1961-05-13

[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, I should like to direct a question to the Prime Minister in his capacity as Secretary of State for External Affairs, and ask him whether representations have been made to Canada by the United States state department in connection with the water levels of the great lakes, and with particular reference to a diversion out of the Hudson bay watershed to the great lakes. If that is so, could the Prime Minister tell us the nature of the representations?


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Chairman, the hon. gentleman gave me notice of this question a few moments ago, and I have endeavoured to secure the latest information. As of yesterday no representations had been received on this matter from the state department. I should add that from time to time various proposals have been made for a diversion of water from the Hudson bay watershed to permit an additional diversion at Chicago, but as far as this government is concerned it stands unalterably opposed to any further diversion of water at the request of Chicago.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kooienay West):: Mr. Speaker, I should like to address a question to the Prime Minister. In view of official United States reaction to a statement our Secretary of State for External Affairs is alleged to have made, in which he offered to mediate differences between the United States and Cuba, could the Prime Minister report to the house what the Secretary of State for External Affairs actually said?


John George Diefenbaker: Mr. Speaker, I have not as yet been able to secure any statement that was
made by the Secretary of State for External Affairs that would bear out the press references. However, on his return to Ottawa he will be able to go into some detail in this connection. Suffice it to say that naturally the Canadian government is always ready to discuss with American states those things that can be of help, with a view to the attainment of good relations among the nations of the western hemisphere. In saying that, I would emphasize that in my opinion there is no justification for any suggestion in the press to the effect that mediation was discussed.


[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: Mr. Speaker, I should like to direct a question to the Minister of Mines and Technical Surveys. Is the minister in a position to report to the house on the meeting held yesterday in Ottawa to discuss the coal problem of Cape Breton? Also, is he in a position to assure the house that action will be taken to avert the closures announced for the coming week?
(Translation):


Hon. Paul Comiois (Minister of Mines and Technical Surveys):: Mr. Speaker, a meeting was in fact held yesterday afternoon under the chairmanship of the mayor of Glace Bay, Mr. Macdonald. The group included about twenty people from various sections in the vicinity of the mines in question, that is to say mines No. 4, Caledonia, Lawrence, and No. 16, as the house knows.
The discussion, which dealt with the various points submitted by the parties concerned, was quite friendly, and opinions were exchanged freely. The ministers present were my colleagues the ministers of national revenue, labour, and forestry, as well as myself. We listened carefully to the various points of view that were expressed.
However, in view of the official meeting with the premier of Nova Scotia, which is scheduled for next Monday in Ottawa, I do not think it would be wise to make any further comments at this time. After that

Inquiries of the Ministry meeting it will probably be in order to issue a statement as to the decision taken and where the matter stands.
(Text):



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Hon. J. W. Monteith (Minister of National Health and Welfare):: Mr. Speaker, yesterday the hon. member for Port Arthur asked me about the distribution of a certain recent speech of mine. I find that in my absence from Ottawa the channels used were those normally involved when 1 am dealing with a strictly departmental subject. I have given instructions that the oversight should not in future be repeated.


Mr. Pickersgill:: How do you repeat an oversight?


Mr. D. M. Fisher (Port Arthur):: Will the minister consider making some apology for some of the slurs that were in the speech circulated by his government or departmental staff, as distinct from whatever political staff or staffs he may have?



NATIONAL REVENUE


[Stage Direction]
On the orders of the day:
Hon. George C. Nowlan (Minister of National Revenue):: Yesterday the hon. member for Port Arthur asked me a question with respect to the seizure or delay of certain books by officials of the Department of National Revenue. I knew nothing about the matter. I made inquiries and found that those books had been delayed some considerable time ago and were subsequently released without the matter being referred to Ottawa.



MANITOBA


[Stage Direction]
On the orders of the day:
Mr. Nicholas Mandziuk (Marquette):: May I
address a question to the Minister of Agriculture. My question arises out of some anxiety expressed by Manitoba farmers that their delivery quotas authorized by the wheat board will be lower than those of Saskatchewan and Alberta. Can the minister give the house an up to date report on delivery quotas in Manitoba and how they compare with those of the other two provinces?


Hon. Alvin Hamilton (Minister of Agriculture):: Mr. Speaker, I have not my documents
on this subject with me this morning. I shall be glad to take the question as notice and give an answer as soon as possible.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: I should like to address a question to the Minister of Transport based upon the announcement yesterday about shipbuilding subsidies. Because eastern shipyards have a price advantage over the west coast yards owing to such things as the proximity of steel supplies and transportation, can the minister indicate whether any consideration was given to allowing a higher subsidy on ships built in west coast yards in order that they may be in an equally competitive position with eastern yards?


Hon. Leon Balcer (Minister of Transport):: The answer is no, Mr. Speaker.



THE CENSUS


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to address a question to the Minister of Trade and Commerce based on a telephone call from a person of great rectitude who is interested in public life and is not a supporter of this party. In view of the minister's statements in the house on April 12 and April 19 that candidates for the position of census commissioner had to meet certain high qualifications, and that his department would select only the very best persons available in each area to carry out this important and exacting operation; and in view of the appointment of Mr. Frank E. Smith as census commissioner for the riding of Vancouver Centre, will the minister assure the house that this person's background and experience meet the high qualifications which the minister has informed the house are necessary for this appointment?


Hon. George H. Hees (Minister of Trade and Commerce):: Mr. Speaker, I do not know Mr. Frank E. Smith personally and I am not aware of his qualifications. The qualifications that I outlined in the house on several occasions are those that are supposed to be adhered to in the choosing of census commissioners. I will have inquiries made as to

the qualifications of this particular gentleman and will be glad to inform the hon. member when I have done so.

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



DEPARTMENT OF TRANSPORT

[Stage Direction]
402. Departmental administration, $3,395,700.
Léon Balcer: Mr. Chairman, in that part of the blue book of estimates entitled "Transport" there are several dozen votes, together with three or four items authorized by statute, pertaining to the Department of Transport and several other government agencies which report to parliament. A quick glance at the bottom of page 82 will show that these appropriations total $287,468,802.
The first allotment to which I will direct the attention of the committee is vote 404, aids to navigation, construction, to be found on page 75. This vote is up by approximately 70 per cent. A large expenditure is associated with construction of our new marine agency depot at Charlottetown. This project, begun in 1958, requires several years for completion. The Department of Public Works administers this type of construction for us; and we are providing $500,000 for wharf construction.
Another work of a similar type will be completed this year at Saint John, New Brunswick. There we must spend $250,000 to wind up construction of the agency complex which we began four years ago. We will also embark on a wharf extension project at Dartmouth, Nova Scotia. The $200,000 which the Department of Public Works expects to spend on our behalf represents the first portion of an outlay of some $2,200,000.
Erection of lighthouse piers will be pushed ahead in line with our program for installation of the most modern aids for the assistance of shipping. One of these items alone, the light station at Prince shoal in the St. Lawrence river, represents the largest single outlay in the appropriation, namely $700,000. Eacilities at our Quebec city agency will be improved at a cost of $250,000.
There is another proposal related to the trend toward modernization. Many of our light stations are isolated, and the attendants and their families are cut off from contact with other people. When weather conditions are particularly bad the delivery of supplies or the evacuation of sick persons cannot be performed. With a view to lessening the hardships on these employees we propose to construct helicopter landing platforms at several
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stations this year. If this experiment proves successful it will, of course, be extended to many other locations.
Increased shipping activity from the seaway is reflected in the decision to construct modern type establishments at Prescott, Ontario, to replace the structure destroyed by fire last year and other obsolete facilities. The overall cost of that work will be $1.5 million. Among the many other specific points at which major works will be performed are Victoria and Prince Rupert, British Columbia, and St. John's, Newfoundland.
Despite its very short existence, the St. Lawrence seaway has already resulted in a very definite-


John Whitney Pickersgill: On a point of order, Mr. Chairman, I wonder if we could have a little more quiet in the committee so that those of us who want to follow what the minister is saying can do so.


The Chairman:: I agree with the hon. member. I think private conversation should be continued in a much quieter tone.


Léon Balcer: This very definite trend about which I was speaking is borne out quite conclusively by an examination of the annual reports of the seaway authority and the national harbours board. Both agencies have reported the movement and handling of more cargo by fewer but larger ships. Quite clearly this emphasizes the urgency of maintaining and improving shipping channels in the St. Lawrence and Saguenay rivers. With this in mind we are planning to construct and operate, at a cost of some $350,000, a hydraulic model of the river section below Montreal.
The long term capital dredging program, begun five years ago, for widening critical sections and deepening other areas in the ship channel will be advanced considerably with the expenditure of some $3| million.
The summarized detail in the estimates book discloses that total moneys proposed with respect to our marine services aggregate something over $63 million. That figure represents an increase of 24 per cent over the related total for 1960-61. I think I should, therefore, explain the reason for this.
The recommended programs for aids to navigation and ship channel work, to which I have already referred, account for about $4 million of the increase. The largest single appropriation is that operation and maintenance of the Canadian marine service, our departmental fleet. Here we will be holding to an outlay almost identical with last year's appropriation. The $18.8 million we have allotted pertains to expenditures associated with design of new vessels, as well as refit,

Supply-Transport
conversion, repairs and operation of our fleet of icebreakers, supply and buoy vessels, weather ships and northern service vessels.
Next in order of size is the vote for construction or acquisition, for which $15.5 million is provided. This vote shows the largest increase percentagewise of our 40-odd departmental appropriations. During the past year our ship construction program levelled off very appreciably. We were then witnessing completion of numerous large units. Apart from this, our ship construction organization was engaged in the preparation of plans and specifications for additional ships. That planning has now progressed to the point where we are able to embark on actual construction. To illustrate this aspect of the proposed program set out in this appropriation, let me point out that approximately $11 million is labeled for additional vessels.
I shall give a rundown on the larger projects. There is first a triple screw icebreaker, similar in type to the John A. Macdonald which entered service last year. It is hoped to commence construction some time this fall, with completion billed for the fall of 1964. Included in the proposed new starts is one unit which will differ somewhat in type and function from any of our existing vessels. I am sure all members of this committee are aware of the publicity given to breaks occurring in trans-Atlantic cables fanning out from our shores. This has been a matter of some concern to the government, for the loss of revenue resulting from so much as one day's interruption in service is very appreciable. In addition, it is a fact that there is a very decided shortage of cable repair ships, and this country must depend on other nations for assistance. It is proposed, therefore, to construct a dual type unit suitable for cable repair work and for icebreaking. When not engaged on the former work, this ship will be used on normal departmental tasks. The total cost may go as high as $7.5 million, and we have included approximately $2 million for the initial construction work.
For the past 10 years the department has operated, under international agreement, two weather ships in the Pacific ocean. After careful consideration extending over the past couple of years, it has been decided we should take action to replace the two ships. This decision is based on two factors. The ships are wartime frigates of the R.C.N. converted for this particular assignment, and maintenance costs have become excessive. Furthermore, a broadened demand for scientific data tends to make the ships quite unsuitable. The two new ships will cost some $8 million each. The department is now conferring with other departments to determine suitability
[Mr. Balcer.l
of design. This is not an easy matter to resolve, because the ships must serve such diversified requirements as meteorology, oceanography, hydrography, search and rescue, aircraft guidance, etc. Subject to settlement of the design feature, we plan on getting construction under way in the latter part of this year.
During the past few years my predecessor in office has kept hon. members informed of the very heavy work load we have assumed regarding transportation of cargo to the far north in support of domestic and international activities, both civil and military. Each succeeding year our techniques are being improved upon, so much so that the hazardous assignment of a few years ago has become somewhat routine today. Despite this transition, however, the operation continues to be one which imposes rigorous working conditions for our personnel. It is for this reason that we have included in our program an item of $1.5 million for a depot ship which will provide living accommodation for stevedores.
I am sure that representatives of east and west coast areas will be specially interested in another part of our shipbuilding program. Announcement was made in 1960 of the government's intention to improve our marine search and rescue operations as well as safety practices among shipping operators. In line with that decision we intend to provide, at a cost of some $4 million, eight high speed cutters-five large and three small-which will operate on both coasts and in the great lakes. Barring any unforeseen delay we should have these cutters ready in the summer or autumn of 1962.
The 1961-62 vote bearing No. 413 should be explained inasmuch as it appears to be approximately five times the last appropriation. Actually this vote is a consolidation of two or three appropriations appearing separately in past years. This has resulted from a reorganization of the establishment which links together pilotage, steamship inspection and marine reporting service. Apart from that, a few large construction projects are contemplated. Present temporary accommodation for the pilotage station at Les Escoumains, Quebec, will be replaced by a new station at Anse aux Basques, at a cost of $750,000. The Department of Public Works will construct for us at Clarenville, Newfoundland, a marine haul-out and a fitting-out wharf. Vote 413 contains $400,000 for these facilities, which will permit the inspection and repair of ships of up to 500 tons capacity. Another proposal related to improvement of the pilotage service rendered to shipping involves an expenditure of some $900,000 to replace obsolete pilot boats at Sydney, Halifax, Saint John, New Brunswick, and Vancouver.

Grouped together in the blue book under the heading "Railway and Steamship Services" there are 12 votes totalling $32 million plus, a slight increase over last year's figure. I shall comment very briefly on the larger of the individual changes. Moneys required for the auto-ferry vessel for the Prince Edward Island car ferry service are considerably less; the ship will be completed in the latter part of this year. The item for improvements to the terminal at North Sydney is likewise decreased by approximately $400,000, and for the same reason. The project related to additional railway trackage undertaken last summer is now finished.
We find it necessary to increase by $1,175,000 the allowance for the anticipated deficit in operation of the Newfoundland ferry services and terminals. The Canadian National Railways, who operate the service on behalf of the government, anticipate a slight increase in revenue, but operating expenses are expected to be a good deal higher.
The blue book comparison also indicates a sizeable increment in the deficit for the Prince Edward Island ferry service. The increase shown is $546,000. This is to a certain extent misleading, because subsequent to the preparation of these estimates a final supplementary vote increased the 1960-61 appropriation by $322,000. Thus the expected net increase for 1961-62 is $224,000.
Last year parliament approved an expenditure of $325,000 for improvements to the Cape Tormentine terminal of the Prince Edward Island ferry service. This work was necessary to permit efficient use of the vessels now operated. With the commissioning of the new ship to which I referred just now a total of four ships will be operating during the peak traffic season. Since this will overtax the facilities at Borden, it is proposed, therefore, to build a new ferry dock there at a cost of $980,000.
The lengthy, diversified list of services, programs, functions and responsibilities which are grouped together under the air services of my department accounts for some $155 million of the total funds we are asking parliament to provide. In relation to the main estimates for the last fiscal year, this proposed total outlay means an increase of some $15 million. This is, of course, indicative of the ever expanding requirements we must expect in our efforts to cope with the trend toward travel by air.
Just to demonstrate the tremendous growth in this area of public expenditure, let me point out that funds voted ten years ago, that is for 1951-52, amounted to $39 million. Other illustrations of this growth factor are easy to find in any study of this area. In the same decade the number of Canadian civil
Supply-Transport
aircraft licensed has multiplied; it was 1,960 aircraft at the end of 1950 and is now 5,400. Examination of personnel licensing records disclosed an almost identical rate of growth. We find that for each type of licensing there is a remarkably consistent increase of 15 per cent each year.
Let me mention here some significant detail on the traffic side of the picture. Whereas in 1950 our Canadian operators carried slightly more than 1 million passengers, in 1959 they transported close to 5 million. Carriage of goods showed a fourfold increase.
To compound the problems presented by this growing acceptance of air travel we now have the demands of the jet age. The noise level and greater space requirements are, in many instances, forcing design changes in airport construction. Runways have to be lengthened and strengthened, greater allowances are required for apron and hangar space and fuel storage. Location of airports in turn demands innovations to speed up refuelling, loading, unloading and shortening of taxiing distances; otherwise the advantage of speed will be lost. The more critical performance standards of jet aircraft demand other requirements as well. A good example is the more sophisticated traffic control services and the growing acceptance of some element of automation.
Proper administration of the numerous programs planned for the meteorological, telecommunications and civil aviation branches during the next year will most certainly make for a heavy work load, so much so that we must seek approval for a staff increase of 243 positions. This augmented staff will total 9,809 positions.
I do not intend to try to spell out in any great detail the many constituent parts of the various proposed activities. To do so I would be obliged to deal with a number of separate divisions, each of which in turn has a variety of activities, such as construction, operation, regulation, etc. I shall therefore attempt to single out particular items which I believe will be of greatest interest to the members of this committee.
The very large sum of $60,900,000 is set down for all types of construction related to airports, whether this be terminal buildings, runways, service buildings, taxiways, parking aprons, approach lighting, power plants, seaplane docks, water or sewage services. Within the last few years increasing emphasis has been given to the establishment of a series of modern air terminal buildings which will soon extend the length of our trans-Canada airway. In 1930 we saw that objective brought much closer with completion of our terminals at Montreal, Regina, Halifax and Ottawa. Very substantial progress likewise

Supply-Transport
was made on the structures at Edmonton, Winnipeg and Toronto. For these latter three projects alone the sum of $20.5 million is provided in these estimates. Numerous other points should witness air terminal building construction this year, for example North Bay, Sault Ste. Marie, Port Hardy, Victoria, Fort McMurray, and Prince Rupert and Penticton. Some of these are projects we had, in fact, planned to start last year, but changes in requirements and internal reallocations of funds have led us to institute revised planning.
A significant change appears in the two appropriations related to both the operation and the construction of radio aids for air and marine navigation, and again the change is upward. I refer to the two allotments on page 80 of the estimates book, which total some $33 million. The programs envisaged here do not lend themselves to ready explanation. One reason for this is the technical nature of the work. Then, too, the various systems of communication facilities are so dispersed that one cannot pinpoint expenditures by specific locations.
I would, however, like to apprise this committee of one particular assignment to be added to the work of this section of the department this year. This is the operation of four chains of DECCA navigator stations, a task heretofore performed for us by a commercial agency.


Lionel Chevrier: What is the name of the stations?


Léon Balcer: 
Lionel Chevrier: Mr. Chairman, the committee is grateful to the minister for the very comprehensive statement he has just given us, breaking down the various items of his department into a number of divisions which will enable us to consider these estimates with greater clarity than we otherwise could. 1 have some comments I should like to make regarding these divisions of his department, and I shall make them as I go along.
First, I should like to reiterate my congratulations to the minister on his appointment to what I have always considered the finest and best department in the government service. I have no hesitation in adding to that my best wishes to the minister for a happy but short tenure of office.
My first suggestion is one which may not meet with the approval of the minister but which I feel should commend itself to the consideration of a government that intends to deal with this huge department in an objective way. One has but to look at the estimates of the Department of Transport and consider the very wide field that the department covers to come to one conclusion; that it is extremely difficult for any one individual to administer the activities of a department of that size effectively and in the manner in which they should be administered. I am sure the minister will understand that I make that suggestion objectively without in any way wanting to be derogatory to himself. One has but to look at the annual report of the Department of Transport to appreciate what this department contains.
The department can be divided under three main headings: railway services, waterway services and air services, which in themselves are tremendous. But when one looks
Supply-Transport
at the many corporations and boards which are also responsible to the minister, such as Canadian National Railways, Trans-Canada Air Lines, Canadian Overseas Telecommunications Corporation, the air transport board, the board of transport commissioners, the maritime commission, the St. Lawrence seaway, and many other such agencies for which the minister is responsible, one can appreciate how vast the department is.
To strengthen my argument, I suggest there should be added to the Department of Transport such other communication matters as the operations of the Canadian Broadcasting Corporation, which are assigned to one particular minister because of their importance. That was the policy of the former government, and it has been followed by this government. However, the Canadian Broadcasting Corporation and all its affiliations are matters which normally should come under the department having to do with transportation. That is why I suggest that the ministry of transport should be divided into two parts, one having to do with air services, under which would come civil aviation, meteorological services and communication services, together with the crown corporations, boards and commissions that normally fall under those three headings. Under the jurisdiction of the other part could come other services that fall under the Department of Transport such as rail services and waterway services, together with the crown corporations, agencies, commissions and boards relating to those services. It seems to me, sir, that this is not an illogical division. Because of the tremendous importance which this department takes on year in and year out, the government should give consideration to this suggestion.
I move to another point which has to do with the railways. What is the position of the Canadian railways? It had a huge deficit in 1960; I think the amount was $65 million or $70 million. A large deficit for 1961 has also been prophesied. A threatened strike has just been averted by the operators of the railways and their employees. When one refers to that threatened strike one cannot do other than ask the government where it is going with reference to railway services in this country.
Some time ago the Prime Minister set up the MacPherson royal commission on transportation. It has brought down four recommendations involving subsidies of about $97 million. What is the policy of the government with reference to these four recommendations? We have asked repeatedly in this house for information in that respect and we have received none, save that the policy of the

Supply-Transport
government will be announced in due course. That is not what the Prime Minister said in November of last year when we were face to face with a railway strike. It is important for the people of Canada and the members of the House of Commons to know what is to be done with respect to those recommendations.
There is on the order paper now a bill having to do with the Freight Rates Reduction Act, with which we shall be dealing early next week. A statement has been made by the Prime Minister and the Minister of Transport in that regard, and I shall not take up the time of the committee in commenting on it other than to say that on the one hand we have the board of transport commissioners, which cannot make freight rates retroactive; it cannot reduce freight rates retroactively. On the other hand we have the minister and the Prime Minister saying that the Freight Rates Reduction Act will be made retroactive. How these two things are going to be reconciled I do not know. Perhaps I should not put it positively, but rather should ask the question. How does an act of parliament giving a freight rate reduction retroactively jibe with the policy of the board of transport commissioners, which is based on the Railway Act, which clearly states that freight rates cannot be reduced or increased retroactively? These are matters that we shall be discussing during the course of next week.
I come back to the threatened strike which was settled recently, because I asked the very important question in the house, where was the money to come from? We all remember what the Prime Minister said when this matter was under discussion in November of last year. I should like to put on record what he said as reported at page 359 of Hansard of November 30, 1960:
It will make its report as to the means whereby these discriminatory rates may be avoided. Legislation will then be introduced in order to equalize opportunity across Canada. The freeze will then be taken off and the railway companies may then make an application to the board of transport commissioners to raise the freight rates and to take into consideration the agreements now in existence between the employers and the unions back to January 1, 1960.
Legislation will be introduced in parliament. First the Prime Minister said that the royal commission on transportation would bring in a formula that would settle the dispute. Well, if they brought in a formula it certainly did not settle the dispute. Then the Prime Minister said that legislation would follow. It is there in black and white. Notwithstanding our demands of the Prime Minister as to what was going to be done with the recommendations made by the royal commission, he said that the policy would

be announced in due course. There is no question of legislation, although the report was made some weeks ago.
The Prime Minister said that the freeze would be lifted and the railways would then be in a position to make an application to the board in order, I presume, to take into consideration the agreements in existence between the employers and the unions. Therefore I think I am justified in asking the question, where is the money to come from? Does the minister not think it is about time for the government to make known its policy on this whole matter of railway transporta^ tion in Canada, as was done yesterday with reference to shipping policy, about which I shall have something to say later on.
The point is that the railways find themselves in a difficult position, and I think it is the duty of the government to tell the country what its policy is to be, not only in the general field, having regard to the report of the MacPherson commission, but in the other field that I mentioned. I should like to put on Hansard what the Prime Minister said on May 10 in his television broadcast on "The Nation's Business":
I think most Canadians will welcome the fact that the railway strike scheduled to take place next week has been averted. Some opposition members, you should have seen them in the house, they were far from happy when it was announced. They looked disturbed.
This is not a statement which should come from the Prime Minister. I said in the house, and I repeat now, that all Canadians should have been pleased and I am sure were pleased that a railway strike was averted. This kind of statement comes with ill grace from the Prime Minister in so far as it is a reflection upon the members of the opposition. Then he went on to say:
The action we have taken and the stand we took last fall has been fully vindicated.
That is not so; that is a complete inaccuracy. I continue:
And yet what happened last fall? The members of the Liberal party and the C.C.F. party voted against the legislation, but the vocal critics of last December are not so noisy now in the month of May.
Well, just let us pause for a moment and see what happened. The dispute was settled on the very basis of the recommendation made by the Liberal party. The Liberal party suggested to the government that the dispute be settled on the basis of the majority report of the conciliation board, known as the Mil-vain report.


