1961-09-28

Hon. D. S. Harkness (Minister of National Defence):: By leave of the house, may I be permitted to refer to the presence in the gallery of the Nigerian minister of defence and deputy prime minister Alhji, the Hon. Mohammadu Ribadu. Mr. Ribadu has been visiting Canada during the last few days, and I and other members of the government have had the opportunity and pleasure of meeting this distinguished representative of a commonwealth country which has only recently achieved independence.
Mr. Ribadu has given many years of service to the welfare of the people of Nigeria. Following his appointment in 1951 as northern region minister, he joined the federal government in 1954, being in turn minister of lands, mines and power; minister of Lagos affairs and, since independence, minister of defence. This is his first visit to Canada since assuming his important office, and on behalf of all hon. members I should like to extend him a warm welcome.


Hon. Paul Martin (Essex East):: Mr. Speaker, the acting leader of this party has suggested that in the absence of the hon. member for Trinity 1 might join with the Minister of National Defence in extending a sincere welcome to the minister of national defence from Nigeria. The words of welcome which the minister has used are words with which we would want strongly to be associated.
This is not the first visit that we have had in recent months from a distinguished member of the government of Nigeria. This, I believe, is the second occasion within the course of the last few months when we have been honoured with a visit to this country by a member of the government of that country. This affords us an opportunity to say to this representative of Nigeria how honoured we are to have him in our House of Commons and how pleased we are to be joined with Nigeria in the pursuit of great objectives, which we sincerely trust will lead to peace among the nations.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, I should like to be associated with the welcome expressed to our distinguished international guest who sits in the gallery. I think Nigeria personifies the hope of the commonwealth for the future. We are confident that Nigeria will play an important role in the days ahead in strengthening the commonwealth and assisting like nations of the world to strengthen freedom and peace.



NUCLEAR ENERGY


Hon. J. W. Monteith (Minister of National Health and Welfare):: Mr. Speaker, I have some further figures on fall-out that I would like to have tabled, with the permission of the house. These cover the period September 11-17 and1 represent final results for that week.
It will be noted that there are differences as compared with the preliminary figures I gave the house on Wednesday, September 20. Such differences are to be expected and result from the fact that a first reading is merely indicative of the general range of levels whereas subsequent readings over a period of a week or so afford a more accurate result.
As to the significance for health of these latest readings, I would simply repeat what I have said in previous statements to the house. In our judgment the levels so far recorded do not represent an immediate threat to health. At the same time, we feel that if very high levels were maintained over a long period of time, a threat to health might very well result.


Paul Joseph James Martin: Mr. Speaker, we thank the minister for his further report. We hope the Secretary of State for External Affairs has been able to transmit these readings to the United Nations, and trust that as a result of such transmittal some progress will be made in the effort to arrive at a test ban on nuclear weapons.


Mr. Speaker:: Has the minister permission to table the statement containing the figures to which he referred?


Some hon. Members:: Agreed.
9026	HOUSE OF
Inquiries of the Ministry COMMONWEALTH RELATIONS



WEST INDIES


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, may I direct a question to the Secretary of State for External Affairs. In the light of the decision made by the island of Jamaica to withdraw from the West Indies federation, will this affect the technical assistance program provided for in the estimates of the minister's department?


Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker, the five year assistance program for the West Indies in the amount of $10 million was announced some time ago and was to begin in the fiscal year 1958-59. Each year since then, including the present session, parliament has appropriated funds for an item which is described in these words, "Canada-West Indies assistance program". Since those moneys have been voted for assistance to an area and not to specific countries, the withdrawal of Jamaica from the federation would not affect our program.
As of this date about $2.45 million of the $10 million total remains unspent, although $1.1 million of that amount is earmarked for projects which have already been approved. It is probable that most of the remaining $1.3 million will be spent for assistance to the smaller islands of the federation on projects now being discussed with the government of the federation.
The two ships supplied by Canada under this program were recently transferred to the central government, and they will remain the property of any continuing properly constituted central government in the West Indies. As in the case of all grants under Canadian external assistance programs, there were no strings attached to the gift of these two ships, and there would be nothing to prevent them from continuing to ply between Jamaica and the other islands in the area, if that were the wish of the central authorities.
Canada has undertaken no capital projects in Jamaica, and under our technical assistance program there are at present three teachers in that island.


EUROPEAN COMMON MARKET-REPORTED STATEMENT BY SECRETARY OF STATE FOR EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I was about to ask the Secretary of State for External Affairs whether he would comment


on a press dispatch of a speech he made in which he was reported as saying that the United States is crowding Britain to join the common market. In view of his rather serious accusation, can the minister give us a further explanation and say whether the Canadian government has discussed this question with the United States in the hope that the pressure would be removed.


Howard Charles Green: Mr. Speaker, I made an oration in Timmins on Tuesday evening. The air up there is rare and very beneficial. However, I think it affected the reporter more than it did me. I did not use the word "crowding" at all, though I see it is in quotation marks in the heading and also in the body of the dispatch. I was pointing out to the Canadian club that this question of the United Kingdom joining the common market involved not only trade and economic questions but also an extremely serious political question, namely whether the United Kingdom would become part of the new European amalgamation constituting a third great force similar to the standing of the United States and the Soviet union, and pointing out some of the results that might follow in the commonwealth if such a move were to take place. I did explain that the United States was in favour of the United Kingdom joining the common market for the reason that she hoped it would help to build up one big Europe, and also because they do not like the commonwealth preferences and would be very happy to see an end put to such preferences.


Hazen Robert Argue: I wonder whether the minister would comment on that part of my question wherein I asked if the government had discussed with the United States the implications for Canada of Britain joining the common market, and whether Canada had asked the United States to modify some of the pressure.


Howard Charles Green: The views of the United States government on this or any other issue are their own views. If they feel this way about the United Kingdom entering the common market, that is for them to decide, and on questions of that kind I doubt that it would be proper for Canada to start making representations to the United States. They know very well how we feel about their views. We do not always agree with the views of the United States, and sometimes they do not agree with ours.


Hazen Robert Argue: Maybe you should tell them in Washington instead of Timmins.


Howard Charles Green: Maybe we have.


Paul Joseph James Martin: I should like to ask the Secretary of State for External Affairs a supplementary question. Was he correctly reported when the dispatch went on to say that the minister observed that one of the objectives the United States had in support of the common market was that it regarded the latter organization as an effective way of resisting potential economic aggression from the Soviet union?


Howard Charles Green: Mr. Speaker, the hon. member for Essex East is a good deal worse than the reporter. He has added a lot of words to those found in the newspaper dispatch.



PUBLIC BUILDINGS


[Stage Direction]
On the orders of the day:
Mr. G. J. Mcllrailh (Ottawa West):: Mr. Speaker, I should like to direct a question to the Minister of Public Works. I regret that I have not been able to give him notice, and if he does not have the information perhaps he can treat this as notice. Has the government yet decided upon a site for the new post office at Portland?


Hon. D. J. Walker (Minister of Public Works):: I will be very happy to accept that question as notice.



COMBINES


[Stage Direction]
On the orders of the day:
Mr. A. R. Webster (St. Anioine-Wesimount):: Mr. Speaker, I should like to direct a question to the Acting Minister of Justice. There is an article in the Montreal Gazette this morning on the problem of mergers which leads one to believe that the Department of Justice has changed its policy in this respect following a meeting of the productivity council. Would the minister care to comment?


David James Walker: In reply to the hon. member for St. Antoine-Westmount may I say that I have had the opportunity of reading the article referred to, and I wish to point out that there is no change in policy or a new policy as the article would lead one to believe. In a speech delivered to the Canadian Manufacturers' Association on January 10, 1961, the Minister of Justice invited manufacturers and exporters to submit their ideas to the director of the branch. He said:
My director under the combines act has stated publicly on several occasions that he believes that as a director he should be available to individuals and representatives of industry who wish to discuss
Inquiries of the Ministry their problems with respect to the application of the anti-combines legislation. While, of course, he cannot become a sort of government uncle to anyone who seeks to avoid prosecution, and while he cannot take the part of private solicitor, he can, and I know he will, describe to anyone interested how he views the application of the legislation to any projected set of circumstances so that those who may come to see him can apply his general indication to their particular case or plans.
From this three points should be retained. First, this is not a new policy. Second, it must be remembered that the director can only apply the law and assess the legality of a project.


Lionel Chevrier: Order.


David James Walker: Third, and finally, the industry-


Lionel Chevrier: Mr. Speaker-


David James Walker: -with a few exceptions, has not taken advantage of the invitation.


Lionel Chevrier: -I rise on a point of order.


David James Walker: My reply is finished.


Lionel Chevrier: Yesterday I posed a question to the Minister of Trade and Commerce which had to do with this very matter. It arose out of an article which appeared in the Montreal Gazette, and Your Honour prevented me from pursuing the question further. Now the Minister of Public Works rises and reads a long statement, which is contrary to the rules of the house.


Mr. Speaker:: I recall that yesterday the hon. member did seek to raise a question about the policies respecting administration of the combines act, but in my view what he was asking for then was a comment on the opinion expressed in an article in general terms. The question which was asked today was a precise one and I therefore allowed it to go. I agree with the hon. member that the answer has been rather more extended than is necessary to indicate simply that there has been no change in policy. It amounts to a statement, and if the hon. member for Laurier wishes to ask a supplementary question or to comment on the statement, I would not object.
(Translation):



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, yesterday, on the orders of the day, the hon. member for St. Denis put a question concerning part-time government employees.

Inquiries of the Ministry
Since the Secretary of State is unavoidably absent, I shall answer this question in his place.
Under the present system, part-time or seasonal employees are granted leave with pay like the regular employees. However, those who work part-time get only half the pay they would have earned if the holiday had been a working day.


Mr. Azellus Denis (St. Denis):: Mr. Speaker, I should like to observe that my question had no reference to statutory leave but rather to the annual leave that permanent civil servants are entitled to, for instance, two weeks each year. I was thinking in particular of post office employees-


An hon. Member:: Order. Question.


Azellus Denis: -who work only four hours a day, year in year out, and who never get annual leave. I was referring to holidays, not statutory leave like on Christmas, New Years, Easter, etc.; I mean the annual leave to which full-time civil servants are entitled.


Léon Balcer: Mr. Speaker, in view of the explanation given by the hon. member for St. Denis, I will pass on this new question to my colleague immediately on his return.
(Text):



AGRICULTURE


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: In view of the statements that are being made by certain commercial interests having to do with the manufacture of butter, that butter prices should be reduced, I wonder if the Minister of Agriculture could inform the house what steps the government has taken to dispose of the very large surplus of butter that now overhangs the market.


Hon. Alvin Hamilton (Minister of Agriculture):: Mr. Speaker, naturally with the surplus of butter on hand the government would follow a course of trying to ascertain what it could do to put this butter into circulation without destroying the market for the producers of butter. There have been stories in the press about the various efforts we have been making to distribute this butter surplus, but no announcement has yet been made by the government. Until such a decision is made, there will not be any announcement.



BUSINESS OF THE HOUSE


Mr. Speaker:: If the house will permit, before the first order is called may I inquire what is the intention of the house with respect to an order made yesterday that private Bill S-30 be considered today in committee of the whole? Perhaps the house leader has a suggestion to make, since there is no time allotted for private bills today, yet the house has ordered that the item be considered. It is a question of deciding now when it will be taken.


Hon. Gordon Churchill (Minister of Veterans Affairs):: I would think later in the day. If a debate on a private bill were interposed now it would upset the normal process with regard to government business. I think by arrangement we can get it before the house later today.


Mr. Speaker:: Perhaps the house leader and others could agree as to what time it will be taken.



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

Hon. Donald M. Fleming (Minister of Finance) moved: that the house go into committee to consider Bill No. C-122, to authorize the Minister of Finance to make payments to the governments of the provinces and to authorize the government of Canada to enter into tax collection agreements with the governments of the provinces.
Motion agreed to and the house went into committee, Mr. Chown in the chair.
On clause 1-Short title.


The Deputy Chairman:: Shall clause I carry?


Donald Methuen Fleming: Mr. Chairman, there is one matter which I had thought was not relevant to the measure under consideration, but reference has been made to it in the course of the debate and some attention has been paid to the matter in comment outside the house. This concerns the subject of federal university grants. Perhaps I should say a word about this in the hope of clarifying the subject, because the present bill does not change the existing situation in that regard.
Federal grants to universities from their outset had been on an annual basis, until two years ago. They were simply provided by an item in the estimates each year; they had no continuing effect otherwise. In the 1960 session steps were taken by the government to introduce a measure to put the

university grants on a statutory basis for the two remaining years of the present five year period under the Federal-Provincial Tax-Sharing Arrangements Act. Therefore the provision made under existing legislation for the payment of university grants continues to March 31, 1962, and any provision of university grants from federal sources beyond that date will require a new provision of supply for the purpose by parliament.
The bill now before the committee does not touch on that question. I want to make that very clear. It will remain for the next session of parliament to make whatever provision is to be made in regard to federal grants to universities for the period commencing April 1, 1962, whether it be for one year or more.
Mr. Chairman, in case a question exists in the mind of any hon. member as to why this subject of university grants and the tax arrangements introduced in regard thereto in the 1960 session have not been carried forward into the present bill, let me endeavour to clarify that matter. After long years during which the universities of one province received no benefit from the federal grants to universities, the federal government and the government of the province of Quebec a year and a half ago arrived at terms of understanding so that a way could be found under which these benefits would no longer be enjoyed by the universities of only nine provinces and no benefit accrue therefrom to one province which pays a quarter of the federal taxes of this country and has one third of the university students of Canada. Legislation was accordingly introduced and was passed by this house. It is to be found in the 1960 statutes, chapter 13, clause 2.
Without delaying the committee by reviewing the details of that enactment, let me simply remind the committee that it made it possible for any province which chooses to be a prescribed province under this legislation, and which provides by special grants comparable aid to the universities of its province, to obtain for the federal corporate taxpayers in that province an additional abatement of 1 per cent on the corporation tax. With regard to the federal corporate taxpayers in other provinces-that is to say, provinces whose universities receive the benefit of the federal university grants-the abatement in respect of corporate tax is 9 per cent, and that rate in the case of a prescribed province was advanced to 10 per cent.
In the course of the discussion I gave the house figures to show the relationship between the 1 per cent abatement on corporation tax compared with the federal university grants accruing in any province, and provision was made in that legislation-
Dominion-Provincial Relations


Mr. Pickersgill:: Mr. Chairman, I wonder whether the minister would permit me to raise a point of order, not in a contentious spirit. The minister pointed out in beginning his remarks that he was talking about something that was not in the present bill-


An hon. Member:: Don't you want to hear it?


John Whitney Pickersgill: I merely like to observe the rules. If we are to have a debate on this subject, that is fine. If we are to obey the rules of the house and debate the bill that is before us, I have no objection to the minister stating what the future intentions of the government are with respect to this matter. However, I think it is rather an abuse of the privileges of hon. members for him to be going over the explanation of what happened in the past. We were all here when that took place, and we are quite familiar with what happened-
(Translation):


Mr. Tremblay:: Ask Mr. Lesage-
(Text):


John Whitney Pickersgill: -and if the minister would like to take advantage-
(Translation):


Léonard-David Sweezey Tremblay: Ask Mr. Lesage-
(Text):


John Whitney Pickersgill: -of this opportunity I have not the slightest objection; in fact I would be most anxious to hear any advance indication of the government's intentions with respect to what they are going to do in the future. But I do not think we ought to enter into a debate about something that was done a couple of years ago.


Hazen Robert Argue: On the point of order, Mr. Chairman, I should like to support the remarks of the hon. member for Bonavista-Twillingate. I think it is the mood of the house that this, the longest session in parliamentary history, should be wound up at an early time, either today or tomorrow. I think it would be an error on the part of the Minister of Finance if he should insist upon being out of order just to generate a debate on the government's policy toward university grants.


Donald Methuen Fleming: Mr. Chairman, you will recall the words with which I introduced my remarks on this subject. This subject was referred to in the debate on second reading-


Hazen Robert Argue: That does not make it in order.


Donald Methuen Fleming: -and no objection was taken to the reference to it. To my surprise that intervention has evidently

Dominion-Provincial Relations attracted not a little attention outside the house; I am speaking of both press and radio. I agree with the hon. member for Bonavista-Twillingate, and I made it quite clear in my opening remarks that I thought that subject was not raised by the bill. The bill does not make provision for it, but some question was raised as to why provision was not made in the bill in relation thereto.
Perhaps my remarks are really related to a point of order with regard to relevancy. I was simply explaining why that subject is, in my respectful submission, outside the scope of this legislation. I am giving an explanation of why in this particular legislation the subject of the university grants is not involved. It is covered by other legislation, and this matter must be dealt with at some time with respect to the new fiscal year commencing April 1, 1962. Far be it from me to wish to generate a debate on this question. I am emphasizing my view that the subject was extraneous to the bill in the first place.
As to the intention of the government, I shall content myself with the previous statement made in this regard. There will, of course, have to be legislation on this subject at the next session. It would be premature for me to indicate now what the government will propose in relation to university grants. Certain it is that whatever is proposed in that regard will take due note of, and make proper provision for, the situation in relation to any province whose universities do not receive the benefit of the university grants. This is what was done in 1960 in the legislation of that time, and no person need have any doubt whatever as to the will and intention of the government in this regard. We indicated clearly at that time that we cannot support the continuation of a situation-


John Whitney Pickersgill: The minister is going back to history again.


Donald Methuen Fleming: -in which the benefits of that legislation were enjoyed by only nine provinces while the taxes were paid by ten. That continues to be the position of the government. I hope this subject can be dismissed with this clear assurrance that in any provision which parliament is asked to make with regard to these grants, parliament will be asked to make provision for any province whose universities do not choose to receive these grants directly. I draw attention to the letter written by the Prime Minister to the premier of Quebec inviting a statement of his views and wishes in this regard.


John Whitney Pickersgill: I do not intend to enter now upon the discussion of this subject, apart from making one observation. The minister will recall that at the time this measure was


brought in as an amendment to this legislation, that was the view which we took. We took the view that this was an extraneous subject and that there should have been legislation dealing exclusively with university grants. Notwithstanding all this information, that is still our view and I am glad the minister shares it.


Donald Methuen Fleming: If the hon. member would permit me I should like to make it clear-


John Whitney Pickersgill: It is very hard to understand the hon. gentleman. He is the most misunderstood man in Canada.


Donald Methuen Fleming: I thought we were trying to clarify the situation. Whatever provision is made, accompanying legislation will be required. If the arrangement takes a form similar to that of 1960, obviously there must be provision in the Income Tax Act. It will depend on the form the proposed solution takes.


John Whitney Pickersgill: Of course it will. That is what I was saying. I did not misunderstand at all. The minister has become so accustomed to being misunderstood that even when he is clearly understood he still thinks he has been misunderstood. However, I do not intend to take any more time discussing what is not in the bill, because there is plenty in this bill which needs time spent on it during this committee stage.
I intend to avail myself of what I refer to as the Howard Green rule or convention in order to make several observations on this first clause about specific matters, not by way of general debate. I intend to refer to matters which were raised after I spoke in the debate which directly refer to things I had said. I want first of all to make a few observations about the speech which was made in his usual amiable and earnest manner by the Minister of Forestry. The minister said yesterday, as recorded at page 8992 of Hansard:
I submit that great satisfaction was expressed by some premiers after the conference of last autumn.
I think it was not the conference of last autumn which the hon. gentleman had in mind but the conference held in February, because the conference last autumn brought a universal chorus of dispraise which, the minister may remember, was recorded in graphic form in the Toronto Star. Every premier was against what was proposed in October. I think the minister was just mistaken as to the date. It was the February conference he was referring to because of the conditions-


Mr. Flemming (Royal):: Perhaps it was the
conference in February.


John Whitney Pickersgill: It was after the proposals were made which, substantially, are the ones in this bill which we are considering. It was not that $220 million freeze which was the first proposal made last October.


Donald Methuen Fleming: It was not a proposal.


John Whitney Pickersgill: It was not a proposal, it was a suggestion. I had forgotten. I am accustomed to plain language, and these euphemisms and hair splitting distinctions are something which a simple mind like my own finds it difficult to grasp. The difference between a suggestion and a proposal is the difference between telephoning a reporter saying "I don't like that story" and writing him a letter saying "Don't write that kind of story".
As I was saying, I believe the Minister of Forestry was referring to the February conference, and the hon. gentleman seems to agree.


Hugh John Flemming: The important thing was, they were pleased.


John Whitney Pickersgill: The hon. gentleman said, in fact:
I suggest that the premier of Newfoundland was very well satisfied. I suggest he was very happy.
I think it is true that the premier of Newfoundland was exceedingly reassured to find that the government was going to recommend that parliament should vote for an additional five years the $8 million which was to go on indefinitely according to the McNair award and which ought to have been voted indefinitely in exactly the same way as the constitutional subsidies to other provinces. I am sure he was greatly relieved. However, I am sure he would have been a great deal happier if the proper course had been taken with regard to that matter and the payment had been treated like the other constitutional subsidies, as it should have been and as it will be when there is again a Liberal government.
I do not intend to say any more about that subject, because that is another subject which we on this side consider extraneous to this bill. It should have been dealt with once and for all in the proper manner after the McNair award was made. It so happened that under the arrangement which was proposed in February, apart from the constitutional aspect, the additional $10 million to the four Atlantic provinces was relatively attractive to Newfoundland as compared with some of the other provinces, and notably with New Brunswick. The point in the hon. member's speech to which I was going to refer
Dominion-Provincial Relations particularly is found in the next sentence. As reported at page 8992 the hon. gentleman said:
I do not know how the hon. member for Bonavista-Twillingate is going to justify the statements he made yesterday when he meets the premier of Newfoundland in Newfoundland.
I can tell the hon. gentleman how I am going to justify them, and I shall do so in his own words. Speaking for himself the hon. gentleman said, as reported at page 8995:
I try to reconcile my duties as a member of the central government with my loyalties to the province that I have the honour to represent.
I am not a member of the central government, but I am a member of the parliament of Canada. In the very felicitous phrase of the hon. gentleman I try also to reconcile my duties as a member of the central parliament with my loyalties to the province I have the honour to represent, and I find no difficulty whatever in doing that.
Mr. Smallwood is the premier of a province, and the hon. member for Royal was premier of a province. When he was premier he recognized that it was his duty in his dealings with the government of Canada to represent the interests of that province. He did not do so against the interests of Canada, but it was not part of his duty to consider the general interest of Canada, which was the duty of the government of Canada and of the parliament of Canada. The same situation still applies to the premier of Newfoundland. When he comes here to a federal-provincial conference he does not come to solve the nation's problems but to look after the interests of Newfoundland, as he properly should.
I was elected just as the hon. member for Royal, the Minister of Forestry, was elected as a member of the parliament of Canada to represent an important constituency, but also to act in the interests of all the people of Canada. I am sure the hon. gentleman does not disagree with me in the least. It is not because of any aspect of this matter relating especially to Newfoundland but because it seems to me that this bill as it now stands is not in the national interest that I feel it is my duty to oppose it. For that reason I am opposing it. If the hon. member for Royal thinks it is in the national interest and that he should support it for that reason, I do not quarrel with that view. We just happen to differ about the bill itself.
The hon. gentleman also made some reference to the extraordinary increase in the amounts paid to Newfoundland at a particular time, and to the fact that the amount was over $40 million in one year and went down, I think, to $37 million. These distortions result from the fact that the $8 million McNair

Dominion-Provincial Relations award was included in the statistical table. Other distortions would have been apparent it the constitutional payments to the other provinces had been included, too. My point is simply that these amounts should not be included.
The hon. gentleman also suggested, although he was rather careful to correct it at the bottom of page 8893, that all he got as premier of New Brunswick from the legislation of 1956 was courtesy. Well, the courtesy in that particular instance was $5 million by way of an additional payment to the province of New Brunswick. It has been the tendency, and the hon. gentleman is too honest not to admit it, as he did when he was confronted with it-


Hugh John Flemming: I was not confronted with it. I gave it voluntarily.


John Whitney Pickersgill: The hon. gentleman did give it voluntarily, as I think he would always do in these matters. I would never suspect the hon. member for Royal of deliberately distorting anything. I suppose, like the rest of us, he would put the more favourable features in the front and try to keep the less favourable ones in the back, and I would not criticize him for that either. From that point of view I think the observation I am going to make is just as relevant, and that is, as I even got the Minister of Finance to admit once in an incautious moment, that under the proposals embodied in the Federal-Provincial Tax-Sharing Arrangements Act of 1956 that came into effect on April 1, 1957, the increase in payments and advantages to the provinces was something in the order of $100 million in the very first year of the new arrangement. I use the word "advantages" because in the case of some of the provinces it was merely a matter of withdrawing from the field and letting the province collect the tax itself. Therefore, as I say, the increase in payments and advantages added together was approximately $100 million in the very first year.
According to the tables the minister himself has put before us, all the additions that have been made including those in this bill will, in the first year under this new arrangement, not reach the amount of Mr. Harris' increases in one single measure. When we hear about the new era and the great generosity of the present government, this must be borne in mind. This is a hard fact shown in the minister's own statistics. In other words, what was done by the St. Laurent government in 1956 for all the provinces of Canada in the aggregate was to increase the payments or advantages to them by approximately $100


million in the first year. That has increased since; the result has had an increment in every year since that time.
What hon. gentlemen opposite did in 1958 and what they are proposing now to do, which as I pointed out is in essence merely for Ontario, when you take out the pluses and minuses in the other provinces, will be still less in the first year that the Liberal increase between 1956 and 1957.


Donald Methuen Fleming: No, no.


John Whitney Pickersgill: If the minister is able successfully to refute that statement he will have an opportunity to do so.


Donald Methuen Fleming: I invite the hon. gentleman to look at page 7927. He has said that the increase that was provided in 1958 and the increase now provided by this government do not equal the increase in 1957 over the previous time, but he has an opportunity of comparing this with the first year of the new five year period by examining the table to be found at page 7927 of Hansard, which shows very clearly that the increase for the next fiscal year will be $128 million.


John Whitney Pickersgill: But the minister is forgetting that in order to achieve that increase he has to stick with Mr. Harris' formula for three provinces, Quebec, Manitoba and Saskatchewan, because his own new formula would have such a bad effect on those provinces that he could hardly take something that would not even work in the case of those provinces.


Donald Methuen Fleming: That is only part of the new formula.


John Whitney Pickersgill: But even on the minister's own figures all he has achieved in the four years he has been in office is to provide $118 million, of which $18 million goes to Ontario under this bill. Mr. Harris in one measure in 1956 which came into effect in 1957 increased the payments by $100 million. The minister is well aware that in the propaganda literature that is spread across the country by his party they always give the figure for 1956-57 instead of 1957-58 so as to give the false impression that everything that was done in the last budget of the Liberal government was done by the present administration.


Donald Methuen Fleming: Oh, no.


John Whitney Pickersgill: I do not think the hon. member for Royal has had any part in preparing that kind of fallacious propaganda. It has been exposed a number of times in this house but it continues to circulate throughout the country and is, I must say, rather like other forms of inflation indulged in by some members of the government.

I wish now to turn to one or two things which were said yesterday afternoon by the Prime Minister. I am sure the Minister of Finance must have trembled when the Prime Minister ventured into the field of arithmetic; because while the minister has a little difficulty in adding, the Prime Minister never adds but always multiplies and some of the results he achieved by his multiplication are really fantastic.
Of course it would take far too long to correct all the arithmetical errors in the Prime Minister's speech of yesterday, and it would be profitless because undoubtedly he would just make another speech in which astounding errors would be made. I do not want anyone to think I am suggesting anything in saying this except that the Prime Minister is not interested in details; he is interested in the broad picture, but even his broad picture sometimes gets a little out of focus, and it certainly did yesterday. At page 9004 of Hansard the Prime Minister is reported as having said:
We consider that the present system, based on the three standard tax rates and equalization to the average of the two top provinces, is neither logical nor practical.
Now, that is the right hon. gentleman on September 27, 1961, but I think the house ought to recall what the Prime Minister said on July 25, 1960. He said:
I want to make this abundantly clear on behalf of the dominion government that whatever the ultimate decision may be the principle of equalization must be preserved.
Equalization, the second component, is a payment by Canada to the provinces to bring the per capita return from the three taxes at standard rates up to the average per capita yield in the two provinces in which per capita yield is highest.
On September 27 he said:
We consider that the present system, based on the three standard tax rates and equalization to the average of the two top provinces, is neither logical nor practical.
Well, now, if that was the view of the Prime Minister why did he not say so on July 25 instead of giving this pledge, which he gave then and which was echoed by the Minister of Finance, to maintain the equalization on the basis on which the Prime Minister then defined it? Here is what the Minister of Finance had to say about equalization at that time. This is at page 112 of the proceedings of the dominion-provincial conference of 1960.


Donald Methuen Fleming: There is a difference between formula and principle.


John Whitney Pickersgill: The Prime Minister gave the principle here. The formula is surely the number of points to which you equalize, but the principle is the basis of the equalization, and the basis of the equalization was clearly
Dominion-Provincial Relations and unmistakably defined by the Prime Minister on July 25, 1960. I do not think there is any doubt that at that time the government did intend to carry on with that principle. Something happened afterwards to change it, but let us see what the Minister of Finance had to say at that conference. This is at page 112. He said:
I think all of us were delighted to hear the virtually unanimous expressions of opinion in favour of a principle of equalization, upon which the Prime Minister made such a clear and forceful statement yesterday. I simply remind the conference that the equalization payments, whatever they may be, will not come from any joint proceeds earned from taxes jointly collected, but will come from the federal treasury, and it is evident that there are requests for increases in the equalization payments.
There was no request for a change in the principle or for a change in the formula.


Donald Methuen Fleming: There were requests for changes in the formula.


John Whitney Pickersgill: But not in the principle.


Donald Methuen Fleming: What you call the principle; I do not call it the principle.


John Whitney Pickersgill: The principle is clearly defined by the Prime Minister, and I repeat it because it seems very hard to penetrate the mind of the minister. I read from page 10 of the proceedings:
Equalization, the second component, Is a payment by Canada to the provinces to bring the per capita return from the three taxes at standard rates up to the average per capita yield in the two provinces in which per capita yield is highest.
That is the principle. It is the principle that the Prime Minister defined and pledged himself to carry out. It is the principle that the minister said-after the premiers had all spoken-the premiers accepted. It is true that Mr. Frost wanted a lot more points than he was getting. Some of the other provincial premiers were a little more modest, though they all wanted more; that is quite true. I believe Mr. Manning came along with his usual theory which is rather different from this.
As I recall the proceedings of that conference, which I have read with great care, and most of which I listened to, with the exception of Mr. Manning, I think there was no dissent whatsoever about the principle except the premier of Manitoba in particular said that it should be to the top province, not the top two. He said so again the other day in one of the letters printed as an appendix to Hansard. Of course the premier of Manitoba has had no choice but to accept the views of the Liberal party of Manitoba on this matter, and he has accepted them wholeheartedly because he knows they are the views

Dominion-Provincial Relations oi the people of Manitoba. That is the root of my objection to this whole bill, and that is where I quarrel with the Minister of Forestry.
I say, and I said earlier, that when the Atlantic provinces grants were established we were told they were to be in addition to equalization, not in substitution for equalization, and in 1958 they were in addition to equalization. New Brunswick and Nova Scotia, Prince Edward Island and Newfoundland all got the same increment of equalization, the same three points that the minister talked about yesterday in his speech. They got that just as did all the other provinces, but they got this other in addition. What the government has done this time has been to change the principle of equalization for something which is not equalization at all but an averaging down of the poorer provinces. That is not equalization. Equalization means to make something equal, not to make it unequal, and the whole device here is to make the thing unequal. Because it was so unequal for the Atlantic provinces $10 million was added to the Atlantic provinces grants in substitution for, not in addition to, the equalization which they were losing by this new and disadvantageous formula.
That is the point. Now, it just so happened that that formula was much more disadvantageous to the province of New Brunswick than it was to the other three Atlantic provinces. It just so happened that it was and is, and that is what my hon. friend from Gloucester was complaining about; that is what the premier of the province is complaining about. In the light of the Prime Minister's pledge, it seems to me this is what every citizen of New Brunswick has a right to complain about. Every citizen of Manitoba has a right to complain about the deal that province has received compared with what the Prime Minister said in July would be the foundation of this whole system.
I could not argue against the additional $10 million for the Atlantic provinces grants. According to the minister's tables, the total payment is increased by $18 million, which is all to go to one province. That is all this bill does; it increases the payments by $18 million over what we are paying this year. It is true that British Columbia and Alberta lose absolutely, and what they lose the four Atlantic provinces gain. It just happens to add up to about the same amount. What I am saying is that the right thing to have done was to carry out the Prime Minister's pledge of July to increase the equalization on that basis which was fair to everybody, and which was genuine equalization. If the government felt that all it could afford was $18 million

as an increase, that could be another $8 million distributed among the provinces when they felt the Atlantic provinces should have this $10 million. In other words, what should have been done was to keep the Atlantic provinces grants separate for the purpose for which they were established, the purpose which I have always supported, and the purpose which I have always given the government credit for; to meet the additional need that could not be met by equalization. It is surely prostituting them to use them as a substitute for equalization because you make the so-called equalization formula so bad.
That is the real trouble. It also makes it so unequal as between New Brunswick on the one hand and Nova Scotia and Newfoundland on the other, no one can help but feel that it is not just unless the previous system was not just. I do not think anyone would argue that New Brunswick was getting too much under the previous system; at least I would be very surprised if anyone would so argue.
That is the basic criticism that I have to make on clause 1. There are a couple of other things, of course, that the Prime Minister said which I do not think can really be overlooked. I will leave the question of Saskatchewan to others, beyond saying that Saskatchewan is apparently going to have to be content with the old system throughout the whole period.
That brings me to a point at which I should like to repeat my request of yesterday, which was echoed by the hon. member for Laurier; namely, that we should be given a projection over the whole five years of the old system and the new. We are being asked to pass what is in many ways the most important statute this parliament could possibly pass, and we are entitled to all the information available to the government to illuminate this matter. We are entitled to know just what the relationship of each province would be between a continuation of the present system and the substitution of the new system. Otherwise we cannot determine whether what we are doing is fair or not fair.
I cannot understand the reluctance of the government to do this. I do not know because I have seen such tables, but I have had enough experience in these matters to know perfectly well that they exist. Nobody is going to expect the end results to turn out to be exactly the same as the estimates in these tables. We are grown men and women. We all know these are estimates, but we are entitled to those estimates. This parliament, which is being asked to make a decision, is

entitled to the information on which the government made a decision to upset the principle of equalization which the Prime Minister promised and substitute this melange for it. I appeal again to the minister to let us have these tables.
The Prime Minister made this statement, as found on page 9907 of Hansard:
The preservation and extension of the fundamental principles of freedom for provinces to tax as they see fit, of equalization based on broader determination of fiscal need and the fuller recognition of fiscal disabilities peculiar to the large eastern segment of Canada, will contribute to the financial strength and independence of the provinces and to equality of opportunity for Canadians throughout Canada.
All I want to say is that what this measure is going to do, as I am sure we will be able to show later in the committee, is to contribute to inequality throughout Canada rather than equality. I suggest that the minister show us any provision of the bill that gives any province more right to tax than it has now. I should like to see it. A great deal was made of that by the Prime Minister, and I suggest that we be given that information in black and white.
I believe I am finished except for one observation I wish to make with respect to the remarks of the Minister of Finance, which I had to read so hastily that I am not sure I have them clearly in my mind. I think the only thing I want to say anything about is the extraordinary argument that the minister made toward the end of his speech about what we would be doing in voting against this bill. He suggested that one would be voting against this or that benefit to this or that place, and that it was particularly ungracious of the members from the province of Newfoundland to vote against the bill.
I might remind the minister, whose memory in these matters is often a little short, that in the year 1956 he voted against a bill that increased the payments or financial advantages to the provincial treasuries of this country by $100 million. He voted against that bill, and I do not think anyone suggested at that time that in doing so he was hostile to such advantages as might come from that measure. He voted against it, according to him, because he was opposed to the principle of that bill, and he gave very strong arguments in his opposition to that principle. It would not be proper for me to enter into those arguments now, but I think they were accepted at that time in good faith.
It is, it seems to me, a kind of perversion to suggest, because a member believes a measure is bad and a better measure could
Dominion-Provincial Relations be substituted for it and therefore votes against it, that this means that he is opposed to such advantages as there may be in the measure for certain sections of the country. After all, it is our duty here to make good laws. It is our duty to criticize defects in laws. If we think there is a fundamental defect in a law, as I think there is a fundamental defect in this law in the abandonment of the Prime Minister's pledge, in the abandonment of the real principle of equalization, surely it is our duty to vote against it. Although I am not taking exception because I know the Minister of Finance, I do not think we add to our debates by attributing other motives than those which exist.
(Translation):


Mr. Lafreniere:: Mr. Chairman, I wish to thank the Minister of Finance (Mr. Fleming) for the statement he made a moment ago, namely that a special bill will be introduced with respect to university grants, and especially for stating that the government will take into account that certain provinces cannot accept direct grants from the federal government for education purposes.
I trust that the hopes I expressed yesterday when I spoke in the debate, will then become a reality.


Mr. Robichaud:: In the course of his short contribution to the debate on the second reading of this bill, yesterday, the hon. member for Restigouche-Madawaska (Mr. Fournier) referred to the "howling" of some members during this debate.
According to Larousse, "howling" is the peculiar cry of wolves and dogs. I hope the hon. member had not in mind the speeches that were made yesterday, for instance, by the Minister of Forestry (Mr. Flemming), the Minister of Finance (Mr. Fleming) and the Prime Minister himself (Mr. Diefenbaker).
The hon. member also charged that I had cast insult on Acadians and French Canadians, because I ventured to make my speech in one of the two official languages of the country.
Mr. Chairman, I need not be ashamed of my attitude and patriotism, both in and out of this house; I am not ashamed of my mother tongue, but that will not prevent me from respecting, as I have always done, both official languages in this country.
In those fields, Mr. Chairman, I have no lesson to take from the hon. member for Restigouche-Madawaska. As a matter of fact, I hold in my hand copy of a speech made by the hon. member at the Star theatre of Edmundston on August 31, 1961. Unfortunately, the rules of the house do not permit me to put on record what the hon. member said in

Dominion-Provincial Relations that speech, which was a most violent charge against all Acadian patriotic organizations in the province of New Brunswick, including SONA which is launching a drive for funds in favour of national societies in Acadia. (Text):
Now, Mr. Chairman, yesterday the Minister of Forestry said I could not give one project that the new provincial government had started and completed, and he challenged me to name one. The minister knew then that under the rules of this house I had no right to reply. The minister should also know that the present government of New Brunswick has only been in power for 15 months, and the type of project that is being undertaken by the present government will take more than 15 months to complete. If the rules in this connection would allow me to enumerate what has been done by the present government of New Brunswick in the short time it has been in office, I think the Minister of Forestry would have a reply to his challenge. May I mention in passing the abolition of hospital premiums which his government introduced, and which were abolished within a few days after the present government came into power.
In so far as new industries are concerned, the present government of New Brunswick has guaranteed more financial loans to new industry in New Brunswick in a period of 15 months than the previous government under the leadership of the Minister of Forestry did during its eight years in office.
I have one question I should like to ask the Minister of Finance. If he looks at table 3 on page 7927 of Hansard he will see that under the new formula New Brunswick will receive for the year 1962-63 approximately $36,265,000. Then if he looks back at page 7919 of Hansard, table 4, he will find that New Brunswick under the present formula will receive for the year 1961-62 the sum of $36,334,000. According to the figures which have been released by the Minister of Finance, therefore, under the new formula New Brunswick will receive $69,000 less in 1962-63 than it would under the old formula.


Donald Methuen Fleming: The hon. member is comparing two different things, Mr. Chairman. If he will look at the table on page 7927 he will see that the amount of $36,265,000 is the provision under this bill in relation to standard taxes, whereas the table on page 7919 includes such other things as statutory subsidies, which in this present year amount to $1,754,000, and as well, the public utilities taxes which, in the present year, amount to $164,000. These sources of revenue are not


included in the figure $36,265,000 for the fiscal year 1962-63 under this bill and indicated in the total on page 7927.


