marcel Joseph Aimé Lambert: Surely the hon. member does not believe that.


George James McIlraith: Well, I can speak for myself. The hon. member for Edmonton West can interject as much as he wishes and speak as much as he wishes. I shall always protect his right to speak. I have that feeling in any event. I believe that had the cabinet had the benefit of the advice of the Minister of National Revenue on this measure since it has come back from the Senate the message we would now be sending back to the Senate would be one of concurrence in the proposed amendment. That is my assessment of the man and, as I say, I regret he has unfortunately been ill, and unable to give the benefit of his views to the cabinet on this point since it was dealt with by the Senate.
I know the Minister of Finance has a somewhat different outlook on these things. Once he has put a provision in a bill, good bad or indifferent, he will stand by it no matter how wrong it is shown to be in the course of debates in this house or by an amendment from the other place. I regret that the minister takes this attitude. I regret, also, that the Prime Minister in seeking to deal with the issue before us at this time chose to deal with many side issues which are interesting and, indeed, important, but which are irrelevant to this particular motion. The rest of the right hon. gentleman's arguments had mainly to do with personalities. I have sought in my observations to steer clear of personalities and to relate my remarks directly to the point of issue. I, for my part, must support the right of the taxpayers of this country to appeal from the arbitrary decision of the minister to the tariff board. This was a right which they had enjoyed. It was taken away by this House of Commons, and I wish to see it restored to them.


Hon. W. J. Browne (Solicitor General):: am sure everyone in this house appreciates the kind reference which the hon. member for Ottawa West (Mr. Mcllraith) has made to the Minister of National Revenue (Mr. Nowlan). We all regret that he is not here today. I think that if he were here he would give an answer to the observation which the hon. member for Ottawa West made about his attitude in regard to this bill. I think the hon. member has misrepresented the opinion which the Minister of National Revenue would have expressed on this matter.

The hon. member for Ottawa West seems unable to appreciate the nature of the legislation which is before us. He has regarded this as a very simple matter. All we have here, he says, is a simple amendment which is going to protect the interests of the taxpayers. Well, who are the representatives of the taxpayers of this country? Are we not their representatives? Have we not been elected as members of this house to be their representatives? Any decision which is made here is made in the interest of the taxpayers.


Lionel Chevrier: You would not think so.


Mr. Browne (Si. John's West):: The hon.
member has said that this is simply an amendment granting a right of appeal to the tariff board. But the hon. member has chosen to overlook a rule of this house which was established when Canada became a nation in 1867. I am referring to standing order 63 which was read by Your Honour:
All aids and supplies granted to Her Majesty by the parliament of Canada, are the sole gift of the House of Commons, and all bills for granting such aids and supplies ought to begin with the house, as it is the undoubted right of the house to direct, limit, and appoint in all such bills, the ends, purposes, considerations, conditions, limitations and qualifications of such grants, which are not alterable by the Senate.
Is this present bill, an act to amend the Customs Tariff, a bill which grants aid and supply to Her Majesty? Anyone who listened to the historical references in the speech of the hon. member for Bonavista-Twillingate (Mr. Pickersgill) would certainly have thought that this was a bill to grant aid and supply to Her Majesty, because he spoke of the arbitrary power which was given to the minister to collect taxes and to alter taxes.


George James McIlraith: Would the minister permit a question arising out of his reference to standing order 63? Does he suggest that the Senate amendment respecting the right of appeal to the tariff board is related to such grants as are the subject of standing order 63, or is an aid or supply within the meaning of standing order 63?


John Ferguson Browne: I think anyone with a fair mind reading standing order 63 which I will read again for the hon. member-


George James McIlraith: I have it before me.


John Ferguson Browne: The hon. member says he has it there; perhaps he would look at it. It reads:
All aids and supplies granted to Her Majesty by the parliament of Canada, are the sole gift of the House of Commons-
Mr. Speaker, I do not think I have to go into detail to explain for the benefit of the
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hon. member the meaning of the words "sole gift of the House of Commons".


George James McIlraith: That is elementary.


John Ferguson Browne: Standing order 63 then continues as follows:
-and all bills for granting such aids and supplies ought to begin with the house-
This bill began with the house. The standing order then continues:
-as it is the undoubted right of the house to direct, limit, and appoint in all such bills, the ends, purposes, considerations, conditions-
What is the condition here? The condition here is that it shall be decided by the minister, whose decision shall be final.


Some hon. Members:: Oh, oh.


William Joseph Browne: Hon. members opposite do not agree with me.


Lester Bowles Pearson: That is the way all tyrants begin.


Donald Methuen Fleming: You should know.


William Joseph Browne: What meaning does the Leader of the Opposition ascribe to the words "limitations and qualifications of such grants which are not alterable by the Senate"? If they are not alterable by the Senate then the Senate has no power to alter them. Has the Senate altered them in this instance? Yes; for we have before us today an amendment which is in essence an alteration of the bill granting aids and supplies to Her Majesty. No one can question the fact that a bill dealing with customs tariffs is a bill granting aids and supplies to Her Majesty.
The hon. member for Ottawa West is probably as familiar as anyone in this house with the fact that the Customs Tariff involves hundreds of items and deals practically entirely with the collection of taxes through customs and exise and by other means. Therefore, the amendment to this bill is precisely that which is not allowable because this is a bill which is not alterable by the Senate.
The question which we are concerned with is not merely a question of whether a right is being refused to taxpayers to prevent them from appealing a decision of the minister to the tariff board but is a question as to whether we are going to acquiesce in an amendment by the other place which it has no right to make. That is the real question before us today.
If the hon. member for Bonavista-Twillingate and the hon. member for Ottawa West think that this is a bill dealing with taxation, and I believe they are right, they must also agree that it is unalterable by the Senate. The hon. member for Ottawa West believes

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that it is a taxation bill because, to use his own words as I wrote them down-


George James McIlraith: I think perhaps I can help the minister. The point I made was that the bill in toto is not before us but only the amendment dealing with the right of appeal.


William Joseph Browne: I beg your pardon?


George James McIlraith: I suggested that it was only the amendment to the bill that was before us and argued that the whole bill was not now before us.


William Joseph Browne: The hon.
member also stated that this was something affecting the taxpayers. I suggest if it affects the taxpayers it does so in respect to a matter of taxation; that is, taxes they must pay. I think the hon. member will agree with that, because if there is any complaint on the part of taxpayers it has to do with the taxes which they must pay being unfair and they, therefore, want to appeal to the tariff board to make it right. That being correct, there is no doubt, using the hon. member's own argument, that this bill deals with taxation. I think it is unnecessary for me to argue any further along that line.
To reinforce my suggestion that this is not unusual, I point out that there are hundreds of provisions in public statutes granting to ministers discretionary powers more or less of this type.


Lester Bowles Pearson: No.


William Joseph Browne: The hon. member for Bonavista-Twillingate was the minister for citizenship and immigration for three or four years and I am sure that no one knows better than he the discretionary powers he possessed while acting in that capacity. The hon. member for Ottawa West, who was the parliamentary assistant to the minister of defence production, knows full well the powers that the minister of defence production possesses. Who in this country has ever possessed greater powers than the late Right Hon. C. D. Howe?


Jean-Paul Deschatelets: Are you arguing against that?


William Joseph Browne: No, no, the
hon. member does not follow my argument.


Jean-Paul Deschatelets: Oh, yes, I do.


William Joseph Browne: I should like to point out-


Lionel Chevrier: It is not even an argument.


William Joseph Browne: The hon. member for Laurier (Mr. Chevrier) says this is not even an argument, the fact that many ministers have discretionary powers.


Lionel Chevrier: I was referring to youi speech as a whole as not being even an argument.


William Joseph Browne: I suppose when the hon. member for Laurier was the minister of transport he had many powers which he could exercise and did exercise without there being granted any right of appeal from his decisions.


Lionel Chevrier: I do not know of any.


William Joseph Browne: Certainly the Minister of National Revenue (Mr. Now-lan) under the Customs Act and the Customs Tariff Act has many other powers apart from this one given by this bill from which there is no appeal.


Marcel Joseph Aimé Lambert: There are 64.


William Joseph Browne: I am informed by the parliamentary secretary to the Minister of National Revenue that there are 64 different powers which have been in existence from which there is no appeal.


Lester Bowles Pearson: Would the minister permit a question? Is the logic of his argument that whenever possible we should reduce and take away these rights of appeal just because there are 64 instances which exist where there is no right of appeal?


William Joseph Browne: No, that is not my argument.


Lionel Chevrier: Well, what is your argument.


William Joseph Browne: I am trying to point out some of the inconsistencies in the arguments presented by hon. members of the official opposition. I am attempting to show that we are not doing something quite original and out of keeping with the history of this country as has been suggested by those hon. members. No one knows better than those hon. gentlemen who were members of the previous ministry, that these powers have existed, because some of them and their colleagues exercised these powers when they held office.


Lester Bowles Pearson: Is that your excuse?


John Ferguson Browne: No, sir. The Leader of the Opposition knows very well that no one would attempt to alter all the powers and discretions that are given to various ministers, some of which are very necessary for the administration of the country. That is the reason this amendment was put into the Customs Tariff. That is, it is considered necessary at this time.


Lester Bowles Pearson: But the right of appeal existed for years.


John Ferguson Browne: The House of Commons saw fit to pass this bill and the members of the other place felt they had the power to alter it.


Lester Bowles Pearson: No, the power to put back the right of appeal.


William Joseph Browne: The House of Commons is now being asked whether the other place has the right to alter it and whether this house is going to maintain the rights and privileges, as well as duties, established as part of the constitution of this House of Commons and, therefore, of this country, in 1867 as contained in standing order 63.


John Whitney Pickersgill: Mr. Speaker, I rise because I feel that the Solicitor General (Mr. Browne), and I am sure not intentionally, misrepresented what I said. I have the words I actually used and feel that 1 should be permitted under the rules to set the record straight.
The Solicitor General gave the impression that I suggested that the amendment we are now considering was in itself a taxing statute. What I said was that this whole bill was a normal taxing statute. I continued, and these are the precise words I used, to say that there are sharp differences in the house about whether this bill is even good for the state, but that is not at issue, as Your Honour properly pointed out. We are not concerned now with whether or not this taxing statute in itself shall prevail because it is going to prevail. We are concerned with whether or not, in the interpretation of this measure, the determination of what articles shall be taxable, and at what rates, shall be done in the open with a right of appeal such as has existed for a long time, or whether that right shall, in defiance of the bill of rights, be taken away. That seems to be the sole issue here.


Herbert Wilfred Herridge: Mr. Speaker, it is not my intention to indulge in any technical or legal hairsplitting on this issue. We in this group simply oppose this issue on the basis of what is in the best interest of the people. I am a simple country man searching for the truth in the dense political fog which has been created by repeated government errors in recent days. I rise to express our opposition to this very unique and, I would say, unusual resolution, and to express our concern over the unreasonable things that have occurred in recent days.
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The second paragraph of this resolution simply diverts attention from the principle of an appeal on, from our point of view, a very trivial basis indeed.
I listened with interest, as I always do, to the orchidaceous rhetoric of the Prime Minister and the speech delivered in such a dramatic manner which made us all feel as though there was a crisis in it. Anyway, it was obvious from the Prime Minister's remarks that he has clearly indicated he refuses to accept the amendment proposed by the Senate that restores the right of appeal to the Canadian people from the decision of a minister or of officials. We think that right of appeal is fundamental. It has been mentioned on a number of occasions by the spokesmen of the official opposition and by the members of this group. In our opinion on this occasion the Senate has performed a service for the Canadian people. Hon. gentlemen of the other place have protected the rights of the Canadian people in, shall I say, taking this second look and finding out the weaknesses in the legislation that was sent over to their house. That legislation received a great deal of attention in this house. Fears were expressed during the rather lengthy and at times heated debate that this was a wrong principle to establish in legislation and the Senate has vindicated that opinion as expressed by a good number of members of the opposition during that debate.
I judge from the Prime Minister's remarks that he challenges the house to oppose his will. This is the way I take it. From the very emphasis he used and the dramatic way in which he brought the matter to the attention of the house there was no question but that he challenges the house to oppose him. I did not sense in his speech the question of a great principle. The Prime Minister challenged the house to oppose his will. You could see all the power vested in the Prime Minister and all the determination of one self-willed man to impose his will on this House of Commons. Members of this group accept this challenge and welcome an immediate appeal to the highest court of the land, which is the people.


An hon. Member:: Let's go home and settle this problem.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order. The election is not going to be held today.


Herbert Wilfred Herridge: I am distinctly under that impression, Mr. Speaker, and possibly not next month. The Prime Minister blows this thing up as a great issue. You could see in his attitude and in his remarks that he thought to himself, now, I have got something that

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will befog the minds of the Canadian people. This is an issue; this is a smokescreen; this is something I can take pleasure in presenting. I can see him rampaging around the country talking about the members of the opposition disregarding the rights of parliament.


Mr. Ricard:: True.


Herbert Wilfred Herridge: We must not forget, Mr. Speaker, that no one was more vociferous in days past with respect to reform of the Senate and no one has said less since he was elected to office with respect to the suggested reform of the Senate than the Prime Minister. This is not a major issue. What are the issues in this country if the government should go to the country?


Mr. Speaker:: Order. I hope the hon. member is not going to answer his own question because it would be out of order.


Herbert Wilfred Herridge: I am using a counter-argument as against this being the issue. In doing so I think I must propose what are the issues.


Mr. Drysdale:: Let us keep on one side of the case.


Herbert Wilfred Herridge: The issues are not this one. The issues are unemployment, markets, health insurance, security and justice for old persons. I am sure, Mr. Speaker, if the Prime Minister wishes to go to the country at this time the Canadian people will not be misled by the presentation of what is obviously an expedient, a manufactured and synthetic issue. Therefore we on this side of the house, say, let the people decide now.


Donald Methuen Fleming: Mr. Speaker,-


Mr. Speaker:: I must inform the house if the minister speaks now he will close the debate.


Donald Methuen Fleming: Mr. Speaker, this debate has exemplified on the part of the opposition some quite extraordinary features but they are quite obvious, and I shall not detain the house long in speaking of them.
Hon. members must have been conscious of a curdling of their blood here today, Mr. Speaker, as they listened to the hon. member for Bonavista-Twillingate tell them that the day of freedom had passed and we are now under the rule of tyranny. The hon. member for Kootenay West was just talking about blowing something up into a great issue. If there was any blowing up done in this house it was done by the hon. member for Bonavista-Twillingate in what he had to say about the effects of this measure. He was talking about the danger of the bill in question if passed, without the benefit of the amendment introduced by the Senate. This house has

dealt with this matter, Mr. Speaker. It was before the house on nine different days of the present session. On April 18 the house gave this bill second reading without amendment by a vote of 141 to 34, and on April 19 the measure was passed on third reading on division, a division not called by the Liberals but by the hon. member for Assiniboia. He called out "on division" and that is the only record there is of a division of opinion in the house on the third reading of the bill.
But the hon. member for Bonavista-Twillingate curdled our blood by talking about "dark deeds in dark places". Well, I think his following comments indicated that probably he knew more about the subject of dark deeds in dark places than any other member of this house. What are those dark deeds which he fears, Mr. Speaker, as a result of the enactment of this measure without the Senate amendment? Without traversing ground that is already so familiar, may I say that this measure simply follows well established precedents in this house. Hon. members opposite were not lying awake at nights as they dreamed about the loss of freedom when they were in power. Is freedom passing in the United Kingdom?


Paul Joseph James Martin: It is passing here.


Donald Methuen Fleming: Is tyranny overcoming freedom there, Mr. Speaker? I have already drawn to the attention of the house that under similar legislation of the United Kingdom power is given to the treasury in just such cases without any right of appeal. Here are the notes issued by the board of trade and commissioners of customs and excise under the Import Duties Act. This is the official note:
Under the Import Duties Act, 1958, protective duties are normally chargeable on imported machinery in order to protect United Kingdom machinery manufacturers.
And then they say this about duty free admission:
Section 6 of the 1958 act and paragraph 1(b) of the fourth schedule thereto provide that the treasury may, on the recommendation of the hoard of trade, direct that payment shall not be required of any duty chargeable under section 1 of the 1958 act on particular importations of machinery,-
Some exceptions are set out and then the following words appear:
-if similar articles are not for the time being procurable in the United Kingdom.
The decision in that matter is not subject to appeal. It is a decision made by the treasury.
Further on in this document, Mr. Speaker, we find the following:
The similarity of machines for the purposes of compliance with the statutory condition referred to in paragraph 1(b) is judged primarily in relation

to the product or effect and the efficiency with which it is produced. The appearance, size, shape, method of producing the given product or effect and the cost of machines are not regarded as relevant. To justify a recommendation for remission of the protective duty, it must be shown that the foreign machine has a definite and marked superiority in performance over any comparable machine procurable in the United Kingdom.
Those, Mr. Speaker, are decisions made by the treasury of the United Kingdom, just as decisions under this measure are to be made by the minister of national revenue. This is described as ushering in the rule of tyranny. Well, Mr. Speaker, if any hon. member's judgment has gone so completely astray, has turned to such irrational lengths then he must, if he is to be consistent, say that tyranny has come in the United Kingdom.
Hon. members opposite do so much dislike to be reminded that there are in this country statutes, most of which were enacted in the days when hon. members opposite were in the government, conferring upon ministers and particularly upon the minister of national revenue just such necessary powers as this present bill proposes to confer upon the minister, and without appeal. These are powers without appeal.
I hold in my hand a list of these statutory measures, measures passed by this parliament conferring upon, in this case the minister of national revenue, powers by the dozens that are not subject to appeal, and practically all these statutes were enacted when a Liberal government was in power. Here they are, Mr. Speaker: The first is the Customs Act, and here we have amendments running back over these recent years. They read: the minister may prescribe; the minister may prescribe; the minister may determine value. Here, we are back in 1921 and we find that the minister may revoke a custom house broker's licence; 1951, the minister may appoint a commissioner, and so on it goes. In 1927 we find this: the minister may make regulations.
Then, there is the Customs Tariff, the statute which is now being amended; in 1948, the minister may determine the tariff or surtax; 1948, the minister may authorize collections of special duties; 1931, the minister may dispose of prohibited goods; 1950, the minister may apply specific duties to fruits and vegetables; 1931, the minister may make marking regulations.
Here is the Excise Act, and in 1934, the minister may refuse to issue a licence; 1934, the minister may prescribe; 1934, the minister may refuse a licence; 1948, the minister may require additional data, and so on it goes, the minister may prescribe; the minister may revoke penalties. Throughout all these statutes, there is no right of appeal. Practically every
Customs Tariff
one of these powers was conferred by parliament on the minister of national revenue when a Liberal government was in office. Are they going to say that there was a crisis in every year when these statutes were passed by parliament conferring these powers upon the minister without appeal? I suppose it is futile to look for anything in the way of rational argument or consistency on the part of hon. members opposite.
Let hon. members recall what happened in 1947. These great apostles of freedom, these defenders of parliament, who are they, Mr. Speaker? They are the people who in November, 1947, did not even wait for parliament to be called but announced the budget over the radio and proceeded to impose tariff embargoes and other imposts by radio without parliament even being in session. The Leader of the Opposition was not then a member of the government. However, the hon. member for Laurier was a member of that government, as was the hon. member for Essex East. The hon. member for Bonavista-Twillingate was then serving in his other political capacity as secretary of the cabinet, and was doing things in secret, as we were told this morning.


John Whitney Pickersgill: I am sure the minister does not wish to be inaccurate. I was not the secretary of the cabinet at that time.