Mr. Browne (Vancouver-Kingsway):: By
compulsory arbitration, you mean; that is what you suggested.


Lionel Chevrier: And the Liberal opposition made it quite clear where it stood in so far as a strike was concerned. The conclusions that have been reached in the settlement of the strike are the same as those that were recommended from this side of the house. Therefore it ill becomes the Prime Minister to be blowing oft steam because of the fact that he or the government by inference have been responsible for the settlement of the strike.
I say to the minister that we were the ones who were in the right in reference to this matter. The government was wrong, because the agreement was not according to the procedure described by the Prime Minister. I have put on record the statement made by the Prime Minister as to the manner in which this matter would be dealt with, and there is no doubt that is not the way in which the strike was settled. It was done on an entirely different basis. According to the statement which I put on record, the railways were not supposed to receive any subsidy from the government but would improve their ability to pay by increased freight rates according to a formula which the royal commission was to recommend.
Where is the money going to come from? Is the Minister of Transport going to bring down another estimate of $40 million, or whatever amount is required to pay these increased wages, or will the recommendations of the royal commission on transportation be implemented by way of subsidies? Those are earmarked for a specific purpose. So the question immediately arises whether the one will be used to satisfy the other. Nothing of what was recommended by the Prime Minister on November 30 has happened. The royal commission did not produce a formula, and the railways will have to pay the wage increases from the subsidies they will receive from the government for this particular purpose or for other purposes.
The Prime Minister in the speech he made the other day over the air on the program "The Nation's Business" tried to create the impression that the Liberal party last fall was opposed to government action in order to prevent a strike. That statement is simply untrue. We said again and again last fall that we were against a railway strike, but instead of accepting the mere delaying tactics proposed by the government at that time we said, in the form of an amendment-and it is there for anyone to see-that the strike could be prevented through a settlement based on the Milvain report, and that is exactly what has happened.


John Ferguson Browne: Not by
compulsion, though.
90205-6-301
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Lionel Chevrier: So there was no purpose in the Prime Minister appearing on "The Nation's Business" and making the statement he did.


Mr. Grills:: What about 1951?


Lionel Chevrier: I presume that those who are now interrupting will have the opportunity to speak in this debate, and I should like to hear what they have to say. So far as 1951 is concerned, absolutely nothing happened in that year with reference to the strike. I am glad that the Prime Minister has now come into the house. I am delighted that he should be here, and so that he will not think I took advantage of his absence-


John George Diefenbaker: You generally do.


Mr. Walker:: He did this morning.


Lionel Chevrier: Mr. Chairman, I raise a question of privilege. The Prime Minister says that I generally take advantage of his absence from the house to make statements concerning him. That is untrue. That is not so, and I ask you, Mr. Chairman, to have the Prime Minister withdraw that implication with respect to my conduct.


John George Diefenbaker: The hon. gentleman is very touchy. I repeat what I said. It is a common practice among certain hon. members opposite-


Lionel Chevrier: Mr. Chairman, on a question of privilege, the Prime Minister is now shifting his ground. He has said it is a common practice among certain members of the house, but that is not what he said a moment ago. He directed his statement to me, and I am asking the Prime Minister to withdraw that statement because it is untrue and it is unfair of him to say so.


John George Diefenbaker: I have nothing to withdraw, and it is not untrue. I read in Hansard what has gone on when I am out of the house, and I find that so frequently this has become a method, a modus operandi as we lawyers call it-


Lionel Chevrier: Mr. Chairman, I am asking you to rule on the question of privilege. The Prime Minister has no right to reflect on a member of parliament in the manner in which he has. He has no right to reflect on any member on this side of the house by saying that he takes advantage of the fact he is not in the house to make statements concerning him. If he is not in the house that is his fault, but I can tell the Prime Minister now that anything I have to say with reference to him I will say in his presence.


John George Diefenbaker: Go right ahead.

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Lionel Chevrier: I am now asking the Prime Minister to amend the language he used a moment ago.


Jacques Flynn: I must say it is very often charged that some members take advantage of the absence of others to make statements with respect to them, and references to the absence of members are very frequent. I do not recall having seen in Beauchesne or any other authority any indication that statements of that kind have been considered improper, or that would justify the Speaker or Chairman requesting that they be withdrawn. If the hon. member has a case in point I am willing to consider it.


Lionel Chevrier: I think that is a most unfair way in which to put it.


Some hon. Members:: Order.


Lionel Chevrier: It is not up to me as a
member to submit authority. The Prime Minister is the one who has broken the rules of the house.


Some hon. Members:: No.


Lionel Chevrier: I think that is also a reflection from the Chair on myself as a member.


Some hon. Members:: Order.


Lee Elgy Grills: Sit down.


Lionel Chevrier: I will not sit down for you.


Jacques Flynn: Order.


An hon. Member:: Steady, boy.


Jacques Flynn: Order. The hon. member for Laurier has indicated his view that he does not think the Chair is being fair in its consideration of this problem. I have indicated that in my view there are no precedents, and I am asking him if he has any to submit. I think it is only natural that the Chair should not be forced to make a decision without having some ground for the decision which the hon. member suggests. If the hon. member has no precedents I will consider that such references, which are very frequent, have been considered parliamentary and are not such as to justify any withdrawal.


Lionel Chevrier: It is a common rule of this house.


David James Walker: It is not.


Lionel Chevrier: Well, you know a great deal about the rules. The Minister of Public Works does not even know the minor rules of the house, and it would be much better for him to sit down.


David James Walker: Mr. Chairman, on a question of privilege, I want to say that I know of no one in the house who breaks the rules

more than the hon. member for Laurier, and I know of no one who takes greater advantage of the absence of ministers than the hon. member for Laurier. I respectfully suggest, Mr. Chairman-


Some hon. Members:: Order.


Jacques Flynn: Order. What we have j;o consider now is the point raised by the hon. member for Laurier. If other points are raised I will deal with them later. The hon. member for Laurier may consider that the unparliamentary words referred to in citation 155, for instance, do not apply in this case. As to other precedents which may apply. I may tell the hon. member that I do not know of any. If the hon. member for Laurier has some such citations-


David James Walker: It is pure bluff; he has nothing.


Jacques Flynn: -I am willing to consider them. I might say that I have heard similar charges in the house since I have been here. I have never heard anybody request that they be withdrawn. I have heard members rising on questions of privilege, or something like that, and explanations given. However, that is another matter. I think the hon. member for Laurier has sufficiently explained his position in so far as any question of privilege is concerned.


Lionel Chevrier: I would have thought that the rules of the house-


David James Walker: What rule?


Lionel Chevrier: -were clear enough to indicate that the Prime Minister should amend his language. However, if I may-


John George Diefenbaker: Mr. Chairman, I want to hear what the hon. gentleman has to say. If his sensibilities have been exacerbated may I say I will immediately amend my statement and say that whatever he did say he really did not mean.


John Whitney Pickersgill: That statement is clearly against the rules.


Lionel Chevrier: I am not going to lose any more time in connection with this statement by the Prime Minister. I have a contribution to make and remarks to make in answer to what has been said by the Minister of Transport on this occasion. I intend to proceed with my remarks. I leave to the house the words that were used by the Prime Minister. I do not believe they meet the position. However, that is his responsibility, and he alone will have to take it.


David James Walker: You are hoist on your own petard.


Lionel Chevrier: Now, Mr. Chairman-


David James Walker: On a question of order, Mr. Chairman, may I say that you have asked the hon. member for precedents. He has not given any precedents, and I think he should withdraw his insulting remarks to you, as Chairman of this committee.


Jacques Flynn: I heard the hon. member for Laurier say he had accepted the ruling and was now reverting to his speech.


David James Walker: Has he?


Lionel Chevrier: Mr. Chairman, I think you should immediately call the Minister of Public Works to order. I am entitled, as a member of the house, to proceed and this minister is continually interrupting these proceedings. He has no right to do so. He has referred to insulting language that I used. I did not use insulting language. On the contrary-


David James Walker: It was extremely insulting to you, sir.


Lionel Chevrier: -it was language used by the Prime Minister that brought this about.


Jacques Flynn: I consider the incident closed. The hon. member for Laurier may proceed with his speech, and I ask all hon. members not to interrupt the member who has the floor.


Lionel Chevrier: To come back to what the Prime Minister said a moment ago, I should like to invite him to point to any circumstances under which I have made statements such as he said I had made. In his absence I put on the record certain statements he made on November 30, and I do not intend to repeat them. However, he quite clearly said at that time how the strike would be settled. He made it quite clear there would be four matters taken into consideration. First, there would be a report from the royal commission on transportation. Then there would be legislation introduced. Then the freight rates freeze would be lifted, and then it would be possible to come back to a consideration of the agreements that had been made between the parties. This did not happen.
The question I asked while the Prime Minister was absent from the house was, when are we going to get a statement of policy from the government with reference to this whole matter, the report of the royal commission and the four recommendations that were made and the policy of the government with reference to the manner in which funds will be provided for the settlement of the strike?
I think the committee is entitled to know and the country is entitled to know. We have not heard a word, and that is why I say,
90205-6-301J
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and repeat now, that the policy of the government in respect to that part of transportation services, namely rail services, is a complete blank.


John George Diefenbaker: I want to ask the hon. gentleman a question. He is proceeding with an argument and, while I am not accepting it, it is an argument. I should like to ask him this. Does he have any objection to the labour unions and the railways getting together and coming to a settlement as a result of the processes of negotiation, or would he have had the government step in and stop that?


Lionel Chevrier: In answer to that question, I am asking the Prime Minister whether they did get together, or whether the government instructed certain people to bring about a settlement. That is the point. I think that is the question that should be answered before I answer the question asked by the Prime Minister. Then again-


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


Jacques Flynn: Order.


Donald MacInnis: Will the hon. member permit a question? In his last statement he implied that the labour unions or a segment of the upper echelon of the labour unions had accepted instructions against the wishes of the rank and file to carry out a settlement of this threatened strike. If that was his implication he had better amend his statement.


Lionel Chevrier: I would not amend my statement for the hon. member. If he had listened to the question I put to the Prime Minister in answer to the question he put to me, the hon. member would have understood what the implication was. The implication was quite clear. In so far as we are concerned, I think we are entitled to know in what manner these funds are going to be provided and that certainly has not been indicated either by the Prime Minister or the Minister of Transport.
Then I was about to go on to another matter when the Prime Minister entered the house. I think we should know the position taken by the Canadian National Railways toward employment. I believe the committee is entitled to know that. These questions have been asked and the answer has been, "Well the committee will be set up and questions can be answered during the deliberations of that committee." While that is true in general, the opposition is entitled to know whether the general position of railway workers on the Canadian National has deteriorated over the years. The minister surely ought to be in a position to tell us that.

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While we do know that there has been deterioration in the position of many Canadian National employees, there is on the order paper a resolution indicating that the directors will be increased from seven to 12. We will be dealing with that resolution on another occasion. While there are hundreds of thousands of people out of work in this country, there is on the order paper a resolution indicating that the number of directors of the Canadian National Railways is going to be increased. How many people have been laid off by the Canadian National? What is the position of the employees at the McGill street headquarters of Canadian National Railways and the aviation building in Montreal?
I attempted to move the adjournment of the house on one occasion to deal with this situation. The minister made the usual statement that, in so far as the Canadian National Railways were concerned, they were not interested in laying off people; they would do the best they could. I think the minister owes it to these people to say what is the position of those men who are employed in the headquarters building of Canadian National Railways at 360 McGill street and the adjoining building and who, because of the shift from that building to the new office premises in the city of Montreal, may be laid off. What is the position of those who are engaged in the maintenance of those buildings, now that Canadian National Railways are handing out this work to a contractor? How many of these men remain out of work? In the C.N.R. building alone 160 of them were affected by this move, and I am told that in the aviation building a number were also affected.
This first item should not be allowed to pass, Mr. Chairman, until the committee is given the details. I will give the minister credit for this sentiment. I am sure that he is not any more anxious than anybody else to see men out of work. But that feeling will not suffice. What is the position of these people who have lost their jobs. Before this first item is disposed of I hope the minister will be able to tell us what the situation is.


Jacques Flynn: Order. I am sorry to interrupt the hon. member but I must inform him that his time has expired.


An hon. Member:: Let him continue.


Jacques Flynn: Is it agreed that the hon. member be allowed to continue


Some hon. Members:: Agreed.


Lionel Chevrier: I am grateful to the committee for their consent. I will try to bring these remarks to a close as quickly as I reasonably can do so. However, I would bring

to the attention of the minister the representations that were made by those employees to the Prime Minister. I am sure the Prime Minister has received a large number of letters from the employees at the headquarters building in Montreal. I have received one copy if not several copies of letters that have gone to him. I am sure the Prime Minister has turned them over to the Minister of Transport. That is another reason we should have a complete breakdown of the position as it affects these employees.
I next come to the question of aviation services. I am somewhat surprised that a statement has not been made by the government with reference to aviation policy in Canada. I do not believe a statement has been made on aviation policy for many years. Certainly no statement has been made by the present government except, of course, in answer to questions that were put to the former minister of transport and to others. I do not think that is a healthy situation, Mr. Chairman. Because the air services in any country are of such great importance, careful consideration should be given to the position having to do first with (1) international carriers; (2) domestic and transcontinental carriers; and (3) regional carriers. No announcement of policy has been made. I submit to the minister that he should give some indication of what the policy is.
I should like to say a word in connection with the bilateral air agreements. There are in existence a number of bilateral air agreements that Canada has made with other countries. Since this government has been in office those agreements have been detrimental to Canada. They have been detrimental because Canada has given away certain of its sovereign rights-I refer to fifth freedom rights-to foreign carriers when Canada itself did not have those rights in the foreign countries concerned. In one case Canada gave up a substantial and important right in its own country in an exchange with another country.
There has been or there is before the cabinet an application by Canadian Pacific Airlines for certain international air services. In equity and in fairness I think the committee is entitled to know the nature of the application and the government's decision on it. Surely the government is not going to sit on it. What are the demands that are made in the international field by Canadian Pacific Airlines? Have Trans-Canada Air Lines made similar representations? What has been the decision of the government? Is the government still studying those applications?
Under the Aeronautics Act-I have forgotten the section, but I believe it is section 15

-it falls within the jurisdiction of the governor in council to deal with applications of that nature when the applicant is also a surface carrier. What is the position of carriers in so far as transcontinental services are concerned? Have Canadian Pacific Airlines made application for certain services? Will those applications be dealt with by the cabinet, or will they be given to the air transport board for determination?
It would seem to me that the logical body to make a determination on applications of that kind is the air transport board. They are a technical body. They have all the necessary facilities. They have held hearings from one end of the country to the other. Last year, during consideration of the estimates of the minister's predecessor, a statement was made that regional hearings were being held by the air transport board all across Canada, first in the eastern part of Canada and later in the western part, and that some decisions would be arrived at. It seems to me that the committee is entitled to know what those decisions are.
Then again there is the question of the regional air carriers. Need I tell the minister that some of them are in difficult circumstances and need assistance? Perhaps all of them need assistance. I know definitely of some instances, in the province of Quebec particularly, where assistance is needed if the carrier is to be able to carry on.


John George Diefenbaker: Will the hon. gentleman say what carrier that is?


Lionel Chevrier: Yes. If the Prime Minister will allow it, I should like to defer doing so; I am coming to it in just a moment. I wanted to preface my statement with an article that appeared in the Ottawa Citizen following the minister's statement to the air industries and transport association at Quebec last year. He had just been appointed at the time, and there was a good deal of consideration for and sympathy with the difficult position in which he found himself at that meeting. The title of this article which appeared in the Citizen of November 5, 1960 is "Air Carriers are Seething" and it reads in part as follows:
There was little secret that the A.I.T.A. members were dissatisfied with Mr. Balcer's defence of the controversial decontrol policy and more forthright indignation was only suppressed by the members' consideration for the fact that he has just stepped into the post of a new minister.
Following that up, may I say that the minister was told that in 1958 the aviation industry employed about 40,000 people directly and 65,000 people indirectly, and was the third largest employer in Canada. In 1960, for which I have the latest figures, the
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situation had worsened considerably. The gross selling value of products in 1958 amounted to $462 million. In 1960 that figure was down to $327 million, and the employment roster was down to 28,516. It was taken for granted-and in fact it was so stated at the A.I.T.A. conference in Quebec-that the position in 1960 would be worsening.
The Prime Minister asked me to what air carrier I referred. I refer to an article which appeared in L'Echo du Bas Saint-Laurent, in which it is stated that Quebecair is being threatened because of competition from other carriers, but more particularly T.C.A. Many reasons are given in the article, but I will only place this paragraph on record. I think it is an excellent article; the minister may have seen it. It is by Jean-Paul Legare and is entitled "La Concurrence d'Air Canada Menace la Survie de Quebecair".
(Translation):
The Quebec Airways, or Quebecair, has struggled mightily to secure the right of flying the Quebec airlanes. The company is using those airlanes as its natural field of operations. There is therefore no valid reason for T.C.A. to continue duplicating Quebecair service between Montreal and Seven Islands. We have it from good authority that, if Quebecair had the monopoly of its airway network, they could give first class service and prosper. On the other hand, if T.C.A. keeps competing, this state-owned company will pile up deficits and, which is still worse, jeopardize the survival of Quebecair, a private enterprise.
(Text):
I do not, of course, intend to extend the same arguments to other corporations having to do with T.C.A. This being a regional area I think the position is entirely different than that of the two main carriers in this country, namely, T.C.A. and C.P.A. But I hope the government is taking into consideration the recommendations of its own report, the Wheatcroft report, and I trust the minister has given consideration to the conclusions which were reached by the distinguished commissioner which at the request of the government made a complete study of the whole field. It was clear, following that report, that there should not be competition in certain areas, and that when competition did take place it was to happen in a very gradual way. Particular reference was made to a five year period and a ten year period. I have forgotten the date of the Wheatcroft report, but I think it was published some three or four years ago.
However, having regard to the deficit of Trans-Canada Air Lines, which amounted to $2J million in 1960, and the deficit of the Canadian Pacific Airlines, amounting to $4

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million or more during the same period, the government, it seems to me, must be extremely careful in reaching any decision which it might make either in the international field or in the domestic and transAtlantic fields which would affect the strength of either of those two great corporations.
That is easier said than done. I will grant at once that in theory it is easy, in the field of aviation, to make a general statement, but when you come to apply it things are far more difficult. That is why I say this is not a political question. It is a technical question which should be decided on the merits and the facts, and there is a body which deals with that responsibility under the Aeronautics Act, namely the air transport board.