Hédard-J. Robichaud: I thank the minister for the information.


Lionel Chevrier: Yesterday the Prime Minister in the course of his remarks made a great deal of the fact that the government claims this new proposal is a return to the spirit of the constitution, and that it gives to the provinces their complete rights in the field of direct taxation. Well, of course, we all know that is not so. I would not want to qualify it with the word "nonsense" that we often hear from the other side of the house, but that statement certainly is not a fact. The present system, which has been in existence since 1957, gives three options which were offered to the provinces. They could levy and collect their taxes at whatever rates they wished to determine, as in the case of one province. They could simply rent the three direct tax fields, or they could levy these taxes and the federal government was willing to collect, provided the provincial rates did not exceed the standard rates. Under the new system the rental option would cease to be available but the federal government would be willing to collect provincial taxes at any rates.
While this last change may be an improvement in certain rich provinces, it could hardly be described as a revolution or a return to the spirit of the constitution. It may well lead, as has been stated by several premiers who took part in this conference, to a return to the tax jungle of the thirties. However, to the extent that the provinces will have to depend on additional direct taxes without equalization for their financing, I have no hesitation in saying that great financial inequalities and great regional inequalities will take place across the country.
This leads me to ask the minister one or two questions. I think the government and the minister should state clearly and unequivocally what the province of Quebec will receive under this legislation as compared with the old scheme. Perhaps the minister might reply to that now in order that we may avoid repetition.


Donald Methuen Fleming: In the interests of orderly procedure there are some things I wish to say in reply to the hon. member for Bonavista-Twillingate, and the hon. member for Laurier has just said some things I will have to comment upon, however briefly. I wonder which would contribute best to orderly procedure, Mr. Chairman; that I dispose of the questions and then deal in general terms with the remarks that have been made, or reverse the order? I had assumed the latter.


Lionel Chevrier: Then perhaps I can continue with the questions which I have and the minister can deal with them all when he gets to them. My first question was, what additional amount will Quebec receive under this scheme as compared with the old scheme? I think here I should repeat what the hon. member for Bonavista-Twillingate asked the minister yesterday and which I too interjected during the course of his remarks; namely, a request for a projection over the whole five years of this new legislation as compared with the old. I may be mistaken in this, but my understanding is that the province of Quebec will receive over the full five year period about $2.5 million more than before. The minister will correct my impression if it is wrong, and I should like to have on the record the exact amount. I should like also to have that projected under this scheme for the province of Quebec over the whole five year period. For instance, I would like to know what Quebec will receive under this legislation in every year from 1962 to 1966. Then I would like the same information for the province of Ontario. I would like to find out from the minister what the province of Ontario will receive under the new scheme for the first year. I made the statement yesterday that this would be $18 million, and if that is inaccurate the minister will probably comment on it. Then I think I should obtain the same information for Ontario during the period from 1962 to 1966.
The next question that I would direct to the minister is this. What are the changes included in this bill which will improve the right of the province of Quebec to levy and collect direct taxes? What is there here which gives Quebec greater constitutional freedom than it before? I hope the minister will answer these questions when he has disposed of the other matters that have been raised on clause 1.


Donald Methuen Fleming: Mr. Chairman, perhaps it will contribute to orderly discussion if I review the points that have been raised this morning largely in the order in which they were put forward by hon. members opposite.
First of all, the hon. member for Bonavista-Twillingate invited the committee to compare the result of the legislation in 1957 in increasing the payments to the provinces in the preceding five year period with the increases brought about by the combined operation of the 1958 increases and those that will come into effect under this bill. Let me clarify this.
The table on page 7927 I think gives the complete answer as applied to the year about which the hon. member was speaking. He
Dominion-Provincial Relations says, "Compare this in the first year with the new five year period", that is to say the next fiscal year, 1962-63, commencing April 1, 1962.


John Whitney Pickersgill: Which table is that?


Donald Methuen Fleming: It is table No. 3 on page 7927 of Hansard. This table shows this very clearly. The line at the bottom of the page gives the projection into 1962-63 of the formula that was legislated by parliament in 1956 under the Federal-Provincial TaxSharing Arrangements Act for the five-year period commencing April 1, 1957. If that formula had continued into the fiscal year 196263, the total paid to the provinces would be $771,936,000, according to the best estimate that can be made to date.
The effect of the combination of the 1958 changes and those provided for by this bill -because this bill carries forward and extends the increases that were made by the legislation of 1958 and later years-shows that on the same calculation for the same year, with the benefit of this bill and the changes it makes and continues, the total paid to the provinces is estimated to be $899,414,000. So the increase brought about is of the order of $128 million. I think the hon. member realizes now that the statement he was making in relation to the comparison does not hold water.
He is also overlooking the fact that this table is based upon the year 1962-63, in which year the federal withdrawal from the income tax field in favour of the provinces will be 16 per cent; that each succeeding year there is to be an increase of 1 per cent in the extent of the federal withdrawal until in the last of the five years the withdrawal will be 20 per cent. So I think the hon. member will realize now that his comparison and the conclusions he was drawing are quite unsound.
Next, Mr. Chairman, I cannot let pass his comment on the figures used by the Prime Minister yesterday without taking issue with it. He says the Prime Minister's arithmetic was not right, but he did not follow that up by taking issue with any figure at all.


John Whitney Pickersgill: Mr. Chairman, the minister seems to forget this fact. I did not go into the Prime Minister's figures, but I did take one general statement about the figures, and I pointed out that when the Prime Minister said this government had done more than the previous government-before this bill, that is to say-that just does not happen to be so, as the minister's figures show. The increase that Mr. Harris made in 1957 was approximately $100 million and, as the minister's own figures show, if he continued his

Dominion-Provincial Relations own scheme it would not be until next year, not this year, that $100 million more would be given to the provinces. So the Prime Minister was quite wrong in what he said.


Donald Methuen Fleming: No, Mr. Chairman, the Prime Minister was not wrong at all. The hon. gentleman has chosen to make broad, general assertions without supplying the evidence. The fact is that the benefit of the increases that have been made commencing in 1958, after the change of government, is as follows. Here I am confining my remarks to the increases brought about in the unconditional payments. The increase from 10 per cent to 13 per cent in the provincial share of the yield from personal income tax and the Atlantic provinces adjustment grants-


John Whitney Pickersgill: And the grant to Newfoundland, which I do not admit should be in this at all.


Donald Methuen Fleming: I set this out in my remarks of July 11, at page 7914 of Hansard. I said:
In 1958-59 this increase was worth $55.9 million to the provinces, in 1959-60 $67.2 million, in 1960-61 $68.3 million, and the estimated value for 1961-62 is $72.6 million or a total of $262 million for the four years.
On the same page I also pointed out that the benefit of this progressive withdrawal of the federal government in favour of the provinces in the personal income tax field will result at the end of this coming five year period in-


John Whitney Pickersgill: Mr. Chairman, the minister does not need to talk about the future. I was talking about the effect up to the present. All the minister is doing is confusing matters.


Donald Methuen Fleming: Mr. Chairman, the minister is seeking to clarify the confused approach of the hon. member to the statements of the Prime Minister. The Prime Minister was speaking yesterday of the tremendous increases in the federal payments to the provinces. The Prime Minister drew the attention of the house to the very large increases in payments that had been made out of the federal treasury to the provinces, including the unconditional grants, conditional grants and payments for the benefit of provincial institutions.


John Whitney Pickersgill: Not in the passage I am referring to.


Donald Methuen Fleming: The payments he dwelt upon are set forth on page 7915 of Hansard. Without going over the ground again, the Prime Minister in this respect was drawing the attention of the house to the fact that
tMr. Pickersgill.]

the payments under these various headings for the benefit of the provinces in 1956-57 totalled $689,352,000; in 1957-58, $837,136,000, and in this present fiscal year these payments will total $1,470,139,000.
The next point put forward by the hon. member for Bonavista-Twillingate is one that the house has heard him refer to very frequently. I suppose if any subject is worn threadbare it must be this one. It is the subject to which the hon. member refers constantly. I refer to the subject of equalization and the remarks of the Prime Minister at the dominion-provincial conference in July, 1960. We have discussed this before. The interpretation the hon. member has put on the words of the Prime Minister is not the correct interpretation.


John Whitney Pickersgill: I have never interpreted them; I have always read them.


Donald Methuen Fleming: He comes back to it again and again. His interpretation, I say, as I have said so often, is not the correct interpretation, but as he has stated it again this morning I am obliged to set the record straight again. In his remarks which have been quoted by the hon. member from page 10 of the report of the dominion-provincial conference of July 25, 1960, relating to this question of equalization, the Prime Minister was placing himself and the government firmly on record in favour of the principle of equalization. The hon. member then goes on to identify the principle of equalization with the formula in the Federal-Provincial TaxSharing Arrangements Act by which the government of that day proposed to meet the problem of equalization.


John Whitney Pickersgill: I did not do it. The Prime Minister did.


Donald Methuen Fleming: We take issue with the hon. member as to the interpretation he places on the words of the Prime Minister. We say he is misinterpreting them. We have said that before. I suppose the hon. member will go on giving his interpretation to the house until kingdom come or until there is a change of representation. We, on the other hand, will continue to deny the interpretation he is putting on the words of the Prime Minister.


John Whitney Pickersgill: On a question of privilege, I have never interpreted the Prime Minister's words. I have only read them. They speak for themselves. I am not surprised that the Prime Minister is sensitive, because he knows this is a repudiation.


Donald Methuen Fleming: That last sentence is utterly false. There has been no repudiation at any time by the Prime Minister. The

hon. member says he reads the words of the Prime Minister, but he always goes on to put his own interpretation on them. I say it is not the correct interpretation, but the hon. member goes on doing it and will go on doing so, I suppose, as long as he is a member of this house. We, for our part, will go on correcting that interpretation as long as we are here.
The Prime Minister was talking about the principle of equalization. The government has taken a firm position in relation to the principle of equalization, and this bill provides a more effective formula for meeting the problems of equalization and fulfilling the government's views in recognizing the principle of equalization. Surely the principle of equalization is the principle that it is proper to draw on federal resources to seek to bring about the strengthening of the fiscal position of those provinces which by reason of geography and less plentiful natural resource development are in a weaker fiscal position than other provinces.
Now, it happens that the formula applicable from 1957 to 1962 under the Federal-Provincial Tax-Sharing Arrangements Act proposed to meet the problem of equalization by equalizing the yields from the three tax sources to the average of the two provinces with the highest yield. But there is nothing sacrosanct or immutable about that. That was not a question of principle. That was the particular method or formula which was applied. Those who heard the words of the Prime Minister on July 25, 1960 did not interpret them as meaning that the government was committed to the particular formula or method which was written into the Federal-Provincial TaxSharing Arrangements Act.
As a matter of fact the hon. member is altogether wrong in the interpretation he put on this subject, because the matter continued to be discussed at the conference and members of the conference asked for a revision of that formula. Of course they were asking for it in terms which would favour them. Naturally they wanted to see the formula changed so there would be equalization based on the province with the highest yield, not on the average of two or more.
I think I am safe in saying, then, that nobody placed on the statement of the Prime Minister the interpretation which the hon. member for Bonavista-Twillingate insists on putting on it at every opportunity. We could argue this subject until kingdom come, but as long as he is in this house the hon. member will go on putting his interpretation on the words of the Prime Minister and, as I say, as long as I am here I shall put the correct
Dominion-Provincial Relations interpretation upon them and say that the hon. member is misinterpreting what the Prime Minister said.
As we have pointed out on several occasions, the formula which this bill proposes as a means of giving effect to the principle of equalization is a much improved formula, a formula which goes much further to meet the problems of the provinces which are in the weakest fiscal position. It will do very much better work in that respect than the formula written into the bill of 1956. It does this in two ways-


John Whitney Pickersgill: Would the minister permit a question? He said, if I understood him correctly, that the formula was designed to help the provinces in the weakest financial position. In view of the fact that the total additional outlay is $18 million and Ontario gets an advantage of $18 million, does the minister mean that he thinks Ontario is in the weakest position?


Donald Methuen Fleming: The hon. member is not dealing with the matter of equalization now. He is talking about total payments. I am talking about equalization. The hon. member knows perfectly well that Ontario derives no equalization payment under this legislation. It derived none under the legislation of 1956, and it does not qualify under the bill now before us. So the hon. member is simply drawing red herrings across the trail. That is typical. He puts his own definition on his own terms and then argues from that, regardless of what the facts are or of what the legislation says.
I was pointing out to the committee before the hon. member's latest intervention that the equalization formula in this bill will serve the principle of equalization more effectively in two respects. We are dealing now with equalization to the national average instead of to the level of the top two provinces. This change means that the bulk of the equalization benefit goes to the provinces which are in the greatest need. It is not disbursed so widely in terms of the number of provinces, but that money will be distributed in those provinces whose revenues are below the national average; there will be a concentration of it among the provinces which are in the greatest fiscal need. This was not the case under the formula in the earlier legislation.
The other change which has been made in aid of the principle of equalization is that now we are equalizing not merely in terms of the yield from the three standard taxes, but we are equalizing in terms of this yield plus 50 per cent of the yield from resource revenues. That latter element is of great importance. Why the principle of equalization

Dominion-Provincial Relations should have been limited to the three standard taxes is something which hon. members opposite will have to defend, because they themselves so limited it. We want to extend it more widely and to take into account 50 per cent of the yield from resource revenues. This will be a factor of great importance in serving the principle of equalization. I pointed out yesterday that disparities in the yield to provinces from resource revenues ranged all the way from 18 cents per capita to $112 per capita. The 1956 formula completely ignored this disparity. We propose to include this element and to apply the principle of equalization in this regard at least to the extent of 50 per cent from this source.
The next point which was made related to future projections. In table 3 which appears in Hansard at page 7927 we have sought to give the house the benefit of our best calculations for the fiscal year 1962-63. Both the hon. member for Bonavista-Twillingate and the hon. member for Laurier have asked for a table giving projections beyond that date. Any projection beyond that date is necessarily hypothetical. It will depend upon many factors.


Mr. Benidickson:: This one is hypothetical, too, as the heading of the table indicates.


Donald Methuen Fleming: Yes, but we are
much closer to next year; and while we have taken very great care to point out that this is hypothetical in that sense, it is the best we can do right now in making a calculation for a fiscal year the commencement of which is now some seven months removed. To go beyond that and ask the government to put on the record of the house tables of projections beyond that date is not, I think, a proper request. Any figures in that respect will depend upon a variety of circumstances. They will depend on the rate of yield from these various taxes. They will depend upon the element of growth of the gross national product. They will depend upon the number of wealthy persons who die leaving estates, and matters of that kind. The projection into the coming fiscal year is as far as I think it is proper to ask the government to go in putting figures before the house.


John Whitney Pickersgill: In other words, we are denied the information.


Donald Methuen Fleming: No. The hon. member can make up his own tabulations as he wishes. In the department we have made up many tabulations. These all depend upon circumstances. There is a great variety of permutations and combinations depending upon the weight you are to give to growth factors here and there. We did not put forward at the dominion-provincial plenary
IMr. Fleming (Eglinton).]

conference any projections beyond 1962-63. The table we have put before the house at page 7927 is the table that was put before the conference. We did not put before the plenary conference projections beyond that date. Every province makes its own calculations for future years depending upon what weight they give to these different factors. I believe I have made my position quite clear in that respect, and I feel it is a sound position.
The hon. member for Laurier came back to the question of the constitution, and challenged the argument that the Prime Minister made yesterday. An important advance that this legislation makes over the 1956 legislation under which we have been operating in this regard for the last five years is that under this new legislation each provincial legislature will assume its proper and constitutional responsibility for determining what shall be the taxes levied in the province.


Lionel Chevrier: The provinces had the option of doing that before.


Donald Methuen Fleming: Ah, but the pressures were such that that was chosen by one province with respect to three sources of tax and by one other province with respect to one source. For that reason we say that the tax rental system, whether you put it on an optional basis or on any other basis, was a system which put the federal government in the unconstitutional position of standing between the needs of the provinces in relation to revenue, on the one hand, and their proper constitutional responsibility in regard to determining what revenues should be raised on the other hand. This new legislation restores the responsibility precisely where it belongs under the constitution. Each legislature will take responsibility before the electorate and the taxpayers of the province to determine what revenue shall be raised to meet what are considered to be the proper fiscal needs of the province.


John Whitney Pickersgill: Will the minister permit a question at this point?


Donald Methuen Fleming: I was hoping to finish my remarks by one o'clock, and I will not be able to do so if I accept questions.


John Whitney Pickersgill: I feel this is relevant. I should like to ask the minister whether any provincial government that now has a tax rental system has asked the federal government to stop it.


Donald Methuen Fleming: Several of the provinces indicated that they were quite prepared to have the new system.


John Whitney Pickersgill: That is not my question at all.

Dominion-Provincial Relations


Donald Methuen Fleming: It is, Mr. Chairman.	AFTER RECESS


John Whitney Pickersgill: It is not.


Donald Methuen Fleming: They did not indicate opposition to the new system at all. They were quite prepared to accept the responsibility for the new system, but they did express the hope that the federal government would collect their taxes for them because they have not the tax collecting machinery-


John Whitney Pickersgill: Would the minister mind answering my question? My question is this. Did the premier of any of the eight provinces that now have tax rental systems ask the federal government to drop that option?


Donald Methuen Fleming: I do not recall that any of them asked us to do so-


John Whitney Pickersgill: In fact most of them asked you to keep it.


Donald Methuen Fleming: -but several urged the continuation of the tax rental system. There is no secret about that. They wanted the federal government to go on taking the responsibility of levying and collecting these taxes and sharing the proceeds with the provinces, for very obvious reasons. Some had grown accustomed to a system under which they had not taken the responsibility before their own electors and provincial taxpayers of levying and collecting taxes. Under that system when they found that what they were receiving was not adequate, what did they do? They came to Ottawa and pleaded for more money, blaming the federal government if more money was not forthcoming. That is not a constitutional position.


John Whitney Pickersgill: This has nothing to do with the constitution.


Donald Methuen Fleming: The new system will restore the constitution and place responsibility where the constitution puts it, namely on the shoulders of the federal government with respect to federal levies and on the shoulders of the legislatures of the provinces with respect to provincial levies.


John Whitney Pickersgill: Rubbish.


Donald Methuen Fleming: The argument about the return to the tax jungle was also advanced, but I see that it is one o'clock and therefore I shall have to reserve my comments in this respect until we resume.


Paul Joseph James Martin: The minister is in the jungle.
At one o'clock the committee took recess.
90205-6-570
The committee resumed at 2.30 p.m.


Donald Methuen Fleming: This morning the hon. member for Laurier referred to the expression "tax jungle".


Lionel Chevrier: So did the premiers.


Donald Methuen Fleming: As a matter of fact, the hon. member went further and said that this subject had been referred to in those words by many persons at the conference.


Lionel Chevrier: By several premiers.


Donald Methuen Fleming: His expression was "by many persons"; I made a note of it at the time. It was not referred to by many persons; it was referred to by one or two premiers. This is a subject in which the premier of Saskatchewan has shown some special interest. Whatever may be said about the condition of tax collection in this country in the 1930's, whatever may then have been the differences in tax rates applied by different provinces in the field of income tax, it is a fantastic inaccuracy to talk about a return to the tax jungle and associate that lurid expression with a measure of this kind.
This bill has two important provisions. In the first place it offers to the provinces the services and the facilities of the federal government in collecting their taxes. The only requisite in this respect is that the definition of income under provincial legislation should be the same as that contained in the federal legislation. It would be quite unreasonable to expect the federal government to undertake this service, particularly as it is being offered gratis, if the provinces were to create a diversity of definitions of income. This is a very necessary condition; but, subject to that one condition, the provinces are at liberty to impose whatever rates they choose with respect to the personal income tax and the corporation tax, and the federal government will collect their taxes for them and will do so without any charge whatever.
It is a substantial undertaking on the part of the federal government to assume the cost of collection. This will mean a service costing some millions of dollars offered by the federal government to the provinces. It is not necessary that the provinces confine their tax rates to the extent to which the federal government is withdrawing from the income tax field. That is not necessary; the federal government will provide the tax collection machinery and service regardless of the rate established by the province, provided the definition of income is the same.

Dominion-Provincial Relations
Accordingly, Mr. Chairman, taxpayers will be called upon to complete only one income tax return in the case of provinces that choose to take advantage of this free federal service. Therefore the individual taxpayer has no reason to fear that he is going to be called upon to make two returns. In these cases he will be required to make only one return, and we are doing everything in our power to simplify that return and the division of the tax between the federal and provincial governments.
The argument that there should be only a federal tax in this field has been put forward with some degree of ardour in the past by socialists who see in this element a means of centralizing power in the federal government and concentrating power at Ottawa. I am glad this bill gives us an opportunity to provide an effective bulwark against that kind of attempted centralization. So I think it is quite clear, Mr. Chairman, that these attempts to frighten people by talking about a tax jungle have no basis whatever.
The other point that has been put forward previously in this regard, particularly by socialists, has been that the federal government can maintain greater fiscal control over the economy if it has within its power the exclusive right to impose taxes and to reduce or increase them according to the economic conditions prevailing. These arguments may possibly have had some validity years ago, let us say 20 years ago, but they have not nearly as much validity today when tax rates both in the personal and corporation tax fields are as high as they are. That argument flourished years ago when the corporation tax was only a fraction of what it is today, and the same is true of the personal income tax in those days.
However, be that as it may, Mr. Chairman, it should be borne in mind that this progressive withdrawal of the federal government is in the personal income tax field. The federal government under this proposal extends to the provinces the same abatement in relation to the corporation tax that has applied during the past five years.
Finally, Mr. Chairman, the hon. member for Laurier asked me certain questions with regard to what the provinces of Quebec and Ontario would receive both in the first year and in succeeding years. As to the succeeding years, Mr. Chairman, that will depend entirely, of course, upon circumstances. It will depend on the tax yields, and this in turn depends upon the incomes that persons and corporations will earn in those succeeding years. It will depend upon the rate of growth in the economy. It will depend upon the size of the gross national product. Therefore this will have to be a matter of estimate


and the farther away from the particular year concerned the more difficult it will be to put forward a reliable estimate. However, in table No. 3 on page 7927 of Hansard we have put forward the best estimate we have been able to make as to the yields to the provinces in the fiscal year 1962-63. If the hon. member will examine that table he will see the answers to his questions.


Lionel Chevrier: Is the Minister of Finance not in a position to give in dollars and cents the amount of money that the province of Quebec will receive under this scheme in the first year and then over the succeeding four years?


Donald Methuen Fleming: I have already given the information with respect to next year. It is there on page 7927. I also dwelt on this subject at some length yesterday. My remarks as found on page 9017 will indicate that I dwelt on this subject with respect to the figures for the province of Quebec.


Lionel Chevrier: I remember what the minister said, and he has repeated it today in answer to my colleague the hon. member for Bona-vista-Twillingate. But the point I want to make to the minister is this. Table No. 3 page 7927 of Hansard for July 11, 1961 is a hypothetical illustration of provincial revenues for the year 1962-63 under the new formula. If the minister is able to do that for the first year under the new formula, why can he not project it over the full period until 1966 under the new formula?


Donald Methuen Fleming: I have already said that the farther away one is from the year concerned the more difficult it becomes to project. We have gone as far as we prudently can in offering this projection for the year 1962-63. It must be taken subject to the obvious limitations. We have done the best we can to calculate what this might be in the light of what might reasonably be expected to be the tax yields next year. But if you go beyond that you are getting farther and farther away from the present time, and any projection of that kind has less and less validity the farther you project it into the future. I do not wish to be in the position of being accused later on of misleading the house if the actual figures should be higher or lower than those put forward in any projection that we might attempt to make now. Table No. 3 on page 7927 is the best estimate that we have been able to compile for the fiscal year 1962-63 and, as I say, it must be taken subject to the obvious limitations of the situation.


Lionel Chevrier: I am familiar with table No. 3. I have glanced over it several times,

and I am not satisfied that it gives the information which I seek. I come back to the preamble to my question this morning. Am I correct in assuming that under this new scheme the province of Quebec will receive $2J million more over the period of five years? Is the minister able to answer that question?


Donald Methuen Fleming: If I had the gift of prophecy, if I had a crystal ball and could look into it and read the future, I would be happy to answer the question; but I cannot be expected, I am sure, to answer as to what may be the gross national product or the tax yields from the personal income tax or the corporation tax or the succession duty in the province or the federal estate tax in those succeeding years. I think I have been quite reasonable about this. We have put forward our best calculation for the next fiscal year which begins just six months from now. It is a very different matter to be called upon to carry the projection farther into the future. I do not profess to have the gift of prophecy. I think we have gone as far as it is reasonable to expect us to go in connection with this forecast.


Lionel Chevrier: I suppose we shall have to take that for an answer, but I would have thought that if the minister could project it for one year he could project it for the remaining four years as well. I come back to the preamble to my question having to do with the province of Ontario, and I ask the minister whether it is a fact that under this new arrangement the province of Ontario will receive in the first year $18 million more under this agreement than under the former agreement.


Donald Methuen Fleming: This table indicates that according to our best estimate at the present time the province of Ontario will receive $314,480,000 in the fiscal year 1962-63 under the new legislation, whereas under the present legislation it would receive $296,170,000, that is to say if the present scheme were carried forward into the fiscal year 1962-63. It should be borne in mind that this is a calculation of what will accrue to the provincial government if they occupy the tax fields to the extent to which the federal government withdraws from them or allows an abatement.


Lionel Chevrier: If this table were projected over the full term of the new agreement, is it a fact that the province of Ontario would receive $180 million over the whole five year term as opposed to the province of Quebec receiving $2J million?


Donald Methuen Fleming: I cannot say that. No one can answer that question. It is completely hypothetical. The hon. member is 90205-6-570i
Dominion-Provincial Relations making guesses at figures and asking me to say whether they are right or wrong. I have already said that I do not profess to have the gift of prophecy, and the answer to any such speculation will depend entirely upon conditions. It will depend upon the extent of income, both personal and corporate; it will depend on other factors related to growth and yield. Therefore, Mr. Chairman, I have gone as far as I can, and I think I would be rendering the committee no service by attempting to speculate.


Lionel Chevrier: Like the song in "Oklahoma".


Donald Methuen Fleming: Which one?


Lionel Chevrier: "I've gone about as far as I can go".


John Whitney Pickersgill: Here is the minister asking us to agree to a bill that covers a five year period, not one year. If he were asking us to make arrangements for the next year only, then his answer would be quite reasonable. He is asking us to substitute for the existing law, which we on this side of the house say in so far as equalization goes is better than what he is suggesting, something which he will not compare with the old law. He will not tell us how the two compare over the whole five year period according to the best computation.
Now he creates a smokescreen by talking about being unable to estimate the gross national product and various other factors. We know that he cannot be certain about these things, but he can use the same factors in both projections and they will then both be equally accurate or inaccurate and the gap between them, if there is a gap, will be on the same basis. That is all we are asking. He did it in one case. I know, and the minister knows I know, it was done for the whole five years, because this minister would not have been so irresponsible as to introduce this bill if he had not had a projection for the whole five years. He seems to regard it as a strategic secret that should not be revealed to the representatives of the people who are asked to vote this money; that is what he is saying.
I say to the minister that if at some stage the province of Quebec-and this applies equally to Manitoba and Saskatchewan-is to get any advantage under the new formula, there must be a point when that happens. It does not happen in the first year. In the first year Quebec is worse off under the new formula and is therefore allowed to continue under the old formula. Is the reason for the minister's reticence the fact that Quebec will never get any additional benefit and therefore will be under the old formula for the

Dominion-Provincial Relations whole five years? Is that why this is being kept a secret? I ask the minister that question.


Donald Methuen Fleming: The hon. member, if he knows as much as he claims, will know the answer to that question. It is a question of growth. If the growth is sufficient, Quebec will reap benefits in increased yields from the growth. The hon. member has no right, Mr. Chairman, to start imputing dark motives for the position I have taken.


John Whitney Pickersgill: Give us the information, then.


Donald Methuen Fleming: It is not a matter of information. Hon. members opposite are asking me to engage in a high degree of speculation in regard to the future. I have already said I would not be rendering a service to the committee by engaging in that kind of speculation. Or course we have made forecasts. We have made all kinds of them, depending on all the factors that are involved in any particular year. The year 1962-63 was given to the provincial conference in this form.


John Whitney Pickersgill: It was asked for though.


Donald Methuen Fleming: Table 3 was given to the conference. Yes; although the proceedings are secret, the hon. member is aware that a request was made for that.


John Whitney Pickersgill: Well, I know that premiers are intelligent men and of course they would ask for it.


Donald Methuen Fleming: It was not the
premiers; it was one premier who asked for that, and evidently the hon. member has been having some discussions with the one premier who asked for that projection. I give the hon. member the same answer I gave to the premier who asked for this, and that is that it would involve entering into the realm of speculation. The answer depends upon hypothetical factors, and I do not think it would add to the knowledge of anyone, Mr. Chairman, to attempt to engage in that kind of speculation. The provincial premiers make their own calculations. They were in a position to assess what they considered to be the merits or demerits of the proposal, and they arrived at their own conclusions and based their arguments on those conclusions.
The hon. member knows, I think, that he already has adequate information to draw enough conclusions to enable him to take his position on this matter. It is interesting to me to hear him now requesting information when yesterday he denounced the bill and announced his intention of voting against it. Now he says he needs some more information but, presumably, no matter what


this information might be it is not going to affect his attitude toward the bill. I do not question the right of any hon. member to obtain information. I know when I was in opposition I did not desist from efforts to obtain information that was available and was necessary to a proper understanding of the provisions of any bill, whether or not I favoured the bill. I do not question the right of any hon. member to ask for whatever information may be available.
It is one thing, Mr. Chairman, to ask for information and quite another thing to invite a minister to indulge in speculation. I must say that I shrink from engaging in speculative or hypothetical pursuits.


John Whitney Pickersgill: Of course in 1955-56, when the new scheme was proposed for tax equalization, these projections were given over the whole period and a comparison was made between the new scheme and the old so the premiers would be given the best information that could possibly be given. The minister dared, a few years ago, to refer to Mr. C. D. Howe as arrogant. After seeing the attitude the minister has taken with this committee this afternoon I say there has never been such an example of arrogance. He says, we were so arrogant we told the premiers they had no right to know. We know they told the premiers that. We know they told them, you take it or else; but you do not even know what you are taking. You are not allowed to know.
However, we are parliament and the minister is the servant of this house, or he is supposed to be. This seems to be the idea that is most difficult to get through his head. This committee is entitled, especially in financial matters, to know the best projections on which we are asked to vote money. This is what we are being asked to do here, to vote money, and we are entitled to know to whom it is going and in what proportions.
It is obvious that in so far as Manitoba, Quebec and Saskatchewan are concerned, there is going to be no change in 1962-63. If, as the Prime Minister claimed yesterday, this is a more generous provision for all the provinces than the other, which I do not believe, there must be some point between now and the end of the five year period when Quebec will do better under the new formula than it will do under the existing formula. Surely it is reasonable to be told when, in the opinion of the government, that point will be reached, and approximately how much better off Quebec will be.
The minister says calculations have been made. Certainly calculations have been made. It should not really be necessary for us in parliament-and nobody should know this better than the minister-to have to engage

people to make these calculations. They should be equally available to both sides of the house once the government has made up its mind. We are not asking the government to give us any of the information they used in these various projections for schemes they did not employ. We are only asking the minister to continue table 3 on page 7927 of Hansard for the whole period, and to make the assumptions that are made for the whole period. We know it will be hypothetical but it will give us the best possible information, as the government had, on which to base a decision.
I do feel the hon. member for Laurier is probably right. I think it is probably true that perhaps in the last year, as the hon. member suggested, Quebec might get a little something out of the new arrangement. As for Manitoba, I am not sure that they will ever get anything out of it; and I think it is pretty certain that Saskatchewan will not. In no circumstances that we can readily envisage would Saskatchewan do as well under the new formula in the next five years at is does under the existing formula. So Saskatchewan is apparently to be kept screwed down with the existing formula even if there are improvements for others. That is the new concept of equalization.
The minister suggested that the premiers thought this was a better scheme. I think I ought to read what the premier of Manitoba said about it, and I would like to put this on record from the premier's letter to the Prime Minister dated August 23 last. It is already in the appendix to Hansard of September 22, 1961. Mr. Roblin said this, and I am not reading the whole letter but the parts that relate to equalization:
It must be acknowledged that there are aspects of your announcement which represent a decided improvement over the federal-provincial agreement of 1957, and indeed it is estimated that Manitoba will likely benefit financially at least to some extent-
I stress those words "at least to some extent". The letter continues:
-during the course of the new arrangements even after the amendments of 1958 are taken into account. Nevertheless, I must again draw your attention to the fact that Manitoba is not to receive under the new proposals that proportion of the shared tax fields for which we believe we have made a convincing and logical case.
That was the case that the Prime Minister said yesterday was not logical. The letter
continues:
Further, I must refer particularly to that portion of the equalization formula based on Canadian average yields. Manitoba reaffirms-
I think here the premier is speaking for all Manitobans regardless of party, because this is the Liberal position, not the Tory position.
Dominion-Provincial Relations


Donald Methuen Fleming: No, it is not the Liberal position.


John Whitney Pickersgill: The letter continues:
Manitoba reaffirms its proposal to equalize to the highest Canadian province-


Donald Methuen Fleming: That is not the
Liberal position.


John Whitney Pickersgill: That is the Liberal position.


Donald Methuen Fleming: Since when?


John Whitney Pickersgill: It has been the Liberal position since the convention of 1958. It was not the position taken by the St. Laurent government in 1956, and it was not what was promised by the present Prime Minister in 1960; but it has been the position of the Liberal party, which has changed its position on certain matters just as hon. gentlemen opposite have changed theirs. But we think we have changed for the better, whereas hon. gentlemen opposite have palpably, in this bill, changed for the worse. I am just drawing attention to the fact that Mr. Roblin has embraced in toto the Liberal position, because he would not dare to take any other course in Manitoba. He says:
Manitoba reaffirms its proposal to equalize to the highest Canadian province and we shall continue to work for its implementation.
I hope Mr. Roblin will get behind the party in this house that is working to that end and not working to thwart it. His letter continues:
This we regard as more in keeping with the basic principles-
He does not say "formulae"; he says "principles", the minister will note. He continues:
-on which these arrangements have been founded.
Under present circumstances, however-
I think this is pretty significant of the new harmony and the new spirit of good will, cooperation find agreement which is said to exist. Hon. members will remember that in 1957 the provinces were not going to be coerced into doing anything; nothing was going to be forced on them; they were going to agree. Mr. Roblin's letter continues:
Under present circumstances, however, there is no alternative but to take the steps necessary to implement the most advantageous of the options open to us under Bill C-122-
In other words, "We have to take it; we dare not leave it". There is just one other point I wish to make, Mr. Chairman, and it is this.


An hon. Member:: You haven't made one yet.


John Whitney Pickersgill: A good deal was made of the views of the premier of Newfoundland, and the minister just said that only one of

Dominion-Provincial Relations the premiers had said anything about the tax jungle. I have in my hand a clipping from the St. John's daily News of September 14 this year. The article is entitled "No Change With Provincial Income Taxes" and it reads:
Corner Brook. Premier Smallwood says there will be no change in the scale or method of corporate and income taxation when it becomes a provincial responsibility January 1 next year.
Ottawa will continue to collect taxes imposed by the province, the premier said in an interview Tuesday night.
Premier Smallwood said the federal government's decision to abolish the tax rental agreement with the provinces "sets us back in the tax jungle".
He preferred the present tax rental system under which Ottawa imposes and collects income and corporation taxes and, under an agreed formula, shares the proceeds with the provinces.
I suggest that the position taken by Premier Smallwood was taken by almost all the other premiers who had tax rental agreements. The Prime Minister and the minister have talked about restoring constitutional rights. There were no constitutional rights to restore; the constitutional rights were there. What they are doing is terminating a fruitful field of federal-provincial co-operation; and they are terminating it unilaterally.


Paul Joseph James Martin: Hear, hear.


John Whitney Pickersgill: They are terminating it unilaterally and forcing on several of the provinces a system which they do not want. That is what this restoration of constitutional rights really means.


Donald Methuen Fleming: Mr. Chairman, we are engaged in a repetition of things that have been said again and again. Evidently I have not succeeded in changing the mind of the hon. member; nor has he by his repeated arguments, I must tell him, made very much impression on me. I think I may best answer some of his flights into the realm of fancy in his last intervention by reading this Canadian Press dispatch. I will leave one name blank while I am reading it and I will give the name when I have finished reading the extract.


Paul Joseph James Martin: Don't be so dramatic.


Donald Methuen Fleming: The article reads:
The federal government's tax sharing offer to the provinces stands today as take it or leave it.
Premiers at Friday's one day federal-provincial conference were hit bluntly with this information after they had spent much of the day outlining a miscellany of proposed changes favourable to the province from the federal offer.
Finance Minister-
-blank:
-said flatly that the central government's plan goes "as far as we can go at this time" in money terms.
His statement, given at a closed meeting and made public later, means the premiers are going

away empty handed from a conference from which several had hoped to get a better split on taxes with the central government.
The date of that Canadian Press dispatch is March 10, 1956.


John Whitney Pickersgill: And the name is Harris.


Donald Methuen Fleming: The finance minister concerned was Mr. Harris.


Lionel Chevrier: Mr. Chairman, a moment ago the minister in replying to my question in which I sought to obtain from him a hypothetical illustration as contained in table 3 projected from 1962-63 to the end of the term in 1966, stated that it was difficult to do that for many reasons, one of which was growth, which he said was impossible to predict and prophesy. The minister said it was impossible to predict what the growth would be in the province of Quebec, and in other provinces for that matter.
I should like to bring to the attention of the minister this fact. If there is any growth it will apply to both formulae, the present one and the new one as well. Therefore growth certainly cannot prevent, by any stretch of imagination, a comparison between the two. I make that point because I do not think, the minister's argument was a valid one, having regard to what I have just said.


[Stage Direction]
Clause agreed to.
On clause 2-Definitions.
John Whitney Pickersgill: Mr. Chairman, there are a good many questions on clause 2. A few minutes ago the minister said something and I want to be absolutely sure about this. I raise this matter under the definitions section because, to be quite frank about it, I have not had time to reread the definition since we started our proceedings today. I would like the minister to tell us whether I was right in my assumption that the provincial governments may impose any rate of taxation, either corporate or personal, that they choose so long as all the rest of the scheme is exactly the same as the federal scheme.


Donald Methuen Fleming: It depends on what the hon. member means by the word "scheme". I have already said this afternoon that a province may set its own rate. It is a matter entirely for decision by the provincial authority what the rate of taxation should be in respect to both personal and corporate income. But the definition of income must be the same as it is in the federal legislation if the federal government is to be asked to collect these taxes on behalf of the province.


John Whitney Pickersgill: Must the exemptions be the same?


Donald Methuen Fleming: Yes. You must arrive at the same taxable income. That assumes the identity of the definition, including exemptions.


John Whitney Pickersgill: What I am really asking is this. If a province is to avail itself of this offer, their law must be identical with that of the federal government except as to rates?


Donald Methuen Fleming: That is broadly correct.


William Moore Benidickson: What freedom is there in that?


Donald Methuen Fleming: The province is not obliged to ask the federal government to collect taxes on its behalf. It is presently within the power of any province to decide to collect its own taxes, and one province has informed us that it is its intention to do so. It rests within the power of the provinces to vary the rates, vary the exemptions, change the definition of income or anything else in that field. We only say that if they wish the federal government to collect the taxes we can only operate when we are working on the same basis as to the taxable income.