Donald Methuen Fleming: I apologize for having advanced the hon. member prematurely. He had not even got that far at that time.
In 1947, they proceeded to apply licences. They cut off a lot of imports, just by order in council, and in many cases nobody was permitted to import except under licence. Of course, the power to issue a licence was conferred upon the minister. Yes, Mr. Speaker, the kind of conferment of power that they view now with such stricken horror was conferred at that time upon the minister of finance. Was there any right of appeal provided from the decision of the minister of finance? There was not. Here, in case after case we have a measure applicable not simply to a handful of commodities but literally hundreds and hundreds of commodities, and there was no right to import except where the minister, in his sole discretion, directed that a permit might be granted. We are asked now to take seriously these roars and thunders from hon. members opposite in their hollow pretence that now the foundations of freedom are being shaken by this measure because it does not provide that in three simple respects in which it is so appropriate, proper and necessary that a decision be made by the minister, there is being provided no right of appeal to the tariff board. Did you ever

Customs Tariff
hear a more hollow presentation than was made today by hon. members opposite on this subject?
Then, in 1948, parliament passed the Emergency Exchange Conservation Act. It received assent on March 24, 1948. Here we find a Liberal government asking parliament to confer on a minister powers like these. Section 3: The minister may issue, vary or revoke permits for the import of such goods. Was there a right of appeal? No, there was not. Section 4 says that no permit shall be issued for the import of goods listed in schedule I, unless in the opinion of the minister, etc. Was there any right of appeal from the decision of the minister? No, there was not. Freedom must have been tottering that day, Mr. Speaker.
Then, section 6 states that, subject to this act and the regulations the minister may (a) prescribe the procedure, (b) prescribe the forms, and do all kinds of things such as (d) authorize persons in his behalf to do things. Was any right of appeal provided there? No, there was no right of appeal.
Let us look at section 12 and compare that with these protestations of hon. members opposite of their undying fidelity to the principles of the bill of rights. Section 12 provides that:
"Where a person is charged with an offence under this act, if it is established that the said person did any act for which a permit is required under this act, it shall not be necessary to establish that the person charged did not possess a permit and the burden of proof that he possessed the necessary permit shall be upon the person charged."
Well, freedom must have been shaken to its foundations that day.
Perhaps I have said enough on this subject. I pass from my comments on this aspect of the matter, Mr. Speaker, only for the purpose of reading one out of many comments that might be chosen at this point. 1 quote:
The budget proposals changing definitions of "made in Canada" will permit the manufacture here of many products now imported and will give our manufacturers a better relative position against foreign competition.
This sounds like a very sensible and fair observation as to the effect of this measure. It is interesting to know who says this. This statement appears, if you please, in a pamphlet issued by the North American Fund of Canada Limited and it is entitled, "Annual Report to Shareholders, December 31, 1960". You will observe that this annual report was issued very shortly after the introduction of the supplementary budget. Then, we find a message to the shareholders signed by the chairman and president, and it is this message to the shareholders from which I have read this particular extract. But, Mr. 
Speaker, if you are interested further and happen to turn the page you would see, under the list of officers and directors, that among those is "A. Bruce Matthews, vicepresident and director". Mr. Matthews is a very distinguished citizen and a former president of the national Liberal federation. But, Mr. Speaker, I hope you would not stop your reading there because if you were interested to go a little further and happened to read the names appearing under the list of other directors you would find there, to your shocked amazement I am sure, the name "Hon. Lionel Chevrier, Member of Parliament".


Lionel Chevrier: Thanks for the advertisement.


An hon. Member:: Look and see how he
blushes now.


Lionel Chevrier: Not in the least.


Donald Methuen Fleming: Mr. Speaker, I turn to the other point. I was not a little surprised to hear hon. members opposite in both the old and new wings of the opposition say what they said today in relation to the fact that the amendment before us was proposed by the Senate. If one had reached the point of looking for nothing resembling consistency on the part of hon. members opposite, then, of course, there would be no occasion for surprise. But as to those who think hon. members of this house made in 1959 bold statements of their principles and positions on such matters, surely we are entitled to be somewhat surprised when they take a complete somersault in July, 1961.
Mr. Speaker, this is a money bill. It is a money bill under every definition of the rule respecting the prerogatives of the House of Commons in such matters. This is a money bill within the meaning of rule 63 of the standing orders of this house. This is a money bill within all of the declarations in relation to the prerogatives of this house in such matters.
We shall not be lightly misled, I am sure, in this house by the suggestion that was made, I believe by the hon. member for Ottawa West, that there was something different about the bill in 1959, on which this house took a stand in relation to this principle. I say again that in relation to this principle there is no difference whatsoever between the issue that was presented to this house in July, 1959, and the issue that is presented to it today by this Senate amendment.


William Moore Benidickson: May I ask a question?


Donald Methuen Fleming: Yes.


William Moore Benidickson: On July 18, 1959, having regard to what is recorded in the Votes and Proceedings of this House of Commons and the minister's remarks on that day recorded in Hansard, will the minister not say that there was involved there an important difference in the ways and means in regard to the income of the crown and the taxation right of the crown on a taxpayer?


Donald Methuen Fleming: I say certainly not, Mr. Speaker. There is no difference whatsoever in relation to the principle at stake on this amendment today. What we had before us then was a bill to amend the Income Tax Act; and, as I pointed out this morning, the amendment did not relate to any clause respecting a rate of taxation; not at all.


William Moore Benidickson: No; to an imposition or not on a taxpayer.


Donald Methuen Fleming: It was an amendment about closing a particular class that was created by one section of the bill which did not for this purpose name rates. This was a question of closing a class of corporation and of saying that no more corporations should be permitted to qualify for that particular treatment. Was that any more of a money bill than the one we have before us today? Of course it was not, Mr. Speaker. The thing that determines what is a money bill or determines the application of the principle here involved to the amendment, is whether the main bill is in its nature a taxing statute. Does it relate to money? Is it a fiscal measure? Does it bring into effect any question pertaining to the balance of ways and means? You have these determinations, Mr. Speaker, that it is not simply appropriation acts or simply estimates that are deemed to be money bills of this house for that purpose. It is the taxing statutes, measures like the Income Tax Act as in 1959 or the Estate Tax Act as in 1958. These are money measures for this purpose; and bills to amend such statutes, are money bills and there can be no escape from that fundamental position. It is a well established position in the jurisprudence of this house.


Mr. Peters:: Try to sell that somewhere else.


Donald Methuen Fleming: I will come to hon. members opposite in a moment. What did we find in July, 1959? Mr. Speaker, when we dealt with this subject on July 18, 1959, it fell to my lot to present to the house an amendment similar in certain respects to the one now under debate or at least a message to the Senate similar to the one now under debate. There were more clauses. The third one contains these words:
The said amendment of the Senate infringes the sole and undoubted right of the Commons to impose taxation: it alters the application of taxes and interferes with the public revenue.
Customs Tariff


William Moore Benidickson: But this one does not involve a change in revenues.


Donald Methuen Fleming: That was adopted by this house on July 18, 1959. What was said on that occasion? Both on that occasion in my own remarks and in the remarks of other hon. members on that occasion reference was made to some of the great statements of the past. In his speech on July 14, the Prime Minister had occasion to refer to remarks made in this house by some of the leading authorities of earlier years. He drew attention to what had been said on September 7, 1917. Here is what the Speaker of that day said:
On a previous occasion when this motion was under consideration, two points of order were taken by the hon. the leader of the opposition, (1) that the Senate has no power to amend a money bill, and, (2) if the Senate makes such an amendment, in view of rule 78, the house is bound to insist on its privileges and reject the amendment.
The leader of the opposition who is referred to by the Speaker in this passage is none other than Sir Wilfrid Laurier. The Speaker proceeds:
As to the first point, it is beyond question that, in view of section 53 of the British North America Act, bills appropriating any part of the public revenue or for imposing any tax or impost must originate in the House of Commons; and there is no doubt that the Senate has neither power to increase the tax or impost nor to change the incidence of the burden of any such tax or impost in any such bill originating in this house;-
And so on.


William Moore Benidickson: May I ask a question?


Donald Methuen Fleming: I will accept questions when I have finished if the hon. member does not mind.


William Moore Benidickson: Very well.


Donald Methuen Fleming: Then further, the Speaker had something to say and Sir Wilfrid Laurier commented on the ruling of the Speaker, and asked that the remarks of the Speaker be not simply a matter of record but should be made a part of the decision of the house. That was the doctrine that was honoured by the Liberal party. In bygone years my predecessor, Mr. Ilsley, was very punctilious in his insistence on the prerogatives of the House of Commons in this matter. In 1941 when the house agreed to accept an amendment he was very careful to insist that the following should be made a part of the decision of the house. He moved:
That the said amendment be now read the second time and concurred in; but that this house, while disapproving of any infraction of its privileges or rights by the other house, in this case waives its claims to insist upon such rights and privileges but the waiver of such rights and privileges is not to be drawn into a precedent; and, further, that this house agrees to the incorporation in this bill-

Customs Tariff
Et cetera. Mr. Ilsley was very careful to insist upon that assertion of the rights of the house.
We come along to July 18, 1959. As to the nature of the measure, I simply observe that it was a measure comparable in all respects, for this purpose, with what we have before us today.


William Moore Benidickson: Will the minister read Votes and Proceedings of that day at page 750?


Donald Methuen Fleming: These are the words of Sir Wilfrid Laurier on September 7, 1917. This is the great voice of liberalism, Sir Wilfrid Laurier; not the hollow voices of the liberalism of 1961. He said, as quoted on page 6402 of Hansard:
It is a well-known principle that the upper chamber can reject any bill, even though it deals with financial matters, that has been passed by this house. The Senate can reject the supply bill; it can reject a bill adopted by the committee of ways and means of this house, but it cannot amend such bills.
This principle has been affirmed over and over again. Mr. Speaker, can you find a clearer statement anywhere? That was the great voice of liberalism in 1917, but that voice has been forgotten; it is not heard today by, hon. members opposite over the clamour and roar of lesser voices. On that occasion the Leader of the Opposition (Mr. Pearson) chose to make some remarks following those which it had been my honour to make. They appear on the same page. He almost went so far as to congratulate the government for the strong stand it had taken in rejecting the amendment proposed by the Senate. He said:
We are therefore naturally gratified that the government has taken this position and we will support it.
That was the Leader of the Opposition on July 18, 1959, Mr. Speaker. I do remember, when that address to the Senate was adopted unanimously that day, the congratulations that were extended to the government by hon. members of the C.C.F. party. 1 can well remember the spirited applause that some of them extended to the government because we would not yield or compromise on this principle that the Senate cannot amend a money bill.
I was shocked today to hear the hon. member for Burnaby-Coquitlam (Mr. Regier) making compromise with the principles of the past. I was more shocked by the hon. member for Kootenay West (Mr. Herridge), for whom many of us in this house have great respect, this afternoon making compromise with a sound and well established principle.

These hon. members have been greatly misled since the days when they took their stand on principle in 1959.


Jean-Paul Deschatelets: Let us go to the people with it.


Donald Methuen Fleming: Mr. Speaker, this points to the sorry departure of hon. members opposite from the positions they were prepared to take when they were on sound ground and stood on principles. Do not take my word for this principle-


Murdo William Martin: You are right.


Donald Methuen Fleming: -on which the C.C.F. stood, Mr. Speaker. Here are the words of the hon. member for Assiniboia (Mr. Argue), then the leader of the C.C.F. party. I quote from page 5980 of Hansard of July 14. Here he was chastising the Liberal party in this house for the weakness of its position on this question. He said:
I do not think we can emphasize too strongly that with regard to money bills it should be the sole right of the House of Commons not only to originate them but in fact to have them passed in their original form.


William Moore Benidickson: But there is no money involved in this amendment.
Mr. Fleming (Eglinion: That was the hon. member for Assiniboia in 1959, standing on principle. Today we have the hon. member for Burnaby-Coquitlam and the hon. member for Kootenay West leading themselves, and we do not know yet how many others, into error because they are prepared under these circumstances to depart from a sound principle. Mr. Speaker, the government stands on the principle that the Senate cannot amend money bills.


Azellus Denis: Give us an election on that.


William Moore Benidickson: Mr. Speaker, I wish to direct a question to the Minister of Finance. In two speeches the Minister of Finance has indicated that he-


Some hon. Members:: Question.


Murdo William Martin: Let him put the
question.


William Moore Benidickson: May I ask a question?


Some hon. Members:: Question.


William Moore Benidickson: The Minister of Finance has referred to the debate on July 18, 1959 which he gives as a precedent on this question. He says the conflict between the House of Commons and the Senate at that time was similar to that presented to us today. I wish to direct-


Michael Starr: Question.


Mr. Habel:: A "starred" question?


William Moore Benidickson: I wish to ask the Minister of Finance this question. The minister said today that the exemption of foreign corporations did not involve a change in revenues and therefore we had there a proposal from the Senate which did not in any way involve a change in revenues. I wonder whether the minister has read what he said at that time.


Donald Methuen Fleming: Precisely, Mr. Speaker. This is what I said on July 18. It is to be found in Hansard at page 6401. Here I was speaking about the amendment that was then being debated:
It was made clear that this clause 19 was not introduced into the bill with the object in view of enlarging the revenues. It was introduced with a view to abridging what was regarded as a discrimination or favoured position enjoyed by foreign business corporations under the Income Tax Act here. In the light of the views expressed in the house, the government is pleased to reaffirm, reemphasize and reassert the principle that money hills passed by this house may not be amended in the other place.


John Whitney Pickersgill: Mr. Speaker, I wonder whether the hon. gentleman would permit me to ask him one short question. Was the final determination by the Minister of National Revenue (Mr. Nowlan) introduced into this bill for the purpose of enlarging the revenues?


Donald Methuen Fleming: This amendment was introduced-that is, the whole bill we are speaking of now-


John Whitney Pickersgill: Answer my question.


Donald Methuen Fleming: -for the purpose of changing a definition in the act which has a bearing upon the interpretation of some 75 items in the Customs Tariff. This has been made clear. Hon. members opposite, in the nine days this measure was before the house this session, kept telling us that this gave the minister power to determine rates, rates of customs tariff, and now they are shilly-shallying and pretending that this has no resemblance to a money bill.


John Whitney Pickersgill: Would the minister answer my question?


Some hon. Members:: Question.
Divisions
Bourbonnais
Broome
Browne (St. John's West) Browne (Vancouver-Kingsway)
Brunsden
Campbell
(Lambton-Kent) Campbell (Stormont) Campeau Casselman, Mrs.
Cathers
Chambers
Charlton
Chatterton
Churchill
Coates
Comtois
Cooper
Crouse
Danforth
Deschambault
Diefenbaker
Dinsdale
Drouin
Drysdale
Dubois
English
Fairclough, Mrs.
Fane
Fleming (Eglinton) Flemming (Royal)
Forbes
Fournier
Frechette
Green
Grenier
Grills
Gundlock
Hales
Halpenny
Hamilton (Qu'Appelle)
Hanbidge
Harkness
Hees
Hicks
Horner (The Battlefords)
Howe Jorgenson Jung Keays Kindt Knowles Korchinski Lafreniere Lahaye Lambert Legere Letourneau Macdonald, Mrs. MacLean (Queens) MacLean (Winnipeg North Centre) MacLellan
Macquarrie
MacRae
McBain
McCleave
McFarlane
McGee
McGrath
McPhillips
Martel
Martineau
Martini
Matthews
Monteith (Perth)
Monteith (Verdun)
More
Morissette
Morton
Muir (Cape Breton North and Victoria) Muir (Lisgar)
Nasserden
Nesbitt
Nugent
O'Hurley
O'Leary
Pascoe
Paul
Phillips
Pigeon
Rapp
Regnier
Ricard
Richard (Kamouraska)
Rogers
Rompre
Rynard
Sevigny
Skoreyko
Small
Smith (Lincoln)
Smith (Simcoe North)
Smith (Winnipeg North)
Southam
Speakman
Spencer
Starr
Stearns
Stefanson
Stewart
Stinson
Tasse
Thomas
Thompson
Thrasher
Tremblay
Valade
Villeneuve
Walker
Webb
Webster
Weichel
White
Winkler
Wratten-134.


John Whitney Pickersgill: More evasion.



CANADIAN NATIONAL RAILWAYS


Donald Methuen Fleming: that the house go into committee to consider the following resolution:
That it is expedient to bring in a measure to authorize the Canadian National Railway Company to make capital expenditures in the year 1961 not exceeding $178,900,000 and to make certain capital expenditures and enter into certain contracts prior to July 1, 1962; to authorize the national company to issue securities to provide amounts required for the authorized expenditures: to provide that, except as expressly provided, the aggregate principal amount of securities outstanding at any time shall not exceed $76,800,000; to authorize the governor in council to guarantee the principal and interest of securities issued by the company for the purpose aforesaid; to authorize the Minister of Finance to make loans to the said company secured by such securities and not exceeding $76,800,000 in principal amount to enable the said company to meet such expenditures and with authority to give financial aid and assistance to other companies of the national system; and to provide further in respect of the refunding of matured, maturing and callable obligations of the said company, for the issue of securities guaranteed by the Dominion of Canada, to an aggregate principal amount not exceeding $230,000,000 in lieu of the present amount of $200,000,000.
Motion agreed to and the house went into committee thereon, Mr. Flynn in the chair.


Donald Methuen Fleming: Mr. Chairman, the resolution now presented is that which annually precedes the introduction of the Canadian National Railways Financing and Guarantee Act. In accordance with the practice followed since 1952, the 1961 act will again include the financing of all capital expenditures whether authorized in the current year's act or in earlier financing and guarantee acts.
The bill is intended to accomplish six main purposes. The first is to authorize the Canadian National Railways to incur capital expenditures not exceeding $178,900,000 during the 1961 calendar year.
The second is to authorize the company to make, prior to July 1, 1962, such capital expenditures as may be necessary to discharge obligations incurred under the 1961 act, but which become due for payment after January 1, 1962, as long as these expenditures do not exceed $76 million.
The third purpose served by the bill is to authorize the railway company to enter into contracts prior to July 1, 1962, for new

equipment and for general additions and conversions where payment will come due after the calendar year 1961, provided that such amounts do not exceed $44 million.
In addition to these three purposes, all of which are similar to those of previous years' acts it is necessary this year to introduce three new provisions pending a review of the Canadian National Railways capital structure. As I announced in the house last year during the debate on the financing and guarantee act, 1960, the government had intended to proceed with the re-examination and, if necessary, revision of the capital structure of the railway company prior to December 31, 1961. However, since the complete report of the royal commission on transportation has not yet been received it was considered advisable to make provision in the 1961 act for a one-year extension of the present capital structure. As the president of the C.N.R. indicated in the recent hearings before the sessional committee on railways, air lines and shipping, the capital structure is at present under study. This review will be continued in the light of the complete report of the royal commission once it has been received.
Consequently, the bill provides for the continued purchase by the Minister of Finance of Canadian National Railway 4 per cent preferred stock through to the end of the calendar year 1962. Hon. members will recall that the 1960 financing and guarantee act extended to December 31, 1961 the expiry date of the authority granted by the Canadian National Railways Capital Revision Act for the purchase of such stock up to the limit of 3 per cent of the company's gross revenue. The 1961 act will extend this expiry date by a further year.
The bill also will extend by one year, to December 31, 1962, the moratorium on interest on the government loan of $100 million to the railway company authorized by the capital revision act, 1952.
Finally, the bill will contain a new section to increase to $230 million the limitation in the Canadian National Railways Refunding Act, 1955, placed on the authority to refund maturing or matured securities of the railway company. The limit is at present $200 million and it is necessary to increase this limit to allow the refunding of securities of the company maturing during the currency of the 1961 financing and guarantee act and pending the review of the capital structure.
The financing, either by means of the issue of new securities by the government of Canada or by way of direct loan, which parliament is being asked to approve, is an

amount not to exceed $76,800,000. I would ask permission at this time to place on Hansard for the convenience of hon. members a table giving details of this amount.
[Editor's Note: The table referred to above
The amount of $76,800,000 appearing in clauses
Road property	
Branch line construction	
Hotels	
Equipment	
Investment in affiliated companies: Trans-Canada Air Lines financial
requirements	
Others	
Less:
Uncompleted work
Add:
Interim financing authority January 1 to June 30, 1962, on obligations incurred prior to January 1, 1962	
Less:
Depreciation accruals and amortization of discount on funded debt, etc., in
relation to calendar year 1961	
Depreciation accruals and amortization of discount on funded debt, etc., in relation to period January 1 to June 30, 1962


Donald Methuen Fleming: As in previous years, the bill provides authority to make temporary loans to the Canadian National Railways and Trans-Canada Air Lines to meet deficiencies in operating revenues up to June 30, 1962. As hon. members are aware, these loans to the two companies on income deficit account are of a temporary nature to meet deficiencies in revenue which regularly occur in the early part of each calendar year and are repaid later in the year either from revenues or, if these are insufficient, are written off by parliamentary appropriation. For 1961, the railway company has forecast a deficit of $64 million, while the air line is budgeting for a surplus of $500,000.
At present, temporary loans to the railway company in respect of capital expenditures authorized under the 1960 act are outstanding in the total amount of $36,389,212.


Lester Bowles Pearson: I wonder whether the minister can tell the committee before he sits down who is the president of the Canadian National Railways at this moment?
6,	1961	7641
Canadian National Railways The Chairman: Does the committee grant leave to have this table printed in Hansard at this point?


Some hon. Members:: Agreed.
follows: ]
4(3) and 6(2) is computed as follows:

25,622,000	$178,900,000
16,000,000
162,900,000
76,000,000
238,900,000
108,100,000
54,000,000
162,100,000 $ 76,800,000


Donald Methuen Fleming: I am surprised the Leader of the Opposition is not aware that Donald Gordon is the president.


Lionel Chevrier: Mr. Chairman, there are a number of points I should like to make in connection with this legislation. In the first place, as the minister has indicated, this is the resolution which precedes the annual bill concerning the financing of Canadian National Railways. As is the custom, this bill is generally brought in after the report of the committee on railways, air lines and other government owned corporations is received. However, such is not the case this year.
I must immediately indicate to the com mittee the delay on the part of the government in connection with this matter, as in so many other matters. It has been the custom, as the committee knows, to deal with the affairs of Canadian National Railways long before the end of the session. My recollection is that in years previous to 1961, the committee on railways, air lines and shipping has reported much earlier than on this occasion. I believe

Canadian National Railways they have reported in March and April, but I have no recollection, during the long years I have been in this house, of an occasion when the committee has held its sittings so late and at this time has not brought forward a report.
When the Minister of Finance introduced a similar bill on June 7. 1960, he had this to say as reported at page 4601 of Hansard:
It is the custom to introduce this present measure after such a committee has conducted that review of the operations and financing of the Canadian National Railways system and has made its report to the house.
The question I put to the minister, then, is why is the measure being brought in before that committee has made its report?