Léon Balcer: They are doing just that at the
present time.


Lionel Chevrier: Well, in that case why is the cabinet holding hearings? Why did the cabinet appoint a subcommittee and hear representations from the presidents of C.P.A. and T.C.A.?


Léon Balcer: That had nothing to do with the domestic aspect.


Lionel Chevrier: I am dealing with both. I am dealing with both the international aspect of the aviation policy and the transcontinental aspect. I am happy to hear the minister say that the air transport board is dealing with this now.


Léon Balcer: Could I ask the hon. gentleman a question? I wonder if the hon. member for Laurier could tell me on what occasion there was ever a public hearing before the air transport board on the allocation of an international route.


Lionel Chevrier: I believe there were public hearings in at least one case. I may be mistaken, but I think it was in the case of the air cargo application some years ago. In that case there was a public hearing before the air transport board.


Léon Balcer: Followed by a meeting of the committee of the cabinet.


Lionel Chevrier: What was that?


Léon Balcer: Is it not a fact that this matter was brought before a committee of the cabinet?


Lionel Chevrier: That is true, but not until the air transport board had made a complete study of this question and had made recommendations to the cabinet with regard to it.

That is why I said a moment ago that under the provisions of the Aeronautics Act it is the governor in council which deals with a certain aspect of this whole matter, namely the international carriers. We did not deal with it in the past until we had before us a complete study and recommendations by the air transport board.


Léon Balcer: I am sorry to interrupt the hon. gentleman, but just to clear this up I wonder if he could tell us whether the air cargo he mentioned was domestic or international. I am under the impression that it was domestic air cargo which was under discussion at that time.


Lionel Chevrier: Yes, the particular application as between T.C.A. and C.P.A. had to do with domestic air cargo, but the decision the government took was made following a study by the air transport board after a hearing before them, and its effect had to do with international services and international air cargo as well. That is why I say to the minister that it seems to me this whole question is one for a technical body, the air transport board, which has the facilities and the personnel to deal with this matter in the manner in which it should be handled. If it is dealt with by that body, and if there is a recommendation made, I do not think the minister will find any exception being taken from this side of the house.
I should like just to say one word about the shipping policy which the minister announced yesterday in the House of Commons. I told him, and I repeat, that in my opinion it was one of the most important statements to have been made in this house in a very long time. It has to do with three aspects of water transportation; assistance to the shipping operator and the shipbuilder; assistance to the fishing industry; and cabotage, or the manner in which ships may move in and out of the great lakes.
The minister has stated that the first two aspects will not be dealt with by legislation, but brought about by means of an item to be introduced in the estimates. In so far as the latter item is concerned, namely the one involving amendment to the commonwealth merchant shipping agreement, there is a point which I should like to bring to the attention of the minister.
My recollection is that there are five kinds of trade on the great lakes. There is trade moving from one Canadian port to another Canadian port; there is trade moving from one United States port to another United

States port; there is trade moving from a Canadian port to a United States port; there is trade moving from a Canadian port to an overseas port, and there is trade moving from a United States port to an overseas port. As the situation is now, the laws of the United States prevent or prohibit cabotage or the carrying by foreign vessels of trade or cargo from one United States port to another United States port.	[DOT]
This is not so in Canada. That restriction does not apply to British vessels or to commonwealth vessels. They may move from one Canadian port to another Canadian port, and the announcement the minister made yesterday was that he intends to apply for an amendment to the act so that after the passage of that act, cabotage, as I call it, will not be permitted to other than Canadian vessels in that area from Les Escoumains to the head of the lakes. Downstream from Les Escoumains, British vessels and commonwealth vessels will be able to trade from one Canadian port to another Canadian port. The question that comes to my mind therefore, is this. What will be the position, first, of Canadian owners who are now operating vessels under the British flag; and what will be the position of Canadian owners who have transferred their flag to other flags of convenience, as did the operator I referred to yesterday? Does this mean that they will bring their ships back to the Canadian flag?
The next question I should like to ask the minister is this. He has already stated that he intends to amend the shipping act in order to bring this about, and I think there is a part of the shipping act which has to do with this matter; but will that be done only after an agreement has been completed with the commonwealth countries? If that is so, does the minister anticipate that agreement with the commonwealth countries can be finalized before the end of this session? This must be an international agreement, an intercommonwealth agreement, and I take it these agreements are not made overnight but by representations on a formal basis through the usual offices, the Secretary of State for External Affairs, or by meetings of a committee.
What effect is this policy going to have on the ships of the Canadian National Steamships line that are still lying at anchor in Halifax harbour? Will it be possible to use this policy, in some form or other, to assist those ships? Have payments been made in accordance with the agreement that has been arrived at between the Browning company and the guarantors through the bank of Cuba, and has the new bank repudiated any of the payments? Will the minister give consideration to rehabilitating these ships under the
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new policy if the other matter falls to the ground; because surely the minister will agree that there are six or seven ships there doing nothing, and that have been doing nothing for many years, that could be of great service in trade to and from the federation of the West Indies.
(Translation):
Mr. Chairman, I wonder if the house would allow me a few minutes before I resume my seat, so that I may deal with a matter I recently brought to the minister's attention. It was about the use of the Soulanges canal, in regard to which I put the following question to him on May 3, 1961:
Since the discussions were started between the two governments, have any industrial corporations approached the government with a view to locating plants in the area set aside by the minister?
Mr. Chairman, this is the one mile strip of land set aside for industrial development purposes in the vicinity of Cascades. As reported on page 1 on the appendix to Hansard for May 3, the minister replied as follows:
Not directly, Mr. Speaker, but a number of chambers of commerce in the area have made representations to have this federal government property set aside so they may have time to approach various industries with a view to bringing industrial construction into the area.
Following that answer, I asked the minister which chamber of commerce had made such representations; the minister then said that he would make inquiries and reply later.
Now yesterday, or was it the day before, I forget which-


Mr. Johnson:: The day before yesterday-


Lionel Chevrier: -the minister replied-


Paul Léo Maurice Johnson: Yes, it was the day before yesterday.


Lionel Chevrier: -that he had on hand a pamphlet indicating that the chamber of commerce of Vaudreuil-Soulanges supported such industrial development. Now, what the minister had on hand at that time was not a petition, but publicity material which had been written in 1958, at least two years before the petitions he received. It therefore seems to me that the minister should have admitted at once that he had received no representation to that effect from a chamber of commerce of the Vaudreuil-Soulanges area, for I have them all here before me and none of them recommends that mile long area in question be set aside. On the contrary, each of the' seven requests states that:
-many industrial promotion organizations and large financial syndicates have vainly sought to convert the canal and areas along the canal, into a source of income for the population-

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-of Vaudreuil-Soulanges, and that, in spite of this, the chambers of commerce recommend to the minister:
-to encourage the free assignment of the land and buildings of the Soulanges canal in whole-
And not only in part.
-to the government of the province of Quebec, to help carry out the above projects and thereby provide people in the constituency of Soulanges with a source of income that would enable them to prosper as they did before the closing of the canal.
Mr. Chairman, I do not intend to keep raising this matter indefinitely but I feel that the minister should admit that no chamber of commerce in the constituency-if this be the case, as I believe it is-has recommended that this mile long strip of land be reserved for industrial development purposes.
What is more, the whole railway system which might promote industrial development on the canal is at the other end and not in the Cascades area. In fact, the C.N.R. has a railway centre at Coteau Landing, while the C.P.R. has one at De Beaujeu, near St. Polycarpe, which is quite close to the upper end of Soulanges canal. Therefore, if it is advisable to promote industrial development in that part of the constituency, it is at the upper end of the canal it should be done, and not in the Cascades area.
(Text):
Sir, I have been much too long, I know, but there were certain matters which I thought should be brought to the attention of the committee. I reiterate my statements with reference to two of them. The first is that, I regret the failure of the government to give the House of Commons the policy of the government in the field of railway services. I also regret the failure of the government to make any announcement of policy in so far as aviation services are concerned,
I hope it will be possible for the minister to do this in both those important fields of transportation-perhaps the most important of his department-as he has done in the field of water transportation, before the consideration of his estimates has been concluded.


Donald MacInnis: Mr. Chairman, would the hon. member permit a question?


Lionel Chevrier: Certainly.


Donald MacInnis: The hon. member made reference to the changed status of Canadian National Railways employees at headquarters in Montreal. My question to the hon. member is this. Is the hon. member aware that prior to this government taking office a similar change took place in Nova Scotia, where a contract had been awarded by the

Canadian National Railways to a private company depriving union men of work, and among the directors of that company at that time was the then president of the Nova Scotia Liberal association?


Lionel Chevrier: I am afraid my hon. friend misunderstood my remarks. I was dealing with the maintenance employees on the headquarters staff of the Canadian National Railways at 360 McGill street. I said that what the Canadian National Railways had done was to give a contract for its new office building on Dorchester street, where the circumstances are not at all the same as those related by the hon. member. I also said that because of the change from a prevailing rate group to a contractual group many men on the Canadian National Railways maintenance and operational staff would find themselves without work. I believe 160 of them were affected, and I was asking the minister to tell me what their position was. I said I did not think this first item should be allowed to pass until all these men had found employment.


Donald MacInnis: Mr. Chairman, to that reply I can only say that when the hon. member rose he said the circumstances were not similar. This would indicate he knew very well what the circumstances were.


Mr. Hellyer:: On a point of order, Mr. Chairman; are you recognizing the hon. gentleman?


Jacques Flynn: The hon. member for
Trinity has a point of order?


Paul Léo Maurice Johnson: I have a question. If the hon. member for Laurier is willing to answer it now I have no objection.


Lionel Chevrier: Yes.
(Translation):


Paul Léo Maurice Johnson: Does the hon. member for Laurier not feel that it would be possible for the provincial government to take on those employees, since the work involved is not of a clerical nature such as might require major changes in the organization of the work, but is more in the nature of what is described as "maintenance", that is cleaning work in the buildings. I therefore ask the hon. member for Laurier if the provincial government could not employ these persons?


Lionel Chevrier: As usual, Mr. Chairman, the hon. member has not-


Paul Léo Maurice Johnson: Let us have an answer.


Lionel Chevrier: As usual, Mr. Chairman, the hon. member does not clearly picture the situation. The Quebec government is not responsible for this situation; C.N.R. officials are the ones responsible-


Paul Léo Maurice Johnson: Could not the government do it?


Lionel Chevrier: There is only one answer-


Paul Léo Maurice Johnson: Do answer my question.


Lionel Chevrier: Well, let me do it. There is only one answer, and it is this: first, the C.N.R. is responsible for the situation, and then the minister answers for it in this house. So, in the last analysis, it is up to the C.N.R. to provide employment for those people and not for the Quebec government.


Paul Léo Maurice Johnson: Therefore, it is the Quebec government that is laying them off.


Lionel Chevrier: Because it is not


Paul Léo Maurice Johnson: It will not give them jobs.


Lionel Chevrier: Will you allow me to answer?


Paul Léo Maurice Johnson: Give us an answer.


Lionel Chevrier: You do not like the one I am giving you.


Paul Léo Maurice Johnson: That is no answer.


Lionel Chevrier: That is because you misconstrued the question.


Paul Léo Maurice Johnson: That is no answer.


Lionel Chevrier: I am simply telling you that it is not the responsibility of the Quebec government but the responsibility of the C.N.R. to find jobs for them.


Paul Léo Maurice Johnson: They could co-operate with the C.N.R.
(Text):


Douglas Mason Fisher: Mr. Chairman, I think I can agree with many of the points made by the previous speaker, the hon. member for Lau-rier, without agreeing that he has made a better review of the over-all problem of transportation which we face today than the minister has. One would assume that the present minister received his post because of the desire of the Prime Minister and the cabinet to have a stronger representation of French speaking colleagues. This is, I think, to most hon. members the most important practical cabinet post of all. I am torn between appreciation, for example, of the announcement made yesterday on Canadian shipping and other factors that have arisen since the minister has taken office. He has the verve of a cigar store Indian when it comes to putting over his department. The other point that stuns me about the department since he has taken over the post is the 90205-6-302
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delay in getting replies. I see that the Minister of Public Works wishes to interrupt, Mr. Chairman.


Mr. Brunsden:: On a question of privilege, the hon. member for Port Arthur has made allegations against the minister which are unwarranted.


Jacques Flynn: Order.


Edwin William Brunsden: I suggest that he be asked to retract the statement.


David James Walker: On the point of order, we all know that the hon. member for Port Arthur speaks from Mount Olympus and looks down on ordinary members of the House of Commons. I think we should consider the source of the remark. If I were the hon. member I would not ask that the hon. member for Port Arthur should withdraw this insult to the French Canadian race.


Douglas Mason Fisher: Mr. Chairman, where the insult comes I cannot see. I used a simile. Is there anything wrong with that? I believe this is the first time since I came to this house that I have been asked to withdraw anything. If the minister personally takes objection to what was said I will be only too pleased to withdraw. I think the Minister of Public Works is leaping into a breach that has not been made yet in so far as an insult to the French Canadian race is concerned.


David James Walker: The rest of the committee thinks so.


John Whitney Pickersgill: Is the minister an authority on the rest of us?


David James Walker: Not on you.


Léon Balcer: Mr. Chairman, since this remark was made about me I must say that I did not see too much offence in it. I shall be in a position to answer the specific points raised by the hon. member at the end of the discussion on the first item. At that time I shall deal with everything he has to say. I urge him to carry on; he is extremely interesting.


Edwin William Brunsden: On the question of privilege, there is a term in western Canada which my friend from Port Arthur should know. A cigar store Indian is a dead duck, and certainly our minister is anything but that.


Paul Theodore Hellyer: You mean a Bomarc.
At one o'clock the committee took recess.

Supply-Transport AFTER RECESS
The committee resumed at 2.30 p.m.


Douglas Mason Fisher: Mr. Chairman, perhaps I should have begun my remarks with some acknowledgement of the pleasure it is to be speaking in the House of Commons on Saturday. It seems to have been such a popular move, particularly with the staff although they seem to have shared an inordinate amount of credit for the condition, that I should like to extend my words of appreciation to those hon. members who have managed to find it possible to be here on this particular day.
The theme on which I should like to approach the estimates of the Department of Transport and the whole question of transportation has really been offered to us by the Prime Minister in his ringing declaration that the future election, which I think most of us will agree will be coming very soon, is going to be centred on the issue of free enterprise versus socialism. I know this is a topic that is dear to many members' hearts, particularly on the government side, and I want to try to analyse the problems that we face in transportation in the light of this situation.
If the issue is between free enterprise and socialism, it seems to me that in all fairness the thing to do is to get the government out of any kind of operation of transportation services at all. If you are going to have a pure and thus, I think, a practical free enterprise approach, if you are going to use the theme that as a political party and government you stand for free enterprise, then it seems to me that the challenge is to get the government out of any kind of transportation operation. That is the first point.
How do you get the government out of such operations? Do you sell the C.N.R.? Do you sell Northern Transportation Limited? Do you turn them over to private enterprise? That is one side of the problem. The other question is, what about the problem of subsidies? If you are a free enterpriser and against socialism, especially the creeping or dead hand of socialism, are you going to offer subsidies to private enterprise in any shape or form?
Yesterday we had an announcement, which will be very much welcomed in my own region and is welcomed by this party, in relation to the shipbuilding industry. But I put it to the minister and to the Conservative members of the house: In view of the Prime Minister's theme for the next election, does this announcement not bother you? Does it not strike a blow at the very purity of your theme of free enterprise? The minister was candid enough to say that there is no idea what this is going to cost. I know that last
[Mr. Hellyer.i
year the hon. member for Laurier and I made recommendations along this line and he estimated the cost, as I remember, at $40 million to $50 million a year to carry out this kind of proposal, that is, a 40 per cent contribution to the capital cost and a fitting in with the depreciation pattern we already have.
It seems to me that there is here a challenge to the government to explain to us how this announcement, which I take as a form of socialism, fits into the free enterprise theme. After all, if you are going to underwrite both the shipyards and the shipbuilding industry to the extent of 40 per cent of capital costs, you will have a most difficult time coming forward as an apostle of free enterprise. This is something in a policy way that I wish the minister would explain. How does this announcement that we welcome fit in with the role of the government in moving from this trend toward socialism toward what the Prime Minister says is the issue in the next election?


Léon Balcer: Will the hon. member permit a question?


Douglas Mason Fisher: Yes.


Léon Balcer: Would he call the United States government a socialist government because it gives subsidies to its shipping and shipyard operations?


Douglas Mason Fisher: No, I would suggest that throughout the world we have a trend toward both planning and the support of industries by governments. I was talking to a Conservative just before I came into the chamber who was telling me how attracted he was-I think this is fair-to the statements of senator Barry Goldwater and the whole idea of stopping the trend toward collectivism and the mixed economy. Is this theme of free enterprise versus socialism going to be an attempt to stop the trend toward collectivism and the mixed economy? In all fairness, I think the minister has to recognize that this is a trend toward a mixed economy. Here is a 40 per cent underwriting of the shipbuilding industry and the shipping industry in Canada.
I also hope that some time during this debate Conservative members from the west, especially those representing prairie constituencies where grain is shipped, will give us their views on the announcement of yesterday. I acknowledge there is a tradition, whether you are a Conservative, Liberal or C.C.F.'er from the west, that you want the cheapest shipping rates possible in order to get your grain into foreign markets, and

I should like to hear from these western members whose constituents export grain as to what they feel the effect will be.


Edwin William Brunsden: Will the hon. member permit a question? Where are the C.C.F. members from the west?


Douglas Mason Fisher: Where are the C.C.F. members from the west? I was referring to C.C.F. members who have been here in the past. We have one C.C.F. member from the west now and I think we are likely to have more again. That is beside the point. I should like to hear what the western members think of this announcement and what it may do to the cost of carrying their grain to world markets.
I want to touch on another aspect of this question of free enterprise versus socialism. We have had the argument put forward in other places attached to this house that the government should get out of the operation of Northern Transportation Limited. Here is a company that is not really making money and it is in competition with private enterprise, so the theme is get rid of it and let private enterprise handle the freight transportation problem in the Yukon. We have a situation with the Polymer Corporation where a crown organization is making a great deal of money and the argument there seems to be that we should sell it right away because what business does the government have in engaging in any field in which money can be made? This is another contradiction in the free enterprise approach of the present government that I cannot understand.
There is in Canada today a free enterpriser who has spoken forth recently and who seems to have a certain amount of influence with the government. I am referring to Mr. Crump, the president of the Canadian Pacific Railway. Not long ago on the occasion of the annual meeting of the Canadian Pacific, he made an address that was well covered in the press. I should like to quote an extract from the Gazette of May 4, 1961. Mr. Crump sets out a number of the difficulties confronting the Canadian economy at the moment, and points out that the growth of the gross national product per capita does not match that of the United States. Then, he says this:
Among the reasons responsible for this undesirable situation, it would appear, is that Canada, to a greater degree than the United States, is committed to the mixed economy, in which state enterprise and private enterprise function in coexistence.
I can only take that statement as a criticism of the mixed economy. I should like to hear the minister's views because, as I understand it, Mr. Crump's air line has been before 90205-6-302J
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him and before the cabinet in relation to demands that it have a better break, as a private enterprise carrier, in the carriage of passengers.


Mr. Macdonnell:: Would the hon. member permit a question?


Douglas Mason Fisher: Yes.


James MacKerras Macdonnell: Would he explain a little further why he took that as a criticism on the part of Mr. Crump? I have read the statement but I did not take it as a criticism.


Douglas Mason Fisher: The hon. member is mistaken. I did not say this was a criticism of the Prime Minister.


James MacKerras Macdonnell: I thought the hon. member said it was a criticism of the mixed economy?


Douglas Mason Fisher: Yes. Well, he set out why Canada is not doing so well. He said that among the reasons responsible for this undesirable situation it would appear is that Canada, to a greater degree than the United States, is committed to the mixed economy in which state enterprise and private enterprise function in co-existence. I can only take it from that that Mr. Crump thinks the mixed economy has gone too far. It is one explanation of why we are in a stagnation period.


James MacKerras Macdonnell: When I undertook to question the statement I must say I had forgotten Mr. Crump's full statement. I am inclined to agree with the hon. member.


Douglas Mason Fisher: This is a legitimate line that Mr. Crump took. It is a legitimate line, but I do not agree with it, and his action in having Mr. McConachie down here lobbying for an extension of the franchise of Canadian Pacific Air Lines is in agreement with this particular attitude.
What I want to know is whether or not it is the attitude of the government that the mixed economy has gone too far. I know the Prime Minister was probably oversimplifying when he said the choice is going to have to be between free enterprise and socialism. Nowhere will you find a department in which you have this problem staring you right in the face to a greater extent than you do in the Department of Transport. I should like to give some examples.


Edwin William Brunsden: Would the hon. member permit a question?


Douglas Mason Fisher: Yes.


Edwin William Brunsden: The hon. member has used the term "mixed economy". Will he define it?