John Whitney Pickersgill: I do not disagree with that at all. I think the minister is right. It would not be feasible to collect it if you had two different schemes; and besides, there would be no advantage to the taxpayers anyway because they would have to make separate calculations.
I should like to pursue further the question asked by the hon. member for Kenora-Rainy River. It has always been true, of course, that any province had the right to impose any taxes it liked. That right has never ceased to exist at any time since confederation. I agree that there was a disability on the provinces which did so between 1947 and 1957, but there has been no disability on any province since 1957, as the minister well knows, and the province of Quebec, which has been collecting taxes of its own kind in its own way, has been getting equalization on exactly the same principle as any other province. So there is nothing new here as far as freedom is concerned. The only thing is that under the existing law a provincial government has the freedom, if it wishes, to make a tax rental agreement. That is a freedom which is now being taken away. Nothing whatever has been added, but something has been taken away. That is all.


Donald Methuen Fleming: We have been over this time and time again. The hon. gentleman makes these categorical statements which just do not gibe with a proper interpretation of the measure. He can go on reiterating these
Dominion-Provincial Relations statements of his if he likes, but that does not bring us into agreement as to whether they are correct.


John Whitney Pickersgill: May I put one simple question to the minister. Is there anything whatsoever which the government of Quebec can do now in the way of levying income tax that it could not do under the existing law?


Donald Methuen Fleming: With regard to levying, once the province of Quebec decided not to rent tax fields the positions are similar, with this exception. Previously the province of Quebec had no opportunity of having its taxes collected gratis by the federal government. Now it has that opportunity if it chooses to use it. However, I think the government of that province prefers to collect its own taxes.


William Moore Benidickson: I see that in subclause (c) of clause 2 provision is made for the acceptance of a practice which has been developed by the dominion bureau of statistics. I assume that this was presented to the provinces and they agreed to it. Is that correct? Then again, with respect to subclause (f), if we are allowing the provinces full freedom in this matter it should be borne in mind that from time to time there may be negotiations with other countries with respect to tax claims. To what extent has this been discussed with the provinces at the conferences?


Donald Methuen Fleming: Both these matters were brought before the representatives of the provinces at the conference. The hon. member asked me if the provinces were agreed in relation to the natural resource revenue. I would say that some provinces expressed their approval while others prefered not to see natural resource revenue taken into the equalization formula. It very much depends where the benefit lies in a particular case. The inclusion of natural resource revenue in the formula benefits some provinces, and naturally, they would welcome it. To the extent that some provinces would not benefit, it would not be natural to expect them to enthuse over it. With regard to succession duty, there was very little discussion on the part of the provinces of this particular proposal.


William Moore Benidickson: I see that 2(l)(c) defines what natural resource revenues are to be. Coming back to my first point, would the minister tell us which provinces will actually receive less as a result of the inclusion of this provision in the agreement? I think, of course, of Alberta and perhaps British Columbia. Which other provinces actually lose in comparison with the old agreement as

Dominion-Provincial Relations a result of this definition? I want to know how many members of parliament from those provinces will vote for this amendment.


Donald Methuen Fleming: As the hon. member is aware, Alberta and British Columbia lose something under the new equalization formula. The province of Saskatchewan opposes it because, as the hon. member is aware, that province has substantial resource revenues.


John Whitney Pickersgill: Was this not also opposed by the government of New Brunswick?


Donald Methuen Fleming: I believe so. I do not recall it personally.


John Whitney Pickersgill: I think the correspondence which has been tabled shows that it did.


Donald Methuen Fleming: I thought the hon. member was asking about the positions taken at the conference.


William Moore Benidickson: I wonder whether all the members from the provinces of British Columbia and Alberta are happy about approving this particular clause of the agreement, which seems to have a very severe and adverse effect upon the revenues of those provinces, and perhaps those of New Brunswick, too.


Donald Methuen Fleming: The hon. member is wrong, I think, in saying it has a severe effect on those provinces. I do not think the effect could be said to be severe having regard to the guarantees which are given to all the provinces. Alberta and British Columbia are both provinces where the yields from this source are higher than the national average. But, of course, they are protected by the guarantee that they will receive in any year not less than they receive in the fiscal year 1961-62.
The hon. member's reference to the position of New Brunswick is not accurate, because although that province now appears to be objecting to the inclusion of resource revenues my clear recollection is that New Brunswick does derive benefits under the new formula from the inclusion of resource revenues.


[Stage Direction]
Clause agreed to.
On clause 3-Payments to provinces.
Lionel Chevrier: Mr. Chairman, since the minister refuses to give the projection over a five year period, for which we have asked on several occasions, I should like permission to table a hypothetical illustration of provincial receipts for the period 1962-63 to 1966-67 under the new system and under the present system. This table shows the difference between the two systems in relation to the 16-9-50 formula and the 20-9-50 formula.
[Mr. Benidickson.)


Gordon Campbell Chown: I should advise the hon. member for Laurier that nothing can be tabled while we are in committee. He might wish to have this table included in Hansard as part of his speech at the point at which he has offered the table to the committee.


Lionel Chevrier: That would be quite satisfactory.


Gordon Campbell Chown: Does the committee give unanimous consent to the printing of this table in Hansard at this point?


Donald Methuen Fleming: With respect, Mr. Chairman, I think we must know a great deal more about the nature of the table before it is placed on the record. The hon. member has not given the sources or the terms of the projection. We have had a great deal of discussion this afternoon about the matter of projection. The statement was confidently made this afternoon, I think by the hon. member for Bonavista-Twillingate or if not by him by the hon. member for Laurier, that in 1956 Mr. Harris, the then minister of finance, placed on the record a projection, year by year, over the five year period 1957-62. That assertion was made.
I thought there was something in that statement that did not ring true. I took an active part in the debate on the Federal-Provincial Tax-Sharing Arrangements Act in the summer of 1956, and I had no recollection of Mr. Harris having given any such projection. I have been making inquiries since, and I am told that he did not place on record any such projection. I am told further that he was invited to do so and said that he could do it for only one year. In other words, Mr. Chairman, Mr. Harris at that time followed the course of giving the house a projection for the first year of the five year period according to the best calculation that the Department of Finance could make at that date, and we have done the same thing now.
I say that anything beyond that is hypothetical and speculative, and with great respect I think we should not be asked to place such information on the record. Certainly if the hon. member asks for consent to put it on the record without reading it we must be told a great deal more about the sources of the table he is dealing with and the basis of his projection, because this will involve a number of assumptions and we should be told about those; otherwise the figures he is proposing to present to the committee have no validity whatever.


Lionel Chevrier: Mr. Chairman, there would be no request such as I have made to place these figures on Hansard if the minister had

shown any co-operation in projecting the table appearing at page 7927. The minister inquires about the source of the information. This information has been prepared at my request by those who assist the Leader of the Opposition and those who sit with us on this side of the house.


Léon Balcer: Professor Lamontagne.


Lionel Chevrier: These are figures which are comparable to the figures tabled by the minister. I believe there is sufficient authority to allow me to request permission to place this table on Hansard.


Donald Methuen Fleming: Obviously if the hon. member takes personal responsibility for the calculation he would be entitled to read this table into the record and there is no point in delaying the committee in that respect. But I think the hon. member should tell the committee the assumptions upon which this table has been constructed. This is the whole basis, after all, going to the root of the validity of any such calculation.


Lionel Chevrier: The assumptions are all set out in this table. The table sets out in detail what each province receives under the 16-9-50 formula and under the 20-9-50 formula, together with the totals.


Donald Methuen Fleming: What is the assumption with regard to growth factors?


Lionel Chevrier: The assumption in regard to growth factors is the same as that contained in table No. 3.


Donald Methuen Fleming: Does that mean that the hon. gentleman has taken 5 per cent all the way through the period?


Lionel Chevrier: In so far as the new system is concerned it deals with equalization on the national average, $35 million of grants for the Atlantic provinces, and the two special guarantees. So far as the old or present system is concerned it deals with equalization on the basis of the top two provinces and $25 million for the Atlantic provinces.


Donald Methuen Fleming: That does not
answer my question at all.


Mr. Bell (Carleton):: What about the growth factor?


Lionel Chevrier: The growth factor is the same as that contained in table No. 3.


Donald Methuen Fleming: But has it been continued through to arrive at the calculation for the five year period? Was it taken as a flat rate or was it pyramided?


Lionel Chevrier: The minister asked me if I would assume responsibility for this table,
90205-6-571
Dominion-Provincial Relations and I have said I would. I have been cross-examined at some length on the nature of this table. This is unusual, either in committee or in the house.


An hon. Member:: Indeed it is.


Lionel Chevrier: If there is any objection to having it tabled I shall read the whole thing.


Gordon Minto Churchill: There certainly is objection.


Lionel Chevrier: However, in order to save time and at the minister's request I do not propose to read the table. I say this is an unusual procedure, because it is the practice to accept material of this kind, particularly if the hon. member who seeks permission to place it on Hansard takes responsibility for it.


Donald Methuen Fleming: Mr. Chairman, the hon. member says he is taking responsibility for it. He said there is no point in taking the time of the committee to read it and that it should be put on the record without being read. If the hon. member accepts responsibility for this document he ought to be able to offer the committee some illumination as to the basis of this table. I have asked for some information. My question refers to an obvious matter. It goes to the whole root of the projection. I have not received an answer to my question. I will not object to the hon. member putting the table on the record, but I do point out that we have not been given information about this table which would enable us to determine its validity, and in the meantime we can accept it only as a speculative exercise on the part of whoever prepared it.


Lionel Chevrier: Notwithstanding what the minister has said may I point out that when he put his tables on Hansard we did not ask him all these questions.


Richard Albert Bell: That is very different.


Donald Methuen Fleming: Mr. Chairman, that information is given in the headings of my tables.


Lionel Chevrier: Mr. Chairman, I now beg leave to table this hypothetical illustration of provincial revenues over the projected period 1962-63 to 1966-67.


Gordon Campbell Chown: Has the hon.
member for Laurier the unanimous consent of the committee to have this table printed as part of his speech at this point in Hansard?


Some hon. Members:: No.


Mr. Speakman:: On a point of order, Mr. Chairman, surely the hon. member has sufficient experience in this chamber to know he must either identify the source or assume responsibility.



S050 HOUSE OF COMMONS

[Stage Direction]
Dominion-Provincial Relations
Hédard-J. Robichaud: He did both. Where were you?


James Stanley Speakman: He referred to an anonymous source.


Lionel Chevrier: The hon. member has been asleep. I indicated the source of the figures and said that I accepted responsibility for them which is, I think, all I am required to do under the rules.


Gordon Campbell Chown: Does the committee give unanimous consent?


Some hon. Members:: No.


Lionel Chevrier: 
Donald Methuen Fleming: All I have to say is that these figures are utterly weird. As I followed the hon. member in his reading I will have to take issue with at least half of them. He is trying to show somehow or other, by what weird reasoning no one dares say, that under the new formula proposed in this bill at some stage the provinces in the aggregate would receive less than they are receiving at the present time. Mr. Chairman, that is an impossibility.


Lionel Chevrier: If it is an impossibility why did the minister not allow the table to be put on Hansard in the first instance and then reply to it in due course? In other words, the minister forced me to read it; whereas if it appeared side by side with the other table it would be possible to compare the two and then we would understand his argument. As it is now we are not able to do that because I was not able to get unanimous consent. I was not allowed to put the tables side
IMr. Speakman.]
by side, the one which has been prepared by the minister's officials and this one for which I said I would take responsibility.


Gordon Campbell Chown: Shall clause 3 carry?


William Moore Benidickson: 
Donald Methuen Fleming: Mr. Chairman, perhaps the intrinsic merit of the hon. gentleman's demagogic intervention can be judged by the accuracy of his references to hospital insurance. It is quite true that a measure for hospital insurance in Canada was introduced by the former government, but that measure had a typical joker in it, that no such legislation should come into effect and no contributions should be available to any province under it until a majority of the provinces representing a majority of the population set up plans in conformity with its terms. It will be remembered that after the change of government this joker was removed by parliament at the invitation of the new government and then there was an opportunity for the plan to proceed province by province. The old government left a not too creditable record in that regard.


[Stage Direction]
Clause agreed to.
90205-6-571J
Dominion-Provincial Relations
On clause 4-Tax equalization payments.
John Whitney Pickersgill: There is one question I should like to put on clause 4. I should like to ask the minister if it is the present expectation of the government-in using the word "expectation" I am not asking for anything more than that-that Quebec or Manitoba or Saskatchewan at any time during the next five years will move from the guaranteed equalization, which they will be under in the first year according to his projection, to the basic equalization?


Donald Methuen Fleming: Again, Mr. Chairman, that would invite me to engage in prophecy and I do not think I would be serving the house by attempting to do that.


John Whitney Pickersgill: The minister, in other words, is saying that he is not at all sure that at any time in the five years any of these three provinces will have any financial advantage whatsoever under the new legislation compared with the old.


Donald Methuen Fleming: Mr. Chairman, that is obviously not what I said.


William Moore Benidickson: Perhaps that is not what the minister has said but he has given parliament a table which indicates his forecast for one year. We would prefer a projection for a longer period, but the hypothetical conditions involved in the table he has given us include, of course, a 5 per cent growth in income. I have indicated that while the present government has been in office this country vis-a-vis most other countries of the world has fallen behind and that must be contrasted with a growth of perhaps 20 per cent in the years prior to the election of the present government. The minister has chosen to assume a hypothetical growth of 5 per cent and to give us certain figures. Based on those figures it would appear to be clear that Quebec will stand still, Manitoba will stand still and Saskatchewan will stand still. We also know that as a result of the ingenuity of the minister and the government they have somehow contrived to make worse in a relative way the position of Alberta, British Columbia and New Brunswick with respect to tax-sharing agreements. The minister says that he declines to make any further speculations as to what the provinces will get out of the new five year agreement. However, he also denies that certain provinces will not improve and will stand still as I have suggested. I take it that they stand still simply by reason of the fact that they finally fought for a stabilization clause in the new five year agreement under which they would not get any less than had been provided under the agreement which they negotiated with the previous government. Perhaps that is why

Dominion-Provincial Relations table 3 on page 7927 oi Hansard gives dollar for dollar figures with respect to income for Manitoba, Saskatchewan and some of the other provinces for the first year of the new five year agreement. The income they receive will be the same as the income they received during the last year of the old formula which they negotiated with the previous government in 1956.
The new formula includes a growth of 5 per cent per annum. How many people in the province affected will think that this represents any progress, having regard to the various extravagant proposals that were made by the present minister when he looked at these matters when the last five year agreement came up for debate in 1956 and, in particular, when so many of the people in these provinces remember what the Prime Minister said in the election campaigns of 1957 and 1958. In other words, this represents a standstill for those provinces. The figures seem to indicate that. Am I right in assuming that the fact the dollar figures are identical is due to the stabilization clause in the agreement? In other words, there is a floor but apparently the floor is going to be the best that those people in those provinces I have mentioned are likely to get in this next agreement, as opposed to the fact that in the agreement negotiated in 1956 when Mr. Harris was minister of finance, there was an over-all increase of many millions of dollars in the amount the provinces received, and in no case did a province fail to go forward.


Donald Methuen Fleming: Mr. Chairman, the hon. member is getting the terms mixed up. He has been talking about stabilization, and I think he means the guarantee. As a result of the operation of the guarantee feature in the new formula, the provinces he has mentioned, Quebec, Manitoba and Saskatchewan, will not fall below what they would have received under the present formula. These are all provinces with incomes below the national average and therefore they have the benefit of both features of the guarantee. In other words, they are assured not only that their receipts in any future fiscal year will not fall below those in the present fiscal year, but they are also assured that they will not receive less than they would have received had the present formula been carried on into the future throughout the five year period.
Then, by way of comparison, if the hon. member will look at table 3 on page 7927 of Hansard, he will see that in the case of Quebec, had it not been for the change, next year under Mr. Harris' formula Quebec would have received $217 million whereas


under the proposed formula they will receive $241 million. The province of Manitoba under Mr. Harris' formula would receive next year $38 million, and under the formula proposed by the present government will receive $42 million. The province of Saskatchewan, under Mr. Harris' formula would receive next year $38 million and under the formula proposed by the government in this bill will receive $42.5 million.
The hon. gentleman talks about increased benefits, but he is overlooking the fact that the benefit to the provinces is not static. It is a substantial benefit now and it increases year by year over the five year period as the federal government progressively withdraws from the personal income tax field in favour of the provinces.


[Stage Direction]
Clause agreed to.
Clause 5 agreed to.
On clause 6-Tax collection agreements.
Donald Methuen Fleming: There is an amendment to clause 6 to which I referred two days ago by which subclause 3 would be added. I would ask my colleague the Minister of Veterans Affairs to move this amendment. I sent copies of the amendment, Mr. Chairman, to hon. members opposite when I referred to this matter on September 26 as reported at page 8941 of Hansard, and I set forth the reasons for the amendment.


Gordon Minto Churchill: I move:
(3) Where the law of a province that imposes a tax on income as described in subsection (1) contains provisions requiring every person making a payment of a specified kind to another person to deduct or withhold therefrom an amount and to remit that amount on account of such tax, effect may be given to those provisions, in accordance with the regulations, in relation to persons to whom such payments are made out of the consolidated revenue fund or by an agent of Her Majesty in right of Canada.


[Stage Direction]
Amendment agreed to.
Clause 6 as amended agreed to.
Clauses 7 to 9 inclusive agreed to.
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Chown):: When shall this bill be read a third time; now?


John Whitney Pickersgill: By leave.
Mr. Fleming (Eglinton) thereupon moved the third reading of the bill.


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


Lionel Chevrier: On division.
Motion agreed to on division, bill read the third time and passed.

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BUSINESS OF THE HOUSE	(Text):



PROCEDURE WITH REGARD TO PRIVATE BILL

Gordon Minto Churchill: I wonder if at this stage the house would give consent to dealing with the private bill which we mentioned this morning, Bill No. S-30, an act to incorporate the Equitable General Insurance Company?


The Acting Speaker (Mr. Chown):: Does the house give unanimous consent to proceeding now with the private bill which was the subject of discussion earlier today?


Some hon. Members:: Agreed.



PRIVATE BILLS


Robert B. Lafrenière: that the house go into committee to consider Bill No. S-30, to incorporate the Equitable General Insurance Company.
Motion agreed to and the house went into committee, Mr. Chown in the chair.
On clause 1-Incorporation.
(Translation):


Lionel Chevrier: Mr. Chairman, with respect to this bill which was read for the second time in this house yesterday, I must say, first of all, that we, on this side of the house, readily agree that the standing orders be set aside in order that this bill may be passed today.
I understand the upper house has considered this bill in its three stages and has stated its approval. So that the adoption of this bill be not delayed, I would just ask the hon. member if he could tell us whether Mr. MacGregor, who is the expert in this field, has declared himself satisfied at the other place, not only with the bill in its present form but also with the statement of assets of the company, as far as both federal and provincial statutes are concerned, because I understand that in bills of this nature, it is necessary, under federal legislation, for the company to declare a certain amount of assets.


Robert B. Lafrenière: Mr. Chairman, in order to relieve the moral responsibility of the members of this house, I must say that the wording and the provisions of this bill have been approved by the superintendent of insurance.


Lionel Chevrier: I simply wanted to ask the hon. member whether the superintendent had declared himself satisfied with the federal requirements with regard to this bill.


Robert B. Lafrenière: He did, Mr. Chairman.


Mr. Regier:: Mr. Chairman, our procedure in this particular case is somewhat unusual. However, I wish to express on behalf of this group our complete confidence in the superintendent of insurance, Mr. MacGregor. This group has been advised that this bill in all respects has the endorsement of Mr. MacGregor. I wish to take this opportunity to say that, while we have tens of thousands of federal civil servants, very few of them have the confidence of the hon. members of this house to the extent that Mr. MacGregor has. It is on the basis of the assurance that we have received that Mr. MacGregor wholeheartedly approves of this bill that we are willing to agree to these unusual proceedings and allow the bill to pass.


[Stage Direction]
Clause agreed to.
Clauses 2 to 23 inclusive agreed to.
Preamble agreed to.
Title agreed to.
(Translation):
Robert B. Lafrenière: Mr. Chairman, I should like to thank all members of this house for their fine co-operation.
(Text):
Bill reported.


Mr. Speaker:: When shall the said bill be read a third time; now?


Some hon. Members:: Agreed.


Robert B. Lafrenière: the third reading of the bill.


[Stage Direction]
Motion agreed to, bill read the third time and passed.
[Stage Direction]
The house in committee of supply, Mr. Chown in the chair.
DEPARTMENT OF FINANCE General administration-
111. Departmental administration, $1,911,211.
William Moore Benidickson: Mr. Chairman, I think we all thought the other day that the Minister of Finance would introduce his estimates by making a statement, particularly with respect to his representations on behalf of this country at two very important international assemblies. I of course refer to the conference at Accra and the conference of the international monetary fund at Vienna. Is it the intention of the minister to introduce his estimates with a statement? If it is, I know the committee will give him the opportunity to speak prior to any other hon. member of the committee. Does the parliamentary secretary to the Minister of Finance have anything to say in this connection?

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Mr. Bell (Carlelon):: Mr. Chairman, the Minister of Finance will be back in his seat in just a moment.


Donald Methuen Fleming: Mr. Chairman, on this first item in the estimates of the Department of Finance I am very glad to have an opportunity to make a statement to the committee, particularly in relation to the recent meeting of the commonwealth economic consultative council at Accra. I say I particularly welcome this opportunity because of the extent of the error and confusion which has been created by reports and editorial comments that I have *observed since the conference. It seems to me that never in my experience in public life have I seen so much inaccuracy and misunderstanding in regard to any conference or positions taken at it or the results of the conference.
What we have been witnessing in Canada, and indeed elsewhere, in the past fortnight is something of a welter of speculation, very inaccurate speculation, on the part of persons who obviously were not present at the conference, for it was a conference that was held behind closed doors. A great deal of misinformation has been spread about. I welcome, therefore, an opportunity of correcting in so far as I can the gross inaccuracies which have been evident in this connection. The latest one to come to my knowledge was uttered on "Preview Commentary" yesterday morning when the spokesman took it upon himself to say that the Minister of Trade and Commerce and I at the Accra conference took what he called "an anti-British line". I do not like to use harsh terms but I have to call a statement of that kind by its proper name. I have to say that that statement is a blatant lie. It is a downright falsehood. Why people should make irresponsible statements of that kind I shall never be able to under stand.
I think that as far as all hon. members of this house are concerned it is unnecessary for me to make any such statement as this, but in view of that kind of misstatement let me make it very clear that when the time comes when Canadian ministers at a conference of that kind, or at any conference, take an anti-British line, I will not be a minister. I am sure the delegates attending that conference on behalf of the other commonwealth countries would have been utterly amazed if they had heard such a misstatement.
The commonwealth economic consultative council was established pursuant to a decision taken at the Montreal trade and economic conference of 1958. Clause 18 of the report of that conference reads as follows:
Commonwealth consultation and co-operation in economic matters are of primary importance in

achieving our objectives in the economic field. We are agreed that the present machinery for consultation is working well; it is flexible and informal and well fitted to the family character of the commonwealth relationship. We decided that the existing arrangements should be co-ordinated under the name of a commonwealth economic consultative council. We welcomed an offer by the United Kingdom government to provide a commonwealth house to be available for the constituent bodies of the council and for other commonwealth meetings.
The commonwealth economic consultative council has now held three annual meetings. Those of 1959 and 1960 were held in London, and this year's meeting was held in Accra. It was the first time that a commonwealth meeting at government level has been held in Africa, and the significance of Africa as a continent on the world's stage as well as the significance to the commonwealth of the African countries of the commonwealth was recognized in the acceptance of the invitation of the government of Ghana to hold the convention in Accra.
Numerous matters were discussed at the conference. The meeting itself lasted three days, and the days were fully occupied by discussion. This conference was attended for the first time by Nigeria, Sierra Leone, and Cyprus in self governing capacities. I shall not delay the committee by reviewing the other subjects discussed, in view of the absorbing interest which has been attracted to one subject in particular. However, I have put this matter in its setting in order to show that this was one of a number of subjects which were discussed. I refer in particular to the question of the approach of the United Kingdom to the European economic community with a view to negotiating possible terms for joining that community.
Let me make it clear at the outset that the decision in this matter is, and always has been, recognized by all the commonwealth countries as one for the government of the United Kingdom. There can be no question about that. There never has been any question about that. In the communique which was issued here in Ottawa on July 14 following a meeting of Canadian ministers with Mr. Duncan Sandys representing the government of the United Kingdom to discuss this subject, the following sentence appears:
The Canadian ministers recognized that this is a matter for decision by the British government.
That continues to be the position. No one has ever questioned that. Why, then, has this subject become a matter of commonwealth consideration? Well, this is a subject of great concern to the countries of the commonwealth and, broadly speaking, for two very good reasons. First of all, if the United Kingdom accedes to the community on the basis of the treaty of Rome, which

is the treaty which has brought the community into being and which keeps the six in community relationship, there would be changed political relationship involving the United Kingdom. In the second place, there would be changes in the terms of trade between the commonwealth countries and the United Kingdom.
My next observation is that this discussion came about because an item had been placed on the agenda involving consideration of this subject. Here is the item which appeared on the agreed agenda. It reads: "European Economic Problems". This agenda was drafted, at least in part, by the United Kingdom. The ministers representing the United Kingdom at the conference expected a full discussion of the matter and were well aware of the importance attached to it by the commonwealth countries assembled there. At the meeting of heads of delegations prior to the opening of the conference it was agreed that, having regard to the importance of this subject, one complete day should be set aside for it. The second day, by agreement, was therefore set aside. The discussion occupied the whole day and was concluded at the end of the day.
A communique was issued at the conclusion of the conference, and hon. members have had an opportunity of perusing that communique. Therefore, when the Leader of the Opposition intimated to the house, as recorded at page 8407 of Hansard, that Canadian ministers at that conference were squealing before they were hurt, he completely overlooked the fact that this item was placed on an agreed agenda and that the United Kingdom ministers came to Accra expecting a full discussion of the subject.
It is now said in some quarters that the decision recorded at that conference and set down in the communique was what is called "a Canadian decision". It was said here in this house two days ago by the hon. member for Laurier that Canada led "a ganging up on the United Kingdom." There is no shred of truth whatsoever in those charges-not the slightest. They are based upon a complete distortion of the facts. Here is the hon. member for Bonavista-Twillingate adding to that by a statement he made in Toronto last evening. I have in my hand the Ottawa Journal of this afternoon which contains a Canadian Press dispatch. The Journal has surmounted it with a headline reading, "Pickersgill Charges Tories Anti-British". The opening paragraph reads:
Toronto (CP)-Liberal member of parliament J. W. Pickersgill accused the Conservative government last night of being "consistently antiBritish"-
Supply-Finance
Those charges of the hon. member for Bonavista-Twillingate are false in all particulars. I hope I have made myself quite plain. He has been playing his old game of cheap politics.


Lionel Chevrier: The minister does that pretty well.


Donald Methuen Fleming: Mr. Chairman, the communique reveals very completely the unanimity that was reached at this conference. It is a report of agreement on the part of the commonwealth countries. Indeed, a quite extraordinary unanimity was achieved at the conference of the views of the commonwealth countries in relation to this issue. A great injustice is done to the other commonwealth countries by those who pretend and mislead by saying that this was a Canadian decision. Canada played her proper part at this conference. My colleague and I would be open to censure if we had not played a proper part at this conference. However, as the communique shows, the decisions were unanimous decisions on the part of the commonwealth countries in expressing their opinions to the government of the United Kingdom.
The opinions which were expressed by Canadian ministers were government policy, the same policy that was indicated to Mr. Duncan Sandys when he visited Ottawa on July 14 and which are reported in the communique of that date.
The Canadians were not the first to open up this subject at the conference. As a matter of fact, Mr. Chairman, so great was the interest in this subject that in the public session of the conference which preceded our going into private session the Right Hon. Harold Holt, the treasurer of Australia, made reference to the subject. Here is a passage from his remarks in his speech in the public session. He said:
A decision by the United Kingdom to join the community would be a step of such tremendous historical importance that it must, my government believes, affect the commonwealth to some degree. We in Australia recognize that the question whether the United Kingdom should or should not join the community is one which the United Kingdom government alone can decide. But we have been concerned at the weakening effect that a decision to join might ultimately have on the commonwealth reloaionship. None of us wishes to see that happen. The United Kingdom has told us of the great importance it attaches to maintaining the commonwealth relationship unimpaired. We have welcomed the assurances the United Kingdom government has given us on this point. This is more than a matter of trade and ffnancial relationships, but these aspects are of far-reaching importance also. It would be a most unhappy outcome if the long established trade within the commonwealth were not fully maintained and, indeed, given adequate opportunities for expansion.

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We are sure that the European nations appreciate the significance for the world, and for themselves, of a strong and prosperous commonwealth. We, for our part, fully understand what European unity means for peace and economic advancement of the world at large. We are taking no narrow nor unimaginative view of this matter. But we feel that it would be a tragedy if gains made in this direction were secured by impairment of the strength of the commonwealth either as a whole or in any of its constituent parts.
That was the opening reference to the subject. Of course, there had been a debate in the house of representatives in Australia prior to this conference and statements were made in the course of debate there by the prime minister, Mr. Menzies, and the minister of trade, Mr. McEwan. Those are a matter of record and very strong statements they are indeed, drawing attention to the tragic consequences which might result for Australia and the commonwealth.
In the discussions at the meeting at Accra all of the fully self governing countries of the commonwealth spoke through their ministers and as well we heard the views of several of the dependent or emerging territories. My colleague, the Minister of Trade and Commerce, put Canada's position before the conference and I would be doing less than my duty if I did not pay tribute to my colleague for an admirable presentation of the subject in relation to the trading and economic interests of Canada and the United Kingdom.
I may say that the United Kingdom opened the discussion and then the other delegates followed with their remarks. It fell to my honour to speak after the other commonwealth delegates had all spoken, and then the delegate for the United Kingdom, the chancellor of the exchequer, closed the discussion.


Lionel Chevrier: Would the minister permit a question? Would the minister include in his very laudatory remarks with reference to the Minister of Trade and Commerce the decision of that hon. gentleman to release the text of his speech to the United Press?


Donald Methuen Fleming: The hon. gentleman, if he had paid attention to what my colleague said in this house two days ago, would know very well that my colleague said he did not release that statement to the press and that it was done without his knowledge.


William Moore Benidickson: Nevertheless it was said.


Lionel Chevrier: He didn't, but he did, you mean?


Donald Methuen Fleming: I do not mean that. I mean exactly what I said. One would have thought that by this time due note would have been taken of what had been said recently in this country by Right Hon. Reginald Maudling the president of the board of trade of the

United Kingdom. Mr. Maudling was one of the two ministerial delegates of the United Kingdom to this conference. He has been associated with this question for some years, for it was when he was paymaster general in the British government in 1957 and 1958 that he was responsible for carrying on the negotiations of those days for British adherence to the old industrial free trade area plan in Europe. Mr. Maudling has been through this matter for years and is fully acquainted with all features of it. Speaking in Toronto within the last two days Mr. Maudling has made a statement in this connection which ought to be a sufficient answer to any who have been engaged in making misleading statements in regard to this matter and in regard to the Canadian attitude at this conference. The Canadian Press dispatch of September 26 from Toronto reads as follows:
If the price of joining the European common market is to disrupt the commonwealth, then the price is too high to pay, Reginald Maudling, president of Britain's board of trade, said today.
However, he believed it would be possible for Britain to enter the market without incurring the commonwealth penalty that some feared.
"This is what we are trying to find out", he added, referring to Britain's prospective negotiations with the market countries.
Mr. Maudling, whose position in the British cabinet is similar to the Canadian portfolio of trade and commerce, made his comments at a press conference which followed his address to the current three-day annual conference of the Canadian institute of chartered accountants. Stating that one quarter of Britain's exports are within the commonwealth preference set-up, he said the preferences are more important than some people seem to think. Asked if they could be maintained if Britain enters the European market, he replied: "It is wrong to anticipate what may or may not be done before negotiations start. The preferences we enjoy are very important and I hope to see them preserved as much as possible."
He described the recent meeting of commonwealth ministers at Accra, Ghana, as "the best discussion we ever had". He didn't agree with all that was said but he considered that everything said was reasonable.
Concern was expressed, he continued, "but no one went as far as to say it was impossible for Britain to enter the common market and still maintain the Commonwealth, though there was a feeling that it would be difficult to achieve such a situation."
Britain's position was that she was not prepared to enter the market unless there were proper safeguards for the commonwealth. Other representatives expressed worry that Britain might not be able to achieve such safeguards and that the negotiations might break down, causing harm all round.
There is the authentic statement of Mr. Maudling, one of the two ministers representing the United Kingdom government at that conference.
So far as the position of the United Kingdom is concerned, nothing new emerged at the conference beyond what had already been indicated to the government by Mr. Sandys when he was here on July 14 and what had

been said by Prime Minister Macmillan in the parliament at Westminster in the debate there in midsummer.
The position of the United Kingdom was that no decision has been taken by the government of the United Kingdom to join the community, but that the negotiations were necessary in order to ascertain upon what terms it might be possible for Britain to be received into membership in the community. In other words, it was emphasized that the purpose of those negotiations was to ascertain what terms would be possible for Britain to adhere to the community. The statement of Mr. Macmillan in the Westminster debate was reiterated, namely that the British negotiators would do everything possible to defend the interests of the commonwealth, Britain's partners in the European free trade association and British agriculture. It was only after all of these matters had been taken into account that the decision would be taken and also that a commonwealth conference would be held before a decision was arrived at.
The tenor of the discussion, I think, is worthy of mention, particularly in view of the gross misrepresentation that has been carried on since. The discussion was serious. The contributions were marked by a high sense of responsibility and by such restraint that comment was made on the restraint with which all members spoke. The discussion was frank; it was realistic having due regard for the gravity of the matter, and for the future of the commonwealth. There was no such thing as lamentation, as it has pleased one of the newspapers in this country to state. On the contrary, there was an amazing degree of unanimity of feeling indicated. There can be no doubt that the degree of concern and apprehension felt by the governments of all of the commonwealth countries has been underestimated by all; that means underestimated, I think, by all of the commonwealth countries, including the United Kingdom, underestimated by the press of those countries. I am quite prepared to say for myself that I had underestimated the strength of the feeling entertained by the other commonwealth governments in regard to this question and the apprehensions they feel over it.
This was the first opportunity that there had been for a collective expression of commonwealth sentiment in regard to the matter. There had been bilateral consultations in the summer; there had been a somewhat preliminary discussion of the subject at the last annual meeting of the commonwealth economic consultative council in London a year earlier; but since this became a matter of active decision on the part of the United
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Kingdom government this was the first opportunity there had been for a collective expression of opinion.
I think it would have been better if this conference had been held earlier, or a conference at which a collective expression of commonwealth opinion might have been heard. I think it would have been well if the suggestion of our Prime Minister had been acceded to earlier so that the collective views of all of the comonwealth countries might have been made known to all of them; for the danger of miscalculation as the result of underestimating concern and feelings of this kind is obvious.
I said there were two aspects to this question and to the changes that might be brought about by British adherence to the community. The first is political. I think that in all of the discussion in newspaper columns in this country and in speeches this feature has been largely overlooked. The treaty of Rome, it should be borne in mind, creates a new authority. The countries concerned did part with some portion of their sovereignty and therefore any country joining the community on the terms of the treaty of Rome necessarily submits to some modifications of its sovereignty. This is inevitable under the terms of the treaty itself. That fact has never been denied. Indeed, Mr. Chairman, it was discussed at some considerable length by Mr. Menzies, the prime minister of Australia, in his speech in the house of representatives at Canberra recently. Mr. Menzies is a very eminent constitutional lawyer. Quite apart from economic questions, in his speech Mr. Menzies was much concerned about the prospect of changes in political relationships between the United Kingdom on the one hand and other commonwealth countries on the other if Great Britain adhered to the community on the basis of the treaty of Rome and consequently submitted to a modification of sovereignty.
I think it would be well, Mr. Chairman, if I placed on the record some of the observations of Mr. Menzies. The date is August 16, 1961. He said:
We cannot as yet anticipate the result of the negotiations. We can, I think, reasonably assume that Great Britain will not accede to the Treaty of Rome, unconditionally. Such an accession would bring to an end the commonwealth preferential system which has endured for many years. It would be highly damaging to Australia, and could be disastrous to our neighbour and friend. New Zealand. As the preferential system operates both ways, it could mean the end of British preferential tariff rates in our tariff schedules.
On the other hand, it may be too much to hope at this stage that Great Britain will be allowed, by the necessary unanimous agreement of the six, to maintain the commonwealth preferential system completely unimpaired. Some compromise will no doubt be sought. We shall, of course,-

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Please note these words, Mr. Chairman:
We shall, of course, battle for the best possible arrangements for the protection of our traditional and legitimate interests.
Further on in his speech Mr. Menzies said:
The decision that will ultimately be taken by Great Britain, to enter on the negotiated terms or to stay out, will be the most momentous peacetime decision in living memory. Upon its wisdom and success probably the future of the free world and most certainly the future of our own family of nations will turn. It follows that Australia will bring to her own negotiations with Great Britain and, as we venture to hope, with the six, not only the most powerfully presented exposition and defence of our own interests, for her own future is our special care and responsibility, but also a strong and wide sense of common responsibility. It will have been observed, sir, that Great Britain has put the six on notice of these complexities. She has told them that Great Britain must take account of the special commonwealth relationship as well as the essential interests of British agriculture and of the other members of the European free trade association.
I now turn to the broad political issues. We believe that the entry of Great Britain into the European economic community would have far-reaching political implications.
Then Mr. Menzies-


Gordon Campbell Chown: Order. I am sorry to interrupt the minister but his time has expired.


William Moore Benidickson: I am sure all would be agreeable to allowing the minister to continue on this very important subject.


Gordon Campbell Chown: Does the committee give unanimous consent to the minister to continue?


Some hon. Members:: Agreed.


Donald Methuen Fleming: I thank the committee, Mr. Chairman. Further, Mr. Menzies said with regard to the political implications and what they would be it Britain entered the community:
Common domestic policies will cry aloud for common external policies to protect them. If Great Britain joins, and other western European nations with her, and Europe becomes, step by step, a great power, or a cohesive agglomeration of power, Great Britain will become, we would hope and expect, a most important integer in that power. But she will, ex hypothesi, cease to be completely independent in relation to European affairs. This is why the decision which she must make after the proposed negotiations is so politically momentous.
And further, Mr. Chairman:
As a senior commonwealth country, we have felt bound to say that we do not think that the commonwealth as a political organism would be strengthened. Great Britain, as the centre of the commonwealth, has in the past spoken for herself at commonwealth conferences. After entering the new Europe, with its common policies and institutions and rules, she could no longer speak with detachment. The treaty of Rome cannot be approbated and reprobated at the same time. Nor could

a growing interest, and, more than interest, involvement in Europe, be calculated to leave completely untouched the present British position in and around Asia and Africa.
And further:
But it would be a mistake to pretend that there was no change when in fact there had been a great one. We have not based our opinion upon any narrow ground of the importance of absolute sovereignty. All international pacts, from the United Nations to the North Atlantic Treaty Organization and the Southeast Asia Treaty Organization, involve the exercise of sovereignty to limit, by free choice, liberty of individual action. But neither United Nations nor NATO nor SEATO is a super-state. Parties to the agreement may leave as they think fit, in the exercise of the very sovereignty by which they joined. The treaty of Rome, as I have pointed out, is different. There must be unanimous agreement for the joining and the leaving. Complete independence of action no longer exists.
We pronounce no dogma. We do not seek to turn back the great tides of international affairs. We do not say that the British view of the effect upon the commonwealth of a decision by Great Britain to go into Europe is demonstrably wrong. In the present state of the world, with bullying and bluster our daily diet, it may be that the commonwealth must once more change, for the common good. Our belief is that a change is, in fact, involved. That being so, we feel bound to state our belief with firmness but with good will.
I think that is a statement by Mr. Menzies of the Australian position which is worthy of the highest respect and, if I may say so, the concluding words in which he summed up the position of the government accurately describe the position taken by the Canadian delegation at the Accra conference. We recognize that if Great Britain adheres to the community on the basis of the treaty of Rome or something much like it, then unquestionably a political change is involved, as Mr. Menzies has said. That being so, Mr. Chairman, if I may appropriate his words, we felt bound to state our belief with firmness but with goodwill. There was a great expression of goodwill at that conference, Mr. Chairman, and let no one deny that fact. Everything that was said there was said in the deepest spirit of goodwill and mutual understanding.
So, Mr. Chairman, we begin with this fact, that if there is adherence by the United Kingdom to the community on the basis of the treaty of Rome or something close to it there will necessarily be far-reaching political implications and changes within the commonwealth. It cannot be otherwise. The view was expressed by all of the countries at that conference that British leadership in the commonwealth is needed. It is necessary for the full effectiveness of this commonwealth which has such a beneficent and unique mission in the world as a multiracial society or family of equal nations. That is why the countries of the commonwealth recorded their apprehension as to the results that might

follow British membership in the six on the basis of the treaty of Rome or something resembling it.