Donald Methuen Fleming: The hon. member understands that I am not a member of that committee, but I am told the reason the report has not been made is that the chairman is ill. It is hoped the report might be submitted tomorrow morning.


Lionel Chevrier: I am not going to let the minister get away with that statement. While it is true the chairman is ill, there is a deputy chairman of the committee and there always has been a deputy chairman of the committee. The real reason is that the government could not make up its mind as to when it was going to call this committee. The real reason is that the government allowed charges to be made against the president and other officers of Canadian National Railways, and held a debate here for days during which attacks were made on the president, thereby delaying the setting up of this committee. This is the real reason we have not received a report as yet.
The custom which the minister says has been established is not being followed. However, he need not tell the house or tell me that this failure is the result of the illness of the chairman. We all regret his illness. I must say the chairman of the committee has done a magnificent job in trying to maintain order and decorum in the committee. All of us who sit on this side of the house, as well as those sitting on the other side, regret his illness. However, I come back to the point that there is a deputy chairman. There is no reason why this committee could not have been set up much earlier, and therefore had a report before us prior to the introduction of this resolution.
The other point I wish to make is this. Before we vote on this resolution, before we vote these huge sums of money to the Canadian National Railways, we should know who the directors of the railway are going to be. We had a bill introduced into this house some weeks ago increasing the number of directors


from seven to 12. Notwithstanding our demands, both prior and since the introduction and passage by this house of that legislation, we have not been able to find out who the president and directors of the Canadian National Railways are. Before we are asked to vote these large sums of money, I think it is an insult to this house not to tell us who these directors are going to be. It is of the essence of good business, good administration, for the shareholders of any corporation to be told who the directors are going to be. After all, we have a right to know what kind of people they are. We have a right to know whether or not the public will have confidence in them. We have a right to know what business experience, and the like, they have. We are not even being given that information, although the bill concerning the directors has been approved by both houses of parliament for many days, if not weeks. I say to you, Mr. Chairman, that we are entitled to obtain this information before we vote these large sums of money.
There is another point which I think should be brought to the attention of the committee. This has to do with one of the subsidiaries of Canadian National Railways, namely Trans-Canada Air Lines. We were told in the committee that it was not possible to discuss certain matters affecting Trans-Canada Air Lines because they were under study by the cabinet. We were told in the committee that these matters had not been determined by the cabinet, were of a highly confidential nature, and so it was possible to discuss them. We respected the statement which was made by the minister because that has been the practice.


Léon Balcer: I should like to ask the hon. member precisely what matters he is mentioning. I did not ask the committee not to discuss any matters because they were before the cabinet.


Lionel Chevrier: I am referring to the international routes of Canadian Pacific Air Lines and those of Trans-Canada Air Lines, as well as the domestic routes. When we got to the point in committee that we were about to ask questions concerning these matters, we were told that they were sub judice; we were told that they had not been determined by the cabinet and therefore it would not be advisable to discuss them. I, for one, respected that decision. So, I say now-


Léon Balcer: On a question of privilege-


Lionel Chevrier: There is no question of privilege, but there may be a point of order.


Léon Balcer: The hon. member says that the committee was told by the minister that the

committee was not to discuss certain matters because they were before the cabinet and therefore were sub judice. I say that, as minister, I did not say that at all. When this subject was raised, I said that these matters were before the cabinet. I did not tell the committee not to discuss these matters, and I did not say they were sub judice. Any member of the committee was free to discuss any matter as long as he wanted.


Lionel Chevrier: The minister has just
confirmed what I have said; the minister is not disagreeing with anything that I have said. I am the one who said that the matters were sub judice, but the minister rose and said they were under consideration by the cabinet. He certainly made that statement, and immediately he made that statement it was quite clear that the officers were not going to give any information concerning those routes.
The point I am making now is this. Because of that statement we respected the views that were expressed then and we did not pursue the matter. Certainly, I did not pursue the matter. I say now we have arrived at another stage. Where we require large sums of money, we should be told what the position is in so far as these international routes are concerned. Is that decision going to be withheld from the committee and from the country until such time as the house has adjourned its proceedings or prorogued, for that matter, in view of what the Prime Minister said a little earlier? Then, when this house is no longer sitting will we get, as we have in the past, a statement from the Minister of Transport that here are the matters that were under review and here are the decisions that have been taken?
But the press, however, has given some indication of what is being demanded: first, that on its polar routes from Australasia via Edmonton to Amsterdam, C.P.A. be given the right to come down at London; and next, that it also be given the right to fly Toronto-Montreal by way of London with propeller aircraft. The press has given indication that those are the applications that have been made to the cabinet under the Aeronautics Act. It has been well known for many months that this matter has been under cabinet consideration. When is the cabinet going to hand down its decision? What is the nature of the application?
Before these large sums of money are voted by this House of Commons surely we should be given some indication of (1) what the applications are; (2) what effect they will have on the financial position of T.C.A.; and (3) what the decision is going to be. The same thing applies to the transcontinental air routes
Canadian National Railways now being serviced by both these large corporations which are competing with each other and unquestionably causing each other financial harm. I think the committee again in that field is entitled to know what the position is.
The minister made a statement, unfortunately not in the house, having to do with regional carriers, as he had a perfect right to do; and at least in the field of regional carriers we know what the position is east of Oshawa and Sarnia. For instance, the statement was made that applications had been filed with the air transport board relative to Quebecair, Nordair and Maritime Central air lines and the air transport board handed down its decision with reference to these matters. The minister made a statement and, at least in so far as the regional carriers are concerned, we know where we stand and the air carriers know as well. Not so, however, in the other two fields. Not so, however, in the field of international carriers and in the field of domestic carriers as well.
We also know that since the committee on railways, air lines and shipping owned and operated by the government has been sitting, a team of experts from the Department of Transport have gone to Washington. What have they gone there to do? They have gone there to negotiate with their United States counterparts a renewal of the bilateral air agreement between Canada and the United States. We asked questions of the minister in so far as that matter was concerned and we received very unsatisfactory replies. However, we obtained from the press a statement by a United States delegate that it was difficult to decide on the nature of the demands and the discussions when it was impossible to find out what was in the minds of the Canadians. Of course, I am now paraphrasing a question which I put to the minister on an earlier occasion.
What did the Canadian delegates go to Washington to discuss? I think this House of Commons is entitled to know since we are voting large sums of money for this purpose. Was it to seek additional transborder routes? Was it to obtain additional routes from Montreal to Los Angeles, or from Montreal-Toronto to Miami, for instance? They are routes which we should have had since this government has been in office but which we have not obtained. Is it to offset the loss of routes which this government has granted to foreign countries by the signature of bilateral air agreements with, for instance, Italy, west Germany, France and one other country the name of which escapes me for the moment? I think the committee should be given information on matters of this kind. We have not been able to get it in the house by way of

Canadian National Railways questioning. We have not been able to get it in the committee. Surely we should be given it on this last occasion which we shall probably have to discuss matters concerning T.C.A. and the C.N.R.
It is a well known fact that Lufthansa, Air France, and Alitalia have fifth freedom rights in Montreal, with onward rights for these foreign air carriers to Los Angeles and to San Francisco and also that B.O.A.C. has fifth freedom rights to land in Toronto, something which our carriers do not possess in these countries. It is quite clear that the United States has given these foreign countries certain rights which Canada does not possess.


Léon Balcer: Who made the last agreement with the United States? What government did that?


Lionel Chevrier: The minister asks who made the last agreement with the United States. I do not know when the last agreement was made. However, if the minister is referring to agreements which were made when we were in office, let me tell the minister that when we gave a quid we got a quo in return and we never gave fifth freedom rights without getting from these foreign countries similar fifth freedom rights in return therefor. Not so since this government has been in office. I have not the statements before me now but I put them on Hansard last year; and I am only summarizing the position as I can but do on a measure of this character. However, there is no doubt that to west Germany, Italy and one if not two other countries went fifth freedom rights in this country in exchange for third freedom and fourth freedom rights in those foreign countries. Now an attempt is being made by the Canadian team in going to Washington to recapture the position lost in those negotiations.


Léon Balcer: By the government of which the hon. gentleman was a member.


Lionel Chevrier: I think either the Minister of Finance or the Minister of Transport or someone on behalf of the government should give some indication of what it was the Canadian team was seeking in Washington, what success it has had, and what was the nature of the discussions. After all, there is nothing secret about this matter. These transborder routes have been public knowledge to both Canadians and Americans for many years now. It is only fair and right that we on this side of the house and the public should know what the position is with reference to the transborder routes.
There are other matters affecting the Canadian National Railways with which I should like to deal but the amount required in this

resolution and the details thereof have just a short time ago been handed to me by the minister. On short notice like this it is difficult to deal with the matter in the manner in which I should like to deal with it at the present time.
I think those of us who sit on this side of the house will approve of the three new provisions which were announced by the Minister of Finance concerning certain extensions having to do with the capital revision of the Canadian National Railways pending a review of the capital structure of the C.N.R. by the royal commission on transportation.
I do not wish to enter into a discussion of the report of the royal commission. That has been done previously. Until the second and third reports, if that be the case, are brought down it perhaps would not be appropriate at this time to deal with that matter. However, the president of the Canadian National Railways did tell us that there was under consideration with the government at the present time a review of the capital structure of the Canadian National Railways. There is no doubt that the railways all across this country-not to mention railways in the United States and elsewhere-because of competition emanating from air lines, trucks and motor vehicles, are in difficult financial circumstances. The Canadian National Railways is no exception.
The president of the Canadian National Railways gave an excellent summary of the reasons why the net revenue of the railway was so much lower this year than it has been in the past. If one gives heed to the reports that have appeared in the press from time to time, in so far as Canadian National Railways is concerned, the situation certainly is not improving. I hope the royal commission on transportation will make recommendations which the government will find it possible to adopt which will assist Canadian National Railways in the difficult financial position in which it finds itself.
There are many other things I should like to inject into the debate, but I should like to conclude on the note with which I began. It is that before we are asked to vote these huge sums of money the house should be taken into the confidence of the government and parliament should be told who are going to be the directors of Canadian National Railways and, by inference, some of the directors of Trans-Canada Air Lines also. Until we are given that information the house, in all decency, should not be asked to adopt this resolution.


Mr. Fisher:: Mr. Chairman, in view of the Prime Minister's indication this afternoon that we are on the lip of an election, if one

could put it that way, I suppose every time one gets up one is conscious that this may be the last opportunity to express opinions, and especially on an institution such as the Canadian National Railways.


John Andrew W. Drysdale: Don't get political.


Douglas Mason Fisher: The Canadian National Railways bill, as has been pointed out by both previous speakers, is a routine measure in a sense. We find nothing contentious in the measure itself and are prepared to support it.
However, it does seem to me most unfair that the Minister of Finance and the Minister of Transport have not taken the trouble to discover whether the report of the sessional committee on railways, air lines and shipping will be available to the house tomorrow. Without that report before the house we are not in a position to discuss many of the points that really need to be discussed and examined which affect this resolution and the whole financial picture of the C.N.R.
The minister himself indicated that before our committee Mr. Gordon mentioned that completely new proposals with regard to the capital revision of the C.N.R. were under way or were being studied at the present time. To say they are completely new is an understatement. As far as I am concerned they are a bombshell, and I am sure they are a bombshell to the minister. They are a bombshell the size of $700 million or $900 million apparently. We cannot really discuss that now, Mr. Chairman, because in order to do so we should be able to go into the committee proceedings and, according to procedures of the house this is not allowed.


Donald Methuen Fleming: Mr. Chairman, I think the hon. member will agree with me that the proposed changes in the capital structure of the Canadian National Railways are not involved in the present bill. That is something for further study. The bill will simply continue the existing arrangement for another year to enable that study to be carried on. There is nothing in the bill that relates to that study or prejudices the right of any hon. member to comment on it in due course.


Douglas Mason Fisher: I agree with that particular aspect of it, but I say to the minister this. We have a senior management that has been in charge of the railway for 12 years. In 1950 a royal commission made certain recommendations with regard to the capital structure of the Canadian National Railways. In 1952 there was a recapitalization, as the minister knows, but that measure is coming to an end and will be continued in this bill.
Canadian National Railways
To speak properly to this matter we should be able to examine wholly, in relation to this bill, the proposals and information that the president of the Canadian National Railways gave us. The minister mentioned the recent royal commission. Here is a royal commission set up in 1959. It reports in the spring of 1961. Its hearings conclude in the winter of 1961. The president of the Canadian National Railways tells us in the committee that he has these great new provisions coming about, but he did not say a word of this to the royal commission on transportation. Not one thing was brought forward in that respect.
This is a most surprising state of affairs to me, that as a consequence of our last big royal commission on transportation we get a huge revision, well over half a billion dollars, in the debt structure of the C.N.R. Now we have another royal commission, and there seems to be no indication that anything is going to be done or recommended in relation to the C.N.R. debt structure. But the president has a new proposal, and it is a dandy-$700 million or $900 million. I hope that after the resolution is passed we do not deal with the bill until we have the committee report in the house and are free to go into details of the evidence that was presented to the committee.


Donald Methuen Fleming: Mr. Chairman, I may inform the hon. member that I am again told we may expect a report tomorrow morning. In that event we would have it before there is any question of going on with second reading.


Lionel Chevrier: We should have had it a long time ago.


Douglas Mason Fisher: The hon. member for Laurier made the point that the committee has been much delayed this year. I very much regret that it was delayed, because I think the whole attitude toward the C.N.R. management, especially on the part of the government members, might have been much different had we had the committee hearings a month and a half or two months ago, rather than coming with the peculiar juxtaposition to other events that affect other figures in the public service. I hope I am not being too obscure.


Lester Bowles Pearson: No, you are not.


Lionel Chevrier: Another head to roll.


Douglas Mason Fisher: I would suggest that the fact the committee hearings were late, other than the inconvenience of not having the information from the hearings, is really not critical in relation to the bill before us. Another point raised by the hon. member for Laurier

Canadian National Railways was in relation to the fact that we do not know who the directors are going to be. It seems to me that question is one worth putting forward, but I do not know whether it is worth getting excited about. We are pretty sure who the directors will be, in a general sense. I mean, there is no doubt about that. I do not think we are under any illusions that the government is searching around to find a good socialist to sit on this government corporation.


John Andrew W. Drysdale: There aren't any.


Douglas Mason Fisher: Do you mean there are no good socialists?


John Andrew W. Drysdale: Not in crown corporations.


Douglas Mason Fisher: Regarding that contradiction of terms from the hon. member for Drysdale-


John Andrew W. Drysdale: Thank you for changing my riding.


Douglas Mason Fisher: -I suggest that we put it to the voters of Burnaby-Richmond, because I imagine there are some people out there who will be voting in the next election and who might consider that you can link up the adjective "good" with the word "socialist". They may have something to say about the hon. member's return here.
Surely the point in regard to the directors is that the house did act to provide more directors. The official opposition took one position on it; we took another. We were glad to see the number of directors increased. But the delay is just another example of what we have come to assume is the chief characteristic of the present administration and, that, in its simplest terms, and in a word with a Latin root which would appeal to the Minister of Finance, is, simply, procrastination. When we look at this mob around us of 200 plus, we conclude it is easy enough to find Conservative M.P.'s; but it is too bad that in this mob of Conservatives in the country who stand behind them they cannot come up more quickly with people who want to be directors of this crown corporation.
The aspect of the Canadian National Railways about which I should most like to speak-but again, until we have permission to go into the evidence, it would be incomplete-is the question of whether we can have any great confidence in the present management of the Canadian National Railways. I am not going to anticipate what opinion the committee of the house which has looked at the railway might have, but it certainly is apparent from the resolution and from what the hon. member for Laurier called the vast sums involved that we are continuing to give a very free hand to the management

of the Canadian National Railways in its programs of capital expenditure.
I hope that at some time in this debate the Minister of Transport will get up and give us a review of all the capital that has been pumped into the C.N.R. in the past decade and tell us the government's view as to how effective these expenditures have been in terms of operating revenue, operating profits or losses, as they may be, and also in terms of what these capital expenditures have done in providing job opportunities. It seems to me that if we are going to have an election very soon we must look even here at one of the fundamental issues which is going to appear at that election. That is not the issue of Senate reform, but the issue of unemployment. Here is a wonderful example of what has taken place in Canadian industry. Governments, both Liberal and Conservative, supported by all parties in the house, have pumped multimillions of dollars into the Canadian National Railways for change. Out of that change they have had a reduction in jobs and job opportunities which is astounding, and if it continues at the present rate, the railways, within about four more years, will have approximately half the number of employees that they had a decade ago, that is, in about 14 years practically half of the railway labour force will have gone. We should be conscious when we are putting through expenditures on this scale that these are some of the results that are accruing to the Canadian economy.
Someone suggests that you cannot move the clock back, that we cannot be an anachronism in the railway business. One can readily agree, but when one examines the consequence of this job reduction and job dislocation which has happened with the Canadian National Railways and other railways it certainly seems that we are not geared in relation to our willingness to spend on the C.N.R., to take care of the dislocation and the lack of jobs which result from the expenditures.
We shall support the bill and we look forward to the resolution having a quick passage through the committee, especially in view of the indication that tomorrow we shall have both the bill and the report of the sessional committee on railways, air lines and shipping before us.
The hon. member for Laurier went into some detail about the issue of Trans-Canada Air Lines and its position, especially with relation to rights which are being negotiated with the United States. What we are most concerned about is the apparent hesitancy on the part of the government and the Minister of Transport to come up with a clear-cut answer, yes or no, to the Canadian Pacific Airlines request for added opportunities for

service on the domestic lines. Again, even the friends of this government suffer from procrastination. In this regard, Trans-Canada Air Lines has given an indication that what competition was allowed on domestic routes has led them to have the first deficit in a period of nine years. We can only assume that this deficit results from the change in government policy which was made several years ago following the Wheatcroft report and the decision to allow Canadian Pacific Airlines to get into the trans-continental service. The issue is an extremely simple one and it can be put in the form of a question: Will a government decision to give Canadian Pacific Airlines more opportunity for domestic service create a greater deficit and greater problems for the government owned railway? It is as simple as that. It seems to be such a simple problem that it takes a great deal of time for the government to make up its mind. There is a very crude expression that one cannot use in the house in relation to this kind of proscrastination, but something needs to be done immediately, and since the next election is being fought on the basis not only of Senate reform, we hear, but on the basis of free enterprise versus socialism we can only assume that the government, when it finally does get through procrastinating is going to give Canadian Pacific Airlines exactly, or most of, what it is asking for.
I hope the government is consistent in its philosophy-and it seems to think it has a philosophy in this regard-because it would give us the opportunity of pointing out how paradoxical and ridiculous it is to create an instrument of national policy which is an efficient organization and then to turn around and cut its throat.


William Moore Benidickson: I have in the past had the privilege of introducing a resolution of this type when I was parliamentary assistant to the minister of finance of another government. I had at that time consistently said to the Canadian National Railways and to those officials in the Department of Transport who serve as liason officers between government and the railways that I felt there was a great desire in the interest of members of parliament that there be consistency in the wording not only in bills reflecting these tremendous amounts of money involved in these grants, but in the resolutions.
We are now at the resolution stage. I am disappointed that the C.N.R. has not assisted the administration by presenting to us something that is consistent along the lines I advocated. I was not a member this year of the committee on railways, air lines and shipping. I was last year. I made this point, but I find a radical departure when it comes
Canadian National Railways to the phraseology of the resolution presented to us in 1961 as compared with 1960. We have before us in 1961 a resolution which in the first two or three lines makes reference to $178 million. I say that $178 million is an amount of money with which most hon. members of this committee are unfamiliar. For years and years on the government side and on the opposition side I have urged the adoption of consistency of terminology in this resolution so that we may go back to Hansard of previous years and compare oranges with oranges and not oranges with lemons.


Donald Methuen Fleming: Would the hon. member agree that the resolution is in precisely the same form as the standard resolution we have had year by year, the only difference this year being the addition of the last clause which is necessary by reason of the new additional purposes which I outlined in my remarks a few moments ago?


William Moore Benidickson: I will not agree with the minister at all.


Donald Methuen Fleming: Apart from that one clause the resolution is identical with the resolution last year.


William Moore Benidickson: I do not know whether the minister has the resolution for 1960 in front of him, but I have them both in front of me and contradict the minister in that statement categorically. I have urged that we adopt consistency in the matter of the wording of resolutions of this kind.


Donald Methuen Fleming: Let me say to the
hon. member that I have been assured by the official who drew this resolution that it is identical with the resolution of last year with the exception of the additional clause, but in view of what the hon. member says I will check it again.


Lionel Chevrier: Do not make a speech.