Douglas Mason Fisher: Well, I do not want to get into a discussion of terminology, but I do not want

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to use a term upon which there is some misunderstanding. Let us put it this way: It is an economy in which there is a great interrelationship between private business and government, where the government not only gives the initiative in certain fields but also gives subsidies and, in certain areas it carries on operations and services that could be carried on by private enterprise.
However, I wanted to point out some examples of this problem. I am sure every member of this house received a communication from the representatives of the trucking industry after the announcement was made that subsidies were going to be paid to the railways as a result of the MacPherson commission report-at least, we assume they are. The trucking industry, on the basis of the argument by the MacPherson commission that they are prime, hard, legitimate competitors of the railways, ask what business the government has in subsidizing the railways in competition with them. Again, they have a point if you accept the commission's attitude.
What is their thesis? As I understand it, it can be taken two ways. One of their positions is that they do not want the government subsidizing the railways at all. Let us say we are talking in terms of the relevant period. Their other argument, as I understand it, is, if you are going to subsidize the railways then you have to subsidize us. Of course, the railways and the railway unions answer by saying that the truckers are already subsidized by the fact that their right of way is provided by the taxpayers. You can get lost in this kind of maze. My argument is that we are going to have a blurring of the line between free enterprise and socialism.
One of the aspects upon which I expected the minister to comment, as he was requested to do by the hon. member for Laurier, is this question of air line competition. Perhaps I can best make my point by quoting from an article that appeared in the Montreal Star of May 6, 1961 under the heading "Air line costs cause fear of another 'C.N.R. situation' ". The article goes on to say:
Fear of "producing another C.N.R. situation" has become a dominating shadow hanging over the government's consideration of aviation policy, highly reliable sources said here today.
The fears have been heightened, these sources continued, by an estimate produced within the government that too rapid an increase in competition in the air could quickly send this country's air line losses up to around $40 million a year. The combined losses of Trans-Canada Air Lines and Canadian Pacific Airlines last year were $7 million.
If I could skip through the general argument and come to the last paragraph which is relevant to the request I should like to make of the minister, it reads:

The position of the Prime Minister on these issues appears to be unknown to his colleagues in the cabinet and is accepted as vital. External affairs minister Howard Green is widely identified as McConachie's strongest supporter in the cabinet. Finance minister Fleming, justice minister Fulton, trade minister Hees and transport minister Balcer are described as strongly opposed to granting the C.P.A. request at the present time.
This last paragraph is pure speculation. I introduce it only to suggest that, in this kind of situation which is being aggravated by these speculative stories, we deserve a statement from the minister on this particular issue. I would challenge him to come out with a free enterprise stand such as that which is going to be presented to the people at the next election. It seems to me the free enterprise stand should be to give Canadian Pacific whatever they want. If you are going to be a free enterpriser you have to widen the opening in the gates for competition. Let me underline the fact that this is not our position. It seems to me that in a battle between free enterprise and socialism, this is what you have to do. I expect before this debate is over we will hear from the minister what the free enterprise position of the government is in relation to this issue.
One other point upon which the minister did not touch to any great degree is the situation with regard to the St. Lawrence seaway and the fact that the seaway has not been bringing in the amount of revenue which had been estimated. The minister is aware that there is still a very strong feeling in certain parts of Canada, particularly in the Welland-Niagara area, that tolls on the seaway at the present time are discouraging traffic through the canal. There are still demands that tolls, in so far as Canada is concerned, should be wiped out. In essence, if you abolish tolls, you would be putting the government in the position of completely underwriting a service and getting no return from the private users of that service.
In one sense I suppose this is a denial of government intervention or the mixed economy. In another way, we need an explanation from the minister as to what the views of the government are. Again, as has so often happened in Canadian history, the government has taken the lead in providing a service and that service, in terms of return, does not match what was expected so we, as taxpayers, are underwriting the venture. What is the consistent approach, if you are going to provide a service like that? It seems that we would be on much better ground if we forgot about the tolls, and if we looked at services such as the St. Lawrence canal as vital to providing a traffic condition in the

country that we have needed to keep improving since a time prior to confederation and then to accept the fact that is a basic service that must be provided for.
From the canal situation I turn to what I think is a most expensive future aspect of transportation services as it relates to air. If any hon. members look at the charts at the back of the annual report of the department, I think they will note the astronomical rate of ascent of the expenses for air services and there is no indication at all that we have any horizon in sight. The cost is tremendous. This matter is having repercussions, but again the minister did not mention it in his address as far as I know. I refer him here to an article in the Financial Post of April 29 of this year which reads "Airlines pile up moans at cost of D.O.T. services".
The minister knows that D.O.T. is having difficulty in collecting from foreign air lines for the services we are providing. These services are tremendously expensive. When one looks at the aspects of meteorological services and telecommunications and realizes that as the jet age advances they are going to become more prosperous, I should like to ask again this question: Where is the free enterprise versus socialism philosophy in this matter? How do you adopt a free enterprise versus socialism philosophy and yet continue to go on providing these tremendously expensive services and extensions of services for what is in essence a fairly small sector of the country and a fairly small sector of the travelling public? It is this kind of paradox which makes this department a particularly fruitful field for inquiry on the basis of free enterprise or socialism or a middle of the road mixed economy. What are we getting into with the spiralling transportation costs in terms of the ethic that the Prime Minister has announced for his party? I think we deserve some kind of statement on this matter.
I would imagine that the costs in the next ten years would be well over $1 million just for air services and for those ancillary things that are required. I am sure we can afford this amount and I am sure these things should be provided. But when you provide this sort of thing, is it fair to accept the argument of Mr. Grant McConachie that Canadian Pacific Airlines deserve a chance to compete for and to get their share of the business in air travel? The Lord knows that the return one gets, whether it is from T.C.A. or C.P.A. or any other line, for the provision of services is just a pittance. I ask any hon. member to look at the fees which the Department of Transport gets from the provision of air services as against the expenditures. I refer
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not only to the capital expenditures which are growing but also to the expenditures required just to keep the services in existence. No one would want to contend that we should go back to the horse and buggy days. Neither do we wish to restrict the development of these services. However, we need to see the provision of these services against the background of this free enterprise cry of the C.P.A.
One thing about Mr. Crump's announcement that intrigued me was this. If any hon. member looks at the historical review of the Canadian Pacific Railway as provided by the dominion bureau of statistics he will see in there a number of items which indicate that the C.P.R. has had provided over a number of years a tremendous amount of subsidy from the Canadian people both in terms of money and in terms of resources that were turned over to the railway. This fact again highlights the continuing dilemma in Canadian transport: What do you do from a free enterprise point of view or from a mixed economy point of view or from a socialistic point of view? I suggest that there is a great inconsistency in any political party that stands for free enterprise and yet continues to go along in the way in which the minister went yesterday with his announcement that we are going to underwrite 40 per cent of the cost of ships built in Canada.
One of the other aspects of which I thought the minister would treat is the following which I know is a delicate matter. No one wants to talk about this matter really and yet we have a very definite trend. I refer to the matter of winter transportation in the St. Lawrence river. I am sure the minister has seen the story in yesterday's Financial Post relating to the excitement of the gulf ports such as Baie Comeau and other ports like it, over the fact that their winter shipping is going ahead by leaps and bounds.
We know that there are now icebreakers and mechanical devices which can keep the port of Montreal open for almost the whole of the year. We also know that this is a delicate political problem because it is going to have its repercussions and its effects upon Halifax and Saint John. Yet I had a figure given to me by a man who is very prominent in shipping. He pointed out to me that the average saving per ton on freight coming through Halifax and Saint John in the winter as against that coming through Montreal is $12 a ton in favour of Montreal. One only has to look at the amount of freight coming through the two maritime ports in order to realize that we are in effect subsidizing the Atlantic ports by not pushing very strongly a policy to open up Montreal to winter

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shipping. Again, there are political situations that need to be accounted for. But how can a free enterprise party continue to allow this kind of lack of efficiency to go on? I refer to shipping that costs $12 more a ton in effect to bring the goods to the Canadian people through an important part of the year when there are techniques and ships that can keep Montreal an open port.
One of the problems that always comes to mind in transportation as against other problems which the government faces relates to the matter of jurisdiction. That is one of the great excuses for all of us as politicians. I am sure every hon. member has been struck by this fact. If you are making a speech and somebody nails you with a question there is always a certain amount of delight in being able to say that this is really a matter for the provinces, and you can shrug off the responsibility. This just happens to be a department in which, except for the field of trucking, there is very little chance to shrug off anything because of the jurisdictional angle. For that reason it seems to me that this department, perhaps more than any other one, gives the government the opportunity to work out a coherent transportation policy for all parts of the national picture.
In that regard I should like to say this to the hon. member who suggested that the department be broken up-at least that is what I understood him to say-that it is really too big for any one man to administer. This is an argument that I have placed twice before the House of Commons in previous years and I am beginning to have doubts about it now. I am wondering if what we do not need is perhaps some more deputy ministers within this department or perhaps under ministers and then to have the minister in charge of transportation doing the job of trying to relate all the shipping and transportation problems we have in Canada; then have some five year or 10 year plan that will set objectives, set the amount of money we wish to spend and work out the amalgam we are going to have between private bodies and public bodies.
To me it is a striking thing that the royal commission on transportation really is not a royal commission on transporation but is just a royal commission on railways. I notice that a great many people have taken from the report of this royal commission that it stresses competition as the main factor in existence today within the transportation business. This is so. But one needs to underline the fact that this is competition between types of carrier services and not basically competition between carriers themselves. I

can see in our transportation picture no efficacy of cutthroat competition between the carriers themselves.


Jacques Flynn: I am sorry to interrupt the hon. member but I must inform him that his time has expired.


Some hon. Members:: Go on.


Jacques Flynn: Does the committee give consent to the hon. member continuing?


Some hon. Members:: Agreed.


An hon. Member:: Ten minutes.


Douglas Mason Fisher: I should only be another few minutes.
The competition which the transportation commission stresses is one which seems to me has some imperfection to it, as far as the government approach is concerned, because if we do not make some decision as to what is the best kind of service in certain areas we are going to have to have a dual service in which the various elements are rivalling each other. We can see this between T.C.A. and C.P.A.; we can see it between the various trucking companies. The approach to a solution, it seems to me, would be for the Minister of Transport to take as his goal some kind of integration of the transportation picture within a five year or a ten year plan and explain to Canadian citizens where we are going in transportation and how much it is going to cost.
I should like to offer one opinion on the matter and that is we should not be scared of either of these things; we should not be scared of this free enterprise idea and deciding that we are going to sell all government enterprises off. At the same time I do not think that in the trucking field we should go forward with the conception of underwriting all these truckers and, in effect, building up some kind of naturalized industry. It seems to me that in the next ten years what we need is some idea of our goal and how we are going to get there, and some lessening of the duplication we have. It seems to me that one thing which is required immediately is the bringing together of the transport industry within the ambit of the board of transport commissioners and some kind of integration between the various transport commissions we have at the present time. I am thinking of the national energy board, the board of transport commissioners, the air transport board and the Canadian maritime commission.
The last remarks I wish to make at this stage relate to the C.N.R. and the fact that we still have not had the president of the railway before the house committee. I do

no want to impinge on the debate which was suspended on this matter but I do want to stress definitely that since I made some remarks in this house in that debate relating to my view that it was time for Mr. Gordon to go, I have received, and I am not exaggerating, hundreds of letters, wires and cards from employees of the Canadian National Railways. I received only one card that disagreed with me. That came from a little place in Saskatchewan, Tisdale, and was to the effect that no one with an English name should at any time be criticizing a good Scotsman like Mr. Gordon. All the railway workers agreed with me. Some of them pushed it even further. The point it reinforces for me in terms of this response is that the president of the Canadian National Railways has lost the confidence of his employers. I hope the government and the minister are giving very serious consideration to replacing that gentleman at the earliest possible time.


Edwin William Brunsden: The hon. member used the term "employers". Did he mean "employees"?


Douglas Mason Fisher: I have forgotten the context, but I was referring to employees.
(Translation):


Paul Léo Maurice Johnson: Mr. Chairman, I should like at the outset of my remarks to congratulate the Minister of Transport (Mr. Balcer) not only for the work he has accomplished since his elevation to that office, but also for his appointment to the Department of Transport, for the good reason that this is the first opportunity I have had to congratulate him in this house. I find that, since his appointment to the post of Minister of Transport, the present minister has been successfully continuing the work of his predecessor and is doing a gigantic task in the service of the whole country, and particularly of the province of Quebec.
Mr. Chairman, I know you will not mind my saying that the province of Quebec is proud to see one of its sons, a man of the ability of the present Minister of Transport, in charge of such an important department. Since I am allotted only a limited time to deal with various matters, I should like to reply forthwith to the remarks made this morning by the hon. member for Laurier (Mr. Chevrier) with regard to the maintenance staff in the building sold by the C.N.R. to the Quebec government. I asked the hon. member for Laurier whether he did not feel that the Quebec government, through its public works department, should take on the former C.N.R.
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staff, since the building in question is now the property of the Quebec government, who got it at a more than reasonable price.
If it is true, as indicated by the Liberal platform last year during the provincial election campaign, and as the Quebec premier took pleasure in repeating, that unemployment is primarily a problem of concern to provincial authorities, it is the duty of those authorities, who have entered into a contract with the C.N.R., to take on again the C.N.R. employees who were laid off as a result of the sale of this building to the provincial government. In fact, the Quebec provincial department of public works could employ those same workers, thus avoiding a rise in unemployment in Montreal.
Obviously, if C.N.R. officials did not see fit to insert a clause to this effect in the sales contract, they deserve to be blamed for not doing so; however, I believe the only person who can solve this problem is not the federal Minister of Transport, but the minister of public works of the province of Quebec.
Mr. Chairman, I would have liked to deal more extensively with this subject, but since my time is limited, I turn immediately to the matter that 1 want to consider more specifically this afternoon and which is being more and more talked about-the deepening of the Richelieu river.
Mr. Chairman, I feel this project is worthy of the greatest consideration on the part of the federal government, but before stating the problem as I see it, I think it should be said that all responsible associations, like the Quebec chambers of commerce, various committees composed of prominent citizens in the Richelieu area and even government opponents recently converted to the idea of this project-in particular the Liberal members-all agree that the government should be requested, not to start work immediately on the construction of the canal, but to have some kind of an agency determine whether the project of a waterway between the St. Lawrence river and lake Champlain via the Richelieu river would be a paying proposition.
At the moment, United States authorities seem prepared to undertake joint surveys with the Canadian government, either through the international joint committee, known as the international joint commission on boundary waters, or a United States-Canada commission, so as to come to a definite conclusion as to the economic feasibility of this project.

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I know the cost of this undertaking will be extremely high. In fact, back in 1937, it was said that the dredging of a 27-foot channel in the Richelieu river would cost some $342 million. At present prices the cost would be about $600 million, maybe more. Therefore, the matter should be carefully considered and the project should be studied from every angle before it is undertaken.
Mr. Chairman, in my humble opinion, if the Canadian government were to undertake a survey like the one I referred to earlier, we would get an answer to all the problems created by the deepening of the Richelieu; I therefore hope that our government will at the earliest possible moment, announce its intention of carrying out such a survey.
(Text):
Mr. Chairman, first of all, I should like to place some emphasis upon an area close to Montreal which would, at the outset, be the principal beneficiary of the modernization of the Richelieu canal system. For convenience in discussion, I have given this area the title of the "Canadian golden triangle".
I should point out that this title is now in use in the United States. For many years the name has been given to a tongue of land in the city of Pittsburgh, which is bounded on both sides by the Alleghany and Monon-gahela rivers, which join to become the Ohio river, thereby forming a triangular peninsula which is called the "golden triangle" by reason of the fact that the aforesaid tongue of land is completely covered by skyscrapers without a blade of grass in sight and is very comparable to the lower tip of Manhatten island, New York. It is hardly necessary for me to point out that the fabulously wealthy city of Pittsburgh is-besides having other distinctions-the steel capital of the entire world.
I have, therefore, given this name to an area of land on the south shore of the St. Lawrence river just opposite Montreal which is roughly triangular in shape and bounded on three sides by: (1) the St. Lawrence river from Sorel to Laprairie, or Candiac; (2) the Richelieu river from Sorel to St. Jean d'Iberville; (3) the area between Laprairie and St. Johns.
This area is what I have designated as the "golden triangle" of Canada, and I shall clearly demonstrate how richly deserved this appellation will be in a very few years' time. It will qualify as the greatest concentration of industrialization in all Canada. May I be allowed to state here, Mr. Chairman, that the
IMr. Johnson.]
beautiful towns of Chambly, Fort Chambly, Richelieu and St. Mathieu are located in the heart of this triangle.
It is doubtful if a high percentage of the citizens of our Canadian metropolis are aware that over 14 per cent of the population of this country live in greater Montreal, and with no decrease in the tempo at which their population, industrial expansion and building construction are assuming progressively larger proportions. The transformation presently taking place on Dorchester boulevard in Montreal, is a sufficient indication of things to come, and proves that Canada's largest city is now bursting at the seams, and for some years has been obliged to search for suitable factory sites far beyond the city limits.
Montreal has the principal car shops and other major installations in Canada for the servicing and reconditioning of the rolling stock of our two railways. Its new international airport has facilities second to none on the continent, it is Canada's principal seaport and has now embarked upon an era of terrific industrial expansion. But where? Not to the west of the island of Montreal where expansion is circumscribed by several non-navigable streams and inferior transportation and service facilities. Nor would expansion northwards toward the foothills of the Laurentian be attractive because of increasing remoteness from the facilities of the port of Montreal, and also because of inadequate rail communication. East of Montreal on the Quebec mainland, lies a large strip of somewhat desolate farmland with no sizeable municipality between Montreal and Three Rivers. There would be no adequate provision for housing for factory workers.
Actually the port of Montreal has recently extended its jurisdiction to cover an additional 25 miles downstream along the north shore, but solely in order to ensure that no new waterfront construction will hinder the future development of Montreal navigation and port facilities, which already have reached the saturation point. Some people have emphasized the fact that it will be many years before there is any perceptible change in the Montreal harbour picture downstream from the city. It is, therefore, very obvious that the logical extension of Canada's largest seaport can take place only on the south shore of the St. Lawrence, an area which has none of the disqualifications that characterize the other three major areas to the north, east and west.
Furthermore, shipment of merchandise manufactured in industrial plants situated to the north, east or west of Montreal can only

reach the harbour after the usual annoying delays encountered because of the serious traffic problem in this metropolis, for which no alleviation appears to be in sight. Contrariwise, the situation is becoming worse.
Implementation of the Richelieu canal modernization project should, of course, be a highly desirable concomitant to the utilization of the south shore or the extension of the port of Montreal facilities. The physical aspects of the canal project are briefly these; to deepen the present Richelieu canal, which now has only a depth of six feet and is about 100 years old, to 26 feet, the same as the seaway and, the construction of a new 15 miles of canal from Longueuil to Friar's island or from Laprairie basin, if the route from Sorel to St. Johns through the Richelieu river itself proves to be not economic or not logically possible. This canal, when completed, will provide the third side of the golden triangle. Two entrances will thus be available for United States bound traffic; (a) one at Sorel, Quebec, to handle upriver traffic from Seven Islands, Three Rivers, Port Cartier, European ports, etc. This would be a short route for iron ore shipments from new Quebec and Labrador, and newsprint from Three Rivers where the world's largest pulp and paper mills are situated, destined for New York city, which consumes one million tons of newsprint annually. And (b), the Longueuil entrance to the canal to be used for shipment to and from Montreal, the upper St. Lawrence and great lakes ports.
Admittedly, implementation of the canal project would be extremely costly, but as well as lower shipping costs for Canadian products to United States markets, commensurate benefits would similarly transform the economy of three large United States industrial states, New York, New Jersey and Pennsylvania.
It will be noted that I respectfully recommend the deepening of the waterway to 26 feet-the same as the seaway. Already Lieutenant Colonel Lucien Dansereau, a member of the international joint commission, has indicated that he, having made an intensive study of the project, as well as official Washington, would recommend that we go along, as of now, on a basis of a 12-foot depth of the canal, but I feel that if the costly undertaking were justified at all, it should have the same depth as the seaway. I feel we should adopt that position rather than compromising on the 12 feet and then, I am sure, having all the expense of a further inevitable deepening in years to come.
It will be readily seen that a 440 mile waterway between Montreal and New York, instead of the 1,670 mile trip down the St. Lawrence, around the Gaspe peninsula and
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thence along the Atlantic coast, would represent an enormous saving in transportation charges on many millions of tons of waterborne freight, annually.
I should like now to make reference to the hazards of the Atlantic route during war time. An aspect of this question that we cannot possibly afford to ignore concerns the effect that another world war would have upon the safety of our Atlantic communications. One of the latest editions of Janes' "Fighting Ships" published in London-conceded to be the leading authoritative reference for all statistical information concerning the navies of the world-claims that soviet Russia has 500 submarines available for Atlantic service, an undisclosed number of which are nuclear propelled and equipped with the latest in armaments. Janes do not exclude the possibility that certain of these submarines will be able to fire ballistic missiles without surfacing. R.V.B. Blackman editor of Janes, says:
In the event of hostilities, the allied navies might be threatened by 450 to 500 submarines, and the damage they could inflict on our material, personnel and economy staggers the imagination, when it is remembered that at the height of world war II, a little more than a fifth of this total were enough to bring the United Kingdom to the brink of starvation; not only as regards food for Britain's population, but as regards the vital raw materials required to prosecute the war.
Janes further believe that Russian submarines could seal off all communications between Europe and America, and it is well known that Soviet underwater craft have been caught making reconnaissances in the gulf of St. Lawrence, off the American Atlantic coast, and the coast of Argentina as well. We now live in a very small world.
The exposed Atlantic route would accordingly not be available for iron ore shipments from Port Cartier and Seven Islands once a world war got under way. So a short, deep water, sheltered route of 450 miles only between Montreal and New York is an absolute must.
Incidentally, Rear Admiral H. F. Pullen, flag officer, Atlantic coast and commander of the Atlantic submarine area under NATO, in a powerfully argued article appearing in the Atlantic Advocate of January, 1959 took a very pessimistic view of our defensive resources against the nuclear propelled Soviet submarines, some probably armed with ballistic missiles, which might even be capable of being launched by a submarine without surfacing.
Canada is not a member of the nuclear club; but we must agree that upon what success the western nuclear powers have in

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establishing amicable relations with the communists will depend whether we have peace or war.
All the United States authorized groups and organizations, having either a geographical, economic or political interest in the implementation of the project, have been working feverishly to get the canal modernization under way, such as the state of New York, the state of Vermont, the joint state, New York and Vermont, commission on the Champlain basin, the port of New York authority and the United States army corps of engineers. Besides, the congressional delegation from both these states I mentioned have instructions from their state governments to place pressure on Washington to schedule an early commencement of the project.
There is little doubt in my mind, Mr. Chairman, that if the Kennedy administration can be persuaded that the short, modernized, sheltered waterway between Montreal and New York is absolutely necessary to over-all continental defence, Washington may not be inclined to take no as Ottawa's answer; there is too much at stake. The project was also strongly endorsed by Governor Nelson Rockefeller during his gubernatorial campaign. It is perhaps unfortunate that practically all of the physical and engineering aspects of the work lie in Canadian territory.
Let me return for a moment to the potentialities of the "golden triangle". Here are some highlights that were suggested by competent observers. It contains the entrance to the St. Lawrence seaway. It would contain all entrances to the proposed Richelieu canal. At this point let us not forget that the valley of the Richelieu river is the cradle of the Canadian nation. It is the hub of direct rail routes and highways connecting Montreal with (a) the eastern United States, wherein lies the greatest concentration of United States markets and industrialization; and (b) direct rail routes to the maritime provinces. The Steel Company of Canada is now operating its new $10 million plant at Contrecoeur. The Quebec Iron and Titanium Corporation has spent an additional $5 million on new plant facilities, making $80 million in all invested by this ambitious company in Quebec province. Thousands and thousands of new jobs are already available. Nationally known companies have allocated a total of $500 million for plant facilities in the area, either already completed, under construction or projected, with a potential of 70,000 industrial jobs on completion of the schedule.