Erhart Regier: Is that a threat to the British commonwealth?


Donald Methuen Fleming: This was an expression of opinion on the part of all of the commonwealth countries. There were no threats uttered at any time by anyone. Apparently the only threats that exist are in the minds of some people who are malevolently determined to misrepresent what occurred at Accra. I want to make it very clear that correction is needed of some of the statements I have seen as to remarks attributed to me. It is said that I warned the ministers at Accra that if Britain made this move the commonwealth could never be the same again. What was said, Mr. Chairman, not only by Canada but by others, was that if the United Kingdom adheres to the community on the basis of the treaty of Rome or unless there is a very substantial change in the terms of the treaty of Rome, there will inevitably follow a change in political relationships. That is the inevitable consequence of the treaty of Rome.


William Moore Benidickson: Will the minister quote from the text that he used at that time?


Donald Methuen Fleming: I did not use a
text. I have the clearest recollection of what I said. I had notes but not a text.
The other aspect of this matter is the trade and economic aspect, and I shall not deal with it because my colleague, the Minister of Trade and Commerce, has already made a statement to the house two days ago and will be here to deal with that subject further. The communique draws attention in this respect to several things of which I trust all hon. members are now aware. The first is that adherence by Great Britain to the community under the treaty of Rome will involve a change in the terms of trade. Next, it will not affect all commonwealth countries equally. Some could be affected disastrously, some seriously, some not so seriously. This inequality of effect may, as the communique points out, have a divisive effect within the commonwealth.
The role of these emerging countries and of the newly self governing countries as primary producers is a matter of very great concern to them. They do not wish to be condemned to a continuation of the role of being simply primary producers. They do not see much economic security for their future if they are so confined. That is one reason why they have expressed very great concern about losing the benefit of the British market and, in order to reach the British market,
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having to hurdle the kind of tariff barriers that now prevent their goods from entering the markets of the six, or restrain that entry. So, Mr. Chairman, on both of these grounds, the political ground and the economic and trade ground, important changes are involved and they will inevitably follow if Great Britain, as I say, adheres to the community on the basis of the treaty of Rome.


George James McIlraith: I wonder whether the minister would permit a question at this point. On the day that European common market matters were being discussed, and since the direct and immediate effect of them had to do with commonwealth preference, was there any representation from South Africa who still receive preferential treatment?


Donald Methuen Fleming: No, South Africa was not a member of this conference.


George James McIlraith: No, I understand that; but on this particular point, they still receive commonwealth tariff preferential treatment.


Donald Methuen Fleming: No, there were no views expressed on behalf of South Africa.
Let me clarify one matter in passing. It has been said in some quarters that some of the commonwealth countries would be glad to take advantage of the provision in the treaty of Rome that permits the adherence to the community of associated overseas territories of the parties. The commonwealth countries, the self governing countries, made it abundantly and emphatically clear without exception that they would have nothing to do with any such status. Indeed, one delegate said he would not touch it with a barge pole. All were concerned that this would put them in a second-class position as regards sovereignty. I wish to say, in all fairness, that the United Kingdom disclaimed any thought whatever that any of the self governing countries of the commonwealth would adhere to the community as associated overseas territories. Some of the dependent countries might wish to do so, but those who were heard from indicated that they would attach very stiff conditions to their association with the community in this capacity.
So, Mr. Chairman, as the communique makes quite clear, this question was viewed as one having all the elements of gravity about it for the commonwealth. Let me take up some comments that are being made, and being made rather loosely, in regard to Britain's forthcoming negotiations with the six. It is said in some quarters in this country that the United Kingdom is compelled to join the six; that there is no future for her unless she joins the six. Well, Mr. Chairman, let me say for those who are trying to make Canadians believe today that it is inevitable

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that Britain shall join the six, that is not what the government of the United Kingdom says. They do not at all accept the idea that this is inevitable and they have made it very clear that the purpose of these negotiations is to ascertain terms upon which it may be possible for Great Britain to join the six.
Then, it is said the commonwealth countries have no right to try and restrain the United Kingdom from adhering to the community, also that if they have anything to say, they should be putting forward an alternative. This conference, Mr. Chairman, was not called for the purpose of discussing any particular alternative to this proposal; that was quite beyond its scope and agenda. Anything of that nature would require a conference called on due notice.


William Moore Benidickson: Surely, you knew that this was the major item coming up?


Donald Methuen Fleming: This agenda was made known a few days before the conference, yes. However, there was no thought that this conference was called for the purpose of discussing some particular alternative plan. Let me make that very clear. No one expected that at all, and no one looked for it at the conference.
In so far as the subject of an existing alternative is concerned, let me draw attention to some figures that ought to be borne in mind by some people who have been writing very freely on this subject and who seem to have overlooked the importance of commonwealth trade. It is true that the exports of the United Kingdom to the six have declined moderately in percentage terms, but the same is not true of volume or value terms. The fact is that Britain's exports to the commonwealth are three times what they are to the six. Much has been made about the large population that is available in the six as a market. Well, the population of the commonwealth is several times that of the present population of the six. I point out this fact, and it was discussed by the various ministers at Accra, that the potentialities of trade within the commonwealth are not exhausted; indeed they have not yet been fully developed.
I think it is not unfair to say that most of the countries of the commonwealth are looking for opportunities-this is certainly true of the Canadian government-for enlarging trade within the commonwealth, certainly between the United Kingdom and the other countries. Trade relations within the commonwealth are constantly under review. Of course, much of the trade in the commonwealth is now governed by agreements under GATT. They are a matter of contract; they represent concessions that have been bought and paid for on he basis of exchange. The principle that the

commonwealth countries declared for at the Montreal trade and economic conference in 1958 was the principle of multilateralism in world trade. This is the policy that was declared at Montreal. It was not a restrictive policy. This is the policy to which the Canadian government adheres.
Let me remind the committee, Mr. Chairman, of some of those provisions in the report of the Montreal conference of 1958, a unanimous document adhered to by all the then members of the commonwealth. Article 7 reads:
It is our firm belief that commonwealth countries should continue to work in no exclusive spirit towards a multilateral trade and payments system over the widest possible area. We are also convinced that there are many things which can appropriately be done to increase trade between one commonwealth country and another. Commonwealth participation in the preferential system has proved to be of mutual benefit and we have no intention of discarding or weakening it. Some of the trade agreements between commonwealth countries now require review, and work has begun on renegotiating them. It is our intention to work towards an expansion of commonwealth trade by all practicable means, and we have explored a number of these.
Then, Mr. Chairman, here is article 21:
About half of the total trade of the commonwealth is exchanged within the commonwealth and half with the rest of the world, and it must be the aim of every commonwealth government to foster trade within and outside the commonwealth. The conference reaffirmed the policy that commonwealth countries should work to achieve a multilateral trade and payments system over the widest possible area.
Then, article 28 reads:
The conference reaffirmed the importance of the role that preferences have played and continue to play in commonwealth economic relations. Commonwealth countries have continued to adhere to the preferential system while adjusting their policies to the requirements of changes in the scope and character of world trade.
There was an emphatic declaration in favour of continuation of the commonwealth preferential system, a system that has been of great advantage to commonwealth countries. This was the unanimous expression of the commonwealth countries in 1958.
Article 31 reads:
The United Kingdom government confirmed its intention of maintaining as an important element in the preferential system the free and unrestricted entry of nearly all goods imported from the commonwealth.
If there is adherence by the United Kingdom to the community on the basis of the treaty of Rome, it will no longer be possible to carry that policy into effect.
Then, Mr. Chairman, the last quotation I have is from article 40.
Here let me remind hon. members that in the years 1957 and 1958 Great Britain and

other countries were engaged upon plans and negotiations for the formation of a free trade area in Europe. It was to be an industrial free trade area. It was to embrace the six; it was to embrace the other countries that are now members of the European free trade organization; but it was to be, so far as Great Britain was concerned, an industrial free trade area, and there was to be no interference whatever with Britain's trading relations in agricultural products. This was very reassuring to Canada and other commonwealth countries because it carried with it the assurance that there would be no interference with the preferred position of Canadian agricultural products in the market of the United Kingdom.
Here then is article 40:
The conference considered the influence which the European economic community might have on commonwealth trade interests and reviewed the progress of the negotiations for a European free trade area.
Mr. Chairman, perhaps I may interpose and say this was before the plans and negotiations for the creation of the industrial free trade area came to nought at that meeting in Paris on December 15, 1958, when the efforts that had been made failed completely, and from that time on the six went their way and the other countries who were not members of the six proceeded to form the European free trade association. This reference to the European free trade area is to the proposed industrial free trade area at that time. I continue:
It reaffirmed the conviction of commonwealth countries that an outward-looking free trade area in which trade would be increased rather than merely rechannelled would contribute to their common objective of an enlarging world economy. It was the belief of the conference that the European countries could make an important contribution of their own to the freeing of world trade and payments, the removal of discrimination and the expansion of world trade. Many delegations expressed anxiety lest arrangements for closer economic association in Europe should result in a narrowing of the trading opportunities for outside countries, or in the extension of protection especially in agriculture where they feared that existing protectionist tendencies might become reinforced and entrenched. The United Kingdom delegation recognized the importance of making the provisions of the free trade area such as would ensure the widest possible trading opportunities and reaffirmed the undertaking about the safeguarding of commonwealth interests in the United Kingdom market for foodstuffs including drink and tobacco. The conference reviewed the arrangements made to ensure effective and continuing consultation on these issues among commonwealth countries; and noted the progress of consultations in the GATT with the members of the European economic community.
I shall not detain the committee, Mr. Chairman, by further references to the report of the Montreal conference or the unanimous agreements entered into there as recorded in
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this very extensive report. In summary, in 1958 all commonwealth countries reaffirmed their belief in the value of the commonwealth preference system and reaffirmed as well the importance of ensuring the preferred access of foodstuffs from the commonwealth into the market of the United Kingdom, and that there should be no interference with that in any developing new trade arrangements in Europe.
This remains the policy of the Canadian government. We have subscribed to and have wholeheartedly upheld the principle of multilateralism in world trade. We have sought the continued expansion of Canadian trade in the world. My colleague the Minister of Trade and Commerce has pressed as hard as any minister of trade and commerce could press for the extension of Canadian markets and Canadian efforts to sell abroad. It is government policy to seek to promote our trade on the multilateral basis that is enshrined in the GATT.
These policies we believe to be important We believe they have lost nothing of their importance. Those reservations that were expressed in 1958 concerning even British adherence to the industrial free trade area apply with infinitely reinforced effect in relation to proposed British adherence to the European economic community, because in the light of the protectionist agricultural policies that are being pursued by the six today I do not think anyone well informed on this subject thinks it is possible to negotiate with the six such terms of adherence of the United Kingdom to the European economic community as will preserve the preferred position of Canadian foodstuffs in the market of the United Kingdom. Certainly no one could possibly expect that the preferred position of Canadian manufactured exports in the United Kingdom market can be preserved in the light of the policies of the six.
An hon. member a moment ago used the word "threats". Let me make it clear, Mr. Chairman, that at all times, whether you are speaking of the meeting of this commonwealth consultative executive council in London a year ago, or the Accra meeting this year, there never has been any threat. We do not talk in those terms at these meetings. We talk at these meetings as friends. We talk frankly and with a due sense of responsibility and a due acknowledgment of our very great common interests.


Lionel Chevrier: You talk as amicus amici.


Donald Methuen Fleming: This is well known to all of these commonwealth countries, and the kind of statements that have appeared in some quarters in Canada would shock any delegate from any country who attended

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this conference, because they have given such a completely misleading impression of the conference, what was said there and the spirit in which it was carried on.
It is acknowledged by all the commonwealth countries that if they are shut out of the market in the United Kingdom for any of their products as the result of terms made with the six, these commonwealth countries will have to look for markets elsewhere. These advantages are a matter of exchange; they are a matter of contract. These advantages are bought and paid for in terms of reciprocal exchange of advantages, and this is the way that in the world today countries exchange trade opportunities.
Our effort has been to preserve for Canadian producers all of the markets that they have had. I say this, that if my colleague and I had not taken that position there-as did other commonwealth countries on behalf of their producers-we would have been failing in our duty to Canadian agriculture, Canadian primary producers and Canadian producers of manufactured goods for the United Kingdom market.
The communique has been said by some to be a strong document. Well, Mr. Chairman, it was an accurate document. It correctly reported the views expressed by the numerous countries that attended that conference. The views recorded there-and that communique, of course, was an agreed document and every phrase in it was carefully weighed-properly express the consensus of views. It was written by those who have a high appreciation of the importance of the commonwealth and the contribution it makes to the world.
We make sacrifices because of our belief in the commonwealth, because we believe that the commonwealth should be strengthened. Canada has provided substantial assistance through the Colombo plan. It has been axiomatic in the policy of this government that practically all of our Colombo plan aid goes to commonwealth countries. Look at the other things that we have done with a view to bringing aid to other commonwealth countries, particularly those that are seeking to develop their resources. We do this because we believe in the commonwealth as an institution. We believe that it has a mission in the world that no existing international institution has. As the communique of July 14 points out, we would view with grave concern anything which would weaken the commonwealth, so high a value do we attach to it and to its mission in the world today as a multi-racial group or family of self governing nations bound together by ties which are really indefinable.
[Mr. Fleming (Eglinton).l
An attempt has been made to play down the Canadian government's interest in trade with the community. This does a grave injustice to the government's efforts to expand trade with the six and to strengthen our trade and economic interest in that quarter. Canada has played a leading part in the reorganization of O.E.E.C. into the organization for economic co-operation and development. We are their fellow-members with all the members of the community. Indeed, we are allies, in NATO, of all these members of the community. We have a very close relationship with it. It is not as close as our relationship with the commonwealth countries, but we value our relationship with these countries of the six and look forward to expanding our trade with them. That has been government policy and it continues to be our policy.
Because of our relationship with these countries we have been able to impress upon them, I think, the importance which we as a great trading nation attach to the pursuit of their goals by outward-looking policies and not by inward-looking policies which would have the effect of restricting trade between the community and the rest of the world.
On the subject of the attitude of the United States to this important question, I simply draw attention to the fact that at least one member of the United States cabinet has recently declared publicly that the United States would not wish the United Kingdom to adhere to the community on a basis of a continuance of the commonwealth preference system. While we were still in Accra my attention was drawn by telegram to remarks made by the secretary of agriculture of the United States, as reported in the New York Times of September 8, that if the United Kingdom were to join the community it would produce an intolerable situation, in the view of the United States, were it to result in a continuance of the preferential trade system of the British commonwealth on its present basis. It is the policy of the Canadian government to seek to preserve to Canadian producers the opportunities and advantages which they enjoy under the commonwealth preference system. At the Montreal conference of 1958, all the commonwealth countries reaffirmed the value of that system to them. The Canadian government also reaffirms its belief in the advantages of that system to its producers, regardless of the views other nations may have toward the preference arrangements.
Finally, may I say that I think this conference has produced very beneficial results. All the countries of the commonwealth now know fully what the views of all other countries of the commonwealth are in relation to this subject of such far-reaching importance. There can be no possibility now

of any of the commonwealth countries underestimating the views of other commonwealth countries in this regard. United Kingdom delegates are reporting back, of course, to their own colleagues just as the Minister of Trade and Commerce and I are reporting to this house.
Let is not be thought, as has been erroneously asserted in some United Kingdom newspapers, that the views of Canada were different from those of Australia or India or the other countries. There was a complete identity of views among these leading countries of the commonwealth. Indeed, I would say there was an extraordinary unanimity of view among all countries of the commonwealth. On this question we see eye to eye with the countries I have mentioned.
I close on the note on which I opened. Everyone recognized that this is a decision for the government of the United Kingdom. It is a decision to which a very great responsibility attaches because of the far-reaching consequences which would follow. As Mr. Menzies pointed out in the statement from which I have read, all commonwealth countries must sympathize with the government and the parliament of the United Kingdom in the responsibility which faces them in this regard. It is a very difficult decision for any government to make. The views expressed by commonwealth countries at Accra were not unsympathetic. They were not unmindful of the problem which faces the United Kingdom government. They fully recognized it.
Perhaps I might close by using in this house the words with which I closed my remarks at that meeting when I reviewed what had been said by the other commonwealth delegates. I pointed out that in an uneasy world we had an existing reality which we believe to be vitally important for all the world. I said we did not want to see any of the commonwealth values in this world weakened. Before this institution is in any way modified, we must be sure that we were giving up substance for substance, not substance for shadow. Having regard to the fears, the forebodings and the apprehensions which were expressed at that meeting-expressed with restraint, expressed with responsibility, expressed candidly, expressed in the most friendly way by all countries, I said: "These are not the fears of the indifferent; these are not the forebodings of the unsympathetic; these are not the apprehensions of adversaries. These are, rather, the fears, the forebodings and the apprehensions of the best friends that Great Britain has in all the world."


Lionel Chevrier: I desire to raise a point of order, and the point of order is this. Accord-
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ing to the minister himself, the hon. gentleman has read from a part of the speech, or the concluding remarks of the speech which he delivered. I think it is the usual practice in those circumstances for him to produce the rest of the speech-in other words, the whole of it.


Donald Methuen Fleming: I can assure the hon. member that nothing would give me greater pleasure than to repeat the speech I gave there.


Lionel Chevrier: I have listened to one, and that is enough.


Donald Methuen Fleming: It occupied 50 minutes. I was shocked to be told that after it was completed. I have not the text of that speech, but I have my notes. As I say, it would give me great pleasure to reproduce that speech, to repeat it here if the hon. gentleman wishes.


Lionel Chevrier: That is not the point of order. The point of order was that the minister, having read part of his speech should now table the whole speech.


Howard Charles Green: Perhaps I might point out, on the point of order, how ridiculous that suggestion is, Mr. Chairman. For example, I understand the hon. member for Bonavista-Twillingate made a speech in Toronto yesterday. Suppose he were to get up today and quote one sentence from it. Would some Liberal be entitled to demand, on the strength of that, that he could table the whole speech?


John Whitney Pickersgill: I can assure the Secretary of State for External affairs that I should be very happy to reproduce it.


Howard Charles Green: Yes, but nobody would be very happy to have to listen to it. I suggest it is going from the sublime to the ridiculous to try to introduce in this house the practice of the wholesale tabling of speeches.


Lionel Chevrier: I like the way in which the Secretary of State for External Affairs waives aside any point of order as being ridiculous- as going from the sublime to the ridiculous. I submit to the committee that not only did the minister read a part of the speech he made at Accra but that he read lengthy portions of the speech made by Mr. Menzies. Having done that, surely he should have no objection to producing the speech he made.


Donald Methuen Fleming: The speech Mr. Menzies made was made in the house of representatives at Canberra, Australia and presumably is reproduced in the records of the Australian parliament. It is one thing to reproduce the closing sentence of a speech, but for the hon. member to ask me to table the speech is to ask the impossible because there is no text. I can assure the hon. member that I made that closing statement and if on

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some occasion the house had 50 minutes or an hour to spare I will be very happy to repeat the speech I made at Accra.


Lionel Chevrier: Just let us have it.


Donald Methuen Fleming: I think I can do it
almost verbatim. I have my notes and a clear recollection of everything I said. My colleague who was at my elbow on that occasion will be able to correct me if I depart from the course of the speech. I will be very happy to make that speech any time the house has an hour to spare.


Mr. Hees:: Mr. Chairman, I request permission of the committee to have included in Hansard at this point a table showing the effects which the United Kingdom acceptance of the European common market tariff could have on our principal exports to the United Kingdom market.


George James McIlraith: That is an interpretive document.


Lionel Chevrier: There is objection to that statement.


William Moore Benidickson: It is not based on any known government records, is it?


George Harris Hees: Yes, it is.


Gordon Campbell Chown: Would the minister assist the committee by giving the sources of these figures that make up the table to which he has referred?


George Harris Hees: I shall be very glad to do so if the committee wishes. The table consists of five columns which, in consecutive order, are headed: (1) commodity; (2) dollar value of Canadian exports to the United Kingdom market 1960; (3) present United Kingdom tariff on commodities; (4) final common market tariff which would be reached in stages in the next ten years and (5) commonwealth preference which would be lost. Those are all facts.


Lionel Chevrier: I object to this table being produced. A table I attempted to introduce this day was objected to and I object to the tabling of this on the grounds that it is not unlike the table I sought to produce.


Donald Methuen Fleming: On a point of order, Mr. Chairman, may I point out that the statement which my colleague is offering to the committee is drawn from official government sources and was prepared for the information of hon. members. That is a status different from that of documents that are privately prepared which any individual private member of this house chooses to bring forward. This is information compiled from government records which has been prepared for the use and information of the committee.


George James McIlraith: As I understood the Minister of Trade and Commerce, this document represents the interpretation the minister places on events that might happen in the future. He is now asking the committee to accept his interpretation rather than the actual facts as they are recorded.


George Harris Hees: My whole objective in presenting this table was to give hon. members information which I believe will make it possible for them to better study this whole question which I think the hon. member for Ottawa West will agree is a complicated one. The figures I have here were prepared by the Department of Trade and Commerce and are factual. The whole intent is to make it easier for hon. members to understand what is a very complicated matter but if the hon. member does not wish to have this information tabled I shall be very pleased to follow the course of making copies available to all hon. members and to members of the press and handle it in that manner.


George James McIlraith: My remarks have been misinterpreted by the minister who persists in stating that these are facts. If he would examine the record he will see that he is dealing with his interpretation of future events. That is the point.


Erhart Regier: I have no objection to the tabling of any facts but I strenuously object to the tabling of expectations either on the part of the minister or his officials. I feel that his request is entirely uncalled for, unprecedented and out of order.


George Harris Hees: That is perfectly all right with me, Mr. Chairman. Obviously hon. members are not interested in discussing this matter in an intelligent way. They wish to speak on a prejudiced political basis in an effort to confuse the people of Canada in any way they can. Understanding that, I can appreciate their position. I shall deal with the table in the way I have outlined. I will make copies available to all hon. members of the house and to members of the press and in that way the members of the house and the people of Canada can become a little better acquainted with this very difficult subject.


George James McIlraith: I rise on a point of order, Mr. Chairman. The Minister of Trade and Commerce has put himself in the position of having imputed motives to all hon. members who disagree with him, in addition to which he has cast reflections on the characters of all hon. members. On both counts the minister is in breach of the rules of the House of Commons. I ask, therefore, that he withdraw his remarks including his imputation of motives to all hon. members.


George Harris Hees: Mr. Chairman, I have imputed motives to nobody.


Lionel Chevrier: No; you have congratulated us.


George Harris Hees: Perhaps I might be permitted to proceed.


George James McIlraith: I ask for your ruling, Mr. Chairman.


George Harris Hees: Oh, don't be so precious.


Gordon Campbell Chown: Order. As I heard his remarks the minister probably transcended the bounds of good taste to some extent and perhaps he would modify what he said previously to assist the mood of the committee.


Mr. Pugh:: Bring out the modifier.


George Harris Hees: Mr. Chairman, if I have offended the feelings of any hon. members I hasten to withdraw any remarks that could possibly have offended the sensibilities of such hon. gentlemen.


Mr. Smith (Calgary South):: Hon. members opposite are pretty sensitive about this subject.


Erhart Regier: I rise on a point of order, Mr. Chairman. I wish to know who has the floor. I thought the Minister of Trade and Commerce rose to table a document. Our normal custom is to have a member of the official opposition speak after the minister introduces his estimates. We allowed the Minister of Finance an additional hour in which he made a highly political speech-


David Vaughan Pugh: A very good one.


Erhart Regier: -and we were understanding and sympathetic. But I am now interested in hearing what the hon. member for Kenora-Rainy River has to say. I think it improper for one minister to follow another.


William Moore Benidickson: I do not wish to use up any time I may be allowed in this debate but may I point out that the other day the hon. member for Laurier, the acting leader of the opposition on that occasion, was not allowed to continue certain remarks in reply to the Minister of Trade and Commerce. The Minister of Finance indicated that he proposed to refer to the Accra conference. He dealt exclusively with that. In view of the circumstances I wish to relinquish, in favour of the hon. member for Laurier, the normal opportunity accorded a member on the opposition side to speak at this time because the Minister of Finance did not deal with the over-all nature of his estimates but confined himself to one aspect of his own personal activities connected therewith.
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Gordon Campbell Chown: Inasmuch as the Minister of Trade and Commerce did not get launched on what he had to say, we will follow the practice normally followed in committee and call on the hon. member for Laurier.
(Translation):


Lionel Chevrier: Mr. Chairman, I thank my colleague, the hon. member for Kenora-Rainy River (Mr. Benidickson), for giving me the opportunity of making comments on the speech which the Minister of Finance (Mr. Fleming) has just delivered.
I listened closely to the minister who was long-winded as usual-that is his privilege.
Mr. Chairman, it is quite remarkable that every time a senior member of this government attends a conference, he is always in the embarrassing position of having to explain his statements in the house on his return.
For instance, when the Minister of Veterans Affairs (Mr. Churchill) came back from his trip to Hong Kong, he complained rather bitterly about the way newspapers had treated him. The main victim of his criticism at the time was an American newspaperman. Today, we are witnessing a somewhat similar situation following the statements made by the Minister of Finance and his colleague, the Minister of Trade and Commerce (Mr. Hees). In fact, both of them have claimed that their statements were misinterpreted not only in press or radio reports but even by the Leader of the Opposition (Mr. Pearson).
The Minister of Finance was quite peeved at the radio commentators who yesterday morning and yesterday evening openly condemned the government's policy at the Accra conference. The commentators strongly criticized the stand taken by those two ministers. So it was with the Leader of the Opposition. The Minister of Finance feels that the latter lacked courtesy when he asked a question and made certain comments during a discussion on that subject in the house, on the orders of the day.
The Minister of Finance complains that the Leader of the Opposition has said about him that he was squealing before being hurt. And what is more, he finds fault with the statement made by my colleague from Bonavista-Twillingate (Mr. Piekersgill) in Toronto-


Donald Methuen Fleming: That was not a statement; it was a false charge.

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Lionel Chevrier: Once again, the minister is saying that it was a false charge. In that case, I would ask him to make known the contents of his speech so that we may know whether or not the Minister of Finance and the Minister of Trade and Commerce have actually made the statements they are reported to have made-


Donald Methuen Fleming: Mr. Chairman, I rise on a point of order. I have stated that I would be glad to deliver again in the house the speech I made in Accra, if the hon. member would give me the time to do it.


Lionel Chevrier: Mr. Chairman, I do not intend to listen to the minister for another hour. I listened to him long enough a while ago. If he can repeat the speech he made over there, why not write it down and hand us a copy so that we would know exactly what he said because, as I stated at the outset of my remarks, it seems quite strange to me that every time the Canadian ministers take part in an important conference, they are always misquoted either in the press or elsewhere.


Mr. Valade:: They are simply misinterpreted by the Liberals.


Donald Methuen Fleming: It is not the
reports-


Lionel Chevrier: As regards the common market, this government has no positive policy. On the contrary, it seems to have adopted a negative policy for it is saying to the member countries of the common market: "Do not belong to that organization lest you harm us," whereas it should consider carefully and thoroughly the respective situations of the nations of the Inner Six in order to see whether it would not be possible to come to some agreement or association with those nations.
We on this side of the house believe that the stand taken by the government on this question is wrong.
We believe more than anything that in view of the serious situation of our times, we should do all we can to unify the commonwealth instead of dividing it. We should not try, as I said a moment ago, to cause a division among the nations of the commonwealth, thereby weakening the free world.
We must obviously protect Canada's interests before and above everything else, but is there no other way to protect those interests beside the one adopted by both ministers?

Do I have to say here that it is within the inner six that the current expansion is the most dramatic? And this is why, in my opinion it is in those countries that tariffs should be reviewed.
By the extraordinary economic evolution, the gradual reduction of customs tariffs, in conjunction with the wide opportunities of a competitive market of 180 million people- which is comparable to the American market -there has been achieved a real economic revolution within the inner six: France, West Germany, Italy, Luxemburg, Belgium, and the Netherlands. The results-as the minister probably knows better than I-of that European structural reconversion were soon felt. Today, the productivity of large European industries is comparable to that of the United States and Canada. Living standards are rising. The expansion rate of the six is the quickest in the world except, perhaps, in Japan. All productive potentials, manpower and equpiment, are fully used. Unemployment is virtually unknown there. In 1960, production has gained 8 per cent in the countries of the common market. The manufacture of steel, which is a significant index of industrial activities, has increased by more than 15 per cent, as compared to 8.5 per cent in the Soviet union and 5.3 per cent in the United States.
Now, in spite of that rapid growth, prices have remained firm. The cost of living has not risen excessively. In short, the economic prospects are so attractive that it is not surprising if American, British and even Canadian capital is migrating to those countries.
For instance, Polymer Corporation Ltd., of Sarnia, Ont., is going to build a synthetic rubber plant in Strasburg, France; Massey-Ferguson is expanding and converting its plants in that country; and, also in France, Seagram's is taking an active part in the wine industry. Those are facts, which goes to show very clearly that, as a result of the expansion going on there, Canadians, Americans and British are considering the possibility of establishing themselves there while we, on this side of the ocean, are more and more inclined to move away from there.
We have to admit, Mr. Chairman, that North America does not strike a very brilliant figure in comparison with what is going on over there. In the last four years, the expansion rate of our economy has been very slow. Investments in industrial equipment are declining. We had a recession in 1957-58, and another one in the spring of 1960. Unemployment in this country has now reached disquieting proportions. In 1960, our per capita

production was 5 per cent lower than in 1956. The upward trend in our exports is slowing down and, although they were satisfactory last year, they fell off these last few months, which causes some concern for 1961 and 1962. Our balance deficit is getting worse and the United States are not in a better position than we are, as the deterioration of their balance of payments is marked by an alarming outflow of gold and a threat to their dollar. Most of our industries suffer from a surplus of unused potential. In short, our economy is far from working at full capacity.
I therefore reiterate the question: What is the Canadian government doing in view of this situation? Unfortunately the government does not have a definite policy in connection with the common market situation. On the other hand, the government is worried, as it should be, about what would happen if we lost our British markets, and the government voices protests and threats. The Minister of Finance may well complain. Here is what a European leader recently said in Brussels, with regard to this whole matter, to a correspondent of the Financial Post:
You should explain to Canadians that, even if we understand their problems, Mr. Fleming's threats cannot intimidate us... If our actions fail to please you, you are free to take any steps which your government thinks necessary.
We like Canadians very much. But do not think that a market of 18 million people could, by any protests, bring about a change in our basic policies. You should keep a sense of proportion.
And he concluded by saying:
If, out of sheer spite, you draw back Into a protective shell, you will only complicate and multiply the troubles facing your economy.
I should now like to read into the record the words of somebody who was at the conference, somebody you never failed to quote here in this House of Commons, because he writes in the Gazette; the Minister of Labour (Mr. Starr) among others quoted him with glee the other day, when his estimates were being discussed. I am thinking of the financial columnist of the Gazette, Mr. John Meyer, who, on September 13, wrote the following paragraph during the commonwealth economic conference:
(Text):


Donald Methuen Fleming: He wasn't there. (Translation):


Lionel Chevrier: The Canadian government delegation at Accra is wasting its time trying to impress the British, and thus contributes to strengthen the view that Canadians are not able to look after their own business. For the last two years, the Canadian
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government did nothing to anticipate the effects of London's participation in the common market. All it did was threaten-
That conference, like the previous ones in London and Ottawa, shows that our policy has failed.
We are creating the impression of wanting in vain to oppose the rising tide of European economic expansion.


Mr. Marfineau:: Has the hon. member said that Mr. Meyer attended the conference at Accra?


Lionel Chevrier: Yes, I said that, but I accept the correction of the minister that he was not there.
All the same, the fact is that the Gazette's columnist, a financier working for a paper quite sympathetic to this government, has written what I have just quoted.


Donald Methuen Fleming: He has written nothing from Accra on this subject, I assure you.


Lionel Chevrier: He wrote what I just quoted and this shows clearly the views of his newspaper recognized in Canada for its Conservatism.
But I have another quotation to add to that one, from Mr. Olivier Moreau-Neret, who addressed the French chamber of commerce in Montreal only a week ago. He spoke on the French economy, the common market and Canada's stand concerning the common market.
Mr. Moreau-Neret, whose remarks have been reported in Le Devoir, Le Nouveau Journal and La Presse of September 21 said:
Why are Canadians so concerned with the common market? We had the same concern in France about the common market, we were afraid of it, we joined it with apprehension but we joined and we are quite happy because our industries have been greatly revitalized.
Those are the very words reported in La Presse of September 21, 1961.
Incidentally, this French banker, who is chairman of the "Credit-foncier franco-canadien" and, through his corporation, is greatly interested in Canada as a whole, said:
The common market may be the factor that did the most to rejuvenate France. We used to live in an atmosphere of extreme protectionism that was perhaps justified at one time, but that crystallized old habits and caused a lazy ageing of economic structures.
In America, when nylon was killing flax, that was too bad for flax. We, in France, were subsidizing flax growers! With the common market, those methods are no longer admissible.
And that is why, since we joined the common market, he added, the French economy has become young and strong once again.
A while ago the minister had American statements to put on record. Is he aware

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that a great number of important American people are in favour of an association between North America and the countries-


Donald Methuen Fleming: It is not in the
interest of Canada or of the commonwealth.


Lionel Chevrier: Well, then listen to this. The suggestion and proposal of a common market were put forward by leading statesmen like Mr. Ludwig Erhard, Mr. Nelson Rockefeller, Mr. Adlai Stevenson, Mr. Kamp-mann, prime minister of Denmark, ex-secretary of state Dean Acheson, one of the promoters of the Marshall plan and NATO, Mr. Faure, French minister of economic affairs, and the Prime Minister of Great Britain, Mr. Macmillan, during his recent visit in Ottawa.
Of course, the Leader of the Opposition (Mr. Pearson) advocated that idea time and again in this house.
An Atlantic economic community would give real economic meaning to the Atlantic alliance and strengthen its political cohesion where there is very much room for improvement. It would give more strength to free world unity against communist expansion. It would increase our trade with Europe and consequently reduce our dependence on the United States.
And I stop here to say that if the minister maintains his stand, he will have no alternative but to advocate economic union with the United States. But we on this side of the house would object and muster all our efforts against an economic union with the United States which could only lead us to a political union.


Donald Methuen Fleming: Are you still a Liberal? Your policy has changed.


Lionel Chevrier: I am not advocating a new policy; this is the policy of my leader, it is the Liberal policy that I am recalling here, and it is the policy that I would have liked to put on record the other day when I was interrupted by Mr. Speaker, who was obviously acting in accordance with the rules of the house.
Finally, I submit that such a step on our part might solve the difficult problem arising from the relations among the six and the seven, for it would entail, a far-reaching decision.
Mr. Chairman, Canada should take the lead and extend the European accomplishments to the Atlantic area so as to form a larger association, out of the existing groups, by establishing an Atlantic economic committee on which we would sit, and

we would then take advantage of the economic integration of free trade and of a large competitive market.
This is how we must meet the challenge of the success attained in Europe, that I-
I shall put on our official record a sentence which expressed my thought: "If you can't fight them, then join them".
Then, instead of fighting against this movement, as did the two ministers who represented us over there, it seems that we should have tried another strategy. The situation would be altogether different if a definite policy, that we could have discussed in this house, had been suggested.
I shall close my remarks by saying that we condemn the stand apparently taken by the two ministers and that we-


Donald Methuen Fleming: The stand was not taken by the two ministers and you know it very well.


Lionel Chevrier: I said "apparently taken by the two ministers". And, along with the Minister of Trade and Commerce (Mr. George Hees), as long as you do not produce the statements which you have read and used over there, we on this side of the house, have the right to-


Donald Methuen Fleming: I already said that I had no written statement; there is nothing that I could possibly read.
If the hon. member (Mr. Chevrier) continues to ask me to read a text-


Lionel Chevrier: Well, Mr. Chairman, if it is true that the hon. minister has no text, he could at least write down what he said. But the Minister of Trade and Commerce has a text; let him produce it. He said that he had inadvertently handed it to the reporters over there. I therefore believe that we should see this text, for the newspapers have, apparently, interpreted that text in a manner which was quite unfair to those ministers.
I pity the ministers for the injustice they have to suffer from the press, radio, the Leader of the Opposition and some of my colleagues. What injustice. They always complain when they come back from long trips. I was just about to say: Travellers from afar can lie with impunity, but I will not do so because that would be contrary to the standing orders. Yet, Mr. Chairman, I should like to conclude my remarks-


An hon. Member:: Read a text.


Lionel Chevrier: If I did have the minister's text, I would certainly read it, but I only have extracts. I shall not press this matter any further.
I should like to conclude by reading into Hansard part of a document which is prepared regularly by the government's information service at Canada House, in London, a service which is well known to any member who travels a bit. Here is what that document issued by Canada House, in London, said about the conference. The comments, which are taken from the Sunday Telegraph of September 24, read as follows:
(Text):
But we would do well to pay far more attention to the implications of the commonwealth finance ministers unqualified disagreement of the week before.
Even now, I am not, repeat, not sure that the burden of the Accra communique has been fully understood here . .. Recording that all other commonwealth representatives expressed grave apprehension and concern at the British application to join the common market, it doubted whether we would, in fact, be able to negotiate adequate protection for commonwealth interests, and implied the complete collapse of the commonwealth as a political entity without such protection.
But behind this lies something new. Until Accra, it had been commonwealth policy to insist on the need for its various economic interests to be accommodated in an U.K.-common market agreement. The Accra communique represents, for the first time, a deliberate attempt to sabotage British entry altogether.


Donald Methuen Fleming: An utterly false statement.


Lionel Chevrier: Well, you had better get it straight at Canada House; this is your own document.


Donald Methuen Fleming: This is not a statement from Canada House. The hon. member is quoting now a statement from a United Kingdom publication and he is trying to drag in Canada House. All that Canada House does is to gather together these statements appearing in the United Kingdom newspapers, so let us not have any misrepresentation about Canada House.


Lionel Chevrier: Is this a point of order?


Donald Methuen Fleming: This is a false statement in a British newspaper.


Lionel Chevrier: The minister likes to interrupt me, but whenever 1 interrupt him he calls on the rules of the house to be put into effect.


Donald Methuen Fleming: The hon. member is quoting a false report.


Lionel Chevrier: I should like to continue with this report.


Donald Methuen Fleming: It is a false report.
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Lionel Chevrier: It emanates from Canada House, London.


Donald Methuen Fleming: No, it does not.


Lionel Chevrier: Yes, it does, and I continue with the last paragraph.


Donald Methuen Fleming: Mr. Chairman, on a point-


Lionel Chevrier: I quote:
At present, this is the policy-


Donald Methuen Fleming: On a point of order, Mr. Chairman-


Lionel Chevrier: I do not yield, Mr. Chairman.


Gordon Campbell Chown: The Minister of Finance, on a point of order.


Donald Methuen Fleming: The hon. member is reading a document which he says comes from Canada House, and he is trying to put the authority of Canada House behind it. That is not a document, Mr. Chairman, that has the authority of Canada House behind it any more than the post office of this country is responsible for the accuracy of the texts it may carry through the mails.