William Moore Benidickson: I have both documents ir my hand and can make it very clear to hon members of this committee that there is i difference, and I shall read them if it is desired that I do so.
There is no suggestion in the first few lines of the resolution of 1960 as to the ultimate amount of money that this committee is committing the taxpayers to by the passage of this resolution. However, in the 1961 resolution in the first three lines we have a reference to capital expenditures in the year 1961 not exceeding $178,900,000. That is of course the crux of what this committee is being asked to do at the present time. I suggest that the members of this committee find the expenditure of this amount of money far beyond their experience as individuals and must, therefore, refer to the presentation made by

Canadian National Railways the president of the Canadian National Railways to the committee on railways, air lines and shipping of this year.
The sittings of that committee were rather drawn out. The interesting thing to note is that not only were the officers of the Canadian National Railways not brought before the committee at the normal time, but very late in this session, but report No. 5 of the proceedings and evidence, which should have been available to hon. members, was not printed and available to my knowledge until last Saturday. I was concerned with that report because I intended to do some research in respect to it. In spite of the fact that it was not available until last Saturday the government leader of this house proposed that we deal with this legislation prior to the time we had this evidence in our hands.
Be that as it may, we are faced with the difficulty and without much help, of translating the phraseology of this resolution given to us on July 3 in terms of what the president said as reported in the minutes of proceedings No. 5 of that committee at page 370.


John Ferguson Browne: Why
didn't you sit with that committee?


John Andrew W. Drysdale: What year is that report?


William Moore Benidickson: It is a 1961 report. I think the key to the examination of the capital expenditures can be found at page 370.


John Andrew W. Drysdale: Mr. Chairman, I should like to rise on a point of order.


The Chairman:: I think I know what the hon. gentleman's point of order is.


John Andrew W. Drysdale: The hon. member intends to refer to a report which I believe is not yet properly before this house.


Jacques Flynn: Yes. The hon. member for Port Arthur refrained from reading from the evidence of that committee because that particular report has not yet been received.


William Moore Benidickson: Mr. Chairman, how horrible and reprehensible the situation is. We are now in a position to discuss this resolution which involves the capital expenditure of $178 million but are unable to refer to the evidence presented to that committee at this time because it has not been properly placed before us. How reprehensible for the government to advance legislation at this stage and then for hon. members on the government side to suggest that it is improper, and it is improper under the rules of the committee of the whole, to refer to evidence which I read with great care over the week end, and upon which I had made annotations, particularly when this is evidence of a committee which was supposed to save the time

of the committee of the whole. I say that this is just further proof of the mismanagement of the government in guiding this house in its legislative program.


John Andrew W. Drysdale: The evidence will be available tomorrow if you like.


William Moore Benidickson: If it is to be available tomorrow I suggest that the resolution relating to this monumental capital obligation on the part of the taxpayers of this country should not have been advanced by this government until all the procedures had been followed in order that the evidence be available.
Last year the same committee suggested in its report that it took a serious view of the continuing deficit of the Canadian National Railways. I am not allowed now to refer to the fact that my colleagues investigated the budget of the Canadian National Railways and had before them the senior officers, nor the evidence which is available as a result of the ten meetings held by that committee. Incidentally, I should like to compliment my colleagues for the attention and efforts they devoted to the investigation of these important matters. In spite of the fact that the evidence is available, although not properly before the committee, I am not allowed to refer to it and must, therefore, turn to the report of that committee presented last year to point out that the committee does take a serious view of the continuing deficit of the Canadian National Railways.
I was not a member of that committee but my recollection is that-


John Andrew W. Drysdale: You were a member last year.


William Moore Benidickson: I was a member of that committee last year and am referring now to a report which is properly before this house, because you have denied me the right to refer to this year's report on the ground that it has not been presented as yet to this committee. I read that evidence very carefully over the week end but am now unable to refer to it.


John Andrew W. Drysdale: I am sorry.


William Moore Benidickson: I suggested last year that the deficits of the Canadian National Railways were not taken into the minister's calculations in making his budget estimate on March 31, 1960, that his budget would provide a surplus of $12 million, because very shortly after that an announcement was made by the Minister of Finance regarding the deficit to be incurred by the Canadian National Railways in 1960.
We know that the Minister of Finance in the presentation of his budget this year has done an unprecedented thing. He has not been prepared to date to inform hon. members

what the gross national productivity in 1961 is likely to be based on real values. However, we have some evidence that the Minister of Finance has not been very helpful to the House of Commons or to the country when an opportunity is given to look at the evidence concerning perhaps the biggest corporation in this country, namely the Canadian National Railways. We find that in 1961 they do not expect their revenues to increase even at the rate mentioned by the minister in his budget speech, namely 3 per cent, notwithstanding that certain costs of operation, in the opinion of the president, might be considerably greater than they were in 1960. These are questions of moment and importance which we are denied the opportunity to discuss on the grounds of a technicality, namely, that the report of the committee of 1961 has not been presented to us.
Let me use my own words. I am not going to quarrel with the president of the C.N.R. I quarrelled with him last year when he gave evidence on this same type of legislation. I said the deficit would be three or four times what it was represented to us by the government it would be and I proved to be right. This time I am only going to say that the president of the Canadian National Railways does not indicate that in 1961 his revenue will increase at a rate even comparable to the evasive and back-handed estimate given to us by the Minister of Finance in his budget speech on June 20 when he referred to a possible 3 per cent increase in growth.
I say these are the matters we have to consider when we are voting capital expenditures which involve interest on obligations of the C.N.R. This has continued year after year. These are the matters that are pertinent to the resolution before us which is a resolution preliminary to a bill. I repeat, I am not happy with technicalities and with amendments in language. The 1961 proposals for capital expenditures of the Canadian National Railways may amount to $178 million, and no truly comparable figure is given to us as members of parliament with respect to the 1960 budget of $279 million.
Apparently under the rules I am debarred from dealing with the evidence upon which members of parliament are supposed to rely when we come to discuss the matter further. I am debarred from dealing with evidence taken in a careful way, I would imagine, detailed in seven or eight reports of committee proceedings, and I would assume that they involved two meetings a day. I have respect for my colleagues. I am sure they gave great attention to this capital budget. But since I was not a member of that committee I am not able to refer to it when discussing a resolution introduced by this government at
Canadian National Railways this time with the knowledge that perhaps the report would be available tomorrow. This resolution has been advanced on a technical, partisan basis because the government are not prepared to deal with another very important issue which we discussed yesterday and which they said was of the utmost emergency-


Gordon Minto Churchill: We will get it tonight if we keep going.


William Moore Benidickson: Will the report of the committee on railways, air lines and shipping be available to us before we conclude this stage of the debate in the House of Commons? I refer to the resolution stage where we have rather unlimited and frequent opportunities to question the minister. Will that report be available? Will an opportunity be given to see whether the committee did as it did last year when it took a serious view of the continuing deficits of the Canadian National Railways?
I cannot refer to the evidence but I am informed that the president of the Canadian National Railways said that the deficit this year would perhaps be as large as or a little less than it was last year notwithstanding the fact that the Minister of Finance says we might have a 3 per cent increase in the growth of our national production.
These are serious questions, Mr. Chairman. I say we cannot proceed with this line of disorganization. When we have something of consequence, such as we have here, involving $178 million, I say we must have leadership from this government in directing the course of the day to day business of the House of Commons so that we are not prevented from utilizing the good work done for a period of, I would assume, perhaps 40 hours by members of parliament in the committee on railways, air lines and shipping.
Will you call it six o'clock, Mr. Chairman.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 7.30 p.m.
John Whitney Pickersgill: Mr. Chairman, I do not intend to speak at any great length on this resolution. Indeed, it is not the type of resolution on which I would normally have had anything to say at all. However, I did have the opportunity of serving for a short while on the committee, which I believe we are allowed to mention as long as we do not mention anything that happened in the committee. It is permissible to recognize that the committee had an existence. I must say that

Canadian National Railways I was in attendance in that committee on a day when the press states it was very dramatic. I had quite an interest in what happened there.
What I wished to speak about at the outset was, having been appointed to this committee and not having been removed from it, I have been receiving notices for the last few days about meetings of this committee in camera to prepare a report at a time when events in this house seemed to me to be of more compelling importance. We are now assured by the Minister of Finance, who although not a member of the committee seems to be better informed than some of us who are, that the committee is going to make a report tomorrow. I do not believe the hon. member for Laurier or I will have much idea what is going to be in that report, through no fault of our own. This is just another example of the way in which the affairs of this parliament have been mismanaged by the present administration ever since we came back in January.
As a result of our co-operation with the government in November, some legislation was passed because the government was caught off guard. Government members, however, did their best to filibuster their own legislation at that time. From January onward, we have had week after week, month after month of the time of this house and the committee of the whole taken up with endless repetition from hon. gentlemen on the other side. There was repeated delay of the important business and now we reach a situation where on the 151st day of the session, just two days short of the longest session in our whole history-this was Sir Wilfrid Laurier's session in 1903 when things were being done in this country and not being postponed-in which I venture to say that, apart from Mr. Coyne, Senator Courtemanche and the delayed budget, there will not be a person in this country who will remember anything that has happened in the whole of this session-


Jacques Flynn: Order. I hope that the hon. member's introductory remarks will come to an end soon and he will discuss this resolution.


John Whitney Pickersgill: I hope they will not, sir, because what I am pointing out is we are being asked, on the 151st day of the session, to consider a resolution, the proper consideration of which necessitates having before us, for at least two or three days, the report and the proceedings of the sessional committee on railways, air lines, and shipping, owned and operated by the government.
Why do we have that committee, sir? We have that committee precisely so that we can give intelligent consideration to the future


needs of the railway. We do not have it, though some members seem to think we do, for the purpose of engaging in a lot of useless recriminations about the past. We have it because we know there is a great problem in connection with the railway and a developing problem in connection with T.C.A., and there is a good deal of concern about all these government operations that are covered by this committee. In spite of this the government, on the 151st day of the session, has managed things so badly that we find ourselves being asked to vote blindly on this resolution.
Perhaps of itself and by itself, isolated from everything else, this might not be a very serious matter but it is symptomatic of everything that has happened during the session and suggests that it has really become almost intolerable to have in charge of operations of one of the greatest countries in the world a lady and a collection of gentlemen-I must say for the hon. lady that I would give her higher marks than most of the hon. gentlemen-who seem to be incapable of decision, incapable of action and incapable of managing the affairs of the country.


Marcel Joseph Aimé Lambert: Including the opposition that cannot keep its mouth shut.


John Whitney Pickersgill: We have now one of those interventions from the hon. member for Edmonton West sitting right behind the Minister of Finance who on one celebrated occasion before the hon. member for Edmonton West had been elected to this house so asserted his alleged right to speak that he was expelled from the house for asserting it. In those days the Conservative party thought an opposition should talk; they thought it should have the right to talk. Now the only part of this house that is doing its duty is the opposition and hon. gentlemen seek to prevent it from doing that.


Marcel Joseph Aimé Lambert: Not the opposition; a few people in it. Let us hear occasionally from some of your other members.


John Whitney Pickersgill: Perhaps after the distinguished intervention that was made the other day by the hon. gentleman from Edmonton, it is not surprising that he has reverted to his usual practice of speaking from his seat.
I was saying, Mr. Chairman, that I really rose for another purpose. My purpose was to do today what I said at six o'clock yesterday I would do and that is to read into the record a letter I wrote to the present Prime Minister of this country in 1953 with respect to one aspect of the operation of the Canadian National Railways about which the Prime Minister quite extraneously in another debate

made certain gratuitous observations to which I took exception. Since it is relevant in this context and was not relevant in that in which it was used, and since it seems to me that I should be entitled to have this document put on the record today, I propose now to read a letter which I wrote to the Prime Minister and which I mentioned yesterday. It is a letter I wrote to the Prime Minister on July 15, 1953, when I was for the first time a candidate for election to this parliament.


An hon. Member:: Eight years ago.


John Whitney Pickersgill: Eight years ago; that is right. I do not think any member of the house would have expected me to raise this question at all. I was exceedingly surprised that the right hon. gentleman raised it, but since he chose to do so I think the record should be set straight. This letter is dated Regina, Saskatchewan, July 15, 1953. It is addressed to J. G. Diefenbaker, Esq., Q.C., Prince Albert, Saskatchewan, and it reads as follows:
Dear Mr. Diefenbaker:
I have just seen reports in the Ottawa "Citizen" and the London "Free Press" of July 7 of a speech you made the previous day in St. Thomas in which you are said to have made certain statements about interference by the government with the Canadian National Railway hotel management at Winnipeg.
The London "Free Press" report also states you said there was proof-
And I underline that word "proof".
-that I had "complained" to the cabinet and to C.N.R. management about the "treatment" I got at the hotel.
You obviously have no personal knowledge of any such action and the president of the Canadian National Railways denied there had been any complaint.
I made no complaint to the cabinet or anyone else and it was only some weeks later that I made a reference to the matter at all in a private conversation with Mr. Donald Gordon in a reply to a question from him.


Gordon Minto Churchill: The reference was a complaint, was it not?


Mr. Brunsden:: Mr. Chairman, I rise on a point of order.


Some hon. Members:: Oh, oh.


Edwin William Brunsden: Will the hon. member explain how he came into possession of this letter addressed to the Prime Minister?


John Whitney Pickersgill: I wrote it. I must say that I am staggered by that question. I am the author of this letter and being the author of it, having had some occasion to look into the copyright laws, I believe I own the letter. However, I have no doubt that the hon. member for Medicine Hat has not only satisfied his curiosity but has also achieved what he set out to do which was to divide the letter into two parts in Hansard. That is one of the
Business of the House
risks one has to take in this game and I take it. But I think perhaps I should read again from the letter and I hope that this time, having confessed that I wrote the letter myself, I might be allowed to read it uninterrupted. I am not going to read the first two paragraphs again but will commence with the third:
You obviously have no personal knowledge of any such action and the president of the Canadian National Railways denied there had been any complaint.
I made no complaint to the cabinet or anyone else and it was only some weeks later that I made a reference to the matter at all in a private conversation with Mr. Donald Gordon in a reply to a question from him.
Are you now suggesting I should not have told him the truth for fear someone would subsequently misrepresent what had happened for a supposed political advantage?
You are a lawyer and I assume when you tell the public you have "proof" of something you do not mean you have just been listening to gossip or hearsay.
I myself made a memorandum of my personal conversation with Mr. Donald Gordon which the prime minister-
That was Mr. St. Laurent.
-sent to Mr. J. M. Macdonnell, M.P. on March 30th last. Since that time I have seen no further reference by Mr. Macdonnell to the matter.
I have the prime minister's permission to send you the enclosed copy of this correspondence with Mr. Macdonnell and I would hope that, if you feel it necessary to refer again to my conduct, you will give the facts fully and fairly as I cannot imagine that you believe the Conservative party needs to distort and misrepresent facts to impress the public.
I am, of course, a newcomer in public life, but I would find it hard to believe that a public man with your many years of experience and your reputation would continue to repeat statements that are not true, once he was aware of the truth.
Yours sincerely,
J. W. Pickersgill


Jacques Flynn: Shall the resolution carry?


Some hon. Members:: Carried.
Resolution reported and concurred in.
Mr. Fleming (Eglinton) thereupon moved for leave to introduce Bill No. C-121, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system for the period from the 1st day of January, 1961 to the 30th day of June, 1962, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company.
Motion agreed to and bill read the first time.



BUSINESS OF THE HOUSE

Léon Balcer: Mr. Speaker, I wonder whether I might get leave of the house to revert to motions. I should like to make an announcement.

Business of the House


Mr. Deputy Speaker:: Has the minister leave to revert to motions at this time?


Some hon. Members:: Agreed.
The house having reverted to the order for motions:
(Translation):



TRANSPORT


Léon Balcer: Mr. Speaker, I should like to make the following announcement. Over the past few months, we have had discussions with the government of the province of Quebec with regard to the Soulanges canal, which has not been in use since the opening of the St. Lawrence seaway. As a result of correspondence exchange with the minister of fish and game of the province of Quebec, we have agreed that the federal government would offer to sell for industrial purposes some land located along the Soulanges canal. It was also agreed that if, after a month, the offers received were considered inadequate by the federal government, the Soulanges canal would be offered to the province of Quebec. To that effect, Mr. Speaker, I have written today the following letter to the minister of fish and game, Mr. Gerard Levesque:
July 6, 1961.
Hon. Gerard Levesque,
Minister of Fish and Game,
Parliament Buildings,
Quebec City, Que.
Honourable Sir:
Further to my letters of last April 4 and May 12, concerning the Soulanges canal properties, X
wish to inform you that my department has received a few oifers from industrial and commercial firms in connection with the land and buildings at Cascade Point. Having given serious consideration to those offers, we have decided to turn them down and, as agreed with you, I am now prepared to recommend to treasury board that all the Soulanges canal properties be transferred to the province of Quebec for the nominal sum of $1, those properties to be used as a fish reserve for the people of the district.
As mentioned in my letter of April 4, my department would like to reserve itself the right to use, during the winter, the wharf situated at the entrance of the canal at Coteau Landing for the storage of the buoys used on lake Saint-Fran-eois, in the summer. My department will take the necessary steps to turn over to you the Soulanges canal properties as soon as we have received confirmation of your acceptance of this offer.
I should like this transaction to be subject to only one condition, namely the following:
We should like the province to undertake to keep in its service the few federal employees who are now looking after the maintenance of the canal.
Please accept, Sir, my best regards.


Lionel Chevrier: Mr. Speaker, if I may, I should just like to congratulate the minister on the decision he has reached. In my opinion, it was the only one possible under the circumstances.
I will not indulge in political considerations since this question is now settled. I will merely add that it is unfortunate that it could not have been settled sooner.
The minister has written to the Quebec minister of fish and game to inform him that he was willing to hand over to the province the whole canal from the upper part, in Coteau, to Cascade Point.
I am sure that all members who followed the negotiations between the two governments are not only happy with the results but feel that it was the only proper thing to do under the circumstances.
I should like to thank the minister once more and to commend him for the decision he has made as to that matter.
(Text):



INDUSTRIAL DEVELOPMENT BANK ACT


[Stage Direction]
The house resumed, from Monday, July 3, consideration in committee of Bill No. C-117, to amend the Industrial Development Bank Act-Mr. Fleming (Eglinton)-Mr. Flynn in the chair.
On clause 6-Capitalization.
William Moore Benidickson: Mr. Chairman, the committee considered this bill on July 3 and we saw that the explanatory notes with respect to clause 6 read as follows:
The purpose of this amendment is to increase the authorized capital of the bank from $25 million to $50 million. Section 12 at present reads as follows:
That section is available to all members of the committee. A few minutes before the adjournment on July 3 I asked the Minister of Finance how this capital was going to be raised. As reported on page 7469 of Hansard, I asked:
Where does the money come from? In what manner is it provided?
The Minister of Finance had only a very short time in which to reply, but I say he replied in a most inadequate and shabby fashion. I suggest that all hon. members of this committee want to know a little more about the provision of these funds beyond what the Minister of Finance said on that occasion. In reply to my question the minister said, as reported at page 7469 of Hansard:
The legislation imposes the duty upon the Bank of Canada to provide this additional capital.

The minister was referring to this extra $25 million. That is all the Minister of Finance thought he should tell the committee. He went on to say:
The money will be provided, in-
I emphasize this next word:
-obedience to the legislation enacted by this parliament.-
Does that explain to hon. members of the committee how the additional $25 million is going to be provided under the amending bill which is before us? I must confess, in all modesty, that it does not explain it to me. I went on to ask:
Does that mean the printing presses?
I admit the minister did not have very much time in which to answer my criticism, but he has adequate time tonight. He has 2J hours tonight in which to explain to this committee, in layman's language, how the Bank of Canada will discharge-to use the minister's words-"the duty" upon it to provide these funds, and how "in obedience" to legislation enacted the money will be provided. As I said earlier in the debate, the lending power provided in the bill is five times the $25 million increase in capital funds; the ratio of the lending power provided is increased to five times the capital under this statute.
On July 3 the minister did not have time to explain this matter to those of us who are ignorant about some of these machinations in the financial field, but I take it that in the hours ahead he can adequately explain just how this is going to be done. He can explain whether it will involve utilization of the printing presses and whether it will involve inflation.


Donald Methuen Fleming: Mr. Chairman,
there is no secret involved here. All this bill does is amend certain words in the present statute. When the present statute was enacted in the session of 1944-45 section 12 provided that the authorized capital of the bank should be $25 million, divided into 250,000 shares at par value of $100 each. Subsection 2 of section 12 provided:
The Bank of Canada shall subscribe-
There was a command given by parliament to the Bank of Canada:
The Bank of Canada shall subscribe for the said 250,000 shares at par and shall pay the amount of such subscription at such times and in such amounts as the board may determine.


William Moore Benidickson: You are reading the bill.


Donald Methuen Fleming: All that this bill does is change the amount. Clause 1 simply changes "25" to "50"; it changes "250'-' to "500". Clause 2 simply changes "250,000" to 90205-6-483
6.	1961
Industrial Development Bank Act "500,000". It does not change the terms at all in which parliament directs the Bank of Canada to subscribe the authorized capital. The statement of assets and liabilities of the Bank of Canada for some time has showed and shows now $25 million of the capital stock of the industrial development bank as one of the assets of the bank. The Bank of Canada has various investments which are carried on the assets side of its statement. It would be a matter for decision on the part of the Bank of Canada whether the additional $25 million should be provided by the realization of other assets and the investment of the proceeds in this manner or by the exercise of other powers open to the Bank of Canada under the act.