Natural gas from western Canada is almost available in the triangle for industrial and residential purposes. The area is also serviced by the Shawinigan Water and Power Company or, rather, its subsidiary, the Southern Canada Power Company and Hydro-Quebec. The tonnage of two-way traffic anticipated for a modernized Richelieu canal would be comparable with, or even exceed, present traffic on the seaway.
Many homesites approved by the crown company, Central Mortgage and Housing Corporation, as well as by industrial plants for their workers, are under construction in the triangle to provide adequate housing commensurate with the projected industrial expansion. Schools, churches, recreation and shopping centres will follow in due course. A large part of the triangle will be only 20 minutes distant from downtown Montreal.
I repeat, the "golden triangle" a few years hence could conceivably become the greatest concentration of industrialization to be found anywhere in Canada. I would therefore express the hope that the government will endeavour by every means at its disposal to keep implementation of the canal project very much in mind.
It may not be out of place, Mr. Chairman, when discussing developments of properties, whether in industrial or residential districts, or in desolate areas where an abundance of valuable mineralization has been discovered, to recall that in August, 1958, when opening the Canadian National exhibition at Toronto, our Prime Minister made a vibrant appeal for acceleration in the exploitation of our fabulous hinterland, and he further drew attention to the startling fact that only 10 per cent of the total area of our country is privately owned, the remaining 90 per cent of our vast expansive territory consisting of crown lands being held either by federal or provincial governments.
Those who remind us that a sizeable percentage of this area is uninhabitable tundra or barren land in the far north do not take sufficient cognizance of the fact that we are living in the atomic age. I believe that certain nuclear physicists of impeccable professional reputation have even hinted that outdoor air conditioning, climate control, may well be within the range of future possibiliti-ties. This could hardly be more fantastic than the circumnavigation of the earth by a guided missile, already a "fait accompli".
Far too high a percentage of our native Canadians are completely indifferent as to the ownership of property, probably because Canada has more territory than she knows what

to do with. Most immigrants coming to Canada to seek homes and careers have been truly amazed at our general apathy when it comes to the acquisition of real estate. These new Canadians coming from the crowded countries of central or eastern Europe where every square foot of land has been chained down for centuries will often forgo the necessities of life in order to keep up their instalments on a piece of property in what they often call our undeveloped country.
What Canada needs more than anything else is a tremendous infusion of new wealth. We have at our back door the last natural treasure house left on the continent, with an abundance of valuable mineralization whose development is still in the early stages. Its exploitation should be accelerated as rapidly as the necessary capital and equipment can be obtained and, may I hope, primarily for Canadians.
Let me conclude, Mr. Chairman, with a reference to my own province. No government is perfect, but Quebec citizens have not entirely forgotten the achievements of the predecessor government of the province of Quebec for the benefit of Quebec agriculture and for the development of our superb natural resources as well as the massive industrialization program inaugurated and now attaining higher levels by leaps and bounds, and which will be crowned by the spectacular exploitation of the "golden triangle". There is no comparison between the transformation that has taken place in the economy of our province in recent years and contrariwise the lethargy and vacuum that characterized the Liberal regimes.
In point of history, Quebec is our oldest province and the intensive industrialization of the "golden triangle", not to mention new Quebec, will maintain the pre-eminence of the banner province for many years to come. Thank you.
(Translation):


Mr. Denis:: Mr. Chairman, may I direct a question to the hon. member for Chambly-Rouville (Mr. Johnson)?
I should like to ask him who wrote the speech he has just read in English?


Léon Balcer: You are so considerate.


Paul Léo Maurice Johnson: Mr. Chairman, I was not aware that the member for St. Denis wanted to be funny, though he did give us a sample of that yesterday. In any event, rather than making a fool of myself and making mistakes like he does when he uses English, I decided
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to write my speech and keep as close to it as possible in the delivery, something I have a perfect right to do. I would advise the hon. member to do the same, as it would improve not only his English, but also his French when he uses French.


Mr. Cardin:: Mr. Chairman, I did not intend to take part in the discussion this afternoon, but it is so seldom that I have an opportunity to support a position taken by the member for Chambly-Rouville that I felt compelled to rise after him to urge the government to reconsider the possibility of going ahead with the Richelieu waterway project.
I must, however, express regret that the hon. member for Chambly-Rouville did not make his speech before the government took the decision last December not to go on with plans for deepening the Richelieu. It is a bit like locking the stable after the horse has fled. Perhaps the hon. member would have been in a better position than I to urge the government to give serious consideration to the Richelieu waterway project.
I attended the conference where the Minister of Transport (Mr. Balcer) stated that the government had no intention to go ahead with the project, and indeed saw no need to conduct a formal investigation of the scheme.
After hearing the speeches made in this house by the hon. member for Chambly-Rouville, as well as others who have referred to this matter, and after reading the briefs sent to the government by Canadian organizations as well as by representatives of U.S. administrations, I think the government should realize that the Richelieu seaway project is causing great interest everyhere. Very serious studies were made from the economic, as well as from the technical angles, and it seems that, not only is the project economically sound but is in the best interest of the Richelieu valley area, and also of this country's economy as a whole.
I deplore the fact that the house should not have been informed of the result of the surveys which the government says were undertaken with regard to the project. I also regret that it should be so difficult to find out the contents of the correspondence recently exchanged between the government of the United States and the government of Canada in respect of a joint study which the U.S. government is willing to undertake, because I feel that the expenses incurred for such surveys would be insignificant and that, because of the interest shown in this project, they would, to my mind, be amply justified.

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The other day, during a discussion in this house with regard to the Richelieu seaway, the Prime Minister (Mr. Diefenbaker) suggested that the Liberals had never done anything about this matter since 1935. There seems to be some confusion in this respect, in spite of the fact that the reason for which it was impossible to make any further progress with regard to the project has been repeated over and over again. Therefore, I believe it would be well to say once again that a start had been made on the Richelieu seaway project and that some work was done in 1937, because, at the time, the St. Ours locks were deepened and extended.
It was also in 1937 that the Liberal government of the day built the Friar island dam which, as you know, has not yet been used but was specially erected for the purposes of the Richelieu seaway project.
Therefore, it is not only false but unfair to suggest that the Liberal government did nothing about it when, after all, the work had already been carried out at that time. On the other hand, there was, in 1937, the boundary waters commission, which, after studying the project, suggested waiting for the completion of the St. Lawrence seaway, before considering the deepening of the Richelieu; and that is exactly what happened.
I also would like to point out to the government, and more particularly to the Minister of Transport, that what we are asking today is not necessarily the completion of the Richelieu seaway, but simply that some serious consideration be given to the project. As you know, a project like this one requires a joint survey with the United States. That is all we, on this side of the house, are asking for at the moment. I hope the government will be in a position to reconsider that project more favourably and, at least, to agree to proceed with the already initiated economic survey.
The second point I should like to bring up is about the statement made yesterday by the minister. He surely knows how interested I have been in the legislation he is planning to introduce in the house to provide assistance to shipyards.
A shipyard in my riding has had trouble in recent years-as did all other shipyards elsewhere-in getting contracts and work for its skilled workers.
I do not know to what extent the measure announced by the minister yesterday will provide assistance to shipyards. At first sight,

the grants seem generous and I imagine that many shipyards will use the money that the government seems prepared to make available to them.
If I am not mistaken, those grants will simply be included in the estimates and will not be provided by special legislation. I sincerely hope that this government's offer to the shipyards will not be shot through with administrative difficulties and that the assistance will be readily available to the shipyards.
On this matter, I suggest that the minister tell us in his reply whether the federal government's share of the cost will apply to all vessels or only to those of a certain tonnage. Will there be restrictions? For instance, will the cost sharing apply to the building of 10,000-ton vessels, to ocean-going vessels? Could the minister tell me also whether this cost sharing will apply to any ocean-going vessel, including freighters, tankers and liners.


Léon Balcer: With my hon. friend's permission, I shall tell him at once that this will apply to any self-propelled vessel. It will not apply to barges towed by tug-boats, for instance. It will apply to any self-propelled boat. It will not apply, however, to pleasure yachts.


Louis-Joseph-Lucien Cardin: I thank the minister very much for this information. I am all the more happy about the legislation he announced yesterday. At last, our shipyards will have the means they need in order to remain in operation.
However, I reserve the right to criticize the measure, if necessary, once it is implemented and after we have had a chance to see how it works. For the time being I congratulate the minister for announcing this measure which, I think, may provide assistance to the shipyards.


Lionel Chevrier: Would the minister permit a question based on the answer he gave to the member for Richelieu-Vercheres. (Mr. Cardin)? How much do the officials of the Department of Transport think it wiU cost to carry out the policy which he announced in the house yesterday?


Léon Balcer: Mr. Chairman, as stated this morning, I intend to answer all those questions at the same time. I wiU answer this question when I answer those of the other hon. members.


Paul Léo Maurice Johnson: Would the member for
Richelieu-Vercheres permit me a question?

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He said a moment ago that the Minister of Transport had positively closed the door on the project. Is that really what he meant?


Louis-Joseph-Lucien Cardin: Well, I was present at the conference when the minister made this statement, and I, like all the guests at this dinner,
had the impression, that the minister had definitively closed the door on this project.


Paul Léo Maurice Johnson: I beg your pardon, Mr. Chairman, but I am making it a question of privilege. I was personally present at that conference, as was the hon. member for Richelieu-Vercheres.


Lionel Chevrier: That is no question of
privilege.


Paul Léo Maurice Johnson: The hon. member for Richelieu-Vercheres stated that all the guests, all those attending shared the opinion he has now expressed. I object to such a statement and I could say, with equal truthfulness, that many persons suggested that there was still hope and that there had been indications that, because of the cost of the project, its implementation would be difficult for the moment.


Louis-Joseph-Lucien Cardin: Since the hon. member does not share my views and is not yet convinced that the government has closed the door on the project, II would ask him to refer to the answers given by the Prime Minister (Mr. Diefenbaker) to questions on this matter only a few days ago.


Léon Balcer: Mr. Chairman, the argument between the two hon. members has to do with a statement I made in Montreal. I am the one most involved, for it concerns parts of my speech. I would therefore like to repeat what I said at that time: "At the present time, an economic study is being made in my department on the possibility of deepening the Richelieu river".
This study is being contunued, but at that time I had come to the conclusion, after examining the different reports prepared on the subject by my officials, that the expenditure the project would require would not be justified in the circumstances.


Louis-Joseph-Lucien Cardin: Mr. Chairman, would the minister allow me a question? Could he tell me whether the survey now being made by his department is another of those secret surveys that the house is never told about?


Léon Balcer: Well, Mr. Chairman, everyone knows very well that the reports of surveys undertaken by the officials of a department are for the exclusive use of the department; they are privileged documents, never tabled in the house.
(Text):


James MacKerras Macdonnell: I should like to make a momentary interjection merely to comment on the speech made by the hon. member for Port Arthur. I tried to find him to ask him to come back into the chamber to hear this interjection, but I have been unable to do so.
The hon. member, in his speech, referred to criticisms he had received of Mr. Gordon, the president of Canadian National Railways. I regret that he did that, and I suggest that anonymous criticism of this kind from people who communicated privately with the hon. member, is unfortunate. I suggest further that the time when Mr. Gordon's ability, character and experience can be assessed is when he appears, as he will, before the relevant committee of the house dealing with railway questions.


Mr. Winch:: Perhaps the hon. member for Port Arthur would like to answer now? I understand he will answer. Since the hon. member just entered the chamber, I thought perhaps he might have heard the interjection and desire to answer now.
Do I understand from the minister that after the first item of his estimates is carried he will supply the details relating to the subsidy on the building of ships? Is that what the minister intends to do?


Léon Balcer: Mr. Chairman, what I said was that after every member has spoken on the first item I shall attempt to answer all the questions that have been raised. In so far as the questions relating to the new shipping policy are concerned, the answers to those questions will be covered by the regulations that will be passed by the governor in council and tabled in the house. I will certainly answer all the questions it is possible for me to answer.


Harold Edward Winch: The reason for my question is that I am most interested in knowing the details of this policy. As I said yesterday, I am a little bit disturbed about the amount of help this will be to the people on the B.C. coast. I am hoping the minister will give some indication as to how this policy is going to help the fishermen on the B.C. coast with the purchase of new ships.
In addition to that, we are now considering estimates which I understand were prepared months ago for this department. Am I right, sir, in believing that the minister now has to introduce supplementary estimates in order to get the funds required for his new policy?

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Léon Balcer: That is quite right, Mr. Chairman.


Harold Edward Winch: Can the minister give us an idea of the amount of the supplementary estimate?


Léon Balcer: My understanding is that it will be a one dollar item.


Harold Edward Winch: That is the very reason why I rose. Do we understand then that the minister has no idea of what this is going to mean or what is going to be the effect? He is only going to put in $1. That means then that $1 is going to be of such a nature as to cover whatever it means, and I hope it means a great deal. How do we know the exact plan? Is it completely on the Canadian content of these ships or on the entire cost of these ships?


Léon Balcer: I do not want to be unfair to the hon. member for Laurier who asked me a similar question earlier. I told him that I would answer him at the end of the debate on the first item. I do not want to be unfair to him and I also do not want to be unfair to the hon. member for Vancouver East. However, I will answer whatever questions he now asks and I will do so all together after the last speaker on this first item.


Lionel Chevrier: In view of what the minister said and of what was said by the hon. member who has just taken his seat, will the minister answer this particular question? As to this important program, consisting of two divisions, to assist the ship operators and the shipbuilders and the fishing industry-will all of it be put into effect by the insertion of a $1 item in the estimates.


Léon Balcer: Yes. It will be inserted as a $1 item because there is no limitation to this subsidy. We do not want to restrict shipbuilding in Canada. I think our regulations will be drafted in such a manner that we can look after all reasonable requests from shipbuilders and ship owners. No ship operator, I am quite sure, will risk 60 per cent of the cost of a ship if there is no market for the services of that ship. However, on the other hand, if a definite amount were set up, the result would be to limit this subsidy policy and we do not want to do that.


Harold Edward Winch: That is the very thing that has me bothered.


Mr. Pearson:: On that point, may I say this. Yesterday we heard from the minister a statement enunciating a very important policy in respect of a very important matter

and making a far-reaching change in our shipping policy. That change is not to be made in this important matter by the introduction of legislation in the House of Commons. Legislation has been introduced during this session on matters of far less importance than the matters which were dealt with by my hon. friend yesterday. On this occasion in respect of this extremely important and far-reaching change of policy, the government is going to proceed by way of item in the estimates rather than by way of legislation. The government is going to proceed not only by way of an item in the estimates but by a dollar item in the estimates, a procedure which they used to attack very bitterly in the past in respect of far less important matters than a change in Canadian shipping policy.
The minister has said that it is necessary or desirable to handle the matter in this way because no one knows how much money may be required. That is perfectly true, but it does not prevent the government from making an estimate of the amount of money that might be required and putting that amount in an estimate. Then if it is not sufficient, they can always get extra money in the next estimates. There is no reason in the world why the matter should be dealt with in this way or why parliament should not be given some idea of the general extent of the program. However, in connection with a change in Canadian ship policy which is of national and international importance, we now find that this government is going to proceed by putting a $1 item in the supplementary estimates.


Harold Edward Winch: The Leader of the Opposition has in part covered what I wished to say when I rose. I must admit that I cannot understand the attitude the government is taking to this most important matter. It will, of course, be realized that the statement made yesterday by the minister was on a most important matter. I simply cannot understand the approach that is being made by the minister and by the government.
The minister has within the last five minutes said that this matter is going to be covered by a supplementary vote of $1. That statement indicates to me that he does not know what the program is going to cost. Not knowing what it is going to cost, the government or the minister puts in the supplementary estimates an item of $1. However, he told us yesterday it meant 10,000 direct jobs in the shipbuilding industry and 10,000 indirect jobs. If the minister can tell us, as he

told us yesterday, that it means 20,000 jobs, he must have some idea of the cost to the government over and above the cost of $1.
I say quite bluntly that if the hon. member was not being political yesterday because there is a by-election in Esquimalt-Saanich and because there are two shipbuilding yards in Esquimalt-Saanich, then he must have some information about the cost. In addition to that, there is this consideration. I am certain that every member of this committee will vote any money required to rebuild the shipbuilding industry of Canada. But the way in which the minister is now presenting the matter to us means that the House of Commons is completely in the dark and that he is asking for a blank cheque. I do not believe in blank cheques, Mr. Chairman. I do not believe in the $1 item technique in this instance. Surely the minister can give us more information, more direction or be a little bit more specific. Surely he can act more in keeping with the integrity of a cabinet minister and not so much in keeping with expediency having regard to a by-election in Esquimalt-Saanich.


Léon Balcer: I think the document that I read yesterday stated in very clear fashion the shipping policy of this government to come to the rescue of the shipping and shipbuilding industries in this country which in the last 15 years have been left in an awful state by the previous government.


John Whitney Pickersgill: And the present government. Hon. members opposite have been in office for four years.


Léon Balcer: Yes; and we came up with something.


John Whitney Pickersgill: Hon. gentlemen opposite have been in office for four years and this policy was forecast six months ago.


Léon Balcer: The shipbuilders and the ship operators understood what I said yesterday.


Lester Bowles Pearson: Parliament does not matter.


Léon Balcer: What I said yesterday was that we wanted shipbuilding to have a chance to survive in Canada.


Harold Edward Winch: That is right.


Léon Balcer: I think we are bringing in a measure that will really give us a place in the sun. What I said was very clear. We are giving a subsidy of 35 per cent on shipping built in Canada, to be registered under Canadian registry. This 35 per cent is given in order to provide an incentive. It will be put up to 40 per cent until March 31, 1963. In
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addition, we intend to help the fishing industry in a manner which would give our fishermen a chance to compete with foreign trawlers operating near the coast of Canada. We intend to help the fishermen who are working in very small boats. We are going to look after them, too.


Harold Edward Winch: Boat construction?


Léon Balcer: If the hon. member would read what I said yesterday he would not be so worried. We are not doing this only to please the people from Esquimalt-Saanich. We are doing what this government has always done. We are trying to answer the needs of the Canadian people in general and, in this instance, provide help for an industry which has known great days in the history of Canada. Canada has always built ships. This new policy has been extremely well received by the industry, by labour, and by the public in general. I am asking all hon. members to support the government when it comes before parliament with such forward looking legislation whose only purpose is to help Canadians to help themselves.


Lester Bowles Pearson: What the minister has said is, of course, completely irrelevant to the point
we were discussing.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: It was completely irrelevant, and perhaps the minister will come back to the point and forget about the by-elections for the moment.


An hon. Member:: Who spoke about them?


Lester Bowles Pearson: The minister has said that this policy is of extreme importance and will prove of great advantage to the people of Canada. We hope it will. When the time comes, we shall make our views clear with respect to that policy. The minister does not intend to proceed with respect to this policy by way of legislation. He says we can proceed by way of legislation with respect to a good many matters which are of less importance, but when we deal with shipping policy -a policy which the minister says will put the industry on a new foundation-we are to proceed by way of an item in the estimates.
The minister said we have to do it that way, irrespective of the rights and privileges of parliament, because we do not know how much money we shall have to spend. But the minister told us yesterday we know how much more employment will be created-that it was going to employ 10,000 people directly and 10,000 indirectly.