William Moore Benidickson: Canada House sent it out.


Donald Methuen Fleming: If the hon. member is pretending that Canada House stands behind this, that is a misrepresentation. This is simply an extract from a British newspaper, and the article was written by someone who was not at Accra. It is not an accurate interpretation of what happened at Accra.


Lionel Chevrier: The minister is annoyed by what I have said.


Donald Methuen Fleming: Because it is a departure from the truth.


Lionel Chevrier: I have not departed from the truth. I said at the outset of my remarks, if you had listened or if you had understood, either one or the other, that this was prepared by the information office at Canada House, and I submit I have the right to read the last paragraph. I quote:
At present, this is the policy only of the Canadians, whose eloquent finance minister, Mr. Fleming, drafted the document. Mr. Fleming, a political to his fingertips,-


Donald Methuen Fleming: I can help the hon. member with what was said.


Lionel Chevrier: -is well aware of the value of the appealing over the heads of the British government to the profound fund of commonwealth sentiment that exists in this country.
(Translation):
In concluding, I should like to say that I understand now why the minister did not like the last part of that statement. He did not like it because probably-

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Donald Methuen Fleming: That report is false.


Lionel Chevrier: The minister says that the report is false. Then, everything I said since the outset of my remarks must be false or inaccurate.
I should like to tell the minister that since neither he nor his colleague will consent to show us the text of what was said over there, I will accept the report which appeared n the Canadian newspapers.
Mr. Chairman, it is six o'clock-


Donald Methuen Fleming: You would rather believe what is not true.
(Text):
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 7.30 p.m.
Erhart Regier: Mr. Chairman, a very long report was given to this committee by the Minister of Finance as to what had happened at the Accra conference. I remember the last election only too vividly. At that time I had been given to understand that the Conservatives, if they received the confidence of the Canadian electorate, which they did, were going to end the days where we had all our eggs in one basket, as the saying is. They were going to transfer much more of our trade away from the U.S.A. and there was going to be a great enhancement of our trade with the commonwealth and especially with the United Kingdom.
I have also been in this house long enough that I remember only too clearly the day when the present Secretary of State for External Affairs accused a former government of giving Britain a stab in the back. This had to do with the attempted invasion of Egypt by Britain. I feel that at this particular time this government is giving the government of the United Kingdom a stab in the back, a much worse kind of stab than the St. Laurent government might ever have inflicted upon the motherland.
We have had a number of debates in this house on the importance of the European economic community. Members of both opposition parties have repeatedly urged this government to ally our economy more closely with the economy of the United Kingdom. I remember very well the day when the hon. member for Ottawa West introduced a resolution in this house advocating a free trading arrangement between Canada and the British West Indies. The government has paid no heed to these recommendations, and now a goodly number of us are afraid that we are about to see the end of the British West Indies Federation. I am sure no member of this

committee would like to see the disintegration of the British West Indies Federation. I should like to read from the editorial page of the Financial Post of September 30. The editorial states in a concluding paragraph:
Is there no commercial bargain Canada could afford which would make confederation attractive to Jamaica? Their vote was not so decisive as to be irreversible.
I should like to pose this question to the government of the day. If they had paid any heed to the proposal which was put before this house in a resolution brought forward by the hon. member for Ottawa West, the vote in Jamaica might well have been different.
I believe that the Canadian government at the present time is guilty either of asserting its desire to supplant the United Kingdom in its traditional role as the leader of the commonwealth or, for other reasons which I shall not enumerate, of attempting to sabotage the whole concept of the commonwealth. Many articles have appeared to the effect that the Canadian government is attempting to take over from the United Kingdom the role of leadership within the commonwealth. I was amazed when the Minister of Finance this afternoon used the phrase "commonwealth values will weaken". That is the substance. I had never imagined that commonwealth ties were based primarily on dollars and cents, but apparently the government of the day places a greater value on immediate and selfish Canadian commercial interests than on the traditional and historic values which so many of us have always associated with the concept of the British commonwealth. The minister's own words were "commonwealth values will weaken". That is the substance. If the financial loss to Canada is the substance of our loyalty and love for the commonwealth, then I say that this Tory government is not a Tory government in any sense of the word but a purely selfish government. If commonwealth ties will weaken because we will lose money, then I say that this Tory government is being disloyal to its own name.


Donald Methuen Fleming: You are not telling the truth.


Erhart Regier: It is a wrecker of the commonwealth if it has that kind of attitude.


Donald Methuen Fleming: That was not the
Canadian attitude.


Erhart Regier: A year ago I said that the Minister of Finance was marching around western Europe like the abominable snowman with a club over his shoulder. He has not foresaken that club, and his speeches and the reports we have had out of Accra show that he is still marching around with that club over his shoulder attempting to dictate to the

United Kingdom. Despite all the bland assurances of the minister this afternoon that this decision is one for the United Kingdom to make, we cannot forget that this government is attempting to enlist as much support as it can in the rest of the commonwealth in order to prevent the United Kingdom government from looking after the interests of its own population.
I was pleased that the minister at no time attempted to deny that the immediate best interest of the United Kingdom is to ally the economy of the United Kingdom with that of the European community.


Donald Methuen Fleming: Evidently you did not listen to me.


Erhart Regier: All we are saying is that this government ought to be aiding and assisting and joining with the government of the United Kingdom, not only so that there might be a greater interchange of goods between members of the commonwealth themselves but also between nations belonging to the European economic community and commonwealth nations. That would be an approach which, in the long rim, would really be worth while and one which would be worthy of the interest and the sentiments of the Canadian people. I can only recall, in conclusion, the words used by the Secretary of State for External Affairs, as he now is, at a time when Great Britain was in difficulty in the Middle East when he said: "This government is, really, pushing a knife into the back of our mother country."


Donald Methuen Fleming: That is a malicious untruth.


Erhart Regier: It is not a malicious untruth, and the minister is well aware of it.


Lionel Chevrier: On a point of order, the minister has no right to say that it is a malicious untruth. That is a reflection on the hon. member. He may say a statement is untrue but to say that it is malicious is contrary to the rules which govern this committee. The minister should know better than that.


Some hon. Members:: Withdraw.


Erhart Regier: I am very happy to let the record speak for itself. If the Minister of Finance wishes to leave that on the record it is up to him. He has often made retorts in the heat of the moment. As I say, I shall leave it up to him.
I had expected that this debate would have been concerned with the estimates of the department. I wish, now, to return to those estimates. I know that we have concluded the debate on the dominion-provincial tax arrangements. However, I do want to add one
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statement to what has been said, and I think it is appropriate at this time. Even though I come from British Columbia, one of the wealthiest areas of the dominion, and even though our premier continuously rants and rails at the hard deal he pretends he is getting from the federal government, I should like to say that I am a Canadian first and a British Columbian second. Despite the legislation which was approved yesterday, I hope this government will give serious consideration to doing much more on behalf of the "have not" provinces of Canada than has been indicated up to now. I realize that in terms of the legislation which has been passed today, in the long run my own province of British Columbia is going to lose. However, despite that, a decision has been made and I am not referring to that decision. I do hope that many times the aid which has so far been given will be made available to Newfoundland, New Brunswick and Nova Scotia.
It almost breaks your heart to walk into a school house in rural Nova Scotia and see how little those people who have always loved education so much are able to offer their children compared with what we in British Columbia are able to offer ours. I hope the day is not too far distant when the government will appeal to the Canadian people as a whole to make many more tens of millions of dollars available in order to enable the boys and girls of eastern Canada to enjoy the same opportunities and rights that are presently enjoyed by the boys and girls of Ontario and British Columbia.
I fail to see in the estimates any indication that the present government is aware of the fantastic discrepancy that exists in the opportunities that are available to Canadian children in one part of Canada as opposed to another. I assure the government that when it decides to spend not $25 million but $250 million annually in order to ensure equality of opportunity among Canadian children I shall go out on the public platform in British Columbia and defend the action and attitude of the government in that regard.
I turn now to the subject of interest rates, a major item in the estimates. I wish to underline the importance of a reduction in prevailing interest rates to our prosperity and national welfare. This government proposes to spend no less than $747 million on interest on the public debt. This is roughly ten times as much as we propose to spend on the C.B.C. which offers so much of value to the Canadian public.


William Moore Benidickson: Three million dollars more on interest than Mr. Harris spent.


Erhart Regier: The government proposes to spend through the Department of Agriculture

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an amount that is roughly one fifth of the amount the minister proposes to spend on interest on the public debt. The Department of External Affairs intends to spend only $88 million. Our contribution to world peace totals $88 million but our homage to the money lenders will represent an expenditure ten times as great. This levy will be hard on the taxpayers and I appeal to the minister in the interest of the welfare of our Canadian economy.
I have in my hand the September 30 issue of the Financial Post. In another editorial I notice a report to the effect that Canadian manufacturers now must invest $13,377 per employee in equipment and facilities. I hope the government realizes that a lowering of interest rates by 2 per cent in relation to the total working force and the investment I referred to would make possible an increase in wages of $22.30 per month. I used the figure of 2 per cent deliberately because since this government took office interest rates not only to governments but to individuals and corporations have increased by more than 2 per cent. A lowering of interest rates by some 2 per cent would make possible an increase in wages or a reduction in the cost of production and would make us more competitive in the world, involving an amount of $22.30 per month for every individual employed in industry.
Not many Canadian realize the important role the level of interest rates plays in our cost of production at this time. I feel the minister does not appreciate it nor did the former governor of the Bank of Canada. Incidentally, I was happy to observe that at long last the minister has assumed responsibility for the monetary and fiscal policy of this nation. I believe all Canadians breathed a sigh of relief when the problem was resolved at long last.


Donald Methuen Fleming: That was possible only after there was a change of governors.


Erhart Regier: If the minister now wishes to reverse himself I leave that up to him. I read carefully the statement released by the new governor and that released by the minister at the time of the appointment. If the minister wishes to reverse himself in this regard that is strictly up to him.


Donald Methuen Fleming: I said that that was possible only after a change of governors.


Erhart Regier: I did not agree with the policy of the former governor that interest rates have to be left to find their own level. If he wants to I believe the minister can do much toward reducing the level of prevailing interest rates paid by all governments, individuals and corporations.
(Mr. Regier.]
While on that subject I wish to present an idea to the minister. The hon. gentleman has been visiting in many parts of the world and has met many new people. I hope he has acquired many new ideas. If that is so he may not be very receptive to a proposal. However, I believe it would be in the national interest if at least once a year there was a meeting of the federal government and of provincial governments at which they would express opinions on and assess all their borrowing needs for the ensuing 12 months including the borrowing needs of all municipalities, hospitals, school boards, etc. I understand this has been done for a number of years in another commonwealth nation where the central government meets with the governments of the state once a year and makes a survey of all their borrowing needs. They then obtain information concerning how much investment capital might be available within the nation for the purposes of government and agencies of government. As I understand it, once the formula has been agreed upon, then the federal government does all the borrowing on behalf of the provinces, the municipalities, the school boards, the hospitals, and so forth, and it allocates the money that it has been able to borrow on a previously agreed upon formula. This would bring about a tremendous lowering of the interest burden that now has to be borne by us when we pay our school taxes, our hospital levies, our municipal taxes and our provincial taxes. All the borrowing is done by the federal government on a mutual understanding with all levels of government. I believe this would be a great improvement upon the existing situation where there are levels of government of all kinds and government agencies competing with each other on the money markets in order to obtain their required funds.
While I am on my feet may I say I hope that before these estimates are concluded the minister will express the attitude of this government in regard to what I believe is the issuing of money on the part of provincial governments. Our government in British Columbia has been issuing bonds payable on demand with interest. In my books this in effect is no different from a dollar bill. Once a government issues a bond payable on demand with or without interest it is the same as issuing money. I might warn the minister that unless this government takes a position on what is happening in this regard he may find 10 provincial governments issuing currency of this kind and his whole monetary and fiscal policy will go out the window. I believe that the right to issue currency is within the exclusive jurisdiction of the federal government. I hope the federal government will take a look at this business and will

assert its rights in this regard, as it had to do on another occasion many long years ago with respect to the activities of another western government.
I know the government is most concerned about its deficit. I am sure the Minister of Finance is not happy at having to record his fourth or fifth consecutive deficit. The forecasts he has made have been so wrong. The newspaper world is encouraged to report a 3 per cent increase, I believe it is, in our gross national product. I should like to analyse that report and to see what it means in terms of our dollar today and of our per capita production, because the minister is aware of the fact that there has been a decline in the per capita production of goods and services ever since this government took office. Percentagewise the decline has been considerable. I believe the minister also knows that our economy needs a 6 per cent per capita per annum growth in order to supply the employment opportunities that the country needs.
I would suggest to the government that this is its responsibility, if it wants to balance the budget and bail out the minister before he gets appointed to some other place. The way to do it is to get the economy going again, and to get it rolling at least to the extent of a 6 per cent increase per capita per annum in real wealth. If the government will take measures that will enhance and boost the economy to that extent I shall have no quarrel to find with a deficit if it is designed to fulfil that purpose. But the deficit was designed only to patch up the immediate situation; it was not designed to give our economy the boost that it needs. If the government is going to give our economy that boost, then the day is not far distant when the minister will no longer have to report a deficit; he will be able to report a surplus instead. You cannot report a surplus when you have a million people unemployed.
I hope the government is going to do much more in the months immediately ahead than it has done in the past to get Canada on to a rolling start. Among other things there is need to associate ourselves with the economies of western Europe and of the United Kingdom. If we intend to bury our heads in the sand and think that we can continually live off the little bit of the spillover of prosperity that may come to us across the 49th parallel we will be hurting not only our own Canadian welfare but we will be also very seriously damaging the cause of western unity and of world peace.


George Harris Hees: When I rose before the dinner recess, Mr. Chairman, as you know, I asked permission to have a table inserted in Hansard which I thought would be useful to hon. members and would enable them to study 90205-6-572
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the important question that is of so much interest to the committee, namely the possible entry of Great Britain into the common market. That permission was denied by the opposition. That, of course, is understandable because they do not want to be confused by knowledge or facts; they would far sooner go on approaching these matters from the point of view of ignorance and not know the facts about the matter they are discussing. However, as I said, I have arranged to have that table distributed to hon. members. I know members of the opposition will not look at it because they do not want to be informed, but I know that the Conservative members of parliament, who are good members of parliament, who want to be advised about important matters of the day, will study it with great interest. They will see it shows the effect which the United Kingdom acceptance of the European common market tariff could have on our trade with the United Kingdom market. After studying it, I feel that hon. members will understand why I took such pains at Accra to point out to the United Kingdom government the importance to Canada of maintaining our present trading arrangements in that market.
We are convinced that when another government is contemplating action which we believe could seriously affect the welfare of Canadians, it is our duty to bring that matter to the attention of the other government well in advance of the contemplated action being taken, and this we have done. The official opposition objects to our having done this, as shown by the words of the Leader of the Opposition when he said in this house on Friday, September 15, as recorded at page 8407 of Hansard:
May I ask the Prime Minister a question arising out of what he has just said. In view of what he has said, will the right hon. gentleman instruct the ministers concerned to stop their public squealing before Canada is hurt.
I can quite understand the Leader of the Opposition saying this, Mr. Chairman, as the government of which he was a member never did have the courage to speak up to another government about matters concerning the welfare of Canadians until after action had been taken, and it was then too late to do anything about it. The former government would then squeal piteously, but, of course, it was too late.
The leader of the C.C.F. party took a different and much more objective view of this whole matter when he commented on it last Tuesday. He suggested, if I interpret his remarks correctly, that Canada should make application to join the European common market, and I should like to comment now on that suggestion. The countries

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which form, the European, common market are steadily reducing the tariffs which apply against each member country until they disappear and there is free trade among the countries which form the group. By the end of this year these internal tariffs will have been cut approximately in half.
Manufacturing industries in the European common market countries have a high degree of efficiency and a great deal of technological skill. They also have lower wage rates than we have here in Canada. The result is that they produce products of good design and quality at prices which are usually lower than those at which similar Canadian products can be offered for sale. The result is that if our manufacturing industries in Canada are faced with competition on a free trade basis with the industries of western Europe, they will, in most cases, come off second best, with the consequent loss of production and employment.
More than one quarter of our people in Canada are directly employed in manufacturing industries, and a great many more are employed in industries which service manufacturing, such as transportation, production of power, and so on. I would estimate that somewhere between one third and one half of our people are directly affected by the level of manufacturing activity in this country, and many more, such as the shopkeepers in the industrial areas, are indirectly affected.
Although the need for maintaining a strong and healthy manufacturing industry is particularly important to those areas in Canada where manufacturing is concentrated, it is equally important for the future in those areas where secondary industry must be developed so that the economies of all parts of the country may become diversified, and not be dependent on one or a few primary industries. The past summer, Mr. Chairman, has given us a prime example of how the weather can affect the income of large numbers of our people living in areas which depend largely on agricultural production. The new manufacturing industries which we must develop in all parts of the country cannot be developed if they- have to face free trade competition from the industries of western Europe.
These are matters which must be kept very much in mind when we are considering the desirability or otherwise of joining various trading groups. I can assure all hon. members that these questions are being intensively studied by the government, to make sure that the best possible arrangements for our country as a whole are worked out.

In speaking for the official opposition, the hon. member for Laurier was less specific than the leader of the C.C.F. in his suggestions as to the action the government should take. He contented himself mainly with protests against the approach which the Minister of Finance and I took at Accra on behalf of our farmers, our fishermen, our lumbermen, our miners, our other primary producers and our manufacturers. He objected on behalf of his party-


Lionel Chevrier: Mr. Chairman, I rise on a point of order. The member for Laurier made no such affirmation and the minister either was not listening to the speech which the member for Laurier made or he did not understand it because I made no such affirmation, nor do I recognize the language the minister has just quoted.


George Harris Hees: I am referring to a speech by the hon. member for Laurier which I listened to with great attention this afternoon, wherein he found great fault with what the Minister of Finance and I did at Accra, where we put forward very clearly and incisively the position of Canadian producers of all kinds, our farmers, our fishermen, our lumbermen, our miners, our other primary producers and our manufacturers.


Lionel Chevrier: That is not so.


George Harris Hees: That is what we did, Mr. Chairman. I claim that is what we did. I was at Accra and so was the Minister of Finance. We both know what we said and we put forward on behalf of Canada-


Lionel Chevrier: I rise on a point of order.


The Acting Chairman (Mr. Creaghan):: We
have had two points of order on the same subject. I listened to most of the debate this afternoon and I am more or less in agreement with both hon. members. It seems to me that the fault, if any, is brought about by the fact that we have had two types of allegations. I think the Minister of Trade and Commerce legitimately has the floor and if the hon. member for Laurier will permit him to proceed I am sure more progress will be made.


Lionel Chevrier: Mr. Chairman, under the rules of the house I am not going to allow the minister to proceed if he is stating things that I did not say. What he is trying to do is to take words out of context and put them into a text which has been prepared for delivery for him here. I will not stand for that because that is contrary to the rules of the house. What I did today was to complain bitterly about the attitude that had been taken by these ministers as reported

in the press, and unless they produce the documents containing the statements they made there they have no right to complain about my statement in the house.


George Harris Hees: The Minister of Finance and I have made very clear what we said at Accra. As the spokesman for the C.C.F. party said quite rightly, when an hon. member states that he did or did not say something, it is considered proper procedure for other hon. members to accept what he says. I have said, and the Minister of Finance has said, that when we were at Accra we put forward very sincerely the reasons why it is necessary to maintain our present trading arrangements in the British market, arrangements which benefit our fishermen, our farmers, our lumbermen, our miners, our other primary producers and our manufacturers.


John Whitney Pickersgill: That is not in the minister's text.


George Harris Hees: The Acting Leader of the Opposition has objected very strongly to the attitude that we took, and the fact that we put forward these views strongly and clearly. The Minister of Finance pointed out that the Right Hon. Mr. Maudling, who was at that meeting, said that the views that had been expressed had been put forward in a moderate and constructive way.


Lionel Chevrier: There are many others who state the contrary.


George Harris Hees: I would think that the hon. member for Laurier would accept the view of an independent British minister who was there, and has said what he heard, instead of what the hon. member for Laurier thinks he would like to believe was said there.


John Whitney Pickersgill: May I ask the minister a question?


George Harris Hees: Certainly.


John Whitney Pickersgill: Could I ask the minister if he said at Accra: "And so we in Canada are convinced that we are considering not only an economic problem which has far-reaching implications for all of us but also a problem which involves the future of the commonwealth itself"?


George Harris Hees: That is correct. I said that, and expressions of that kind were made by virtually every delegation that was there.


John Whitney Pickersgill: The slippery slope.


George Harris Hees: What is bothering the hon. member is that he and his colleagues were not representing Canada at that meeting, for the very good reason of what happened on June 10, 1957.
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Lionel Chevrier: Old stuff.


Donald Methuen Fleming: And because they are not representing Canada they are misrepresenting Canada.


George Harris Hees: By their attitude and their objection to the point of view that the Minister of Finance and I expressed at Accra so forcefully and sincerely on behalf of all Canadian producers, the opposition has made it very clear, in this exhibition of great world statesmanship or whatever it is that they have in their minds, that they are perfectly willing to see these important trading relations diminished even though it would make a great deal of difference to the production, livelihood, and standard of living of our producers in Canada. That is what they are saying. We put forward a sincere point of view on behalf of those producers. They object to our having done so. Therefore they are saying, "You should have sat back and kept quiet; you should have been good little boys and have done what we did when we were in office and attending meetings of this kind". All they did was to mouth platitudes which meant nothing, and let the other governments go ahead without knowing what Canada's views were.


Lionel Chevrier: Take a look at the standard of living over there.


George Harris Hees: We felt it was our responsibility to let the British government know exactly how Canada felt about this matter. The other commonwealth delegates at that meeting did exactly the same thing.


John Whitney Pickersgill: If I were the Minister of Finance, I would say that was false.


George Harris Hees: Now, Mr. Chairman, this afternoon we heard nothing but protests, and we have heard nothing but protests ever since we were at Accra. It remained, however, for that other leader of the opposition, the hon. member for Essex East, to advance a positive suggestion on behalf of his party. This he did in Charlottetown, and it is reported in the Ottawa Journal of September 27 by the Canadian Press. I should like to read exactly what the Canadian Press, a reliable news agency-


John Whitney Pickersgill: Except at Accra.


William Moore Benidickson: That was British United Press.


George Harris Hees: I have had no comment to make on what any particular newspaperman had to say.


John Whitney Pickersgill: Your colleague had, the other twin.


George Harris Hees: We are talking about what I am saying. This is what the other leader of the

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opposition had to say at Charlottetown, as reported by the Canadian Press. If anyone would like to have the article, here it is:
The Canadian government's approach to Britain's participation in the European common market is mistaken and negative, Liberal Paul Martin told the Prince Edward Island Liberal leadership convention Monday.
The former Liberal cabinet minister said the Diefenbaker government should try to unite Britain, the United States, and Canada with the European trade group in a North Atlantic community, rather than lecture the United Kingdom on its trade policy.


William Moore Benidickson: What is the matter with that?


George Harris Hees: I am very interested to note that all the members in the Liberal party present in the house applaud that statement. They are in favour of entering into a trade group comprised of Britain, the United States, Canada and Europe. Now, Mr. Chairman, this involves nothing less than free trade with those countries, including the United States.


John Whitney Pickersgill: Ask the Minister of Finance what his interpretation was.


George Harris Hees: That is exactly what the hon. member for Essex East was putting forward on behalf of his party, and all the Liberal members present in the house applauded this suggestion.
This is an interesting suggestion, free trade, because it takes us back to the election of 1911, the reciprocity election. In making the suggestion, the hon. member for Essex East seems to forget that United States industrial plants, with a market ten times the size of the Canadian market, can usually produce on a much larger scale and at a lower cost than can corresponding Canadian plants. On a free trade basis with Canada, which is what the Liberal party is now advocating in this house, the United States plants would simply increase their production by 10 per cent, at very little extra cost, and pour their cheap goods into this country. The effect on our manufacturing industries would be very serious indeed.
It is very interesting to note, Mr. Chairman, where the hon. member for Essex East made his speech. It was down in Prince Edward Island, a province which is primarily interested in agricultural production, a province which could be counted upon to be interested in free trade ideas. I would suggest to the hon. member for Essex East that he make the identical speech, urging free trade with the United States, in his home city of Windsor. I ask him to go there and make his speech to the labour unions and workers of Windsor, and explain to them what he

thinks would be the result in his own city if we had free trade with the United States.


John Whitney Pickersgill: There is nothing about free trade with the United States in that at all.


George Harris Hees: That is exactly what a trading area, including the United States, would mean and the hon. member for Bonavista-Twillingate knows that quite well. If it does not mean that, what does a trading area mean?


John Whitney Pickersgill: I will answer the hon. gentleman, since he has asked me a question.


George Harris Hees: I will answer the question.


John Whitney Pickersgill: The hon. gentleman has asked me a question-


George Harris Hees: I have the floor.


Some hon. Members:: Order, order.


John Whitney Pickersgill: The hon. gentleman asked me a question and I propose to answer that question unless I am denied the opportunity.


Gordon Campbell Chown: Order.


George Harris Hees: I have the floor.


John Whitney Pickersgill: Keep it; you don't want an answer.


George Harris Hees: I am saying, Mr. Chairman, that the European common market is a trading group which is moving towards free trade within that group, and the same kind of association, including Canada and the United States, which is being advocated in this house by the Liberal party, would include the United States and Canada in a free trade area. I should like them now to go out across the country and explain to all our manufacturers, all our industrial centres across Canada-


John Whitney Pickersgill: Let me explain it now.


George Harris Hees: -what they feel would be the effect of free trade with the United States. As I say, United States plants have a far bigger market-


John Whitney Pickersgill: Mr. Chairman, I am rising on a point of order-


George Harris Hees: There is no point of order. The United States plants have a market ten times the size of our market-


John Whitney Pickersgill: On a point of order, Mr. Chairman.


Some hon. Members:: Sit down.


Gordon Campbell Chown: Order; the hon. member for Bonavista-Twillingate rises on a point of order, and in that situation the minister should yield the floor.


John Whitney Pickersgill: My point of order, sir, is a very simple one. We are debating the estimates of the Department of Finance. It was

understood in debating them that we would discuss the government's conduct at Accra. However, it was not considered that we would have an academic debate-


George Harris Hees: It is beginning to hurt a little now.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: -it was not considered that we would have an academic debate on the policy of the Liberal party which, unfortunately for this country, does not happen to be in office now. I suggest that if we are going to have that debate, and I would have no objection to it, a Liberal spokesman should be allowed to expose Liberal policy-


An hon. Member:: It has been exposed now.


John Whitney Pickersgill: -instead of the extraordinary farce to which we are listening now by the Minister of Trade and Commerce.


George Harris Hees: This is not a point of order, this is a speech.


John Whitney Pickersgill: I entreat the chairman-


George Harris Hees: This is not a point of order, it is a speech.


John Whitney Pickersgill: I am still on the point of order.


Gordon Campbell Chown: My earlier advice was that there was a consensus ad idem among all parties in the house that we might close the session this evening and, in that spirit, we might move along with the debate. Perhaps I was allowing a little more latitude than might otherwise have been the case on the understanding that there would be comment on the visit of the two ministers involved abroad. I would ask the indulgence of the committee, if I may, with the end in view that we might conclude the session this evening. Perhaps we could get on with the discussion of the first item of the Department of Finance.


George Harris Hees: I am, as always, only too glad to conform with your ruling, Mr. Chairman.


George James McIlraith: I want to discuss for a moment the administration of the government with particular reference to items coming under the jurisdiction of the Minister of Finance. At this stage in our proceedings, I should like to address myself to that part of his duties connected with responsibility for tarriffs and foreign trade negotiation. I think it is clear that is squarely within his responsibility and can be discussed at this time on item 1. I have particular reference, of course, to his attendance at the commonwealth conference at Accra and to the attitude taken
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by the Canadian government there. It is a matter of regret to me that a subject as important as this should have been treated in the way it was treated by the Minister of Trade and Commerce tonight. It seems to me that the matter is of major importance to all Canadians and I should have thought that the government would have wished to treat it responsibly and have their policy exposed and defended, or varied, as they see fit.
However, it seems that the exuberant feelings of the Minister of Trade and Commerce led him into every irrelevance that one usually associates with someone a great many years his junior-many decades, perhaps I should say. The Minister of Finance in his remarks this afternoon started out by applying very strong language to the newspaper reports of his speech. He said that the newspaper reports contained many gross inaccuracies and he expressed himself in language of that sort.


Donald Methuen Fleming: I did not say
reports; I said articles and editorials.


John Whitney Pickersgill: Muttering again.


George James McIlraith: He generally questioned the treatment of his conduct at this conference as reported in the newspapers. He referred to the radio commentators' remarks on this subject as a blatant lie. Then he went on to say, when he was dealing with that part of the newspaper stories which indicated that the policy of the government had the effect of being anti-British and anti-commonwealth, as I have noted his remarks, "When any government takes an anti-British line, I will not be a minister". I copied the remarks down and I think that is a precise indication of his feelings, and I agree with them. I think that is an accurate expression of his feelings.
The point I wish to deal with tonight is the policy of the government, as best we can get it, in spite of the minister's attempt to quote verbatim from a speech he delivered in Accra and then not tabling the speech. His colleague the Minister of Trade and Commerce pulled another of his famous boo-boos and inadvertently distributed his speech to the press. We have only the text of the press report of the copy delivered to it, together with all these other comments in the newspapers which seem to concern the Minister of Finance so much.
The release I have is one by a press gallery correspondent of some three decades, Mr. Norman MacLeod. It is a U.P.I. press dispatch which is headed:
Informatively, following runs to around 2,000 words. It includes most of the text of a major speech by trade minister George Hees on Britain's proposed entry into the Kuropean common market.

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That is the only document made available for public circulation, and the newspapers. That document having been made available to the press, even although by mistake, clumsiness or what have you, by the Minister of Trade and Commerce, I asked that the actual text covering the parts of the speech that are dealt with in this press report be made available so there should be no confusion as to just what was said, because I think it is of the utmost concern to the country that there be great accuracy in this matter. The minister refused this request.
I have made reference to this matter in earlier debates. Indeed on April 24, the opposition moved an amendment to a supply motion in these words:
This house regrets the protectionist and inconsistent trade policies of the government and its failure to develop a long term foreign economic policy to enable Canada to participate fully in the challenging new opportunities in the field of international trade by implementing a vigorous program to promote the expansion of our secondary manufacturing industries and by encouraging the development of an Atlantic economic community.
In that debate on April 24 and 25 reference was made to the European common market and a good deal of the debate turned on the positions of the parties concerning the European common market. I do not propose to repeat the arguments made at that time but I want to make passing reference to the fact that this subject matter was dealt with and I charged the two ministers concerned with threats of retaliation to the United Kingdom if she joined the common market, and that their negative and threatening attitude was only harmful to our interests.
The Minister of Finance is on record as denying the newspaper stories which I quoted on that occasion. I think he will recall that he denied them quite strenuously, using such terms as "nonsense" and terms of that sort.


Lionel Chevrier: His usual epithets.


George James McIlraith: I can give the minister the exact reference if he wishes. The point is that, having taken that position with regard to stories that were mild compared with the current stories of the positions of the two ministers, he now comes along and is again in the position where he takes the offensive in repudiating the newspaper comment and reports of the position taken by the ministers. But this time we have the actual text of the speech, or part of the speech delivered by the Minister of Trade and Commerce. I take it to be admitted that the part of the speech the U.P.I. put out is accurate. I refer to that part of the text which supports the stories, and the release seems to form the basis of most of the stories. It is with this matter that I wish to deal tonight.

I think this whole subject matter has got out of context in the argument of the Minister of Finance this afternoon. The Prime Minister of the United Kingdom, in the United Kingdom House of Commons on July 31, had something to say on this subject. I think it should be quoted for the purpose of getting the atmosphere in which the conference was held.
The part I will quote can be found either in the United Kingdom records of the House of Commons, or it is reported in the European free trade association bulletin for August and September, 1961, page 7. The excerpt I wish to quote is this:
X believe it is our duty and our interest to contribute towards that strength by securing the closest possible unity within Europe. At the same time, if a closer relationship between the United Kingdom and the countries of the European economic community were to disrupt the long-standing and historic ties between the United Kingdom and the other nations of the commonwealth, the loss would be greater than the gain.
The commonwealth is a great source of stability and strength, both to western Europe and to the world as a whole, and I am sure that its value is fully appreciated by the member governments of the E.E.C. I do not think that Britain's contribution to the commonwealth will be reduced if Europe unites. On the contrary I think its value will be enhanced.
That was the attitude taken by the Prime Minister of the United Kingdom reporting to his parliament before the conference took place. I think there can be no issue that his view about the commonwealth and its being a great source of stability and strength, both to western Europe and to the world as a whole, is the correct view. I think all hon. members of this house would agree wholeheartedly with that proposition. But what has happened now is that the Minister of Finance and his colleague have by their conduct taken a position that is destructive of the commonwealth, and they have-


Donald Methuen Fleming: Pardon?


George James McIlraith: I said, Mr. Chairman, that the ministers, by their position at the Accra conference, have done something that is destructive of the commonwealth.


Donald Methuen Fleming: Ridiculous.


George James McIlraith: They may not have intended to do it, but that is the inevitable consequence of the line of argument they took.


Donald Methuen Fleming: No.


George James McIlraith: Perhaps I might be allowed to develop my argument. I am not accusing hon. gentlemen opposite of wilfully doing it. I am accusing them of doing it-


John Whitney Pickersgill: Through ignorance.


George James McIlraith: Well, I was about to use a somewhat milder term, and say that the damage done is a natural consequence of the position taken and of the method used to handle the situation and explain Canada's point of view. In this connection I invite the two ministers concerned to study the remarks made by Canada's Prime Minister when they were absent from this country and their comments first came before the House of Commons. They would notice a wide divergence in the points of view which have been expressed-a marked difference between what the Prime Minister said on that occasion in answer to questions, though, of course, the right hon. gentleman could only speak briefly on that occasion-as compared with what has been said by the two ministers today.
The bulletin of the European free trade association for August-September, 1961 contains a series of comments on Britain's decision to apply for membership of the European economic community. The opinions of a number of well known newspapers are printed and all of them express approval of the stand taken by the United Kingdom. For example, approval is expressed by such papers as the New York Times, the Paris newspaper Les Echos, the Frankfurter Allgemine and the Journal de Geneve. These comments all show a constructive approach to the problem. The Canadian approach is altogether different, and without repeating the arguments which have been put forward in relation to what should have been done I should like to explore this question a little further.
The Minister of Trade and Commerce used these words in his speech in Ghana:
There is no substitute for the terms of access we are now afforded in the United Kingdom market.
Hon. members will note that this statement is absolute in its terms. I should have thought there might well be substitutes which would be more to the advantage of Canadian producers of farm products. In any case, it would be seen that the argument advanced by the Minister of Trade and Commerce on this important subject is a negative, restrictive and destructive one. What was required was a positive approach, recognizing that the great period of prosperity in this country under the former administration during the late forties and fifties took place under a government which was seeking to liberalize trade. The ministers representing this country at Accra should have been putting forward solutions seeking an expansion of trade rather than trying to preserve, in all the circumstances, the identical form of the trade pattern which exists at the present time.
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The minister must recognize that the ECM group of countries has in the last two years been enjoying a period of prosperity which may well be without parallel in recent history. Incidentally, I was disappointed that, when the Minister of Finance used an argument this afternoon with reference to the size of the common market, he should have referred only to the number of persons living in that area and compared that number with the population of the commonwealth, making no reference whatever to the volume of trade, to purchasing power or to the other factors which ought properly to be considered in this context together with population. I thought that was not a worthy way of expressing the point of view which, apparently, the hon. gentleman wished to express at that time. A question of this sort must be dealt with on a much broader basis. It is not just the number of persons in a particular market which matters. There are a great many other factors which must be considered including, for example, the potential of that market and its purchasing power.
Then there was another phrase, used at Accra, by the Minister of Trade and Commerce. Speaking of the damage which would be done if commonwealth preference were to be changed or reduced, he said that in some cases irreparable damage would be done if our present trading arrangements with the United Kingdom were altered. Had the minister been thinking in a positive way he would have put forward constructive proposals calculated to minimize any damage. Such proposals would, possibly, have the effect of bringing about great gains for this country instead of damage. I suggest to the hon. gentleman that he should recognize some of the facts which apply to trade in the commonwealth, in Europe and in the world as these facts exist today, and that he try to act constructively and responsibly so that Canada may play a full part in working out means of enlarging our trade pattern rather than merely giving an obstructive lecture to the United Kingdom at a time when the country is faced with a very difficult decision to make. I may add that I am sure her government will have the capacity to make that decision. I am disappointed that our own government did not address itself to these problems and come forward with a more constructive solution.
I do not wish to develop an argument on the finance department's estimates which deals with all aspects of trade. I wish to confine my observations as far as possible to the part played by the two ministers at this conference. However, I would point out that in debates in this house, both on the



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estimates of the Minister of Trade and Commerce and on a supply motion amendment on April 24 and 25, the nature of such a constructive approach was put forward from this side of the chamber. That is the kind of action which should have been taken. That is the kind of attitude which should have been adopted. Perhaps at this late hour I should not elaborate, other than to say that in my view the two ministers ought to be concerning themselves with getting rid of some of the burdens they are placing on the backs of production in this country. They should be seeking to put both our primary producers and our secondary industries into a competitive position instead of blindly piling burden after burden on their backs as they are now doing.
Somewhere in his remarks at Accra the Minister of Trade and Commerce said that the commonwealth was held together by tradition, trust and trade. Though he did not say it in so many words, the theme of his argument at that point was: "And the greatest of these is trade". The commonwealth I think, is held together by many ties other than trade. I am not one to minimize the importance of trade within the commonwealth. I have no desire to do that and indeed, I tend rather to maximize its importance. However as I say, the commonwealth, which has represented such a great force in the world over the years, is held together by other things besides trade. That hideous parody of a biblical quotation was rather ill advised. If the minister wishes I can elaborate.
George Harris Hees: I will take it as read.


George James McIlraith: The minister might well do so. If he wishes to develop it he will see that the British press characterized that part of his speech as the Canadian Tory imperialism.
In any event, in complaining about the comment made by the press in this country the Minister of Finance said-


Donald Methuen Fleming: Not only the press in this country.


George James McIlraith: This and other countries. The minister was very sweeping in his denunciation of press comment. I do not like using his adjectives because it seems to me they are unnecessarily offensive. There is no doubt, however, what he meant. He denounced them in excessive and abusive terms.
The Minister of Trade and Commerce quoted one newspaper with some approval and I wish to quote from this source, too. The source is the Ottawa Journal and I refer to the September 26 issue carrying an article

by Duart Farquharson of the Journal's London bureau. The article reads in part as
follows:
The head-on clash between Britain and the overseas commonwealth countries at the Accra finance ministers' meeting was not exaggerated but underplayed by the British press, according to Canadian finance minister Fleming.
To set the record straight, Mr. Fleming last week called in leading British correspondents covering the international monetary fund meeting in Vienna. With great emotion, he argued that commonwealth countries were unanimous in their condemnation of Britain's attempt to join the common market. They were not merely striking up bargaining postures, but sincerely believed that such a British move was bound to result in the disintegration of the commonwealth.


Donald Methuen Fleming: He was not there and that is a very inaccurate statement.


George James McIlraith: It is interesting that the minister should say that the reports written by the press men at the press conference were wrong, that he should take the position that he was misunderstood. I think it unlikely that all the press men in the United Kingdom are wrong or are incapable of understanding the English language as spoken by the Minister of Finance. The minister takes the position that they are all out of step. Hon. members know the story about the infantry platoon sergeant.


George Harris Hees: Tell us.


George James McIlraith: It will be recalled that a fond mother came up to him and said that all the men in the platoon were out of step except her little Willie. I am wondering whether one should substitute the name Donald?
The comments on the situation as carried by the United Kingdom press are based on the minister's own statement to the press. This is a very competent press and the minister's violent denunciation today will not favourably impress anyone in this committee or in the country.