William Moore Benidickson: I think all members of the committee, including those who usually support the government, would really wish to look at the last words of the Minister of Finance in which the hon. gentleman vaguely said that the Bank of Canada might resort to some other opportunities open to them to finance this particular enactment. Specifically, surely, we are entitled in committee of the whole to ask the minister, taking his own words, what the Bank of Canada is going to do in recourse. Is it going to go to the Canadian Bank Note Company on Wellington Street and print notes? Is the government of Canada going to enlarge its cash borrowings for the current fiscal year about which it has given us no advice in the budget? Hon. members opposite have stipulated that they have an ultimate ceiling on the amount of money they feel they should go out to the public and borrow in the course of the fiscal year 1961-62. That was indicated to us in the budget speech on June 20. Now I ask the minister, and I know he left this gigantic gamble about the exchange rate out of his speech, why there was nothing in his speech with respect to requirements for cash borrowings on the part of the government, guaranteed by the government, in relation to acceptance of the requirements of the industrial development bank?


Donald Methuen Fleming: I can answer that very simply.


William Moore Benidickson: I am not finished.


Donald Methuen Fleming: Oh dear.


William Moore Benidickson: The minister can answer all these points simply, to a simple man and to all simple men in this committee. What I am saying is this. Under what operation does the minister foresee that the Bank of Canada will provide another $25 million in capital for the industrial development bank and then afterwards, on a multiple of five plus $25 million, provide lending power for

Industrial Development Bank Act the industrial development bank as contemplated in the amending bill before us? Will the minister explain that to all of us who, I say, are not too knowledgeable in some of these aspects of finance? We have suggested that there might be utilization of the printing press. The Minister of Finance says that is not so. He says the stroke of the pen will not be utilized; that real money will create this additional capital for the bank and, indeed, will create five times the capital to be provided as lending power. Will the minister please explain to the satisfaction of all of us simple people here in this committee how that is going to be done?


Donald Methuen Fleming: In the manner prescribed by the clause, Mr. Chairman, if the clause is duly carried. It is not the government which is to provide the additional capital authorized by the clause; it is the Bank of Canada. Therefore, there is no question of government money-raising being involved here at all. As to the way in which the Bank of Canada is subscribing the $25 million additional capital, that would be a matter for decision by the bank. I have no doubt the bank will comply with the terms of a statute when enacted by parliament.


William Moore Benidickson: And pay for a little printing down Wellington street at the office of the Canadian Bank Note Company.


Donald Methuen Fleming: If the hon. member-


William Moore Benidickson: I have the floor, Mr. Chairman. Subclause 2 says:
The Bank ol Canada shall subscribe for the said five hundred thousand shares at par and shall pay the amount of such subscription at such times and in such amounts as the board may determine.
I wish to know how they are going to pay. My question is how is this going to be done? I say to the minister: Tell your colleagues here in the committee of the whole how this is going to be done by a course in any way different from that which has been followed with regard to, shall we say, the farm credit corporation, or Central Mortgage and Housing Corporation. Tell us how this is different from the manner in which credit is provided in those circumstances, and why, in the hon. gentleman's budget there was no reference to a cash borrowing liability potential in 1961 and 1962 with respect to this requirement comparable to the cash liability and borrowing set out in the minister's budget tables on June 20 with relation to the farm credit corporation, Central Mortgage and Housing Corporation and so on.
The minister knows I have criticized him severely for that blank, that little item of a dot, in his cash requirements statement in


the budget which refers to the exchange fund gamble that he talked about a year ago. I shall not deal with that. That is irrelevant, perhaps, to tonight's debate. But I am asking him what is the difference between the method of providing credit under the Farm Credit Act or under the National Housing Act, and providing credit under this act? Under the two other measures referred to, the minister reports to parliament in respect of cash requirements and borrowings needed during the fiscal year 1961-62.


Donald Methuen Fleming: Obviously this has nothing to do with government borrowing requirements for 1961-62. It is entirely different from the provision of capital for the farm credit corporation or for Central Mortgage and Housing Corporation. In the case of those two crown corporations the capital is provided by the government. In the case of the industrial development bank, the capital has been provided in accordance with the act by the Bank of Canada. That is the difference. In the one case it is provided by the government, and in the other case it is provided by the Bank of Canada; so they are different. The capital in this case has been provided by the Bank of Canada and the increase will be provided by the Bank of Canada if this measure carries, and obviously it does not enter into the budget requirements of the government.


John Whitney Pickersgill: I should like to ask the minister a different line of question with regard to this capital. Perhaps I should ask two or three questions at once so that the minister could reply to them all.
The minister has asked parliament to instruct the Bank of Canada to subscribe another $25 million capital. I think the minister told us just before bringing in this bill that he had discussed this bill with the Bank of Canada.


Paul Joseph James Martin: In a general way.


John Whitney Pickersgill: Perhaps I could add one final question so the minister can give a contusing answer as he undoubtedly will. Will this have any effect upon the monetary policy of the Bank of Canada and upon the total money supply of the country?


Donald Methuen Fleming: Mr. Chairman,
communications passing between the government and the Bank of Canada in relation to such matters are confidential, and it would be quite improper on my part to discuss communications that pass in respect to this subject. I was asked that same question on a previous occasion and was obliged to take the same position.
What effect this will have on the money supply is a matter for decision on the part of the Bank of Canada, which is the only authority in this country that can create currency under the provisions of the Bank of Canada Act.


William Moore Benidickson: Mr. Chairman, this question of monetary supply involves a statute. I recognize, although the minister has not during a period of four years, that the Bank of Canada has some responsibility in connection with monetary supply. However, I am asking in regard to clause 6 how the additional $25 million capital for the industrial development bank is to be created. Further to that I should like to know how the government intends to create the $125 million which is to be made available to the constituents of hon. members who sit here in this chamber. I should like to know what the minister's opinion is in this regard, because I have held the minister responsible, at least for four years, in respect to monetary policy. I should like to ask the minister what his opinion is in regard to the printing of this money to meet those obligations with which most of us are concerned, but with which the minister for four years has not been concerned. I suggest he has not yet been concerned at all with the high costs which result to the taxpayers of this country. That is the question we must discuss here in relation to clause 6.
Will the minister to explain to us how the $25 million is going to be subscribed by the Bank of Canada? I will sit down and let the minister answer that question and just forget about the additional $125 million. Are bonds of the Dominion of Canada to be offered to the public to create this $25 million? Is the $25 million going to come out of the existing savings of the Canadian public, or is the Bank of Canada going to sell the bonds which it now holds? The minister has already told us that he is not going to depress the long term bond situation in which the provinces, 90205-6-483J
6,	1961
Industrial Development Bank Act municipalities and corporations are interested. He said he was going to stay out of that market. In light of that assurance, can he tell us where this $25 million is going to come from?


Donald Methuen Fleming: Mr. Chairman, I have already given that explanation.


Paul Joseph James Martin: Mr. Chairman, I have been listening with considerable interest to the valuable interrogations of the minister by the hon. member for Kenora-Rainy River.


Some hon. Members:: Oh, oh.


John Andrew W. Drysdale: Try again, Paul.


Paul Joseph James Martin: I have not altogether been surprised by the inconclusive character of the response the minister has made to some of the questions put to him by that hon. member, but the more one dwells on the nature of these interrogations, and the more one bears in mind the implications of the various sections-almost every section of this act-it becomes increasingly clear that the Bank of Canada will play the central role in the operations of the industrial development bank.
The hon. member for Kenora-Rainy River has asked where in the first instance the $25 million is to come from. The minister initially replied so evasively that I found it difficult to keep my seat even while the hon. member for Kenora-Rainy River was talking. What the minister said was that all this bill does is simply amend the statute. That was no reply at all. It is quite clear that clause 6 continues the principle involved in the original section except-


William Joseph Browne: Hear, hear.


Paul Joseph James Martin: The Solicitor General says "Hear, hear". I hope that he will not regard the amendments as a mere bagatelle. The same principle is continued except that the authorized capital of the bank is to be increased from $25 million to $50 million and the Bank of Canada is to subscribe, instead of 250,000 shares, 500,000 shares. Those figures must be regarded by the Solicitor General as providing a very substantial change in the effect of the section. It is to those increases that the questions of my friend the hon. member for Kenora-Rainy River have been addressed.
The minister said in regard to how this money was to be provided, that it will be up to the bank itself to determine whether it is going to use its investment portfolio or other methods provided under the Bank of Canada Act. To repeat what the minister

Industrial Development Bank Act said, it is a matter for the determination of the Bank of Canada itself. The Minister of Finance cannot tell us-


John Whitney Pickersgill: He does not know.


Paul Joseph James Martin: -to what means the Bank of Canada is going to resort, to its investment portfolio or the other methods open to it under the statute. This is important information which has been asked for, and which is essential for us to have in order to fully-


William Joseph Browne: May I ask
the hon. member a question?


Paul Joseph James Martin: May I complete my sentence? I suggest this is very important information and essential in order that we fully understand the potential of this act. The Solicitor General is obviously agitated because he has a good question.


William Joseph Browne: I wanted to ask whether the hon. member was a member of the cabinet when the industrial development bank was formed in the first place. Where did they got the money then?


Paul Joseph James Martin: If my hon. friend had been in this house he would have remembered. He may find that this can be verified in Hansard. When the industrial development bank was first discussed in this house there was not the same reluctance to give information as one has found in the case of the present Minister of Finance. That is clear. The Minister of Finance seems to regard the Bank of Canada-


William Joseph Browne: The hon. gentleman is not answering my question.


Paul Joseph James Martin: Will my hon. friend permit me to answer it in the careful way in which I like to prepare my answers?


John Andrew W. Drysdale: You have a good quarterback, too.


Paul Joseph James Martin: I should remind my hon. friend-I just forgot my history for a moment-I was not a member of the government at the time, but I was a member of this house. My hon. friend knows well that I am somewhat assiduous in the performance of my duties. I was here when the discussion took place and I recall very well the way in which the minister of finance of that day, Mr. Ilsley, gave replies to these questions.


Herbert Wilfred Herridge: Hear, hear.


Paul Joseph James Martin: The member for Kootenay West says "hear, hear." He has been here for a long time and he will recall that the minister of finance of that day did not regard the Bank of Canada with the same


air of detachment and mystery that apparently pervades the thinking and the manner of treatment of the bank by the Minister of Finance.


Mr. Aiken:: He does not remember, either.


Paul Joseph James Martin: The minister of finance of that day would have had no difficulty in saying, as a result of his consultations with the bank, that the bank proposed to use a particular method for raising the moneys that were required under the statute. I do not think that that would be very difficult for the Minister of Finance today. In any event, he says he does not know. He says it is a matter for the bank to determine.
Subclause 2 of clause 6 reads:
The Bank of Canada shall subscribe for the said 500,000 shares at par and shall pay the amount of such subscription at such times and in such amounts as the board may determine.
This is a very large increase in the credit that is to be made available now under the amending legislation to assist industrial enterprises.


Mr. Macdonnell:: What percentages of the assets of the Bank of Canada is it?


Paul Joseph James Martin: I did not catch the hon. member's question.


James MacKerras Macdonnell: Can the hon. member tell us what percentage of the assets of the Bank of Canada is represented by this $25 million?


Paul Joseph James Martin: My hon. friend says $25 million, but this is not the only amount that the bank is going to be called upon to put up. The rise in the credit available will be $300 million. The total amount of credit which will be provided under this legislation will be $400 million.
The question my hon. friend asks is a very important one but I do not know why he puts the question to me. It is the kind of question that should be put to the Minister of Finance. I am afraid that if any one of us on this side of the house asked the Minister of Finance for the answer to that question we would not receive it. When I am through I hope the hon. member for Greenwood will rise and ask that question. I am sure the Minister of Finance will give that information to the hon. member for Greenwood and we can vicariously take advantage of the reply. I am sure if I asked the Minister of Finance-he feels so cool toward me these days-I would not be able to get any kind of reply.
The point of my present intervention is this. Since the minister finds it difficult to give us replies to some of these questions I wish to renew tonight the request we made the other night, namely that we send this

bill to a committee of this house so that we can examine the president of the industrial development bank.


Donald Methuen Fleming: I rise on a point of order, Mr. Chairman. This is a repetition of the tactics we had in this house on Monday night when the fair discussion of the bill was greatly delayed. We are in committee on the bill because of a decision of the house, Mr. Chairman, and it does not lie within the power of this committee to change the decision of the house in that regard and any discussion of that subject in this committee is entirely out of order.


Paul Joseph James Martin: Mr. Chairman, I am sure you do not need any assistance from me to deal with the most unfortunate intervention of the Minister of Finance. We discussed this the other night on clause 3 of the bill. We had some discussion on clause 6. There was no suggestion at any time that that kind of request was out of order. The only purpose the Minister of Finance can have in raising it now is that he finds this repeated suggestion embarrassing and irritating. That is the only reason; I can find no other reason and it is not a ground for raising a point of order. I can very well understand how irritated the minister is.


Jacques Flynn: Order.


William Moore Benidickson: He cannot explain it
to us.


Jacques Flynn: I think the hon. member for Essex East will remember that the point was raised the other night by the hon. member for Hull. I indicated that this committee had no purpose other than to study the bill clause by clause. Therefore it seems to me that to discuss the sending of this bill to a special or a standing committee would not be relevant at this time.


Paul Joseph James Martin: I must say I do not agree; I profoundly disagree and I hope that you, sir, will not make that kind of ruling.


William Moore Benidickson: Mr. Chairman-


Jacques Flynn: Order. May I complete my remarks before the hon. member for Essex East expresses his disagreement.
To express of regret that this was not done may be one thing, but to suggest repeatedly that this be done would be out of order. There is a distinction there that the hon. member can make.


John Whitney Pickersgill: Before you make a final ruling, sir, will you hear argument on this point?
I think the minister quite wrongly said that a decision was made on this point by
Industrial Development Bank Act the house. No decision was ever made by the house. The point was never put before the house; there was no way of putting it. It is true that we resolved to go into committee on the bill but no motion was made that the bill should go to a special committee, so that the house took no decision on this matter. Therefore, there is no decision of the house that is being contravened by our suggesting, as my hon. friend from Essex East was just doing, that since we cannot get the information from the minister we ought to be in another place where we could get it from someone who knows what it is. Since the minister is not on speaking terms with the governor of the Bank of Canada, we ought to get someone from the Bank of Canada who will know how they are going to do this.


Paul Joseph James Martin: Mr. Chairman, you have suggested that there was no objection, of course, to a suggestion. I thought I had put the request in the form of a suggestion. If I have not, I will suggest to the minister now that because of the fact he says the replies to certain of these questions reside in the bank, and because obtaining answers to these questions is vital to this matter, in the interests of the quick dispatch of this measure and a full comprehension of all of its implications we should have the opportunity of examining the governor of the Bank of Canada who is the president of the industrial development bank so that we could ask him-


Donald Methuen Fleming: On a point of order, Mr. Chairman, I must ask you now to make a ruling on the point I raised a while ago. The hon. member for Bonavista-Twillingate had quite overlooked the facts of the case when he said there had been no decision of the house. If you refer to Hansard of July 3, at page 7447, at the top of the second column, you will see that after the bill in question was read the second time Hansard proceeded in this way:


Donald Methuen Fleming: that the house go into committee on the bill.


Mr. Deputy Speaker:: Is it the pleasure of the house to adopt the motion?


John Whitney Pickersgill: On division.


Mr. Deputy Speaker:: Carried on division.
That is the decision of the house to refer this bill to this committee. Under the rules of this house, Mr. Chairman, it is referred to this committee for the purpose of a review of the clauses of the bill and not for the purpose of discussing reference of it to some other committee. It was a decision of the house that it be referred to this committee.


John Whitney Pickersgill: The Minister of Finance, as usual, has misrepresented what I said. What I said was that this house took no

Industrial Development Bank Act decision about referring this bill to the banking and commerce committee. If the house had made a decision, if there had been a motion made to refer this bill to the committee on banking and commerce and the house had turned it down, then the minister would be quite right. This would be a decision of the house and we could not reopen that question. However, the question was never put to the house at all. It is still open to us, therefore, to say we are not getting the information we ought to be getting here in committee of the whole and therefore the committee should rise, report progress and the government should let us go to another place where we can get the information. That is all we are suggesting.
The minister has told us he does not know anything about this. He has no way of finding out, and if he did the information would be secret; parliament would not be entitled to it. Surely parliament is not going to be asked to order the Bank of Canada to put up $25 million without knowing where this money is coming from. This is what the minister is asking us to do. He does not know where or from what source the money is coming. He says it is none of our business where it is coming from; we have no right to know; we have no right to go to a place where we could find out.


William Moore Benidickson: On this point of order, the Minister of Finance again has given us only part of the record in twisted form. He referred to page 7447 of Hansard and told us this particular situation had been resolved. He referred to the matter being settled on division. I wish to refer my colleagues to the words that the Minister of Finance did not read, and they are attributed to me. I quote:


William Moore Benidickson: There are unanswered questions. That is why it was agreed to on division.
We are now at another stage of the debate in which we expect to obtain some answers to these questions.


James MacKerras Macdonnell: I suggest we are in great danger of making a laughing stock of ourselves in this house. The Minister of Finance has been asked a question as to how a comparatively small amount of money is to be raised by the Bank of Canada.


Paul Joseph James Martin: Then, $25 million is small?


James MacKerras Macdonnell: I used the word "comparatively". The Bank of Canada has $3 billion of assets. The minister has answered the question in terms which anyone with even a modest familiarity with financial affairs would understand. We are now being told, I do not think very seriously and I hope not very seriously, that he has not explained or he does

not know merely because he has not undertaken to say which of the various means at the disposal of the bank, with $3 billion of assets, will be used by the bank. The bank has also the power to create more money if necessary. The minister has not undertaken to say by what detailed measures the bank will provide this sum. I suggest that anyone with even the slightest familiarity with financial matters would say that the Minister of Finance has answered the question satisfactorily, and that we are making a laughing stock of ourselves at the present time.


Jacques Flynn: Order. I find that as chairman I ruled on this point the last time the bill was before the committee. I refer hon. members to page 7456 of Hansard. Essentially, the ruling explains that this committee only has the power to examine this bill clause by clause, and it was for the house to decide whether or not the bill should have been referred to the banking and commerce committee or any other special or standing committee of the house. This was not done, so the situation has not changed at all. Having ruled this discussion out of order at another time, it is clear that I have to rule the same way tonight.
I may mention also that as reported at page 7457 the hon. member for Hull moved that the committee rise, report progress and ask the house to refer the bill to the banking and commerce committee for further study. This motion was ruled out of order. The hon. member for Essex East then moved that the committee rise and report progress. The motion was decided in the negative. However, the motion made by the hon. member for Essex East did not deal with this particular point. I am not citing this motion to indicate that the committee made a decision on that point. I only point out that the Chair made a decision then and it was not appealed. We should, therefore, proceed in accordance with this decision.


Paul Joseph James Martin: I do not dispute what you have said; of course, what you have said is true, Mr. Chairman. You did make a specific ruling on a specific point. However, you said a few moments ago that there was a difference between making a request in the form of a motion that this matter be sent to the banking and commerce committee and making a suggestion, in the course of argument to the minister, that because the minister was not in a position to answer certain questions some other instrumentality might be found for giving the house an opportunity of securing this information. I am not making any motion. I am not moving that this matter go before the banking and commerce committee.

Are we not in this position? The minister says that these are answers that can only be given by the Bank of Canada. I simply say, in parenthesis, to the hon. member for Greenwood that he may have an understanding of this subject that perhaps I should have, but it is quite obvious that we do not have the same background and the same experience. Consequently, we are not in a position to give to ourselves the ready answers which he feels he has. I wish he had told us how the bank was going to raise this money, whether through its investment portfolio or through other means and methods open to it under the act. Since the Minister of Finance does not give us this information, surely no one sitting on the treasury benches is going to argue that an hon. member has not the right, in the course of a clause by clause discussion of this bill, to say that being the case and this being a vital element in the bill, the minister should assist us in obtaining the kind of information we wish in the only place that information can be obtained, from the president of the industrial development bank and the governor of the bank.
The minister told us that he had some general discussions with the governor of the bank with regard to this whole scheme. I have suggested that it was perhaps a result of the suggestions made by the governor of the bank that these amendments were being put forward to improve the industrial development bank. The minister can tell us whether, as a result of having this general discussion with the governor of the bank or with the bank's officials, he is now able, on reflection, to give us some of the answers for which we are asking. Surely, no one is going to contend that this House of Commons should be called upon to pass this measure without being able to determine how the bank is going to raise this money and what the effect of raising this money, through its investment portfolio or other methods, will have on the general position of the Bank of Canada.
The hon. member for Greenwood says we are making a laughing stock of ourselves. I do not know exactly what interpretation he wished to have placed on those words. I say we will be making a laughing stock of ourselves if this high court of parliament is not able to obtain directly from the Minister of Finance or vicariously through some other means, answers to these questions. These questions are not being put forward merely for the sake of provocation. They are proper questions. Let me tell my hon. friend just how serious this matter is.
When the Industrial Development Bank Act was first introduced the bill was sent to the banking and commerce committee. The
Industrial Development Bank Act governor of the bank of that day, namely Mr. Towers, appeared and he was asked questions along these lines. If it was right to have another means of ascertaining what the information was in these particulars then, is it any less so now when we are raising the capital that will be available for capital purposes fourfold from $100 million to $400 million?