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Léon Balcer: I said "over 10,000" and the reports of the shipbuilders say it will be even more than that.


Lester Bowles Pearson: I hope it will be. Nevertheless, my point is this: the minister has the details when it comes to the employment which may be created but when we ask him how much this might cost he says he has no idea, so we are to proceed by way of an item in the estimates. We have to put an item of $1 in the estimates. That item of $1 was something against which hon. members opposite used to inveigh when we on this side formed the government. We may have to spend $10 million, $15 million or $20 million, but the hon. gentleman does not know how much; the government will spend whatever is necessary to put this policy into effect.


Some hon. Members:: Hear, hear.


Lester Bowles Pearson: But why not put down an estimate of what this project is likely to cost? If you need more money you can get more above $10 million just as well as you can get more above $1 million. Why put down $1 to implement a policy of national and international importance which is going to have such far-reaching consequences?


Harold Edward Winch: Mr. Chairman-


Jacques Flynn: Is the hon. member about to ask a question? If not, other hon. members have indicated their desire to speak. I appreciate there has been a debate on a certain point but, I am trying to recognize alternately, as is the usual practice, those hon. members who have indicated their desire to speak.
(Translation) :


Mr. Bourbonnais:: Mr. Chairman, first of all I would like to congratulate the Minister of Transport (Mr. Balcer) for the decisively progressive policy he announced yesterday regarding coastal shipping in Canadian waters and shipbuilding.
With all due deference to opposition members who complain about this declared policy of the government, I am sure that it is an asset which will help solve the problem this industry is facing by improving the conditions in a field that has been neglected for many years by the previous administration.
I would like also to thank the minister for the kind support he gave me in all the representations made in connection with the Soulanges canal.
Last fall, at the request of the Vaudreuil-Soulanges voters, the minister was kind

enough to use his influence to hasten the work on the jetties which now replace the swing-bridges over the Soulanges canal.
At the request of these same people, the minister agreed to set aside part of the properties along the canal, which will be used as a lure to get the industries that have been needed for so long in that part of my constituency. In fact the establishment of industries there would provide profitable and stable employment in a section of my constituency.
Despite the province of Quebec offer to take over the whole Soulanges canal, which would have relieved him of a heavy task, the minister, with all his many occupations, worked overtime in the interest of a population which is grateful to him for his devotion. May I be allowed here to thank him for that, both in my own name and on behalf of my constituents. With reference to the offer made by the province of Quebec to take back all properties along the Soulanges canal, I must say that, at first glance, one must be more than a realist not to accept it at once, because the decisions to be taken will affect the economic future of a whole area. I believe we must, by all means possible, ensure the prosperity of an area that deserves to be developed. The minister of fisheries and game of the province of Quebec wishes to obtain all properties along Soulanges canal in order to set up there a fishbreeding centre and develop camping grounds and parks for tourists. We approve all those projects and we admire those who planned them.
That is why we have refused to sell any part of those lands to private individuals. We were keeping them for the department of game and fisheries of the province of Quebec.
However, it is feared in Vaudreuil-Sou-langes that the transfer of the canal to the provincial government will cause some trouble.
Over the past few months, hundreds of provincial employees who had lost their jobs have been replaced by supporters of the new party in power, as a result of directives from a group of patronage distributors.
The people of Vaudreuil-Soulanges would not want the plans worked out by the minister of games and fisheries of Quebec to be used only to reward those who voted for the party temporarily in power in Quebec.
I should like at this point to draw a comparison between what was done in Ottawa after the Conservatives were returned to office in 1957, and what has been going on since the Liberal party took over in Quebec last June.

Out of 600-odd federal civil servants resident in Vaudreuil-Soulanges, none have lost their jobs for showing a preference for any of the political parties represented in this house.
All employees who had been operating the Soulanges canal from the beginning have been able, through our efforts, to find other employment either on the St. Lawrence seaway or at Lachine or at Ste. Anne de Bellevue or elsewhere, or have been pensioned off.
The wholesale dismissals by the provincial government of workers who in fact had only exercised their rights as free citizens are not likely to improve relations with political opponents who have very different views on the way to deal with economic problems.
Such actions show a total lack of social sense and Christian charity. The Liberals should have shown greater wisdom and greater respect for the working classes of Quebec.
I feel duty bound to do everything in my power to protect from political retaliation on the part of the Quebec Liberal party, those free citizens whose only desire is to be able to earn an honest living.
Soulanges canal was built at the turn of the century for a specific purpose: to improve navigation between Montreal and the great lakes so that 14-foot draft ships could increase their cargoes between the two points.
It had never entered into the minds of the public men, of the economists and engineeers of that time to make it a fishpond or a tourist's paradise. Let the Quebec minister of game and fisheries think of turning it overnight into a hatchery, if he so wishes. Let him dream. But a canal, an economic instrument, cannot be altered into a centre for tourists and sportsmen without undergoing deep changes.
The Tory government is ready to let go of the most important section of the canal to serve this purpose. I refer to all the area west of Pointe Cascades extending for 13 miles in the direction of lake St. Francois and which includes:
1.	A strip approximately 200 feet wide all along the south side of the canal;
2.	About 10 acres of fine land and the power station at Coteau du Lac;
3.	A piece of land of about 60 acres between the canal and the C.N.R. line near Coteau du Lac;
4.	A large piece of land on the shore of lake St. Francois, at Coteau Landing; for which we refused $15,000;
5.	All the land north of the canal where the provincial department of roads built
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highway No. 2 without having to pay anything for expropriation purposes. That is what the federal government is offering the department of game and fisheries for the fabulous amount of $1-referring to the amount of $1 mentioned by the Leader of the Opposition (Mr. Pearson)-this is a genuine offer of $1-not to mention the $100,000 it cost the federal government last fall to replace the swing bridges.
If we were asking half a million dollars for all those properties, the minister, Hon. Gerard Levesque, woud be justified in haggling about it, but we are offering him without any charge more than 90 per cent of the Soulanges canal properties.
We want to offer industrialists and people who are looking for an ideal site to set up an industry of some kind or to expand their present industries, the Pointe Cascades sector which is connected to the seaway, only two miles away, by lake St. Francois. We merely wish to diversify sources of employment in the Soulanges district. We feel that that is a sounder policy, that it rests on better principles than if Soulanges had all its eggs in one basket, as the Liberals would have it. We are anxious to please the tourists but we feel that our main concern must be the working class which would find permanent employment in the district through the establishment of small and medium size industries.
A campaign has been going on in Quebec for some time now whose object is to have French Canadians get control of part of their economy. Many of our young people wish to set up their own industry, but cannot afford to have their meager capital engulfed in one swoop in the buying of expensive properties near the metropolis. Our suggestion meets their desires and, if implemented, would be of a great help to them.
Let the Quebec game and fisheries and trade and commerce departments agree on a proposal which would reserve Pointe Cascades or a certain area of the canal for the establishment of small Quebec industries, and we shall lose no time in concluding this business about the Soulanges canal. But we do not want to have them talk only of fishing and camping. Low wage earners too are entitled to their share in the development of the Quebec territory.
The hon. member for Laurier (Mr. Chevrier) stated this morning that he had some knowledge of the petitions of the Soulanges chambers of commerce urging that the entire Soulanges canal be surrendered to the province of Quebec. Well, Mr. Chairman, there

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is only one chamber of commerce in the whole Soulanges area. However, there is an industrial development committee whose purpose, as its name indicates, is to promote the establishment of industries in Soulanges.
Having attended a number of meetings of the Soulanges chamber of commerce and of various organizations in the area, I am in a position to state that the people of Vaudreuil-Soulanges are now prepared to accept for lack of anything better, the scheme put forward by the Quebec department of game and fisheries. But if some industry expressed a desire to locate at Pointe Cascades or at the other end of Vaudreuil-Soulanges and was able to provide 200 or 300 permanent jobs, the whole population would support the new scheme.
Besides, the federal government has no
authority to promote any specific industrialization in any area of the country. There is no other means to encourage the establishment of industries in the Soulanges area than to announce that some crown buildings and lands, comprising the Soulanges canal property, shall be put up for sale, in accordance with departmental regulations and practices. In such a way, we shall know who is interested, what industries and investors wish to set up an industry in the Soulanges area. We shall know at the same time whether that area is suitable for industrial expansion.
Mr. Chairman, it seems to me our action should inspire the Quebec legislators, and that instead of trying to confuse the issue and multiply promises, they should show more realism and begin by carrying out their fishbreeding project and creating that anglers' and tourists' paradise in the area we have offered them.
(Text):
Mr. Chairman, I should now like to refer to another matter in respect of the Department of Transport in which I take great interest.
Having had the opportunity to meet members of the Canadian air lines pilots' association, I was shocked to learn how to what a marked extent our once dynamic aviation air lines industry, mainly Canadian Pacific Air Lines and Trans-Canada Air Lines, have lost business to their foreign competitors. This has had the result of forcing our major air lines to face the possibility of having to discharge nearly 100 pilots within the near future. The discharging of 100 pilots will result in approximately 1,000 jobs lost in hangars and airports, with a subsequent loss of employment for well paid technicians. It is pathetic to hear about the plight of professional pilots who will now have to emigrate to Europe in order to continue in their
[Mr. Bourbonnais.l
profession or abandon their profession and seek positions in inferior fields of employment. This same situation applies to thousands of skilled Canadian air lines' employees who will have to seek other sources of income.
This situation has been caused by an imbalance and weakness in the Canadian air lines as compared with the more aggressive foreign competitors on this continent and abroad. As an example of this I should like to cite a few facts regarding our major air lines' weakness in improving their methods in this field of transportation. I shall first list the routes from Canadian cities served unilaterally by foreign carriers. There exist over 2,000 miles Canadian-United States border between Toronto and Victoria, where no Canadian air line has scheduled transborder rights. This large area of Canada is served by five United States carriers, which are as follows: 1. Edmonton-Winnipeg-Min-neapolis-Chicago and the northwest; 2. Ed-monton-Calgary-Great Falls-Denver-Las Vegas and Los Angeles; 3. Regina-Minot, North Dakota and north central United States; 4. Calgary-Spokane-Portland, San Francisco and the west coast; 5. Vancouver direct to Seattle-San Francisco-Los Angeles. These areas are served by the following air lines respectively: Northwest Air Lines, Western Air Lines, North Central Air Lines, West Coast Air Lines and United Air Lines.
No Canadian air line has the right to serve the capital of the United States from either Ottawa, Toronto or Montreal or western Canada. This service is provided by Eastern Air Lines and Northwest Air Lines exclusively.
Another imbalance exists because no Canadian air line is allowed rights over the following major North American routes: Ottawa-Washington, Toronto-Washington, Montreal-Washington and western Canada-Washington, which are served by Eastern Air Lines, American Air Lines, Eastern Air Lines and Northwest Air Lines, respectively. This same imbalance exists between Montreal-Frankfurt and Montreal-Amsterdam, which are served by Lufthansa and K.L.M., respectively.
A comparison can be made between the United States and Canada in respect of their air carriers between the United States, Canada and Europe. Whereas the United States carriers in 1960 enjoyed 50 per cent of the north Atlantic passenger traffic between the United States and Europe, Canada provided only 33 per cent of the scheduled passenger flights between Canada and Europe. This is apart from passenger charter flights where greater imbalance exists. On the north Atlantic routes, there are about 49 foreign

carrier weekly flights compared with 25 Canadian carrier weekly flights. This makes the percentage of weekly flights originating in Canada 33.8.
I submit that although a reasonable balance of flights exists on the Canadian-United Kingdom routes under the Canadian-British pool arrangement, this balance is completely destroyed by the fact that the passenger fare from western Canada to the United Kingdom through the New York gateway via Toronto is identical to that from western Canada to the United Kingdom through Montreal under the pool. I suggest then that the pool can be, and is being, circumvented by way of New York to an alarming extent. I point out that while the Canadian passenger may choose between 22 Canadian and 23 British flights per week under the pool arrangement, he has 45 additional British flights per week to choose from via Toronto-New York at the same price.
The above advantage to the British carrier is tunneling Canadian passengers to the United Kingdom through New York. This advantage is also enjoyed by Air France, K.L.M. and Lufthansa to continental Europe. These foreign carriers maintain large sales offices in every major Canadian city. The figure of 33.8 per cent of the north Atlantic schedule air service from Canada now provided by Canadian carriers is being vastly diluted by the great number of weekly flights available through New York at the same price.
I should like to place on record a table indicating the number of weekly flights available to the western Canadian passenger on foreign carriers to Europe via New York:
	Flights
Carrier	per week
	
K.L.M			 25
	
B.O.A.C		
Total 		
This is the total number of weekly flights operated by direct competitors in the Canadian market to New York-Europe.
Although figures are difficult to obtain on charter flights, the following is a good example of the lack of push on the part of our Canadian air lines' salesmen:
Charter flights planned for period May-September, 1961
B.O.A.C.	North	Atlantic	185T.C.A.	North	Atlantic	30Charter flights operated May-September, 1960 B.O.A.C.	North	Atlantic	120T.C.A.	North	Atlantic	14
This gives a ratio of approximately six British charter flights to one Canadian on the north Atlantic. A similar situation is
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found in the north Atlantic air freight service. At the present time no Canadian carrier operates an all-cargo service over the north Atlantic. Total cargo carried over this route increased by 33.7 per cent-United States carriers included-during 1960. Total cargo carried in 1960 between Canada and Europe was 4,664.6 tons. The share of this amount carried by Canadian air lines in the holds of passenger flights was 1,518.6 tons. This amounts to 32 per cent of the total cargo carried to and from Canada and Europe. Scheduled cargo flights from Canada to Europe planned for 1961 are as follows: K.L.M., six weekly; B.O.A.C., two weekly; C.P.A., nil; T.C.A., nil. B.O.A.C. have two DC-7's converted to freighters and are converting two more. Canadian carriers have similar aircraft which are suitable for cargo conversion. In Canada we also have the best cargo aircraft in the world, designed specifically for air freight, namely the CL-44. To date, no Canadian carrier has given any indication of interest in this national achievement.
Another unfavourable imbalance in Can-ada-Caribbean scheduled passenger service is reflected in the following comparison. Eleven weekly flights are scheduled by foreign air lines from Montreal to Bermuda while only five are scheduled from Montreal and Toronto by Canadian air lines.
May I touch on the Pacific-Orient schedule passenger service. It is also important to point out that the main source of imbalance in this area exists because the Canadian carrier does not have United Kingdom landing rights on its Vancouver-transpolar-Europe route; the contention being that the greatest passenger revenue source lies between Australia, New Zealand, Hong Kong and the United Kingdom. Qantas, on the other hand, enjoys Orient-San Francisco-New York-London rights with pickup rates between Vancouver and San Francisco. This places the Canadian carrier at a distinct competitive disadvantage.
The Canadian air lines pilots' association asserted, on the basis of many years of active association and participation in the Canadian aviation industry, that foreign carriers are getting far more than their share of the air passenger and freight service from this country. I am glad to present its suggestions designed with the sincere hope of giving some assistance to the minister in his consideration of this problem.
The following quotation has a point: "A recession is greatly a state of mind". This point is made in requesting a vigorous nationally sponsored campaign to encourage Canadian passengers and shippers to patronize their own air lines. Some non-members of A.I.T.A., and even some members of A.I.T.A., extend

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special discounts to their own nationals. It is recommended that special discounts be granted to Canadian citizens by Canadian carriers in order to discourage the equal-fare drain of Canadian business to such gateways as New York-to-Europe and the Caribbean.
Extension consideration must also be given to air cargo. It is well known that the majority of stock in the major Canadian carriers is held by the Canadian railways. Consequently, it is understandable that considerable reserve will necessarily dominate any decision by these air lines to enter actively into the air freight markets to the detriment of their major stockholders. It is respectfully submitted, however, that it is this very prejudice that is allowing foreign air freighters to carry approximately 68 per cent of the Canadian cargo and mail across the north Atlantic.
While considerable air freight is being carried into and across the Canadian Arctic, this service is conducted in its entirety with completely antiquated, obsolete and often dilapidated air freighters of quarter century vintage, while the very best freighter in the world, the swing-tailed CL-44, very desperately awaits adequate orders at its factory at Montreal.
Consideration must be given to the equipment and reequipment of international and external Canadian carriers with the CL-44 with the objective of regenerating the Canadian air freight industry and stimulating the Canadian aircraft industry. The thought is respectfully offered that, while such action might have to be supported by government loans, it might also reduce the annual deficit now being borne by the government, through the capture of this country's rightful share of the world-wide cargo market.
It must be pointed out that while our two major Canadian air lines have been fighting one against the other under what is known as fair trade competition and that the respective mouthpieces of those companies have virtually managed their personal grievances rather than managed their air lines, great consideration should be given to affiliation of our Canadian air carriers.
It is respectfully suggested that an operational and economic affiliation between the major Canadian carriers would be far more beneficial to the Canadian economy than the pool agreement between a Canadian carrier and B.O.A.C. The Canadian carriers cannot afford the luxury of abrasiveness between themselves.
I submit that such Canadian operational and economic affiliation, as compared with Ca-nadian-British affiliation, would so dovetail their routes as to offset seasonal revenue fluctuations with north-south routes against east-west routes. It is felt that only benefit

could come from such an amalgamation not only to the carriers but to the Canadian economy as well.
I also submit that the existence of one-sided foreign service into and through Canadian cities as I have outlined earlier should not be tolerated by our country in that it can only contribute to the stagnation of the Canadian aircraft industry and air line industry and at the same time injure our economy. The government should apply vigorous pressure to equalize those areas where the Canadian industry is not enjoying a fair share of its own market, as I have mentioned earlier.
It is my contention that the major Canadian air lines in conjunction with the Canadian government during the years immediately following world war II were not sufficiently aggressive in carrying the Canadian flag to all parts of the world. I point specifically to K.L.M., S.A.S., Air France, Lufthansa, Sabena and even B.O.A.C. as national flag carriers of countries which were decimated by the war but which have nevertheless subsequently extended their air routes to every corner of the earth. Furthermore, I feel that great effort should be directed toward the acquisition of new routes for the major flag carriers of the Canadian air line industry.
Those responsible for the lagging of this once proud and vigorous industry, which put Canada on the air map at the very beginning of aviation and much earlier than most of our competitors of today, those responsible, as I said, for the present deficit of our two major air lines should take a new look at the possibilities of improving their companies' business through the information given them by the Minister of Transport and the Canadian air lines pilots' association rather than ageing through their personal feud. Thank you, Mr. Chairman.


Douglas Mason Fisher: Mr. Chairman, I want to turn to a topic on which we have already had some information relating to the announcement as to shipbuilding, and I should like to place some questions and points before the minister. In his announcement as released yesterday the-relevant paragraph on which I wish to touch reads as follows:
However, at a very rough estimate I would expect this should cover between 7,000 and 10,000 man years of additional employment in each year for the next few years in our shipyards-
I am not concerned now with the equal amount of employment in other industries to which he referred. I just want to look at his statement and come back to the inability of the minister and his officials to forecast with any accuracy what the program will amount to in terms of expenditure and employment, I wonder whether the minister's officials have

looked at the statistics of the shipbuilding industry as revealed in the d.b.s. publication of that name. If the minister will take the year 1959 he will see that the statistics for that year in the shipbuilding industry show that there were some 14,000 workers, that salaries and wages totalled $62 million and that the gross value of the products turned out by these 14,000 employees was approximately $143 million.
If the minister could make a calculation of between 7,000 and 10,000 jobs, which is a very appealing figure, I cannot understand why he could not take the average wage as revealed in these statistics and arrive at the expenditure. There is a remarkable comparison all the way through. According to my rough division, the average wage or salary in the shipbuilding industry is around $4,100 a year. If you are providing 10,000 jobs this means a wage bill of approximately $41 million. If the wage bill in the shipbuilding industry in the past has been on the average approximately 45 per cent of the total gross value of the product as it comes out of the yards, this would indicate to me that the estimate of value is going to come out of this announcement, when you correlate the manpower figures with these figures, is somewhere between $75 million and $85 million, and 40 per cent of that at least in the next two years until 1963 cuts you back roughly to a subsidy on the capital cost of somewhere between $30 million and $40 million.
That is a sum immense enough and yet within frontiers that are understandable enough that we fail to see why the minister cannot give us something better than the dollar item that is going to appear in the supplementary estimates. If he can calculate this attractive figure of 7,000 to 10,000 jobs a year, it seems to me that he can take the average figures in the shipbuilding industry because, Lord knows, in an industry where you have unions you are not going to have any great changes either up or down in this pattern. There is a remarkable failure to provide us with a calculation and to provide the country with some estimate, like the job estimate, of what this program is going to cost.
I do not think we will quarrel with an estimated cost of between $30 million and $40 million with respect to the subsidization of the capital cost of shipping. We are not going to do that, but we think that for general financial purposes that is the figure that should be revealed to us and that is the kind of appropriation that should be set aside rather than this dollar item which just throws it wide open. I think we deserve an explanation from the minister as to why he
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would not push his estimate of the jobs into an estimate of the actual money that the program is going to cost.
There are two other aspects of the shipbuilding announcement on which we need some explanation, and I say this not in criticism but for understanding. One is the matter of Canadian content and how that is going to be written into the question of capital cost. I would assume that the Canadian maritime commission is going to be the body that will determine the capital cost of these vessels, and I am wondering whether it is going to continue under its previous instructions in relation to Canadian content and the encouragement of the use of Canadian machines and equipment within the ships.
The other point on which we deserve an explanation, since there is going to be nothing statutory in relation to this matter is the effect that the minister contemplates this program will have upon the Canadian Vessel Construction Assistance Act. The hon. member for Laurier mentioned this point. While this act, as most members will recall, is complicated in its application, it simply amounts to . giving accelerated depreciation to firms for building ships in Canada. This is a considerable concession although apparently it has not been enough. We would like some estimate from the minister of what is involved for the Department of Finance or the Department of National Revenue so far as this act is concerned with relation to the new subsidy that is going into this field.
If we could have information on these matters during this debate on the estimates of the minister, we would feel much happier about the efficacy of this announcement. My colleague, the hon. member for Vancouver East, has suggested that he feels this legislation is related to the by-election in Esqui-malt-Saanich. I will go him one further. I think it may be related to a much bigger election foray. I have no particular quarrel with that but if we are going to have this as a preliminary to tub thumping on the hustings I think we should have more information as to the cost and the application and as there is to be no statutory change I think the minister should give it to us now. We would especially like from him at this time the views of the Department of Finance in this particular matter, and I would ask him this question. Is it possible that the whole matter of what this program may cost will be revealed to us by the Minister of Finance when he brings down his budget?
To reiterate one part of my argument, I say that when you look at the d.b.s. statistics on the shipbuilding industry you see a remarkable stability in the correlation between

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employees, wages and gross value of the product. Since the minister has had the temerity to give us the figure of 7,000 to 10,000 jobs and since we have this pattern established in the past, why did he not go further and give us, within the limits of this kind of accuracy, an estimate of what the program is going to cost?