Donald Methuen Fleming: Duart Farquharson was not there at all.


George James McIlraith: I would not think that the minister's statement will favourably impress any of the press men whom the Minister of Finance so wrongly condemned in his interjections a few moments ago while I was speaking.


Donald Methuen Fleming: His statement does not resemble the facts.


William Moore Benidickson: The Ottawa Journal is wrong again.


George James McIlraith: The press comment was founded on the press interview given by the Minister of Finance and the Minister of Trade and Commerce.


Donald Methuen Fleming: Which press interview?


George James McIlraith: The one described as a British press conference at which the minister sought to make clear his position. I think the minister will agree that he succeeded in making it clear on that occasion just as he made it clear tonight.


Donald Methuen Fleming: There is no report of a press conference.


George James McIlraith: It is not at all surprising that the press in this country has adopted as the popular subject matter of cartoons the visit abroad of the two ministers in question. One such cartoon reveals the Minister of Finance in the garb of a hunter returning home to visit the Prime Minister and with him is his gun bearer, the Minister of Trade and Commerce. The Minister of Finance is depicted dragging a lion by the tail, the lion wearing a union jack and a crown. The caption reads: "Hi chief-see what we bagged in Africa!"
The point I wish to make is this. It is time-


George Harris Hees: Time.


George James McIlraith: -that this government
adopted a policy on this most important subject and presented it carefully and responsibly in language that would not be misunderstood by all newspapers in this country, in other parts of the English speaking world and in Europe and I hope that in so doing the government will realize its responsibility for the development of the potential of this country and take such action as will develop that potential for the benefit of all Canadians so that this nation may once again go forward toward prosperity.


William Moore Benidickson: Mr. Chairman, I have not dealt with some of the more important principles relating to the minister's speech. The minister indicated that there was a great desire-an absorbing interest, I think was his phrase-to consider the European economic community. Other hon. members on this side have dealt with that most effectively. Perhaps before the minister concludes his contribution to the debate on his estimates he will recognize that there is also a keen domestic interest in such matters as the Bladen report. We have received one report from the Glassco commission, the equivalent of the former Hoover commission in the United States. It simply indicated that some thirty committees had been set into operation. I feel that the minister should perhaps establish target dates for reporting with respect to the commission as a whole and its subcommittees.
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Much interest has been accorded the minister's attendance at the Accra conference. Almost simultaneously the minister attended the annual meeting of the international monetary fund at Vienna. Perhaps he would choose to give us more detail about this before we conclude the debate on his estimates.
The minister and I have sat in this chamber for a number of years and often enjoyed debating together prior to his taking office. He was one who in debate expressed strong objections to a floating fixed rate on our interest. He held out the suggestion to gold mining areas in Canada that he and those associated with him politically would, if elected, be very vigorous in pursuing a change in the price of gold fixed by the United States. This, of course, has relationship to the international monetary fund or the world bank.
Before the minister concludes the discussion of his estimates he should give us his views about the quite substantial increase in the money supply. Since he spoke to us with some preparation on February 20 and 21 of this year the money supply has gone up. I should like to hear from the Minister of Finance about that.
I expect we shall have a new proposal shortly with respect to our national Canada savings bonds promotion campaign. What is the policy with respect to those? What is the policy with respect to savings bond sales for 1961? The minister knows there has been a great turnover of these bonds. This is a bond that one can buy and sell at par. Consequently, if new enticements or advantages are offered, bonds that were purchased years ago are turned over by most of the public or changed for the new opportunities of this year. Can the minister tell us about that?
The minister also knows that as the physician economically for our country at the moment he suggested in December that he had great confidence that we would have an impetus to our economy because of such things as the Columbia power development in British Columbia, the upper Thames development in my province and the Manitoba flood control development in the province in which I was born, and so on. He said these things would be a shot in the arm with respect to the economy of the country. This was part of the baby budget of last December. Can he report on that?
As I recall it, the minister said that Canada was a member, and tried to be a good and law-abiding member, of a new world wide organization related to textiles. He indicated that while we had rather keen competition from Hong Kong, that colony appeared to be

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a bit of a rebel in connection with its international relations. Can the minister tell us about that?
Perhaps not tonight but on another occasion the minister might tell us about the so-called Japanese voluntary indications of withdrawal in respect of certain trade competition and whether they are realistic.
I do not want the discussion of the minister's estimates to be concluded before we look at his statements which were clear and forthright when he made his budget speech on June 20 with respect to two points: first, interest rates generally across Canada; and second, the foreign exchange rate on the Canadian dollar.
Recently we had a debate on the Civil Service Act which is a responsibility of the minister. Since we might be back in two months time perhaps that will satisfy the committee for the moment. I know the minister is making notes, and I should like to ask him a question as to the exchange reserves, having in mind that he felt that he would take new leadership in this field. The exchange reserves of this country do not seem to be in line with the increase in the gross national product or with most of the other indices of our national growth. Having regard to that fund, does the minister think it should be as static as it has proved to be, or has he any policies with respect to it?
We have had a substantial debate on trade, either free trade or selective free trade. Since we are about at the end of the session I do not want to pursue the matter.
In his budget speech the minister introduced a special fund of $100 million to support long term and immediate term bonds. I say to the minister with very keen conviction that although he reported recently to the house on this, it is not an effective way of changing the cost of money to the municipalities and to the provinces. I say to him he also made another commitment to the provinces and to the municipalities that he hoped to stay out of the money market. We know that we have never had such a federal deficit as we had this year, namely a deficit of $650 million. Of course this has an adverse effect on municipalities and provinces, and equally important, it has an effect on industry which also must get capital requirements from the market. To quite an extent they are the people who pay the taxes to provide the minister with enough money to get along. We have had four years of deficits; we have had the biggest deficit ever in our history, a deficit of $650 million. The minister should tell us about this story, that he directed an investigation into the defence department.

He should tell us whether or not, as a result of that investigation, people employed and paid out of the vote before us, namely treasury board, came to the conclusion that there was waste and extravagance. I should like the minister to comment with respect to the numbers of defence personnel and the efficient use of the money expended under the grants that we have before us tonight.


Mr. McMillan:: The estimates of the Department of Finance always seem to come up on the last day of the session when we are in a hurry to close. I want to deal very briefly with interest rates because I think they are fundamental to a good economy in Canada. I saw a dispatch from the Accra conference in which it was reported that the Minister of Finance had said that our economy was lagging behind that of the United States. I have always maintained that one of the reasons for our economy lagging behind that of the United States is higher interest rates. Our interest rates, particularly long-term bond interest rates, are higher by 1J per cent. This differential has existed practically ever since the conversion loan and the high borrowing following that loan. The differential is now about three times the one half of 1 per cent that it was for a good many years prior to the conversion loan.
I think that this government sets long term interest rates by its policy, and if we look at what is going on now we can see that it sets short term interest rates as well. The government sets the mortgage interest rate on 25, 30 and 35 year mortgages at 6J per cent. I say this is too high a rate for any government security. I spoke on housing when we discussed it in the house, and the Minister of Public Works said at that time that he would like to see the interest rates on housing lowered. He said, however, that he did not know what they might do and that if interest rates were lowered, it would discourage the 48 per cent of money going into housing construction from the private sector.
I should like to ask this question. Where else can investment money secure a higher interest rate with government backing? Insurance companies and others with large funds to invest buy these mortgages and from what I have read it costs them about one half of 1 per cent to service them. The fact that mortgages are not as negotiable does not bother these big investment companies because their investment is a continuing and long term proposition. Again, mortgages have certain advantages because there is a gradual return of the principal. When there is inflation some of the principal continues to come back; but that is not true of a bond

because the principal only returns at the time of maturity of the bond.
There is a differential of li per cent or more between the mortgage interest rate and the long term bond interest rate. Investment companies are not interested so much in long term bonds if the differential is any less. If the differential becomes less, bids on bonds become thin, and this helps to keep the long term bond market depressed. If the interest goes up on housing the yield goes up on government bonds and the prices of the bonds are depressed. The reverse is true if the interest on housing goes down.
I maintain that our bond market should be a free market, and in effect it is not. When the minister sets a high interest rate on mortgages he is in effect setting a high interest rate on our long term bonds. At the present time high cost mortgage money is depressing our long term bond market. When a man buys a house and pays 6J per cent interest, whether he knows it or not he is contributing toward higher priced money required to meet the needs of the federal government and the provinces. He is also contributing toward higher cost money to meet the needs of municipalities which issue debentures to build roads, schools and other improvements. In a sense, therefore, he helps to increase his own taxes.
Because the minister has been unable to sell his long term bonds in volume, he has had to go to the short end of the market. This has had the effect of making more and more of our debt short term. As long term debt becomes due it is refinanced in the form of short term debt, the very opposite of what the minister said was desired at the time of the conversion loan. In fact, he gave as one of the reasons for the conversion loan the desirability of converting some of the short term debt to debt of a longer term.
In addition, all borrowing to meet present requirements goes into short term debt. It costs a lot of money to keep going into and out of the market. Our debt is being turned all the time and we know it costs a lot of money to go into and out of the market, because when he did so at the time of the conversion loan it cost over $50 million. It is little wonder then that in four years time the minister has handed the people of Canada an extra interest and servicing bill with respect to our public debt amounting to $800 million. He is getting set to load us up with more interest at a faster pace in the immediate future.
All of this is not a very good performance and is certainly bringing about much extra taxation for the taxpayer. Big money continues to get a high interest rate on mortgages. I know a number of people who own 90205-6

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long term bonds. These bonds are depressed on the market at the present time. These people are just waiting for the bonds to come near par so that they can sell them. However, I do not think they will be able to sell them near par in the very near future because under the fiscal policy of this government the minister is actually pegging these bonds at a depreciated value.
Today I received a memorandum from one of the bond houses concerning the conversion of Canada savings bonds that is going on at the present time. In calling attention to the new savings bonds the memorandum has this to say:
With the exception of three of the prior years' series currently outstanding and in the hands of the public, this year's bonds carry a higher interest rate and corresponding yield if held to maturity than any of the other prior series.
The memorandum goes on to state that for current borrowing the government is putting out 10-year bonds that are cashable at the bank at any time.
In the first year they will bear interest at 4i Per cent; in the next six years at 4J per cent and in the final five years up to November 1, 1971, at 5 per cent. This is what the government is paying now for money in the short-term bond market. According to this memorandum this new 1960 series of Canadian savings bonds can be purchased for cash, on the instalment plan, or outstanding savings bonds can be traded bond for bond. This memorandum recommends that Canadians should do this in order to get a bigger income. It is recommended that Canadians should turn in series 6, 9, 10, 11 and 13. It is recommended also that series 12, 14 and 15 should not be turned in because they are more favourable to the holder.
With the single exception of a limit of $10,000 in bonds per person, all Canadian savings bonds outstanding, valued at close to $3.6 billion, can now be turned in on these new bonds and the holders obtain this interest. The other outstanding bonds, of course will get a little higher rate of interest. I say, therefore, that there is another conversion loan in operation. It has not been advertised and people do not generally know it, but this is a new conversion loan. It is in very large proportions.


George James McIlraith: And just as costly as the last ones.


William Hector McMillan: I say that this government is paying a high rate for short-term borrowing. It is a high rate when you consider that a small municipality near Boston, as I reported the other day from the New York Times, put out 25 year debentures for bids and the bids ranged to yield from 3.71 per cent to 3.73 per cent, and this was for a municipality. Our


An hon. Member:: Very funny.


William Hector McMillan: Last year the Prime Minister said the underbrush was cleared away and he was almost ready for the tall timbers, or something to that effect. I think the Prime Minister may be in the woods at the present time, but the Minister of Finance is certainly still in the underbrush-


John Whitney Pickersgill: He is certainly not out of the woods.


William Hector McMillan: -among the thorns and brambles of debt; there is no doubt about that. Only once or twice has he seen the tall timbers, in December, 1957 and again last year when he predicted surpluses; but these were hewn away. The government tried to rescue the minister and tried to entangle Mr. Coyne so that he could take the blame. The people of this country have not been fooled by this subterfuge of substitution. So the minister, I say, is still in the underbrush.
Mr. Chairman, I intended to deal with two or three other matters but I will not do so in view of the hour. I intended to raise the matter of the minister's responsibility for monetary policy. I know the minister announced outside the house that he would accept the principles laid down by the new governor, Mr. Rasminsky. I saw that in the press, but the minister has never announced it in the house. I think he should announce in the house his idea of his responsibility in connection with monetary policy.


William Moore Benidickson: That was another flip-flop.


William Hector McMillan: I will not deal with that matter further. The minister said recently that we should have lower interest rates. I maintain that he only pays lip service to this matter because when we consider his actions in connection with interest rates we find that the high interest rate of 6f per cent on mortgages was actually set by him. In connection with the conversion loan the minister devised a way to pay bonuses to those people who would take a 50 per cent increase on their interest.


Mr.   Mc@: He was ingenious in that one.


William Hector McMillan: On different occasions he also devised a way to sell short term bonds to large investment dealers at a low yield but with a high discount. This would help them and would be of great advantage to them tax-wise.


William Moore Benidickson: Capital gain.


William Hector McMillan: When the provinces started to use this device to get people to buy their bonds, the minister immediately brought in legislation to prevent their doing so. The minister has set these new rates on the present conversion loan on the Canadian savings bonds.
I also intended to deal with the exchange rate, but since the hour is progressing I will not do so. I just wish to say one word about what has taken place at the commonwealth
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conference in Accra. I think most people in Canada think the minister is at least consistent in his antagonism toward Great Britain, particularly when Great Britain is trying to do something to help her economy in giving consideration to entering the common market. I must say that I was shocked but not surprised when I read some of the articles on the commonwealth conference in Accra. I was not surprised because I remember that at the first commonwealth conference that took place after this government came into power-the conference was held at Mont Tremblant, near Montreal-Mr. Thornycroft, at that time led the delegation from the mother country. Some of the press said that our Minister of Finance used sledge-hammer tactics when softer words would have suited his purpose better.


William Moore Benidickson: A sledge-hammer to deal with a tack.


William Hector McMillan: With regard to the most recent conference, the press has accused the two ministers of ganging up against the mother country. We have heard the ministers' explanations. I saw a cartoon in the Victoria Times. It depicted two valiant hunters, the two ministers, going out and bagging the British lion and delivering it here to their chief. I think the British lion is just hurt. She has been very docile and has not said much in retaliation. This reminds me of a mother who is not willing to correct her defiant child in public. Already the press is reacting in a way best expressed in the words of the London Spectator:
Having made such a mess of her own economics, it is not for the Canadian government to lecture us on ours.
The press in England and in other countries is now aware of the economic mess in which we find ourselves in Canada. Some portions of the United States press in particular were outspoken in this respect at the time of the Coyne affair and at the time the minister brought down his budget. There is nothing new in all this. We have been telling this to the people of Canada and to this government for a long time. We have continued to say that they are getting us further and further into an economic mess. I would say that today with a continuing and persistent deficit of $2 million a day we arrived there long ago.
I wish to refer to one other matter. This is a matter I raised the other day during the discussion on the estimates of the Department of National Revenue, and it is reported on page 8746 of Hansard. I will not go into the matter in detail at this time, but it is concerned with item 709a of the Customs Tariff Act. Under this item Canadian tires can be sent abroad and brought in duty free on United States-made automobiles and trucks.

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It precludes however expensive Canadian equipment being sent abroad and then being admitted duty free. If one piece of equipment is so much as bolted on to a United States component the full duty is charged on the Canadian equipment when it is returned to Canada. I gave an example. I said that in Canada we are making front end loaders to be mounted on tractors. The tractors are admitted free to Canada but if the front end loader is sent to the United States for one-third of the business, the Canadian buyer has to pay $133 duty on each unit coming into Canada. There would be a duty on the Canadian made part of the unit but not on the United States made tractor.


Gordon Campbell Chown: I am sorry to interrupt the hon. member but his time has expired.


An hon. Member:: Do go on.


Gordon Campbell Chown: Is it the wish of the committee that by unanimous consent the hon. member be allowed to continue?


Some hon. Members:: Agreed.


William Hector McMillan: It occurred to me that if suitable arrangements could be made it would save Canadian buyers $133 per unit, it would help Canadian business in the United States to the extent of $1J million a year, it would help secondary industry, particularly steel; and it would give employment to some 40 men. I would therefore appeal to the minister to keep this matter in mind if and when he prepares his next budget.


Lionel Chevrier: There is one matter which I can dispose of briefly if I could have the attention of the committee. It has to do with the statement made by the Prime Minister yesterday and it has to do, also, with a matter which falls under the jurisdiction of the Minister of Finance. Yesterday, prior to the announcement of business for the next day, the Prime Minister entered the house and in dealing with an item on the order paper, namely, an amendment to Bill No. C-72, an act to amend the Customs Tariff, he had this to say as reported at page 9022 of Hansard. Referring to the bill he said "they"-meaning the opposition and the Liberals in the Senate-
-must accept the blame for the thousands of jobs which, because of the action they have taken, will remain uncreated.
I wish to say that this statement is not only ridiculous but it is inaccurate and it is untrue. I think it can easily be refuted. In the first place, it can be refuted by the fact that if the Prime Minister and those associated with him were so anxious to have this

matter go through, and if it was as important as they indicated it was, the government would not have dawdled over this measure from the month of November until the month of April before getting the bill through the house. If the committee wants to have the chronology I can put it on the record, because I have it here and can substantiate what I am saying. There is no doubt that this measure was delayed for weeks and months-


An hon. Member:: By the opposition.


Lionel Chevrier: -so it ill becomes anyone, particularly the Prime Minister, to make such a statement as he made yesterday.
If the government really believes that this measure would have provided so much employment, they should have agreed to the conference which was suggested by the Senate and which would have brought the bill into operation a long time ago. Moreover, if this bill means all the jobs which the Prime Minister has in mind, why did he not call the Senate and the house together? Why did he not do that before he made the announcement yesterday and ask them either to amend the measure or come to some understanding with reference to this so called important legislation which was to provide so much employment for the people of Canada? The right hon. gentleman did not do that because, I am convinced, the statement he made was inaccurate. This bill will not provide jobs on that scale, or any jobs for that matter. The real point is that the government realizes it has made an awful boob and is glad the Senate has taken them off the hook.


William Moore Benidickson: We are dealing still with the first item in the minister's estimates. I regret it, but I feel obliged to direct the attention of the committee to a question which was raised by one of our new members, the hon. member for Niagara Falls. The question is reported in Hansard on July 12, 1961. It is No. 452 and it relates to personal staff in ministers' offices.
In days gone by the Minister of Finance was a great one for talking about economy and saving the taxpayers' money. I am just an ordinary fellow here, though, of course, I was in the office of the minister of finance at one time. However, in order to get acquainted with our senior officials in the ministers' offices I still use what all of us use, namely, the telephone book. The last telephone book I know of put out in the time of the former administration is a red book dated April, 1957. I have the complete list. I see the Secretary of State for External Affairs here. Apparently he has been given a

very much enlarged job and therefore, according to the comparison of the telephone books, he has a much enlarged staff. I notice also that the Minister of National Health and Welfare has added considerably to his personal staff, and so has the Minister of Transport. I am using, as I say, this red book and comparing it with the latest book which we use when we want to contact the personal staff of a minister. I regret to bring up this subject but I cannot help recalling the present minister's predecessor, the Hon. Mr. Harris. I knew something of his self sacrifice with regard to these affairs. I knew he had the idea that he must set an example of economy when it came to the expenditure of public money. So I wonder now about this business of private secretaries, special assistants, executive assistants, assistant private secretaries, associate private secretaries and so on. When I compare this red book, showing the staff in those years, with the latest directory I wonder whether the Minister of Finance really is doing the tough job he says he is doing as chairman of treasury board. For example, here is the Department of Trade and Commerce and provision for assistant private secretaries in English and French, associate private secretaries and so on.


Douglas Scott Harkness: Is this all from the telephone book?


William Moore Benidickson: Mostly from the telephone book but I am a simple man and I think this is something which would appeal to simple taxpayers across the country. Although I do not have them with me this evening, I have kept civil service circulars relating to the enlistment of editorial and information personnel in the various departments. Despite what the Minister of Finance might say in debate about economy I can understand why he would have no control over treasury board or his associates in the cabinet when his own personal staff has increased and when over the last four years the people in the information division of each department have almost quadrupled in numbers. Hon. members on the treasury benches might say that these people are employed to be of service to the department as a whole, but there is a possibility that their first duty is to the minister of the department and the minister's organization in his own office. I merely raise that question and refer to a biblical phrase the minister frequently used to use in the debate. I ask: what about that mote and what about that beam?
If one looks at the old red-covered telephone book and compares it with the present telephone directory he will find some surprising results without going through the formality of placing a question on the order
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paper. The public thought they were electing a government that aimed at economy. I would think that the leadership in economy would start at the ministerial level, but that is not the case in this instance. I think the minister should tell us something about that because he presides at treasury board and almost every year when presenting his budget he almost bursts his buttons in talking about the good management and economy that has come about under his guidance.


Some hon. Members:: Hear, hear.


William Moore Benidickson: Some hon. members applaud. In a return to a question asked by the hon. member for Niagara Falls under date of July 12, 1961 it is indicated that the personal staff of the Minister of Finance numbered ten in the fiscal years 1956-57 and 1960-61. The expenditure in 1956-57 was $35,900 and again in 1960-61 it was about the same. Having served in that department I cannot reconcile the situation I have outlined with what is contained in the current telephone directory. I do not know how many stenographers are required but I shall deal with other employees. In April of 1957 at the time of the issuance of the directory I hold in my hand there was only a private secretary. The current directory issued in February, 1961 indicates that the minister has on his staff an executive assistant, Mr. William N. Allan, a private secretary, Miss A. Hanna, and a special assistant, Mr. G. Hamilton. All hon. members read about him some time ago. He was supposed to sort of "glamorize" the minister.


John Whitney Pickersgill: He is overpaid.


William Moore Benidickson: Perhaps a better way of describing his function is to say that he was supposed to humanize the minister.


John Whitney Pickersgill: In that case he certainly
is overpaid.


William Moore Benidickson: The two other employees whose names appear in the directory for both years are the lady who takes care of phone calls to the department and the lady who takes care of the files of the department. It is difficult to understand why the expenditure would be the same in the two periods I mentioned, especially when one considers that the minister now has an executive assistant, a private secretary and a special assistant despite the fact that he strongly advocated economy prior to 1957. Perhaps the minister might explain this.


Donald Methuen Fleming: Mr. Chairman, I hope I can be more brief in replying to these many matters than hon. members have been in raising them. I shall take the questions in order.

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First, the report of the Bladen commission. This matter, of course, continues under study. In response to what was said in the budget speech various interested groups and organizations are now coming forward with their representations. I hope we may be able to receive the remaining ones reasonably soon.
Second, as the hon. member for Kenora-Rainy River said, I did attend the annual meeting of the governors of the international bank and international monetary fund at Vienna last week. It was a very good meeting and there were a number of very constructive discussions there.
Third, there is no indication of any change in the price of gold. I dealt with this subject in reply to questions asked by the hon. member for Kenora-Rainy River several weeks ago.
Fourth, in regard to money supply, there was an increase over the past year in the money supply, until about a month ago or slightly longer, with some modest decline in it since. At September 13, 1961, the money supply stood at $14,331 million which was an increase of $1,075 million over September 14, 1960 but a decrease of $88 million as compared with September 6, 1961.


William Moore Benidickson: The increase in the
money supply for a date a little earlier than the minister mentioned, September 6, had been perhaps as high as $1,175 million beyond what it was the year before, is that correct?


Donald Methuen Fleming: I indicated that there was a modest decline over the past five or six weeks approximately. The bulk of the increase was in chartered bank deposits.
Fifth, with regard to Canada Savings bonds, the campaign has been launched as hon. members are aware. We hope for a good response and widespread support for this important feature of Canada's financial undertakings. This year we are offering an interest rate of 4.6 per cent. It is slightly lower than last year, but the indications are that we will have a good response. I wish to emphasize the importance of that response in relation to our total financial planning.
Next was a question in regard to the attempt to bring about an agreement between the countries which are interested in textile exports and imports, particularly in view of the volume of low cost textile exports from some of the Asian countries. I may say that the agreement which was reached at Geneva in July created a framework in which bilateral arrangements could be agreed upon for orderly marketing. However, it is too early to say whether the principal countries concerned will accept the agreement. Thus far Canada and the United States have accepted it.

Next was a question in regard to the exchange reserves.


William Moore Benidickson: Are there countries other than Hong Kong about which there may be doubt respecting an agreement on this matter?


Donald Methuen Fleming: No. We cannot say yet definitely what the outcome is going to be as regards other countries. Naturally the concern expressed by some of the western countries was related to the exports from Japan and Hong Kong.
The next question was in regard to exchange reserves. I answered a question on this subject several weeks ago. These are reported regularly. The August figure was $1,944.4 million as compared with a figure of $1,960.3 million for July and $1,985.2 million for June. The holdings of gold have tended to rise in this period; the holdings of United States dollars and obligations have declined somewhat.
The next question was in regard to the purchase of securities in the market with the assistance of the special fund that I announced in the budget. The figures of purchases have been announced for each month. Those for July were $11.8 million and those for August $28.1 million, a total to the end of August of $39.9 million. I made an announcement in relation to policy on this subject several weeks ago.
Next was a question in regard to interest rates raised by the hon. member for Welland. The budget indicated the view of the government that interest rates in the country are higher than desirable having regard to our balance of payments position. In the budget I indicated the kind of efforts that would be made to bring about a reduction in the interest rates. I am very glad to say that those efforts have resulted in a modest decline of the interest rates and, what is quite important, a decline in the differential as between interest rates prevailing in the United States and interest rates prevailing in Canada. This, of course, is of considerable importance having regard to our balance of payments.
The hon. member for Welland always argues as though the only time that a rise in interest rates has been known has been since the change of government in 1957. Well, he always overlooks the fact that there was a steady rise in interest rates for two years before the government came into office.


John Whitney Pickersgill: You were going to change all that.


Donald Methuen Fleming: Yes; interest rates did decline after we came into office.


John Whitney Pickersgill: For a very brief spell.


Donald Methuen Fleming: For a very satisfactory spell and with some very good results.

The hon. member talks about the decline in market values of the outstanding issues. He fails to say that for the two years before this government came into office there was a very substantial decline in the market values of outstanding issues, and the discounts at which good government bonds were selling at that time were quite substantial, running up to 15 per cent.
He has a great fondness for call features of bonds, and always when he speaks he raises the question why there are no call features, why we do not issue bonds that are callable. Well, for the very good reason that these callable features are not too popular, and if we are going to impose on bond purchasers the possibility of calling those bonds in when it happens to suit the interest of the treasury, well, then we are going to find it that much harder to sell them and we shall have to provide some other inducement; and this means higher interest rates, the very thing the hon. member has been talking against. He cannot have it both ways. He will either have to be content with the issuance of bonds without callable features or he will have to be prepared to advocate some other inducement to overcome the detrimental effect marketwise of adding callability.
The hon. member said "the minister has not been able to sell his bonds in the long end of the market." That is not true.


William Hector McMillan: I said "in volume".


Donald Methuen Fleming: The fact is, Mr. Chairman, we have deliberately stayed out of the long end of the market for some time now for the purpose of assisting the provinces and municipalities with their borrowings. We have left that end of the market clear for them. We have gone into the short end of the market for that very reason.
The next question that was raised, Mr. Chairman, was in regard to the Customs Tariff amendment regarding the class or kind definition.


John Whitney Pickersgill: I am raising a point of order at this time. Any debate on this subject would be of course clearly out of order because there is another item on the order paper dealing with it. It was mentioned by my friend from Laurier solely because the Prime Minister had gratuitously mentioned it yesterday. I am just pointing out to you, sir, before the minister proceeds, that if the minister wishes to have a debate on this subject I hope both sides of the house will be allowed to debate it.


Donald Methuen Fleming: Mr. Chairman, this is a fine example of justice. Apparently the hon. member for Laurier is to be entitled to 90205-6-574
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raise this point but nobody else is to be permitted to make any comment on his observations.


John Whitney Pickersgill: The Prime Minister started it yesterday.


Donald Methuen Fleming: Very well; he made the announcement which he had been asked to make earlier in regard to that question.


Lionel Chevrier: And quite irregularly.


Donald Methuen Fleming: Not at all, he made it by consent of the house.


Lionel Chevrier: That may be true. I raise a point of order.


Donald Methuen Fleming: Mr. Chairman, the hon. member for Laurier chose to make reference to this. I indicated that I am making a review of the points that have been raised and I have been doing it very briefly. I propose to make a brief comment on this if the hon. member for Bonavista-Twillingate pleases.
The hon. member for Laurier undertook to make reference to this subject and to comment on it when he tried to lay responsibility for delay at the door of the government. I say this was not the government's responsibility; this was brought up frequently in the house. If he will be fair he will remember that we did debate the measure on nine different days. It was not the government that held it up; it was the opposition that fought the measure. If they want to do that it is perfectly within their rights. They can resist it.


Lionel Chevrier: Why was it not brought down in the early part of the session?


Donald Methuen Fleming: There was other business that had to be dealt with, and this measure was brought up on nine different days.


Lionel Chevrier: If it was to provide so many jobs why did the government not bring it forward earlier in the session?


Donald Methuen Fleming: This was brought up not as the minister for Laurier said, in November; it arose out of the budget that was brought in on December 20, and this matter, along with the other job-making proposals in the budget, was brought forward when we reassembled after the Christmas recess, and with those other measures it was brought forward until it was passed. It was brought up on nine different days. That is the record. Therefore, what is the sense of saying that it was not pressed by the government?


Lionel Chevrier: It was not pressed and we will prove that in a moment.

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Donald Methuen Fleming: It was pressed by the government. If the hon. member chose to oppose it that was perfectly all right. That is his right as a member if he chooses to do so, but let him not say that the government did not press this measure. We did. We pressed it for nine different days until it was finally disposed of.
Next was the point raised by the hon. member for Kenora-Rainy River who had something to say about the staff in the office of the Minister of Finance. If he will look at the statement I made in reply to his question on July 12, page 7937 of Hansard-


William Moore Benidickson: It was not my question.


Donald Methuen Fleming: -he will see that the personnel in the office of the Minister of Finance when the former government went out of office numbered ten and today the number is eight. I quite accept the point that the Minister of Finance in matters like this should try to set an example. I will do my poor best to try to set a good example.
I think these are my observations, Mr. Chairman, on the dozen or so points that have been raised in the discussion.


John Whitney Pickersgill: Mr. Chairman, I assume I will now be allowed to deal with the matter with which the Minister of Finance has dealt. I have in my hand a chronology of this famous Bill No. C-72 which I thought it would be useful to bring here because I expected the customary misrepresentation of this matter by the Minister of Finance.
It happened that this measure was mentioned in the speech from the throne on November 17. It will also be within the memory of hon. members that the speech from the throne was disposed of in two days. If this was the most important job-producing measure that the government had-it was about June that the Minister of Trade and Commerce started saying it was, though they did not make any such claim for it in the early days when it was being debated- why did they not bring it in on the 19th or 20th or 21st of November and give it priority, as they did to one or two other measures, and get it through the house before Christmas?
The plain fact is that the government did not attach any special importance to it before Christmas at all. As we know, the Minister of Finance went on one of those junkets of his to Europe and delayed his baby budget until two days before the Christmas adjournment. That was not our fault. That was the fault of the management of the government. There was no reason why that baby budget should not have been brought down immediately after the speech from the throne was disposed of if the

government had had its business ready and if it was so important. Therefore the delay from November 17 or say November 20 to December 20, one month, was entirely due to the government.
The resolution never came before the house until February 1. There was a big gap. Day after day we kept asking the government to bring it forward. The hon. member for Laurier and I said, "Please bring it on". We wanted to debate it but the government did not like the debate. They did not enjoy it. It took place from February 1 to February 3 and then for 12 days the government refused to bring the measure forward. After the 15th of February another 12 days went by before it appeared again. The government sets the business of the house, not the opposition. I think at that time the minister had gone on a junket to Vancouver. I think he went out to see Mr. Bennett but Mr. Bennett slipped through his fingers and he had to go off to Chicago or somewhere. On one of these occasions that is what happened.
Then the matter came up again relatively soon after that on March 2 and it was discussed on that day. On that same day the bill got first reading. That was March 2. The debate on second reading of the bill did not come up until April 17, over a month and a half after it was given first reading. That is not the fault of the opposition. The government would not even bring forward this great measure that was to produce all this employment for second reading for a month and a half after it got first reading.
As a matter of fact, it took only two days to get second reading and it was not brought up in the Senate right away. I do not blame the government for that, of course, because that was the time of the Easter recess. The bill we brought forward in the Senate in April, and on June 14 the Senate indicated its views with regard to it. The bill was not brought before the house again until July 6. Again that was no fault of the opposition. That was no fault of anyone on this side. It was simply mismanagement of the business of the house by the government.
In the face of that record I say that for the minister to get up and say that it was the opposition and then the Senate that delayed this thing is just a perversion of the facts. 1 suggest that it would have been much better if the minister had just left the statement of the hon. member for Laurier and had no more to say about it because, as the hon. member for Laurier has indicated, the government realized, in the light of the almost unanimous opinion across this country about the bill and its arbitrary features, that they had made a dreadful boob and that the bill when compared with the Prime Minister's

bill of rights was an outrage. They were so pleased to have an excuse given to them by the Senate not to proceed with the bill that that is the reason we have heard no more about it except in those speeches by the Minister of Trade and Commerce outside the house only in selected places in eastern Canada, and never in western Canada, about all the employment that the bill would provide.
If the government really believed that the bill would have provided employment, if the government had really been sincere and earnest about this thing, they would not have dawdled all session about it. They would have got it through well before Christmas in order to get the employment to show for it, so they could boast about it now instead of this record of mismanagement, delay, procrastination and that final feeble performance of the Prime Minister yesterday.


Donald Methuen Fleming: Mr. Chairman, we have indeed heard a perversion of the facts by the hon. member for Bonavista-Twillin-gate. Why does he not come to the point and be frank and fair about this matter? He knows that he and one or two of his colleagues obstructed this bill all the way through. If he thinks that is justified, all right, but let him not then turn around and pretend that all other business of the house should have been set aside so that he and his colleagues could go on with that obstruction. We tried to bring the bill on. There was a great volume of legislation before the house at that time and the leader of the house was very good in giving time to that bill in the face of obstruction, when there was other legislation that had to be put through. There is the story.
If members opposite wish to argue and fight against the bill, that is their privilege; but let them not turn around then and pretend that the government did not wish to get the bill through. The government did want to get the bill through. I say to the member for Laurier that he was entirely mistaken when he said tonight that the government was glad to be taken off the hook by the Senate. We regret very much that the Senate did not see fit to pass that legislation and we could not possibly, as the Prime Minister pointed out yesterday, accept amendments to tax and money legislation introduced by the other house.


Lionel Chevrier: You dawdled with it for months.


Donald Methuen Fleming: There has been no dawdling with this measure. The Senate amendment could not have been accepted at any time because there was an important 90205-6-574i
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constitutional principle at stake. We regret that the Senate did not see fit to pass that legislation. We think it would have been very beneficial to the country if it had done so and allowed the bill to become law.


John Whitney Pickersgill: Mr. Chairman, I spoke from the record and the record speaks for itself.


Erhart Regier: What is the attitude of this government towards provincial governments issuing securities that are payable on demand? I have particular reference to a number of occurrences or a number of other payments on the part of provincial governments like British Columbia, in the light of the realization that we may have much larger financial investments that will have to be made and which I am afraid may be financed in a similar fashion. I am afraid other governments might imitate the example set by British Columbia.


Donald Methuen Fleming: The governments of three provinces have issued bonds that are redeemable on demand, like the Canada savings bonds in that regard. It is a matter over which we, as a federal government, have no control. If a province chooses to issue securities that are redeemable on demand we have no right to interfere. I am afraid there is no constitutional right of action under which the federal government can interfere.


Erhart Regier: I wonder if I might ask the minister if the government has considered asking the Supreme Court of Canada for an opinion as to whether or not this is, in effect, the issuing of currency? Obviously, the issuing of currency is the prerogative of only one government.


Donald Methuen Fleming: No, Mr. Chairman, we have not. If any citizen wishes to challenge the right of the province to do so he, of course, can go to the courts.


[Stage Direction]
Item agreed to.
114. The Bank Act-salaries and expenses of the inspector general of banks' office, $34,330.
William Moore Benidickson: I have a brief request. The Minister of Finance, very prominently in his budget speech of June 20, indicated that we would have a royal commission to review all elements of banking and finance. Very little has been heard of it since. This, perhaps is the prerogative of the Prime Minister in some respects, but can the minister report upon it in view of the fact it was he who, on June 20, made the announcement?

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Donald Methuen Fleming: We hope to be able to announce the personnel of the commission and the terms of reference at a very early date.


[Stage Direction]
Item agreed to.
Miscellaneous grants-
129. Canadian association of consumers, $10,000.
Erhart Regier: I notice that there are grants payable to the universities of Canada. All I want to say at this time is that I see no logical reason, if we were able some years ago to pay 50 cents per capita, then later raised that to $1 per capita and then $1.40 per capita, why we should not raise this grant to at least $3 or $4 per capita to make it a little easier for our young people to get the education they need.


[Stage Direction]
Item agreed to.
Gordon Campbell Chown: This completes the estimates of the Department of Finance. We have now for consideration the estimates of the Department of Transport.
DEPARTMENT OF TRANSPORT Air services-
Administration branch-
429. Air services administration, $1,852,117.


Léon Balcer: Before we proceed with these estimates, I should like to have the leave of the committee to make an announcement. In accordance with the intimation given by the Prime Minister, and with the permission of the committee, I should like to make a statement concerning the board of directors of the Canadian National Railways. The board will comprise the following: Mr. Donald Gordon; Mr. J. R. Griffith; Mr. W. Gerald Stewart, Moncton; Mr. Walter Colquhoun, Sydney; Mr. J. Louis Levesque, Montreal; Mr. Guy Charbonneau, Montreal; Mr. Gilbert Ernest Ayers, Lachute Mills; Mr. Alex McD. McBain, Toronto; Mr. Harry Isaac Price, Toronto; Mr. Jack Sangster, Regina; Mr. Robert Arthur Brown, Calgary; Mr. Walter C. Koemer, Vancouver. Mr. Gordon has also been reappointed as chairman of the board of directors.
In so far as the new directors are concerned, the effective date of appointment is October 1, 1961. The other appointments will be effective as of the date of expiry of the term for which they had previously been appointed. The term of Mr. J. R. Griffith, the labour representative on the board, does not expire until October 1, 1962. The term of office of the new appointments and reappointments is three years.
I might add that a proclamation will issue fixing October 1, 1961 as the day upon which

an act to amend the Canadian National Railways Act, being chapter 28 of the statutes of Canada, 1960-61, shall come into force. Perhaps the committee would also permit me to announce the appointment of Mr. Campbell Haig, Q.C. of Winnipeg as a director of Trans-Canada Air Lines, effective October 1, 1961. Mr. Haig will fill the vacancy on the board which occurred on the expiration of the term of office of Mr. R. A. C. Henry on October 1, 1960.
While I am on my feet, Mr. Chairman, I should like to make another announcement which will be of immediate interest to the members of this house. Following correspondence with the two presidents of our two major railways, I have been advised that the two railways have agreed to extend indefinitely the passes for wives and dependents of members of the House of Commons and of the Senate.