James MacKerras Macdonnell: It was a new departure then. The situation is entirely different.


Paul Joseph James Martin: My hon. friend says it was a new departure then and of course he is right. My hon. friend says it was altogether different. I will admit it was a new departure, but I would ask him to look at what this bill is doing. This bill is now going to give credit not to restricted groups in our industrial and economic life. Under clause 1 of this bill any industrial enterprise, meaning an enterprise in which is carried on any industry-not a particular industry but any industry-trade or business undertaking of any kind, will potentially be able to qualify for credit assistance. That was not the situation under the bill which was before the banking and commerce committee and to which the governor of the Bank of Canada at that time addressed himself. As the minister himself said in a statement in chief, this represents a very important departure in the structure of the industrial development bank. When we are theoretically going to properly extend credit potentially to every industrial enterprise and when we are raising the capital to this amount, surely we should be able to ascertain from the bank or from the government exactly how this money is going to be raised. Are we to treat the Bank of Canada as something separate altogether from the operations of the government? That has not been the argument of the Minister of Finance in the last four or five days. He has said, as has the Secretary of State, that the Bank of Canada must be subservient to the will of parliament. How can the will of parliament in this instance be exercised if we are to take the position taken by my honourable and estimable friend the hon. member for Greenwood.


James MacKerras Macdonnell: Will the hon. member allow me to make a comment?


Paul Joseph James Martin: If my hon. friend wishes to do so.


James MacKerras Macdonnell: If we were discussing the advisability of broadening the operations of the bank and if he had questions as to that
7660	HOUSE OF
Industrial Development Bank Act matter, I would think that they are important and well worth discussing. But to discuss a technical matter of $25 million for an institution-


Paul Joseph James Martin: My hon. friend says it is a technical matter. I do not understand his use of the phrase "technical matter" in this context. He says, "What is $25 million?"


An hon. Member:: No; he did not say that.
Another hon. Member: That is a Liberal
expression.


Paul Joseph James Martin: At the present time, when we have a deficit for the last budget year of over $350 million and when the Minister of Finance is anticipating a deficit in the coming year of over $600 million-


William Moore Benidickson: Likely $700 million.


Paul Joseph James Martin: -and when the Canadian Tax Foundation says that the deficit is going to be $700 million, I assure the hon. member for Greenwood that, whatever he may have said, the impression he has created undoubtedly is that $25 million is not to be calculated in the consideration of the people of this country as a vital matter.


William Moore Benidickson: It is a technical matter, he says.


Paul Joseph James Martin: What is $25 million? I say that $25 million is everything. We are entitled to know from the Minister of Finance how that is going to be raised out of bank assets. It is not only $25 million. That is not the only amount that the bank is going to be called upon to subscribe. My hon. friend says "This is a technical matter". Let us assume for the sake of argument that it is a technical matter. He said that if we were going to ask about other aspects such as, for instance, the enlargement of the concept of the kind of organism that can qualify for credit assistance, that might be a different matter. That, too, is an important matter. Would it not be useful to find out through some other source exactly what kind of industrial enterprise is going to be covered when we say "any industry, trade or other business undertaking of any kind". When you relate this to clause 8-


William Moore Benidickson: Clause 7.


Paul Joseph James Martin: When one relates this to clause 8 in particular which addresses itself to chronically unemployed areas; not by direct wording but by implication, one can see how important the examination of this matter is with regard to that matter. But surely the important point in principle


now is this. We have the Minister of Finance first of all saying that certain information is confidential. He does not explain how it is confidential. He merely makes the assertion. Often his argumentation consists in mere positive assertion. Then he says, in any event, that the determination of the source of some of this credit will be by the Bank of Canada and that it will decide. Are we to take the position that we can pass this bill without having specific answers to these questions? If the Minister of Finance does not feel himself to be in a position to give these answers or if he does not know these answers, then surely the proper thing for him to do is to provide us with a forum in which to obtain these answers. If we cannot have a committee, surely some forum can be provided. I am sure it would be unusual, but I would suggest that we call the governor of the Bank of Canada to the bar of this house and ask him questions about this matter. Let us do that right in this house.


An hon. Member:: Ask him to write another letter.


Paul Joseph James Martin: As a result of the reluctance of this government to confront the governor of the Bank of Canada in a proper place apparently the only way in which we can get any information is through the governor of the Bank of Canada voluntarily embarking upon an epistolographic procedure.


Some hon. Members:: Oh, oh.


James Stanley Speakman: At the expense of the Bank of Canada.


John Andrew W. Drysdale: Explain.


Paul Joseph James Martin: For the benefit of my hon. friend from Wetaskiwin, I may say that "epistolographic" means writing a letter. That is the point. I say this to hon. members. Here we are meeting today at a time when the Social Credit party is holding a national convention.


An hon. Member:: Go and join them.


Paul Joseph James Martin: There is no Social Credit member in this party. However, I would just ask hon. members to think of the kind of argument they are going to make, some of them likely within hearing of our very discussion at this moment. They are going to say that here the parliament of Canada was engaged in a discussion of the industrial development bank, that questions were put to the responsible minister of the crown with regard to the source of credit that is going to be made available under this bank to all industrial enterprises that apply for such assistance, and the Minister of Finance said

that he could not give that information as this was a decision for the bank. Because that is a decision for the bank, the minister now takes the position that this house is not going to be afforded an opportunity of finding out from direct confrontation with the governor of the bank what the answers to these questions are. That is the situation. I say this to the hon. member for Greenwood. If there is anything that is laughable or if there is anything that is regrettable, it is the situation into which the intransigence of the Minister of Finance has put us with regard to this very matter. That is the situation.
The hon. member for Greenwood is a very honoured and respected member of this house. I say this to him with the greatest of kindness. He has allowed his judgment in this matter and in other matters during the last few days to be beclouded by the image of the Minister of Finance which he respects and bows to almost at every turn. I do not wish in any way to disturb the beautiful friendship that prevails between the hon. member for Greenwood and the Minister of Finance. The hon. member for Greenwood is an experienced man and he ought not to allow this infatuation to in any way interfere with his good judgment. I do not know whether the Minister of Finance will still regard me as a friend. I wish to say to him that notwithstanding the very harsh things I have had to say about his policies, I have the highest regard for the Minister of Finance personally.


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: I believe that my affection for the Minister of Finance is no less intense than that of the hon. member for Greenwood, but I am not going to let my infatuation for an old friend interfere with my right to exercise independent judgment. I hope the hon. member for Greenwood will, after this reasoned argument, join with the rest of us in recognizing that we have a right to obtain this information.
I cannot understand why the Minister of Finance does not tell us. He knows, I am sure, what will be the source of this money. He knows whether it will be out of the investment portfolio, or what percentage will be out of the investment portfolio.


William Moore Benidickson: It will come from the printing presses.


Paul Joseph James Martin: The minister
knows whether it is going to be provided through other methods suggested, and rather seriously suggested, by the hon. member for Kenora-Rainy River. In any event, there is no other way; we cannot force the minister to give us this information if he does not 90205-6-484
6, 1961	7661
Industrial Development Bank Act wish to recognize the reasonable proposals that are put forward. I put them forward, and because I think this matter is so vital I hope my colleagues and I will not be alone-


John Andrew W. Drysdale: You will be after the next election.


Paul Joseph James Martin: -in our appeal to the minister to recognize this situation. Perhaps the Minister of Veterans Affairs, who is so helpful in these matters, could assist us; perhaps he could persuade the Minister of Finance-who at the moment is engaged in pensive thoughts, which I hope have some relation to this particular matter-to give us this information.


James MacKerras Macdonnell: Mr. Chairman, I will not try to follow the hon. member for Essex East in his psychological wanderings. I know that no power in the heavens above, or the earth beneath, or the waters under the earth will prevent him from making all kinds of devious political suggestions. I rise purely for one purpose. The hon. member in the course of his wanderings tried to leave the impression that I had referred to the amount of $25 million as a small amount. We think $25 million is a big sum in Greenwood. I wish to make that very clear. My reference to it was purely in its relationship to the large assets of the Bank of Canada. I seek to make that clear, Mr. Chairman, because the hon. member, in his devious way, can leave impressions as he goes along which, innocent as they seem at the moment, are found afterwards to be not nearly as innocent as they appear.


John Andrew W. Drysdale: Beware.


Lester Bowles Pearson: Mr. Chairman, my affection for the Minister of Finance is no less intense and no less discriminating than that of the hon. member for Essex East. Therefore I am emboldened to repeat the appeal that has been made to the minister to give the committee the information on this matter to which we are entitled. After all, as has been pointed out, on March 14, 1944, there was no argument when the bill to establish the industrial development bank was referred to the standing committee on banking and commerce.
The hon. member for Greenwood said that was a very different matter; that was the establishment of the bank. The hon. member knows, of course, that by this bill the functions of the bank are being extended to a point where they are being altered. This is a very important bill. Surely the importance of the bill does justify the kind of examination before the committee for which we have asked. The capitalization of the bank is being

Industrial Development Bank Act increased by $25 million. The hon. member says this is a technical matter. The doubling of the capitalization of a bank of this kind is more than a technical matter, in conjunction with the enlargement and the extension of its functions.
We ask the minister for information. He cannot give it to us. Therefore we ask that this matter be submitted to the committee where we can obtain the information. He will not do that. If he cannot give us the information, perhaps as we are in committee he could invite

it could be done very quickly; it could be brought into operation in a few minutes-[DOT] the man who has the information, the governor of the Bank of Canada, to come to the committee and sit in front of him. He could supply the minister with the information to which we are entitled. In that way we would be able to obtain the information to which we are entitled and the minister himself would have a very stimulating experience.


William Moore Benidickson: Who is in front of him right now?


Donald Methuen Fleming: Mr. Chairman, the Leader of the Opposition speaks as though he had been here all evening. Actually, he came in late. Some of his colleagues had asked questions and had been given the information and all the answers-


William Moore Benidickson: Oh, no.


Donald Methuen Fleming: -before he came in. If the Leader of the Opposition has not been informed of that fact, I inform him now. The information was given. But instead of seeking information we have had these repetitious comments.


Paul Joseph James Martin: Order.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: The purpose of them, obviously, is not to obtain information or dispatch the proper business of the house. Anything but. As the Leader of the Opposition was not here when I answered these questions earlier, let me now say for his information that the additional money required to be provided by the Bank of Canada to increase the capital of the industrial development bank will obviously be provided out of the assets of the Bank of Canada.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: That is a brilliant answer.


Donald Methuen Fleming: The particular assets will be a matter for decision from time to time by the Bank of Canada. It apparently has been completely overlooked by hon. members opposite that it is most unlikely the whole $25 million will be required at one time. That

is the reason why the clause provides that the money shall be provided as required from time to time by the board. That is the board of directors of the industrial development bank.
This money will be drawn down from time to time as the credit demands upon the industrial development bank require. The original $25 million capital, if I recall correctly, was not created at one particular time. It was created over a period of time until it reached $25 million and it has continued at that figure for some years now. But be that as it may, I do not think anyone suggests that this additional $25 million is going to be raised all at once. Therefore the clause makes provision for the payment by the Bank of Canada to the industrial development bank of the amount of such subscription-that is the additional $25 million-at such times and in such amounts as the board may determine.
What will happen is that the board of directors of the industrial development bank, as they require the money, will call on the Bank of Canada to provide this additional money by way of capital subscription. At that particular time, in the face of such a request, it will be a matter for decision on the part of the Bank of Canada as to where, out of its various assets, it shall take the money required; whether it shall take it out of its currency holdings or whether it shall raise the money by disposing of some of the assets held in its investment portfolio and using the proceeds for the purpose.


John Whitney Pickersgill: It seems to me, Mr. Chairman, it is not merely the question of this $25 million increase in capital but it is also the multiplication of it.


William Moore Benidickson: Five times.


Donald Methuen Fleming: That relates to the next clause, Mr. Chairman. That does not relate to clause 6.


John Whitney Pickersgill: I know. The minister need not get excited because I was seeking to save the time of the committee.


Some hon. Members:: Oh, oh.


An hon. Member:: Why don't you go home then?


John Whitney Pickersgill: I was seeking to save the time of the committee by dealing with the one point, which is only one point, on this clause so it would not have to be repeated on the next clause. But if the minister would rather have it raised again on the next clause I will withdraw a few words-


Paul Joseph James Martin: Perhaps we had better wait until the next clause.


John Andrew W. Drysdale: Carried?


John Whitney Pickersgill: Yes. At any rate, even if the $25 million comes down only in dribs and drabs, surely the minister has told us over and over again in the last three years that the Bank of Canada is responsible to parliament, not to the government. If this were a government department and not the Bank of Canada the minister would have his officials here. When we asked questions about its operation he would turn to his officials and obtain the information, because parliament would be entitled to have it. Since it is the Bank of Canada and not a government department the minister says, "There is no way at all in which you can obtain the information". The plain fact is that we are entitled to know what effect this provision is going to have on the total money supply of the country.
It is more compelling that we should know this at a time when certain events are going on-I do not know whether any other hon. member has mentioned it-here in Ottawa. What I mean, is Mr. Caouette or Dr. Thompson prescribing the method by which this additional money supply is to be provided? This is serious business, the question of this very considerable increase in credit. How is it provided? What will be its probable effect on price levels? What will be its effect on the economy generally? Surely, if parliament means anything, if parliament is to exercise that ultimate responsibility which the minister says he does not possess but which he says parliament has over the Bank of Canada and, therefore, over the industrial development bank, then parliament must have some means of obtaining the information which will enable us to make an intelligent decision. The minister says we have just got to fly blind. Surely that is not the way to treat parliament.


[Stage Direction]
Clause agreed to.
On clause 7-Aggregate liabilities.
William Moore Benidickson: On clause 7, we go beyond what we were talking about when we discussed clause 6. The minister completely evaded all the questions which had been asked for many minutes and hours in this committee with respect to where the money is going to come from. He has evaded that. He also knows that under the act there is that multiple of funds which can be provided by the Bank of Canada to the commercial banks for an expansionist program, that is, a multiple of 12 to one. But here we are dealing with a multiple of five to one. We have spent some time discussing $25 million. The minister has not indicated in any manner from where that $25 million is going to come. We have said it might come from the sale of some bond holdings by the bank.
90205-6-484J
6, 1961	7663
Industrial Development Bank Act


Donald Methuen Fleming: Mr. Chairman, we are back on clause 6. This is repetition of what was said on clause 6 which has been adopted.


William Moore Benidickson: We have said-and I am about to conclude, Mr. Chairman-that it might come from the printing press. But now we are dealing with clause 7 and I would draw the attention of all members of the committee to the layman's explanatory notes. This is important, because we received no explanation where the $25 million was going to come from in our discussion under clause 6. It is now, I say, five times more important that we look at clause 7, because the explanatory note to clause 7 says:
The purpose of this amendment is to increase the authorized borrowing authority of the Bank to an amount not exceeding five times the aggregate
amount of its paid up capital and reserve fund.
This committee, under some pressure, has forced the adoption of clause 6 which increased by $25 million the amount that the Bank of Canada could subscribe for stock in the industrial development bank, and now we are on clause 7 where we get this statement that the lending power is five times that amount. The minister has not yet explained in layman's language how the $25 million is to be provided. Will he perhaps attempt on clause 7 to explain whether or not the additional maximum of $125 million is to be raised from the public in bonds that are to be guaranteed by the government of Canada, or whether this sum is to be arranged through the operation of the printing presses of the Bank of Canada?
We remember that the Minister of Finance not long ago deplored, with regard to the unemployment insurance fund, sales of long term holdings of government bonds. Of course, there is a reference here to a reserve fund and the minister might also explain what reserve fund there is, if any, in the industrial development bank. Perhaps the minister would let us know how this $125 million is to be provided.
In other words, if a constituent of mine wanted, say, $250,000 for an industrial purpose under the terms of this act, would the industrial development bank issue a cheque to him? Where does the cheque go? Would the minister explain that to the committee? Where does the industrial development bank get the funds in the first place? And where does every other person wanting $250,000 get the equivalent of $250,000?


Donald Methuen Fleming: In so far as the
provision of financial resources to the industrial development bank for lending purposes is concerned, that is clearly provided for under the clause we have dealt with, and

Industrial Development Bank Act under section 13 of the act and under the clause now being considered. I explained this all very fully when introducing the resolution on June 30. I think the hon. gentleman was here, but evidently he has not absorbed what I then said, so I shall ask him to refer to a paragraph at page 7311 of Hansard in the first column.


William Moore Benidickson: Would the minister read it? I think everyone here would be content if the hon. gentleman were to read it.


Donald Methuen Fleming: I said:
Parliament will fie asked to increase the borrowing authority of the bank. The borrowing authority is now limited to three times the aggregate amount of paid up capital and the reserve fund. Briefly, with paid up capital at a level equal to $25 million and a reserve fund standing at approximately $15 million, this means that the borrowing authority now amounts to about $120 million. It is proposed to increase the limit on borrowing to five times the paid up capital and the reserve fund. As a result, and on the basis of a doubling in capital from $25 million to $50 million, the borrowing authority of the bank will reach $325 million. The total resources of the bank, including capital and reserves, will amount to close to $400 million compared with $160 million today. Of course, as the reserve fund builds up from the present level of about $15 million we can expect a further increase in the bank's resources.
It is all fully stated there.


William Moore Benidickson: Five times the 15 as well as five times the 25.


Donald Methuen Fleming: No. Five times 50. As to the machinery for dealing with loans, the application is made to the bank and dealt with by one of the bank's 13 offices in various places in Canada and, after investigation, presumably in the case put forward by the hon. member the loan would be approved. After it had been approved and the title had been searched and the necessary documents completed, the money would be paid over.


William Moore Benidickson: When someone asks me to lend them money I require a deposit, some asset or other form of collateral and then I write a cheque or, in some way, convey to the borrower what is asked for by the borrower. The industrial development bank will be lending $125 million and I should like to know what security will have to be provided by the borrower and what amount is to be decided upon as just enunciated, as well as in what form the borrower receives his money.


Donald Methuen Fleming: The borrower will receive funds from the industrial development bank. It has funds raised either in the form of its own capital or under clauses 13 and 14 by borrowing, and having that money on hand. In this case it pays the money out by cheque as anyone else would do under similar circumstances.


William Moore Benidickson: I think you should go to the Social Credit convention.


[Stage Direction]
Clause agreed to.
Clause 8 agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Chown):: When
shall the said bill be read the third time, now?


William Moore Benidickson: Next sitting.


Paul Joseph James Martin: Mr. Speaker-


The Acting Speaker (Mr. Chown):: Order. I
must put the question, and I ask the hon. member for Essex East (Mr. Martin) to wait until I do.


Paul Joseph James Martin: I am sorry, Mr. Speaker.


Donald Methuen Fleming: the third reading of the bill.


The Acting Speaker (Mr. Chown):: Is it the
pleasure of the house to adopt the motion?


Paul Joseph James Martin: Mr. Speaker, it will not be necessary to retrace the entire portion of the argument which has been made by a number of hon. members sitting in the opposition. However, I should like once again to remind the house of the provisions of this bill in relation to certain officers in the government service. That is, the deputy minister of the Department of Trade and Commerce and the governor of the Bank of Canada. The latter serves as the president of the industrial development bank at the present time and no change is made in clause 3 in this context.
In a matter of importance, such as is presented by this bill, where an attempt is being made to assist all industrial enterprises in the country by affording them increased credit facilities, and on that account the credit to be made available is to be not $100 million but $400 million, we should receive from the administration or its emanations the fullest information as to the policies to be pursued, particularly at a time when the nation is confronted1 with serious economic problems consisting, among others, of a high level of unemployment.
A proposed attempt to mitigate unemployment by special treatment of special areas in the country is opened under this bill in clause 8 and it would be very useful, I am sure, if we could have a full exposition of all that is intended in this regard. We have not been able thus far to obtain from the Minister of Finance full answers to many of our

interrogations. We have not been able to receive from the minister responses particularly to those questions addressed to the way in which the Bank of Canada is going to raise the necessary funds which the statute imposes up on it, as indeed was the case in the basic act.
The present governor of the Bank of Canada is, as I say, under this amending statute, the president of the industrial development bank. We have been told by the Minister of Finance that the governor of the bank in the usual way provided suggestions and part of the inspiration, at any rate, for this measure. We have not been informed1 as to the extent of collaboration in the project by the governor of the Bank of Canada although the minister did not deny the suggestion that, in the light of the document written to the minister on February 15 last, the governor of the Bank of Canada had much to do with the framing of this particular series of amendments. We should take the position that the present governor of the bank under our law is still the governor of the Bank of Canada, and it is not open to any member of this house or to any member of the government to suggest what course parliament-by parliament I mean its two houses-will take with regard to the opportunity of further participation in public service by that hon. gentleman. He is the governor of the Bank of Canada and as a result continues to be the president of the industrial development bank.
When the industrial development bank project was first proposed in 1944 the bill went to the banking and commerce committee and the then governor of the bank, Mr. Towers, appeared1 before that committee and explained its purposes. It is true that marked the first venture in this field in Canada, as we were reminded a few moments ago by the hon. member for Greenwood. However, the enlargement and the increased scope now being provided for the industrial development bank under these amendments to include all industrial enterprises represents such a fundamental departure, and I believe a wise one, that we should have from those in the government service who are qualified to give us the information that further information thus far not given us during our discussions.
I think it would have been very useful if the Minister of Finance had accepted the suggestion of the Leader of the Opposition that some of the questions to which he did not feel disposed to reply, and questions which he thought were not within his sphere of authority, might have been replied to vicariously tonight by him if the governor of the Bank of Canada had been asked, as has on other occasions been done, to take his place in front of the minister to provide answers,
Industrial Development Bank Act as is usually done by deputy ministers or other selected officials when ministers are presenting estimates or putting forward special legislative enactments.
I believe it is in the interests of a further elucidation of this bill that it be sent to the banking and commerce committee at which time we should ask the governor of the Bank of Canada to come before that committee- not only the governor of the bank but one of the new officials in government service who is now to become a new director of the bank namely, the deputy minister of trade and commerce. I think it would be useful if we had these gentlemen and perhaps others give some indication of the scope intended in the programs they have in mind.
For those reasons Mr. Speaker, I move:
That the said bill be not now read a third time but that it be referred to the banking and commerce committee with instruction that the president of the industrial development bank and the directors be invited to appear before the committee for examination on the existing and proposed functions of the said bank.