Mr. Macquarrie:: I should like to begin my remarks, brief as they usually are-


Lionel Chevrier: May I rise on a point of order, Mr. Chairman? I do not want to interrupt the hon. member who has just risen, but the former chairman had already recognized the hon. member for Fort William and I thought that was what you were going to do at this moment.


The Acting Chairman (Mr. Morton):: May
I point out that there may have been some confusion. When I came to the chair there was a list in front of me and the hon. member for Vancouver East indicated that the hon. member for Port Arthur was to speak in his place. I thought we were rotating back and forth and therefore the hon. member for Queens would be next and then the hon. member for Fort William.


Heath Nelson Macquarrie: In that case, Mr. Chairman, the hon. member for Fort William will be even more pleased with my reference to brevity than were my colleagues on the Conservative side who showed their glee at that stage.
I should like to say how happy I am to congratulate the Minister of Transport upon his assumption of this important and very difficult portfolio. I have had the pleasure of knowing the minister for a long time, a good deal longer I would hazard than has the hon. member for Port Arthur, and I have admired him, and admired the things for which he stood. I am heartily enthusiastic about the great leadership he is giving in this difficult portfolio which means so much to the area which I represent. I suppose there is no minister in the cabinet who receives more letters from me, and I suppose from many of the maritime members, than does the Minister of Transport. In spite of the multitudinous problems we bring to him, he greets us with the courtesy which has always marked his relationships with other people.
We islanders live near the sea and many of us live oft the products of the sea in an economic way, so transportation is of tremendous importance to us. One of the most important problems in the whole Atlantic area is this question of transportation. One of the drawbacks under which we have laboured for many years has been the inadequacy of transportation so we are, therefore, extremely

interested in the type of minister who is in charge of this department. There are many items in the province of Prince Edward Island alone which are of importance to our economic life and upon which the actions and decisions of the government through this Department of Transport have a major bearing. Not long ago in the city of Charlottetown a new 7,000-foot runway was opened. This has meant a great deal to that community and to our province. Had this runway not been constructed, the very fine industry established by Enamel and Heating Products Limited would not have been possible. This new runway was sought by the city of Charlottetown for many years, and for many years it was refused.
We are pleased, too, with the developments in the marine service which have recently taken place. I thought it was very appropriate that the department's new boat based at Charlottetown, for the Charlottetown marine disrict, should be called the Tupper. Tupper was one of the fathers of confederation who performed so magnificently nearly a hundred years ago when he came to the Charlottetown conference, at which conference it has been said he formed an offensive and defensive alliance with Sir John A. Macdonald as he later came to be. I am pleased, too, that the department has authorized the construction of an additional ferry. I refer to the one which is under construction at Halifax, although little progress has been made on this vessel lately because of labour difficulties.
I was pleased this morning to hear the minister's reference to the extension of new facilities to the docks at Borden. He mentioned an impressive figure of $980,000. Recently we have seen his interest in the field of subsidies as indicated by the grant of a new subsidy to the important service between Prince Edward Island and the north shore of the St. Lawrence. This will be very helpful to our primary producers and will act as a stimulant to our whole economy. We have discovered in the maritimes that the development of the St. Lawrence seaway brings new prospects for trade with the area at the mouth of the St. Lawrence. Prince Edward Island, with its surplus of fine agricultural products, is ideally suited for trade with the north shore ports.
In this connection, I should like to say a word about the new chairman of the maritime commission. He is a man, it seems to me, who understands the situation and has been most co-operative and most perceptive in looking at the needs of the Atlantic community. I should like to mention one more item to complete my complimentary list before I commence making suggestions to the minister. I

want to mention the establishment of direct T.C.A. service to Halifax. With all due respect to other parts of Canada, I always thought it highly unfortunate that so many of our visitors from Europe made their first contact with Canada at Montreal. They then went across Canada and missed seeing the Atlantic provinces. No one could possibly know much about Canada with such a neglectful approach as that. It is possible now to land directly at Halifax and then start the journey in the Atlantic provinces where it should commence.
Mr. Chairman, in a previous session of parliament I used as a paper, one might say, the timetable of the Canadian National Railways. I was not asked to table the document because it is fairly well known. I was impressed then, as I am impressed now though still not favourably, by the comparison between the service provided by the Canadian National between Montreal and Ottawa, a distance of 116.1 miles, and the service provided between the city of Charlottetown and the city of Moncton, a distance of 126.8 miles. You leave Moncton at 2.40 and you arrive at Charlottetown at nine o'clock. When you leave Ottawa at 3.30, you get to Montreal at 5.30 o'clock. The difference is phenomenal. I would ask the minister to use his influence with Canadian National Railways to correct this situation as they seek to gain for themselves a greater share of the traffic. We all know the difficulties under which the railways are operating at this time. One of the keynotes in any program to attract a greater share of the traffic is good service. The kind of service I have mentioned to the capital of Prince Edward Island is not good enough. There is no reason why we should spend so many hours travelling from Moncton to Charlottetown. There may be slower runs in some parts of the country, but I am not familiar with many that would compare so uncomfortably.
We islanders never ask for too much and our suggestions are always moderate and modest, but there is one more item that might be brought to the attention of the minister. In addition to the old, familiar lifeline formed by the car ferry that runs between Tormen-tine and Borden, there has been established a new ferry between Wood Islands and Caribou, the latter point in the constituency of my good friend, the member for Pictou. The traffic increase on this run has been rapid in recent years. We have a very fine snipe appropriately named the Lord Selkirk which handles the traffic well and makes the run in proper time. Automobiles are moved on and off quickly with that new boat. There is also a fairly ancient ship which has a fine record and does its best but it cannot by any means cope with the demands of the
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traffic. Just as soon as possible-and we were talking about shipbuilding a while ago in this committee-I think efforts should be made to bring along either a sister ship to the Lord Selkirk or one as modern, effective and efficient. If that is done, it will look after, for some time, this section between Nova Scotia and Prince Edward Island.
I suppose no minister of transport would ever expect any Prince Edward Island member of parliament to discuss his estimates without making some mention of the ferry service between Borden and Tormentine. Indeed, if one went back over Hansard covering the debates of this house since Prince Edward Island entered confederation in 1873, he would find that was the one thread of consistency. Indeed, it is said that no Prince Edward Island politician ever really gets under way unless he has prepared and delivered one speech on transportation across the straits. If he has ever had any difficulty in getting across there, as have many islanders, he will utter that speech with all the more fervour and sincerity.
This does not come into the category of a request of the government. This comes in the category of consideration of the proper fulfilment of a confederation pledge. Ferry service is always on the minds of islanders because we regard this service-and we cannot help doing so-as an economic lifeline. This year the province of Prince Edward Island has endured the worst winter since 1905. I suppose this fact proves the old adage that the rain falls on the just and on the unjust.


An hon. Member:: And snow.


Heath Nelson Macquarrie: There have been many holdups in connection with the crossing of the ferries. Those in charge of the ships have done very well. But when you find the depth, width, extent and continuity of ice that there has been in the Northumberand strait in the last number of months-it seems like six months-the situation can be understood. Of course these matters are beyond the control of the Minister of Transport himself. Nevertheless it has brought into sharper focus than ever the problem with respect to this important ferry. I mentioned earlier the fact that an additional boat is being built at Halifax. This boat will certainly be needed. I would suggest that akin to that but separate from it is the very important consideration of a replacement of at least one of the existing boats. The secondary ferry the Prince Edward Island is a boat that is now older than is the junior member for Queens. When Robert Borden came to Charlottetown in 1911 -I was not there but I acquired this information through going back through the history-he said to the people of the island, "You

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have been wanting a car ferry. Elect me as prime minister of Canada and you will get one". They did and he did. However, the same boat is still there doing valiant service. As much as we love Sir Robert Borden in Prince Edward Island and as much as we prize that old ship-it certainly was a credit to the builders-we would think that an urgent move to replace the Prince Edward Island would be very much in order.
The estimates of the Minister of Transport are before us, not those of the Minister of Public Works. If this latter were the ease, I would be discussing the causeway. However, it is difficult to dissociate completely the two subjects. If the causeway should be proven not feasible, it would be up to the Minister of Transport, as the dominion minister responsible for overseeing this confederation pledge, to give us continuous and efficient communication with the mainland and it would be his responsibility to start a process whereby we would have the most up-to-date ferry service possible.


John Whitney Pickersgill: Will the hon. gentleman permit a question?


Heath Nelson Macquarrie: I expect that it is loaded, but I will be delighted.


John Whitney Pickersgill: I was going to ask the hon.
gentleman whether that last paragraph was a funeral oration on the causeway?


Heath Nelson Macquarrie: A colleague observes that it was loaded. I think it is really far too soon for funeral orations.


John Whitney Pickersgill: Just badly bruised.


Heath Nelson Macquarrie: In fact, we in Prince Edward Island are hoping that the kind of orations we shall be making before very long will be those of great jubilation. Perhaps I had better not pursue the subject of the causeway at this time but leave discussion of it until we reach the estimates of the Minister of Public Works at which time I am sure the hon. member for Bonavista-Twillingate and I will discuss this subject to the nth degree. I know that we shall both be happy in our presentations, if nothing else. The arguments in favour of the causeway are very strong on the economic side because the maintenance of the service by boats has been an extremely expensive matter. The total cost of the capital spent on port Tormentine now amounts to approximately $25 million. The operating deficit since 1933 alone-and the minister referred to this in his opening statement-reaches the figure of $30 million. Therefore when the time comes to discuss the causeway in economic terms there will be 
some very good ammunition which I know the hon. member for Bonavista-Twillingate will support me in using, when the time comes.


John Whitney Pickersgill: That is right.


George Clyde Nowlan: But not for the same reasons.


Heath Nelson Macquarrie: If, however, the causeway is judged feasible, and if it is undertaken very soon indeed, it cannot be completed before the Prince Edward Island boat aforesaid is too old for the service. Therefore, the minister will still be faced with the situation of providing yet another boat. 1 started off by saying that we are modest people, but I see no other solution to the situation except the provision of yet another boat.
No doubt the experts in the Department of Transport have looked at the figures with reference to travel by people from other parts of Canada, from the United States and indeed from other continents to Prince Edward Island. Back in 1943 fewer than 10,000 automobiles were carried across the strait. In 1947 the figure rose to 27,000 and in 1960 the figure was 171,500. I need hardly say that this is a growing service. I need hardly underscore the need for providing increased facilities. Last summer in the midst of the demand, I should say through you, Mr. Chairman, to the minister, the most elaborate facilities were provided in the trans-strait service. More boats were making more trips than ever before, and I am happy to say that the service was enthusiastically applauded by those who undertook it. As I mentioned with respect to the estimates of another department not so long ago, we had more tourists last year than ever before and it is likely their numbers will continue to increase, because once people come to Prince Edward Island they will return and tell their friends what a wonderful place it is.
We are counting on the Minister of Transport to see that our service will be so good that even if-God forbid-we have another winter as tough as this one, or as tough as the winter of '05 which I do not personally remember, we shall be able to get through the wind, ice, sleet and snow, and that he, like Robert Borden will update the transportation facilities and give us the finest and best type of transportation to the mainland we have ever had.
I wish I had time to say more, but I have given my usual undertaking to be brief. I should only say this. At times I have been a little disturbed that, perhaps, as a result of events which were taking place in Canada, if the party to which I belong should make an appeal to the people it might suffer the loss of one or two seats. However, having heard today the reactions of certain hon. gentlemen

opposite to the minister's splendid announcement regarding shipbuilding, recalling their reaction to the recent announcement made by the Minister of Agriculture concerning our sales of wheat to China, I have assured myself that even those limited fears were utterly groundless.


Mr. Badanai:: I am pleased to rise to take part in this debate, and at the outset I wish to express my appreciation of the capable performance of the Minister of Transport since his appointment. The shipping policy which the hon. gentleman announced on Friday is without a doubt the best move that this government could have made toward the creation of job opportunities in the shipbuilding industries. I have personally advocated such a policy ever since my election to parliament in 1958, and I should like to quote a few paragraphs from a speech I delivered in this house on June 27, 1960, as reported at page 5451 of Hansard.
A tew moments ago I was trying to point out the importance of having a Canadian merchant marine. The Canadian great lakes shipping industry could provide the foundation upon which to build an international commercial fleet worthy of a major trading nation. During the war. Canada built training and fighting ships. Some of these were built at the Port Arthur shipbuilding yard which at present is not doing much. However, this yard has the experience in both management and personnel to build ships for any purpose. It is regrettable that many ships of Canadian registry were built in foreign shipyards, and that many more are being built abroad. The federal government could bolster dwindling employment in Canadian shipyards by encouraging shipbuilding in every possible way. We are subsidizing wheat growers, hog producers, egg producers, coal mines, gold mines, and railways; why not give a little help to the shipbuilding industry? Why not reestablish the Canadian merchant marine which was allowed to disappear so ingloriously a couple of years ago? Whatever the circumstances surrounding the disposal of those ships, the action taken at that time has not added to the stature of our nation. If a mistake was made-and I submit that the sale of those eight ships to Cuba was a mistake-let us admit it and renew our efforts with the vigour which is the characteristic of everything Canadian.
I realize that enthusiasm for the idea of a subsidized merchant fleet would probably be challenged on the ground that it would result in additional taxes, but I submit that the benefits resulting from a policy of assistance to shipbuilding and the development of a merchant fleet would more than offset the cost of such a program.
Not long ago I saw a report in a newspaper to the effect that Greece intends to spend more than $10 million to build a fleet of six freighters for the great lakes-Mediterranean trade. This means that the Hellenic lines will be entering the St Lawrence seaway for the first time. These ships will bear cargoes to and from such ports as Naples, Istanbul and Beirut, and they are expected to be put into service by the summer of 1961.
Where will these freighters be built? Not in Canada. Our exports and imports will be carried through the great lakes by vessels of other countries.
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Canada builds fewer ships than Finland. Our deep-sea fleet, which ten years ago numbered some 200 vessels, is now less than a dozen and these are mainly oil tankers sailing between the United States and Canadian ports.
Our shores front on three great oceans, the Atlantic, the Pacific and the Arctic. I especially want to underline the reference to the Arctic ocean. If the Prime Minister's vision ever comes to fruition and we witness an increased development of the north the Arctic ocean will become a great sea lane. In addition we have the great lakes system which in itself could be classed as another ocean.
Despite all this other nations build ships for us. Other nations operate ships for us. All this is true, because we say we cannot possibly afford to build and operate ships ourselves. Then we wonder why we have so many unemployed. The time has surely come to sound a clarion call for the reconstruction and expansion of a national merchant marine. I commend the suggestion to the minister and to the government. They have the power to initiate a movement to bring back our merchant marine and establish our nation in the forefront of seafaring nations of the world. We are the third largest trading nation of the world but so far as shipping is concerned our position is not much superior to that of Switzerland. I sincerely trust that the government will take action as quickly as possible.
I feel strongly about this, Mr. Chairman, because as Canadians we are often prone to boast of our national resources. We boast about what we have under the ground and above it but we say little about the exploitation of what we have in our own country for the benefit of Canadians and for the benefit of those who will come to our shores in the years ahead. I commend to the government consideration of this great challenge that faces us from coast to coast.
I know that objections will be raised. Some will say that this is all nonsense and that it would cost millions of dollars. It probably would represent a large expenditure but it would be worth it. It would be a Canadian enterprise of which we would be proud and in years to come we could look back upon it as something worth while. Let this 24th parliament take action.
That is the end of the quotation from my speech.
At the Liberal rally held in Ottawa last January, at the meeting of the committee on transport I moved a resolution which met with the approval of that body. I quote that resolution because I wish to have it on the record:
Whereas the greater proportion of world's commerce is still being carried by sea going ships, and
Whereas Canada is the world's third trading nation, but no ships flying the red ensign are ever seen on the sea lanes of the world, and
Whereas ten years ago our deep-sea fleet numbered 200 vessels, now being down to fewer than a dozen, namely oil tankers, and
Whereas our shipbuilding industry is now practically at a standstill with thousands of skilled workers unemployed,
Therefore, be it resolved that a Canadian merchant marine be established, and that a formula of assistance to Canadian shipyards be considered, to stimulate shipbuilding in Canada.
It is only natural, therefore, Mr. Chairman, that I should be pleased with the announcement made by the minister to the effect that Canadian shipowners will be able to obtain
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new vessels at reasonable and competitive prices instead of having them built abroad because of lower construction costs. I assume that this will be accomplished with a formula of subsidies which might bring about the gradual creation of a Canadian merchant marine and the beginning of a deep-sea fleet.
Perhaps the government could give some consideration to the establishment of a Canadian coast guard, something which the advent of the St. Lawrence seaway has made not only desirable but necessary. Of course the coasts of the great lakes are not the oniy coasts that need guarding; both the Atlantic and Pacific coasts require patrolling. Coastguard vessels are badly needed and I hope that in this new Canadian marine policy will be included a provision for a Canadian coastguard.
On April 18, 1961 I asked the minister whether he was in a position to indicate to the house if the government intended to bring in legislation which would eliminate unfair competition from commonwealth registered ships which are now permitted to carry goods between Canadian ports. The reply is found in Hansard for that date at page 3747 and reads as follows:
Mr. Speaker, I am looking into the matter at the present time. Further examination by my department is necessary. As I indicated previously, I expect to have something to say about shipping policy generally before this session ends.
The announcement has been made that consideration has been given to these problems affecting the great lakes areas due to the commonwealth shipping agreement under which vessels of commonwealth registry are enabled to engage in domestic coastal trade. The government is evidently conscious of the unfair competition of these ships of commonwealth registry, which is adversely affecting Canadian ships. All in all, the announcement should be welcomed by most Canadians.
I should also like to say a word about the seaway which is now beginning its third year of operations. Ocean-going vessels are now seen on the seaway from Montreal to the Canadian lakehead, and with the enlargement of the Welland canal, the effects are more clearly seen, and ever increasing traffic can be safely predicted.
As an example, the total overseas imports into both Canada and the United States, through the St. Lawrence section of the seaway increased 400 per cent since 1958; a gain from 500,000 tons to 2.1 million tons in 1960. Seaway borne exports expanded even more in 1960, amounting to 5.3 million tons, nearly 10 times the 1958 figure.