Lionel Chevrier: It is perhaps unfortunate, Mr. Chairman, in one sense that these remaining important items of the Department of Transport should be brought down at this period of the session. However, I must say in fairness to the minister that he has already had four, if not five, days on them. If we have taken so much time, it is certainly because of the importance of some of the new items that have been introduced. The only comment I wish to make in connection with the first part of the announcement made by the minister having to do with the directors of Canadian National Railways is this: This announcement is made after a whole year of delay. Look at the calendar. If you go back one year you will find that the terms of office of most of the directors expired at that time. Why it was necessary for the government to wait 12 months before making this announcement, I do not know. All I can say is that the administration of the railway must of necessity have suffered because of that, as the administration of any other corporation would have suffered under the circumstances.
Mr. Chairman, I understand that the item now under discussion is No. 429, air services administration. Before I proceed with my remarks I wish to ask the minister this question. For what reason did he make an announcement having to do with new international air services of C.P.A., because I understand that he did make an announcement while the house was not in session. However, when the announcement was made no reason was given. Many editorials have appeared in the press across Canada complaining very bitterly about the fact that an announcement was made between our sittings this session and no reason was given by the Minister of

Transport for this decision. I ask the minister now if he is prepared to give the reason for this decision.


Léon Balcer: Mr. Chairman, I welcome this opportunity to make a few comments on this decision of the government. There were numerous reasons for the decision of the government to designate Canadian Pacific Airlines as one of the carriers on the service between Canada and the United Kingdom. First of all I should remind the committee that the service in question is between western Canada to the United Kingdom across the northern part of our country.
The international air agreement between the United Kingdom and Canada makes provision for Canada to designate a carrier or more than one carrier for this service overseas between our country and the United Kingdom. One of the main reasons why Canadian Pacific Airlines has been designated is that at the present time from the western provinces, and especially from British Columbia and Alberta, a great many Canadians desiring to go overseas find it preferable, both financially and as far as the time element is concerned, to travel by United States air lines from Seattle. The reason is that the United States air lines give a direct service from Seattle to London. A great many Canadians have been travelling this way because there has been no direct service by a Canadian carrier from our two westernmost provinces to the United Kingdom. This new service means there will be an opportunity for Canadian carriers employing Canadians to offer our people a service that can compete with the United States air lines serving this traffic from Seattle and from the northwestern United States right to the United Kingdom.
There is another reason why the government has decided it is a good thing to give this opportunity to Canadian Pacific Airlines to serve the Canadian public on this route. This is the fact that Canadian Pacific Airlines has at the present time a service between Australia, New Zealand, the Fiji Islands, Hawaii and Canada and then overseas. Unfortunately, because Canadian Pacific Airlines could not serve the United Kingdom all the traffic from Australia, New Zealand and other islands of the Pacific was travelling exclusively on Qantas air lines. These people would cross the United States and travel directly to London. Canadian air lines were not serving this area of the commonwealth and could not provide a service that could compete with the service offered by Qantas at the time.
Canadian Pacific Airlines has pioneered this northern route; this is another reason for the decision of the government. They
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have established a market in the westernmost provinces of Canada, where they have their headquarters and employ almost 3,000 people. We sincerely believe that this will be an opportunity for Canadian carriers, not to compete so much with one another but to compete with other air lines of the world.
When we look at statistics and observe what happens in our international airports, every Canadian must realize that a tremendous number of our citizens are crossing the Atlantic every day on foreign carriers. I think this is a great opportunity for our own carriers to go after the Canadian market for the overseas route. I think the great majority of the passengers who will travel on this Canadian Pacific Airlines route are people who would not have travelled on our other Canadian carriers.
Mr. Chairman, I have given a few of the reasons for this decision. Of course, I know that Trans-Canada Air Lines are facing a deficit for this year, but I would say that practically every large air carrier in the world is at the present time going through a difficult period. The reason for this is not the decreasing traffic over the long routes, but that all the air lines had to switch from propeller aircraft to the big, new jets which are so expensive. We are right in the period of change-over. I am quite convinced that our two extremely efficient carriers will soon get over this change-over period and make up the deficit of the current year.
Trans-Canada Air Lines is providing extremely good service on all its routes and it can compete with every air line in the world. I must say that Canadian Pacific Airlines, which is a much smaller operation, also gives extremely good service. On both air lines we have the best crews in the world. They have very good equipment and both managements have the will to compete with all the other air lines in the world. Even if there is a great deal of traffic on the Atlantic route I believe that both air lines are well equipped and have the will and ability to compete. The decision of the government will in the long term prove a good one and I am convinced that it will not hurt Trans-Canada Air Lines, which is government-owned.


Lionel Chevrier: Mr. Chairman, I am not convinced by the answer the minister has given. I will tell the minister why I am not convinced with the reasons he has advanced. In the first place, I think that a decision of this importance should have been announced when the house was in session and not when the house had adjourned. There has been no opportunity to discuss this matter in the house save and except in the dying days of the session. Second, I am not at all convinced

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by the argument made by the minister that western Canadians desire to go to London via C.P.A. I think that because of the decision the government has made, they will not follow that route. If and when they go, as it is now they must go via Gander. This is clearly set out in the reciprocal bilateral agreement. So the western Canadians are not going to be able to travel any faster via C.P.A. than they can now via T.C.A. So that argument falls to the ground.


Léon Balcer: I wonder if the hon. gentleman would permit a question?


Lionel Chevrier: You can do your talking later-


Some hon. Members:: Oh.


Léon Balcer: The hon. member cannot convince me that the route is shorter via Winnipeg and Montreal than it is via Edmonton and Gander.


Lionel Chevrier: I do not imagine I can convince the minister of anything, because I am convinced in my own mind that the minister and this government are out to destroy T.C.A.


Donald Methuen Fleming: A shocking untruth.


Lionel Chevrier: The Minister of Finance says "shocking untruth". That is all he has been able to say to everything which has come from this side. Everything, he says, is untrue or malicious.
At least the former minister of transport, though he talked about competition when he was on this side of the house, did not always put it into effect.
Furthermore what about the terms of the approval of this line. Has that approval come forward? The minister made an announcement without even consulting the United Kingdom, with the result that one government is now dealing with the other by means of aide-memoires. Is this the way in which to proceed on a matter of this consequence-to announce a decision without even obtaining the approval of the other party as should have been done under the terms of the bilateral agreement?
I am not the only one who feels this way about the situation. There have been many editorials across Canada in connection with this decision. I referred a moment ago to the Montreal Star of August 17. It went on to say that the minister had not even attempted to discuss the reasons behind this decision. Then, long after the decision had been made, he makes this announcement in the house. The Financial Post of September 23, 1961, in an editorial entitled "The Wonders of Competition" says that both government owned Trans-Canada Air Lines and privately owned

Canadian Pacific Airlines have been sinking slowly but steadily in the red. C.P.A. lost $4.7 million last year, its fifth and biggest loss in five years while T.C.A. had a $2.6 million loss in 1960, its first in a decade. I wonder what the late Mr. Howe would have thought in the light of the establishment of this great government-owned air line, Trans-Canada Air Lines, owned by the taxpayers of this country. He brought Mr. Symington to direct its activities for many years, and Mr. Symington was succeeded by Mr. McGregor. I am just as positive as I am of the fact that I am here that there is no room for two trans-continental airlines in this country. The proof of that lies in the estimates which were presented to the committee on railways and shipping when for the first time, Trans-Canada Air Lines had a deficit of close to $200,000 last year and this year, as the Financial Post said, the T.C.A. deficit amounted to over $2 million. In the light of what is happening all over the world, how can you expect these lines to operate profitably if you are going to take traffic away from one and turn it over to another?
At least the government might have allowed the air transport board to deal with this situation, but it chose to deal with the matter itself and I do not know to what extent the situation was studied. In the United States, air lines are merging. But I do know that the government has been whittling away traffic from the T.C.A. year in and year out. They started in connection with some regional air lines. They have continued with a transcontinental reduction in T.C.A.'s line, and now they are taking additional traffic away from the crown-owned company-the taxpayers' company.
What will be the effect? There can be only one effect-that sooner or later the position will be so bad that it will not be possible for either one of them to carry on, and I hate to see the day when that will happen.


Léon Balcer: Before we proceed to the next item I should like to re-establish the facts. The hon. member for Laurier made all kinds of statements but I should like to bring the whole thing back to reality. First of all, he says the route to the United Kingdom from western Canada through Edmonton and Gander is longer than by way of Winnipeg, Toronto and Montreal. I think the hon. member has only to look at a map to see how completely wrong he is with regard to this.
The hon. member also said we did not get approval in advance of our decision from the United Kingdom. Well, there is nothing in the air agreement which says we must get approval from the United Kingdom before

the government of Canada designates a carrier for the trade between the United Kingdom and Canada.


Lionel Chevrier: I asked you in the house and you said it was necessary.


Léon Balcer: No, I did not say that.


Lionel Chevrier: Yes, you did.


Léon Balcer: The hon. gentleman further stated that the United Kingdom were not notified before we made the announcement. In fact, we did notify the United Kingdom of our intention. We gave them proper notice of our plan. Then again, the hon. gentleman talked about reports presented to the committee which considered the affairs of the C.N.R. and of the government-owned air line. If he would turn to the conclusions reached by that committee he will see that the committee stated in its report that no testimony was submitted which proved that competition was responsible for the deficits sustained by T.C.A.
According to the hon. gentleman, this matter should have been considered by the air transport board. Well, there is nothing in the act or in the regulations which says that overseas routes should be discussed before the air transport board. I agree that when we offer a domestic permit for an air line to travel over any route the board has authority to decide which air line should get it, and so forth. As to the accusation that this government is trying to destroy Trans-Canada Air Lines, nothing could be further from the truth. The impact on T.C.A. of this allocation of the northern route from western Canada to the United Kingdom will be somewhere between 1 per cent and 3J per cent of its gross revenue.
The annual rate of growth of T.C.A. has been at a percentage much higher than this, that is between 10 and 15 per cent or more. This indicates that the impact on T.C.A. will be negligible although of course there will be a certain impact.
What C.P.A. is going after and is going to get is traffic coming from the northwestern United States, traffic coming from the Spokane area into Calgary, traffic from Australia, New Zealand and other Pacific islands, and traffic from British Columbia and Alberta destined for Amsterdam.
The ridiculous point has been that Canadian aircraft flying from western Canada have had to fly through the smoke and fog of London to Amsterdam where the passengers were required to board a foreign carrier to be flown back to London. This absurd situation will be remedied in this fashion. I am sure that C.P.A. will not hurt T.C.A. and knowing the management, crew and personnel of T.C.A. I am
Supply-Transport
confident they will continue to work hard joining with C.P.A. in competing with other world air lines, and that our two carriers will soon be out of their deficit situation which has been brought about mainly because of the change-over from conventional propeller aircraft to the new big jet liners.


Lionel Chevrier: I will not pursue the matter in detail. I have said what I wished to say and the minister has not convinced me to any degree by anything he has said. The minister knows that under the Aeronautics Act the responsibility of determining a matter of this kind rests with the cabinet but it is also the responsibility of the cabinet to obtain advice on matters of this nature. There is no better body from which to obtain such advice than the air transport board. That is why I suggested the minister should give some consideration to that.
The last time the estimates of the minister were before the house I dealt with another matter concerning which I wish to make a brief statement now. In the past I have taken considerable exception to the uncalled for and unexplained favouritism shown by the Minister of Mines and Technical Surveys, with the connivance of the Department of Transport, to Autair Helicopter Services Limited. This would be bad enough if Autair was a reputable concern but I have already said enough about the record of Autair including its accident record and insurance record to convince any reasonable person that this government should not have given a contract where the lives of public servants are in jeopardy. In doing so I stated incorrectly that the accidents took place on the polar continental shelf. I have since learned that the accidents took place in the northern part of Quebec. But surely it is the record of the accidents and not the particular place where the accidents occurred that is the relevant consideration. There is no doubt that the accidents did take place nor is there any doubt about the difficulties of this company with respect to its insurance.


Léon Balcer: To set the matter straight let me say that the last time the estimates of my department were before the committee the hon. member for Laurier made a lengthy speech containing derogatory references to Autair and in which he blamed equally the Department of Transport and the Department of Mines and Technical Surveys. The questions the hon. member raised regarding Autair centred round a contract awarded to that company by another department of government and the safety record of the company. My own responsibility is limited to the regulations of the air transport board and the Department of Transport in

Supply-Transport
the administration of those regulations. I have checked with my officials and with respect to the contract about which my hon. friend complained the last time my estimates were before us I am advised that there is no evidence that Autair violated any of the regulations of the board or the department. The procedures followed in the matter of tariff filing, for instance, were legal. Under the board's regulations it is a fact that the procedure for late tariff filing, while legal, raises questions with regard to timing. This is not new to the board since these questions have come up on past occasions in relation to other carriers as well.
The department subsequently decided that as a result of several cases of late tariff filing just before a contract award it should issue a new ruling regarding tariff filing. It provided for longer term notice to avoid opportunities of unfair advantage. The fact remains, however, that the company did not in any way act illegally in this regard.
My hon. friend mentioned the matter of accidents. Following his previous speech the department inquired into the accidents mentioned by the hon. gentleman. We discovered that none of the aircraft of Autair sustained any damage in the accidents noted nor had any of their aircraft been involved in a single accident in 1961 at the time the letter was written which was on June 12.
Inquiries by our Montreal regional office were unable to establish any accident involving Autair Helicopter Services Limited in 1961. There was an aircraft involved in an accident following the date of the correspondence. The accident happened north of Forth Frances and involved a Bell helicopter. The aircraft suffered a loss of control and sank in six feet of water, but there were no injuries whatsoever.


[Stage Direction]
Item agreed to.
Civil aviation branch-
434. Construction or acquisition of buildings, works, land and equipment with respect to national airports (as determined by the Minister of Transport) and related facilities: contributions towards construction done by local or private authorities with respect to such airports, amounts to be paid in settlement of claims for compensation by persons whose property is injuriously affected by the operation of a zoning regulation made under authority of paragraph (j) of subsection (1) of section 4 of the Aeronautics Act and authority, notwithstanding section 30 of the Financial Administration Act, to make commitments for the current year not to exceed a total amount of $69,893,200, $60,900,000.
Erhart Regier: Mr. Chairman, would the minister give us a brief report concerning what is being done toward developing an airport auxiliary to the Vancouver airport? I have particular reference to the proposed airport

at Pitt Meadows. Is there any possibility this might be proceeded with in the ensuing year?


Léon Balcer: The airport at Pitt Meadows has been approved by treasury board and funds will be requested in the estimates at the next session.


[Stage Direction]
Item agreed to.
Air transport board-
446.	Salaries and other expenses including the Canadian delegation to the international civil aviation organization, $550,469.
Lionel Chevrier: Mr. Chairman, will the minister tell the committee when the studies which are being or have been made by the air transport board are likely to be given to the house? I understand that one such study has already beeen made and the minister made an announcement concerning it. Again that announcement was made not while the house was sitting but during a recess. I wish to know when the next study will be completed and I urge the minister to make the announcement when the house is in session so we might have some opportunity to debate it.


Léon Balcer: If the hon. member means the reports that I have in mind, they are confidential. These reports are made to me. If it is the decisions of the air transport board, following the region hearings, well, these decisions have been rendered as far as the eastern part of Canada is concerned as far west as Windsor. There will be hearings in Regina early in December for the western half of Canada.


Lionel Chevrier: How many such reports will be made by the air transport board at other regions in Canada? From what the minister says I understand that the air transport board reports to him and he makes the announcement, as he did for the eastern regions right up to Windsor. How many other reports will there be?


Léon Balcer: There will be two more, the prairies and the far west.


Lionel Chevrier: Would the minister be good enough to make the announcement when the house is in session? Two announcements were made by the minister during the adjournment. It gives us little opportunity to discuss it when the house is in session.


Léon Balcer: These reports are the decision of the air transport board. It has never been the practice to table those decisions or to announce them in the house.


Lionel Chevrier: I am not asking for that. The minister was talking to his officers and because of that I am sure he was not listening to what I was asking. When the confidential report of the air transport board is made to

the minister he makes an announcement. How many such regional reports are to be made to the minister? I understand there are two, one for western Canada and one for the Pacific coast. Will the minister give consideration to making those announcements when the house is in session?


Léon Balcer: I think my hon. friend is under the wrong impression. As far as the eastern hearings are concerned, a report of the decision was made by the board and I made the announcement. I do not know what other report my hon. friend has in mind.


[Stage Direction]
Item agreed to.
Board of Transport Commissioners for Canada-
447.	Administration, operation and maintenance, $1,249,433.
William Moore Benidickson: We are dealing with the board of transport commissioners. I recollect that when the Bell Telephone Company asked for an increase in its rates at one time, this government with an election in the offing, decided to use its power to overrule the board. I think that for a matter of two or three months they did overrule the board. Recently another application from the Bell Telephone Company, which affects users of telephones in Canada, has been dealt with. The cabinet has a chance to overrule the decision. Is there anybody on the front bench who can tell us whether the cabinet proposes to overrule the decision of the board because I understand that one member of the board said that the suggestions in the majority opinion were unconscionable and that in connection with long distance tolls they would impose on the economy of the country something that would not be desirable. Is there anybody who can say whether the cabinet is prepared to do what it did some years ago, namely overrule the board of transport commissioners?


Léon Balcer: Mr. Chairman, the cabinet will follow the legal requirements. At the present time no appeal has been filed against the decision of the board. Until such an appeal has been filed the government does not have to take any decision.


William Moore Benidickson: Would the appeal normally come from some municipality, or since this involves long distance rates, would it come from an individual? What are the possibilities in this regard?


Léon Balcer: Any interested party can file an appeal.


Erhart Regier: I have a complaint to lodge in this regard and it is against the board of transport commissioners. They have jurisdiction over the rates charged by the B.C. Telephone Company. I contend this is completely
Supply-Transport
out of line with common sense. The B.C. Telephone Company ought to have its rates determined by the British Columbia public utilities commission. By hook or by crook, over a long period of years, the B.C. Telephone Company has at long last finally escaped completely any provincial authority or any provincial jurisdiction. My experience has been that the board of transport commissioners in Ottawa accept holus-bolus any argument presented to them by the B.C. Telephone Company. No community or interest in British Columbia has ever had its arguments given any serious consideration by the board of transport commissioners in Ottawa. Immediately upon receipt of a complaint from British Columbia to the board of transport commissioners a letter is mailed out to the B.C. Telephone Company by the board in which it sets forth the complaint. Thereupon the B.C. Telephone Company mails its reply, and this reply has always been accepted in our history as gospel by the board of transport commissioners.
I do not want to be unfair to the board. They may well be able to supervise the operations of the Bell Telephone Company in Ontario. However, they are completely unequipped and unable to supervise the operations of our own B.C. Telephone Company. The sooner they get out of this particular field and hand over to our province the supervision of the operations of our own telephone system the better it will be, and the happier our people will be.
As I said before, I do not want to blame any one individual, but this company has always been treated as a bit of an orphan. I refer now to the assignment of exercising supervision over the B.C. Telephone Company. We pay in our province twice the telephone tolls that many of the citizens of other Canadian cities have to pay. There is now another proposal to increase rates even more. With respect to public utilities, one of the old lessons that was taught to me was that the more users you have the lower the cost per unit of operation, but this is not so with the B.C. Telephone Company. The more little exchanges they establish, and the more they split up existing exchanges the more the rates go up to the householders and to business.
In conclusion, I contend that not only business but every householder in British Columbia will thank this government if it will relieve itself of the responsibilities of supervising the B.C. Telephone Company and hand the whole of the affairs of that company back to the government of British Columbia where it rightfully belongs.


William Moore Benidickson: In practically no place in Canada have we government ownership of

Supply-Transport
telephones except perhaps in British Columbia. I think the Minister of Transport should take an interest in this matter because if you compare the rate from Winnipeg to Kansas City and from Vancouver to Halifax you will find that the Bell Telephone rates are higher than those that prevail to the south of us in the United States. I hope that the cabinet will consider this matter when there are appeals from the board of transport commissioners with respect to rates.


[Stage Direction]
Item agreed to.
448.	Amount to be credited to the railway grade crossing fund, in addition to the amount to be credited to the fund under the Railway Act in the current fiscal year, for the general purposes of the fund, and authority, notwithstanding section 30 of the Financial Administration Act, to make commitments pursuant to this item for the current and subsequent fiscal years not to exceed a total amount of $10 million, $5,000,000.
Mr, Regier:: Would the minister explain why there is a reduction from $10 million to $5 million? All of us regret the number of accidents that are still occurring at our railroad crossings.


Léon Balcer: There is adequate money in the fund at the present time. It was not foreseen that the whole fund would be used up during the year and if there is a need for more money it will be provided.


[Stage Direction]
Item agreed to.
Board of transport commissioners-
590. Interim payments, related to recommendations of the royal commission on railway problems pending its complete report, to companies as defined in the Freight Rates Reduction Act of an aggregate amount in respect of the calendar year 1961 of $50,000,000, to be paid in instalments at such times and in accordance with such method of allocation as may be determined by the Board of Transport Commissioners for Canada, as compensation to such companies for the maintenance of their rates on freight traffic at reduced levels as provided for in the said act, $50,000,000.
Lionel Chevrier: Mr. Chairman, I would point out to hon. members that this is a rather important vote. It involves an expenditure of $50 million and I think that there should be some explanation forthcoming. I should like to read the vote and ask the minister if he can clear up the confusion which anyone reading the vote will certainly find. It reads:
Interim payments, related to recommendations of the royal commission on railway problems pending its complete report-
The royal commission on railway problems has recommended the payment of $100 million divided in four categories. I should like to know first of all how much of this amount will go toward payments as recommended by the royal commission? In its first report the

royal commission, as found on page 60, recommended a subsidy for passenger trains in the amount of $62 million. With respect to losses on Crowsnest rates it recommended a subsidy of $22,300,000, as found on pages 65 and 66. Third, it recommended a subsidy of $13 million for the deficit on light density branch lines, as found on page 62 of its report. That makes a total of $97,300,000. I should like to know how much of the $50 million is related to these payments recommended by the royal commission.


Léon Balcer: I remember explaining this at the time. The $50 million is related, of course, to the MacPherson commission but until the two other reports are tabled and are in the hands of the government the government has decided that all it can do in the circumstances is to consider the recommendation of the commissioners in their first report and the factors behind the three recommendations with respect to the various categories that have been mentioned by the hon. member. As an interim payment while we are waiting for the two other reports the government felt that $50 million would be a fair and appropriate figure in the circumstances, basing its decision on the findings and conclusions of the commissioners. We did not want to present an amount of money covering exactly all the recommendations of the commissioners until we have the other two reports.


Lionel Chevrier: How much of this $50 million is going for one or another of the three categories that I mentioned?


Léon Balcer: I have not got those details with me at the present time. The amount of $50 million is to be allocated by the board of transport commissioners to both railways. The board bases its judgment on various factors and has in mind keeping rates at the present level.


Lionel Chevrier: If it is a matter of keeping rates at the present level, then it has nothing to do with the report of the royal commission on transportation. Is that not right?


Léon Balcer: Indirectly it has.


Lionel Chevrier: There is another question I should like to put to the minister. Since the vote starts off by referring to interim payments related to recommendations of the royal commission on railway problems pending its complete report, it is quite clear that no portion of this amount is going for passenger train service, Crowsnest rates or for the deficit on light density lines.
The next point that arises is this. If the money is going to be paid to companies as defined in the Freight Rates Reduction Act in an aggregate amount in respect of the calendar year of 1961 of $50 million, to be

paid in instalments at such times and in accordance with such method of allocation as may be determined by the Board of Transport Commissioners for Canada, as compensation to such companies- this is the point- for the maintenance of their rates on freight traffic at reduced levels as provided for in the said act, is the answer to my question that the full $50 million goes, as determined by the board of transport commissioners, for the maintenance of the rates on freight traffic at reduced levels as provided for in the Freight Rates Reduction Act?


Léon Balcer: As I said earlier, this is an interim payment. The members of the Mac-Pherson commission have made a complete study of the whole railway situation in Canada. They were faced with the fact that the railways either had to increase their rates or maintain certain inequalities in the rate structure or abandon various services across Canada. In its report the MacPherson commission has set up a certain pattern by way of solution of the problems of the railways in Canada. As I have said earlier, it is only a first report. The second and third volumes are still to come, and so that the railways would not raise their rates all of a sudden and also to permit the railways to equalize the situation all across Canada the government has decided that it is fair to provide a subsidy of $50 million.


Lionel Chevrier: Then, what the minister is saying is that it is for the reduction of freight rates, am I correct?


Léon Balcer: Yes.


Lionel Chevrier: On June 8, 1961, Bill C-93 was assented to and this was an amendment to the Freight Rates Reduction Act which provided the sum of $20 million. If I understand correctly, the government is going to give $50 million additional to the railways, as determined by the board of transport commissioners, over and above the $20 million that was provided by the Freight Rates Reduction Act. In other words, the $20 million was not enough. The $20 million reduced the rate from 17 per cent to 8 to 10 per cent and now this $50 million is going as compensation to the said railway companies for the maintenance of their rates as set out in the last part of the vote, which rates are at a reduced level as provided in the Freight Rates Reduction Act, is that right?


Léon Balcer: That is right.


Lionel Chevrier: What provision is there for doing this when parliament passed a statute which says the railways shall get $20 million for the reduction of freight rates? Now, disregarding the statute, an item is put in
Supply-Transport
the estimates to pay $50 million. Is it not a fact, Mr. Chairman, that that is not the purpose at all of the $50 million? I hope the minister will tell us frankly what the purpose is. The purpose is simply to carry out the recommendations of the Milvain report, and nothing more.


Léon Balcer: No, Mr. Chairman. First of all, the $20 million in the Freight Rates Reduction Act was for the purposes set out in the act. The $50 million, as I said earlier, was based on the MacPherson report, and the only way we could implement that report was by means of an item in the estimates. The wording of the item gives a general description of the purpose and the reason the government is paying this $50 million to the railways.
The two railways faced great problems, and that was the reason the government instituted this royal commission. The commission was to investigate the problems of the railways in Canada and make a report. The commission has partly accomplished this purpose but so far only one part of the report is available. The report gives a good picture of the situation in which the railways find themselves and explains what should be done. Until the other two volumes of the report are available the government cannot make any final decisions, but decided the sum of $50 million would be a proper amount to help the railways carry on until the other two volumes of the report are available.


Lionel Chevrier: The royal commission on transportation made no recommendations having to do with freight rates?


Léon Balcer: Yes.


Lionel Chevrier: No, they did not. I have just put on Hansard the four categories of recommendations which they made. None of them had to do with freight rates. All I am saying to the minister is that the only conclusion to which I can come with reference to this vote is that it is either to pay for the recommendations of the royal commission, and the minister said no to that, or it is to pay for a reduction in freight rates, to which the minister has said yes.


Léon Balcer: I did not say no, I said the payment is based partly on the MacPherson commission recommendations that the railways should receive subsidies, that the railways should be allowed to abandon certain lines, and so on. There were all kinds of recommendations. The government could not implement these recommendations until the other part of the report is available. The

Supply-Transport
government, in fairness to the railways, decided to give this $50 million subsidy.


Lionel Chevrier: I am not going to pursue the matter indefinitely, but I am certainly not satisfied with the explanation which the minister has given because his comment is divided into two parts; one is related to the royal commission report, and there is no mention in the report of any amount to be paid in reduction of freight rates. We passed a statute under which we gave the railways $20 million. There can, therefore, be no other conclusion but that this item has been put in here in that confused form to implement the recommendation of the Milvain report.


William Moore Benidickson: What relationship would the minister say that this has, not only to the revenues of the railways but to the wages of the employees, pending some consideration of some of the items in the royal commission report?


Léon Balcer: As I said earlier, it arises from the royal commission report. The railways were facing great needs and these needs have been met in part by this $50 million.


William Moore Benidickson: Is the minister suggesting that out of this $50 million a substantial portion of it goes to those who work on the railways?


Léon Balcer: Well, it goes for all the expenses of the railways. Railway expenses have increased in a general way and the operating costs of the railways have gone up recently. This is what I meant by the general needs of the railways and it was in the face of those needs that the government decided to grant this amount.


[Stage Direction]
Item agreed to.
Canadian maritime commission-
592. Capital subsidies for the construction of commercial and fishing vessels in accordance with regulations of the governor in council, $10,000,000.
Lionel Chevrier: As the committee knows, this item concerns the subsidy policy which the minister announced in the house, together with the regulations which were circulated. Since these regulations have been circulated, I should like to know how many shipowners, how many shipbuilders, have signed contracts on the basis of the regulations which were circulated by the minister and on the basis of the interim regulations announced by the minister on July 7?


Léon Balcer: At the present time, Mr. Chairman, we have over one hundred applications and the Canadian maritime commission is processing them. At the moment five ships

are being built under the new regulations. There has been a tremendous response from shipbuilders, shipowners and future shipowners, and I am quite confident the new regulations will result in a number of ships being built.


Lionel Chevrier: Out of the hundreds of applications that have been made, five contracts have been signed for the construction of ships, am I correct?


Léon Balcer: Five starts under the regulations are going on at the present time.


Lionel Chevrier: That means that five ships are being built?


Léon Balcer: Five ships under the regulations are being built at the present time. These contracts are being processed and we are quite confident about the matter. The program is going very well and according to expectations.


Lionel Chevrier: Mr. Chairman, in the statement which the minister made in the house and the discussion which followed there was some question of this policy benefiting not only Canadian shipbuilders-that is, Canadian yards-but also Canadian ship operators. The minister went on to say that this would eventually mean assistance to a Canadian merchant navy. The policy as announced by the minister-and I have the announcement in my hand-concerned not only assistance to shipbuilding, as I said, but assistance to a Canadian merchant navy.
Will the minister indicate where in these regulations or in this policy announced by him will be any benefit forthcoming to the operators of Canadian ships on the deep-sea. As I understand it, the measure is one that will give assistance to Canadian yards by a subsidy of 40 per cent, together with the additional 33J per cent over a period of three years by way of depreciation. But how will this policy benefit the operators of deep-sea vessels?


William Moore Benidickson: Canadian operators particularly.


Léon Balcer: First of all, Mr. Chairman, we are not at the present time paying any operating subsidies, but of course these new regulations will help shipowners, because when they want a ship built in Canada they will have the advantage of this 40 per cent subsidy. When a ship is built in Canada for a Canadian shipowner, this 40 per cent subsidy will give the shipowner the opportunity to compete with ships being built in shipyards in other countries.


Lionel Chevrier: Is that what the minister meant when he said these regulations and this policy would help the deep-sea operators,

because the subsidy is one which will assist in the building of ships, not in the operation of ships? I am sure the operators of deep-sea vessels are keenly interested in knowing whether they will benefit from the operation of this policy, as will builders of ships.


Léon Balcer: Mr. Chairman, a very interesting development has taken place in the last few weeks. At the present time some Canadians have contacted the Canadian maritime commission-


Lionel Chevrier: I will have to get a loudspeaker in order to hear you.


Léon Balcer: -in connection with building ships on the great lakes that will be able to serve on the great lakes and on the deep-sea. I think there will be a very interesting development in this way. The purpose of these regulations, of course, is not that of an operating subsidy but to help Canadian shipowners acquire ships from Canadian shipyards at a fair price and one that is competitive with other shipyards in the world.


[Stage Direction]
Item agreed to.
Gordon Campbell Chown: That completes the estimates of the Department of Transport.
Resolutions adopted in committee of supply this day reported and concurred in.



WAYS AND MEANS

[Stage Direction]
Hon. Donald M. Fleming (Minister of
Finance) moved that the house go into committee of ways and means.
Motion agreed to and the house went into committee, Mr. Chown in the chair.
['1.\tWhat is the total amount of the mortgage documents that, as to date, have been offered for sale to the public by Central Mortgage and Housing Corporation?\n2.\tWhat was the amount of unpaid principal and the average interest rate of the securities that have been sold?\n3.\tHow much was realized from the sale of the above securities?\nAnswer by: Hon. D. J. Walker (Minister of\nPublic Works):\nQuestion\n1.\tThe total of the two offerings was $32,500,000. However, it was not intended to sell more than $30 million. The balance was offered merely to make a wider choice of location possible to prospective purchasers.\n2.\tSales were made on the basis of principal and interest and totalled $26 million, including $3f million of option tenders expiring October 28, 1961. All loans offered for sale to date carry an interest rate of 6f per cent per annum calculated semi-annually.\n3.\tAt the present time it is impossible to give an exact figure since some of the options have not yet been exercised. On the first sale, however, an average price of 101.17 was realized and on the second sale the average accepted tender price was 101.35.', 'Supply-Items Passed [The following Items were passed in committee of supply]:']
Donald Methuen Fleming: That towards making good the supply granted to Her Majesty on account of certain expenses of the public service for the fiscal year ending March 31. 1962, the sum of $1,543,443,482.96 be granted out of the consolidated revenue fund.


[Stage Direction]
Motion agreed to.
Resolution reported and concurred in.
Mr. Fleming (Eglinton) thereupon moved for leave to introduce Bill No. C-132, for granting to Her Majesty certain sums of money for the public service for the financial year ending March 31, 1962.
Motion agreed to, bill read the first and second times, considered in committee, read the third time and passed.

Mr. N. L. Spencer (Essex West):: Mr. Speaker, may I have unanimous consent to revert to motions for the purpose of moving
House of Commons
that a message be sent to the Senate to return to that house the evidence taken and the papers produced before the standing committee on divorce in respect of certain bills?


Mr. Speaker:: Does the house give unanimous consent to reverting to motions for that purpose?


Some hon. Members:: Agreed.


Norman Leonard Spencer: That a message be sent to the Senate to return to that house the evidence taken and the papers produced before the Senate standing committee on divorce in respect of the following bills:
Bill SD-54, an act for the relief of Frank Grilli.
Bill SD-139, an act for the relief of Ignatz Rada-kovitz.
He said: By way of explanation I might state that the eighth and ninth reports of the standing committee on miscellaneous private bills presented on September 27 were adverse to the prayer of these two bills. This motion is necessary to return the Senate papers and to avoid a message from the Senate requesting them.


[Stage Direction]
Motion agreed to.

Lionel Chevrier: Since this concludes the business of the house, I should like to pause for a moment and pay tribute to those with whom we have been associated during the course of this session.
I should like to thank the leader of the house for his co-operation always, but more particularly during the last three weeks. I do not say that in any facetious manner. I should like to make this simple statement with reference to the work of the house: if only we could proceed with the work in the same manner as we have done in the last three weeks our sessions would not last nearly as long. I hope it will be possible in the next session so to arrange the work that we shall not begin Saturday and morning sittings until way toward the end, perhaps the second or third week before the end, because I do not think the early sittings and Saturday sittings have been conducive to productive work.
Having said that, I feel I should express one always liked spirited debate in the House of the opposition, our thanks for your courtesy, your kindness, and for the manner in which you preside over the affairs of this chamber.
I should like to say that we have for you great admiration. If we do find that sometimes you lean a little more on the right of your chair than you do on your left we shall never hold it against you because we know that when you do that we either

House of Commons
deserve it or, again, that you are exercising your discretion, as you, in the chair, have every right to do.
(Translation):


Lionel Chevrier: I should not want to forgo the custom of saying a few words about the deputy speaker and chairman of the committees of the house (Mr. Flynn). Unfortunately, he is not here at the moment since he is representing Canada on a mission abroad, according to what I have read in the newspapers.
I wish to thank him for the manner in which he has fulfilled his duties. I am sure he has done as well as he could.
(Text):
Now I should like to say a special word about the chairman of our committee of the whole house. He is not only a new chairman but also a new member. He has had to take over from his predecessor at short notice. In my opinion, a chairman of the committee must have three prerequisite qualities. The first is a knowledge of the rules, the next is good judgment, and the third is a lot of patience. The hon. member who presides now over the committee of the whole possesses those three qualifications. In my opinion he has put into effect not so much the letter of the rules as their spirit and that is, I think, what was intended by those who enacted the rules in the first place.
There are many others in the house to whom I should like to say a word of thanks- to the Clerk and those who sit round him at the table and who perform services for us all; to our Hansard reporters, both in English and in French, who are so accurate and painstaking and who spend a great length of time after the house adjourns preparing transcripts of our speeches. I should like to express our thanks to the translators. This is a new branch of our house. A translator must be extremely efficient. He must have a general knowledge of so many subjects, and more, particularly, of the subjects which are under discussion here. I want to thank them particularly. I wish also to express our thanks to the secretaries and the stenographers of the house, to the protective staff and to the clerks of the committees whom we always seem to omit, and to all others. They perform a commendable task. Committees sit so often now, and the clerks perform most valuable duties. I should like to thank them on behalf of the opposition. Last, but not least, I should like to express our thanks to those page boys who serve us with such devotion, who are so well groomed and well drilled, thanks to those associated with you, Mr. Speaker. We shall miss them in the days that lie ahead.

I think I should conclude by thanking all the members of the house for not having interrupted me and so many others here more often than they did and for their many contributions to the discussions which took place as well as to the general conduct and administration of the House of Commons. To all those hon. members who are here I say "thank you" and look forward to seeing you again in the not too distant future.


Erhart Regier: On behalf of the members of this group I want to endorse all the sentiments which have been so ably expressed by the spokesman of the official opposition. I especially wish to reiterate the kind words he had to say about the leader of the house. We have at all times experienced his willingness to consult in a manner, I may say, we have not always experienced in the past.
To you, Mr. Speaker, we want to say that we have never noticed you leaning either to the left or to the right. You have always maintained an impartial position, often in difficult situations which we have imposed upon you.
I wish to pay the compliments of this group to the many employees of the house, not only to the clerks but even to our office assistants, stenographers, messengers, page boys and all the rest. I am sure all members of this house regret the necessity at this time of having to appoint a new chairman of the committee of the whole. I am sure that all of us wish the former chairman a speedy recovery and return to this house.
The members of our group hope that all hon. members, as they go home for a month or more of fence mending, will have a very interesting experience.


Gordon Minto Churchill: Mr. Speaker, may I thank hon. members of the opposition who have referred so kindly to me and, I am sure, to the great surprise of my colleagues on this side of the house. What the hon. member for Laurier said is very accurate and should be borne in mind. During the last three weeks the house has operate^ more efficiently than it did in earlier parts of the session. I am quite prepared to agree with him that the early imposition of lengthy hours and Saturday sittings is a mistake and perhaps another year we will not have to do that.
I am constantly surprised how well we do manage in this house year after year and I am impressed by the friendly spirit that prevails despite spirited debate which is of importance in a democratic parliament. I for one always liked spirited debate in the House

of Commons either as a participant, an observer or sometimes even as one who interrupts.
I wish to associate myself with the remarks that had been made concerning yourself, Mr. Speaker, concerning the Deputy Speaker, the Chairman, and all the officials of the house, the members of parliament and the members of the staff who look after the needs of the House of Commons. It is impossible to name them all without omitting some who should be named but I wish to include them all in our expression of thanks.
Parliament is a great institution. Although we sometimes appear to falter, nevertheless every hon. member is interested in maintaining the magnificent traditions of this institution and under your leadership, sir, I believe that has been done very ably during this session.


Mr. Speaker:: May I be permitted to acknowledge on behalf of those who have been so deservedly complimented the happy and well justified expressions of appreciation which have come from all sides of the house. The officers, the staff of the House of Commons and the staff of the Department of the Secretary of State have been properly noticed for the service they have given. On behalf of those who are unable to speak for themselves I acknowledge these compliments which I am sure will be gratefully received.
For myself, I am really very pleased at what has been said. It is not possible to walk a tightrope without swinging even involuntarily. I am sure that at times some hon. members have thought I have swung one way when to others it may have seemed that I was swinging in the opposite direction; but it is all the more appreciated that hon. members have expressed themselves as they have and have co-operated so fully in circumstances in which it is not always possible to be right.
I am particularly pleased with the compliments that have been paid to the deputy-chairman of the committee of the whole house.
I have not had the same opportunities as others to observe him in action but I am sure that what has been said is well deserved and I know that hon. members will wish him to have an opportunity to speak for himself.


Gordon Campbell Chown: As
the house would have expected, sir, you have done very adequately what I had hoped to do, however inadequately, and however briefly. I have found my service in the house a very inspiring experience indeed. Such an experience can be inspiring only if one has the gracious co-operation of all hon. members and particularly the co-operation and assistance of those to whom we look to nurse us
Royal Assent
through all the difficult pasages that face us as we proceed with the business of the committee.
I must say I was deeply moved by the probably over generous comments made by the hon. member for Laurier (Mr. Chevrier), the acting leader of Her Majesty's loyal opposition, and I wish the hon. gentleman to know that I shall be everlastingly grateful.