The Acting Speaker (Mr. Chown):: Is the
house ready for the question?


Donald Methuen Fleming: Mr. Speaker, I submit this amendment is out of order. On third reading the kind of amendment that is in order is one calling for reference back to the committee of the whole for the purpose of making certain changes in the bill. This kind of motion is of a different nature. It proposes to refer the bill to a standing committee of the house. The proper time for such a motion, of course, is immediately following second reading of the bill or, if it is a case of referring not the bill but the subject matter of the bill, it can be introduced on amendment to the motion for second reading. In my submission it is too late now in our proceedings to bring forward such a motion. It is not a proper amendment to the motion for third reading of the bill.


John Whitney Pickersgill: Mr. Speaker, I have not yet had time to find in Beauchesne the exact form but the form is taken precisely from Beauchesne's typical forms with relation to the kind of motion that can be moved on third reading, and that is why it was moved in this particular form. It was felt that with the great weight of Dr. Beauchesne's knowledge of the rules he would not have put a form in the rule book for a motion of this kind on third reading unless it was competent to do so, because it is hardly likely that that distinguished clerk of the house who presided at the table for so long would have sought deliberately to mislead the house.

Industrial Development Bank Act The minister has not taken the trouble to cite any authorities for his suggestion that the motion is out of order. In his usual fashion he merely stated that such and such is the rule. We know from previous experience with the minister that those pontifical statements that he is so fond of making are nearly always-I will not say they are quite always -wrong, but they are so rarely right as to be the kind of exception that proves no rule.


Gordon Minto Churchill: Mr. Speaker, the very distinguished former clerk of the House of Commons, drew his experience and his inspiration from his predecessor, Mr. Bourinot. In Bourinot's fourth edition at page 530, citation XV, you will find this with regard to third reading:
When the order of the day for the third reading has been read, it is competent to move-
He cites two things that can be done.
-that it be discharged and the bill withdrawn, or that it be recommitted.
Then he goes on to discuss what had been the practice formerly with regard to suggesting amendments at that stage, but he points out:
-but of late years the house has followed the modern practice of the English commons, which is stated in a standing order: "No amendments, not being merely verbal, shall be made to any bill on the third reading." Whenever it is proposed to make important amendments, it is usual to move to discharge the order for the third reading, and to go back into committee for the purpose.
That is, the same committee from which the bill has emerged. I think this clearly indicates, Mr. Speaker, that on third reading of a bill it is within the competence of anyone in the house to move that the bill be referred back to the committee of the whole house but not to change a decision of the house which was made earlier, which was that the bill should be studied in committee of the whole house.
The amendment introduced by the hon. member for Essex East has brought entirely new material forward to the House of Commons tonight. His amendment is clearly out of order. There is only one of two things that may be done to this bill. One is to move that it be discharged and the bill be withdrawn. The other is that it be recommitted to the committee of the whole house.


Paul Joseph James Martin: Will my hon. friend give us the page of the citation.


Gordon Minto Churchill: Pages 530 and 531.


William Joseph Browne: There is also a reference on page 288 of Beauchesne, fourth edition, Mr. Speaker.


Mr. Forgie:: The expert again.


William Joseph Browne: Now who is
bringing in closure?


The Acting Speaker (Mr. Chown):: Order. I might say that 1 have before me the reference on page 288 to which the Solicitor General is going to address himself.


William Joseph Browne: I would point out that it says:
On the second reading of a bill, an amendment may be moved expressing opinions as to any circumstances connected with its introduction or prosecution, or seeking further information in relation to the bill by committees or commissions, the production of papers or other evidence, or the opinion of judges. This cannot be done on third reading because it is not directly connected with any provision of the bill.


John Whitney Pickersgill: May I say just another word, Mr. Speaker, before you make a ruling? I listened with care to what was said by the government leader. The government leader said there were only two kinds of motions that could be made on third reading. One was to discharge the bill and the other was to recommit it. Of course Your Honour must be aware, and I am sure the government leader is aware, that on third reading it is perfectly competent to move the six-months' hoist, and it is perfectly competent to move what is called a reasoned amendment-that has been done very frequently-setting out reasons why the bill should not now be read a third time. What is being done here, of course, is precisely to move a reasoned amendment as to why the bill should not now be read a third time. Our position is that the bill should not now be read a third time because we need more information on which to base our judgment whether the bill should be read a third time.


The Acting Speaker (Mr. Chown):: I thank hon. members for their assistance. The authority referred to by the Minister of Veterans Affairs and by the Solicitor General gives me the precedents I require to make this ruling. The only portion of citation 418 which was not referred to by the Solicitor General was the part reading as follows:
All amendments which may be moved on a second reading of a bill may be moved on the third reading with the restriction that they cannot deal with any matter which is not contained in the bill.
I might use that additional authority to support my ruling. I would judge that the contents of the amendment moved by the hon. member for Essex East did introduce new material and accordingly I must rule the amendment out of order.


Paul Joseph James Martin: Would Your Honour not agree that it was not new material which was introduced but simply procedure

to deal with existing material? This is really the situation which I put with great respect to Your Honour.


The Acting Speaker (Mr. Chown):: That may be so, but I still feel on the basis of the other authorities cited that the amendment is out of order.


Gordon Harvey Aiken: Mr. Speaker-


The Acting Speaker (Mr. Chown):: The
hon. member for Parry Sound-Muskoka seeks to speak to a ruling which has already been made and I accordingly put the question. Is the house ready for the question?


Donald Methuen Fleming: I ask for the yeas and nays, Mr. Speaker.


The Acting Speaker (Mr. Chown):: Those in favour of the motion will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Chown):: Those opposed will please say nay. In my opinion the yeas have it.


Donald Methuen Fleming: There are no nays.
Motion agreed to and bill read the third time and passed.



CIVIL SERVICE ACT

Donald Methuen Fleming: that the house go into committee to consider Bill No. C-71, respecting the civil service of Canada.
Motion agreed to and the house went into committee, Mr. Chown in the chair.
On clause 1-Short title.


Donald Methuen Fleming: Several months have passed, Mr. Chairman, since the house gave second reading to this Bill No. C-71, an act respecting the civil service of Canada, and then referred it to a special committee for the purpose of study and report. This committee, under the chairmanship of the hon. member for Inverness-Richmond, has applied itself with great determination and patience to a very important task. I am sure that I simply voice the sentiments of all hon. members of this committee when I pay tribute and express the gratitude of hon. members to this special committee for the study that they have given to this bill.
The report of the committee is set forth at pages 723 to 727 of Votes and Proceedings for June 26, where all of the amendments recommended by the committee are to be found. The committee held many meetings. They entertained representations from all of the civil service associations and, indeed, at least several of them were heard on more than one occasion. It may be said, therefore, that the fullest hearing has been accorded
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to those who are particularly interested in the provisions of the Civil Service Act. I do not need to remind the committee that a great deal of study had been expended in the drafting of this measure before it was introduced at the present session and before its predecessor was introduced in the 1960 session of parliament. The committee has added to that study one of the most intensive studies that I think has been given to any bill for many a year. All those hon. members of this house who served on that committee I think have justly earned and deserve the thanks of hon. members.
I, of course, did not attend the meetings of the committee, Mr. Chairman, except the first meeting and the last. However, I know that hon. members would wish a special word of thanks to be extended to the chairman, the hon. member for Inverness-Richmond. The committee was evidently able to proceed with its duties in an atmosphere of calm and reasonableness, and much of the credit for the conduct of the proceedings of the committee is due the hon. member for Inverness-Richmond.
Now, a question may arise as to the status of the amendments proposed by the committee. I may say, Mr. Chairman, that as the sponsor of the bill in this house I am happy to accept the amendments proposed by the committee to the bill. As we proceed in committee of the whole on the clauses of the bill, the amendments will be moved to the clauses and so far as I am concerned, as sponsor of the bill, I make it very clear I am happy to accept all of the amendments proposed by the committee. I believe they do improve the bill over the form in which it was originally introduced and given second reading.
I know that all hon. members in the present deliberations of the committee of the whole will have regard for the fact that this bill has received, on the part of the special committee, a most thorough examination.
(Translation):


Mr. Caron:: Mr. Chairman, we are presented, in the dying days of the session, with a bill that certainly does not have the urgency which is apparently being ascribed to it. Salaries were raised not so long ago, and it cannot be expected that the civil servants will have to come back to the government in the near future, something which would justify the immediate passing of this Bill C-71 before we come back in September.
However, the government has decided that this bill should be submitted to the house before adjournment. Being outnumbered, we shall have to accept.

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I agree with the minister that the hon. member for Inverness-Richmond (Mr. Mac-Lellan) deserves to be commended for leading the committee with great intelligence and skill and for managing, despite some rather sharp differences of opinion at times, to maintain an atmosphere of harmony such as does not exist in every committee.
I must say to the minister that when the government has names to suggest for membership in committees, an effort should be made to consider personalities, but whenever we have a chairman such as the hon. member for Inverness-Richmond, we may still meet with problems but there will never be cause for bitter discussions. I therefore wish to thank the hon. member for his courtesy to all hon. members, and particularly to members of the opposition.
The committee met a number of times. We considered the bill very carefully. I must also thank those who appeared as witnesses, such as the members of the civil service commission, the representative of the treasury board and the representatives of the associations, whose specialized knowledge was very helpful. Frankly, without their assistance and support, the situation would have been extremely difficult. I want to acknowledge their ability and generosity in that regard. In some cases, we may have pressed our questions a little too far, but they always answered our questions with equal co-operation and made our task very easy.
We had a statute that had been on the books since 1918. It obviously needed revamping, because it is impossible to tell 50 years ahead of time what is going to happen.
When the first legislation was enacted, Canada was a colony and the civil service was not as large as it is now. In the meantime we had two wars, during which it was necessary to increase personnel.
Since Canada achieved independence and became a free country, our relations with other countries have been extended; this has called for the establishment of a Department of External Affairs which considerably increased the burden of the civil service as far as selection of personnel is concerned. In my opinion the act, even though outdated, has served its purpose well and, until this year, we did not have too much trouble in the matter of salaries and working conditions. This may be due to the fact that, under the previous administration, or the preceding ones, there were people in office who could

act with benevolence, who understood the workers, the needs of employees. That is why there may have been discussion with civil servants and their associations, but we never felt the need to seek a set protection provided by law, because we knew how to get along with them and granted them, if not all they were asking for, at least what they were entitled to expect from a government.
There were no secret documents at that time. There was no injustice due to delays in granting salary increases, as happened recently when employees were granted raises, between April and October, that were not retroactive. Those raises applied only from the day the department had decided to grant them, and so, for six months, some civil servants lost an increase they were entitled to expect. Why was this done? I do not know, and no explanation was ever given in that regard. I even wonder whether the minister can explain his delay in the matter.
Only this government could spoil everything and make civil servants suspicious of the government.
The new legislation certainly contains improvements. There are some items which considerably improve upon the old act; they have been seriously considered, but they do not amount to all the improvements the civil servants have a right to expect.
I have here a press release sent by the civil service association's chairman, Mr. Best. This is what he says:
(Text):
C.S.A.C. national President J. C. Best has issued the following statement dealing with the amendments to clauses 7, 10, and 69 of Bill C-71, the revised Civil Service Act. The statement has been approved by the executive committee of the association and represents the official position of the C.S.A.C. The statement said:
"The civil service association of Canada has now studied the provisions of clauses 7, 10, and 69 of Bill C-71 (the Civil Service Act) as amended by the special committee of the House of Commons on June 23. Since passage by the committee more or less assures acceptance by the House of Commons, this association now wishes to record its comments on the clauses which, unfortunately could not be made before the committee.
Generally speaking there can be no doubt that the amended clauses represent improvement over the original forms of clauses 7 and 10. However, the association and its members are disappointed that certain basic principles of our position copld not gain acceptance in the committee or from the government. We are as concerned with too rigid legislation as is the government. However, we do not feel that the position we took before the committee requesting negotiation, consultation and arbitration implied any rigidity whatsoever. We viewed these principles as minimum safeguards to the rights of civil servants.

In introducing these amendments the Minister of Finance emphasized the need for good will and good faith on the part of all concerned. With this viewpoint we can readily agree. However, we would point out that such a climate is more readily achieved if the legislation under which we work enumerates certain basic principles which, in our view, are essential to a satisfactory employer-employee relationship within the government service.
Our major area of concern is the lack of definition of what constitutes consultation and whether it is synonymous with negotiation as we view it. We are also concerned that there is no means whatsoever in the legislation to solve fundamental points of disagreement which must, from time to time, arise regardless of how much good faith is evidenced by the parties concerned. We thus feel that the refusal of some constitutionally acceptable form of arbitration will inhibit the staff associations in their representations and will provide additional strains on the "consultative process".
Our other major concern is the government's belief that after so many years we can in effect only now begin to evolve a satisfactory system of dealing between it and its employees on matters concerning salaries, wages and working conditions. In the absence of any indication as to how long the government feels such an evolutionary process should take we are deeply concerned that we may be faced with many more years of struggle to achieve what we feel are legitimate and necessary goals. We do feel that some firm indication is needed on the government's part as to how long it feels this process will take, and when the question of changing the legislation to come closer to our wishes can again expect to be raised before a parliamentary committee. We feel that three to five years is as long as we should be expected to rely on evolution, in view of the long period that has passed without significant change. While we can see validity in a program of gradualism where no precedents exist for guidance, we do not feel that this applies to the present situation.
The civil service association of Canada will do everything possible to assist in working out proper machinery under the act.
(Translation):
As you see, Mr. Chairman, the association was very willing to co-operate with the government. But civil service organizations have some misgivings. Can you blame them for it? Their representatives asked that certain basic protections be included in the legislation. They were not given satisfaction, and they have some misgivings in this respect, because, during the three or four years that this government has been in power, difficulties have always cropped up when these people tried to obtain a salary increase or reasonable working conditions.
In the first case, the civil service commission had recommended not to grant any raises in salaries. The Minister of Finance immediately informed the public of the decision that the requested increases were not being granted.
However, when, on a second occasion, the civil service commission recommended an increase to the department, which submitted the matter to the treasury board, and when an increase had been recognized aceept-
Civil Service Act
able and was to be granted, the position was quite different. Nobody in Canada knew what was going to happen. The minister kept his great secret to himself. The report was held to be a document which could not be revealed either to the house, or to the public, or to federal employees.
It was necessary to wait until the government was ready to say, in April, what categories of civil employees would benefit from a salary increase, as from the first of that month; in May, another group of federal civil servants would be granted a raise, but from May 1 and not April 1. In June, another group of civil servants would be granted an increase, but only as from June the first.
That is how the government went about it, from month to month, granting successive salary increases, but never allowing the civil servants to benefit from retroactivity to April 1, which was the date of the first increase which had been granted, so that federal employees lost some of their confidence in this government; and they can scarcely be blamed for it.
As federal civil servants stated themselves, they accepted the situation, but unwillingly. They are not satisfied with the way they were treated by the government, and they cannot be blamed for that either.
In spite of some improvements, civil servants were sadly disappointed. They had hoped to be treated as first class employees; they had hoped that, as in industry, they would be able to meet the government's representatives and discuss their working conditions and salaries man to man, and not as slaves facing a master.
But at that stage the minister decided that there should be no more than consultation, not negotiation. Those civil servants remain second class citizens, because the Minister of Finance decided that he could not grant them the right of negotiating on a basis of equality with their employer.
That is a situation which is not accepted anywhere in the world, in industry, and it is essential that the government recognize that its employees are entitled to meet their employer and to discuss their working conditions and their salaries man to man. The Canadian government had to be the first to withhold recognition of that right.
The Saskatchewan government is known to have recognized that principle. Did the

Civil Service Act
civil servants in Saskatchewan experience any difficulties? Not in the least. The government and its employees finally agreed on all points, and even if the parties concerned did not obtain all they wanted, they secured a good deal, which enabled them to accept something which did not reduce them to a subordinate standing as human beings.
Why did the federal department reject a request to negotiate? Some officials have stated that the suggestion of the minister had finally been accepted, though it was far from satisfactory, because they had no choice.
The minister indicated that the words "consultation" and "negotiation" meant about the same thing. On this subject, I have here a release issued by the federated association of mail-carriers of Canada, which states:
(Text):
The minister, in his preamble, pointed out that after consulting various dictionaries he was unable to see where the word "consultation" did not meet the same requirements as the word "negotiation". He also stated that he did not favour writing into legislation detailed provisions for negotiation and arbitration.
Whilst the amendment submitted by the minister is, to some extent, an improvement on the original draft of the proposed clause, it does not, in our opinion, give staff associations the protection to which they are entitled.
We fail to see-and we have also consulted dictionaries-where the words "consultation" and "negotiation" are synonymous; on the contrary, we find that there is a vast difference between the two.
When this association submitted its brief it did not suggest that detailed provisions for negotiation and arbitration should be written into the act; we did feel very strongly, however, that the word "negotiation" should be written into the act where it now mentions "consultation",-
(Translation):
Mr. Chairman, I have looked up dictionaries, and this is what I have found:
Negotiator: A person who is appointed to discuss with someone. The negotiators of an alliance.
Negotiation: The act of negotiating important public or private business. That business itself. To break off, to resume negotiations. The act of transferring, of surrendering commercial papers.
Negotiate: To carry on business. To carry on business in the east. Of commercial papers or drafts, to transfer, to pass on to somebody else. To discuss through diplomatic channels or with an individual. To be negotiated, to be the subject of negotiations.
On the other hand, Mr. Chairman, this is what the dictionary has to say about the word "consultation" and its derivatives:
Consultant: A person who gives advice, as a lawyer, a doctor. One who seeks a consultation.
Consultation: The act of consulting. The study of a case by one or more lawyers, of a patient by one or more doctors. Advice given by lawyers, doctors. A conference held to consider a case.

Consult: To seek the opinion of someone. To consider in order to gather information, an explanation. To consult a book. To confer, to deliberate. They are consulting each other. To give consultations. To consult oneself, to deliberate within oneself.
It can be seen that, in one case, the word "consult" means to parley, to hold parleys, while "negotiation" means to parley for a specific purpose, and it is precisely what the postal employees and employees in the other divisions of the civil service have asked for- the right to negotiate rather than the right to consult.
Besides, as far as the principle of consultation is concerned, whether the minister inserts it in the act or not he has granted nothing more to them, for there has been consultations in the past. In fact, whenever government employees have had the privilege to parley with the authorities, those of course were consultations; but that was all. They met with the authorities of the department and explained their problems. The authorities acknowledged the explanation of the problems, dismissed the employees and held discussions among themselves and the civil servants were not informed of what had happened.
On the other hand, when negotiations are held the representatives remain together to the end and they are there and know what the employer's final decision-in this case the government's decision-will be.
That is what they want to know. Therefore, there should be more co-operation between the two parties, so that the civil servants know, before being kicked out, what has been the final decision reached by the government.
They want to know where things stand and what other representations they might make in case they did not get satisfaction.
There are also a number of strange things in the bill before us.
For instance, the civil servants have asked that the word "grievance" be defined. The committee, with the support of its majority, has refused this suggestion. I later made the same suggestion myself, and was told this was not necessary, as the wording was clear enough. As a result, I have come to wonder whether lawyers do not have a special purpose in mind when they say everything is clear. In fact, I wonder if this is not a way of getting more cases and providing for longer and therefore more profitable discussions. I wonder if that could be their purpose.
The civil servants have asked for a clear definition of the word "grievance". They were told no, there was no need for that, as everyone knew what it meant.