Overseas exports of wheat carried directly from the lakehead ports of Fort William and Port Arthur which, before the opening of the seaway, was only a small amount, now accounts for nearly 5 per cent of Canada's total wheat exports. It has been reported that 750 ships will be required to carry the wheat which was sold recently to China. I wonder whether it would not be as economical to move some of this wheat through the lakehead ports and around the Panama canal. Of course, this may not be a practical idea, but it could save on the cost of shipment by rail from Manitoba and Saskatchewan to the Pacific coast.
With all its growing pains and difficulties encountered, especially during the first two years of operation, we can safely say that this gigantic enterprise has certainly proved its worth, and that it will be, and is, a great monument to those who conceived the idea, and those who made the decisions to proceed with the project.
On March 2 of this year the minister addressed the annual meeting of the Fort William chamber of commerce, and he devoted a major portion of his speech to air transport.
There is no question that the airport which serves Fort William, Port Arthur and district, has developed to the point where it requires extensive expansion if it is to meet the continuing increase in demand for air transportation, which has indeed become an almost integral part of our business life today.
The minister at one point in his address said that an estimated $110,000 will be spent this year toward improvement of the airport, and also that plans have been made for an extension of the air terminal building, to triple its capacity to handle travellers. This, together with several other improvements will bring the total expenditures for these expansions and renovations to $650,000.
He also made the statement, with which we cannot quarrel, that, where airport accommodation is concerned, the department is endeavouring to concentrate its plans on needs for the next ten years. This is a sensible approach to the question of meeting the needs of that growing army of air travellers which make Mr. R. G. McGregor's heart beat with warm anticipation and pleasure.
The people of Fort William were pleased to hear the minister paint such a glowing picture of progress for the future of the lake-head in terms of air and sea transportation, and I hope that he will tell us how soon we may expect action on this program of expansion at the lakehead airport.
The advent of fast jet airliners has not improved Trans-Canada Air Lines service to the lakehead. These jets do not stop there, with the result that we now only have two two-way

flights connecting the lakehead with Toronto and Ottawa. I wonder whether there could be some way of improving this service.
And now I wish to deal briefly with perhaps the greatest medium of transportation which made confederation possible in 1867, namely our railways. We can go back to our first prime ministers, Sir John A. Macdonald, Scottish born, and the French Canadian, Sir Wilfrid Laurier. These two great prime ministers were the embodiment of what was the best of the two great historical parties, the parties which will continue to give Canada good government, we hope, and a government of free enterprise without distinction of class. Both these prime ministers strongly supported the first trans-continental railway system as being the only link binding together all parts of Canada and thus forming this young, vigorous nation. They stood shoulder to shoulder in advocating low cost transportation to promote the spread of our population and the development of our resources.
Here I wish to quote Sir Wilfrid Laurier speaking in parliament in support of the railways:
To provide immediate means whereby the products of the new settlers may find an exit to the ocean at the least possible cost and whereby likewise a market may be found in our new regions for those who toil in the forests, in the mines and in the shops of the older provinces. Such is our duty, it is immediate and imperative. Heaven grant that it be not already too late.
At that time a policy was implemented under which shippers were charged on the basis of their ability to pay-in other words, low cost freight rates-and here subsidization was born. Succeeding governments have been more or less, and with very little variation, carrying on a method of subsidization to meet increasing operating costs, the latest being the $97 million for 1961, of which the Canadian National Railways will receive $57 million and a fraction and the Canadian Pacific Railway $39 million and a fraction. According to the recommendation of the royal commission on transportation, the annual amount is to be scaled down until at the end of five years the total will be reduced to $47 million for the two railways. These annual subsidies are the cause of considerable alarm and criticism against the two great trans-continental systems. However, it should not be forgotten that the Canadian National Railways, for example, is made up of a group of private railroads which went bankrupt many years ago. It has been an instrument of the government in opening up the country in which it is still being used.
In dealing with the first report of the royal commission I wish to point out that 90205-6-303i
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the commission substantially agrees with the submission of the lakehead cities to the commission to the effect that horizontal increases on a percentage basis cause unfair distribution of the freight rate burden; also, that freight rates, including increases which the carriers cannot collect, are unrealistic and impose an unfair burden on the so-called "captive traffic" forced to use the rails and to assume the maximum cost; also that certain losses in the passenger service which fares cannot cover should not be a charge on the freight rate structure. While subsidies, which of course nobody likes, are seemingly necessary as the only means of helping the present situation, the carriers should use every possible means to reduce the need for this assistance.
On page 34 of the commission report I find the following:
All industries and regions feel that their particular transportation problems are great and important. It is too much to ask from a rail user in Newfoundland, at the lakehead, or in the Okanagan valley that he agree that the difficulties he has brought before the commission are of a lesser significance than, for instance, the problems of the maritime provinces. How true; and to get the full benefit of this statement one must know how highly the maritimes have rated the importance of the maritimes, with some justification, all down through the years.
This quotation seems to bear out our contention that northwestern Ontario has been penalized with a discriminatory set of freight rates which have militated against a greater expansion of trade and industry at the lake-head.
These are the few suggestions I have presented to the minister here this afternoon. I trust they will be given some consideration. As a matter of fact, they deserve deep study. They require some expert opinion. They require the experts of the department to go into them fully and to see whether or not any of them have merit. I am of the belief that they have merit, and that it will help Canada greatly if the suggestions are implemented.
Before the end of the discussions of these estimates I hope the minister will be able to give us the answers to many of the questions which have been asked and that he will be in a position to come forward with something which we shall all be pleased to hear.


Mr. Nielsen:: Mr. Chairman, I should like to take a few moments of the committee's time to discuss the minister's estimates from the point of view of the development of the north country. Before passing to the main theme of my remarks, which will be criticism of the present policy of the issuance of class C and B licences in air transportation in the north, I should like to draw the

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minister's attention to a number of problems that come under the jurisdiction of his department in the Yukon and Northwest Territories. Many of those have been solved in the last two or three years, and many point up very dramatically the difference between the activities of the department in the northern part of our country now as compared with the lack of such activities in the past.
Before informing the members of the committee on those points, I should like to take issue with one of the remarks of the hon. member who has just taken his seat when he described the support which Sir Wilfrid Laurier gave to the building of the railroad at that time. He forgets, I am sure, the expression coined by the Liberal opponents of the transcontinental railroad of that day about building a railroad from wigwam to wigwam. It seems to me that a similar expression was used by their present leader in recent years. I cannot refrain from reverting to the discussion of the other day with the Leader of the Opposition about his statement concerning the building of roads from igloo to igloo.
In the last two years the department has been responsible for a great expansion of communications generally in the north. In the Yukon and Northwest Territories telephone facilities have been installed where they were not available before. A new line has been constructed from Whitehorse through to Mayo, Dawson City and Elsa as well as new lines in the Northwest Territories. This has made it possible for the Canadian Broadcasting Corporation to provide services to this part of the country where none existed before apart from one or two voluntarily operated stations in the larger communities.
The department has been improving the airport and navigational facilities at the larger airports in the north in a very commendable fashion. The activities of the department have resulted generally in a raising of the standards of air transport in the north and this in turn has provided a certain stimulus to travel to these northern regions. However, there is still much to be done. I might draw the minister's attention to the need for extending the runway at Dawson City. With the Klondike festival targeted for 1962, it is very necessary that this airport be extended to the point where it is able to handle four-engine aircraft. There will be a larger number of tourists who will wish to travel to Dawson City for this event and it will be found that a good deal of this traffic will not be realized unless four-engine aircraft are provided with facilities at Dawson City.
Mayo airport is also due for enlargement to handle four-engine aircraft. This airport is right in the heart of a highly mineralized

area. United Keno Hill mine operating in this area now provides with its one silver mine almost as much in dollar revenue to the Canadian economy as the 20 silver mines of British Columbia and the 12 silver mines of Ontario. Therefore improved facilities at this point are very essential.
I would also draw the minister's attention to the departmental plans concerning the improvement of facilities at the Whitehorse airport. I understand that plans exist for the conversion of one of the existing hangars at the Whitehorse airport in order to provide larger terminal facilities. With the traffic in and out of Whitehorse, which is the main centre on what was known at one time as the northwest stageing route, the facilities required here are not so extensive that the minister could not, I am sure, obtain co-operation from the other government departments requiring space therein.
There is another point I should like to draw to the minister's attention, the maintenance of emergency strips in the north generally. Emergency air strips are very essential in facilitating air traffic and air safety in the north and in my belief much more can be done to improve these very necessary facilities.
One point about which I am particularly concerned has to do with the large turnover in meteorological workers in the northern areas although I believe the problem is national. In these scientific workers we have some of the most highly skilled individuals on the government payroll and yet they are one of the worst paid groups of scientists. These people must have university educations before they undertake their duties and unless much more attention is given to establishing a proper wage structure for meteorologists in the service of the Department of Transport I believe the minister and the department will continue to be faced with difficulties in replacing a large number of these employees who seek employment in the United States and elsewhere where wages are much more attractive.
Specifically, Mr. Chairman, I want to deal with the government's policy in connection with the granting of licences for the operation of non-scheduled commercial air services. In December of 1959 the then minister, who is now Minister of Trade and Commerce, announced that a more liberal policy was being implemented with regard to applications for licences for non-scheduled commercial air services involving small light aircraft and helicopters. It had been decided that, except in unusual circumstances, applications for air services in these categories would not be refused on the grounds of protection of existing operators or restriction of

competition but rather would be made available on a liberal basis in accordance with the spirit of free enterprise.
Prior to the announcement of that policy the principle upon which air transport licences had been granted to non-scheduled commercial air services was based on the need for protecting charter operators out of bases in all areas of Canada so that a healthy and high quality growth in the service concerned would be encouraged. I am not aware how the new policy is working out in the rest of Canada but I can assure the minister it is not having the desired effect in the north. The air transport board now, in exercising its licensing function under the Aeronautics Act, is granting a larger number of class C and class B licences. If the policy is continued I believe that the previous high standard of services provided by these charter operators in the north is going to deteriorate substantially particularly with regard to the operation of helicopters. In January of 1960 the air industries and transport association of Canada submitted a brief to the Prime Minister wherein they set forth their views, and I wish to quote briefly from their submission as follows:
Notwithstanding our submission the Minister of Transport, on December 18, announced the policy of decontrolling non-scheduled air services as defined by the air transport board as being in group "B".
It is therefore our opinion in the light of our earlier submission that we would be remiss in not advising you of the very serious implications of this policy.
While Canada can be justly proud in having recently celebrated its fiftieth anniversary of powered flight, it was not until the thirties that aviation started to show its potential importance to the development of the north. From that period to the year 1945 air carriers operated without any regulatory control for the benefit of the public necessity, convenience or interest. It is a well known fact that this lack of control had a devastating effect on the growth of this industry ...
The potential is only so great and unlimited competition is not the answer.
I should like now to draw the minister's attention to the operations of Eldorado Aviation Limited, a subsidiary of Eldorado Mining and Refining Limited, a crown corporation, and also since it comes under the jurisdiction of the department, the operations of Northern Transportation Company Limited, a water carrier on the Mackenzie river system. In my view, the services of these two subsidiaries have outlived their usefulness, and there should not be a continuation of government subsidies to these organizations in direct competition with the private carriers in the north. Pacific Western Airlines, who now operate services up and down the Mackenzie system from Edmonton and other northern provincial points, is in trouble because of declining load factor which could easily be improved by
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the amount of traffic carried by Eldorado Aviation Limited. P.W.A. is operating a high quality service in the northern regions and is operating on a high standard of safety. This, of course, will continue. There is no doubt, however, that P.W.A. will have to diminish the service it is now supplying to these areas if the operations of Eldorado Aviation Limited are allowed to continue to eat into the potential traffic. For instance, over 8,000 passengers were carried by this crown subsidized corporation during 1960.
Two of the conclusions reached by the air industries and transport association are, one, that the situation will not only stifle but submerge a young and growing industry-that is what it is-which has been one of the major factors in the opening up of Canada's north. Second, the continued implementation of such a liberal policy will result in a situation which could have a vital bearing on the safety of travel and, more specifically, to Canada's north with the obvious resultant expense to search and rescue.
The air carrier, Mr. Chairman, has been for some years basically the prime instrument in the development of the north. The system under which the operator has been able to produce and exist is based on a minimum of protection. In return, he establishes permanent facilities and, as such, becomes a permanent part of the community he serves. It should be pointed out these facilities are provided at the expense of the operators. The Air Industries and Transport Association of Canada is not the only group that is concerned with air development in northern Canada. There are several other organizations, but I do not wish to take up the time of the committee by quoting extensively from correspondence I have had with these other associations.
I should like to put it to the minister that there are a number of ways in which the development of air services in northern areas could be helped. I am constrained to say, however, that they amount to a subsidy of some sort. I am sure that in the transportation field, however, subsidies are not a strange animal to the government. I should like to enumerate some of these ways. A direct operating subsidy could be given to the air lines involved in these northern regions. Second, a fuel rebate could be granted on fuel boarded in the north which would equate the cost of fuel to these northern operators with the cost of fuel in urban areas. Fuel cost is a major air line operating expense, and the saving to the air lines could be passed on to the customers. The exploration of other benefits could probably reveal other

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ways of equating northern operating costs with those of the more economical intercity services.
Another major air line expense is the cost of equipment. The government could underwrite part of the cost of the airplanes in order to make it easier for the air lines to equip or to re-equip. This form of subsidy is used in connection with the civil air reserve plan in the United States. The policy there is that it is in the national interest to further increase the number of individual aircraft available to handle any national emergency. The aircraft purchased by air lines for profit will not provide this capacity because profit margins require high load factors and, therefore, the government will help with the equipment bill if the result provides more aircraft than would have been purchased otherwise.
There are, however, some restrictions imposed. The air lines must agree to release part of their fleet to the nation when required and must buy a type of aircraft which can be used as military transport. I think Canada has taken a most dramatic lead here with the development of the de Havilland Caribou. A plan similar to that which has been devised in the United States would certainly help all aviation in this country.
Another factor in considering this problem is the used aircraft market. This is no longer good and has not been for some time because of the rapid technological developments in this field. Depreciation will become a problem for air lines, and it is a problem for some of the smaller operators now. The government could maintain a market for used aircraft at good prices, thereby encouraging their replacement. This would benefit the country as well as the air lines, in that it would help keep the aircraft modern. The new aircraft are better in every way, including economy of operation.
Another field to which I have devoted some thought is the operation of the R.C.A.F. transport command. I think this could be redefined. The R.C.A.F. now does a lot of northern transport flying which could be handled by commercial operators. Many people believe that the R.C.A.F. should be limited in transport operations to operational support transport and that air lines should be integrated into the defence picture in a way similar to the merchant marine. This is an involved suggestion, but a plan which offers civilians peacetime use from defence expenditures is certainly worth considering. It can be pointed out, too, that an expanded civil air fleet would provide some jobs for the many fine pilots trained by the R.C.A.F. who now, on discharge, find it almost impossible to practise their chosen vocation.

The government could benefit northern air transport greatly if some money were spent on facilities. Northern airports, navigation aids, alternate airports, instrument approach facilities, and night flying facilities need a great deal of improvement. This is true, in spite of the rapid strides the government has been making in improving these facilities. At some stages the air lines own and operate essential equipment themselves. This imposes an additional and unnecessary cost on their operations, which cost is reflected in their service. A lot of present day flying in the north is contract supply to D.E.W. line bases. I think it could be considered that these bases will remain in operation for some time and that a permanent air transport service is warranted. The present system of annual contracts does not encourage the kind of air line growth which has any real benefit to the country. I refer to the fact that these supply contracts are renegotiated annually.
I am not suggesting for a moment that the government, through T.C.A. or any other government service, should go into the north and compete with air lines now operating in the north. On the few northern runs these private companies have left, there is hardly enough to support the service they now provide. As a matter of fact P.W.A. in the Mackenzie system has not enough traffic to support the service they are now operating.
As I have already pointed out, air transport is like all other transportation. It is a matter that is vital to the country, affecting its growth, its prosperity and its defence. The government should appreciate these factors and give careful attention to the development of policies which will be consistent therewith. If we have earned any special criticism in so far as our air line policy is concerned, I think it is because it has not been definitive enough; whereas in the past administration there was absolutely no really definitive policy in so far as the development of air line transport in this country is concerned or, if there was a policy, it was a policy of reaction, laissez-faire, or "We will do something when something appears on the horizon". From this we have advanced at least to the point where we can discern certain definitive avenues in our air transport policies. But these are not yet cohesive and they still must be evolved into a plan which will insure the realization of the factors of growth, prosperity and defence, as I have pointed out. The government as yet has not involved itself deeply in this problem, in my view, and I feel that the time is far past when we should have done so. These are the remarks I have to make concerning the development of air transport particularly relating to the north and I confide them to the minister in the

hope that they will, to use a phrase that I have learned from both sides of the chamber, get the consideration they deserve.


Mr. McMillan:: In connection with the
minister's announcement, Mr. Chairman, may I say that I am very much in favour of helping our shipbuilding industry. I also hope that our Canadian trade between Canadian ports will be carried by Canadian ships and will thus increase employment. I do not believe this matter of helping the shipbuilding industry should be handled by way of a vote of $1 in the estimates. I am in favour of helping the industry in a proper manner. The government should give us an estimate and we could vote it. I think the government should be able to give that estimate and if they did not have enough money, they could come back for more and we would gladly vote it here in this chamber. I do not think any hon. member would be opposed to it. This whole thing seems to be trickery on the part of the government. The Minister of Finance will show $1 as an expenditure, and although expenditures can go up to $40 million, $50 million or even $100 million and they will just show as $1. At the present time we know that his books are away out of balance and that he wants to avoid putting extra expenditures in his budget. He is just going to put in $1 and it will not even stand that.


Mr. Bsnidickson:: Pre-election procedure.


John Whitney Pickersgill: That is right.


William Hector McMillan: To me this is taking away the rights of parliament, to show just a $1 expenditure and be able to go ahead and spend millions. Where are the rights of parliament? What about the bill of rights? We have not so many rights left. If this was a bill, we could refer it to the Minister of Justice and he would pass his opinion on it. However, it is not a bill, and we therefore cannot get his opinion on whether or not this might come within the bill of rights or whether we are leaving with parliament the right to vote money.
Business of the House
I want to deal with something particular, Mr. Chairman. It has to do with a matter in my own area. Since it will probably take me 10 minutes to deal with it and as it is nearly six o'clock now, may I call it six o'clock.
Progress reported.



BUSINESS OF THE HOUSE

John Whitney Pickersgill: May I ask the acting house leader whether he will be good enough to put on Hansard again, so that it will be there for convenient reference, as much of the government's plans for next week as he can give us now?


George Clyde Nowlan: The government's plans for the first two days of next week are set forth on page 4752 of Hansard of May 12. As far as I know at the moment, there are no changes to be proposed in any of those matters which we set forth for Monday and Tuesday. On Wednesday, we are going back into the estimates and, rather than taking up those of the Department of Fisheries, as I intimated last night was the possibility, I think we will proceed with the estimates of the Department of Transport. Following that, we will probably conclude consideration of the estimates of the Department of Fisheries which were under consideration yesterday.


John Whitney Pickersgill: The minister, of course, appreciates the fact that on Wednesday we will not have more than about half an hour. Is that the program also for Thursday?


George Clyde Nowlan: That will be the program. We will carry on with the Department of Transport on Wednesday and Thursday and until concluded. If my colleague who is going to be sitting here on Monday happens to be held up until late Tuesday with transport legislation, he will go on on Wednesday and Thursday and until such time as his estimates are concluded. Then we will take up fisheries, followed by justice or mines and technical surveys, I am not sure which.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to special order.
[Stage Direction]
Question

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

Mr. Regier: 1.	In the fiscal year ended March 31, 1960, what were the total expenditures of the government of Canada in the interest of civil defence?
2.	What was the estimated cost of expenditures for this period on the part of the provincial governments?
3.	What is the estimated cost of expenditures in this regard during the same period on the part of municipal governments?
4.	What is the estimated total cost of expenditures by all levels of government for the fiscal period mentioned above?
5.	What consideration has been given by the government to the project of changing the name from "civil defence" to "civil disaster"?
6.	Has the government any record of the number of homes that have built basement shelters? If so, how many have been built?
7.	What recommendation in this regard has the government to make to people living in apartments in concentrated urban areas?
8.	How much money has already been spent on the proposed project of moving the seat of effective government out of Ottawa in case of a nuclear war?
9.	Who has been designated to decide as to who will be eligible for priority in the proposed movement of government authority out of Ottawa in case of a nuclear war?
10.	Who is on the priority list referred to in the above question?
Answer by: Right Hon. J. G. Diefenbaker
(Prime Minister):
1.	Apart from army expenditure on survival operations and communications, where the expenditures in aid of civil defence and continuity of government cannot be accurately segregated, the total expenditures on civil defence measures and other preparations for civilian measures to be taken in wartime were $4,635,832.
2.	$574,903, excluding those reimbursed by federal grants.
3.	$243,728, excluding those reimbursed by federal grants.
4.	$5,454,463, including both civil defence and other preparations for civilian measures in wartime, in so far as these are segregated in accounts. In some cases work is done for these purposes but paid for out of appropriations for the general purposes of the department concerned and is not separated in accounts.
5.	The government has already been using the term "emergency measures" to cover both civil defence and peacetime disasters, as well as preparations for the continuity of government in wartime.
6.	No.
7.	The government is preparing for publication material regarding protection against radioactive fall-out for people living in apartments. In addition, surveys are being conducted this year to investigate the protection afforded by existing larger buildings in urban areas and means of improving it.
8.	It is not considered in the public interest to publish detailed information relating to all the various sites from which elements of the government would operate outside of Ottawa in wartime.
9 and 10. Various responsibilities for wartime operations have been allocated by the government and by individual ministers, as reported to parliament from time to time. Other responsibilities may be expected to be assigned from time to time in future. The ministers responsible for these various departments and agencies in peacetime, and their deputies, designate the personnel who will be trained for wartime duties and who will take them on, if they can, should war occur. It may be necessary that various individuals be designated as alternatives, or in rotation if, as is now expected, special precautions become necessary because of the very short warning time that may be counted upon when missiles become the main threat to Ottawa. The lists of those being instructed to assume various duties in the event of war are still being compiled and revised. It is considered that publication of the names of these individuals would serve no useful purpose at the present time.
It should be added that those assigned to emergency duties will not be assured of safety, as the emergency facilities cannot provide protection against a nearby nuclear detonation. Protection against fall-out is being provided to enable work to be carried on in these locations. Persons assigned to emergency war duties will not be free to look after the safety of their families, as others will be doing, and will have to make other arrangements in respect of their dependents.

Monday, May 15, 1961