Mr. Speaker:: There is one other item of business not on the order paper. I expect now it is tomorrow's business. When we go to the other place I think it is a reasonable expectation that our duties will not bring us back to this chamber but there are other occupations which I think are appropriate for the termination of the session and I am sure that nourishment will be needed after we have been to the other place.
When we return from the other place I hope that hon. members will come back to the room across the hall and bring their wives or husbands, if they are here. I should also like to include in this invitation the members of the press gallery and their wives.
And the sitting having continued until after midnight.
Friday, September 29, 1961 THE ROYAL ASSENT


Mr. Speaker:: I have the honour to inform the house that I have received the following communication:
Government House, Ottawa, September 28, 1961
Sir:
I have the honour to Inform you that the Honourable Mr. Justice Patrick Kerwin, Chief Justice of Canada, in his capacity as deputy of the Governor General, will proceed to the Senate chamber at 11:50 p.m. today, September 28, 1961, for the purpose of proroguing the fourth session of the twenty fourth parliament of Canada.
X have the honour to be, sir,
Your obedient servant,
Col. A. G. Cherrier, Assistant Secretary to the Governor General.
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Honourable the Deputy of the Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
In the Senate chamber the Honourable the Deputy of the Governor General was pleased to give, in Her Majesty's name, the royal assent to the following bills:
An act for the relief of Jean George Lipsman.
An act for the relief of Margaret Terese MacDonald Tombs.
An act for the relief of Esther Miller Finkelstein.

Royal Assent
An act for the relief of Matilda Aboud Henrig, otherwise known as Matilda Aboud Levac.
An act for the relief of Charles Malcolm Macdonald.
An act for the relief of Georgette Ginette Richar-dot Marica.
An act for the relief of Roland Labelle.
An act for the relief of Robert Clair Alger.
An act for the relief of Susanne Louise Eismann Weinfield.
An act for the relief of Florida McIntyre Marcil.
An act for the relief of Muriel Frances Marion Simpson Anfossi.
An act for the relief of Norma Catherine Shearly McMullan.
An act for the relief of Violanda Fuoco Delage.
An act for the relief of Leonda Suzanne Winston Gold.
An act for the relief of Georgette Claudy Bercler Brabant.
An act for the relief of Anneliese Bauer Kreuzer.
An act for the relief of Beulah Maybelle Purcell Stewart.
An act for the relief of Diana Fraid Gross.
An act for the relief of Nancy Anne Gray
Levesque.
An act for the relief of Agnes Larkin McBride. An act for the relief of Sheila Rose Hutchison Dendy.
An act for the relief of Clara Melamed Schultz. An act for the relief of Josephine Badaha Amyoony Marchadier.
An act for the relief of Bella Grafstein Wein-traub.
An act for the relief of William John Earner,
junior.
An act for the relief of Doreen Mary Swain
Mather.
An act for the relief of Dorothy Grace Brown
Vallieres.
An act for the relief of Nellie Frances Drake. An act for the relief of Louis Fruttero.
An act for the relief of Fritz Flunkert.
An act for the relief of Claude Thibault.
An act for the relief of Remmechiena Elsiena
Jonker.
An act for the relief of Mary Billias.
An act for the relief of Helene Lempp.
An act for the relief of Jean Elizabeth Geraldine Vimbor.
An act for the relief of Hela Hinda Fachler.
An act for the relief of Norma Skolar.
An act for the relief of Jack Warran Jones.
An act for the relief of Phyllis Marjorie Bradley. An act for the relief of Barbara Phyllis Barnes. An act for the relief of Clifford Harvey Stevens. An	act	for	the	relief	of	Nicolas	Denis Lazanis.An	act	for	the	relief	of	Hedwig	Anna Kiss.An	act	for	the	relief	of	Mildred	Linda Sexton.An	act	for	the	relief	of	Hugh Donald McKean.
An act for the relief of Catherine Louise Puddicombe.
An act for the relief of Eunice Beverley Donaldson.	,
An act for the relief of Florrie Naomi Wise.
An act for the relief of Leslie Alfred Wheable. An	act	for	the	relief	of	Roslyn Reisler.An	act	for	the	relief	of	Viola Saykaly.
An act for the relief of Barbara Rose Isenberg. An act for the relief of Thelma Rosemary Picher. An act for the relief of Rita Joubert.
An act for the relief of Evelyn Ann Joy.
An act for the relief of Wendy Grace McCullough. An act for the relief of John Dyall.
An	act	for	the	relief	of	Anna Marie Cholette.An	act	for	the	relief	of	Richard Lome	Moat.
An act for the relief of Juliana Green.
An act for the relief of Marie Veronique Elmire Bugeaud.

An act for the relief of Victor Robert Selvln Rafuse.
An	act	for	the	relief	of	Francis John	Turner.An	act	for	the	relief	of	Mary	Berler.
An act for the relief of Ruth Anna Becker.
An act for the relief of Annunziata Collin.
An act for the relief of Sophie Greuzinger Abelius.
An	act	for	the	relief	of	Joan	Miller.An	act	for	the	relief	of	Marie	Anne	Sigouin.An	act	for	the	relief	of	Jean	Paul Dussault.
An act for the relief of Aleksander (Olexa oi Oleksa) Chomenko.
An act for the relief of Robert Whitla Ross.
An act for the relief of Margherita Di Paolo. An act for the relief of Pauline Lewkowict.
An act for the relief of Marie Louise Aline Ross. An act for the relief of Gisela Lydia Elisabeth Hunnius.
An	act	for	the	relief	of	Dorothy Gertrude
Payment.
An act for the relief of Pierrette De Vynck.
An act for the relief of Dorothy Joan Kovacs. An act for the relief of John Vereshack.
An act for the relief of Eloi Vincent.
An	act	for	the	relief	of	Frederick William
Steppings.
An act for the relief of Dawn Carolyn Kronen. An act for the relief of Mario Ildiko Leitner.
An act for the relief of Nora Vida Dobie.
An act for the relief of Janina Keller.
An act for the relief of Gordon Angus Moore. An act for the relief of Maurice Robert.
An act for the relief of Johann Kinzl.
An act for the relief of Elizabeth Robb Lilley. An act for the relief of Marguerite Archambault. An act for the relief of Nancy Viola Doolittle. An act for the relief of Elsie Margaret Turnau. An act for the relief of Ruth Manhaim.
An act for the relief of Micheline Maud Huguette Deutschenschmied.
An act for the relief of Edith Martha Ami.
An act for the relief of Christa Krusemer.
An act for the relief of John Dennis Grubb.
An act for the relief of Frank (Franz) Zeigler. An act for the relief of Amblena Eva Margaret Mary Brouse.
An act for the relief of Marion Pelletier.
An act for the relief of Catherine Lorraine Berthe Unity Miller.
An act for the relief of Pierre Blagdon.
An act for the relief of Helen Rita Freestone. An act for the relief of Mary Ann Elizabeth Datko.
An act for the relief of Frances Jane Ball.
An act for the relief of Annie Beatrice Fordham. An act for the relief of June Catherine Volkart. An act for the relief of Edith Ruth Gurd.
An act for the relief of Marie Lea Gertrude Constantinides.
An	act	for	the	relief	of	Vera May Kirkpatrick.An	act	for	the	relief	of	Kathleen Isabel Argue.An	act	for	the	relief	of	Florence Parks.An	act	for	the	relief	of	Elaine Linda Goldberg.An	act	for	the	relief	of	Mary Helen Cormier.
An act for the relief of Margaret Evelyn Grierson. An act for the relief of Madeleine St. Arnaud. An act for the relief of Ronald Clarence Breen. An act for the relief of Sally Falovitch.
An act for the relief of Frederick John Downey. An	act	for	the	relief	of	Shirley Mae Clarke.An	act	for	the	relief	of	Jadwiga Nowak.
An act for the relief of Robert Fender.
An act for the relief of Joseph George Marcel Raymond Mady.
An act for the relief of Reuben Gerald Sheaves. An act for the relief of Jean Paul Bourque.
An act for the relief of Theresa Catalfamo.
An act for the relief of Charles Woods.
An act for the relief of Joan Winnifred Chrystal.

An act for the relief of Dorothy Darling.
An act for the relief of Lila Margit Irene Fekete. An act for the relief of Elisabeth Franziska Chamulka.
An act for the relief of Evelyn Patricia Hunter. An act for the relief of Walter Mason.
An act for the relief of Anthony John Tunstall. An	act	for	the	relief	of	Howard	Ferncon Olsen.An	act	for	the	relief	of	Theresa	Irene Godfrey.An	act	for	the	relief of	Geraldine Bousquet.An	act	for	the	relief of	Bernice Clara Judd.An	act	for	the	relief of	Geraldine Koch.An	act	for	the	relief of	Joyce Mary Walker.An	act	for	the	relief of	Jeanne Ouellette.An	act	for	the	relief	of	Patricia	Helen Gagnon.An	act	for	the	relief	of	Thelma	Beatrice Davis.
An act for the relief of Lydia Ingeborg Pachurka. An act for the relief of Ourania Timotheatos, otherwise known as Orania Timotheatos.
An act for the relief of James Christopher Younger Elliott.
An act for the relief of Bernice Catherine Bealy. An act for the relief of Helene Martineau.
An act for the relief of Yvette Cecile Millar. An act for the relief of Mary Evangeline Jackson. An act for the relief of Andrew Drummond Page. An act for the relief of Katie Pollack.
An act for the relief of Shelagh (Sheila) Harriet Jacqueline Smith.
An act for the relief of Roy Charles Melvin.
An	act	for	the	relief	of	Shirley Margaret Ball.An	act	for	the	relief	of	Irene Ruth Farber.An	act	for	the	relief	of	Margaret Edith Myrtle
La tour.
An act for the relief of Charles Georges Andre Perrin.
An	act	for	the	relief	of	Norma Helen Hall.An	act	for	the	relief	of	Evelyn Byrd Taylor.An	act	for	the	relief	of	Eileen Mary Grant.
An act for the relief of Shirley Levitt.
An act for the relief of Judith Patricia Hogwood. An act for the relief of Rose Linden.
An act for the relief of William Gibb Barnard. An act for the relief of Joseph Armand De Belief euille.
An act for the relief of Bernard Campeau.
An act for the relief of Derrick Walsh.
An act for the relief of Genevieve Bollen.
An act for the relief of Joseph Palma Lucien Boucher.
An act for the relief of Joseph Arthur Roger Courtois.
An act for the relief of Catherine Dale Porter. An act for the relief of Betty Jean Maurice-Jones. An act for the relief of Margaret Nancy Bishop. An act for the relief of Thelma Annie McKenna. An act for the relief of Florence Mary Gibson. An act for the relief of James Valiant Hatch. An act for the relief of Sofia Kleiza.
An act for the relief of Elizabeth Ziehm.
An act for the relief of Mary Winnifred Paiement. An act for the relief of Dorothy Irene Payette. An act for the relief of Nancy Carol Stead.
An act for the relief of Leo Thivierge.
An act for the relief of Lola Polka.
An act for the relief of Stella Liberman, otherwise known as Stella Silverman.
An act for the relief of Patricia Cotton.
An act for the relief of Verna Wilson Ellis.
An act for the relief of Mary Freda Doutre. An act for the relief of Wilhelm Antoni.
An act for the relief of Lilian Eleanor Hartglas. An act for the relief of Kathleen Gordon.
An act for the relief of Roslyn Isaacs.
An act for the relief of Claire Gray.
An act for the relief of Olga Megas.
An act for the relief of Frances Bourassa.
An act for the relief of Janet Ellen Nelley.
An act for the relief of Helen Mary Mailath. An act for the relief of Helen Mary Vol.
Royal Assent
An act for the relief of Douglas Yetman.
An act for the relief of Martha Klein.
An act for the relief of Thelma Joy Tapp.
An act for the relief of Marie Therese Beaudry. An act for the relief of Leon Schwertfinger.
An act for the relief of Dorothy Golden.
An act for the relief of Brenda Ruth Black. An	act	for	the	relief	of	Agnes May Hurst.An	act	for	the	relief	of	Stanley Sager.An	act	for	the	relief	of	Rae Price.An	act	for	the	relief	of	Margaret Bloom.An	act	for	the	relief	of	Beena Barbara Koch.
An act for the relief of Pacifique Raymond Jean Ghislain Van Gulick.
An act for the relief of Theresa Bernadette Rose. An act for the relief of Ila Rothman.
An act for the relief of Marcel Paquet.
An act for the relief of Ada Florence Roberts. An act for the relief of Hannah Dorothy Erlich. An act for the relief of Teresa Mary Seguin.
An act for the relief of Mary Stella Williams. An act for the relief of Kathleen Louisa Harrison. An act for the relief of Ilona Helen Adler.
An act for the relief of Lillian Chalfen.
An act for the relief of Dolores Norma Auclair. An act for the relief of Patricia Lillian Mary Walker.
An act for the relief of Milan Yankovic.
An act for the relief of Norma Eileen Hicks.
An act for the relief of Edith Erlick.
An act for the relief of Sidney Russell Drake. An act for the relief of Grace Evelyn Lewis.
An act for the relief of Ursula Edith Elise Morgan.
An act for the relief of Marie Marguerite Jeannette Enlow.
An act for the relief of Barbara Lois Golden. An act for the relief of Eva Maria Muller.
An act for the relief of Neil Marriott Compton. An act for the relief of Carol Marilyn Margot Norcott.
An act for the relief of Eileen Alice Rose.
An act for the relief of Mable Irene Collin. An act for the relief of Johan Hendrick Van Hattem.
An act for the relief of Rhoda Heitner.
An act for the relief of Normand Guy.
An act for the relief of Elizabeth Mclnnis.
An act for the relief of Carl Wilhelm Larson. An act for the relief of Timothy Garfield Pilon. An act for the relief of Mary Theressa Oliver. An act for the relief of Egidia Floriana Ines Zeppettini.
An act for the relif of Georgette Lemieux.
An act for the relief of Sylvia Spivak.
An act for the relief of Margaret Pate Orr. An act for the relief of Laureen Elizabeth Saun-derson.
An act for the relief of Jeannine Marleau.
An act for the relief of Doris Villeneuve.
An act for the relief of Estelle Shetzen.
An act for the relief of Eva Knopf.
An act for the relief of Marie Alice DeWit. An act for the relief of Jean-Louis Trudel.
An act for the relief of Doris Elizabeth McEllin. An act for the relief of Mary Jane Gabrielle Black.
An	act	for	the	relief	of	Lucien Aube.An	act	for	the	relief	of	Denis Biron.
An act for the relief of Guy Robitaille.
An act for the relief of Edith Henshaw Owen. An act for the relief of Ruth Duggan.
An act for the relief of Joseph Georges Maurice Legault.
An	act	for	the	relief	of	Lomer Lussier.An	act	for	the	relief	of	Anna May Blair.
An act for the relief of Norma Bernet Vallieres. An act for the relief of Rose Belsky.
An act for the relief of Csilla Groszman.
An act for the relief of Selma Kostiner.

Royal Assent
An act for the relief of Leah (Lily) Goldberg. An act for the relief of Isabella Gardiner.
An act	for	the	relief	of	Diana	Marian	Favreau.An act	for	the	relief	of	Philias	Doil Menard.
An act for the relief of Viesturs Goba.
An act for the relief of Clifford Woodward Hall. An act for the relief of Emelia Gador.
An act for the relief of Barbara Jean Bertram O'Brien.
An act	for	the	relief	of	Arthur	George	Sims.An act	for	the	relief	of	Gladys	Evelyn	Viau.
An act for the relief of Yvonne Humbert-Droz. An act for the relief of Joseph Paul Maurice Marcel Lefebvre.
An act for the relief of Thomas Smith.
An act for the relief of Marie Pauline Monique Denise Ferron.
An act for the relief of Mara Wokrina.
An act for the relief of Joyce Mary Hagemeyer. An act for the relief of Rowland McLean Loftus. An act for the relief of Janina Stefania Luszcyki. An act for the relief of Esther Mary Adler.
An act for the relief of Marie Juliette Ida Dick. An act for the relief of Fred Austin Griffith.
An act for the relief of Joseph Paul Jules Jodoin. An act for the relief of Janet Louisa Davis.
An act for the relief of Margaret Dorothy Smith. An act for the relief of Christopher John Henry Doscher.
An act for the relief of Martha Saltvik.
An act for the relief of Eva Farkass.
An act for the relief of Albert Courtois.
An act for the relief of Madeleine Lebegue. An act for the relief of Anthony Roy Rabone Hearn.
An act for the relief of Joseph Alfred Pope. An act for the relief of Marigold Mavis Singer. An act for the relief of Georgette Anne O'Leary. An act for the relief of Ann Cicely Cosgrove. An act for the relief of Agnes Hallstein.
An act for the relief of Shirley Sherry Aileen Sarah Bronfman.
An	act	for	the	relief	of	Leta Sybil Farmer.An	act	for	the	relief	of	Vlasta Suchomel.An	act	for	the	relief	of	Lilian Norah Smith.
An act for the relief of Sarah Galganov, otherwise known as Sarah Gale.
An act for the relief of Anna Zinger.
An	act	for	the	relief	of	Lucien Gagnon.An	act	for	the	relief	of	Dennis James Haney.An	act	for	the	relief	of	George Kenneth Polk.An	act	for	the	relief	of	Mario Lattoni.An	act	for	the	relief	of	Vincent Laplaca.
An act for the relief of Marie Marguerite Jeanne-d'Arc Paiement.
An act for the relief of Joy Earle.
An act for the relief of Barbara Rosemary Olga Barbary.
An act for the relief of Assof Ernest Shaar.
An act for the relief of Joseph Wilfrid Paul Emile Marois.
An act for the relief of Erwin Gustav Pfeifer. An act for the relief of Rita Elizabeth Bowden. An act for the relief of Hazel Margaret Calvert. An act for the relief of Luciano Domenis.
An act for the relief of Antonio (Arthur) Ar-chambault.
An act for the relief of Ernestine Lavallee.
An act for the relief of Joseph Honore Antonio Lacerta.
An act for the relief of Doreen Chantigny.
An act for the relief of Sema Borodow.
An act for the relief of Gisele Lamarche.
An act for the relief of Estelle Mathieu.
An act for the relief of Vilma Beaudoin.
An act for the relief of Donald Kirk.
An act for the relief of Jacques-Emile Blanchard. An act for the relief of Guy Thomas Carpenter. An act for the relief of George Louis Draper.
An act for the relief of Berthe Daigneault.

An act for the relief of Stephen Beauchemin.
An act for the relief of Marie Gabrielle Lise Chouinard.
An act for the relief of Zar Boik.
An act for the relief of John Anthony Clifford Manning.
An act for the relief of Pearl Arron.
An act for the relief of Joseph Alfred Laflamme.
An act for the relief of Dorothy Elizabeth Davies.
An act for the relief of Elizabeth Rae Murphy.
An act for the relief of Hazel May Terry.
An act for the relief of Therese Hastings.
An act for the relief of Paul Lapres.
An act for the relief of Mary Christine Sweeney.
An act for the relief of Corinne Ryder Nurse.
An act for the relief of Evelyn Sue Newton.
An act respecting The Cumberland Railway and Coal Company and the Sydney and Louisburg Railway Company.
An act respecting the civil service of Canada.
An act respecting the observance of the centennial of confederation in Canada.
An act to amend the National Housing Act, 1954.
An act respecting the construction of a line of railway in the province of Alberta and in the Northwest Territories by Canadian National Railway Company from a point at or near Grimshaw, in the province of Alberta, in a northerly direction to Great Slave lake, in the Northwest Territories.
An act to amend certain agreements respecting the administration and control of natural resources in the provinces of Manitoba, Alberta and Saskatchewan.
An act to encourage fitness and amateur sport.
An act to authorize the Minister of Finance to make payments to the governments and provinces and to authorize the government of Canada to enter into tax collection agreements with the governments of the provinces.
An act to amend the Transport Act.
An act to incorporate The Equitable General Insurance Company.
To these bills the royal assent was pronounced by the Clerk of the Senate in the following words:
In Her Majesty's name, the Honourable the Depuy of the Governor General doth assent to these bills.
Then the Speaker of the House of Commons addressed the Honourable the Deputy of the Governor General as follows:
May it please Your Honour:
The Commons of Canada have voted supplies required to enable the government to defray certain expenses of the public service.
In the name of the Commons I present to Your Honour the following bill:
An act for granting to Her Majesty certain sums of money for the public service of the financial year ending the 31st March, 1962.
To which bill I humbly request Your Honour's assent.
To this bill the Clerk of the Senate, by command of the Honourable the Deputy of the Governor General, did thereupon say:
In Her Majesty's name, the Deputy of the Governor General thanks her loyal subjects, accepts their benevolence, and assents to this bill.


PROROGATION OF PARLIAMENT
[Stage Direction]
After which the Honourable the Deputy of the Governor General was pleased to close the

fourth session of the twenty fourth parliament of Canada with the following speech:
Honourable Members of the Senate:
Members of the House of Commons:
The fourth session of this parliament, the longest in Canada's history, has been particularly significant for the people of Canada, and the number of measures enacted on their behalf has been unusually large.
Mounting international tensions have been a source of deep anxiety, made more acute by the Soviet union's resumption of nuclear tests and the resultant fear of a renewed menace to human health through radioactive fall-out. These and related developments continue to command the vigilant attention of the government.
Berlin is the latest and most dangerous in a series of regional crises precipitated and exploited by the U.S.S.R. In the Congo, in Southeast Asia, as well as in Berlin, Canada has been active in international arrangements to contain conflict and restore stability. At the same time, my government has been energetic in promoting and exploring through the United Nations and in the North Atlantic alliance all possibilities for negotiated settlements of an honourable and lasting nature.
Despite delays and setbacks in progress toward a treaty providing for controlled disarmament, agreement has been reached on a framework to guide future negotiations with the Soviet side. The government has taken its part in formulating a new and comprehensive western plan which offers a realistic basis for early and effective measures to reduce both conventional and nuclear armaments under safeguards and to provide adequate international means for keeping the peace as disarmament proceeds.
At a meeting in London in March, the prime ministers of the commonwealth resumed their discussions of major world crises and reviewed constitutional developments. Far reaching decisions were taken affecting the composition and character of the commonwealth.
The importance of bearing a fair share of assistance to less developed nations continues to be recognized by the government. Established programs of aid were maintained and new emphasis given to educational assistance, drawing upon both of the historic cultures of Canada. Administrative changes were introduced to improve the central direction of all external assistance programs. Canada's diplomatic representation abroad was expanded, particularly in Latin America.
In the face of the increase in world tension it is necessary to maintain the strength of the free world. You have been informed of the measures being taken to strengthen the Canadian forces in Europe and at home, and of the survival training plan to be conducted in all parts of Canada this year.
During the present session you have welcomed and heard in parliament the President of the United States.
Important international tariff negotiations have been in process in Geneva. In these negotiations every effort has been made to meet the trade problems of Canada in a constructive way in dealing with the new economic grouping in Europe. My ministers have taken a leading role at a meeting of commonwealth economic ministers at Accra, convened to consider economic questions of the commonwealth, including the implications of the possible membership of the United Kingdom in the European economic community.
Important conferences with provincial governments have taken place during the session. Three further meetings have been held at which progress was made in finding ways and means of amending
Prorogation of Parliament the Canadian constitution in Canada. A third dominion-provincial conference on fiscal arrangements was held, and you have approved legislation concerning the arrangements for the five year period beginning April 1962.
My government has been gratified to observe the recent improvement in the general economic conditions in Canada. Although the volume of employment has been at the highest level in the nation's history, the provision of additional employment to re-employ those who have been out of work and to keep pace with the growth in the labour force has remained a cause for concern in Canada as in the United States. Many of the measures passed during the session have been designed to stimulate the national economy and to create more jobs.
You have approved an expanded program of assistance to municipalities for winter works projects. You have amended the National Housing Act to make further improvements in the terms of mortgage lending, to authorize Central Mortgage and Housing Corporation to make loans on favourable terms to universities for students' residences, to enable the corporation to make long term loans to local authorities for approved projects for sewage disposal and treatment, and to increase the lending authority of the corporation.
To assist in strengthening Canada's competitive position in export and domestic markets, you have authorized the establishment of a national productivity council with membership from the fields of industry and commerce, organized labour, agriculture and other primary production, as well as qualified persons chosen from the public at large and from the scientific agencies of government. You have also approved the creation of a national design council which will be devoted to the promotion of excellence in the design of Canadian products of all kinds.
You have enacted measures to extend the assistance given to provincial governments for technical and vocational training, both within the school system and for the training and retraining of persons who have already become workers, and for the vocational rehabilitation of disabled persons.
To stimulate the growth of Canadian private enterprise you have approved legislation authorizing government guarantees for bank loans to small businesses. You have passed measures to expand the field of operations and the lending authority of the industrial development bank, and to make broader and more effective provision for export credits insurance.
Authority has been given under the Income Tax Act for accelerated capital cost allowances to assist new industries in areas having a substantial degree of continued unemployment over a period of years, to aid in the development of new products from processing operations not previously carried on in Canada, to encourage the production of new types of goods, and to promote re-equipment and modernization of Canadian industry. Amendments have been made in the Income Tax Act including revisions in the withholding taxes on interest and dividends paid to non-residents. The Excise Tax Act was amended, notably to repeal the special excise tax on automobiles.
You have enacted a measure in the national agriculture program to authorize the federal government to join with provincial agencies and local groups throughout Canada in comprehensive programs of rural rehabilitation and development. In addition, amendments were made to the Farm Improvement Loans Act to raise the over-all limit on guarantees of bank loans for farm improvement, and to the Farm Credit Act to increase the lending authority of the farm credit corporation for direct loans to Canadian agriculture.
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Prorogation of Parliament
A number of further steps were taken in the government's national development program. A treaty was signed with the United States on the international aspects of the proposed co-operative development of the Columbia river, and the federal government has offered, subject to the approval of parliament, to share equally with the province of British Columbia in the cost of the large water storage projects involved. Agreements have also been signed and appropriations made for flood control and conservation projects in the metropolitan Toronto and surrounding area and on the upper Thames river in southwestern Ontario. Legislation has been passed to approve a Canadian National Railway line to the new mining area near Matta-gami lake in northwestern Quebec. In addition you have authorized the construction of a railway line from northern Alberta to Great Slave lake which constitutes another important step in the development of the Canadian north.
To accelerate the modernization of the Customs Tariff of Canada, you have enlarged the tariff board and authorized it to sit in two panels, and you have made certain revisions in the Customs Tariff.
Amendments to the Pension Act and to the War Veterans Allowance Act have been passed, including provision for substantial increases in pensions and allowances payable to veterans or their dependents.
A measure of potential significance that you have enacted in this session has been the Fitness and Amateur Sport Act, which authorizes the establishment of a national advisory council on fitness and amateur sport and the granting of financial assistance to activities that will promote the fitness of Canadians.
You have enacted a measure to revise the Civil Service Act.
Measures have been passed to improve the law and arrangements for the control of narcotics and
[Stage Direction]
of barbiturates. The Penitentiaries Act has been revised to give effect to my government's policies of correctional reform. Important amendments have been made to the Criminal Code on the subjects of murder and the treatment of sex offenders.
To provide for broader representation on the board of directors of the Canadian National Railways, you have enacted legislation to increase the number of its directors.
Amendments to the Canada Shipping Act have been approved.
You have passed the Canadian National Railways Financing and Guarantee Act.
You have authorized extension of the operation of the Freight Rates Reduction Act to April 30, 1962, and approved a measure to avert a nationwide suspension of railway operations last winter and the disruption of the national economy that would otherwise have ensued.
The National Centennial Act has been passed, giving authority for the establishment of a national centennial administration and for other arrangements designed to ensure that the observance of the centennial of the confederation of Canada suitably accords with the greatness of the occasion.
The signing of an estate tax convention with the United States has been approved.
A number of less noteworthy amendments were made to various statutes.
Members of the House of Commons:
I thank you for the provision you have made for the essential public services and payments for the current fiscal year.
Honourable Members of the Senate:
Members of the House of Commons:
May divine Providence continue to bless, protect and guide our nation.
This concluded the fourth session of the twenty fourth parliament.

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

Mr. Regier: 1.	What is the total amount of the mortgage documents that, as to date, have been offered for sale to the public by Central Mortgage and Housing Corporation?
2.	What was the amount of unpaid principal and the average interest rate of the securities that have been sold?
3.	How much was realized from the sale of the above securities?
Answer by: Hon. D. J. Walker (Minister of
Public Works):
Question
1.	The total of the two offerings was $32,500,000. However, it was not intended to sell more than $30 million. The balance was offered merely to make a wider choice of location possible to prospective purchasers.
2.	Sales were made on the basis of principal and interest and totalled $26 million, including $3f million of option tenders expiring October 28, 1961. All loans offered for sale to date carry an interest rate of 6f per cent per annum calculated semi-annually.
3.	At the present time it is impossible to give an exact figure since some of the options have not yet been exercised. On the first sale, however, an average price of 101.17 was realized and on the second sale the average accepted tender price was 101.35.

Supply-Items Passed [The following Items were passed in committee of supply]:


DEPARTMENT OF FINANCE
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General administration-
111.	Departmental administration, $1,911,211. Comptroller of the treasury-
112.	Central office and branch offices administration, $21,579,725.
Administration of Various Acts and costs of special functions-
113.	Superannuation and Retirement Acts administration, $851,916.
114.	The Bank Act-salaries and expenses of the inspector general of hanks' office, $34,330.
115.	Administration of the Farm Improvement Loans Act, the Veterans' Business and Professional Loans Act, the Fisheries Improvement Loans Act, the Prairie Grain Producers' Interim Financing Act, the Prairie Grain Loans Act and the Small Businesses Loans Act, $108,293.
Tariff board-
116.	Administration, $207,288.
Royal Canadian Mint-
117.	Administration, operation and maintenance, $1,446,230.
118.	Construction or acquisition of equipment, $103,620.
Subsidies and other payments to provinces- Special payments to provinces-
119.	Payments to the government of each province, in respect of income tax collected from corporations whose main business is the distribution to or generation for distribution to the public of electrical energy, gas or steam, of amounts computed in accordance with section 6 of The Tax Rental Agreements Act, 1952, as if the last two lines of subsection (1) of that section read as follows:	"... ending on the thirty-first day of
December, one thousand nine hundred and fifty-nine", $6,000,000.
Payments to municipalities-
120.	Grants to municipalities in accordance with the Municipal Grants Act and regulations made thereunder, $24,700,000.
Contingencies and miscellaneous-
121.	Miscellaneous minor or unforeseen expenses, subject to the approval of the treasury board, including authority to re-use any sums repaid to this appropriation from other appropriations, and for awards under the Public Servants Inventions Act, $1,500,000.
122.	Telephone service at Ottawa for all departments, $1,562,700.
123.	Losses incurred on foreign exchange tendered in payment of accounts receivable, $500.
General items of payroll costs including superannuation payments-
124.	Government's contributions to pension plans (and death benefit plans) for employees engaged locally outside Canada who are excluded from the Public Service Superannuation Act, $85,000.
125.	To supplement other votes, subject to the approval of the treasury board, for the payment of salaries, wages and other paylist charges, $3,000,000.
126.	Government's contribution, as an employer, ;o the unemployment insurance fund in respect of government employees paid through the central pay office, $1,100,000.
127.	Government's contribution to the hospital insurance (outside Canada) plan, $130,000.
128.	Government's share of surgical-medical insurance premiums determined in accordance with regulations made pursuant to vote 124, Appropriation Act no. 6, 1960, $8,000,000.
Miscellaneous grants-
129.	Canadian association of consumers, $10,000.
130.	Institute of public administration of Canada,
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General administration-
517.	Comptroller of the treasury-central office and branch offices administration-further amount required, $104,000.
Administration of various acts and costs of special
functions-
518.	Administration of the Farm Improvement Loans Act, the Veteran's Business and Professional Loans Act, the Fisheries Improvement Loans Act, the Prairie Grain Producers' Interim Financing Act, the Prairie Grain Loans Act and the Small Businesses Loans Act-further amount required, $14,954.
Contingencies and miscellaneous-
519.	Miscellaneous minor or unforeseen expenses, subject to the aproval of the treasury board-further amount required, $1,500,000.
General items of payroll costs including superannuation payments-
520.	To authorize the governor in council to add to part I of schedule A to the Public Service Superannuation Act (a) such part of the staff of government house as is paid by the governor general from his salary or alowance, (b) notwithstanding subsection (2) of section 9 of the Canadian Overseas Telecommunication Corporation Act. the Canadian overseas telecommunication corporation, and (c) notwithstanding subsection (1) of section 5 of the Government Companies Operation Act, Canadian Arsenals Limited; and to authorize the governor in council to make regulations respecting the terms and conditions under which any employee of the Canadian Overseas Telecommunication Corporation or Canadian Arsenals Limited who is, on the addition of those corporations to part I of schedule A, a member of a pension plan to which either corporation contributes in respect of him, may elect not to become a contributor under the Public Service Superannuation Act, $1.
607. To supplement the estimates of other departments for programs which will provide employment in Cape Breton, $120,000.

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Air services-
Administration branch-
429.	Air services administration, $1,852,117.
430.	Construction services administration, $3,708,165.
Civil aviation branch-
431.	Control of civil aviation including the administration of the Aeronautics Act and regulations issued thereunder, $3,115,149.
432.	Airports and other ground services-operation and maintenance, $21,508,485.
433.	Air traffic control, $7,680,749.
434.	Construction or acquisition of buildings, works, land and equipment with respect to national airports (as determined by the Minister of Transport) and related facilities: contributions towards construction done by local or private authorities with respect to such airports, amounts to be paid in settlement of claims for compensation by persons whose property is injuriously affected by the operation of a zoning regulation made under authority of paragraph (j) of subsection (1) of section 4 of the Aeronautics Act and authority,

notwithstanding section 30 of the Financial Administration Act, to make commitments for the current year not to exceed a total amount of $69,893,200 $60,900,000.
435.	Contributions, in accordance with terms and conditions approved by the governor in council, to assist in the establishment or improvement of local airports and related facilities, $161,000.
436.	Grants for the development of civil aviation, in the amounts detailed in the estimates, $430,000.
437.	Payments to the other governments or international agencies that are detailed in the estimates for the operation and maintenance of airports, air navigation and airways facilities, including authority to pay assessments in the amounts and in the currencies in which they are levied, notwithstanding that the total of such payments may exceed the equivalent in Canadian dollars, estimated as of December, 1960, which is, $215,592.
Telecommunications and electronics branch____
Radio aids to air and marine navigation-
438.	Administration, operation and maintenance $18,974,780.
439. Construction or acquisition of buildings, works, land and equipment, $14,400,000.
Radio Act and regulations-
440.	Administration, operation and maintenance including Canada's share of the costs of the international radio, telegraph and telephone organizations listed in the details of the estimates, $2,971,548.
441. Construction or acquisition of buildings, works, land and equipment, $400,500.
Telegraph and telephone service-
442.	Administration, operation and maintenance $72,115.
443. Construction or acquisition of buildings, works, land and equipment, $77,400.
Meteorological branch-
444.	Administration, operation and maintenance, including Canada's assessment for membership in the world meteorological organization and $25,000 for grants in aid of meteorological research in Canadian universities, $17,121,292.
445. Construction or acquisition of buildings, works, land and equipment, $1,769,800.
B-General-
Air transport board-
446.	Salaries and other expenses including the Canadian delegation to the international civil aviation organization, $550,469.
Board of transport commissioners for Canada-
447.	Administration, operation and maintenance. $1,249,433.
448.	Amount to be credited to the railway grade crossing fund, in addition to the amount to be credited to the fund under the Railway Act in the current fiscal year, for the general purposes of the fund, and authority, notwithstanding section 30 of the Financial Administration Act, to make commitments pursuant to this item for the current and subsequent fiscal years not to exceed a total amount of $10,000,000, $5,000,000.
Canadian maritime commission-
449.	Administration, $169,955.
450.	Steamship subventions for coastal services, as detailed in the estimates, $6,466,459.
National Harbours board-
451.	Advances to national harbours board, subject to the provisions of section 29 of the National Harbours Board Act, to meet expenditures applicable to the calendar year 1961 on any or all of the 'ollowing accounts:	reconstruction and capital
expenditures-
Supply-Items Passed
Halifax	 $ 905,065
Saint John	 2,452,000
Chicoutimi	 15,000
Quebec	 2,120,000
Churchill	 2,460,000
Generally-
Unforeseen and
miscellaneous	 200,000
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Less-amount to be expended from replacement and other funds $1,962,513, $6,189,552.
St. Lawrence seaway authority-
452.	Operating deficit and capital requirements of canals and works entrusted to the St. Lawrence seaway authority with the approval of the governor in council, and to authorize, notwithstanding the Financial Administration Act or any other act, the disbursement by the authority of revenues derived from the operation and management of such canals and works, $1,123,356.
Canadian overseas telecommunication corporation___
491.	Loan to the Canadian overseas telecommunication corporation in accordance with section 14 of the Canadian Overseas Telecommunication Corporation Act for additions and betterments to facilities, $8,000,000.
National harbours board-
492.	Advances to national harbours board subject to the provisions of section 29 of the National Harbours Board Act, to meet expenditures applicable to the calendar year 1961 on any or all of the following accounts:
Reconstruction and capital expenditures-
Three Rivers	 $	410,000
Montreal	 19,217,324
Vancouver	 1,872,125
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Less amount to be expended from replacement and other funds, $3,595,457, $17,903,992.
St. Lawrence seaway authority-
493.	Loans to the St. Lawrence seaway authority in such manner and subject to such terms and conditions as the governor in council may approve $15,000,000.	'
Air services-
Civil aviation branch-
587.	Contributions, in accordance with terms and conditions approved by the governor in council, to assist in the establishment or improvement of local airports and related facilities-further amount required, $100,000.
Telecommunications and electronics branch_____
Radio aids to air and marine navigation____
588.	Administration, operation and maintenance- further amount required, $128,760.
Meteorological branch-
589.	Administration, operation and maintenance- further amount required, $400,000.
B-General-
Board of transport commissioners-
590.	Interim payments, related to recommendations of the Royal commission on railway problems pending its complete report, to companies as defined in the Freight Rates Reduction Act of an aggregate amount in respect of the calendar year 1961 of $50,000,000, to be paid in instalments at such times and in accordance with such method of allocation as may be determined by the Board
[Stage Direction]
Supply-Items Passed
of Transport Commissioners for Canada, as compensation to such companies for the maintenance of their rates on freight traffic at reduced levels as provided for in the said act, $50,000,000.
Canadian maritime commission-
591.	Steamship subventions for coastal services, as detailed in the estimates-further amount required, $179,000.
592.	Capital subsidies for the construction of commercial and fishing vessels in accordance with regulations of the governor in council, $10,000,000.
National harbours board-
593.	Advances to national harbours board, subject to the provisions of section 29 of the National Harbours Board Act, to meet expenditures applicable to the calendar year 1961 on the following account:
Reconstruction and capital expenditures-Quebec -further amount required, $1,300,000.
Less-Amount to be expended from replacement and other funds, $250,000, $1,050,000.
St. Lawrence seaway authority-
594.	Operating deficit and capital requirements of canals and works entrusted to the St. Lawrence seaway authority-further amount required, $366,000.
Loans, investments and advances-
Transport-
602. To increase to $9,000,000 the amount that may be charged at any time to the revolving fund mentioned in subsection (2) of section 101 of the Financial Administration Act, chap 12, statutes of 1951 (2nd session), and extended by vote 630 of the Appropriation Act No. 2, 1955, vote 662 of the Appropriation Act No. 5, 1958, and vote 710 of the Appropriation Act No. 3, 1960; additional amount required, $2,000,000.


[Stage Direction]
ROGER DOHAMEt, F.R.S.C.
queen's PRINTER AND CONTROLLER OF STATIONERY OTTAWA, 1961
: ; 3 T
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Thursday, September 7, 1961