Yet there are many definitions in the bill, but when it came to the word "grievance", the government objected.
Those people only asked that the word "grievance" be described as such. A grievance is a reason alleged for a complaint. It would have been easy for the minister to accept that the simple word grievance be defined.
It might have made the bill clearer. Perhaps it would have been repetitive. I do not think so, not being afflicted with the quirks of the legal mind. It would probably be a clarification involving repetition, as lawyers felt it was clear. It seems to me, however, that in the circumstances, the simple word "grievance" might have been made clear, as this would have clarified the bill. Besides there is always room for improving a rather confused situation.
Confidential reports and delays of applications which cause unfair losses with this new word "consultation" instead of "negotiation" will again arise. The government will again be faced with the same problems, though it can ill afford such problems.
Indeed the government does not have to wait for its pay to survive; it is not the government that suffers from working conditions; it is the employees.
The employees are the ones who suffer. They are the ones who want to remove the causes of friction and the difficulties they have been faced with, and have them replaced by smooth discussions, so that when a final settlement has been reached, they will be able to say to the government: Here is what we suggest. We have had discussions with the staff and have reached an agreement. We now ask parliament to refuse or accept the decision reached by the government as a result of discussions with its staff.
The minister has referred to arbitration. He referred to it as something highly dangerous. He said he opposed it because he wanted to protect the rights of parliament.
It is rather astonishing to hear such words from the minister-to protect the rights of parliament. Indeed, since 1958, we in the opposition have many times had occasion to complain that the rights of parliament were disregarded by this government, who often took advantage of its overpowering majority to disregard our legitimate requests, to refuse to produce documents we needed, to turn down our suggestions that matters be referred to committees, to refuse to bring forward its legislation in time so that we could study it,
Civil Service Act
to refuse to announce the business for the session.
And now the minister rises and says he wants to protect the rights of parliament.
When it comes to minor employees who cannot defend themselves, oh, they want to protect the rights of parliament. Members of parliament can easily protect themselves when their rights are interfered with.
Civil servants cannot take such steps. If they raise their voices, their employer can make trouble for them.
That is why I say the act could have been improved. Civil servants should have been given collective bargaining like provincial employees have in Saskatchewan. There has not been more trouble in that province; in fact, there has been less than here. Why?
Because that provincial government has gained the confidence of its employees, while, here, the present employees of the various services or various associations no longer trust the government. The reason is that they have been unfairly treated in the past three or four years, that is, since the present government came to power.
Parliament's rights would not be threatened if we accepted or encouraged bargaining.
The only case where the rights of parliament could be threatened would be if the minister arbitrarily decided to grant salary increases without consulting parliament or without previously asking the latter to approve the necessary funds.
When parliament is consulted with respect to decisions which have already been taken and which involve the government and some other body, be it a civil servants' organization, a provincial government or a foreign government, it cannot be said that there has been encroachment upon the fundamental rights of parliament, because in all those cases, the government has come to an agreement.
One example of that is the agreement between the Canadian government and the United States government on the South Saskatchewan river dam. Was there any encroachment upon parliament's rights because that agreement was signed before it was submitted to parliament? Did we take offence? No, because we knew that sooner or later parliament would have full opportunity to discuss it and that it would have a final say in the matter.
In this case, naturally, giving bargaining rights to employees would in no way threaten or challenge parliament's prerogatives because if there were a dispute, they would just

Civil Service Act
submit their case to an independent body which would hear the evidence and submit its recommendations to parliament. Those recommendations would either be endorsed or turned down.
There has been some talk about the employees' right to go on strike. Only one association mentioned it but did not insist.
In fact, civil servants already have that right since anything which is not specifically prohibited is permissible.
Now, nothing in the previous act prohibits civil servants from going on strike. The same situation prevails in England.
Yet, civil servants have not taken advantage of that right.
Nothing in this bill forbids employees from going on strike; therefore, they still have that right since there is no prohibition in that connection. Consequently, civil servants have the right to strike.
At any rate, that is idle talk because civil servants neither have the intention nor the desire to call a strike.
Most staff organizations, the civil service association of Canada, the civil service federation of Canada and the professional institute of the public service of Canada have stated most emphatically that they have no intention of calling strikes or of taking advantage of their right to do so regardless of whether or not it is in our statutes.
I might add1 that it is not in their interests to go on strike since they have other means at their disposal, especially if they are given bargaining rights.
Those recommendations have been turned down. Why? I could not say. Certain lawyers say that the answer is obvious even though they feel a need to discuss the point. They fear repetitions; yet, that would be conducive to a clarification of this matter.
It was said that this is obvious; still, lengthy discussions took place, questions were asked and long talks were held. However, when asked to tell exactly what would be the prevailing rates, they refused to answer saying it was clear.
There were ten members in attendance, and five of them were not of that opinion. As a matter of fact, the commission's interpretation was often at variance with that of the members of the committee.
It is quite clear that there was a lack of precision there. A text should be given the meaning it should have.

A bill does not have to be a piece of literature but still it must be clearly worded, even if repetitions are involved.
That is why it would have been better for some points to be clarified.
As far as prevailing rates are concerned, I think it was wrong not to accept the suggestions made by the spokesmen of the association.
Another feature of this act which may be criticized is the fact that it grants too full powers to deputy heads. Already those powers were not inconsiderable, yet they are further extended. The deputy heads may do as they wish in order to crush any employee they dislike, because they are sole masters according to the commission and the government. Such a situation should not exist under a civil service act.
I suggest that the powers given the deputy heads and their responsibilities should be limited; that the commission should have the last word-


Jacques Flynn: Order. I regret to interrupt the hon. gentleman but his speaking time is up.
(Text):


Some hon. Members:: Carry on.


Jacques Flynn: Does the committee agree that the hon. member be allowed to proceed?


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


Alexis Pierre Caron: Thank you, and I also thank the committee for allowing me to continue. I hope I will not be too long.
Deputy heads have powers that are too extensive while the commission gets too little.
I think that powers should be given the commission. In fact, the commission deals with individuals that it does not know. Not knowing them, it can examine the matter objectively without saying: "This is the case of So and So; I do not like the looks of him." We often meet people we dislike at first sight. Well, deputy heads are no exception. The civil service commission sends a man over but as he does not like the looks of the applicant, he sidetracks him and, at the first opportunity, the commission manages to fire him on the pretence that he does not give satisfaction. I think that deputy heads are granted too much power. I am sure that, even in the ranks of the government members, there are people who agree with me on this subject. I met some in the committee who

felt the same as I do. The powers of the deputy heads should be limited, and those of the commission should be increased, because in the last analysis, it is the commission that cannot feel any bitterness against any one.
I also think that too much power is given the governor in council. That is a natural tendency with the Tories which we cannot countenance. The governor in council reserves too many powers to himself.
When considering this bill, clause by clause, we will have an opportunity to submit amendments to this effect. That the governor in council has some rights, I admit, but those rights should be limited. They should be well defined, so as to avoid all risks of overriding the powers of some other group. That is why we should be careful when granting such extended powers to the governor in council.
Something else is lacking in this legislation, which is not made clear, because it is claimed this has been handed to the commission to draw regulations therefrom: it is the rights of appeal which are not properly defined. Even if this is included in the regulations, and even if the regulations are considered in consultation with employees' associations, I suggest it would be much clearer if it were provided in the act that certain points may constitute cause for appeal in order to protect the lower civil servant who, often, is the victim of more important people who take advantage of their position-they are those whom we usually call beggars on horseback-to oppress those around them. We often see petty officials who, having climbed the social and official ladder, lose all notions of decency and crush everyone under them. I suggest we should provide for such cases in including very definite rights of appeal in the act.
There is another case which has not been corrected, and which should have been. It is that of veterans. The protection we had provided for them, under the former act, is included in the new one. But neither the former act nor this one provide any recognition for those who served in the army but remained in Canada, against their own wishes, because their special knowledge was required for some work in Canada rather than in Europe or elsewhere. To those veterans is denied the right of preference over others. You may say: "Of course, but the others, it is them who decided to risk their lives abroad." But, they too were prepared
Civil Service Act
to go overseas to risk their lives. But they were kept in Canada because they were needed here. All the same those soldiers had some merit, but it is not recognized. A new act is enacted which completely ignores those who stayed in Canada. I claim that the government should amend the act to give those veterans some advantage, not as much as for the others, but when they pass an examination they should be allowed an advantage of 10 or 15 per cent so that they may have a better chance of being eligible for the civil service.
Those are a few of the amendments which could be moved.
However, notwithstanding the briefs of the conseil de la vie frangaise and the St. John the Baptist Society, I say that there has been no improvement introduced as far as bilingualism is concerned. Confederation is almost 100 years old and we are still treated as the poor relations of the majority. Is it normal that after some 100 years of common existence, we should still be considered as poor relatives? I would have thought that after 100 years, we should know each other well enough and understand each other well enough that prejudices would no more exist.
At present, does the bilingual individual, either French or English, have any advantage? If he is bilingual, he should be considered superior to others. We generally recognize that the minority becomes superior, and that is a necessity imposed by nature. In every country where there is a minority and a majority, we know that the minority, due to its condition, has to become intellectually superior to become the equal of the majority. That we recognize.
I am not asking that everyone learn French or that everyone learn English, but when one knows both languages, he should enjoy special consideration. I suggest that those who are bilingual should get special consideration and this would encourage the study of both languages. In fact, if in a civil service competition a candidate can say he knows the spoken language of the other part of the country if not its written one I say he should be granted at least 5 per cent more than the others who cannot do as well, so that he may have a better opportunity of earning and promotion. This would favour all those who care to study another language. Even when it is not definitely necessary, they could do it as a means of improving their cultural standards.
Besides, the hon. member from Timiskaming (Mr. Peters) suggested in committee-and

Civil Service Act
I entirely agree with him-that the civil service organize both a French course and an English course for those who do not have adequate knowledge of the other language to help them to be prepared for better positions. I think that suggestion should be most seriously considered. For the time being, I will not move an amendment in that regard, because I know it would mean immediate expenditures and under the rules, I cannot move neither in the house nor in committee, an amendment that would result in an additional expenditure. But I do hope the government will continue to give consideration to that matter in order to encourage people to further their intellectual development. I am sure that by granting a 5 per cent more to those who would be able to show in a competition that they know the two languages spoken in this country, we would reach this objective. In this way, the act would be amended in such a way that everybody, and especially the civil servants, would be satisfied, because they would be the ones to suffer if the act were not satisfactory and were left as long as the old act without being amended. At that rate, many of those employees would be dead a long time before ever seeing their lot improved.
Well, I ask the government if it will consider it carefully.
As far as bilingualism is concerned, here is a recent development. Notice had been given of a promotion competition for the office of director of district No. 2 which includes part of the country of Pontiac, the counties of Gatineau, and of Hull, part of the counties of Labelle, Argenteuil, Russell, Stormont, Ottawa East and Ottawa West, as well as many neighbouring counties. There are a great many French speaking Canadians in that district, and I asked the minister why a bilingual employee was not required for that office. He replied that this was not necessary, since the district includes an important part of Ontario, and therefore a bilingual employee was not required. Nevertheless, while we are dealing with a postal district, even where post offices might not be as important as those in Montreal, Toronto or Ottawa, such opportunity could well have been taken to require that a bilingual director be appointed. Many people are qualified for that office. But no: it was decided that this was not necessary. And the minister told us the other day that the decision was the responsibility of the civil service. That statement is wrong: such decision does not come from the civil service, but from the officials of the Post Office Department who decide which qualifications will be required, and the civil service sets out its competition according to those requirements. Therefore, the

department has the right to ask for a bilingual director, be it a French speaking or an English speaking person, provided it is a bilingual employee.
When the mail-carrying service was inaugurated at Gatineau, they had to call upon a bilingual official from Montreal, because the head of the service in Ottawa could not speak French. They realized thus that bilingualism is a necessity; and yet, they did not think it advisable to remedy the situation.
Mr. Chairman, I am sorry I took up more time than was kindly granted me by the house. We shall have occasion to take the matter up again and propose amendments to several clauses.
(Text):


Mr. Hicks:: Mr. Chairman, would the hon. member permit a question? Was the hon. member speaking of the civil service or of his relatives?


Alexis Pierre Caron: That is a fine question but I suggest you should direct it to the Minister of Finance, because I would not stoop that low. Some of my relatives may be in the civil service-


William Harold Hicks: Some of mine are too.


Alexis Pierre Caron: Yes, some of your relatives may be in the civil service too but I am not responsible for that. I can tell you this: if some members of my family are in the civil service they are there of their own accord, because I did not give them recommendations. I can state that I do not intend to give any member of my family a recommendation for employment in the civil service.


William Arnold Peters: Mr. Chairman, as a member of the committee I am happy to report that no such suggestion was discussed there. The proceedings of the committee were not conducted on the level of the last question.
I should like to congratulate the chairman of the committee because I think he did a good job as chairman. He understood the problems that were being discussed. He was lenient with the points of view with which he did not agree, and if there was an honest difference of opinion in the committee he was willing at all times to allow the matter to stand over to see whether some compromise could not be worked out. I think this is the kind of job that a chairman should do and I was certainly pleased to be a member of that committee. I highly recommend the hon. gentleman to the government as an excellent and capable chairman.
The remarks that I have to make cannot be made in the light of whether I have relatives in the civil service because to the best of my knowledge I have none. Very few civil

servants in my riding are in the category of office staff. With the exception of a very limited number my riding does not consist of civil servants. Therefore, I was interested in this matter not on the basis of patronage, not on the basis of what we could get out of it but rather on the basis of what we could put into the committee to accomplish what we all really want, namely the best civil service and the best possible agreement for those civil servants because this is the way to establish a very active and effective civil service body.
In my opinion the members of the civil service commission who attended on a number of occasions were very co-operative in their replies. They were willing to discuss in very broad and effective terms the matters that fell within their jurisdiction.
I agree with the previous speaker with regard to the presentation of our regional arguments having to do with improvement in the civil service. That problem still remains with us. I refer to the matter of whom the civil servants negotiate with, what type of relationship exists between the civil service commission and the civil servants themselves, the civil service associations and representations. I believe this is the crux of the disagreement between the government and the opposition. This is also the reason why the Civil Service Act was opened up at this time. As has been said, there is at the present time no disagreement over salaries or wages but there will continue to be a disagreement if the same type and method of negotiation is continued that took place at the time the civil servants received their last pay increase. I believe the civil servants themselves have the right to know with whom they negotiate, how they negotiate with whatever body is selected for negotiation and what results come from those negotiations. It is still confusing in my mind and I think in the minds of most Canadian civil servants as to whom they negotiate with.
This matter is not nearly as simple as if you were negotiating with management in a plant where you might find that the management really did not have any say because there was a board of directors over that management. But in that case you do know that the representations you make to management in those negotiations are referred to the board of directors. In the case of civil servants' negotiations I am not too sure with whom they are negotiating and I am sure that they are not. We heard such terms kicked around as the governor in council, the treasury board, the civil service commission and the parliament of Canada itself. I think that in solving some of the problems that have been apparent over the past three
Business of the House
years we will have to make a change. This is not one of the changes that has been suggested but we shall have to make a fundamental change so the civil servant and his association will know how to proceed in negotiating under the normal procedure commonly referred to in other acts administered by the federal government. I refer specifically to the Industrial Relations and Disputes Investigation Act.
In other countries civil service commissions have been given authority to make representations in relation to pay and to other conditions of work. They make those representations after having consulted with the associations that represent the employees. When they make those representations to the government, or to the cabinet, a decision has to be arrived at at that level. The governor in council will decide on behalf of the government and of parliament what pay increases will be granted to the civil servants. But in most cases that I have examined where the commission was the equivalent to the civil service commission in Canada, those representations were made public and everyone knew what were the suggestions of the civil service commission and on what grounds the submission had been made. Thus the civil service commission retreats from the negotiations because they become political on the one hand and a matter for decision by the members of civil servants themselves through their associations. Negotiations should take place on that level. I think this has not been done by this government. It probably has not been done by any government in Canada in the past. It seems to me this is the crux of the question of a need for change in the Civil Service Act.
Will you call it 10.30, Mr. Chairman.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I ask the house leader what the business will be for tomorrow and Saturday?


Gordon Minto Churchill: The order of business depends to a large extent on whether it will be possible to reach an adjournment on Saturday. But tomorrow government orders will follow in this way, subject to notification to the opposition in good time if it is necessary to make any change: The first item on the order paper, the third reading of Bill C-114; the second item, Bill No. C-71, respecting the civil service of Canada; and, third, the bill pertaining to the C.N.R. financing. The fourth item will be Bill No. C-120, to amend the Income Tax Act.

Business of the House I do not know how far the house will get tomorrow. The other items that we have for consideration in the happy event of an early adjournment are the resolution stage of the dominion-provincial fiscal relations legislation which is on the order paper and an appropriation bill dealing with the supply that has already passed the house. We have 11 departments that have passed through the committee. The appropriation bill would deal with just those matters. They would be followed, then, by interim supply, if the house
approved, dealing with the departmental estimates that we have not yet concluded. Those appear to be the matters for consideration of the house, if things turn out tomorrow as many members hope they will. If there is a prolonged debate somewhere tomorrow on one of these items, I would hesitate then to forecast what would be the business for Saturday.
It being 35 minutes after ten o'clock, the house adjourned, without question put, pursuant to special order.



ANSWER TO QUESTION

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

Mr. Herridge: 1.	Have tenders been called for the Initial construction of the Bomarc missile launching base near Mont Laurier?
2.	If so: (a) on what date? (b) what were the terms? (c) what firms were invited to tender? (d) what firms tendered? (e) what bid was made by each?
3.	Has a tender or tenders been accepted?
4.	If so: (a) on what date? (b) which one?
Answer by: Hon. Raymond O'Hurley (Minister of Defence Production):
1.	Yes.
2.	(a) January 15, 1960. (b) Firm price, (c) See attachment A. (d) See attachment B. (e) See attachment B.
3.	Yes.
4.	(a) July 29, 1960. (b) A. Janin & Co. Ltd., Montreal, Quebec, the low bidder.



ATTACHMENT &quot;A&quot;

[Stage Direction]
Contractors Invited to Submit Tenders for Construction of Supporting Facilities for R.C.A.F. Bomarc Site, La Macaza, Quebec.
Anglin-Norcross (Quebec) Ltd., Montreal; Angus Robertson Ltd., Montreal; Atlas Construction Co. Ltd., Montreal; Byers Construction Co. Ltd., Montreal; Canit Construction Quebec Ltd., Montreal; E.G.M. Cape & Co. (1956) Ltd., Montreal; Deschamps & Belanger Ltee., Montreal; Louis Donolo Inc., Montreal; Dufresne Construction Co. Ltd., Montreal; Fraser-Brace Engineering Co. Ltd., Montreal; A. Janin & Co. Ltd., Montreal; Key Construction Ltd., Montreal; Peter Kiewit Sons Canada Ltd., Montreal; Robert McAlpine Ltd.,
Question
Montreal; McNamara (Quebec) Limited, Montreal; Northern Construction Co. & J. W. Stewart Ltd., Montreal; H. J. O'Connell Ltd., Montreal; Pentagon Construction Co. Ltd., Montreal; Perini Quebec Inc., Montreal; Pig-ott Construction Co. Ltd., Montreal; C. A. Pitts Construction (Quebec) Limited, Montreal; Quemont Construction Inc., Montreal; Simard & Freres Cie Ltee., Montreal; J. D. Stirling Ltd., Montreal; Terminal Construction, Div. of Henry J. Kaiser Co. (Canada) Ltd., Montreal; J. L. Guay & Frere Ltee., Montreal; Mannix Co. Ltd., Montreal; Ma-gloire Cauchon Ltee., Quebec, P.Q.; Komo Construction Ltd., Quebec; Cimota Construction Corporation Ltd., Quebec; Hill-Clark-Francis (Quebec) Ltd., Noranda, P.Q.; La Societe d'Enterprises Generales Ltee., Amos, P.Q.; Belle Construction Ltee., Isle Maligne, P.Q.; Gregoire Perrault Inc., Joliette, P.Q.; L. O. Trottier & Fils Ltee., Cap-de-la-Made-leine, P.Q.; J. R. Theberge Ltee., Chicoutimi, P.Q.

[Stage Direction]
List of Contractors Tendering on Construction of Supporting Facilities for R.C.A.F. Bomarc Site, La Macaza, Quebec
A. Janin & Co. Ltd., $4,911,151.15; Piggott Construction Co. Ltd., $5,156,505.93; E.G.M. Cape (1956) Ltd., $5,167,508.00; Pentagon Construction (1959) Ltd., $5,208,991.87; Robert McAlpine Ltd., $5,290,623.26; J. L. Guay Limited, $5,315,160.34; Henry J. Kaiser Co. (Canada) Ltd. & Raymond International Ltd. (a joint venture), $5,343,343.12; Perini-Komo Construction Companies (a joint venture), $5,357,130.00; Anglin-Norcross Quebec Ltd., $5,499,022.78; Northern Construction Company and J. W. Stewart Ltd., $5,614,594.43; McNamara (Quebec) Ltd. and Community Enterprises Ltd. (a joint venture), $5,760,000.66; Quemont Construction Ltd., $6,250,988.26.
[Stage Direction]
Friday, July 7, 1961